Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Oct. 31, 2019 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 0-17999 | |
Entity Registrant Name | ImmunoGen, Inc. | |
Entity Tax Identification Number | 04-2726691 | |
Entity Incorporation, State or Country Code | MA | |
Entity Address, Address Line One | 830 Winter Street | |
Entity Address, City or Town | Waltham | |
Entity Address, State or Province | MA | |
Entity Address, Postal Zip Code | 02451 | |
City Area Code | 781 | |
Local Phone Number | 895-0600 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | IMGN | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 149,695,324 | |
Entity Central Index Key | 0000855654 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
ASSETS | ||
Cash and cash equivalents | $ 204,491 | $ 262,252 |
Accounts receivable | 94 | 1,701 |
Unbilled revenue/reimbursement | 3,009 | 617 |
Contract asset | 0 | 500 |
Non-cash royalty receivable | 13,126 | 9,249 |
Prepaid and other current assets | 4,961 | 4,462 |
Total current assets | 225,681 | 278,781 |
Property and equipment, net of accumulated depreciation | 9,118 | 12,891 |
Operating lease right-of-use assets | 15,924 | |
Other assets | 3,413 | 3,709 |
Total assets | 254,136 | 295,381 |
LIABILITIES AND SHAREHOLDERS (DEFICIT) EQUITY | ||
Accounts payable | 7,227 | 11,365 |
Accrued compensation | 13,232 | 11,796 |
Other accrued liabilities | 14,040 | 20,465 |
Current portion of deferred lease incentive | 837 | |
Current portion of liability related to the sale of future royalties, net of deferred financing costs of $707 and $753, respectively | 35,985 | 25,880 |
Current portion of operating lease liability | 2,873 | |
Current portion of deferred revenue | 14,817 | 317 |
Total current liabilities | 88,174 | 70,660 |
Deferred lease incentive, net of current portion | 4,675 | |
Deferred revenue, net of current portion | 131,035 | 80,485 |
Operating lease liability - net of current portion | 22,578 | |
Convertible 4.5% senior notes, net of deferred financing costs of $25 and $36, respectively | 2,075 | 2,064 |
Liability related to the sale of future royalties, net of current portion and deferred financing costs of $977 and $1,536, respectively | 95,529 | 122,345 |
Other long-term liabilities | 970 | 4,180 |
Total liabilities | 340,361 | 284,409 |
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 149,688 and 149,400 shares as of September 30, 2019 and December 31, 2018, respectively | 1,498 | 1,494 |
Additional paid-in capital | 1,204,559 | 1,192,813 |
Accumulated deficit | (1,292,282) | (1,183,335) |
Total shareholders (deficit) equity | (86,225) | 10,972 |
Total liabilities and shareholders (deficit) equity | $ 254,136 | $ 295,381 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
CONSOLIDATED BALANCE SHEETS | ||
Current portion of deferred financing costs for the liability related to the sale of future royalties | $ 707 | $ 753 |
Interest rate (as a percent) | 4.50% | 4.50% |
Non-current deferred financing costs | $ 25 | $ 36 |
Noncurrent portion of deferred financing costs for the liability related to the sale of future royalties | $ 977 | $ 1,536 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized shares | 5,000,000 | 5,000,000 |
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 | 200,000,000 | 200,000,000 |
Common stock, issued shares | 149,688,000 | 149,400,000 |
Common stock, outstanding shares | 149,688,000 | 149,400,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenues: | ||||
Total revenues | $ 13,281,000 | $ 10,928,000 | $ 37,407,000 | $ 40,030,000 |
Operating expenses: | ||||
Research and development | 21,015,000 | 47,243,000 | 88,467,000 | 130,775,000 |
General and administrative | 9,208,000 | 8,347,000 | 28,686,000 | 26,994,000 |
Restructuring charge | 1,020,000 | 870,000 | 20,921,000 | 3,287,000 |
Total operating expenses | 31,243,000 | 56,460,000 | 138,074,000 | 161,056,000 |
Loss from operations | (17,962,000) | (45,532,000) | (100,667,000) | (121,026,000) |
Investment income, net | 1,032,000 | 1,369,000 | 3,741,000 | 2,845,000 |
Non-cash interest expense on liability related to the sale of future royalties and convertible senior notes | (4,275,000) | (2,546,000) | (11,525,000) | (8,203,000) |
Interest expense on convertible senior notes | (24,000) | (23,000) | (71,000) | (70,000) |
Other expense, net | (521,000) | (75,000) | (425,000) | (590,000) |
Net loss | $ (21,750,000) | $ (46,807,000) | $ (108,947,000) | $ (127,044,000) |
Basic and diluted net loss per common share (in dollar per share) | $ (0.15) | $ (0.32) | $ (0.74) | $ (0.92) |
Basic and diluted weighted average common shares outstanding (in shares) | 148,479 | 147,220 | 148,143 | 137,472 |
Total comprehensive loss | $ (21,750,000) | $ (46,807,000) | $ (108,947,000) | $ (127,044,000) |
License and milestone fees | ||||
Revenues: | ||||
Total revenues | 79,000 | 672,000 | 5,237,000 | 13,533,000 |
Non-cash royalty revenue related to the sale of future royalties | ||||
Revenues: | ||||
Total revenues | $ 13,202,000 | 8,441,000 | 32,102,000 | 22,873,000 |
Research and development support | ||||
Revenues: | ||||
Total revenues | 388,000 | $ 68,000 | 1,159,000 | |
Clinical materials revenue | ||||
Revenues: | ||||
Total revenues | $ 1,427,000 | $ 2,465,000 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' (DEFICIT) EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Increase (Decrease) in Shareholders' (Deficit) Equity | ||||
Transition adjustment for ASC 606 | $ 14,090 | $ 14,090 | ||
Balance at Dec. 31, 2017 | $ 1,325 | $ 1,009,362 | (1,028,582) | (17,895) |
Balance (in shares) at Dec. 31, 2017 | 132,526,000 | |||
Increase (Decrease) in Shareholders' (Deficit) Equity | ||||
Net loss | (38,613) | (38,613) | ||
Issuance of common stock pursuant to the exercise of stock options | $ 4 | 2,255 | 2,259 | |
Issuance of common stock pursuant to the exercise of stock options (in shares) | 421,000 | |||
Stock option and restricted stock compensation expense | 3,746 | 3,746 | ||
Directors' deferred share units converted | $ 1 | (1) | ||
Directors' deferred share units converted (in shares) | 77,000 | |||
Directors' deferred share unit compensation | 102 | 102 | ||
Balance at Mar. 31, 2018 | $ 1,330 | 1,015,464 | (1,053,105) | (36,311) |
Balance (in shares) at Mar. 31, 2018 | 133,024,000 | |||
Balance at Dec. 31, 2017 | $ 1,325 | 1,009,362 | (1,028,582) | (17,895) |
Balance (in shares) at Dec. 31, 2017 | 132,526,000 | |||
Increase (Decrease) in Shareholders' (Deficit) Equity | ||||
Net loss | (127,044) | |||
Balance at Sep. 30, 2018 | $ 1,490 | 1,186,935 | (1,141,536) | 46,889 |
Balance (in shares) at Sep. 30, 2018 | 149,049,000 | |||
Balance at Mar. 31, 2018 | $ 1,330 | 1,015,464 | (1,053,105) | (36,311) |
Balance (in shares) at Mar. 31, 2018 | 133,024,000 | |||
Increase (Decrease) in Shareholders' (Deficit) Equity | ||||
Net loss | (41,624) | (41,624) | ||
Issuance of common stock pursuant to the exercise of stock options | $ 1 | 558 | 559 | |
Issuance of common stock pursuant to the exercise of stock options (in shares) | 146,000 | |||
Issuance of common stock | $ 158 | 162,382 | 162,540 | |
Issuance of common stock (in shares) | 15,755,000 | |||
Stock option and restricted stock compensation expense | 3,971 | 3,971 | ||
Directors' deferred share units converted | $ 1 | 1 | ||
Directors' deferred share units converted (in shares) | 96,000 | |||
Directors' deferred share unit compensation | 54 | 54 | ||
Balance at Jun. 30, 2018 | $ 1,490 | 1,182,429 | (1,094,729) | 89,190 |
Balance (in shares) at Jun. 30, 2018 | 149,021,000 | |||
Increase (Decrease) in Shareholders' (Deficit) Equity | ||||
Net loss | (46,807) | (46,807) | ||
Issuance of common stock pursuant to the exercise of stock options | 124 | 124 | ||
Issuance of common stock pursuant to the exercise of stock options (in shares) | 28,000 | |||
Issuance of common stock | (28) | (28) | ||
Stock option and restricted stock compensation expense | 4,308 | 4,308 | ||
Directors' deferred share unit compensation | 102 | 102 | ||
Balance at Sep. 30, 2018 | $ 1,490 | 1,186,935 | (1,141,536) | 46,889 |
Balance (in shares) at Sep. 30, 2018 | 149,049,000 | |||
Increase (Decrease) in Shareholders' (Deficit) Equity | ||||
Net loss | (41,799) | (41,799) | ||
Issuance of common stock pursuant to the exercise of stock options and employee stock purchase plan | $ 4 | 1,355 | 1,359 | |
Issuance of common stock pursuant to the exercise of stock options and employee stock purchase plan (in shares) | 351,000 | |||
Stock option and restricted stock compensation expense | 4,420 | 4,420 | ||
Directors' deferred share unit compensation | 103 | 103 | ||
Balance at Dec. 31, 2018 | $ 1,494 | 1,192,813 | (1,183,335) | $ 10,972 |
Balance (in shares) at Dec. 31, 2018 | 149,400,000 | 149,400,000 | ||
Increase (Decrease) in Shareholders' (Deficit) Equity | ||||
Net loss | (43,751) | $ (43,751) | ||
Issuance of common stock pursuant to the exercise of stock options and employee stock purchase plan | 68 | 68 | ||
Issuance of common stock pursuant to the exercise of stock options and employee stock purchase plan (in shares) | 25,000 | |||
Stock option and restricted stock compensation expense | 5,007 | 5,007 | ||
Directors' deferred share unit compensation | 100 | 100 | ||
Balance at Mar. 31, 2019 | $ 1,494 | 1,197,988 | (1,227,086) | (27,604) |
Balance (in shares) at Mar. 31, 2019 | 149,425,000 | |||
Balance at Dec. 31, 2018 | $ 1,494 | 1,192,813 | (1,183,335) | $ 10,972 |
Balance (in shares) at Dec. 31, 2018 | 149,400,000 | 149,400,000 | ||
Increase (Decrease) in Shareholders' (Deficit) Equity | ||||
Net loss | $ (108,947) | |||
Issuance of common stock pursuant to the exercise of stock options (in shares) | 86,000 | |||
Balance at Sep. 30, 2019 | $ 1,498 | 1,204,559 | (1,292,282) | $ (86,225) |
Balance (in shares) at Sep. 30, 2019 | 149,688,000 | 149,688,000 | ||
Balance at Mar. 31, 2019 | $ 1,494 | 1,197,988 | (1,227,086) | $ (27,604) |
Balance (in shares) at Mar. 31, 2019 | 149,425,000 | |||
Increase (Decrease) in Shareholders' (Deficit) Equity | ||||
Net loss | (43,446) | (43,446) | ||
Issuance of common stock pursuant to the exercise of stock options and employee stock purchase plan | $ 3 | 667 | 670 | |
Issuance of common stock pursuant to the exercise of stock options and employee stock purchase plan (in shares) | 354,000 | |||
Restricted stock award | $ 1 | (1) | ||
Restricted stock award (in shares) | 106,000 | |||
Stock option and restricted stock compensation expense | 2,106 | 2,106 | ||
Directors' deferred share unit compensation | 100 | 100 | ||
Balance at Jun. 30, 2019 | $ 1,498 | 1,200,860 | (1,270,532) | (68,174) |
Balance (in shares) at Jun. 30, 2019 | 149,885,000 | |||
Increase (Decrease) in Shareholders' (Deficit) Equity | ||||
Net loss | (21,750) | (21,750) | ||
Issuance of common stock pursuant to the exercise of stock options and employee stock purchase plan | 73 | 73 | ||
Issuance of common stock pursuant to the exercise of stock options and employee stock purchase plan (in shares) | 30,000 | |||
Restricted stock award (in shares) | (227,000) | |||
Stock option and restricted stock compensation expense | 3,580 | 3,580 | ||
Directors' deferred share unit compensation | 46 | 46 | ||
Balance at Sep. 30, 2019 | $ 1,498 | $ 1,204,559 | $ (1,292,282) | $ (86,225) |
Balance (in shares) at Sep. 30, 2019 | 149,688,000 | 149,688,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (108,947) | $ (127,044) |
Adjustments to reconcile net loss to net cash used for operating activities: | ||
Non-cash royalty revenue related to sale of future royalties | (32,102) | (22,873) |
Non-cash interest expense on liability related to sale of future royalties and convertible senior notes | 11,525 | 8,203 |
Depreciation and amortization | 3,277 | 6,192 |
Loss (gain) on sale/disposal of fixed assets and impairment charges | 2,544 | (30) |
Operating lease right-of-use asset impairment | 694 | |
Stock and deferred share unit compensation | 10,939 | 12,282 |
Deferred rent | (62) | |
Change in operating assets and liabilities: | ||
Accounts receivable | 1,607 | 534 |
Unbilled revenue/reimbursement | (2,392) | 2,059 |
Inventory | (900) | |
Contract asset | 500 | (500) |
Prepaid and other current assets | (499) | (3,353) |
Operating lease right-of-use assets | 994 | |
Other assets | 296 | (144) |
Accounts payable | (3,751) | 1,420 |
Accrued compensation | 2,336 | (1,157) |
Other accrued liabilities | (6,058) | 7,898 |
Deferred revenue | 65,050 | (7,662) |
Operating lease liability | (1,823) | |
Net cash used for operating activities | (55,810) | (125,137) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (2,762) | (4,220) |
Net cash used for investing activities | (2,762) | (4,220) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock under stock plans | 811 | 2,943 |
Proceeds from common stock issuance, net of $395 of transaction costs | 162,512 | |
Net cash provided by financing activities | 811 | 165,455 |
Net change in cash and cash equivalents | (57,761) | 36,098 |
Cash and cash equivalents, beginning of period | 262,252 | 267,107 |
Cash and cash equivalents, end of period | $ 204,491 | $ 303,205 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($) | |
CONSOLIDATED STATEMENTS OF CASH FLOWS | |
Payments of Stock Issuance Costs | $ 395 |
Nature of Business and Plan of
Nature of Business and Plan of Operations | 9 Months Ended |
Sep. 30, 2019 | |
Nature of Business and Plan of Operations | |
