Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2016 | Aug. 01, 2016 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | LIGAND PHARMACEUTICALS INC | |
Entity Central Index Key | 886,163 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2016 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q2 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 20,854,368 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 61,350 | $ 97,428 |
Short-term investments | 45,603 | 102,791 |
Accounts receivable | 9,966 | 6,170 |
Note receivable from Viking Therapeutics | 3,207 | 4,782 |
Inventory | 3,835 | 1,633 |
Other current assets | 2,602 | 1,908 |
Total current assets | 126,563 | 214,712 |
Deferred income taxes | 161,076 | 216,564 |
Investment in Viking Therapeutics | 18,733 | 29,728 |
Intangible assets, net | 210,142 | 48,347 |
Goodwill | 72,360 | 12,238 |
Commercial license rights, net | 26,141 | 8,554 |
Property and equipment, net | 1,181 | 372 |
Other assets | 603 | 27 |
Total assets | 616,799 | 530,542 |
Current liabilities: | ||
Accounts payable | 2,336 | 4,083 |
Accrued liabilities | 4,951 | 5,397 |
Current contingent liabilities | 5,337 | 10,414 |
Current lease exit obligations | 239 | 934 |
2019 convertible senior notes, net | 207,363 | 0 |
Other current liabilities | 121 | 8 |
Total current liabilities | 220,347 | 20,836 |
2019 convertible senior notes, net | 0 | 201,985 |
Long-term contingent liabilities | 4,138 | 3,033 |
Other long-term liabilities | 398 | 297 |
Total liabilities | 224,883 | 226,151 |
Commitments and Contingencies | ||
Stockholders' equity: | ||
Common stock, $0.001 par value; 33,333,333 shares authorized; 20,853,127 and 19,949,012 shares issued and outstanding at June 30, 2016 and December 31, 2015, respectively | 21 | 20 |
Additional paid-in capital | 789,315 | 701,478 |
Accumulated other comprehensive income | 3,745 | 4,903 |
Accumulated deficit | (401,165) | (402,010) |
Total stockholders' equity attributable to Ligand Pharmaceuticals | 391,916 | 304,391 |
Total liabilities and stockholders' equity | $ 616,799 | $ 530,542 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Jun. 30, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (USD per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 33,333,333 | 33,333,333 |
Common stock, shares issued | 20,853,127 | 19,949,012 |
Common stock, shares outstanding | 20,853,127 | 19,949,012 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | ||
Revenues: | |||||
Royalties | $ 9,754 | $ 6,606 | $ 24,144 | $ 16,893 | |
Material sales | 3,886 | 10,681 | 9,227 | 14,410 | |
License fees, milestones and other revenues | 5,881 | 1,131 | 15,798 | 1,717 | |
Total revenues | 19,521 | 18,418 | 49,169 | 33,020 | |
Operating costs and expenses: | |||||
Cost of sales | [1] | 720 | 2,600 | 1,675 | 3,673 |
Amortization of intangibles | 2,681 | 594 | 5,206 | 1,188 | |
Research and development | 4,507 | 3,416 | 8,508 | 6,784 | |
General and administrative | 6,863 | 7,225 | 13,691 | 13,219 | |
Lease exit and termination costs | 374 | 218 | 618 | 441 | |
Total operating costs and expenses | 15,145 | 14,053 | 29,698 | 25,305 | |
Income from operations | 4,376 | 4,365 | 19,471 | 7,715 | |
Other (expense) income: | |||||
Interest expense, net | (3,051) | (2,969) | (6,055) | (5,945) | |
Increase in contingent liabilities | (332) | (7,274) | (1,638) | (7,277) | |
Gain on deconsolidation of Viking Therapeutics | 0 | 28,190 | 0 | 28,190 | |
Loss from Viking Therapeutics | (11,138) | (870) | (12,743) | (870) | |
Other income, net | 501 | 850 | 892 | 404 | |
Total other (expense) income, net | (14,020) | 17,927 | (19,544) | 14,502 | |
Income (loss) before income taxes | (9,644) | 22,292 | (73) | 22,217 | |
Income tax benefit (expense) | 3,881 | (265) | 187 | (279) | |
(Loss) income from operations | (5,763) | 22,027 | 114 | 21,938 | |
Gain on sale of Oncology Product Line before income taxes | 0 | 0 | 1,139 | 0 | |
Income tax expense on discontinued operations | 0 | 0 | (408) | 0 | |
Income from discontinued operations | 0 | 0 | 731 | 0 | |
Net (loss) income including noncontrolling interests: | (5,763) | 22,027 | 845 | 21,938 | |
Less: Net loss attributable to noncontrolling interests | 0 | (1,537) | 0 | (2,380) | |
Net (loss) income | $ (5,763) | $ 23,564 | $ 845 | $ 24,318 | |
Basic earnings (loss) per share data | |||||
(Loss) income from continuing operations (in usd per share) | $ (0.28) | $ 1.19 | $ 0.01 | $ 1.24 | |
Income from discontinued operations (in usd per share) | 0 | 0 | 0.03 | 0 | |
Net (loss) income (in usd per share) | (0.28) | 1.19 | 0.04 | 1.24 | |
Diluted earnings per share data | |||||
(Loss) income from continuing operations (in usd per share) | (0.28) | 1.11 | 0.01 | 1.16 | |
