Immunogen (IMGN) 10-Q 3 Aug 18 2018 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2018	Jul. 31, 2018
Document and Entity Information
Entity Registrant Name	IMMUNOGEN INC
Entity Central Index Key	855,654
Document Type	10-Q
Document Period End Date	Jun. 30, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		149,021,323
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q2

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
ASSETS
Cash and cash equivalents	$ 345,058	$ 267,107
Accounts receivable	19	2,649
Unbilled revenue	522	2,580
Non-cash royalty receivable	7,236
Inventory	1,890	1,038
Prepaid and other current assets	9,893	2,967
Total current assets	364,618	276,341
Property and equipment, net of accumulated depreciation	12,029	14,538
Other assets	4,437	3,797
Total assets	381,084	294,676
LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)
Accounts payable	12,881	8,562
Accrued compensation	8,524	11,473
Other accrued liabilities	17,865	15,767
Current portion of deferred lease incentive	793	784
Current portion of liability related to the sale of future royalties, net of deferred financing costs of $788 and $772, respectively	22,265	17,779
Current portion of deferred revenue	1,020	1,405
Total current liabilities	63,348	55,770
Deferred lease incentive, net of current portion	4,806	5,129
Deferred revenue, net of current portion	80,751	93,752
Convertible 4.5% senior notes, net of deferred financing costs of $43 and $50, respectively	2,057	2,050
Liability related to the sale of future royalties, net of current portion and deferred financing costs of $1,918 and $2,373, respectively	136,701	151,634
Other long-term liabilities	4,231	4,236
Total liabilities	291,894	312,571
Commitments and contingencies (Note I)
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 149,021 and 132,526 shares as of June 30, 2018 and December 31, 2017, respectively	1,490	1,325
Additional paid-in capital	1,182,429	1,009,362
Accumulated deficit	(1,094,729)	(1,028,582)
Total shareholders’ equity (deficit)	89,190	(17,895)
Total liabilities and shareholders’ equity (deficit)	$ 381,084	$ 294,676

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
CONSOLIDATED BALANCE SHEETS
Current portion of deferred financing costs for the liability related to the sale of future royalties	$ 788	$ 772
Non-current deferred financing costs	43	50
Noncurrent portion of deferred financing costs for the liability related to the sale of future royalties	$ 1,918	$ 2,373
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	149,021	132,526
Common stock, outstanding shares	149,021	132,526

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Revenues:
License and milestone fees	$ 1,321	$ 31,080	$ 12,861	$ 49,810
Non-cash royalty revenue related to the sale of future royalties	7,242	6,439	14,432	14,052
Research and development support	388	902	771	2,380
Clinical materials revenue	336	599	1,038	1,277
Total revenues	9,287	39,020	29,102	67,519
Operating Expenses:
Research and development	38,701	35,319	83,532	68,207
General and administrative	8,652	8,836	18,647	16,955
Restructuring charge	686		2,417	386
Total operating expenses	48,039	44,155	104,596	85,548
Loss from operations	(38,752)	(5,135)	(75,494)	(18,029)
Investment income, net	814	143	1,476	258
Non-cash interest expense on liability related to the sale of future royalties and convertible senior notes	(2,611)	(3,501)	(5,657)	(7,076)
Interest expense on convertible senior notes	(23)	(1,125)	(47)	(2,250)
Other (expense) income, net	(1,052)	751	(515)	885
Net loss	$ (41,624)	$ (8,867)	$ (80,237)	$ (26,212)
Basic and diluted net loss per common share (in dollar per share)	$ (0.31)	$ (0.10)	$ (0.61)	$ (0.30)
Basic and diluted weighted average common shares outstanding (in shares)	134,384	87,174	132,512	87,167
Total comprehensive loss	$ (41,624)	$ (8,867)	$ (80,237)	$ (26,212)

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Cash flows from operating activities:
Net loss	$ (80,237)	$ (26,212)
Adjustments to reconcile net loss to net cash used for operating activities:
Non-cash royalty revenue related to sale of future royalties	(14,432)	(14,052)
Non-cash interest expense on liability related to sale of future royalties and convertible senior notes	5,657	7,076
Depreciation and amortization	5,056	2,934
(Gain) loss on sale/disposal of fixed assets and impairment charges	(30)	180
Stock and deferred share unit compensation	7,872	5,801
Deferred rent	(59)	49
Change in operating assets and liabilities:
Accounts receivable	2,630	1,002
Unbilled revenue	2,058	4,971
Inventory	(852)	(1,290)
Prepaid and other current assets	(6,926)	628
Other assets	(640)	(128)
Accounts payable	3,871	(2,394)
Accrued compensation	(2,949)	266
Other accrued liabilities	1,896	802
Deferred revenue	(8,196)	11,487
Net cash used for operating activities	(85,281)	(8,880)
Cash flows from investing activities:
Purchases of property and equipment	(2,127)	(779)
Net cash used for investing activities	(2,127)	(779)
Cash flows from financing activities:
Proceeds from stock options exercised	2,819	32
Proceeds from common stock issuance, net of $367 of transaction costs	162,540
Net cash provided by financing activities	165,359	32
Net change in cash and cash equivalents	77,951	(9,627)
Cash and cash equivalents, beginning of period	267,107	159,964
Cash and cash equivalents, end of period	$ 345,058	$ 150,337

CONSOLIDATED STATEMENTS OF CAS6

CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) $ in Thousands	6 Months Ended
	Jun. 30, 2018USD ($)
CONSOLIDATED STATEMENTS OF CASH FLOWS
Transaction costs	$ 367

Nature of Business and Plan of

Nature of Business and Plan of Operations	6 Months Ended
	Jun. 30, 2018
Nature of Business and Plan of Operations
Nature of Business and Plan of Operations	A. ImmunoGen, Inc. (the Company) was incorporated in Massachusetts in 1981 and is focused on the development of antibody‑drug conjugates, or ADC, therapeutics. The Company has generally incurred operating losses and negative cash flows from operations since inception, incurred a net loss of approximately $80.2 million during the six months ended June 30, 2018, and has an accumulated deficit of approximately $1.1 billion as of June 30, 2018. 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 June 30, 2018, the Company had $345.1 million of cash and cash equivalents on hand. The Company anticipates that its current capital resources will enable it to meet its operational expenses and capital expenditures for more than twelve months after the date 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.