Nature of Business and Plan of Operations | A. Nature of Business and Plan of Operations ImmunoGen, Inc. (the Company) was incorporated in Massachusetts in 1981 and is focused on the development of antibody-drug conjugates, or ADC, therapeutics. The Company has generally incurred operating losses and negative cash flows from operations since inception, incurred a net loss of $108.9 million during the nine months ended September 30, 2019, and has an accumulated deficit of approximately $1.3 billion as of September 30, 2019. 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 September 30, 2019, the Company had $204.5 million of cash and cash equivalents on hand. The Company anticipates that its current capital resources and expense reductions resulting from the operational changes announced in June 2019 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, and research funding. 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 | 9 Months Ended |
Sep. 30, 2019 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | B. Summary of Significant Accounting Policies 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., ImmunoGen BioPharma (Ireland) Limited, 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, 2018, condensed consolidated balance sheet data presented for comparative purposes were 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, 2018. Subsequent Events The Company has evaluated all events or transactions that occurred after September 30, 2019, up through the date the Company issued these financial statements. Following the decision to discontinue development of IMGN779 in conjuction with the portfolio prioritization undertaken as part of the Company’s restructuring, Jazz Pharmaceuticals Ireland Limited provided notice in October 2019 of Opt-Out of the IMGN779 Collaboration Product pursuant to its Collaboration and Option Agreement with the Company. As a result, the Company will recognize as revenue in the fourth quarter $14.5 million of the $75 million of upfront arrangement consideration that was allocated to the material right for the IMGN779 license option. The Company did not have any other material recognizable or unrecognizable subsequent events during this period. Revenue Recognition The Company enters into licensing and development agreements with collaborators for the development of ADCs. The terms of these agreements contain multiple deliverables/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) prior to the decommission of the Company’s Norwood facility in 2018, the manufacture of preclinical or clinical materials for the collaborative partner. Payments to the Company under these agreements may include upfront fees, option fees, exercise fees, payments for research activities, payments for the manufacture of preclinical or clinical materials, payments based upon the achievement of certain milestones, and royalties on product sales. The Company follows the provisions of Accounting Standards Codification Topic 606 - Revenue from Contracts with Customers 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 five 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 selling price for each performance obligation that was identified in the contract, which is discussed in further detail below. At September 30, 2019, 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: Bayer (one exclusive single-target license) Biotest (one exclusive single-target license) CytomX (one exclusive single-target license) Debiopharm (one exclusive single-compound license) Fusion Pharmaceuticals (one exclusive single-compound license) Novartis (five exclusive single-target licenses) Oxford BioTherapeutics/Menarini (one exclusive single target license sublicensed from Amgen) 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) ● 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, previously, the manufacture of preclinical or clinical materials for the collaborative partner. 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 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 has also produced research material for potential collaborators under material transfer agreements. The Company is compensated at negotiated rates that are consistent with what other third parties would charge. The Company records amounts received for research materials produced or services performed as a component of research and development support revenue. As of third quarter 2019, the Company is no longer making research services available under its development and commercialization licenses. Prior to 2019, the Company also provided cytotoxic agents to its collaborators and produced preclinical and clinical materials (drug substance) at negotiated prices generally consistent with what other third parties would charge. The Company recognized revenue on cytotoxic agents and on preclinical and clinical materials when the materials passed all quality testing required for collaborator acceptance and control had transferred to the collaborator. The majority of the Company’s costs to produce these preclinical and clinical materials were fixed and then allocated to each batch based on the number of batches produced during the period. 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 recognizes 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 September 30, 2019, 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 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. 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. 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. In determining whether a collaboration and option agreement is within the scope of ASC 808, Collaborative Arrangements 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 September 30, 2019, the aggregate amount of the transaction price allocated to remaining performance obligations comprising deferred revenue was $145.9 million. The Company expects to recognize revenue on approximately 10%, 30% and 60% 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 nine months ended September 30, 2019 and 2018 (in thousands): Balance at Balance at Nine months ended September 30, 2019 December 31, 2018 Additions Deductions End of Period Contract asset $ 500 $ — $ (500) $ — Contract liabilities $ 80,802 $ 65,287 $ (237) $ 145,852 Balance at January 1, 2018 Balance at Nine months ended September 30, 2018 (ASC 606 adoption) Additions Deductions Impact of Netting End of Period Contract asset $ — $ 500 $ (5,000) $ 5,000 $ 500 Contract liabilities $ 89,967 $ 706 $ (13,368) $ 5,000 $ 82,305 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 Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Revenue recognized in the period from: Amounts included in contract liabilities at the beginning of the period $ 79 $ 172 $ 237 $ 13,368 Performance obligations satisfied in previous periods $ — $ 500 $ 5,000 $ 500 In accordance with ASC 606, a contract asset and related revenue of $500,000 was recorded for a probable milestone in the quarter ended September 30, 2018 pursuant to a license agreement with Fusion Pharmaceuticals, which was subsequently paid during the nine months ended September 30, 2019. During the nine months ended September 30, 2019, the Company received a $5 million regulatory milestone payment earned under its license agreement with Genentech, a member of the Roche Group. The full amount of the milestone was recognized as revenue in the period as the amount allocated to future rights to technological improvements was not material. Also during the nine months ended September 30, 2019, $65.2 million was recorded as deferred revenue as a result of a sale of the Company’s residual rights to receive royalty payments on commercial sales of Kadcyla® (ado-trastuzumab emtansine) as discussed in Note E, and $237,000 of amortization of deferred revenue was recorded related to numerous collaborators’ rights to technological improvements. As a result of adoption of ASC 606, a contract asset of $5 million was recorded for a probable milestone under the Company’s license agreement with Takeda, which was netted against an approximate $1 million contract liability specifically related to the agreement. It was subsequently earned and paid during the nine months ended September 30, 2018. Also during the prior year period, 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 nine months ended September 30, 2018 upon completion of certain performance obligations under license agreements with Debiopharm and Fusion, $1.3 million of amortization of deferred revenue was recorded related to numerous collaborators’ rights to technological improvements, and $335,000 of revenue was recognized upon shipment of clinical materials to a partner. 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 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 September 30, 2019 and December 31, 2018. The Company’s investment policy, approved by the Board of Directors, limits the amount it may invest in any one type of investment, thereby reducing credit risk concentrations. Cash and Cash Equivalents All highly liquid financial instruments with maturities of three months or less when purchased are considered cash equivalents. As of September 30, 2019 and December 31, 2018, the Company held $204.5 million and $262.3 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 The Company had $730,000 of accrued capital expenditures as of September 30, 2018, which has been treated as a non-cash investing activity and, accordingly, is not reflected in the consolidated statement of cash flows. The Company had no accrued capital expenditures as of September 30, 2019. 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 September 30, 2019, the Company held certain assets that are required to be measured at fair value on a recurring basis. The following table represents the fair value hierarchy for the Company’s financial assets measured at fair value on a recurring basis as of September 30, 2019 (in thousands): Fair Value Measurements at September 30, 2019 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 $ 187,759 $ 187,759 $ — $ — As of December 31, 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 December 31, 2018 (in thousands): Fair Value Measurements at December 31, 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 $ 242,604 $ 242,604 $ — $ — 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 estimated fair value of the convertible 4.5% senior notes (the “Convertible Notes”) approximates the gross carrying value of $2.1 million as of September 30, 2019. The estimated fair value and gross carrying amount was $2.8 million and $2.1 million, respectively, as of December 31, 2018. The fair value of the Convertible Notes is influenced by interest rates, the Company’s stock price and stock price volatility and is determined by prices for the Convertible Notes observed in a market which is a Level 2 input for fair value purposes due to the low frequency of trades. There have been no trades since January 2018, so the fair value as of September 30, 2019 uses Level 3 inputs. Unbilled Revenue/Reimbursement Unbilled revenue/reimbursement substantially represents research funding earned based on actual resources utilized and external expenses incurred under certain of the Company’s collaboration agreements. Clinical Trial Accruals Clinical trial expenses are a significant component of research and development expenses, and the Company outsources a significant portion of these costs to third parties. Third party clinical trial expenses include investigator fees, site costs (patient costs), clinical research organization costs, and costs for central laboratory testing and data management. The accrual for site and patient costs includes inputs such as estimates of patient enrollment, patient cycles incurred, clinical site activations, and other pass-through costs. These inputs are required to be estimated due to a lag in receiving the actual clinical information from third parties. . Non-refundable advance clinical payments for goods or services that will be used or rendered for future R&D activities are recorded as a prepaid asset and recognized as expense as the related goods are delivered or the related services are performed. Leases Effective January 1, 2019, the Company adopted ASU 2016-2, Leases (Topic 842) related liability recorded. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The Company uses the implicit rate when readily determinable. As a number of the Company’s leases do not provide an implicit rate, the Company uses an incremental borrowing rate applicable to the Company based on the information available at the commencement date in determining the present value of lease payments. As the Company has no existing or proposed collateralized borrowing arrangements, to determine a reasonable incremental borrowing rate, the Company considers collateral assumptions, the lease term, the Company’s current credit risk profile and rates for existing borrowing arrangements for comparable peer companies. The operating lease ROU assets are netted against any lease incentive and straight-line lease liabilities that have been recorded. The Company accounts for the lease and fixed non-lease components as a single lease component. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. Computation of Net Loss per Common Share Basic and diluted net loss per share is calculated based upon the weighted average number of common shares outstanding during the period. During periods of income, participating securities are allocated a proportional share of income determined by dividing total weighted average participating securities by the sum of the total weighted average common shares and participating securities (the “two-class method”). Shares of the Company’s restricted stock participate in any dividends that may be declared by the Company and are therefore considered to be participating securities. Participating securities have the effect of diluting both basic and diluted earnings per share during periods of income. During periods of loss, no loss is allocated to participating securities since they have no contractual obligation to share in the losses of the Company. Diluted (loss) income per share is computed after giving consideration to the dilutive effect of stock options, convertible notes and restricted stock that are outstanding during the period, except where such non-participating securities would be anti-dilutive. The Company’s common stock equivalents, as calculated in accordance with the treasury-stock method for the options and unvested restricted stock and the if-converted method for the Convertible Notes, are shown in the following table (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Options outstanding to purchase common stock, shares issuable under the employee stock purchase plan, and unvested restricted stock/units at end of period 18,754 18,153 18,754 18,153 Common stock equivalents under treasury stock method for options, shares issuable under the employee stock purchase plan, and unvested restricted stock 731 3,153 926 3,378 Shares issuable upon conversion of convertible notes at end of period 501 501 501 501 Common stock equivalents under if-converted method for convertible notes 501 501 501 501 The Company’s common stock equivalents have not been included in the net loss per share calculation because their effect is anti-dilutive due to the Company’s net loss position. Stock-Based Compensation As of September 30, 2019, the Company is authorized to grant future awards under an employee share-based compensation plan, which is the ImmunoGen, Inc. 2018 Employee, Director and Consultant Equity Incentive Plan, or the 2018 Plan. The 2018 Plan provides for the issuance of stock grants, the grant of options, and the grant of stock-b |
Agreements
Agreements | 9 Months Ended |
Sep. 30, 2019 | |
Agreements | |
Agreements | C. Agreements Significant Collaborative Agreements Roche In May 2000, the Company granted Genentech, now a member of the Roche Group, 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, $32.1 million and $22.9 million of non-cash royalties on net sales of Kadcyla were recorded and included in non-cash royalty revenue for the nine months ended September 30, 2019 and 2018. Kadcyla sales occurring after January 1, 2015 were covered by a royalty purchase agreement whereby the associated cash, except for a residual tail, was remitted to Immunity Royalty Holdings, L.P, or IRH. In January 2019, the Company sold its residual tail to OMERS, the defined benefit pension plan for municipal employees in the Province of Ontario, Canada, for a net payment of $65.2 million, as discussed further in Note E. Simultaneously, OMERS purchased IRH’s right to the royalties the Company previously sold as described above, therefore obtaining the rights to 100% of the royalties received from that date on. On May 3, 2019, Roche notified the Company that the U.S. Food and Drug Administration approved Kadcyla for adjuvant (after surgery) treatment of people with HER2-positive early breast cancer who have residual invasive disease after neoadjuvant (before surgery) taxane and Herceptin® (trastuzumab)-based treatment, resulting in a $5 million regulatory milestone payment to the Company for a first extended indication, which is included in license and milestone fees for the nine months ended September 30, 2019. The next potential milestone the Company will be entitled to receive will be a $5 million regulatory milestone for marketing approval of Kadcyla for a second extended indication as defined in the license. 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 nine months ended September 30, 2018. 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 first license was granted to Takeda in December 2015. In March 2018, the right-to-test agreement expired without Takeda exercising its option to a second license or extending 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 nine months ended September 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. Fusion In December 2016, the Company entered into an exclusive license agreement to a specified target with Fusion Pharmaceuticals Inc. The Company is entitled to receive up to a total of $50 million in milestone payments, plus royalties on the commercial sales of any resulting products. The total milestones are categorized as follows: development milestones—$15 million; and sales milestones—$35 million. During the three months ended September 30, 2018, a development milestone related to dosing of a first patient in a Phase I clinical trial became probable of being attained, and accordingly, $500,000 was recorded as license and milestone fee revenue in the three and nine months ended September 30, 2018, which was subsequently paid in 2019. The next potential milestone payment the Company will be entitled to receive will be a $1.5 million development milestone payment with the initiation of a Phase II clinical trial. Fusion is responsible for the manufacturing, product development, and marketing of any products resulting from the license. Debiopharm In May 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 For additional information related to these agreements, as well as the Company’s other significant collaborative agreements, please read Note C, Agreements, |
Convertible 4.5% Senior Notes
Convertible 4.5% Senior Notes | 9 Months Ended |
Sep. 30, 2019 | |
Convertible 4.5% Senior Notes | |
Convertible 4.5% Senior Notes | D. Convertible 4.5% Senior Notes In 2016, the Company issued 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 $71,000 and $70,000 of interest expense in each of the nine months ended September 30, 2019 and 2018, 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 | 9 Months Ended |
Sep. 30, 2019 | |
Liability Related to Sale of Future Royalties | |
Liability Related to Sale of Future Royalties | E. Liability Related to Sale of Future Royalties In 2015, IRH purchased the right to receive 100% of the royalty payments on commercial sales of Kadcyla subsequent to December 31, 2014, arising under the Company’s development and commercialization license with Genentech, until IRH had 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 was met, if ever, the Company would thereafter have received 85% and IRH would have received 15% of the Kadcyla royalties for the remaining royalty term. At consummation of the transaction, the Company received cash proceeds of $200 million. As part of this sale, the Company incurred $5.9 million of transaction costs, which are presented net of the liability in the accompanying consolidated balance sheet and 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 then ongoing involvement in the cash flows related to these royalties at the time, 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. In January 2019, the Company sold its residual rights to receive royalty payments on commercial sales of Kadcyla to OMERS, the defined benefit pension plan for municipal employees in the Province of Ontario, Canada, for a net payment of $65.2 million (amount is net of $1.5 million in contingent broker fees). Simultaneously, OMERS purchased IRH’s right to the royalties the Company previously sold as described above, therefore obtaining the rights to 100% of the royalties received from that date on. Because the Company will not be involved with the cash flows related to the residual royalties, the $65.2 million of net proceeds received from the sale of its residual rights to receive royalty payments was recorded as long-term deferred revenue and will be amortized as the cash related to the residual rights is received using the units of revenue approach. During the nine months ended September 30, 2019, the Company did not receive any royalties related to the residual rights, therefore, no revenue was recognized. Additionally, the purchase of IRH’s interest by OMERS did not result in an extinguishment or modification of the original instrument and, accordingly, the Company will continue to account for the remaining obligation as a liability as outlined above. The following table shows the activity within the liability account during the nine-month period ended September 30, 2019 (in thousands): Nine Months Ended September 30, 2019 Liability related to sale of future royalties, net — beginning balance $ 148,225 Kadcyla royalty payments received and paid (28,224) Non-cash interest expense recognized 11,513 Liability related to sale of future royalties, net — ending balance $ 131,514 As royalties are remitted to OMERS, 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 as noted above over the life of the underlying license agreement with Genentech covering Kadcyla. 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 8.9%, and a current effective interest rate of 11.6% as of September 30, 2019. The Company periodically assesses the estimated royalty payments to OMERS 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 are paid 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 OMERS 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. |
Capital Stock
Capital Stock | 9 Months Ended |
Sep. 30, 2019 | |
Capital Stock | |
Capital Stock | F. Capital Stock 2001 Non-Employee Director Stock Plan During the nine months ended September 30, 2018, the Company recorded $31,000 in expense related to stock units outstanding under the Company’s 2001 Non-Employee Director Stock Plan, or the 2001 Plan. A market value of $72,000 for the stock units was paid to a retiring director in June 2018, effectively terminating the plan. Compensation Policy for Non-Employee Directors During the three and nine months ended September 30, 2019, the Company recorded $45,000 and $246,000 in compensation expense, respectively, related to deferred share units issued and outstanding under the Company’s Compensation Policy for Non-Employee Directors, compared to $101,000 and $258,000 in compensation expense recorded during the three and nine months ended September 30, 2018, respectively. 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. In February 2018 and June 2018, the Company issued retiring directors 77,012 and 95,497 shares of common stock of the Company to settle outstanding deferred share units. 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 108,000 and 128,000 options in June 2019 and 2018, respectively, and the related compensation expense for the nine months ended September 30, 2019 and 2018 is included in the amounts discussed in the “Stock-Based Compensation” section of Note B above. |
Restructuring Charges
Restructuring Charges | 9 Months Ended |
Sep. 30, 2019 | |
Restructuring Charges. | |
Restructuring Charges | G. Restructuring Charges 2019 Corporate Restructuring On June 26, 2019, the Board of Directors approved a plan to restructure the business to focus resources on continued development of mirvetuximab soravtansine and a select portfolio of three earlier-stage product candidates, resulting in a reduction of our workforce by approximately 220 positions, with a majority of these employees separating from the business by mid-July 2019 and the remaining affected employees transitioning over varying periods of time of up to 12 months. Communication of the plan to the affected employees was substantially completed on June 27, 2019. As a result of the workforce reduction, during the Compensation-Nonretirement Postemployment Benefits, A summary of activity against the corporate restructuring charge related to the employee terminations in 2019 is as follows: Employee Termination Benefits Costs Initial charge related to employee benefits - June 2019 $ 16,030 Additional charges/adjustments during the period (224) Payments during the period (6,930) Balance at September 30, 2019 $ 8,876 In addition to the termination benefits and other related charges, the Company will seek to sub-lease the majority of the laboratory and office space at 830 Winter Street in Waltham, Massachusetts. The financial impact of these efforts is dependent on the length of time it takes to find a tenant and the terms of the sub-lease. The decision to vacate part of its corporate office resulted in a change in asset groupings and also represented an impairment indicator. The Company determined that the right-of-use asset and leasehold improvements were recoverable based on expected sub-lease income, and therefore, no impairment was recorded. In addition, the Company also decided to liquidate excess laboratory equipment and expects the proceeds to be less than the carrying value. As a result, the Company recorded an impairment charge of $2.5 million to write down the equipment to fair value based on current market re-sale estimates obtained. 2018 Manufacturing Restructuring 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 led to the ramp-down of manufacturing and quality activities at the Norwood, Massachusetts facility by the end of 2018, and a full decommissioning of the facility in February 2019. Implementation of the new operating model resulted in the separation of 22 employees. 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 related to a pre-existing plan in the first quarter of 2018 in accordance with ASC 712, Compensation-Nonretirement Postemployment Benefits, as such amounts were probable and reasonably estimable. Additional expense was recorded for incremental retention benefits over the remaining service period of the related employees, which totaled $1.1 million for the six months ended June 30, 2018, all of which was paid out by the end of 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 of 2018. Cash payments related to severance were substantially paid out by June 30, 2019. A summary of activity against the manufacturing restructuring charge related to the employee terminations in 2018 is as follows: Employee Termination Benefits Costs Balance at December 31, 2018 $ 841 Payments during the period (841) Balance at September 30, 2019 $ — 2016 Corporate Restructuring 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 nine months ended September 30, 2019, the Company recorded a $559,000 impairment charge related to this lease, which represents the remaining balance of the right to use asset as the likelihood of finding a sub-lessor has diminished significantly as the lease approaches termination. No such charges were recorded in the prior year period. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2019 | |