Income from discontinued operations (in usd per share) | 0 | 0 | 0.03 | 0 | |
Net (loss) income (in usd per share) | $ (0.28) | $ 1.11 | $ 0.04 | $ 1.16 | |
Shares used for computation (in thousands) | |||||
Basic (in shares) | 20,832,000 | 19,725,000 | 20,765,000 | 19,668,000 | |
Diluted (in shares) | 20,831,809 | 21,276,404 | 22,614,732 | 20,953,134 | |
[1] | Excludes amortization of intangibles. |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Statement of Comprehensive Income [Abstract] | ||||
Net (loss) income: | $ (5,763) | $ 23,564 | $ 845 | $ 24,318 |
Unrealized net gain (loss) on available-for-sale securities, net of tax | 539 | 3,230 | (559) | 7,844 |
Less: Reclassification of net realized gains included in net (loss) income, net of tax | (364) | (1,300) | (600) | (1,533) |
Comprehensive income (loss) | $ (5,588) | $ 25,494 | $ (314) | $ 30,629 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Operating activities | ||
Net income including noncontrolling interests | $ 845 | $ 21,938 |
Less: gain from discontinued operations | 731 | 0 |
Income from continuing operations | 114 | 21,938 |
Adjustments to reconcile net income including noncontrolling interests to net cash provided by operating activities: | ||
Non-cash change in estimated fair value of contingent liabilities | 1,638 | 7,277 |
Realized gain on sale of short-term investment | (602) | (502) |
Gain on write-off of assets | 133 | 0 |
Depreciation and amortization | 5,388 | 1,296 |
Amortization of discount on investments, net | 331 | (34) |
Amortization of debt discount and issuance fees | 5,378 | 5,058 |
Stock-based compensation | 8,359 | 6,675 |
Deferred income taxes | 187 | 268 |
Accretion of note payable | 0 | 16 |
Gain on deconsolidation of Viking Therapeutics | 0 | (28,190) |
Change in fair value of the Viking convertible debt receivable and warrants | (310) | 0 |
Loss from Viking Therapeutics | 12,743 | 870 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (3,791) | 7,102 |
Inventory | (2,202) | (533) |
Other current assets | (629) | (462) |
Other long-term assets | (42) | (598) |
Accounts payable and accrued liabilities | (3,323) | (3,107) |
Restricted investments | 0 | 661 |
Deferred revenue | 113 | (110) |
Net cash provided by operating activities | 23,485 | 17,625 |
Investing activities | ||
Purchase of commercial license rights | (17,691) | (4,030) |
Payments to CVR holders and other contingency payments | (5,635) | (3,663) |
Purchases of property and equipment | (1,021) | (27) |
Cash paid for acquisition, net of cash acquired | (92,504) | 0 |
Purchase of short-term investments | (49,892) | (60,432) |
Purchase of Viking common stock and warrants | (700) | (9,000) |
Proceeds from sale of property and equipment | 0 | 1 |
Proceeds received from repayment of Viking note receivable | 300 | 0 |
Reduction of cash due to deconsolidation of Viking | 0 | (247) |
Proceeds from sale of short-term investments | 22,077 | 2,378 |
Proceeds from maturity of short-term investments | 83,523 | 0 |
Net cash used in investing activities | (61,543) | (75,020) |
Financing activities | ||
Net proceeds from stock option exercises and ESPP | 2,482 | 5,430 |
Purchase of common stock for RSU vesting | (502) | 0 |
Net cash provided by financing activities | 1,980 | 5,430 |
Net decrease in cash and cash equivalents | (36,078) | (51,965) |
Cash and cash equivalents at beginning of period | 97,428 | 160,203 |
Cash and cash equivalents at end of period | 61,350 | 108,238 |
Supplemental disclosure of cash flow information | ||
Interest paid | 919 | 903 |
Taxes paid | 36 | 13 |
Supplemental schedule of non-cash activity | ||
Stock issued for acquisition, net of issuance cost | (77,615) | 0 |
Stock and warrant received for repayment of Viking notes receiveable | 1,200 | 0 |
Unrealized gain (loss) on AFS investments | $ (1,198) | $ 7,844 |
Significant Accounting Policies
Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Significant Accounting Policies | Significant Accounting Principles Business Ligand is a biopharmaceutical company with a business model that is based upon the concept of developing or acquiring royalty revenue generating assets and coupling them with a lean corporate cost structure. We operate in one business segment: development and licensing of biopharmaceutical assets. Principles of Consolidation The accompanying consolidated financial statements include Ligand and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Basis of Presentation The Company’s accompanying unaudited condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial information. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the financial position and results of operations of the Company and its subsidiaries, have been included. Interim financial results are not necessarily indicative of the results that may be expected for the full year. These financial statements should be read in conjunction with the consolidated financial statements and notes therein included in the Company’s annual report on Form 10-K for the year ended December 31, 2015 . Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires the use of estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and the accompanying notes. Actual results may differ from those estimates. Reclassifications Certain reclassifications have been made to the previously issued balance sheet and statement of operations for the three and six months ended June 30, 2015 for comparability purposes. These reclassifications had no effect on the reported net income, stockholders' equity, and operating cash flows as previously reported. Income (Loss) Per Share Basic income (loss) per share is calculated by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted income (loss) per share is computed by dividing net income by the weighted-average number of common shares and common stock equivalents of all dilutive securities calculated using the treasury stock method and the if-converted method. The total number of potentially dilutive securities including stock options and warrants excluded from the computation of diluted income per share because their inclusion would have been anti-dilutive was 3.5 million for the period ended June 30, 2015 . In loss periods, basic net loss per share and diluted net loss per share are identical since the effect of otherwise dilutive potential common shares is anti-dilutive and therefore excluded. The following table presents the computation of basic and diluted net income (loss) per share for the periods indicated (in thousands, except per share amounts): Three months ended Six months ended June 30, June 30, 2016 2015 2016 2015 Net (loss) income from continuing operations $ (5,763 ) $ 23,564 $ 114 $ 24,318 Net income from discontinued operations — — 731 — Net (loss) income $ (5,763 ) $ 23,564 $ 845 $ 24,318 Shares used to compute basic income per share 20,831,809 19,725,410 20,765,053 19,668,183 Dilutive potential common shares: Restricted stock — 42,836 86,419 52,187 Stock options — 1,044,926 785,921 1,001,147 2019 convertible senior notes — 463,232 977,339 231,617 Shares used to compute diluted income per share 20,831,809 21,276,404 22,614,732 20,953,134 Basic per share amounts: (Loss) income from continuing operations $ (0.28 ) $ 1.19 $ 0.01 $ 1.24 Income from discontinued operations — — 0.03 — Basic net (loss) income per share $ (0.28 ) $ 1.19 $ 0.04 $ 1.24 Diluted per share amounts: (Loss) income from continuing operations $ (0.28 ) $ 1.11 $ 0.01 $ 1.16 Income from discontinued operations — — 0.03 — Diluted net (loss) income per share $ (0.28 ) $ 1.11 $ 0.04 $ 1.16 Cash Equivalents Cash equivalents consist of all investments with maturities of three months or less from the date of acquisition. Short-term Investments Short-term investments primarily consist of investments in debt securities that have effective maturities greater than three months and less than twelve months from the date of acquisition. The Company classifies its short-term investments as "available-for-sale". Such investments are carried at fair value, with unrealized gains and losses included in the statement of comprehensive income (loss). The Company determines the cost of investments based on the specific identification method. The following table summarizes the various investment categories at June 30, 2016 and December 31, 2015 (in thousands): Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value June 30, 2016 Short-term investments Bank deposits $ 10,000 $ 28 $ — $ 10,028 Corporate bonds 23,210 174 (1 ) 23,383 Commercial paper 6,665 3 — 6,668 Asset backed securities 695 — — 695 Corporate equity securities 1,700 3,129 — 4,829 $ 42,270 $ 3,334 $ (1 ) $ 45,603 December 31, 2015 Short-term investments Bank deposits $ 43,043 $ — $ (4 ) $ 43,039 Corporate bonds 41,238 — (35 ) 41,203 Commercial paper 1,747 — — 1,747 Asset backed securities 10,020 — (5 ) 10,015 Corporate equity securities 1,843 4,944 — 6,787 $ 97,891 $ 4,944 $ (44 ) $ 102,791 Inventory Inventory, which consists of finished goods, is stated at the lower of cost or market value. The Company determines cost using the first-in, first-out method. Inventory levels are analyzed periodically and written down to its net realizable value if it has become obsolete, has a cost basis in excess of its expected net realizable value or is in excess of expected requirements. There were no write downs related to obsolete inventory recorded for