Summary of Significant Accounti

Summary of Significant Accounting Policies	6 Months Ended
	Jun. 30, 2018
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies	B. Basis of Presentation 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. The consolidated financial statements include all of the adjustments, consisting only of normal recurring adjustments, which management considers necessary for a fair presentation of the Company’s financial position in accordance with accounting principles generally accepted in the U.S. for interim financial information. The December 31, 2017 condensed consolidated balance sheet data presented for comparative purposes was derived from the Company’s audited financial statements but certain information and footnote disclosures normally included in the Company’s annual financial statements have been condensed or omitted. The preparation of interim financial statements requires the use of management’s estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the interim financial statements and the reported amounts of revenues and expenditures during the reported periods. The results of the interim periods are not necessarily indicative of the results for the entire year. Accordingly, the interim financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. Subsequent Events The Company has evaluated all events or transactions that occurred after June 30, 2018 up through the date the Company issued these financial statements. The Company did not have any material recognizable or unrecognizable subsequent events during this period. Adoption of ASC Topic 606, Revenue from Contracts with Customers The Company adopted Accounting Standards Codification Topic or ASC, 606 – Revenue from Contracts with Customers , (ASC 606) on January 1, 2018, using the modified retrospective method for all contracts not completed as of the date of adoption. The reported results for 2018 reflect the application of ASC 606 guidance, while the reported results for 2017 were prepared under the guidance of ASC 605, Revenue Recognition (ASC 605), which is also referred to herein as "legacy GAAP" or the "previous guidance." For discussion on the Company’s revenue recognition policy under ASC 605, please refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. Financial Statement Impact of Adopting ASC 606 The cumulative effect of applying the new guidance to all contracts with customers that were not completed as of December 31, 2017, was recorded as an adjustment to accumulated deficit as of the adoption date. As a result of applying the modified retrospective method to adopt the new revenue guidance, the following adjustments were made to accounts on the condensed consolidated balance sheet as of January 1, 2018: IMMUNOGEN, INC. ADJUSTED CONSOLIDATED BALANCE SHEET (UNAUDITED) In thousands, except per share amounts Adjustments Balance at December 31, Due to January 1, 2017 ASC 606 2018 ASSETS Cash and cash equivalents $ 267,107 $ — $ 267,107 Accounts receivable 2,649 — 2,649 Unbilled revenue 2,580 — 2,580 Non-cash royalty receivable — 8,900 8,900 Inventory 1,038 — 1,038 Prepaid and other current assets 2,967 — 2,967 Total current assets 276,341 8,900 285,241 Property and equipment, net of accumulated depreciation 14,538 — 14,538 Other assets 3,797 — 3,797 Total assets $ 294,676 $ 8,900 $ 303,576 LIABILITIES AND SHAREHOLDERS’ DEFICIT Accounts payable $ 8,562 $ — $ 8,562 Accrued compensation 11,473 — 11,473 Other accrued liabilities 15,767 — 15,767 Current portion of deferred lease incentive 784 — 784 Current portion of liability related to the sale of future royalties, net 17,779 — 17,779 Current portion of deferred revenue 1,405 41 1,446 Total current liabilities 55,770 41 55,811 Deferred lease incentive, net of current portion 5,129 — 5,129 Deferred revenue, net of current portion 93,752 (5,231) 88,521 Convertible 4.5% senior notes, net 2,050 — 2,050 Liability related to the sale of future royalties, net 151,634 — 151,634 Other long-term liabilities 4,236 — 4,236 Total liabilities 312,571 (5,190) 307,381 Shareholders’ deficit: Preferred stock — — — Common stock 1,325 — 1,325 Additional paid-in capital 1,009,362 — 1,009,362 Accumulated deficit (1,028,582) 14,090 (1,014,492) Total shareholders’ deficit (17,895) 14,090 (3,805) Total liabilities and shareholders’ deficit $ 294,676 $ 8,900 $ 303,576 Under the previous guidance, the Company deferred revenue pertaining to the transfer of certain exclusive commercialization and development licenses. Under ASC 606, the Company recognizes revenues from non-refundable, up-front fees allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license. Under the previous guidance, milestones that were considered substantive because the Company contributed significant effort to the achievement of such milestones were recognized as revenue upon achievement of the milestone. Under ASC 606, if the achievement of a milestone is considered a direct result of the Company’s efforts to satisfy a performance obligation or transfer a distinct good or service, the associated milestone value is allocated to that distinct good or service. If a milestone is not specifically related to the Company’s effort to satisfy a performance obligation or transfer a distinct good or service, the amount is allocated to all performance obligations using the relative standalone selling price method. Under ASC 606, the Company also evaluates the milestone to determine whether the milestone is probable of being achieved and estimates the amount to be included in the transaction price. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price to be allocated, otherwise, such amounts are constrained and excluded from the transaction price. The Company determined it was probable that a future $5 million milestone for Takeda enrolling a patient in a Phase I trial as of the date of adoption would occur and, accordingly, recorded a reduction to accumulated deficit of $4.6 million related to this previously delivered license. The $5 million contract asset recorded for the probable milestone was netted against contract liabilities related to the specific contract. Prior to the adoption of ASC 606, the Company recognized royalty revenue when it could reliably estimate such amounts and collectability was reasonably assured. As such, the Company generally recognized revenue for sales royalties 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. Under ASC 606, if the license is deemed to be the predominant item to which the royalties relate, the Company will recognize revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). As a result of recognizing royalties for sales in the fourth quarter of fiscal year 2017, the Company recognized a reduction to accumulated deficit of $8.9 million. The net impact of these changes resulted in a $14.1 million reduction to accumulated deficit, a $5.2 million reduction to deferred revenue and an $8.9 million increase in non-cash royalty receivable. The adoption of ASC 606 resulted in the acceleration of revenue through December 31, 2017, which in turn reduced the related net deferred tax asset by $3.9 million. As the Company fully reserves its net deferred tax assets, the impact was offset by the valuation allowance. Impact of ASC 606 Revenue Guidance on Financial Statement Line Items The following tables compare the reported condensed consolidated balance sheet and statement of operations, as of and for the three and six months ended June 30, 2018, to the pro-forma amounts had the previous guidance been in effect: IMMUNOGEN, INC. PRO FORMA CONSOLIDATED BALANCE SHEET (UNAUDITED) In thousands, except per share amounts As of June 30, 2018 Pro forma as if the previous accounting As reported was in effect ASSETS Cash and cash equivalents $ 345,058 $ 345,058 Accounts receivable 19 19 Unbilled revenue 522 522 Contract asset — — Non-cash royalty receivable 7,236 — Inventory 1,890 1,890 Prepaid and other current assets 9,893 9,893 Total current assets 364,618 357,382 Property and equipment, net of accumulated depreciation 12,029 12,029 Other assets 4,437 4,437 Total assets $ 381,084 $ 373,848 LIABILITIES AND SHAREHOLDERS’ DEFICIT Accounts payable $ 12,881 $ 12,881 Accrued compensation 8,524 8,524 Other accrued liabilities 17,865 17,865 Current portion of deferred lease incentive 793 793 Current portion of liability related to the sale of future royalties, net 22,265 22,265 Current portion of deferred revenue 1,020 755 Total current liabilities 63,348 63,083 Deferred lease incentive, net of current portion 4,806 4,806 Deferred revenue, net of current portion 80,751 83,908 Convertible 4.5% senior notes, net 2,057 2,057 Liability related to the sale of future royalties, net 136,701 136,701 Other long-term liabilities 4,231 4,231 Total liabilities 291,894 294,786 Shareholders’ deficit: Preferred stock — — Common stock 1,490 1,490 Additional paid-in capital 1,182,429 1,182,429 Accumulated deficit (1,094,729) (1,104,857) Total shareholders’ deficit 89,190 79,062 Total liabilities and shareholders’ deficit $ 381,084 $ 373,848 As a result of adoption of ASC 606, a receivable is recorded for royalties earned during the current quarter rather than one quarter in arrears under the previous guidance. Deferred revenue increased under ASC 606 due to a greater amount of the transaction prices being allocated to the future technological improvement rights under ASC 606. IMMUNOGEN, INC. PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED) In thousands, except per share amounts Three months ended June 30, 2018 Six months ended June 30, 2018 Pro forma as if the Pro forma as if the previous accounting previous accounting As reported was in effect As reported was in effect Revenues: License and milestone fees $ 1,321 $ 5,330 $ 12,861 $ 15,159 Non-cash royalty revenue related to the sale of future royalties 7,242 7,222 14,432 16,096 Research and development support 388 388 771 771 Clinical materials revenue 336 336 1,038 1,038 Total revenues 9,287 13,276 29,102 33,064 Operating Expenses: Research and development 38,701 38,701 83,532 83,532 General and administrative 8,652 8,652 18,647 18,647 Restructuring charge 686 686 2,417 2,417 Total operating expenses 48,039 48,039 104,596 104,596 Loss from operations (38,752) (34,763) (75,494) (71,532) Investment income, net 814 814 1,476 1,476 Non-cash interest expense on liability related to the sale of future royalties and convertible senior notes (2,611) (2,611) (5,657) (5,657) Interest expense on convertible senior notes (23) (23) (47) (47) Other income (expense), net (1,052) (1,052) (515) (515) Net loss $ (41,624) $ (37,635) $ (80,237) $ (76,275) Basic and diluted net loss per common share $ $ $ $ Under the previous guidance, non-cash royalty revenue would have been similar to the amount recorded for the three months ended June 30, 2018, however, higher non-cash royalty revenue would have been recorded for the six months ended June 30, 2018 due to higher tiered royalties for Kadcyla ® in the fourth quarter of 2017 (because under the previous guidance, the Company recorded the royalties one quarter in arrears as previously described). During the three and six months ended June 30, 2018, under the previous guidance, a $5.0 million milestone would have been included as license and milestone fee revenue, however, due to its probability of occurring at the time of transition to ASC 606, it was recognized as part of the transition adjustment. Partially offsetting these changes in the three and six-month periods, less license and milestone fee revenue would have been recognized under the previous guidance related to a partner foregoing its remaining rights under a right-to-test agreement upon expiration in March 2018. A greater amount of the transaction price was allocated to the expired material rights under ASC 606 than under the previous guidance.. The adoption of ASC 606 had no aggregate impact on the Company’s cash flows from operations. The aforementioned impact resulted in offsetting shifts in cash flows through net losses and working capital accounts. Revenue Recognition The Company enters into licensing and development agreements with collaborators for the development of ADC therapeutics. The terms of these agreements contain multiple performance obligations 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. Revenue is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. In determining the appropriate amount of revenue to be recognized as it fulfills its obligations under the agreements, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when or as the Company satisfies each performance obligation. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration to which it is entitled in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when or as the performance obligation is satisfied. As part of the accounting for the arrangement, the Company must develop assumptions that require judgment to determine the stand-alone selling price for each performance obligation identified in the contract. The Company uses key assumptions to determine the stand-alone selling price, which is discussed in further detail below. At June 30, 2018, the Company had the following 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 and commercialize anticancer 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) 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) · 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 · Collaboration and license agreement to co-develop and co-commercialize a specified anticancer compound on established terms: MacroGenics 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 obligations 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 obligations 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 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. In the case of Sanofi, its licenses are fully-paid and no further milestones or royalties will be received. In the case of Debiopharm, no royalties will be received. 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. In determining the performance obligations, management evaluates whether the license is distinct, and has significant standalone functionality, 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 and whether technological improvements are required for the continued functionality of the license. If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues from non-refundable, up-front fees allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license. The Company estimates the stand-alone selling prices of the license and all other performance obligations 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. The Company recognizes revenue related to research services as the services are performed. 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 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 also recorded as a component of research and development support revenue. The Company may also produce research material for potential collaborators under material transfer agreements. The Company records amounts received for research materials produced or services performed as a component of research and development support revenue. 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 control has transferred to the collaborator. 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 affected by the number of batches produced during the period. The volume of preclinical and clinical materials the Company produces is directly related to the scale and scope of preclinical activities and 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, which impacts the margins recognized on such product sales. The Company recognizes revenue related to the rights to future technological improvements over the estimated term of the applicable license. 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 arrangement that includes developmental and regulatory milestone payments, the Company evaluates whether the achievement of each milestone specifically relates to the Company’s efforts to satisfy a performance obligation or transfer a distinct good or service within a performance obligation. If the achievement of a milestone is considered a direct result of the Company’s efforts to satisfy a performance obligation or transfer a distinct good or service and the receipt of the payment is based upon the achievement of the milestone, the associated milestone value is allocated to that distinct good or service. If the milestone payment is not specifically related to the Company’s effort to satisfy a performance obligation or transfer a distinct good or service, the amount is allocated to all performance obligations using the relative standalone selling price method. In addition, the Company evaluates the milestone to determine whether the milestone is considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price to be allocated; otherwise, such amounts are considered constrained and excluded from the transaction price. At the end of each subsequent reporting period, the Company re-evaluates the probability of achievement of such development or regulatory milestones and any related constraint, and if necessary, adjusts its estimate of the transaction price. Any such adjustments to the transaction price are allocated to the performance obligations on the same basis as at contract inception. Amounts allocated to a satisfied performance obligation shall be recognized as revenue, or as a reduction of revenue, in the period in which the transaction price changes. For development and commercialization license agreements that include sales-based royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company will recognize revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied) in accordance with the royalty recognition constraint. Under the Company’s development and commercialization license agreements, except for the Sanofi and Debiopharm licenses, the Company receives royalty payments based upon its licensees’ net sales of covered products. Generally, under the development and commercialization agreements, the Company receives royalty reports and payments from its licensees approximately one quarter in arrears. The Company estimates the amount of royalty revenue to be recognized based on historical and forecasted sales and/or sales information from its licensees if available. Collaboration and Option Agreements/Right-to-Test Agreements The Company’s right-to-test agreements provide collaborators the right to test the Company’s ADC technology for a defined period of time through a research, or right‑to‑test, license. Under both right-to-test agreements and collaboration and option agreements, collaborators may (a) take options, for a defined period of time, to specified targets and (b) 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 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, after providing 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 and right-to-test agreements is dependent on the nature of the options granted to the collaborative partner. Options are considered distinct performance obligations if they provide a collaborator with a material right. Factors that are considered in evaluating whether options convey a material right 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 fair value of the licenses, and the additional financial commitments or economic penalties imposed on the collaborator as a result of exercising the options. As of June 30, 2018, all right-to-test agreements have expired. If the Company concludes that an option provides the customer a material right, and therefore is a separate performance obligation, the Company 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 and c) probability of exercise. 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 functionality and is distinct 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, the Company 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, Collaborative Arrangements , 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. Transaction Price Allocated to Future Performance Obligations Remaining performance obligations represent the transaction price of contracts for which work has not been performed (or has been partially performed) and includes unexercised contract options that are considered material rights. As of June 30, 2018, the aggregate amount of the transaction price allocated to remaining performance obligations comprising deferred revenue was $81.8 million. The Company expects to recognize revenue on approximately 1%, 2% and 97% of the remaining performance obligations over the next 12 months, 13 to 60 months, and 61 to 120 months, respectively, however it does not control when or if any collaborator will exercise its options for, or terminate existing development and commercialization licenses. Contract Balances from Contracts with Customers The following table presents changes in the Company’s contract assets and contract liabilities during the six months ended June 30, 2018 (in thousands): Balance at Balance at January 1, 2018 End (ASC 606 adoption) Additions Deductions of Period Six months ended June 30, 2018 Contract asset $ — $ 4,041 $ (4,041) $ — Contract liabilities: Deferred revenue $ 89,967 $ — $ (8,196) $ 81,771 During the three and six months ended June 30, 2018, the Company recognized the following revenues as a result of changes in contract asset and contract liability balances in the respective periods (in thousands): Three Months Ended Six Months Ended June 30, 2018 June 30, 2018 Revenue recognized in the period from: Amounts included in contract liabilities at the beginning of the period $ 1,321 $ 13,196 Performance obligations satisfied in previous periods $ - $ - As a result of adoption of ASC 606, a contract asset of $5 million was recorded for a probable milestone which was netted against an approximate $1 million contract liability related to the specific contract as of March 31, 2018. During the six months ended June 30, 2018, as a result of Takeda not executing a second license it had available, or extending or expanding its rig

Agreements

Agreements	6 Months Ended
	Jun. 30, 2018
Agreements
Agreements	C. Agreements Significant Collaborative Agreements Roche In May 2000, the Company granted Genentech, now a unit of Roche, an exclusive license to use the Company’s maytansinoid ADC technology. Pursuant to this agreement, Roche developed and received marketing approval for its HER2-targeting ADC compound, Kadcyla, in the U.S., Europe, Japan and numerous other countries. 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 under ASC 606, $14.4 million of non-cash royalties on net sales of Kadcyla for the six‑month period ended June 30, 2018 were recorded and included in non-cash royalty revenue for the six-month period ended June 30, 2018. Under the previous revenue recognition policy using ASC 605, $16.1 million of non-cash royalties would have been recorded in the six months ended June 30, 2018. Under the previous guidance, $14.1 million of non-cash royalties on net sales of Kadcyla for the six‑month period ended March 31, 2017 were included in non-cash royalty revenue for the six-month period ended June 30, 2017. 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 E. Sanofi On May 30, 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 and Sanofi 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 under both license agreements. Under the previous guidance of ASC 605, the $30 million payment was recognized as revenue and is included in license and milestone fees for the three and six months ended June 30, 2017. In addition, $6 million of milestone payments related to the license agreements above, prior to the agreement executed in May 2017, are included in license and milestone fee revenue for the six months ended June 30, 2017. 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. In May 2018, Novartis terminated one of its six development and commercialization licenses. As a result, the Company recorded the remaining $978,000 balance of the upfront payment that had been allocated to future performance obligations under this license as revenue, which is included in license and milestone fees for the three and six months ended June 30, 2018. CytomX In January 2014, the Company entered into a reciprocal right‑to‑test agreement with CytomX. The agreement provides CytomX with the right to test the Company’s payload agents and linkers with CytomX antibodies that utilize their proprietary antibody-masking technology, termed Probodies TM for a specified number of targets and to subsequently take an exclusive, worldwide license to use the Company’s technology to develop and commercialize Probody-drug conjugates directed to 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. Instead, the Company received reciprocal rights to test its payload agents and linkers with ImmunoGen antibodies masked using CytomX technology to create Probody-drug conjugates directed to a specified number of targets and to subsequently take exclusive, worldwide licenses to develop and commercialize such conjugates directed to the specified targets on terms agreed upon at the inception 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 license. 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, CytomX took 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, under the previous guidance of ASC 605, 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 six months ended June 30, 2017. With respect to the development and commercialization license taken by 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 three and six months ended June 30, 2017. The next payment the Company could receive would be a $3 million development milestone payment with commencement of a Phase 2 clinical trial. CytomX is responsible for the manufacturing, product development and marketing of any product resulting from the development and commercialization license taken by CytomX under this collaboration. Takeda In March 2015, the Company entered into a three-year right-to-test agreement with Takeda through its wholly owned subsidiary, Millennium Pharmaceuticals, Inc. The agreement provided Takeda with the right to (a) take exclusive options, with certain restrictions, to individual targets selected by Takeda for specified option periods, (b) test the Company’s ADC technology with Takeda’s antibodies directed to the targets optioned under a right-to-test, or research, license, and (c) take exclusive licenses to use the Company’s ADC technology to develop and commercialize products to targets optioned for up to two individual targets on terms specified in the right-to-test agreement. The two additional license options were considered material rights as the exercise price for each option was priced at a discount to the fair value of the underlying licenses. Therefore, the non-refundable, upfront arrangement consideration was allocated to the first license, technological improvements and two additional options based on the relative standalone selling price method. The first license was granted to Takeda in December 2015. In March 2018, the right-to-test agreement expired without Takeda exercising their option to a second license or extending the agreement or expanding the agreement as it had the right to do for a third license. Accordingly, the remaining $10.9 million of revenue that had been deferred for such performance obligations was recognized as revenue and is included in license and milestone fees for the six months ended June 30, 2018. In May 2018, Takeda enrolled its first patient in a Phase I clinical trial, triggering a $5 million milestone payment to the Company. Due to the likelihood of this milestone being attained, this milestone was recognized as a contract asset as part of the cumulative adjustment to transition to ASC 606. It had been previously allocated to the delivered license and the right to technological improvements. The next potential milestone payment the Company will be entitled to receive will be a $10 million development milestone payment with the initiation of a Phase II clinical trial. Takeda is responsible for the manufacturing, product development, and marketing of any products resulting from the remaining license. Debiopharm On May 24, 2017, Debiopharm acquired the Company’s IMGN529 program, a clinical-stage anti-CD37 ADC for the treatment of patients with B-cell malignancies. Under the terms of the Exclusive License and Asset Purchase agreement, the Company received a $25 million upfront payment for specified assets related to IMGN529 and a paid-up license to the Company’s ADC technology. Upon substantial completion of the transfer of the Company’s technologies related to the program (technology transfer) in the fourth quarter of 2017, the Company achieved a $5 million milestone, $4.5 million of which was received in December 2017 and the balance in January 2018. In addition, the Company is eligible for a second success-based milestone payment of $25 million upon IMGN529 entering a Phase 3 clinical trial. The milestone payment will be significantly reduced if a Phase 3 trial using the Company’s technology but not the IMGN529 antibody commences prior to IMGN529 entering a Phase 3 trial. The Company does not believe this scenario is likely to occur. The total arrangement consideration of $30 million (which comprises the $25 million upfront payment and the transfer fee of $5 million) was allocated to the units of accounting based on the relative selling price method as follows: $29.7 million to the license/technology transfer and $300,000 to the physical materials. The Company recorded $29.5 million of revenue as outlined above when the technology transfer work was substantially completed in the fourth quarter of 2017. The $500,000 balance of the milestone was recorded as revenue in January 2018, coinciding with the delivery of the physical materials, which is included in license and milestone fees for the six months ended June 30, 2018. Jazz Pharmaceuticals In August 2017, the Company entered into a collaboration and option agreement granting Jazz exclusive, worldwide rights to opt into development and commercialization of two early-stage, hematology-related ADC programs, as well as an additional program to be designated during the term of the agreement (“License Options”). The programs covered under the agreement include IMGN779, a CD33-targeted ADC for the treatment of acute myeloid leukemia (AML) in Phase 1 testing, and IMGN632, a CD123-targeted ADC for hematological malignancies also in Phase I testing, and an early-stage program to be determined at a later date. Under the terms of the agreement, the Company will be responsible for the development of the three ADC programs prior to any potential opt-in by Jazz. Following any opt-in, and subject to the Company’s co-commercialization rights, Jazz would assume overall responsibility for further development as well as for potential regulatory submissions and commercialization. As part of the agreement, Jazz made an upfront payment of $75 million to the Company. Additionally, Jazz will pay the Company up to $100 million in development funding over seven years to support the three ADC programs. For each program, Jazz may exercise its License Options at any time prior to a pivotal study or at any time prior to the filing of a biologics license application (BLA) upon payment of an option exercise fee of mid-double digit millions or low triple digit millions, respectively. For each program to which Jazz elects to opt-in, the Company would be eligible to receive milestone payments based on receiving regulatory approvals of the applicable product aggregating $100 million plus tiered royalties as a percentage of commercial sales by Jazz, which will vary depending upon sales levels and the stage of development at the time of opt-in. Per the applicable accounting standards, at the time of execution of this agreement, significant uncertainty is deemed to exist as to whether the 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. After opt-in, Jazz and the Company would share costs associated with developing and obtaining regulatory approvals of the applicable product in the U.S. and EU. The Company has the right to co-commercialize in the U.S. at least one product with U.S. profit sharing in lieu of Jazz's payment of the U.S. milestone and royalties to the Company. Due to the involvement the Company and Jazz both have in the development and commercialization of the products, as well as both parties being part of the cost share agreement and exposed to significant risks and rewards dependent on the commercial success of the products, the arrangement has been determined to be a collaborative arrangement within the scope of ASC 808. Accordingly, the Company carved out the research and development activities and the related cost sharing arrangement with Jazz. Payments for such activities will be recorded as research and development expense and reimbursements received from Jazz will be recognized as an offset to research and development expense in the accompanying statement of operations during the development period. Included in research and development expense for the three and six months ended June 30, 2018, is a $1.8 million and $3.8 million credit, respectively, related to reimbursements from Jazz. The three License Options are considered material rights as the exercise price for each option is priced at a discount to the fair value of the underlying licenses. Therefore, the non-refundable, upfront arrangement consideration of $75 million was allocated to the three License Options based on the relative standalone selling price method. The amounts allocated to the License Options will be recognized as revenue when exercised by Jazz or upon expiration. The Company does not control when Jazz will exercise its options for development and commercialization licenses. As a result, the Company cannot predict when it will recognize revenue related to the delivery of the licenses, and accordingly, the upfront payment of $75 million is included in long-term deferred revenue as of June 30, 2018. For additional information related to certain of these agreements, as well as the Company’s other significant collaborative agreements, please read Note C, Agreements, to the consolidated financial statements included within the Company’s 2017 Annual Report on Form 10-K.