Leases | |
Leases | H. Leases The Company currently has the following two real estate leases: (i) an agreement with CRP/King 830 Winter L.L.C. for the rental of approximately 120,000 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 . 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; and (ii) an 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 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 the 930 Winter Street space, and as a result of the 2019 corporate restructuring plan announced in June 2019, will begin to seek to sublease a significant portion of the space at 830 Winter Street. The Company ended its lease and vacated its manufacturing and office space at 333 Providence Highway, Norwood, MA in February 2019 pursuant to the manufacturing restructuring plan described previously. In addition to the two real estate leases noted above, the Company currently has a lease agreement through November 2023 for the rental of copier equipment. During the first quarter of 2019, the Company adopted the new lease standard by recognizing and measuring leases existing at, or entered into after, January 1, 2019. In accordance with the transition method provided by ASC Update No. 2018-11, Leases (Topic 842): Targeted Improvements, Upon adoption, a ROU asset of $17.6 million and a lease liability of $27.3 million were recorded and are identified separately in the Company’s consolidated balance sheets for the existing operating leases. There was no impact to the consolidated statements of operations. Upon adoption, the amount of the ROU assets recorded was offset by the applicable unamortized lease incentive and straight-line lease liability balances of $9.7 million, therefore, there was no impact to accumulated deficit. There were no initial direct costs related to the leases to consider. The Company’s operating lease liabilities related to its real estate lease agreements were calculated using a collateralized incremental borrowing rate. The Company’s operating lease liability related to its equipment lease was calculated using an implicit rate provided in the lease. The weighted average discount rate for the operating lease liability is approximately 11%. A 100 basis point change in the incremental borrowing rate would result in less than a $1 million impact to the ROU assets and liabilities recorded. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term, which for the nine months ended September 30, 2019 and 2018 was $3.3 million and $4.3 million, respectively, and is included in operating expenses in the consolidated income statements. Cash paid against operating lease liabilities during the nine months ended September 30, 2019 was $4.0 million. As of September 30, 2019, the Company’s ROU assets and lease liabilities for operating leases totaled $15.9 million and $25.5 million, respectively, and the weighted average remaining term of the operating leases is approximately six and a half years. The Company’s finance leases consist entirely of single payment obligations that have been made for equipment. The related asset balances, net of accumulated amortization, of $1.2 million and $595,000 as of September 30, 2019 and December 31, 2018, respectively, are included in property and equipment in the consolidated balance sheets. Amortization expense of $237,000 and $139,000 for the nine months ended September 30, 2019 and 2018, respectively, is included in operating expenses in the consolidated income statements. There are no obligations under finance leases as of September 30, 2019, as all of the finance leases were single payment obligations which have all been made. The maturities of operating lease liabilities discussed above are as follows (in thousands): 2019 (three months remaining) $ 1,360 2020 5,485 2021 5,323 2022 5,389 2023 5,510 Thereafter 12,336 Total lease payments 35,403 Less imputed interest (9,952) Total lease liabilities $ 25,451 In addition to the amounts in the table above, the Company is also responsible for variable operating costs and real estate taxes approximating $3.0 million per year through March 2026. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies | |
Commitments and Contingencies | I. Commitments and Contingencies 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 September 30, 2019, the maximum amount that may be payable in the future under the Company’s current collaborative agreements is $80.0 million. Manufacturing Commitments In 2018, the Company executed a commercial agreement with one of its manufacturers for future production of antibody through calendar 2025. In May 2019, the agreement was amended to reduce the number of committed antibody batches for an agreed-upon exit fee, which was recorded as research and development expense in the first quarter of 2019. After further negotiations, the Company’s noncancelable commitment for future production is approximately €5 million at September 30, 2019. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
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., ImmunoGen BioPharma (Ireland) Limited, 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, 2018, condensed consolidated balance sheet data presented for comparative purposes were 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, 2018. |
Subsequent Events | Subsequent Events The Company has evaluated all events or transactions that occurred after September 30, 2019, up through the date the Company issued these financial statements. Following the decision to discontinue development of IMGN779 in conjuction with the portfolio prioritization undertaken as part of the Company’s restructuring, Jazz Pharmaceuticals Ireland Limited provided notice in October 2019 of Opt-Out of the IMGN779 Collaboration Product pursuant to its Collaboration and Option Agreement with the Company. As a result, the Company will recognize as revenue in the fourth quarter $14.5 million of the $75 million of upfront arrangement consideration that was allocated to the material right for the IMGN779 license option. The Company did not have any other material recognizable or unrecognizable subsequent events during this period. |
Revenue Recognition | Revenue Recognition The Company enters into licensing and development agreements with collaborators for the development of ADCs. The terms of these agreements contain multiple deliverables/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) prior to the decommission of the Company’s Norwood facility in 2018, the manufacture of preclinical or clinical materials for the collaborative partner. Payments to the Company under these agreements may include upfront fees, option fees, exercise fees, payments for research activities, payments for the manufacture of preclinical or clinical materials, payments based upon the achievement of certain milestones, and royalties on product sales. The Company follows the provisions of Accounting Standards Codification Topic 606 - Revenue from Contracts with Customers 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 five 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 selling price for each performance obligation that was identified in the contract, which is discussed in further detail below. At September 30, 2019, 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: Bayer (one exclusive single-target license) Biotest (one exclusive single-target license) CytomX (one exclusive single-target license) Debiopharm (one exclusive single-compound license) Fusion Pharmaceuticals (one exclusive single-compound license) Novartis (five exclusive single-target licenses) Oxford BioTherapeutics/Menarini (one exclusive single target license sublicensed from Amgen) 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) ● 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, previously, the manufacture of preclinical or clinical materials for the collaborative partner. 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 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 has also produced research material for potential collaborators under material transfer agreements. The Company is compensated at negotiated rates that are consistent with what other third parties would charge. The Company records amounts received for research materials produced or services performed as a component of research and development support revenue. As of third quarter 2019, the Company is no longer making research services available under its development and commercialization licenses. Prior to 2019, the Company also provided cytotoxic agents to its collaborators and produced preclinical and clinical materials (drug substance) at negotiated prices generally consistent with what other third parties would charge. The Company recognized revenue on cytotoxic agents and on preclinical and clinical materials when the materials passed all quality testing required for collaborator acceptance and control had transferred to the collaborator. The majority of the Company’s costs to produce these preclinical and clinical materials were fixed and then allocated to each batch based on the number of batches produced during the period. 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 recognizes 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 September 30, 2019, 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 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. 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. 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. In determining whether a collaboration and option agreement is within the scope of ASC 808, Collaborative Arrangements 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 September 30, 2019, the aggregate amount of the transaction price allocated to remaining performance obligations comprising deferred revenue was $145.9 million. The Company expects to recognize revenue on approximately 10%, 30% and 60% 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 nine months ended September 30, 2019 and 2018 (in thousands): Balance at Balance at Nine months ended September 30, 2019 December 31, 2018 Additions Deductions End of Period Contract asset $ 500 $ — $ (500) $ — Contract liabilities $ 80,802 $ 65,287 $ (237) $ 145,852 Balance at January 1, 2018 Balance at Nine months ended September 30, 2018 (ASC 606 adoption) Additions Deductions Impact of Netting End of Period Contract asset $ — $ 500 $ (5,000) $ 5,000 $ 500 Contract liabilities $ 89,967 $ 706 $ (13,368) $ 5,000 $ 82,305 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 Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Revenue recognized in the period from: Amounts included in contract liabilities at the beginning of the period $ 79 $ 172 $ 237 $ 13,368 Performance obligations satisfied in previous periods $ — $ 500 $ 5,000 $ 500 In accordance with ASC 606, a contract asset and related revenue of $500,000 was recorded for a probable milestone in the quarter ended September 30, 2018 pursuant to a license agreement with Fusion Pharmaceuticals, which was subsequently paid during the nine months ended September 30, 2019. During the nine months ended September 30, 2019, the Company received a $5 million regulatory milestone payment earned under its license agreement with Genentech, a member of the Roche Group. The full amount of the milestone was recognized as revenue in the period as the amount allocated to future rights to technological improvements was not material. Also during the nine months ended September 30, 2019, $65.2 million was recorded as deferred revenue as a result of a sale of the Company’s residual rights to receive royalty payments on commercial sales of Kadcyla® (ado-trastuzumab emtansine) as discussed in Note E, and $237,000 of amortization of deferred revenue was recorded related to numerous collaborators’ rights to technological improvements. As a result of adoption of ASC 606, a contract asset of $5 million was recorded for a probable milestone under the Company’s license agreement with Takeda, which was netted against an approximate $1 million contract liability specifically related to the agreement. It was subsequently earned and paid during the nine months ended September 30, 2018. Also during the prior year period, 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 nine months ended September 30, 2018 upon completion of certain performance obligations under license agreements with Debiopharm and Fusion, $1.3 million of amortization of deferred revenue was recorded related to numerous collaborators’ rights to technological improvements, and $335,000 of revenue was recognized upon shipment of clinical materials to a partner. 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 September 30, 2019 and December 31, 2018. 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 September 30, 2019 and December 31, 2018, the Company held $204.5 million and $262.3 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 $730,000 of accrued capital expenditures as of September 30, 2018, which has been treated as a non-cash investing activity and, accordingly, is not reflected in the consolidated statement of cash flows. The Company had no accrued capital expenditures as of September 30, 2019. |