the three and six months ended June 30, 2016 and 2015 . Goodwill and Other Identifiable Intangible Assets Goodwill and other identifiable intangible assets consist of the following (in thousands): June 30, December 31, 2016 2015 Indefinite lived intangible assets Acquired IPR&D $ 12,556 $ 12,556 Goodwill 72,360 12,238 Definite lived intangible assets Complete technology 182,267 15,267 Less: Accumulated amortization (8,161 ) (3,762 ) Trade name 2,642 2,642 Less: Accumulated amortization (718 ) (652 ) Customer relationships 29,600 29,600 Less: Accumulated amortization (8,044 ) (7,304 ) Total goodwill and other identifiable intangible assets, net $ 282,502 $ 60,585 As Discussed in Note 2-Business Combination , on January 8, 2016, the Company completed its acquisition of OMT. As a result of the transaction, the Company recorded $167.0 million of intangibles with definite lives and goodwill of $60.1 million . Amortization of definite-lived intangible assets is computed using the straight-line method over the estimated useful life of the asset of 20 years . Amortization expense of $2.7 million and $5.2 million was recognized for the three and six months ended June 30, 2016 , respectively. Amortization expense of $0.6 million and $1.2 million was recognized for the three and six months ended June 30, 2015 , respectively. The Company tests the carrying value of goodwill in accordance with accounting rules on impairment of goodwill, which require that the Company estimate the fair value of the reporting unit annually, or when impairment indicators exist, and compare such amounts to their respective carrying values to determine if an impairment is required. The Company performed its annual assessment for goodwill impairment for the year ended December 31, 2015 , noting no impairment. Commercial License Rights Commercial License Rights consist of the following (in thousands): June 30, December 31, 2016 2015 CorMatrix $ 17,692 $ — Selexis 8,602 8,602 26,294 8,602 Less: accumulated amortization (153 ) (48 ) Total commercial rights, net $ 26,141 $ 8,554 Commercial license rights represent a portfolio of future milestone and royalty payment rights acquired from Selexis in April 2013 and April 2015 and CorMatrix in May 2016. Individual commercial license rights acquired are carried at allocated cost and approximate fair value. The carrying value of the license rights will be reduced on a pro-rata basis as revenue is realized over the term of the agreement. Declines in the fair value of individual license rights below their carrying value that are deemed to be other than temporary are reflected in earnings in the period such determination is made. As of June 30, 2016 , management does not believe there have been any events or circumstances indicating that the carrying amount of its commercial license rights may not be recoverable. Relationships between the CorMatrix Parties As previously disclosed in Ligand’s filings, Jason Aryeh is a director of both Ligand and CorMatrix. Mr. Aryeh beneficially owns equity of CorMatrix representing approximately .56% of CorMatrix’s outstanding equity. Mr. Aryeh recused himself from all of the board’s consideration of the Purchase Agreement, including any financial analysis, the terms of the Purchase Agreement and the vote to approve the Purchase Agreement and the related transactions. Property and Equipment Property and equipment is stated at cost and consists of the following (in thousands): June 30, December 31, 2016 2015 Lab and office equipment $ 1,063 $ 2,248 Leasehold improvements 929 273 Computer equipment and software 692 632 2,684 3,153 Less accumulated depreciation and amortization (1,503 ) (2,781 ) Total property and equipment, net $ 1,181 $ 372 Depreciation of equipment is computed using the straight-line method over the estimated useful lives of the assets, which range from three to ten years. Leasehold improvements are amortized using the straight-line method over the shorter of the estimated useful lives or the related lease term. Depreciation expense of $0.1 million was recognized for each of the six months ended June 30, 2016 and 2015 , which is included in operating expenses. Other Current Assets Other current assets consist of the following (in thousands): June 30, December 31, 2016 2015 Prepaid expenses $ 2,122 $ 1,177 Other receivables 480 731 Total other current assets $ 2,602 $ 1,908 Accrued Liabilities Accrued liabilities consist of the following (in thousands): June 30, December 31, 2016 2015 Compensation $ 1,463 $ 1,711 Professional fees 828 726 Amounts owed to former licensees 852 915 Royalties owed to third parties 1,037 823 Other 771 1,222 Total accrued liabilities $ 4,951 $ 5,397 Other Long-Term