Convertible 4.5% Senior Notes

Convertible 4.5% Senior Notes	6 Months Ended
	Jun. 30, 2018
Convertible 4.5% Senior Notes
Convertible 4.5% Senior Notes	D. Convertible 4.5% Senior Notes In 2016, the Company issued the Convertible 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 the Company’s 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 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. 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 $47,000 and $2.3 million of interest expense in the six months ended June 30, 2018 and 2017, 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.

Liability Related to Sale of Fu

Liability Related to Sale of Future Royalties	6 Months Ended
	Jun. 30, 2018
Liability Related to Sale of Future Royalties
Liability Related to Sale of Future Royalties	E. Liability Related to Sale of Future Royalties In April 2015, IRH purchased the right to receive 100% of the royalty payments on commercial sales of Kadcyla subsequent to December 31, 2014, arising under the Company’s development and commercialization license with Genentech (a unit of Roche), 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 in April 2015, 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 will be 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 six-month period ended June 30, 2018 (in thousands): Period from December 31, 2017 to June 30, 2018 Liability related to sale of future royalties, net — beginning balance $ 169,413 Kadcyla royalty payments received and paid (16,097) Non-cash interest expense recognized 5,650 Liability related to sale of future royalties, net — ending balance $ 158,966 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 results in an effective annual interest rate of 7.2%, however, currently the prospective rate is estimated to be 5.8% . 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	6 Months Ended
	Jun. 30, 2018
Income Taxes
Income Taxes	F. Income Taxes 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 during the year ended December 31, 2017. 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 its 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 the Company’s 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. At June 30, 2018, there has been no change in the provisional amount and the Company will continue to analyze and refine its calculations related to the measurement of these balances, which is to be completed no later than one year after the enactment of the TCJA.

Capital Stock

Capital Stock	6 Months Ended
	Jun. 30, 2018
Capital Stock
Capital Stock	G. Capital Stock 2001 Non-Employee Director Stock Plan During the three and six months ended June 30, 2018, the Company recorded approximately $4,000 and $31,000 in expense related to stock units outstanding under the Company’s 2001 Non-Employee Director Stock Plan, or the 2001 Plan, compared to $21,000 and $32,000 recorded during the three and six months ended June 30, 2017. A market value of $72,000 for the stock units was paid to a retiring director in June 2018, effectively closing out the plan. Compensation Policy for Non-Employee Directors During the three and six months ended June 30, 2018, the Company recorded $54,000 and $156,000 in compensation expense, respectively, related to deferred share units issued and outstanding under the Company’s Compensation Policy for Non-Employee Directors compared to $47,000 and $85,000 in compensation expense recorded during the three and six months ended June 30, 2017, respectively . Pursuant to the Compensation Policy for Non-Employee Directors, in June 2018, February 2018 and January 2017, the Company issued retiring directors 95,497, 77,012 and 53,248 shares of common stock of the Company to settle outstanding deferred share units. Pursuant to the Compensation Policy for Non-Employee Directors, the redemption amount of deferred share units issued will be paid in shares of common stock of the Company on the date a director ceases to be a member of the Board. Annual retainers vest quarterly over approximately one year from the date of grant, contingent upon the individual remaining a director of ImmunoGen as of each vesting date. The number of deferred share units awarded is fixed per the plan on the date of the award. All unvested deferred stock awards will automatically vest immediately prior to the occurrence of a change of control. In addition to the deferred share units, the Non-Employee Directors are also entitled to receive a fixed number of stock options on the date of the annual meeting of shareholders. These options vest quarterly over approximately one year from the date of grant. Any new directors will receive a pro-rated award, depending on their date of election to the Board. The directors received a total of 40,000 options in December 2016, 80,000 options in June 2017, and 128,000 options in June 2018, and the related compensation expense for the six months ended June 30, 2018 and 2017 is included in the amounts discussed in the “Stock-Based Compensation” section of footnote B above.

Restructuring Charges

Restructuring Charges	6 Months Ended
	Jun. 30, 2018
Restructuring Charges.
Restructuring Charges	H. Restructuring Charges In February 2018, following an in-depth review of manufacturing and quality operations, the Board of Directors authorized management to implement a new operating model that will rely on external manufacturing and quality testing for drug substance and drug product for the Company’s development programs. The implementation of this new operating model will lead to the ramp-down of manufacturing and quality activities at the 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 the separation of approximately 30 employees, with a net reduction of 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 recorded a one-time charge of $1.2 million for severance in the first quarter related to a pre-existing plan. Additional expense will be recorded for retention benefits over the remaining service period of the related employees, which totaled $1.1 million in the six months ended June 30, 2018. Additionally, certain options held by the employees to be separated were modified to extend the exercise period, resulting in a stock compensation charge of $157,000 in the first quarter. Cash payments related to severance will be substantially paid out by the end of the second quarter of 2019. The retention benefits are expected to be paid out in the fourth quarter of 2018. As a result of a workforce reduction in September 2016, the Company began seeking to sub-lease 10,281 square feet of unoccupied office space in Waltham that was leased in 2016. During the six months ended June 30, 2017, the Company recorded $386,000 of impairment charges related to this lease. No such charges have been recorded in the current period.

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jun. 30, 2018
Commitments and Contingencies
Commitments and Contingencies	I. 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 through December 2015, the Company received construction allowances totaling approximately $2 million to build out office and lab space to the Company’s specifications. The Company executed a fourth amendment to this lease in April 2018, leasing an additional 10,000 square feet of office space in order to accommodate employees being retained from the future Norwood closure previously discussed. The Company is entitled to a construction allowance of $400,000 to build normal tenant improvements in this space to its specifications. The Company expects to commence recording rent expense for this space during the quarter ending September 30, 2018, when it takes control of the space. 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 February 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 amended its lease for manufacturing and office space at 333 Providence Highway, Norwood, MA in June 2018 to extend the lease through March 31, 2019, at which time it plans to have vacated the premises pursuant to the restructuring plan described previously. Effective April 2013, the Company entered into a lease agreement with River Ridge Limited Partnership for the rental of 7,507 square feet of additional office space at 100 River Ridge Drive, Norwood, MA. The initial term of the lease is for five years and two months commencing in 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 entered into a sublease in December 2014 for this space, effective from January 2015 through July 2018. Due to past payment delinquency, the short span of time remaining on the lease and the estimated amount of time it would take to find another sub-tenant, the remainder of this lease was accrued as a charge in the amount of $169,000 in the first quarter of 2017. The minimum rental commitments for the Company’s facilities, including real estate taxes and other expenses, for the next five fiscal years and thereafter under the non-cancelable operating lease agreements discussed above are as follows (in thousands): 2018 (six months remaining) $ 4,702 2019 7,995 2020 7,877 2021 7,716 2022 7,782 Thereafter 25,778 Total minimum lease payments $ 61,850 There are no obligations under capital leases as of June 30, 2018, as all of the capital leases were single payment obligations which have all been made. Collaborations The Company is contractually obligated to make potential future success-based development, regulatory or sales 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 June 30, 2018, the maximum amount that may be payable in the future under the Company’s current collaborative agreements is $80.0 million. Manufacturing Commitments As of June 30, 2018, 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 $2.8 million, of which approximately $1.9 million and $0.9 million will be paid in 2018 and 2019, respectively. In February 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, of which only €14.7 million euros is noncancelable as of June 30, 2018.