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 September 30, 2019, the Company held certain assets that are required to be measured at fair value on a recurring basis. The following table represents the fair value hierarchy for the Company’s financial assets measured at fair value on a recurring basis as of September 30, 2019 (in thousands): Fair Value Measurements at September 30, 2019 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 $ 187,759 $ 187,759 $ — $ — As of December 31, 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 December 31, 2018 (in thousands): Fair Value Measurements at December 31, 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 $ 242,604 $ 242,604 $ — $ — 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 estimated fair value of the convertible 4.5% senior notes (the “Convertible Notes”) approximates the gross carrying value of $2.1 million as of September 30, 2019. The estimated fair value and gross carrying amount was $2.8 million and $2.1 million, respectively, as of December 31, 2018. The fair value of the Convertible Notes is influenced by interest rates, the Company’s stock price and stock price volatility and is determined by prices for the Convertible Notes observed in a market which is a Level 2 input for fair value purposes due to the low frequency of trades. There have been no trades since January 2018, so the fair value as of September 30, 2019 uses Level 3 inputs. |
Unbilled Revenue/Reimbursement | Unbilled Revenue/Reimbursement Unbilled revenue/reimbursement substantially represents research funding earned based on actual resources utilized and external expenses incurred under certain of the Company’s collaboration agreements. |
Clinical Trial Accruals | Clinical Trial Accruals Clinical trial expenses are a significant component of research and development expenses, and the Company outsources a significant portion of these costs to third parties. Third party clinical trial expenses include investigator fees, site costs (patient costs), clinical research organization costs, and costs for central laboratory testing and data management. The accrual for site and patient costs includes inputs such as estimates of patient enrollment, patient cycles incurred, clinical site activations, and other pass-through costs. These inputs are required to be estimated due to a lag in receiving the actual clinical information from third parties. . Non-refundable advance clinical payments for goods or services that will be used or rendered for future R&D activities are recorded as a prepaid asset and recognized as expense as the related goods are delivered or the related services are performed. |
Leases | Leases Effective January 1, 2019, the Company adopted ASU 2016-2, Leases (Topic 842) related liability recorded. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The Company uses the implicit rate when readily determinable. As a number of the Company’s leases do not provide an implicit rate, the Company uses an incremental borrowing rate applicable to the Company based on the information available at the commencement date in determining the present value of lease payments. As the Company has no existing or proposed collateralized borrowing arrangements, to determine a reasonable incremental borrowing rate, the Company considers collateral assumptions, the lease term, the Company’s current credit risk profile and rates for existing borrowing arrangements for comparable peer companies. The operating lease ROU assets are netted against any lease incentive and straight-line lease liabilities that have been recorded. The Company accounts for the lease and fixed non-lease components as a single lease component. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. |
Computation of Net Loss per Common Share | Computation of Net Loss per Common Share Basic and diluted net loss per share is calculated based upon the weighted average number of common shares outstanding during the period. During periods of income, participating securities are allocated a proportional share of income determined by dividing total weighted average participating securities by the sum of the total weighted average common shares and participating securities (the “two-class method”). Shares of the Company’s restricted stock participate in any dividends that may be declared by the Company and are therefore considered to be participating securities. Participating securities have the effect of diluting both basic and diluted earnings per share during periods of income. During periods of loss, no loss is allocated to participating securities since they have no contractual obligation to share in the losses of the Company. Diluted (loss) income per share is computed after giving consideration to the dilutive effect of stock options, convertible notes and restricted stock that are outstanding during the period, except where such non-participating securities would be anti-dilutive. The Company’s common stock equivalents, as calculated in accordance with the treasury-stock method for the options and unvested restricted stock and the if-converted method for the Convertible Notes, are shown in the following table (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Options outstanding to purchase common stock, shares issuable under the employee stock purchase plan, and unvested restricted stock/units at end of period 18,754 18,153 18,754 18,153 Common stock equivalents under treasury stock method for options, shares issuable under the employee stock purchase plan, and unvested restricted stock 731 3,153 926 3,378 Shares issuable upon conversion of convertible notes at end of period 501 501 501 501 Common stock equivalents under if-converted method for convertible notes 501 501 501 501 The Company’s common stock equivalents have not been included in the net loss per share calculation because their effect is anti-dilutive due to the Company’s net loss position. |
Stock-Based Compensation | Stock-Based Compensation As of September 30, 2019, the Company is authorized to grant future awards under an employee share-based compensation plan, which is the ImmunoGen, Inc. 2018 Employee, Director and Consultant Equity Incentive Plan, or the 2018 Plan. The 2018 Plan provides for the issuance of stock grants, the grant of options, and the grant of stock-based 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 of the Company’s stock. The expected term of stock options granted is based exclusively on historical data and represents the period of time that stock options granted are expected to be outstanding. The expected term is calculated for and applied to one group of stock options as the Company does not expect substantially different exercise or post-vesting termination behavior among its option recipients. The risk-free rate of the stock options is based on the U.S. Treasury rate in effect at the time of grant for the expected term of the stock options. Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Dividend None None None None Volatility 81.63% 71.91% 76.28% 70.99% Risk-free interest rate 1.78% 2.89% 2.24% 2.72% 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 September 30, 2019 and 2018 were $1.68 and $6.11 per share, respectively, and $2.85 and $6.74 for options granted during the nine months ended September 30, 2019 and 2018, respectively. A summary of option activity under the Company’s equity plans as of September 30, 2019, and changes during the nine 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, 2018 15,564 $ 10.20 Granted 7,340 4.28 Exercised (86) 2.53 Forfeited/Canceled (5,712) 9.07 Outstanding at September 30, 2019 17,106 $ 8.08 There were approximately 3.7 million stock options included in the options outstanding balance as of June 30, 2019 that were expected to forfeit in the second half of 2019 in connection with the workforce reduction related to the restructuring event in the second quarter, the details of which are discussed further in Note G. The majority of these options were forfeited in the quarter ended September 30, 2019. Accordingly, the Company recorded an approximate $2.8 million credit to stock compensation expense in June 2019 as a result of the change in the forfeiture estimate. In 2018, the Company granted 295,200 performance stock options to certain employees that will vest in two equal installments upon the achievement of specified performance goals within the next five years . At September 30, 2019, 168,200 of these options are still outstanding. The Company determined it is not currently probable that these performance goals will be achieved, and, therefore, no expense has been recorded to date. The fair value of the performance-based options that could be expensed in future periods, net of estimated forfeitures (inclusive of the impact of the recent restructuring event), is $850,000. A summary of restricted stock and restricted stock unit activity under the Company’s equity plans as of September 30, 2019 and changes during the nine-month period ended September 30, 2019 is presented below (in thousands): Number of Weighted- Restricted Average Grant Stock Shares Date Fair Value Unvested at December 31, 2018 1,816 $ 2.87 Awarded 631 2.55 Vested (504) 2.64 Forfeited (296) 2.56 Unvested at September 30, 2019 1,647 $ 2.88 In August 2016, February 2017, June 2017, and April 2019, the Company granted 117,800, 529,830, 239,000 and 106,000 shares of performance-based restricted common stock with grant date fair values of $3.15, $2.47, $4.71 and $2.82, respectively, to certain employees of the Company, which are reflected in the table above. Of these awarded shares, 219,130 have subsequently been forfeited. These restrictions will lapse in three equal installments upon the achievement of specified performance goals by August 12, 2021. The Company determined it is not currently probable that these performance goals will be achieved, and, therefore, no expense has been recorded to date. The fair value of the performance-based shares that could be expensed in future periods, net of estimated forfeitures (inclusive of the impact of the recent restructuring event), is $1.5 million. During the nine months ended September 30, 2019, holders of options issued under the Company’s equity plans exercised their rights to acquire an aggregate of approximately 86,000 shares of common stock at prices ranging from $1.84 to $3.05 per share. The total proceeds to the Company from these option exercises were $217,000. In June 2018, the Company's Board of Directors, with shareholder approval, adopted the Employee Stock Purchase Plan, or ESPP. An aggregate of 1,000,000 shares of common stock have been reserved for issuance under the ESPP. On June 30, 2019, approximately 323,000 shares were issued to participating employees at a fair value of approximately $1.63 per share. The fair value of each ESPP award is estimated on the first day of the offering period using the Black-Scholes option-pricing model. The expected volatility used in the fair value calculation was 67.3%, the expected life was . 5 years , the expected dividend yield was zero, and the risk-free rate was 2.51%. The Company recognizes share-based compensation expense equal to the fair value of the ESPP awards on a straight-line basis over the offering period. Stock compensation expense related to stock options and restricted stock awards granted under the stock plans was $3.6 million and $10.7 million during the three and nine months ended September 30, 2019, respectively, compared to stock compensation expense of $4.3 million and $12.0 million for the three and nine months ended September 30, 2018, respectively. The decrease in expense is primarily due to less awards expected to vest in the current periods compared to prior year periods as a result of the restructuring at the end of the second quarter. Stock compensation expense related to the ESPP was $53,000 and $345,000 for the three and nine months ended September 30, 2019 and $213,000 for the three and nine months ended September 30, 2018. As of September 30, 2019, the estimated fair value of unvested employee awards, exclusive of performance awards, was $23.8 million, net of estimated forfeitures. The weighted-average remaining vesting period for these awards is approximately two years. Also included in stock and deferred stock unit compensation expense in the consolidated statements of cash flows for the nine months ended September 30, 2019 and 2018, is expense recorded for directors’ deferred share units, the details of which are discussed in Note F. |