Liabilities Other long-term liabilities consist of the following (in thousands): June 30, December 31, 2016 2015 Deposits $ 42 $ 268 Deferred rent 326 — Other 30 29 Total other long-term liabilities $ 398 $ 297 Contingent Liabilities In connection with the Company’s acquisition of CyDex in January 2011, the Company recorded a contingent liability, for amounts potentially due to holders of the CyDex CVRs and former license holders. The liability is periodically assessed based on events and circumstances related to the underlying milestones, royalties and material sales. Any change in fair value is recorded in the Company’s consolidated statement of operations. The carrying amount of the liability may fluctuate significantly and actual amounts paid under the CVR agreements may be materially different than the carrying amount of the liability. The fair value of the liability at June 30, 2016 and December 31, 2015 was $7.0 million and $9.5 million , respectively. The Company recorded a fair-value adjustment to increase the liability by $0.2 million and $0.5 million for the three and six months ended June 30, 2016 , respectively. The Company recorded a fair-value adjustment to increase the liability by $1.0 million and $2.2 million for the three and six months ended June 30, 2015 , respectively. The Company paid CyDex CVR holders $3.0 million and $3.2 million during the six months ended June 30, 2016 and 2015 , respectively. In connection with the Company’s acquisition of Metabasis in January 2010 , the Company issued to Metabasis stockholders four tradable CVRs, one CVR from each of four respective series of CVR, for each Metabasis share. The CVRs will entitle Metabasis stockholders to potential cash payments as frequently as every six months as cash is received by the Company from proceeds from the sale or partnering of any of the Metabasis drug development programs, among other triggering events. The fair values of the CVRs are remeasured at each reporting date through the term of the related agreement. Any change in fair value is recorded in the Company’s consolidated statement of operations. The carrying amount of the liability may fluctuate significantly based upon quoted market prices and actual amounts paid under the agreements may be materially different than the carrying amount of the liability. The fair value of the liability was estimated to be $2.5 million and $4.0 million as of June 30, 2016 and December 31, 2015 , respectively. The Company recorded an increase in the liability for Metabasis-related CVRs of $0.1 million and $1.2 million for the three and six months ended June 30, 2016 . The Company recorded an increase of $6.4 million and $5.3 million for the three and six months ended June 30, 2015 , respectively. The Company paid Metabasis CVR holders $2.6 million for the six months ended June 30, 2016 . No payments were made to Metabasis CVR holders for the six months ended June 30, 2015 . Revenue Recognition Royalties on sales of products commercialized by the Company’s partners are recognized in the quarter reported to Ligand by the respective partner. Generally, the Company receives royalty reports from its licensees approximately one quarter in arrears due to the fact that its agreements require partners to report product sales between 30 and 60 days after the end of the quarter. The Company recognizes royalty revenues when it can reliably estimate such amounts and collectability is reasonably assured. Under this accounting policy, the royalty revenues reported are not based upon estimates and such royalty revenues are typically reported to the Company by its partners in the same period in which payment is received. Revenue from material sales of Captisol is recognized upon transfer of title, which normally passes upon shipment to the customer, provided all other revenue recognition criteria have been met. All product returns are subject to the Company's credit and exchange policy, approval by the Company and a 20% restocking fee. To date, product returns by customers have not been material to net material sales in any related period. The Company records revenue net of product returns, if any, and sales tax collected and remitted to government authorities during the period. The Company analyzes its revenue arrangements and other agreements to determine whether there are multiple elements that should be separated and accounted for individually or as a single unit of accounting. For multiple element contracts, arrangement consideration is allocated at the inception of the arrangement to all deliverables on the basis of relative selling price, using a hierarchy to determine selling price. Management first considers VSOE, then TPE and