Summary of Significant Accoun16

Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2018
Summary of Significant Accounting Policies
Basis of Presentation	Basis of Presentation 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. The consolidated financial statements include all of the adjustments, consisting only of normal recurring adjustments, which management considers necessary for a fair presentation of the Company’s financial position in accordance with accounting principles generally accepted in the U.S. for interim financial information. The December 31, 2017 condensed consolidated balance sheet data presented for comparative purposes was derived from the Company’s audited financial statements but certain information and footnote disclosures normally included in the Company’s annual financial statements have been condensed or omitted. The preparation of interim financial statements requires the use of management’s estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the interim financial statements and the reported amounts of revenues and expenditures during the reported periods. The results of the interim periods are not necessarily indicative of the results for the entire year. Accordingly, the interim financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.
Subsequent Events	Subsequent Events The Company has evaluated all events or transactions that occurred after June 30, 2018 up through the date the Company issued these financial statements. The Company did not have any material recognizable or unrecognizable subsequent events during this period.
Adoption of ASC Topic 606, Revenue from Contracts with Customers	Adoption of ASC Topic 606, Revenue from Contracts with Customers The Company adopted Accounting Standards Codification Topic or ASC, 606 – Revenue from Contracts with Customers , (ASC 606) on January 1, 2018, using the modified retrospective method for all contracts not completed as of the date of adoption. The reported results for 2018 reflect the application of ASC 606 guidance, while the reported results for 2017 were prepared under the guidance of ASC 605, Revenue Recognition (ASC 605), which is also referred to herein as "legacy GAAP" or the "previous guidance." For discussion on the Company’s revenue recognition policy under ASC 605, please refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. Financial Statement Impact of Adopting ASC 606 The cumulative effect of applying the new guidance to all contracts with customers that were not completed as of December 31, 2017, was recorded as an adjustment to accumulated deficit as of the adoption date. As a result of applying the modified retrospective method to adopt the new revenue guidance, the following adjustments were made to accounts on the condensed consolidated balance sheet as of January 1, 2018: IMMUNOGEN, INC. ADJUSTED CONSOLIDATED BALANCE SHEET (UNAUDITED) In thousands, except per share amounts Adjustments Balance at December 31, Due to January 1, 2017 ASC 606 2018 ASSETS Cash and cash equivalents $ 267,107 $ — $ 267,107 Accounts receivable 2,649 — 2,649 Unbilled revenue 2,580 — 2,580 Non-cash royalty receivable — 8,900 8,900 Inventory 1,038 — 1,038 Prepaid and other current assets 2,967 — 2,967 Total current assets 276,341 8,900 285,241 Property and equipment, net of accumulated depreciation 14,538 — 14,538 Other assets 3,797 — 3,797 Total assets $ 294,676 $ 8,900 $ 303,576 LIABILITIES AND SHAREHOLDERS’ DEFICIT Accounts payable $ 8,562 $ — $ 8,562 Accrued compensation 11,473 — 11,473 Other accrued liabilities 15,767 — 15,767 Current portion of deferred lease incentive 784 — 784 Current portion of liability related to the sale of future royalties, net 17,779 — 17,779 Current portion of deferred revenue 1,405 41 1,446 Total current liabilities 55,770 41 55,811 Deferred lease incentive, net of current portion 5,129 — 5,129 Deferred revenue, net of current portion 93,752 (5,231) 88,521 Convertible 4.5% senior notes, net 2,050 — 2,050 Liability related to the sale of future royalties, net 151,634 — 151,634 Other long-term liabilities 4,236 — 4,236 Total liabilities 312,571 (5,190) 307,381 Shareholders’ deficit: Preferred stock — — — Common stock 1,325 — 1,325 Additional paid-in capital 1,009,362 — 1,009,362 Accumulated deficit (1,028,582) 14,090 (1,014,492) Total shareholders’ deficit (17,895) 14,090 (3,805) Total liabilities and shareholders’ deficit $ 294,676 $ 8,900 $ 303,576 Under the previous guidance, the Company deferred revenue pertaining to the transfer of certain exclusive commercialization and development licenses. Under ASC 606, the Company recognizes revenues from non-refundable, up-front fees allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license. Under the previous guidance, milestones that were considered substantive because the Company contributed significant effort to the achievement of such milestones were recognized as revenue upon achievement of the milestone. Under ASC 606, if the achievement of a milestone is considered a direct result of the Company’s efforts to satisfy a performance obligation or transfer a distinct good or service, the associated milestone value is allocated to that distinct good or service. If a milestone is not specifically related to the Company’s effort to satisfy a performance obligation or transfer a distinct good or service, the amount is allocated to all performance obligations using the relative standalone selling price method. Under ASC 606, the Company also evaluates the milestone to determine whether the milestone is probable of being achieved and estimates the amount to be included in the transaction price. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price to be allocated, otherwise, such amounts are constrained and excluded from the transaction price. The Company determined it was probable that a future $5 million milestone for Takeda enrolling a patient in a Phase I trial as of the date of adoption would occur and, accordingly, recorded a reduction to accumulated deficit of $4.6 million related to this previously delivered license. The $5 million contract asset recorded for the probable milestone was netted against contract liabilities related to the specific contract. Prior to the adoption of ASC 606, the Company recognized royalty revenue when it could reliably estimate such amounts and collectability was reasonably assured. As such, the Company generally recognized revenue for sales royalties 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. Under ASC 606, if the license is deemed to be the predominant item to which the royalties relate, the Company will recognize revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). As a result of recognizing royalties for sales in the fourth quarter of fiscal year 2017, the Company recognized a reduction to accumulated deficit of $8.9 million. The net impact of these changes resulted in a $14.1 million reduction to accumulated deficit, a $5.2 million reduction to deferred revenue and an $8.9 million increase in non-cash royalty receivable. The adoption of ASC 606 resulted in the acceleration of revenue through December 31, 2017, which in turn reduced the related net deferred tax asset by $3.9 million. As the Company fully reserves its net deferred tax assets, the impact was offset by the valuation allowance. Impact of ASC 606 Revenue Guidance on Financial Statement Line Items The following tables compare the reported condensed consolidated balance sheet and statement of operations, as of and for the three and six months ended June 30, 2018, to the pro-forma amounts had the previous guidance been in effect: IMMUNOGEN, INC. PRO FORMA CONSOLIDATED BALANCE SHEET (UNAUDITED) In thousands, except per share amounts As of June 30, 2018 Pro forma as if the previous accounting As reported was in effect ASSETS Cash and cash equivalents $ 345,058 $ 345,058 Accounts receivable 19 19 Unbilled revenue 522 522 Contract asset — — Non-cash royalty receivable 7,236 — Inventory 1,890 1,890 Prepaid and other current assets 9,893 9,893 Total current assets 364,618 357,382 Property and equipment, net of accumulated depreciation 12,029 12,029 Other assets 4,437 4,437 Total assets $ 381,084 $ 373,848 LIABILITIES AND SHAREHOLDERS’ DEFICIT Accounts payable $ 12,881 $ 12,881 Accrued compensation 8,524 8,524 Other accrued liabilities 17,865 17,865 Current portion of deferred lease incentive 793 793 Current portion of liability related to the sale of future royalties, net 22,265 22,265 Current portion of deferred revenue 1,020 755 Total current liabilities 63,348 63,083 Deferred lease incentive, net of current portion 4,806 4,806 Deferred revenue, net of current portion 80,751 83,908 Convertible 4.5% senior notes, net 2,057 2,057 Liability related to the sale of future royalties, net 136,701 136,701 Other long-term liabilities 4,231 4,231 Total liabilities 291,894 294,786 Shareholders’ deficit: Preferred stock — — Common stock 1,490 1,490 Additional paid-in capital 1,182,429 1,182,429 Accumulated deficit (1,094,729) (1,104,857) Total shareholders’ deficit 89,190 79,062 Total liabilities and shareholders’ deficit $ 381,084 $ 373,848 As a result of adoption of ASC 606, a receivable is recorded for royalties earned during the current quarter rather than one quarter in arrears under the previous guidance. Deferred revenue increased under ASC 606 due to a greater amount of the transaction prices being allocated to the future technological improvement rights under ASC 606. IMMUNOGEN, INC. PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED) In thousands, except per share amounts Three months ended June 30, 2018 Six months ended June 30, 2018 Pro forma as if the Pro forma as if the previous accounting previous accounting As reported was in effect As reported was in effect Revenues: License and milestone fees $ 1,321 $ 5,330 $ 12,861 $ 15,159 Non-cash royalty revenue related to the sale of future royalties 7,242 7,222 14,432 16,096 Research and development support 388 388 771 771 Clinical materials revenue 336 336 1,038 1,038 Total revenues 9,287 13,276 29,102 33,064 Operating Expenses: Research and development 38,701 38,701 83,532 83,532 General and administrative 8,652 8,652 18,647 18,647 Restructuring charge 686 686 2,417 2,417 Total operating expenses 48,039 48,039 104,596 104,596 Loss from operations (38,752) (34,763) (75,494) (71,532) Investment income, net 814 814 1,476 1,476 Non-cash interest expense on liability related to the sale of future royalties and convertible senior notes (2,611) (2,611) (5,657) (5,657) Interest expense on convertible senior notes (23) (23) (47) (47) Other income (expense), net (1,052) (1,052) (515) (515) Net loss $ (41,624) $ (37,635) $ (80,237) $ (76,275) Basic and diluted net loss per common share $ $ $ $ Under the previous guidance, non-cash royalty revenue would have been similar to the amount recorded for the three months ended June 30, 2018, however, higher non-cash royalty revenue would have been recorded for the six months ended June 30, 2018 due to higher tiered royalties for Kadcyla ® in the fourth quarter of 2017 (because under the previous guidance, the Company recorded the royalties one quarter in arrears as previously described). During the three and six months ended June 30, 2018, under the previous guidance, a $5.0 million milestone would have been included as license and milestone fee revenue, however, due to its probability of occurring at the time of transition to ASC 606, it was recognized as part of the transition adjustment. Partially offsetting these changes in the three and six-month periods, less license and milestone fee revenue would have been recognized under the previous guidance related to a partner foregoing its remaining rights under a right-to-test agreement upon expiration in March 2018. A greater amount of the transaction price was allocated to the expired material rights under ASC 606 than under the previous guidance.. The adoption of ASC 606 had no aggregate impact on the Company’s cash flows from operations. The aforementioned impact resulted in offsetting shifts in cash flows through net losses and working capital accounts.
Revenue Recognition	Revenue Recognition The Company enters into licensing and development agreements with collaborators for the development of ADC therapeutics. The terms of these agreements contain multiple performance obligations 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. Revenue is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. In determining the appropriate amount of revenue to be recognized as it fulfills its obligations under the agreements, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when or as the Company satisfies each performance obligation. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration to which it is entitled in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when or as the performance obligation is satisfied. As part of the accounting for the arrangement, the Company must develop assumptions that require judgment to determine the stand-alone selling price for each performance obligation identified in the contract. The Company uses key assumptions to determine the stand-alone selling price, which is discussed in further detail below. At June 30, 2018, the Company had the following 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 and commercialize anticancer 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) 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) · 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 · Collaboration and license agreement to co-develop and co-commercialize a specified anticancer compound on established terms: MacroGenics 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 obligations 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 obligations 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 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. In the case of Sanofi, its licenses are fully-paid and no further milestones or royalties will be received. In the case of Debiopharm, no royalties will be received. 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. In determining the performance obligations, management evaluates whether the license is distinct, and has significant standalone functionality, 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 and whether technological improvements are required for the continued functionality of the license. If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues from non-refundable, up-front fees allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license. The Company estimates the stand-alone selling prices of the license and all other performance obligations 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. The Company recognizes revenue related to research services as the services are performed. 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 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 also recorded as a component of research and development support revenue. The Company may also produce research material for potential collaborators under material transfer agreements. The Company records amounts received for research materials produced or services performed as a component of research and development support revenue. 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 control has transferred to the collaborator. 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 affected by the number of batches produced during the period. The volume of preclinical and clinical materials the Company produces is directly related to the scale and scope of preclinical activities and 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, which impacts the margins recognized on such product sales. The Company recognizes revenue related to the rights to future technological improvements over the estimated term of the applicable license. 