Segment Information | Segment Information During the nine months ended September 30, 2019, the Company continued to operate in one operating segment, which is the business of development of monoclonal antibody-based anticancer therapeutics. The percentages of revenues recognized from significant customers of the Company in the three and nine months ended September 30, 2019 and 2018 are included in the following table: Three Months Ended Nine Months Ended September 30, September 30, Collaborative Partner: 2019 2018 2019 2018 Roche 99% 77% 99% 57% CytomX - 14% - 7% Takeda - 2% - 29% There were no other customers of the Company with significant revenues in the three or nine months ended September 30, 2019 and 2018. |
Recently Adopted Accounting Pronouncements and not yet Adopted | Recently Adopted Accounting Pronouncements In February 2016, the FASB issued ASU 2016-2, Leases (Topic 842) in order to increase transparency and comparability among organizations by requiring the recognition of ROU assets and lease liabilities on the balance sheet. Most prominent among the changes in the standard is the recognition of ROU assets and lease liabilities by lessees for those leases classified as operating leases. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. In accordance with the transition method provided by ASC Update No. 2018-11, Leases (Topic 842): Targeted Improvements, The Company elected several of the available practical expedients, which are also outlined in Note H. The standard had a material impact to the Company’s consolidated balance sheets, but did not have an impact to the consolidated statement of operations. The most significant impact was the recognition of ROU assets and lease liabilities for operating leases, while the accounting for finance leases, which consist entirely of single payment obligations made for equipment, remained substantially unchanged. In June 2018, the FASB issued ASU No. 2018-07, Compensation — Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting Recently Issued Accounting Pronouncements, not yet Adopted In November 2018, the FASB issued ASU 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606 Collaborative Arrangements In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments 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 Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Summary of Significant Accounting Policies | |
Contract assets and contract liabilities | The following table presents changes in the Company’s contract assets and contract liabilities during the nine months ended September 30, 2019 and 2018 (in thousands): Balance at Balance at Nine months ended September 30, 2019 December 31, 2018 Additions Deductions End of Period Contract asset $ 500 $ — $ (500) $ — Contract liabilities $ 80,802 $ 65,287 $ (237) $ 145,852 Balance at January 1, 2018 Balance at Nine months ended September 30, 2018 (ASC 606 adoption) Additions Deductions Impact of Netting End of Period Contract asset $ — $ 500 $ (5,000) $ 5,000 $ 500 Contract liabilities $ 89,967 $ 706 $ (13,368) $ 5,000 $ 82,305 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 Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Revenue recognized in the period from: Amounts included in contract liabilities at the beginning of the period $ 79 $ 172 $ 237 $ 13,368 Performance obligations satisfied in previous periods $ — $ 500 $ 5,000 $ 500 |
Schedule of assets that are required to be measured at fair value on a recurring basis | As of September 30, 2019, the Company held certain assets that are required to be measured at fair value on a recurring basis. The following table represents the fair value hierarchy for the Company’s financial assets measured at fair value on a recurring basis as of September 30, 2019 (in thousands): Fair Value Measurements at September 30, 2019 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 $ 187,759 $ 187,759 $ — $ — As of December 31, 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 December 31, 2018 (in thousands): Fair Value Measurements at December 31, 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 $ 242,604 $ 242,604 $ — $ — |
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 Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Options outstanding to purchase common stock, shares issuable under the employee stock purchase plan, and unvested restricted stock/units at end of period 18,754 18,153 18,754 18,153 Common stock equivalents under treasury stock method for options, shares issuable under the employee stock purchase plan, and unvested restricted stock 731 3,153 926 3,378 Shares issuable upon conversion of convertible notes at end of period 501 501 501 501 Common stock equivalents under if-converted method for convertible notes 501 501 501 501 |
Schedule of risk-free rate of the stock options based on US Treasury rate | Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Dividend None None None None Volatility 81.63% 71.91% 76.28% 70.99% Risk-free interest rate 1.78% 2.89% 2.24% 2.72% 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 September 30, 2019, and changes during the nine 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, 2018 15,564 $ 10.20 Granted 7,340 4.28 Exercised (86) 2.53 Forfeited/Canceled (5,712) 9.07 Outstanding at September 30, 2019 17,106 $ 8.08 |
Summary of restricted stock activity | A summary of restricted stock and restricted stock unit activity under the Company’s equity plans as of September 30, 2019 and changes during the nine-month period ended September 30, 2019 is presented below (in thousands): Number of Weighted- Restricted Average Grant Stock Shares Date Fair Value Unvested at December 31, 2018 1,816 $ 2.87 Awarded 631 2.55 Vested (504) 2.64 Forfeited (296) 2.56 Unvested at September 30, 2019 1,647 $ 2.88 |
Schedule of percentage of total revenues recognized from each significant customer | Three Months Ended Nine Months Ended September 30, September 30, Collaborative Partner: 2019 2018 2019 2018 Roche 99% 77% 99% 57% CytomX - 14% - 7% Takeda - 2% - 29% |
Liability Related to Sale of _2
Liability Related to Sale of Future Royalties (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
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 nine-month period ended September 30, 2019 (in thousands): Nine Months Ended September 30, 2019 Liability related to sale of future royalties, net — beginning balance $ 148,225 Kadcyla royalty payments received and paid (28,224) Non-cash interest expense recognized 11,513 Liability related to sale of future royalties, net — ending balance $ 131,514 |
Restructuring Charges (Tables)
Restructuring Charges (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Restructuring Charges. | |
Schedule activity against the restructuring charge related to the employee terminations | A summary of activity against the corporate restructuring charge related to the employee terminations in 2019 is as follows: Employee Termination Benefits Costs Initial charge related to employee benefits - June 2019 $ 16,030 Additional charges/adjustments during the period (224) Payments during the period (6,930) Balance at September 30, 2019 $ 8,876 A summary of activity against the manufacturing restructuring charge related to the employee terminations in 2018 is as follows: Employee Termination Benefits Costs Balance at December 31, 2018 $ 841 Payments during the period (841) Balance at September 30, 2019 $ — |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases | |
Schedule of maturities of operating lease liabilities | The maturities of operating lease liabilities discussed above are as follows (in thousands): 2019 (three months remaining) $ 1,360 2020 5,485 2021 5,323 2022 5,389 2023 5,510 Thereafter 12,336 Total lease payments 35,403 Less imputed interest (9,952) Total lease liabilities $ 25,451 |
Nature of Business and Plan o_2
Nature of Business and Plan of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Net loss | $ (108,947) | $ (127,044) | ||||
Accumulated deficit | $ (1,292,282) | (1,292,282) | $ (1,183,335) | |||
Total revenues | 13,281 | $ 10,928 | 37,407 | 40,030 | ||
Cash and cash equivalents | $ 204,491 | $ 303,205 | $ 204,491 | $ 303,205 | $ 262,252 | $ 267,107 |
Number of months Capital resources meets capital expenditures | 12 months | |||||
Product | ||||||
Total revenues | $ 0 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Subsequent Events (Details) - IMGN779 [Member] - Subsequent event - Jazz Pharmaceuticals $ in Millions | 3 Months Ended |
Dec. 31, 2019USD ($) | |
Subsequent Event [Line Items] | |
Revenue to be recognized | $ 14.5 |
Deferred revenue | $ 75 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Revenue Recognition (Details) - item | 1 Months Ended | 9 Months Ended |
Mar. 31, 2015 | Sep. 30, 2019 | |
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 | |
Oxford BioTherapeutics Ltd Member | ||
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 | |
Fusion Pharmaceuticals | ||
Summary of Significant Accounting Policies | ||
Number of single-compound licenses | 1 | |
Novartis | ||
Summary of Significant Accounting Policies | ||
Number of single-target licenses | 5 | |
Roche | ||
Summary of Significant Accounting Policies | ||
Number of single-target licenses | 5 | |
Sanofi | ||
Summary of Significant Accounting Policies | ||
Number of single-target licenses | 5 | |
Takeda | ||
Summary of Significant Accounting Policies | ||
Number of single-target licenses | 2 | 1 |
Term of agreement | 3 years | |
Debiopharm | ||
Summary of Significant Accounting Policies | ||
Number of single-compound licenses | 1 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Performance Obligations Comprising Deferred Revenue (Details) $ in Millions | Sep. 30, 2019USD ($) |
Summary of Significant Accounting Policies | |
Revenue, Remaining Performance Obligation | $ 145.9 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Performance Obligations (Details) | Sep. 30, 2019 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-09-30 | |
Summary of Significant Accounting Policies | |
Remaining performance obligations, percent | 10.00% |
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]: 2020-09-30 | |
Summary of Significant Accounting Policies | |
Remaining performance obligations, percent | 30.00% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-09-30 | |
Summary of Significant Accounting Policies | |
Remaining performance obligations, percent | 60.00% |
Minimum | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-09-30 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction | 13 months |
Minimum | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-09-30 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction | 61 months |
Maximum | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-09-30 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction | 60 months |
Maximum | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-09-30 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction | 120 months |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Contract Balances (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Changes in the Company's contract assets and contract liabilities | ||
Contract asset, Beginning balance | $ 500 | $ 0 |
Contract asset, Additions | 0 | (500) |
Contract asset, Deductions | 500 | 5,000 |
Contract Asset, Impact Of Netting. | 5,000 | |
Contract asset, Ending balance | 0 | 500 |
Contract liabilities: | ||
Contract liabilities, Beginning balance | 80,802 | 89,967 |
Contract liabilities, Additions | 65,287 | 706 |
Contract liabilities, Deductions | (237) | (13,368) |
Contract Liabilities, Impact Of Netting | 5,000 | |
Contract liabilities, Ending balance | $ 145,852 | $ 82,305 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Revenues Recognized as a Result of Changes in Contract Asset and Liability Balances (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenue recognized in the period from: | ||||
Amounts included in contract liabilities at the beginning of the period | $ 79 | $ 172 | $ 237 | $ 13,368 |
Performance obligations satisfied in previous periods | $ 500 | $ 5,000 | $ 500 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Contract Balances from Contracts with Customers - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue recognized in the period from: | ||||||
Probable milestone earned and paid | $ 0 | $ 500,000 | ||||
Deferred revenue | $ 145,852,000 | $ 82,305,000 | 145,852,000 | 82,305,000 | $ 80,802,000 | $ 89,967,000 |
Revenue from contract with customer | 13,281,000 | 10,928,000 | 37,407,000 | 40,030,000 | ||
Revenue recognized that was previously deferred | 237,000 | 13,368,000 | ||||
Milestone earned, included in accounts receivable | 500,000 | 5,000,000 | ||||
Milestone related | ||||||
Revenue recognized in the period from: | ||||||
Revenue from contract with customer | 500,000 | |||||
Clinical materials revenue | ||||||
Revenue recognized in the period from: | ||||||
Revenue from contract with customer | 1,427,000 | 2,465,000 | ||||
Upon shipment | Clinical materials revenue | ||||||
Revenue recognized in the period from: | ||||||
Revenue recognized that was previously deferred | 335,000 | |||||