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 arrangement that includes developmental and regulatory milestone payments, the Company evaluates whether the achievement of each milestone specifically relates to the Company’s efforts to satisfy a performance obligation or transfer a distinct good or service within a performance obligation. If the achievement of a milestone is considered a direct result of the Company’s efforts to satisfy a performance obligation or transfer a distinct good or service and the receipt of the payment is based upon the achievement of the milestone, the associated milestone value is allocated to that distinct good or service. If the milestone payment is not specifically related to the Company’s effort to satisfy a performance obligation or transfer a distinct good or service, the amount is allocated to all performance obligations using the relative standalone selling price method. In addition, the Company evaluates the milestone to determine whether the milestone is considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price to be allocated; otherwise, such amounts are considered constrained and excluded from the transaction price. At the end of each subsequent reporting period, the Company re-evaluates the probability of achievement of such development or regulatory milestones and any related constraint, and if necessary, adjusts its estimate of the transaction price. Any such adjustments to the transaction price are allocated to the performance obligations on the same basis as at contract inception. Amounts allocated to a satisfied performance obligation shall be recognized as revenue, or as a reduction of revenue, in the period in which the transaction price changes. For development and commercialization license agreements that include sales-based royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company will recognize revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied) in accordance with the royalty recognition constraint. Under the Company’s development and commercialization license agreements, except for the Sanofi and Debiopharm licenses, the Company receives royalty payments based upon its licensees’ net sales of covered products. Generally, under the development and commercialization agreements, the Company receives royalty reports and payments from its licensees approximately one quarter in arrears. The Company estimates the amount of royalty revenue to be recognized based on historical and forecasted sales and/or sales information from its licensees if available. Collaboration and Option Agreements/Right-to-Test Agreements The Company’s right-to-test agreements provide collaborators the right to test the Company’s ADC technology for a defined period of time through a research, or right‑to‑test, license. Under both right-to-test agreements and collaboration and option agreements, collaborators may (a) take options, for a defined period of time, to specified targets and (b) 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 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, after providing 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 and right-to-test agreements is dependent on the nature of the options granted to the collaborative partner. Options are considered distinct performance obligations if they provide a collaborator with a material right. Factors that are considered in evaluating whether options convey a material right 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 fair value of the licenses, and the additional financial commitments or economic penalties imposed on the collaborator as a result of exercising the options. As of June 30, 2018, all right-to-test agreements have expired. If the Company concludes that an option provides the customer a material right, and therefore is a separate performance obligation, the Company 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 and c) probability of exercise. 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 functionality and is distinct 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, the Company 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, Collaborative Arrangements , 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. Transaction Price Allocated to Future Performance Obligations Remaining performance obligations represent the transaction price of contracts for which work has not been performed (or has been partially performed) and includes unexercised contract options that are considered material rights. As of June 30, 2018, the aggregate amount of the transaction price allocated to remaining performance obligations comprising deferred revenue was $81.8 million. The Company expects to recognize revenue on approximately 1%, 2% and 97% of the remaining performance obligations over the next 12 months, 13 to 60 months, and 61 to 120 months, respectively, however it does not control when or if any collaborator will exercise its options for, or terminate existing development and commercialization licenses. Contract Balances from Contracts with Customers The following table presents changes in the Company’s contract assets and contract liabilities during the six months ended June 30, 2018 (in thousands): Balance at Balance at January 1, 2018 End (ASC 606 adoption) Additions Deductions of Period Six months ended June 30, 2018 Contract asset $ — $ 4,041 $ (4,041) $ — Contract liabilities: Deferred revenue $ 89,967 $ — $ (8,196) $ 81,771 During the three and six months ended June 30, 2018, the Company recognized the following revenues as a result of changes in contract asset and contract liability balances in the respective periods (in thousands): Three Months Ended Six Months Ended June 30, 2018 June 30, 2018 Revenue recognized in the period from: Amounts included in contract liabilities at the beginning of the period $ 1,321 $ 13,196 Performance obligations satisfied in previous periods $ - $ - As a result of adoption of ASC 606, a contract asset of $5 million was recorded for a probable milestone which was netted against an approximate $1 million contract liability related to the specific contract as of March 31, 2018. During the six months ended June 30, 2018, as a result of Takeda not executing a second license it had available, or extending or expanding its right-to-test agreement, the Company recognized $10.9 million of revenue previously deferred, with a net reduction in deferred revenue of $5.9 million due to contract asset and contract liability netting. In addition, $750,000 of the deferred revenue balance at December 31, 2017 was recognized as revenue during the quarter upon completion of the Debiopharm and another collaborator’s performance obligations, $1.2 million of amortization of deferred revenue was recorded related to numerous collaborators’ rights to technological improvements and $335,000 of deferred revenue was recognized upon shipment of clinical materials to a partner and is included in clinical material revenue. The timing of revenue recognition, billings and cash collections results in billed receivables, contract assets and contract liabilities on the consolidated balance sheets. When consideration is received, or such consideration is unconditionally due, from a customer prior to transferring goods or services to the customer under the terms of a contract, a contract liability is recorded. Contract liabilities are recognized as revenue after control of the products or services is transferred to the customer and all revenue recognition criteria have been met.
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 June 30, 2018 and December 31, 2017. 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 June 30, 2018 and December 31, 2017, the Company held $345.1 million and $267.1 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 and Financing Activities	Non-cash Investing and Financing Activities The Company had $795,000 and $482,000 of accrued capital expenditures as of June 30, 2018 and December 31, 2017, respectively, 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 Fair value is defined under ASC Topic 820, “Fair Value Measurements and Disclosures,” as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a 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 June 30, 2018, the Company held certain assets that are required to be measured at fair value on a recurring basis. The following table represents the fair value hierarchy for the Company’s financial assets measured at fair value on a recurring basis as of June 30, 2018 (in thousands): Fair Value Measurements at June 30, 2018 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 $ 323,388 $ 323,388 $ — $ — 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 $ — $ — The fair value of the Company’s cash equivalents is based 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 (the “Convertible Notes”) was $2.1 million and $5.7 million, respectively, as of June 30, 2018 compared to $2.1 million and $3.8 million as of December 31, 2017. The fair value of the Convertible Notes is influenced by interest rates, the Company’s stock price and stock price volatility and for December 31, 2017 was 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. There have been no trades since January 2018, so the market value as of June 30, 2018 has been estimated based on the Company’s stock price, which is a Level 3 input.
Unbilled Revenue	Unbilled Revenue The majority of the Company’s unbilled revenue at June 30, 2018 represents research funding earned prior to that date based on actual resources utilized under the Company’s agreements with various collaborators.
Inventory	Inventory Inventory costs relate to clinical trial materials being manufactured for sale to the Company’s collaborators. Inventory is stated at the lower of cost or net realizable value as determined on a first-in, first-out (FIFO) basis. Inventory at June 30, 2018 and December 31, 2017 is summarized below (in thousands): June 30, December 31, 2018 2017 Raw materials $ — $ 40 Work in process 1,890 998 Total $ 1,890 $ 1,038 Raw materials inventory consists entirely of proprietary cell‑killing agents the Company developed as part of its ADC technology. The Company considers more than a twelve month supply of raw materials that is not supported by firm, fixed orders and/or projections from its collaborators to be excess and establishes a reserve to reduce to zero the value of any such excess raw material inventory with a corresponding charge to research and development expense. In accordance with this policy, the Company recorded $403,000 of expense related to excess inventory in the six months ended June 30, 2017. There were no similar charges in the six months ended June 30, 2018. Work in process inventory consists of drug substance manufactured for sale to the Company’s collaborators to be used in preclinical and clinical studies. All drug substance 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 drug substance that did not meet specification and the status of current drug substance on hand or 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 June 30, 2018 or December 31, 2017. Arrangement consideration allocated to the manufacture of preclinical and clinical materials in arrangements with multiple performance obligations 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, and therefore, costs are capitalized into inventory at the supply prices which represents net realizable value. During the six months ended June 30, 2018 and 2017, 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 $471,000 and $929,000, respectively.
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 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): Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Options outstanding to purchase common stock and unvested restricted stock at end of period 17,776 15,588 17,776 15,588 Common stock equivalents under treasury stock method for options and unvested restricted stock 3,451 1,224 3,484 463 Shares issuable upon conversion of convertible notes at end of period 501 23,878 501 23,878 Common stock equivalents under if-converted method for convertible notes 501 23,878 23,878 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 June 30, 2018, the Company is authorized to grant future awards under one employee share ‑ based compensation plan, which is the ImmunoGen, Inc. 2018 Employee, Director and Consultant Equity Incentive Plan, or the 2018 Plan. At the annual meeting of shareholders on June 20, 2018, the 2018 Plan was approved and provides for the issuance of stock grants, the grant of options and the grant of stock ‑b ased Awards for up to 7,500,000 shares of the Company’s common stock, as well as up to 19,500,000 shares of common stock which represent awards granted under the two previous stock option plans, the ImmunoGen, Inc. 2006 or 2016 Employee, Director and Consultant Equity Incentive Plans, that forfeit, expire, or cancel without delivery of shares of common stock or which result in the forfeiture of shares of common stock back to the Company on or subsequent to June 20, 2018. Option awards are granted with an exercise price equal to the market price of the Company’s stock at the date of grant. Options vest at various periods of up to four years and may be exercised within ten years of the date of grant. The stock-based awards are accounted for under ASC Topic 718, “Compensation—Stock Compensation.” Pursuant to Topic 718, the estimated grant date fair value of awards is charged to the statement of operations and comprehensive loss over the requisite service period, which is the vesting period. Such amounts have been reduced by an estimate of forfeitures of all unvested awards. The fair value of each stock option is estimated on the date of grant using the Black-Scholes option-pricing model with the 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 among its option recipients. The risk-free rate of the stock options is based on the U.S. Treasury rate in effect at the time of grant for the expected term of the stock options. Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Dividend None None None None Volatility 71.60 % 68.17 % 70.90 % 67.10 % Risk-free interest rate 2.84 % 1.90 % 2.71 % 2.01 % Expected life (years) 6.0 6.0 6.0 6.0 Using the Black-Scholes option-pricing model, the weighted average grant date fair values of options granted during the three months ended June 30, 2018 and 2017 were $6.82 and $2.86 per share, respectively, and $6.80 and $1.75 per share for options granted during the six months ended June 30, 2018 and 2017, respectively. A summary of option activity under the Company’s equity plans as of June 30, 2018, and changes during the six month period then ended is presented below (in thousands, except weighted-average data): Weighted- Number Average of Stock Exercise Options Price Outstanding at December 31, 2017 $ 9.92 Granted 4,925 10.54 Exercised 4.97 Forfeited/Canceled 12.65 Outstanding at June 30, 2018 15,960 $ 10.22 During the six months ended June 30, 2018, holders of options issued under the Company’s equity plans exercised their rights to acquire an aggregate of approximately 568,000 shares of common stock at prices ranging from $2.03 to $12.21 per share. The total proceeds to the Company from these option exercises were $2.8 million. 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. A summary of restricted stock activity under the Company’s equity plans (inclusive of the performance awards noted above) as of June 30, 2018 and changes during the six month period ended June 30, 2018 is presented below (in thousands): Number of Weighted- Restricted Average Grant Stock Shares Date Fair Value Unvested at December 31, 2017 $ Awarded — — Vested (503) Forfeited — — Unvested at June 30, 2018 1,816 $ Stock compensation expense related to stock options and restricted stock awards granted under the stock plans was $4.0 million and $7.7 million during the three and six months ended June 30, 2018, respectively, compared to stock compensation expense of $3.1 million and $5.7 million for the three and six months ended June 30, 2017, respectively. As of June 30, 2018, the estimated fair value of unvested employee awards was $35.3 million, net of estimated forfeitures. The weighted-average remaining vesting period for these awards is approximately two and a half years. Also included in stock compensation expense for the six months ended June 30, 2018 and 2017 is expense recorded for directors’ deferred share units, the details of which are discussed in Note G.
Segment Information	Segment Information During the six months ended June 30, 2018, the Company continued to operate in one operating segment which is the business of discovery of monoclonal antibody-based anticancer therapeutics. The percentages of revenues recognized from significant customers of the Company in the three and six months ended June 30, 2018 and 2017 are included in the following table: Three Months Ended Six Months Ended June 30, June 30, Collaborative Partner: 2018 2017 2018 2017 CytomX 6 % 3 % 4 % 22 % Novartis 11 % — % 4 % — % Roche 78 % 17 % 50 % 21 % Sanofi — % 77 % — % 53 % Takeda 1 % 2 % 39 % 2 % There were no other customers of the Company with significant revenues in the three or six months ended June 30, 2018 and 2017.
Other Recently Adopted Accounting Pronouncements	Other Recently Adopted Accounting Pronouncements In January 2016, the FASB issued ASU 2016-1, Recognition and Measurement of Financial Assets and Financial Liabilities (Topic 825). The amendments in this ASU 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 did not have a material impact on the Company’s consolidated financial statements. 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 ASU 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 adoption of this guidance did not have a material impact on the Company’s consolidated financial statements. Recently Issued Accounting Pronouncements, not yet Adopted 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, which substantially consists of the Company’s facility leases summarized in Note I, Commitments and Contingencies , to the consolidated financial statements. In June 2018, the FASB issued ASU No. 2018-07, Compensation — Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting , which expands the scope of Topic 718 to include all share-based payment transactions for acquiring goods and services from nonemployees. ASU 2018-07 specifies that Topic 718 applies to all share-based payment transactions in which the grantor acquires goods and services to be used or consumed in its own operations by issuing share-based payment awards. ASU 2018-07 also clarifies that Topic 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under ASC 606. ASU 2018-07 is effective beginning December 1, 2019, with early adoption permitted. This ASU is not expected to have a material effect on the Company’s consolidated financial statements. No other recently issued or effective ASUs had, or are expected to have, a material effect on the Company's results of operations, financial condition, or liquidity.