Genentech | Regulatory milestones | ||||||
Revenue recognized in the period from: | ||||||
Revenue from contract with customer | 5,000,000 | 5,000,000 | ||||
Kadcyla | Royalty revenue | ||||||
Revenue recognized in the period from: | ||||||
Deferred revenue | $ 65,200,000 | 65,200,000 | ||||
Takeda | ||||||
Revenue recognized in the period from: | ||||||
Revenue from contract with customer | 10,900,000 | |||||
Takeda | Milestone related | ||||||
Revenue recognized in the period from: | ||||||
Deferred revenue | 1,000,000 | 1,000,000 | ||||
Potential milestone payment | $ 5,000,000 | 5,000,000 | ||||
Takeda | License Revenue | ||||||
Revenue recognized in the period from: | ||||||
Revenue from contract with customer | 10,900,000 | |||||
Revenue recognized that was previously deferred | 5,900,000 | |||||
Debiopharm and Fusion | License Revenue | ||||||
Revenue recognized in the period from: | ||||||
Revenue recognized that was previously deferred | 750,000 | |||||
Other Collaborators | Technological Improvements | ||||||
Revenue recognized in the period from: | ||||||
Amortization of deferred revenue | $ 237,000 | |||||
Revenue recognized that was previously deferred | $ 1,300,000 |
Summary of Significant Accou_11
Summary of Significant Accounting Policies - Financial Instruments and Concentration of Credit Risk (Details) | 9 Months Ended | |
Sep. 30, 2019USD ($)item | Dec. 31, 2018USD ($) | |
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 |
Summary of Significant Accou_12
Summary of Significant Accounting Policies - Cash and Cash Equivalents (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 |
Summary of Significant Accounting Policies | ||||
Cash and cash equivalents | $ 204,491 | $ 262,252 | $ 303,205 | $ 267,107 |
Summary of Significant Accou_13
Summary of Significant Accounting Policies - Non-cash Investing and Financing Activities (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Summary of Significant Accounting Policies | ||
Accrued capital expenditures | $ 0 | $ 730,000 |
Summary of Significant Accou_14
Summary of Significant Accounting Policies - Fair Value of Financial Instruments (Details) | 9 Months Ended | |||
Sep. 30, 2019USD ($)item | Dec. 31, 2018USD ($) | Dec. 31, 2017 | Dec. 31, 2016USD ($) | |
Fair value hierarchy for the Company's financial assets measured at fair value | ||||
Interest rate (as a percent) | 4.50% | 4.50% | ||
Number of trades | item | 0 | |||
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 | |||
Significant Other Observable Inputs (Level 2) | Convertible Notes | 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 | ||
Significant Other Observable Inputs (Level 2) | Convertible Notes | Estimated fair value | ||||
Fair value hierarchy for the Company's financial assets measured at fair value | ||||
Convertible debt fair value | 2,800,000 | |||
Recurring basis | ||||
Fair value hierarchy for the Company's financial assets measured at fair value | ||||
Cash equivalents | 187,759,000 | 242,604,000 | ||
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 | 187,759,000 | 242,604,000 | ||
Recurring basis | Significant Other Observable Inputs (Level 2) | ||||
Fair value hierarchy for the Company's financial assets measured at fair value | ||||
Cash equivalents | 0 | 0 | ||
Recurring basis | Significant Unobservable Inputs (Level 3) | ||||
Fair value hierarchy for the Company's financial assets measured at fair value | ||||
Cash equivalents | $ 0 | $ 0 |
Summary of Significant Accou_15
Summary of Significant Accounting Policies - Leases (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Leases | |
Obligations under finance leases | $ 0 |
Summary of Significant Accou_16
Summary of Significant Accounting Policies - Computation of Net Loss per Common Share (Details) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019USD ($)shares | Sep. 30, 2018USD ($)shares | Sep. 30, 2019USD ($)shares | Sep. 30, 2018USD ($)shares | |
Computation of Net Loss per Common Share | ||||
Options outstanding to purchase common stock, shares issuable under the employee stock purchase plan, and unvested restricted stock at end of period | 18,754 | 18,153 | 18,754 | 18,153 |
Common stock equivalents under treasury stock method for options, shares issuable under the employee stock purchase plan, and unvested restricted stock | 731 | 3,153 | 926 | 3,378 |
Shares issuable upon conversion of convertible notes at end of period (in shares) | $ | 501 | 501 | 501 | 501 |
Common stock equivalents under if-converted method for convertible notes (in shares) | 501 | 501 | 501 | 501 |
Summary of Significant Accou_17
Summary of Significant Accounting Policies - Stock-Based Compensation (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Jul. 31, 2019shares | Apr. 30, 2019item$ / sharesshares | Jun. 30, 2017item$ / sharesshares | Feb. 28, 2017item$ / sharesshares | Aug. 31, 2016item$ / sharesshares | Sep. 30, 2019USD ($)$ / sharesshares | Sep. 30, 2018USD ($)$ / shares | Jun. 30, 2019USD ($)$ / sharesshares | Sep. 30, 2019USD ($)employeeitem$ / sharesshares | Sep. 30, 2018USD ($)$ / shares | Dec. 31, 2018USD ($)$ / sharesshares | Jun. 30, 2018shares | |
Number of Stock Options | ||||||||||||
Outstanding at the beginning of the period (in shares) | 3,700,000 | 3,700,000 | ||||||||||
Exercised (in shares) | (86,000) | |||||||||||
Outstanding at the end of the period (in shares) | 3,700,000 | |||||||||||
Stock plans disclosure | ||||||||||||
Cash received for exercise of stock options | $ | $ 811,000 | $ 2,943,000 | ||||||||||
Stock compensation expense | $ | $ 2,800,000 | |||||||||||
ESPP | ||||||||||||
Weighted-average assumptions used to estimate the fair value of each stock option | ||||||||||||
Dividend (as a percent) | 0.00% | |||||||||||
Volatility (as a percent) | 67.30% | |||||||||||
Risk-free interest rate (as a percent) | 2.51% | |||||||||||
Expected life | 5 years | |||||||||||
Weighted-Average Grant Date Fair Value | ||||||||||||
Awarded (in dollars per share) | $ / shares | $ 1.63 | |||||||||||
Stock plans disclosure | ||||||||||||
Aggregate number of common shares reserved for future issuance | 1,000,000 | |||||||||||
Estimated subscriptions outstanding | 323,000 | |||||||||||
Stock compensation expense | $ | $ 53,000 | $ 213,000 | $ 345,000 | 213,000 | ||||||||
Stock options and restricted stock awards | ||||||||||||
Stock-Based Compensation | ||||||||||||
Vesting period | 2 years | |||||||||||
Stock plans disclosure | ||||||||||||
Stock compensation expense | $ | 3,600,000 | $ 4,300,000 | $ 10,700,000 | $ 12,000,000 | ||||||||
Estimated fair value that could be expensed | $ | $ 23,800,000 | $ 23,800,000 | ||||||||||
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) | 81.63% | 71.91% | 76.28% | 70.99% | ||||||||
Risk-free interest rate (as a percent) | 1.78% | 2.89% | 2.24% | 2.72% | ||||||||
Expected life | 6 years | 6 years | 6 years | 6 years | ||||||||
Weighted-average grant date fair value (in dollars per share) | $ / shares | $ 1.68 | $ 6.11 | $ 2.85 | $ 6.74 | ||||||||
Number of Stock Options | ||||||||||||
Outstanding at the beginning of the period (in shares) | 15,564,000 | 15,564,000 | ||||||||||
Granted (in shares) | 7,340,000 | |||||||||||
Exercised (in shares) | (86,000) | |||||||||||
Forfeited/Canceled (in shares) | (5,712,000) | |||||||||||
Outstanding at the end of the period (in shares) | 17,106,000 | 17,106,000 | 15,564,000 | |||||||||
Weighted-Average Exercise Price | ||||||||||||
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 10.20 | $ 10.20 | ||||||||||
Granted (in dollars per share) | $ / shares | 4.28 | |||||||||||
Exercised (in dollars per share) | $ / shares | 2.53 | |||||||||||
Forfeited/Canceled (in dollars per share) | $ / shares | 9.07 | |||||||||||
Outstanding at the end of the period (in dollars per share) | $ / shares | $ 8.08 | $ 8.08 | $ 10.20 | |||||||||
Stock plans disclosure | ||||||||||||
Cash received for exercise of stock options | $ | $ 217,000 | |||||||||||
Stock options | Minimum | ||||||||||||
Weighted-Average Exercise Price | ||||||||||||
Exercised (in dollars per share) | $ / shares | $ 1.84 | |||||||||||
Stock options | Maximum | ||||||||||||
Stock-Based Compensation | ||||||||||||
Vesting period | 4 years | |||||||||||
Exercise period | 10 years | |||||||||||
Weighted-Average Exercise Price | ||||||||||||
Exercised (in dollars per share) | $ / shares | $ 3.05 | |||||||||||
Performance shares | ||||||||||||
Stock-Based Compensation | ||||||||||||
Exercise period | 5 years | |||||||||||
Number of equal installments restrictions lapse | $ | 2 | |||||||||||
Number of Stock Options | ||||||||||||
Outstanding at the end of the period (in shares) | 168,200 | 168,200 | ||||||||||
Number of Restricted Stock Shares | ||||||||||||
Awarded (in shares) | 295,200 | |||||||||||
Stock plans disclosure | ||||||||||||
Stock compensation expense | $ | $ 0 | |||||||||||
Estimated fair value that could be expensed | $ | $ 850,000 | $ 850,000 | ||||||||||
Restricted stock | ||||||||||||
Stock-Based Compensation | ||||||||||||
Number of equal installments restrictions lapse | item | 3 | 3 | 3 | 3 | ||||||||
Number of Restricted Stock Shares | ||||||||||||
Unvested at the beginning of the period (in shares) | 1,816,000 | 1,816,000 | ||||||||||
Awarded (in shares) | 631,000 | |||||||||||
Vested (in shares) | (504,000) | |||||||||||
Forfeited (in shares) | (219,130) | (296,000) | ||||||||||
Unvested at the end of the period (in shares) | 1,647,000 | 1,647,000 | 1,816,000 | |||||||||
Weighted-Average Grant Date Fair Value | ||||||||||||
Unvested at the beginning of the period (in dollars per share) | $ / shares | $ 2.87 | $ 2.87 | ||||||||||
Awarded (in dollars per share) | $ / shares | 2.55 | |||||||||||
Vested (in dollars per share) | $ / shares | 2.64 | |||||||||||
Forfeited (in dollars per share) | $ / shares | 2.56 | |||||||||||
Unvested at the end of the period (in dollars per share) | $ / shares | $ 2.88 | $ 2.88 | $ 2.87 | |||||||||
Restricted stock | Officers | ||||||||||||
Number of Restricted Stock Shares | ||||||||||||
Awarded (in shares) | 106,000 | 239,000 | 529,830 | 117,800 | ||||||||
Weighted-Average Grant Date Fair Value | ||||||||||||
Awarded (in dollars per share) | $ / shares | $ 2.82 | $ 4.71 | $ 2.47 | $ 3.15 | ||||||||
Stock plans disclosure | ||||||||||||
Stock compensation expense | $ | $ 0 | |||||||||||
Estimated fair value that could be expensed | $ | $ 1,500,000 | $ 1,500,000 | ||||||||||
2016 Plan | ||||||||||||
Stock-Based Compensation | ||||||||||||
Number of employee share-based compensation plans | employee | 1 | |||||||||||
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 | |||||||||||
2018 Plan | ||||||||||||
Stock-Based Compensation | ||||||||||||
Common stock authorized for issuance (in shares) | 7,500,000 | 7,500,000 | ||||||||||
Previous stock option plans | ||||||||||||
Stock-Based Compensation | ||||||||||||
Common stock authorized for issuance (in shares) | 19,500,000 | 19,500,000 |
Summary of Significant Accou_18
Summary of Significant Accounting Policies - Segments (Details) - item | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Segment Information | ||||
Number of operating segments | 1 | |||
Other customers | ||||
Segment Information | ||||
Percentages of revenue recognized | 0.00% | 0.00% | 0.00% | 0.00% |
CytomX | ||||
Segment Information | ||||
Percentages of revenue recognized | 14.00% | 7.00% | ||
Roche | ||||
Segment Information | ||||
Percentages of revenue recognized | 99.00% | 77.00% | 99.00% | 57.00% |
Takeda | ||||
Segment Information | ||||
Percentages of revenue recognized | 2.00% | 29.00% |
Agreements - Roche (Details)
Agreements - Roche (Details) - USD ($) $ in Thousands | May 03, 2019 | Jan. 31, 2019 | May 31, 2000 | Sep. 30, 2019 | Sep. 30, 2018 |
Collaborative Agreements disclosures | |||||
Non-cash royalty revenue related to sale of future royalties | $ 32,102 | $ 22,873 | |||
Non-cash royalty revenue related to the sale of future royalties | 32,102 | 22,873 | |||
Revenue recognized that was previously deferred | 237 | 13,368 | |||
Roche | |||||
Collaborative Agreements disclosures | |||||
Period in arrears to receive royalty reports and payments related to sales of Kadcyla | 3 months | ||||
Percentage of royalty payments | 100.00% | ||||
Roche | Regulatory milestones | |||||
Collaborative Agreements disclosures | |||||
Revenue recognized that was previously deferred | $ 5,000 | ||||
Roche | Kadcyla | |||||
Collaborative Agreements disclosures | |||||
Non-cash royalty revenue related to sale of future royalties | 32,100 | 22,900 | |||
Non-cash royalty revenue related to the sale of future royalties | 32,100 | $ 22,900 | |||
Roche | Kadcyla | Regulatory milestones | |||||
Collaborative Agreements disclosures | |||||
Potential milestone payments | $ 5,000 | ||||
OMERS | Kadcyla | |||||
Collaborative Agreements disclosures | |||||
Non-cash royalty revenue related to sale of future royalties | $ 65,200 | ||||
Non-cash royalty revenue related to the sale of future royalties | $ 65,200 | ||||
Percentage of royalty payments | 100.00% |
Agreements - Novartis (Details)
Agreements - Novartis (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
May 31, 2018USD ($)item | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)item | Sep. 30, 2018USD ($) | |
Collaborative Agreements disclosures | |||||
Revenue from contract with customer | $ 13,281,000 | $ 10,928,000 | $ 37,407,000 | $ 40,030,000 | |
Novartis | |||||
Collaborative Agreements disclosures | |||||