Summary of Significant Accoun17

Summary of Significant Accounting Policies (Tables)	6 Months Ended
	Jun. 30, 2018
Accounting Policy Schedules
Contract assets and contract liabilities	Balance at Balance at January 1, 2018 End (ASC 606 adoption) Additions Deductions of Period Six months ended June 30, 2018 Contract asset $ — $ 4,041 $ (4,041) $ — Contract liabilities: Deferred revenue $ 89,967 $ — $ (8,196) $ 81,771 Three Months Ended Six Months Ended June 30, 2018 June 30, 2018 Revenue recognized in the period from: Amounts included in contract liabilities at the beginning of the period $ 1,321 $ 13,196 Performance obligations satisfied in previous periods $ - $ -
Schedule of assets that are required to be measured at fair value on a recurring basis	As of June 30, 2018, the Company held certain assets that are required to be measured at fair value on a recurring basis. The following table represents the fair value hierarchy for the Company’s financial assets measured at fair value on a recurring basis as of June 30, 2018 (in thousands): Fair Value Measurements at June 30, 2018 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 $ 323,388 $ 323,388 $ — $ — 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 $ — $ —
Schedule of inventory	Inventory at June 30, 2018 and December 31, 2017 is summarized below (in thousands): June 30, December 31, 2018 2017 Raw materials $ — $ 40 Work in process 1,890 998 Total $ 1,890 $ 1,038
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): Three Months Ended Six Months Ended June 30, June 30, 2018 2017 2018 2017 Options outstanding to purchase common stock and unvested restricted stock at end of period 17,776 15,588 17,776 15,588 Common stock equivalents under treasury stock method for options and unvested restricted stock 3,451 1,224 3,484 463 Shares issuable upon conversion of convertible notes at end of period 501 23,878 501 23,878 Common stock equivalents under if-converted method for convertible notes 501 23,878 23,878
Schedule of risk-free rate of the stock options based on US Treasury rate	Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Dividend None None None None Volatility 71.60 % 68.17 % 70.90 % 67.10 % Risk-free interest rate 2.84 % 1.90 % 2.71 % 2.01 % Expected life (years) 6.0 6.0 6.0 6.0
Summary of stock option activity	A summary of option activity under the Company’s equity plans as of June 30, 2018, and changes during the six month period then ended is presented below (in thousands, except weighted-average data): Weighted- Number Average of Stock Exercise Options Price Outstanding at December 31, 2017 $ 9.92 Granted 4,925 10.54 Exercised 4.97 Forfeited/Canceled 12.65 Outstanding at June 30, 2018 15,960 $ 10.22
Summary of restricted stock activity	A summary of restricted stock activity under the Company’s equity plans (inclusive of the performance awards noted above) as of June 30, 2018 and changes during the six month period ended June 30, 2018 is presented below (in thousands): Number of Weighted- Restricted Average Grant Stock Shares Date Fair Value Unvested at December 31, 2017 $ Awarded — — Vested (503) Forfeited — — Unvested at June 30, 2018 1,816 $
Schedule of percentage of total revenues recognized from each significant customer	Three Months Ended Six Months Ended June 30, June 30, Collaborative Partner: 2018 2017 2018 2017 CytomX 6 % 3 % 4 % 22 % Novartis 11 % — % 4 % — % Roche 78 % 17 % 50 % 21 % Sanofi — % 77 % — % 53 % Takeda 1 % 2 % 39 % 2 %
ASU 2014-09
Accounting Policy Schedules
Schedule of financial statement impact of adopting ASC 606	Adjustments Balance at December 31, Due to January 1, 2017 ASC 606 2018 ASSETS Cash and cash equivalents $ 267,107 $ — $ 267,107 Accounts receivable 2,649 — 2,649 Unbilled revenue 2,580 — 2,580 Non-cash royalty receivable — 8,900 8,900 Inventory 1,038 — 1,038 Prepaid and other current assets 2,967 — 2,967 Total current assets 276,341 8,900 285,241 Property and equipment, net of accumulated depreciation 14,538 — 14,538 Other assets 3,797 — 3,797 Total assets $ 294,676 $ 8,900 $ 303,576 LIABILITIES AND SHAREHOLDERS’ DEFICIT Accounts payable $ 8,562 $ — $ 8,562 Accrued compensation 11,473 — 11,473 Other accrued liabilities 15,767 — 15,767 Current portion of deferred lease incentive 784 — 784 Current portion of liability related to the sale of future royalties, net 17,779 — 17,779 Current portion of deferred revenue 1,405 41 1,446 Total current liabilities 55,770 41 55,811 Deferred lease incentive, net of current portion 5,129 — 5,129 Deferred revenue, net of current portion 93,752 (5,231) 88,521 Convertible 4.5% senior notes, net 2,050 — 2,050 Liability related to the sale of future royalties, net 151,634 — 151,634 Other long-term liabilities 4,236 — 4,236 Total liabilities 312,571 (5,190) 307,381 Shareholders’ deficit: Preferred stock — — — Common stock 1,325 — 1,325 Additional paid-in capital 1,009,362 — 1,009,362 Accumulated deficit (1,028,582) 14,090 (1,014,492) Total shareholders’ deficit (17,895) 14,090 (3,805) Total liabilities and shareholders’ deficit $ 294,676 $ 8,900 $ 303,576 As of June 30, 2018 Pro forma as if the previous accounting As reported was in effect ASSETS Cash and cash equivalents $ 345,058 $ 345,058 Accounts receivable 19 19 Unbilled revenue 522 522 Contract asset — — Non-cash royalty receivable 7,236 — Inventory 1,890 1,890 Prepaid and other current assets 9,893 9,893 Total current assets 364,618 357,382 Property and equipment, net of accumulated depreciation 12,029 12,029 Other assets 4,437 4,437 Total assets $ 381,084 $ 373,848 LIABILITIES AND SHAREHOLDERS’ DEFICIT Accounts payable $ 12,881 $ 12,881 Accrued compensation 8,524 8,524 Other accrued liabilities 17,865 17,865 Current portion of deferred lease incentive 793 793 Current portion of liability related to the sale of future royalties, net 22,265 22,265 Current portion of deferred revenue 1,020 755 Total current liabilities 63,348 63,083 Deferred lease incentive, net of current portion 4,806 4,806 Deferred revenue, net of current portion 80,751 83,908 Convertible 4.5% senior notes, net 2,057 2,057 Liability related to the sale of future royalties, net 136,701 136,701 Other long-term liabilities 4,231 4,231 Total liabilities 291,894 294,786 Shareholders’ deficit: Preferred stock — — Common stock 1,490 1,490 Additional paid-in capital 1,182,429 1,182,429 Accumulated deficit (1,094,729) (1,104,857) Total shareholders’ deficit 89,190 79,062 Total liabilities and shareholders’ deficit $ 381,084 $ 373,848 Three months ended June 30, 2018 Six months ended June 30, 2018 Pro forma as if the Pro forma as if the previous accounting previous accounting As reported was in effect As reported was in effect Revenues: License and milestone fees $ 1,321 $ 5,330 $ 12,861 $ 15,159 Non-cash royalty revenue related to the sale of future royalties 7,242 7,222 14,432 16,096 Research and development support 388 388 771 771 Clinical materials revenue 336 336 1,038 1,038 Total revenues 9,287 13,276 29,102 33,064 Operating Expenses: Research and development 38,701 38,701 83,532 83,532 General and administrative 8,652 8,652 18,647 18,647 Restructuring charge 686 686 2,417 2,417 Total operating expenses 48,039 48,039 104,596 104,596 Loss from operations (38,752) (34,763) (75,494) (71,532) Investment income, net 814 814 1,476 1,476 Non-cash interest expense on liability related to the sale of future royalties and convertible senior notes (2,611) (2,611) (5,657) (5,657) Interest expense on convertible senior notes (23) (23) (47) (47) Other income (expense), net (1,052) (1,052) (515) (515) Net loss $ (41,624) $ (37,635) $ (80,237) $ (76,275) Basic and diluted net loss per common share $ $ $ $

Liability Related to Sale of 18

Liability Related to Sale of Future Royalties (Tables)	6 Months Ended
	Jun. 30, 2018
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 six-month period ended June 30, 2018 (in thousands): Period from December 31, 2017 to June 30, 2018 Liability related to sale of future royalties, net — beginning balance $ 169,413 Kadcyla royalty payments received and paid (16,097) Non-cash interest expense recognized 5,650 Liability related to sale of future royalties, net — ending balance $ 158,966

Commitments and Contingencies (

Commitments and Contingencies (Tables)	6 Months Ended
	Jun. 30, 2018
Commitments and Contingencies
Schedule of minimum rental commitments	The minimum rental commitments for the Company’s facilities, including real estate taxes and other expenses, for the next five fiscal years and thereafter under the non-cancelable operating lease agreements discussed above are as follows (in thousands): 2018 (six months remaining) $ 4,702 2019 7,995 2020 7,877 2021 7,716 2022 7,782 Thereafter 25,778 Total minimum lease payments $ 61,850

Nature of Business and Plan o20

Nature of Business and Plan of Operations (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017	Dec. 31, 2016
Nature of Business and Plan of Operations
Net loss	$ (80,237)	$ (26,212)
Accumulated deficit	(1,094,729)		$ (1,028,582)
Product revenue	0
Cash and cash equivalents	$ 345,058	$ 150,337	$ 267,107	$ 159,964

Summary of Significant Accoun21

Summary of Significant Accounting Policies - Impact of Adopting ASC 606, Adjusted Balance Sheet (Details) - USD ($) $ in Thousands	Jan. 02, 2018	May 31, 2018	Jun. 30, 2018	Mar. 31, 2018	Jun. 30, 2018	Dec. 31, 2017	Dec. 31, 2010	Jun. 30, 2017	Dec. 31, 2016	Dec. 31, 2015
ASSETS
Cash and cash equivalents			$ 345,058		$ 345,058	$ 267,107		$ 150,337	$ 159,964
Accounts receivable			19		19	2,649
Unbilled revenue			522		522	2,580
Non-cash royalty receivable			7,236		7,236
Inventory			1,890		1,890	1,038
Prepaid and other current assets			9,893		9,893	2,967
Total current assets			364,618		364,618	276,341
Property and equipment, net of accumulated depreciation			12,029		12,029	14,538
Other assets			4,437		4,437	3,797
Total assets			381,084		381,084	294,676
LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)
Accounts payable			12,881		12,881	8,562
Accrued compensation			8,524		8,524	11,473
Other accrued liabilities			17,865		17,865	15,767
Current portion of deferred lease incentive			793		793	784
Current portion of liability related to the sale of future royalties, net			22,265		22,265	17,779
Current portion of deferred revenue			1,020		1,020	1,405
Total current liabilities			63,348		63,348	55,770
Deferred lease incentive, net of current portion			4,806		4,806	5,129				$ 2,000
Deferred revenue, net of current portion			80,751		80,751	93,752
Convertible 4.5% senior notes, net of deferred financing costs of $43 and $50, respectively			2,057		2,057	2,050
Liability related to the sale of future royalties, net			136,701		136,701	151,634
Other long-term liabilities			4,231		4,231	4,236
Total liabilities			291,894		291,894	312,571
Shareholders' deficit:
Preferred stock
Common stock			1,490		1,490	1,325
Additional paid-in capital			1,182,429		1,182,429	1,009,362
Accumulated deficit			(1,094,729)		(1,094,729)	(1,028,582)
Total shareholders’ equity (deficit)			89,190		89,190	(17,895)
Total liabilities and shareholders’ equity (deficit)			381,084		381,084	294,676
Reduction to accumulated deficit related to previously delivered license	$ 4,600
Deferred tax assets:
Milestone recognized as contract asset					4,041
Novartis
Deferred tax assets:
Potential milestone payment							$ 199,500
Takeda
LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)
Deferred revenue, net of current portion			10,900		10,900
Pro forma as if previous accounting was in effect | ASU 2014-09
ASSETS
Cash and cash equivalents	267,107		345,058		345,058
Accounts receivable	2,649		19		19
Unbilled revenue	2,580		522		522
Non-cash royalty receivable	8,900
Inventory	1,038		1,890		1,890
Prepaid and other current assets	2,967		9,893		9,893
Total current assets	285,241		357,382		357,382
Property and equipment, net of accumulated depreciation	14,538		12,029		12,029
Other assets	3,797		4,437		4,437
Total assets	303,576		373,848		373,848
LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)
Accounts payable	8,562		12,881		12,881
Accrued compensation	11,473		8,524		8,524
Other accrued liabilities	15,767		17,865		17,865
Current portion of deferred lease incentive	784		793		793
Current portion of liability related to the sale of future royalties, net	17,779		22,265		22,265
Current portion of deferred revenue	1,446		755		755
Total current liabilities	55,811		63,083		63,083
Deferred lease incentive, net of current portion	5,129		4,806		4,806
Deferred revenue, net of current portion	88,521		83,908		83,908
Convertible 4.5% senior notes, net of deferred financing costs of $43 and $50, respectively	2,050		2,057		2,057
Liability related to the sale of future royalties, net	151,634		136,701		136,701
Other long-term liabilities	4,236		4,231		4,231
Total liabilities	307,381		294,786		294,786
Shareholders' deficit:
Common stock	1,325		1,490		1,490
Additional paid-in capital	1,009,362		1,182,429		1,182,429
Accumulated deficit	(1,014,492)		(1,104,857)		(1,104,857)
Total shareholders’ equity (deficit)	(3,805)		79,062		79,062
Total liabilities and shareholders’ equity (deficit)	$ 303,576		373,848		373,848
Adjustments due to new guidance | ASU 2014-09
ASSETS
Non-cash royalty receivable						8,900
Total current assets						8,900
Total assets						8,900
LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)
Current portion of deferred revenue						41
Total current liabilities						41
Deferred revenue, net of current portion						(5,231)
Total liabilities						(5,190)
Shareholders' deficit:
Accumulated deficit						14,090
Total shareholders’ equity (deficit)						14,090
Total liabilities and shareholders’ equity (deficit)						8,900
Deferred tax assets:
Increase (decrease) in deferred tax assets						3,900
Milestone recognized as contract asset				$ 5,000
Potential milestone payment			$ 5,000		$ 5,000
Phase 1 clinical trial | Takeda
Deferred tax assets:
Milestone recognized as contract asset		$ 5,000
Phase 1 clinical trial | Adjustments due to new guidance | Takeda | ASU 2014-09
Deferred tax assets:
Potential milestone payment						$ 5,000

Summary of Significant Accoun22

Summary of Significant Accounting Policies - Impact of Adopting ASC 606, Pro Forma Balance Sheet (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Jan. 02, 2018	Dec. 31, 2017	Jun. 30, 2017	Dec. 31, 2016	Dec. 31, 2015
ASSETS
Cash and cash equivalents	$ 345,058		$ 267,107	$ 150,337	$ 159,964
Accounts receivable	19		2,649
Unbilled revenue	522		2,580
Non-cash royalty receivable	7,236
Inventory	1,890		1,038
Prepaid and other current assets	9,893		2,967
Total current assets	364,618		276,341
Property and equipment, net of accumulated depreciation	12,029		14,538
Other assets	4,437		3,797
Total assets	381,084		294,676
LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)
Accounts payable	12,881		8,562
Accrued compensation	8,524		11,473
Other accrued liabilities	17,865		15,767
Current portion of deferred lease incentive	793		784
Current portion of liability related to the sale of future royalties, net	22,265		17,779
Current portion of deferred revenue	1,020		1,405
Total current liabilities	63,348		55,770
Deferred lease incentive, net of current portion	4,806		5,129			$ 2,000
Deferred revenue, net of current portion	80,751		93,752
Convertible 4.5% senior notes, net	2,057		2,050
Liability related to the sale of future royalties, net	136,701		151,634
Other long-term liabilities	4,231		4,236
Total liabilities	291,894		312,571
Shareholders' deficit:
Preferred stock
Common stock	1,490		1,325
Additional paid-in capital	1,182,429		1,009,362
Accumulated deficit	(1,094,729)		(1,028,582)
Total shareholders’ equity (deficit)	89,190		(17,895)
Total liabilities and shareholders’ equity (deficit)	381,084		$ 294,676
Pro forma as if previous accounting was in effect | ASU 2014-09
ASSETS
Cash and cash equivalents	345,058	$ 267,107
Accounts receivable	19	2,649
Unbilled revenue	522	2,580
Non-cash royalty receivable		8,900
Inventory	1,890	1,038
Prepaid and other current assets	9,893	2,967
Total current assets	357,382	285,241
Property and equipment, net of accumulated depreciation	12,029	14,538
Other assets	4,437	3,797
Total assets	373,848	303,576
LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)
Accounts payable	12,881	8,562
Accrued compensation	8,524	11,473
Other accrued liabilities	17,865	15,767
Current portion of deferred lease incentive	793	784
Current portion of liability related to the sale of future royalties, net	22,265	17,779
Current portion of deferred revenue	755	1,446
Total current liabilities	63,083	55,811
Deferred lease incentive, net of current portion	4,806	5,129
Deferred revenue, net of current portion	83,908	88,521
Convertible 4.5% senior notes, net	2,057	2,050
Liability related to the sale of future royalties, net	136,701	151,634
Other long-term liabilities	4,231	4,236
Total liabilities	294,786	307,381
Shareholders' deficit:
Common stock	1,490	1,325
Additional paid-in capital	1,182,429	1,009,362
Accumulated deficit	(1,104,857)	(1,014,492)
Total shareholders’ equity (deficit)	79,062	(3,805)
Total liabilities and shareholders’ equity (deficit)	$ 373,848	$ 303,576