Number of single-target licenses | item | 5 | ||||
Number of licenses terminated | item | 1 | ||||
Novartis | Regulatory milestones | |||||
Collaborative Agreements disclosures | |||||
Potential milestone payment | 199,500,000 | 199,500,000 | |||
Upfront payment | Novartis | |||||
Collaborative Agreements disclosures | |||||
Revenue from contract with customer | $ 978,000 | 45,000,000 | |||
License and milestone fees | |||||
Collaborative Agreements disclosures | |||||
Revenue from contract with customer | $ 79,000 | 672,000 | $ 5,237,000 | 13,533,000 | |
Exercise fee | Novartis | |||||
Collaborative Agreements disclosures | |||||
Potential milestone payment | 1,000,000 | 1,000,000 | |||
Research and development support | |||||
Collaborative Agreements disclosures | |||||
Revenue from contract with customer | $ 388,000 | $ 68,000 | $ 1,159,000 |
Agreements - Takeda (Details)
Agreements - Takeda (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
May 31, 2018USD ($) | Mar. 31, 2015item | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)item | Sep. 30, 2018USD ($) | |
Collaborative Agreements disclosures | ||||||
Revenue from contract with customer | $ 13,281 | $ 10,928 | $ 37,407 | $ 40,030 | ||
Takeda | ||||||
Collaborative Agreements disclosures | ||||||
Term of agreement | 3 years | |||||
Number of single-target licenses | item | 2 | 1 | ||||
Revenue from contract with customer | $ 10,900 | |||||
Type of Revenue | imgn:LicenseAndMilestoneFeesMember | |||||
Takeda | Phase 1 clinical trial | ||||||
Collaborative Agreements disclosures | ||||||
Revenue from contract with customer | $ 5,000 | |||||
Takeda | Phase 2 clinical trial | ||||||
Collaborative Agreements disclosures | ||||||
Revenue from contract with customer | $ 10,000 | |||||
License and milestone fees | ||||||
Collaborative Agreements disclosures | ||||||
Revenue from contract with customer | $ 79 | $ 672 | $ 5,237 | $ 13,533 |
Agreements - Debiopharm (Detail
Agreements - Debiopharm (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||
Jan. 31, 2018 | Dec. 31, 2017 | May 31, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | |
Collaborative Agreements disclosures | ||||||||
Revenue from contract with customer | $ 13,281,000 | $ 10,928,000 | $ 37,407,000 | $ 40,030,000 | ||||
License and milestone fees | ||||||||
Collaborative Agreements disclosures | ||||||||
Revenue from contract with customer | $ 79,000 | 672,000 | $ 5,237,000 | 13,533,000 | ||||
Debiopharm | IMGN529 program | ||||||||
Collaborative Agreements disclosures | ||||||||
Revenue from contract with customer | $ 4,500,000 | |||||||
Debiopharm | Phase 3 Clinical Trial | ||||||||
Collaborative Agreements disclosures | ||||||||
Potential milestone payment | $ 25,000,000 | 25,000,000 | ||||||
Debiopharm | Transfer of ImmunoGen technologies | ||||||||
Collaborative Agreements disclosures | ||||||||
Revenue from contract with customer | $ 500,000 | $ 5,000,000 | ||||||
Debiopharm | Upfront payment | IMGN529 program | ||||||||
Collaborative Agreements disclosures | ||||||||
Revenue from contract with customer | $ 25,000,000 | |||||||
Debiopharm | License and milestone fees | IMGN529 program | ||||||||
Collaborative Agreements disclosures | ||||||||
Revenue from contract with customer | $ 500,000 |
Agreements - Fusion (Details)
Agreements - Fusion (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2016 | |
Collaborative Agreements disclosures | |||||
Revenue from contract with customer | $ 13,281,000 | $ 10,928,000 | $ 37,407,000 | $ 40,030,000 | |
Fusion Pharmaceuticals | Development milestones | |||||
Collaborative Agreements disclosures | |||||
Potential milestone payment | $ 15,000,000 | ||||
Fusion Pharmaceuticals | Phase 2 clinical trial | |||||
Collaborative Agreements disclosures | |||||
Potential milestone payment | 1,500,000 | 1,500,000 | |||
Fusion Pharmaceuticals | Milestone payments | |||||
Collaborative Agreements disclosures | |||||
Potential milestone payment | 35,000,000 | ||||
License and milestone fees | |||||
Collaborative Agreements disclosures | |||||
Revenue from contract with customer | $ 79,000 | 672,000 | 5,237,000 | 13,533,000 | |
License and milestone fees | Fusion Pharmaceuticals | |||||
Collaborative Agreements disclosures | |||||
Potential milestone payment | $ 50,000,000 | ||||
License and milestone fees | Fusion Pharmaceuticals | Phase 1 clinical trial | |||||
Collaborative Agreements disclosures | |||||
Revenue from contract with customer | 500,000 | 500,000 | |||
Research and development support | |||||
Collaborative Agreements disclosures | |||||
Revenue from contract with customer | 388,000 | $ 68,000 | 1,159,000 | ||
Clinical materials revenue | |||||
Collaborative Agreements disclosures | |||||
Revenue from contract with customer | $ 1,427,000 | $ 2,465,000 |
Convertible 4.5% Senior Notes (
Convertible 4.5% Senior Notes (Details) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2017USD ($)shares | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($)$ / shares | Dec. 31, 2018 | |
Convertible debt | ||||||||
Interest rate (as a percent) | 4.50% | 4.50% | 4.50% | |||||
Interest expense | $ 24,000 | $ 23,000 | $ 71,000 | $ 70,000 | ||||
Convertible Notes | ||||||||
Convertible debt | ||||||||
Interest rate (as a percent) | 4.50% | 4.50% | 4.50% | 4.50% | ||||
Principal amount of debt | $ 2,100,000 | $ 2,100,000 | $ 100,000,000 | |||||
Proceeds from issuance of debt | 96,600,000 | |||||||
Issuance of debt transaction costs | 3,400,000 | |||||||
Debt converted | $ 97,900,000 | |||||||
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 _3
Liability Related to Sale of Future Royalties (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | 12 Months Ended | |
Jan. 31, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2015 | |
Liability Related to Sale of Future Royalties | ||||
Non-cash royalty revenue related to the sale of future royalties | $ 32,102 | $ 22,873 | ||
Kadcyla | ||||
Liability Related to Sale of Future Royalties | ||||
Percentage of royalty payments if applicable threshold is met | 85.00% | |||
Change in liability related to sale of future royalties | ||||
Liability related to sale of future royalties, net - beginning balance | $ 148,225 | 148,225 | ||
Royalty payments received and paid | (28,224) | |||
Non-cash interest expense recognized | 11,513 | |||
Liability related to sale of future royalties, net - ending balance | 131,514 | |||
IRH | Kadcyla | ||||
Liability Related to Sale of Future Royalties | ||||
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 | $ 200,000 | ||
Transaction costs for royalty agreements | 5,900 | |||
Change in liability related to sale of future royalties | ||||
Effective annual interest rate | 8.90% | |||
Current effective interest rate | 11.6 | |||
IRH | Kadcyla | Maximum | ||||
Liability Related to Sale of Future Royalties | ||||
Royalties threshold | 260,000 | |||
IRH | Kadcyla | Minimum | ||||
Liability Related to Sale of Future Royalties | ||||
Royalties threshold | $ 235,000 | |||
OMERS | Kadcyla | ||||
Liability Related to Sale of Future Royalties | ||||
Percentage of royalty payments | 100.00% | |||
Non-cash royalty revenue related to the sale of future royalties | $ 65,200 | |||
Contingent broker fees | 1,500 | |||
Net proceeds from sale of residual rights to receive royalty payments | $ 65,200 | $ 0 |
Capital Stock (Details)
Capital Stock (Details) - USD ($) | Dec. 09, 2016 | Jun. 30, 2019 | Jun. 30, 2018 | Feb. 28, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Jun. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 |
Stock-based compensation disclosure | |||||||||
Stock compensation expense | $ 2,800,000 | ||||||||
Stock options | |||||||||
Stock-based compensation disclosure | |||||||||
Stock options granted to directors (in shares) | 7,340,000 | ||||||||
2001 Non-Employee Director Stock Plan | |||||||||
Stock-based compensation disclosure | |||||||||
Stock compensation expense | $ 31,000 | ||||||||
2001 Non-Employee Director Stock Plan | Retiring director | |||||||||
Stock-based compensation disclosure | |||||||||
Stock compensation expense | $ 72,000 | ||||||||
Compensation Policy for Non-Employee Directors | |||||||||
Stock-based compensation disclosure | |||||||||
Stock compensation expense | $ 45,000 | $ 101,000 | $ 246,000 | $ 258,000 | |||||
Compensation Policy for Non-Employee Directors | Stock options | |||||||||
Stock-based compensation disclosure | |||||||||
Vesting period | 1 year | ||||||||
Stock options granted to directors (in shares) | 108,000 | 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 | |||||||
Vesting period | 1 year |
Restructuring Charges (Details)
Restructuring Charges (Details) | Jun. 26, 2019employee | Feb. 28, 2018employee | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2018USD ($) | Jun. 30, 2018USD ($) | Sep. 30, 2019USD ($)ft² | Sep. 30, 2018USD ($) | Dec. 31, 2020USD ($) |
Workforce reduction | |||||||||
Restructuring charge | |||||||||
Balance at beginning of the period | $ 16,030,000 | $ 841,000 | $ 8,876,000 | ||||||
Additional charges/adjustments during the period | (224,000) | ||||||||
Payments during the period | (6,930,000) | (841,000) | |||||||
Balance at end of the period | 8,876,000 | $ 16,030,000 | $ 8,876,000 | ||||||
Workforce reduction | 2019 Corporate Restructuring | |||||||||
Restructuring | |||||||||
Number of employees eliminated due to new operating model | employee | 220 | ||||||||
One-time charge for severance | $ 16,000,000 | ||||||||
Workforce reduction | 2018 Manufacturing Restructuring | |||||||||
Restructuring | |||||||||
Number of employees eliminated due to new operating model | employee | 22 | ||||||||
Workforce reduction | 2018 Manufacturing Restructuring | Stock options | |||||||||
Restructuring | |||||||||
Severance costs, charges incurred | $ 157,000 | ||||||||
Workforce reduction | 2016 Corporate Restructuring | |||||||||
Restructuring charge | |||||||||
Unoccupied office space for sub-lease | ft² | 10,281 | ||||||||
Lease | 2016 Corporate Restructuring | |||||||||
Restructuring charge | |||||||||
Leasehold impairment charge | $ 559,000 | $ 0 | |||||||
One-time charge | 2018 Manufacturing Restructuring | |||||||||
Restructuring | |||||||||
Severance costs, charges incurred | $ 1,200,000 | ||||||||
Incremental retention benefits | 2019 Corporate Restructuring | |||||||||
Restructuring | |||||||||
Severance costs, charges incurred | $ 1 | 1,500,000 | |||||||
Incremental retention benefits | 2018 Manufacturing Restructuring | |||||||||
Restructuring | |||||||||
Severance costs, charges incurred | $ 1,100,000 | ||||||||
Incremental retention benefits | Forecast | 2019 Corporate Restructuring | |||||||||
Restructuring | |||||||||
Severance costs, charges incurred | $ 3,800,000 | ||||||||
830 Winter Street in Waltham, Massachusetts | Lease | 2019 Corporate Restructuring | |||||||||
Restructuring charge | |||||||||
Laboratory equipment, impairment charge | $ 2,500,000 |
Leases - Operating Leases (Deta
Leases - Operating Leases (Details) $ in Thousands | 9 Months Ended | |||
Sep. 30, 2019USD ($)ft²item | Sep. 30, 2018USD ($) | Mar. 31, 2019USD ($) | Feb. 29, 2016ft² | |
Lease terms | ||||
Number of real estate leases | item | 2 | |||
Lease, Practical Expedients, Package [true false] | true | |||
Lessee, Operating Lease, Existence of Option to Extend [true false] | true | |||
Weighted-average remaining non-cancelable lease term | 6 years 6 months | |||
Right-of-use assets | $ 15,924 | |||
Lease liabilities | 25,451 | |||
Unamortized lease incentive and straight-line lease liability balances | $ 9,700 | |||
Weighted-average discount rate | 11.00% | |||
Aggregate adjustment to ROU asset | $ 1,000 | |||
Lease expense for operating lease payments | 3,300 | $ 4,300 | ||
Cash paid against operating lease liabilities | $ 4,000 | |||
830 Winter Street, Waltham, MA | ||||
Lease terms | ||||
Area of Real Estate Property | ft² | 120,000 | |||
Number of additional terms for which lease agreement can be extended | item | 2 | |||
Operating lease term extension period | 5 years | |||
830 Winter Street in Waltham, Massachusetts | ||||
Lease terms | ||||
Area of Real Estate Property | ft² | 10,281 | |||
ASU 2016-2 | Restatement Adjustment | ||||
Lease terms | ||||
Right-of-use assets | $ 17,600 | |||
Lease liabilities | $ 27,300 |
Leases - Finance Leases (Detail
Leases - Finance Leases (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Leases | |||
Finance Leases, net of accumulated amortization | $ 1,200,000 | $ 595,000 | |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Property, Plant and Equipment, Net | Property, Plant and Equipment, Net | |
Finance leases, amortization expense included in operating expenses | $ 237,000 | $ 139,000 | |
Obligations under finance leases | $ 0 |
Leases - Maturities of Operatin
Leases - Maturities of Operating Lease Liabilities (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Leases | |
2019 (three months remaining) | $ 1,360 |
2020 | 5,485 |
2021 | 5,323 |
2022 | 5,389 |
2023 | 5,510 |
Thereafter | 12,336 |
Total lease payments | 35,403 |
Less imputed interest | (9,952) |
Total lease liabilities | 25,451 |
Variable operating costs and real estate taxes | $ 3,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - Sep. 30, 2019 € in Millions, $ in Millions | USD ($) | EUR (€) |
Collaborations and Manufacturing Commitments | ||
Potential milestone payable | $ | $ 80 | |
Minimum | ||
Collaborations and Manufacturing Commitments | ||
Manufacturing commitment | € | € 5 |