Summary of Significant Accoun23

Summary of Significant Accounting Policies - Impact of Adopting ASC 606, Pro Forma Statement of Operations and Comprehensive Loss (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Revenues:
License and milestone fees	$ 1,321	$ 31,080	$ 12,861	$ 49,810
Non-cash royalty revenue related to the sale of future royalties	7,242	6,439	14,432	14,052
Research and development support	388	902	771	2,380
Clinical Material Revenue	336	599	1,038	1,277
Total revenues	9,287	39,020	29,102	67,519
Operating Expenses:
Research and development	38,701	35,319	83,532	68,207
General and administrative	8,652	8,836	18,647	16,955
Restructuring charge	686		2,417	386
Total operating expenses	48,039	44,155	104,596	85,548
Loss from operations	(38,752)	(5,135)	(75,494)	(18,029)
Investment income, net	814	143	1,476	258
Non-cash interest expense on liability related to the sale of future royalties and convertible senior notes	(2,611)	(3,501)	(5,657)	(7,076)
Interest expense on convertible senior notes	(23)	(1,125)	(47)	(2,250)
Other (expense) income, net	(1,052)	751	(515)	885
Net loss	$ (41,624)	$ (8,867)	$ (80,237)	$ (26,212)
Basic and diluted net loss per common share (in dollar per share)	$ (0.31)	$ (0.10)	$ (0.61)	$ (0.30)
Pro forma as if previous accounting was in effect | ASU 2014-09
Revenues:
License and milestone fees	$ 5,330		$ 15,159
Non-cash royalty revenue related to the sale of future royalties	7,222		16,096
Research and development support	388		771
Clinical Material Revenue	336		1,038
Total revenues	13,276		33,064
Operating Expenses:
Research and development	38,701		83,532
General and administrative	8,652		18,647
Restructuring charge	686		2,417
Total operating expenses	48,039		104,596
Loss from operations	(34,763)		(71,532)
Investment income, net	814		1,476
Non-cash interest expense on liability related to the sale of future royalties and convertible senior notes	(2,611)		(5,657)
Interest expense on convertible senior notes	(23)		(47)
Other (expense) income, net	(1,052)		(515)
Net loss	$ (37,635)		$ (76,275)
Basic and diluted net loss per common share (in dollar per share)	$ (0.28)		$ (0.58)
Adjustments due to new guidance | ASU 2014-09
Operating Expenses:
Potential milestone payment	$ 5,000		$ 5,000

Summary of Significant Accoun24

Summary of Significant Accounting Policies - Revenue Recognition (Details) $ in Thousands	May 24, 2017USD ($)	Dec. 31, 2017USD ($)	Feb. 29, 2016USD ($)	Mar. 31, 2015item	Dec. 31, 2017USD ($)	Jun. 30, 2018USD ($)item	Dec. 31, 2010USD ($)item
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
Amgen
Summary of Significant Accounting Policies
Number of single-target licenses						2
Oxford BioTherapeutics Ltd Member | Amgen
Summary of Significant Accounting Policies
Number of single-target licenses						1
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
Potential milestone payment | $			$ 160,000
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
Novartis
Summary of Significant Accounting Policies
Number of single-target licenses						5	6
Potential milestone payment | $							$ 199,500
Roche
Summary of Significant Accounting Policies
Number of single-target licenses						5
Sanofi
Summary of Significant Accounting Policies
Number of single-target licenses						5
Potential milestone payment | $						$ 0
Takeda
Summary of Significant Accounting Policies
Number of single-target licenses				2		1
Debiopharm
Summary of Significant Accounting Policies
Number of single-target licenses						1
Potential milestone payment | $	$ 5,000	$ 4,500			$ 5,000	$ 0

Summary of Significant Accoun25

Summary of Significant Accounting Policies - Performance Obligations (Details)	6 Months Ended
	Jun. 30, 2018
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-07-01
Summary of Significant Accounting Policies
Remaining performance obligations, percent	1.00%
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation, expected timing of satisfaction	12 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-07-01
Summary of Significant Accounting Policies
Remaining performance obligations, percent	2.00%
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation, expected timing of satisfaction	48 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-07-01
Summary of Significant Accounting Policies
Remaining performance obligations, percent	97.00%
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation, expected timing of satisfaction	60 months

Summary of Significant Accoun26

Summary of Significant Accounting Policies - Performance Obligations Comprising Deferred Revenue (Details) $ in Millions	Jun. 30, 2018USD ($)
Summary of Significant Accounting Policies
Aggregate amount of transaction price allocated to remaining performance obligations	$ 81.8

Summary of Significant Accoun27

Summary of Significant Accounting Policies - Contract Balances (Details) - USD ($)	Jan. 02, 2018	Jun. 30, 2018	Mar. 31, 2018	Jun. 30, 2018
Changes in the Company’s contract assets and contract liabilities
Contract asset, Additions				$ 4,041,000
Contract asset, Deductions				(4,041,000)
Contract liabilities:
Deferred revenue, Deductions				(8,196,000)
Deferred revenue, Balance at End of Period	$ 89,967,000	$ 81,771,000		81,771,000
Revenues recognized from changes in contract asset and liability balances
Amounts included in contract liabilities at the beginning of the period		$ 1,321,000		13,196,000
Performance obligations satisfied in previous periods	$ 4,600,000
Milestone recognized as contract asset				4,041,000
Takeda
Contract liabilities:
Deferred revenue, Deductions				(5,900,000)
Revenues recognized from changes in contract asset and liability balances
Amounts included in contract liabilities at the beginning of the period				10,900,000
Other Collaborator
Revenues recognized from changes in contract asset and liability balances
Deferred revenue recognized upon completion of performance obligations				750,000
Other Collaborator | Technological Improvements
Revenues recognized from changes in contract asset and liability balances
Amortization of deferred revenue				1,200,000
Upon shipment
Revenues recognized from changes in contract asset and liability balances
Deferred revenue recognized upon completion of performance obligations				$ 335,000
Adjustments due to new guidance | ASU 2014-09
Changes in the Company’s contract assets and contract liabilities
Contract asset, Additions			$ 5,000,000
Revenues recognized from changes in contract asset and liability balances
Milestone recognized as contract asset			$ 5,000,000

Summary of Significant Accoun28

Summary of Significant Accounting Policies - Financial Instruments (Details)	6 Months Ended	12 Months Ended
	Jun. 30, 2018USD ($)item	Dec. 31, 2017USD ($)	Jun. 30, 2017USD ($)	Dec. 31, 2016USD ($)
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	345,058,000	267,107,000	$ 150,337,000	$ 159,964,000
Noncash Investing Activities
Accrued capital expenditures	$ 795,000	$ 482,000

Summary of Significant Accoun29

Summary of Significant Accounting Policies - Fair Value (Details)	6 Months Ended
	Jun. 30, 2018USD ($)item	Dec. 31, 2017USD ($)	Dec. 31, 2016USD ($)
Fair value hierarchy for the Company's financial assets measured at fair value
Number of trades | item	0
Recurring basis
Fair value hierarchy for the Company's financial assets measured at fair value
Cash equivalents	$ 323,388,000	$ 240,013,000
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	$ 323,388,000	$ 240,013,000
Convertible Notes
Fair value hierarchy for the Company's financial assets measured at fair value
Interest rate (as a percent)	4.50%	4.50%
Principal amount of debt for conversion calculations			$ 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
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	$ 5,700,000	$ 3,800,000

Summary of Significant Accoun30

Summary of Significant Accounting Policies - Inventory (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Inventory
Raw materials					$ 40,000
Work in process	$ 1,890,000		$ 1,890,000		998,000
Total	1,890,000		$ 1,890,000		1,038,000
Minimum supply period of raw materials that is not supported by firm, fixed orders and/or projections from collaborators considered to expense inventory			12 months
Value of excess inventory	0		$ 0
Expense related to excess inventory	38,701,000	$ 35,319,000	83,532,000	$ 68,207,000
Reserve for work in process	$ 0		0		$ 0
Difference between full cost and amounts received			471,000	929,000
ADC Technology
Inventory
Expense related to excess inventory			$ 0	$ 403,000

Summary of Significant Accoun31

Summary of Significant Accounting Policies - Net Loss per Common Share and Stock-Based Compensation (Details)	Dec. 09, 2016shares	Jun. 30, 2017item$ / sharesshares	Feb. 28, 2017item$ / sharesshares	Aug. 31, 2016item$ / sharesshares	Jun. 30, 2018USD ($)item$ / sharesshares	Jun. 30, 2017USD ($)item$ / sharesshares	Jun. 30, 2018USD ($)employeeitem$ / sharesshares	Jun. 30, 2017USD ($)item$ / sharesshares
Computation of Net Loss per Common Share
Options outstanding to purchase common stock and unvested restricted stock at end of period (in shares)					17,776,000	15,588,000	17,776,000	15,588,000
Common stock equivalents under treasury stock method for options and unvested restricted stock (in shares)					3,451,000	1,224,000	3,484,000	463,000
Shares issuable upon conversion of convertible notes at end of period (in shares) | item					501	23,878	501	23,878
Common stock equivalents under if-converted method for convertible notes (in shares)					501,000	23,878,000	501,000	23,878,000
Additional disclosure for options
Cash received for exercise of stock options | $							$ 2,819,000	$ 32,000
Estimated fair value of unvested employee awards, net of estimated forfeitures | $					$ 35,300,000		$ 35,300,000
Weighted average vesting period of unvested employee awards							2 years 6 months
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%	0.00%
Volatility (as a percent)					71.60%	68.17%	70.90%	67.10%
Risk-free interest rate (as a percent)					2.84%	1.90%	2.71%	2.01%
Expected life					6 years	6 years	6 years	6 years
Weighted-average grant date fair value (in dollars per share) | $ / shares					$ 6.82	$ 2.86	$ 6.80	$ 1.75
Number of Stock Options
Outstanding at the beginning of the period (in shares)							11,971,000
Granted (in shares)							4,925,000
Exercised (in shares)							(568,000)
Forfeited/Canceled (in shares)							(368,000)
Outstanding at the end of the period (in shares)					15,960,000		15,960,000
Weighted-Average Exercise Price
Outstanding at the beginning of the period (in dollars per share) | $ / shares							$ 9.92
Granted (in dollars per share) | $ / shares							10.54
Exercised (in dollars per share) | $ / shares							4.97
Forfeited/Canceled (in dollars per share) | $ / shares							12.65
Outstanding at the end of the period (in dollars per share) | $ / shares					$ 10.22		$ 10.22
Additional disclosure for options
Cash received for exercise of stock options | $							$ 2,800,000
Stock options | Minimum
Weighted-Average Exercise Price
Exercised (in dollars per share) | $ / shares							$ 2.03
Stock options | Maximum
Weighted-Average Exercise Price
Exercised (in dollars per share) | $ / shares							$ 12.21
Restricted stock
Stock-Based Compensation
Exercise period		5 years	5 years	5 years
Number of equal installments restrictions lapse | item		3	3	3
Number of Restricted Stock
Unvested at the beginning of the period (in shares)							2,319,000
Vested (in shares)							(503,000)
Unvested at the end of the period (in shares)					1,816,000		1,816,000
Weighted-Average Grant Date Fair Value
Unvested at the beginning of the period (in dollars per share) | $ / shares							$ 2.82
Vested (in dollars per share) | $ / shares							2.64
Unvested at the end of the period (in dollars per share) | $ / shares					$ 2.87		$ 2.87
Additional disclosure for options
Stock compensation expense (reduction) | $					$ 4,000,000	$ 3,100,000	$ 7,700,000	$ 5,700,000
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
Additional disclosure for options
Stock compensation expense (reduction) | $							$ 0
2016 Plan
Computation of Net Loss per Common Share
Common stock equivalents under treasury stock method for options and unvested restricted stock (in shares)	19,500,000
Stock-Based Compensation
Number of employee share-based compensation plans | employee							1
Common stock authorized for issuance (in shares)	7,500,000
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
2016 Plan | Stock options | Maximum
Stock-Based Compensation
Vesting period							4 years
Exercise period							10 years

Summary of Significant Accoun32

Summary of Significant Accounting Policies - Segments (Details) - item	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Segment Information
Number of operating segments			1
Revenues percentage | Customer concentration
Segment Information
Percentages of revenue recognized	1.00%	2.00%	39.00%	2.00%
CytomX | Revenues percentage | Customer concentration
Segment Information
Percentages of revenue recognized	6.00%	3.00%	4.00%	22.00%
Novartis | Revenues percentage | Customer concentration
Segment Information
Percentages of revenue recognized	11.00%		4.00%
Roche | Revenues percentage | Customer concentration
Segment Information
Percentages of revenue recognized	78.00%	17.00%	50.00%	21.00%
Sanofi | Revenues percentage | Customer concentration
Segment Information
Percentages of revenue recognized		77.00%		53.00%

Agreements - Roche (Details)

Agreements - Roche (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		6 Months Ended		15 Months Ended
	May 31, 2000	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Collaborative Agreements disclosures
Non-cash royalty receivable		$ 7,236		$ 7,236
Non-cash royalty revenue related to sale of future royalties		7,242	$ 6,439	14,432	$ 14,052
ASU 2014-09 | Adjustments due to new guidance
Collaborative Agreements disclosures
Non-cash royalty receivable						$ 8,900
Roche
Collaborative Agreements disclosures
Period in arrears to receive royalty reports and payments related to sales of Kadcyla	3 months
Roche | ASU 2014-09 | Adjustments due to new guidance
Collaborative Agreements disclosures
Non-cash royalty receivable		$ 16,100		16,100
Roche | ASU 2014-09 | Adjustments due to new guidance | Kadcyla
Collaborative Agreements disclosures
Non-cash royalty revenue related to sale of future royalties				$ 14,400		$ 14,100

Agreements - Sanofi (Details)

Agreements - Sanofi (Details) $ in Thousands	May 30, 2017USD ($)item	Jun. 30, 2018USD ($)	Jun. 30, 2017USD ($)	Jun. 30, 2018USD ($)	Jun. 30, 2017USD ($)
Collaborative Agreements disclosures
Milestone payment recorded in license and milestone fee revenue		$ 1,321	$ 31,080	$ 12,861	$ 49,810
Sanofi
Collaborative Agreements disclosures
Milestone payment recorded in license and milestone fee revenue					6,000
Sanofi | License amendments
Collaborative Agreements disclosures
Number of compounds | item	4
Payments received under collaboration agreement	$ 30,000
Sanofi | ASU 2014-09 | Previous guidance of ASC 605 | License amendments
Collaborative Agreements disclosures
Milestone payment recorded in license and milestone fee revenue			$ 30,000		$ 30,000

Agreements - Novartis (Details)

Agreements - Novartis (Details)	1 Months Ended	3 Months Ended		6 Months Ended		12 Months Ended
	May 31, 2018item	Jun. 30, 2018USD ($)	Jun. 30, 2017USD ($)	Jun. 30, 2018USD ($)item	Jun. 30, 2017USD ($)	Dec. 31, 2010USD ($)item
Collaborative Agreements disclosures
License and milestone fees		$ 1,321,000	$ 31,080,000	$ 12,861,000	$ 49,810,000
Novartis
Collaborative Agreements disclosures
Number of single-target licenses | item				5		6
Payments received under collaboration agreement						$ 45,000,000
License exercise fee						1,000,000
Potential milestone payment						$ 199,500,000
Number of licenses terminated | item	1
License and milestone fees		$ 978,000		$ 978,000

Agreements - CytomX (Details)

Agreements - CytomX (Details) - USD ($) $ in Thousands	1 Months Ended		3 Months Ended		6 Months Ended
	Feb. 29, 2016	Jan. 31, 2014	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Collaborative Agreements disclosures
Milestone payment recorded in license and milestone fee revenue			$ 1,321	$ 31,080	$ 12,861	$ 49,810
CytomX
Collaborative Agreements disclosures
Payments received under collaboration agreement		$ 0				13,000
Milestone payment recorded in license and milestone fee revenue						12,700
Potential milestone payment	$ 160,000
CytomX | Development milestones
Collaborative Agreements disclosures
Potential milestone payment	10,000
CytomX | Phase 1 clinical trial
Collaborative Agreements disclosures
Milestone payment recorded in license and milestone fee revenue				$ 1,000		$ 1,000
CytomX | Phase 2 clinical trial
Collaborative Agreements disclosures
Potential milestone payment					$ 3,000
CytomX | Regulatory milestones
Collaborative Agreements disclosures
Potential milestone payment	50,000
CytomX | Sales milestones
Collaborative Agreements disclosures
Potential milestone payment	$ 100,000

Agreements - Takeda (Details)

Agreements - Takeda (Details) $ in Thousands	1 Months Ended		6 Months Ended
	May 31, 2018USD ($)	Mar. 31, 2015item	Jun. 30, 2018USD ($)item	Dec. 31, 2017USD ($)
Collaborative Agreements disclosures
Arrangement consideration included in long-term deferred revenue			$ 80,751	$ 93,752
Milestone recognized as contract asset			$ 4,041
Takeda
Collaborative Agreements disclosures
Term of agreement		3 years
Number of single-target licenses | item		2	1
Arrangement consideration included in long-term deferred revenue			$ 10,900
Takeda | Phase 1 clinical trial
Collaborative Agreements disclosures
Milestone recognized as contract asset	$ 5,000
Takeda | Phase 2 clinical trial
Collaborative Agreements disclosures
Potential milestone payment			$ 10,000

Agreements - Debiopharm (Detail

Agreements - Debiopharm (Details) - USD ($)	May 24, 2017	Jan. 31, 2018	Dec. 31, 2017	Jun. 30, 2018	Dec. 31, 2017	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Collaborative Agreements disclosures
License and milestone fees				$ 1,321,000		$ 31,080,000	$ 12,861,000	$ 49,810,000
Research and development support				$ 388,000		$ 902,000	771,000	$ 2,380,000
Debiopharm
Collaborative Agreements disclosures
Payments received under collaboration agreement	$ 25,000,000
Potential milestone payment	5,000,000		$ 4,500,000		$ 5,000,000		$ 0
Fair value of consideration for services provided	30,000,000
License and milestone fees	29,700,000	$ 500,000			$ 29,500,000
Research and development support	300,000
Debiopharm | Phase 3 Clinical Trial
Collaborative Agreements disclosures
Potential milestone payment	$ 25,000,000

Agreements - Jazz Pharmaceutica

Agreements - Jazz Pharmaceuticals (Details) $ in Thousands	1 Months Ended	3 Months Ended	6 Months Ended
	Aug. 31, 2017USD ($)productitem	Jun. 30, 2018USD ($)	Jun. 30, 2018USD ($)	Dec. 31, 2017USD ($)
Collaborative Agreements disclosures
Remaining arrangement consideration to be recognized as license revenue		$ 80,751	$ 80,751	$ 93,752
Jazz Pharmaceuticals
Collaborative Agreements disclosures
Number of early stage ADC programs | item	2
Number of ADC programs | item	3
Payments received under collaboration agreement	$ 75,000
Term of agreement	7 years
Number of products with rights to co-commercialize | product	1
Offset to research and development expense		1,800	3,800
Number of development and commercialization licenses | item	3
Remaining arrangement consideration to be recognized as license revenue	$ 75,000	$ 75,000	$ 75,000
Jazz Pharmaceuticals | Maximum
Collaborative Agreements disclosures
Potential milestone payment	$ 100,000

Convertible 4.5% Senior Notes (

Convertible 4.5% Senior Notes (Details)	3 Months Ended		6 Months Ended			12 Months Ended
	Jun. 30, 2018USD ($)	Jun. 30, 2017USD ($)	Jun. 30, 2018USD ($)	Dec. 31, 2017USD ($)shares	Jun. 30, 2017USD ($)	Dec. 31, 2016USD ($)$ / shares
Convertible debt
Interest expense	$ 23,000	$ 1,125,000	$ 47,000		$ 2,250,000
Convertible Notes
Convertible debt
Interest rate (as a percent)	4.50%		4.50%	4.50%
Principal amount of debt				$ 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
Shares issued with debt conversion (in shares) | shares				26,160,187
Shares issued with debt conversion adjustment (in shares) | shares				2,784,870
Principal amount of debt for conversion calculations						$ 1,000
Ratio issued upon conversion						238.7775
Initial conversion price (in dollars per share) | $ / shares						$ 4.19

Liability Related to Sale of 41

Liability Related to Sale of Future Royalties (Details) - Kadcyla - USD ($) $ in Thousands	1 Months Ended	6 Months Ended
	Apr. 30, 2015	Jun. 30, 2018
Contract with Customer, Liability [Line Items]
Percentage of royalty payments if applicable threshold is met	85.00%
IRH
Contract with Customer, Liability [Line Items]
Percentage of royalty payments	100.00%
Percentage of royalty payments if applicable threshold is met	15.00%
Proceeds from sale of future royalties - net	$ 200,000
Transaction costs for royalty agreements	5,900
Change in liability related to sale of future royalties
Liability related to sale of future royalties, net — beginning balance		$ 169,413
Royalty payments received and paid		(16,097)
Non-cash interest expense recognized		5,650
Liability related to sale of future royalties, net — ending balance		$ 158,966
Effective annual interest rate		7.20%
Prospective annual rate		5.8
IRH | Maximum
Contract with Customer, Liability [Line Items]
Royalties threshold	260,000
IRH | Minimum
Contract with Customer, Liability [Line Items]
Royalties threshold	$ 235,000

Income Taxes - Deferred (Detail

Income Taxes - Deferred (Details) - USD ($) $ in Millions	6 Months Ended	12 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Income taxes, additional disclosures
U.S. federal corporate tax rate (as a percent)	21.00%
Provisional income tax expense, Tax Cuts and Jobs Act of 2017		$ 97.5
Maximum
Income taxes, additional disclosures
U.S. federal corporate tax rate (as a percent)		35.00%

Capital Stock (Details)

Capital Stock (Details) - USD ($)	Dec. 09, 2016	Jun. 30, 2018	Feb. 28, 2018	Jun. 30, 2017	Jan. 31, 2017	Dec. 31, 2016	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Stock options
Stock-based compensation disclosure
Stock options granted to directors (in shares)									4,925,000
2001 Non-Employee Director Stock Plan
Stock-based compensation disclosure
Stock compensation expense (reduction)							$ 4,000	$ 21,000	$ 31,000	$ 32,000
2001 Non-Employee Director Stock Plan | Retiring director
Stock-based compensation disclosure
Stock compensation expense (reduction)		$ 72,000
Compensation Policy for Non-Employee Directors
Stock-based compensation disclosure
Stock compensation expense (reduction)							$ 54,000	$ 47,000	$ 156,000	$ 85,000
Compensation Policy for Non-Employee Directors | Stock options
Stock-based compensation disclosure
Vesting period									1 year
Stock options granted to directors (in shares)				80,000		40,000			128,000
Compensation Policy for Non-Employee Directors | Deferred share units
Stock-based compensation disclosure
Common stock issued to retiring directors (in shares)		95,497	77,012		53,248
Vesting period	1 year

Restructuring Charges (Details)

Restructuring Charges (Details)	3 Months Ended	6 Months Ended		12 Months Ended
	Mar. 31, 2018USD ($)	Jun. 30, 2018USD ($)	Jun. 30, 2017USD ($)	Dec. 31, 2018employee	Sep. 30, 2016ft²	Feb. 29, 2016ft²
Workforce reduction
Restructuring
One-time charge for severance	$ 1,200,000
Benefit plan severance cost		$ 1,100,000
930 Winter Street, Walham, MA
Restructuring
Area of space leased | ft²						10,281
930 Winter Street, Walham, MA | Lease
Restructuring
Area of space leased | ft²					10,281
Leasehold impairment charge		$ 0	$ 386,000
Forecast | Workforce reduction
Restructuring
Approximate positions to be eliminated | employee				30
Approximate current positions to be eliminated | employee				20
Stock options | Workforce reduction
Restructuring
Stock compensation expense (reduction)	$ 157,000

Commitments and Contingencies45

Commitments and Contingencies (Details) € in Millions	1 Months Ended		3 Months Ended	6 Months Ended
	Feb. 28, 2017EUR (€)	Apr. 30, 2013ft²	Mar. 31, 2017USD ($)	Jun. 30, 2018EUR (€)ft²item	Dec. 31, 2019USD ($)	Dec. 31, 2018USD ($)	Jun. 30, 2018USD ($)ft²	Apr. 30, 2018USD ($)ft²	Dec. 31, 2017USD ($)	Feb. 29, 2016USD ($)ft²	Dec. 31, 2015USD ($)
Operating leases
Construction allowance							$ 4,806,000		$ 5,129,000		$ 2,000,000
Minimum rental commitments under the non-cancelable operating lease agreements
2018 (six months remaining)							4,702,000
2,019							7,995,000
2,020							7,877,000
2,021							7,716,000
2,022							7,782,000
Thereafter							25,778,000
Total minimum lease payments							61,850,000
Obligations under capital leases							0
Collaborations and Licenses
Potential milestone payable							80,000,000
Manufacturing commitments
Collaborations and Licenses
Obligation to make payment to vendor for certain contractual services | €	€ 46.2
Manufacturing commitment							$ 2,800,000
Term of agreement	5 years
Noncancelable commitment | €				€ 14.7
Forecast | Manufacturing commitments
Collaborations and Licenses
Manufacturing commitment					$ 900,000	$ 1,900,000
830 Winter Street, Waltham, MA
Operating leases
Area of space leased | ft²				110,000			110,000	10,000
Number of additional terms for which lease agreement can be extended | item				2
Operating lease term extension period				5 years
Construction allowance								$ 400,000
930 Winter Street, Walham, MA
Operating leases
Area of space leased | ft²										10,281
Construction allowance										$ 617,000
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
Facilities rent expense, net of sublease income			$ 169,000