if neither VSOE nor TPE exist, the Company uses its best estimate of selling price. Many of the Company's revenue arrangements for Captisol involve a license agreement with the supply of manufactured Captisol product. Licenses may be granted to pharmaceutical companies for the use of Captisol product in the development of pharmaceutical compounds. The supply of the Captisol product may be for all phases of clinical trials and through commercial availability of the host drug or may be limited to certain phases of the clinical trial process. Management believes that the Company's licenses have stand-alone value at the outset of an arrangement because the customer obtains the right to use Captisol in its formulations without any additional input by the Company. Other nonrefundable, upfront license fees are recognized as revenue upon delivery of the license, if the license is determined to have standalone value that is not dependent on any future performance by the Company under the applicable collaboration agreement. Nonrefundable contingent event-based payments are recognized as revenue when the contingent event is met, which is usually the earlier of when payments are received or collections are assured, provided that it does not require future performance by the Company. The Company occasionally has sub-license obligations related to arrangements for which it receives license fees, milestones and royalties. The Company evaluates the determination of gross versus net reporting based on each individual agreement. Sales-based contingent payments from partners are accounted for similarly to royalties, with revenue recognized upon achievement of the sales targets assuming all other revenue recognition criteria for milestones are met. Revenue from development and regulatory milestones is recognized when earned, as evidenced by written acknowledgement from the collaborator, provided that (1) the milestone event is substantive, its achievability was not reasonably assured at the inception of the agreement, and the Company has no further performance obligations relating to that event, and (2) collectability is reasonably assured. If these criteria are not met, the milestone payment is recognized over the remaining period of the Company’s performance obligations under the arrangement. Revenue from research funding under our collaboration agreements is earned and recognized on a percentage-of completion basis as research hours are incurred in accordance with the provisions of each agreement. Stock-Based Compensation Stock-based compensation expense for awards to employees and non-employee directors is recognized on a straight-line basis over the vesting period until the last tranche vests. The following table summarizes stock-based compensation expense recorded as components of research and development expenses and general and administrative expenses for the periods indicated (in thousands): Three months ended Six months ended June 30, June 30, 2016 2015 2016 2015 Stock-based compensation expense as a component of: Research and development expenses $ 1,682 $ 1,253 $ 3,267 $ 2,174 General and administrative expenses 2,558 2,507 5,092 4,501 $ 4,240 $ 3,760 $ 8,359 $ 6,675 The fair-value for options that were awarded to employees and directors was estimated at the date of grant using the Black-Scholes option valuation model with the following weighted-average assumptions: Three months ended Six months ended June 30, June 30, 2016 2015 2016 2015 Risk-free interest rate 1.7% 1.7% 1.5% 1.8% Dividend yield — — — — Expected volatility 49% 58% 50% 58% Expected term 6.7 6.6 6.6 6.6 Forfeiture rate 5.0% 8.5% 5.0% 8.5% Income Taxes Income taxes are accounted for under the liability method. This approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of differences between the tax basis of assets or liabilities and their carrying amounts in the consolidated financial statements. The Company provides a valuation allowance for deferred tax assets if it is more likely than not that these items will expire before it is able to realize their benefit. The Company calculates the valuation allowance in accordance with the authoritative guidance relating to income taxes under ASC 740, Income Taxes, which requires an assessment of both positive and negative evidence that is available regarding the reliability of these deferred tax assets, when measuring the need for a valuation allowance. Developing the provision for income taxes requires significant judgment and expertise in federal and state income tax laws, regulations and strategies, including the determination of deferred tax assets and liabilities and, if necessary, any valuation allowances that may be required for deferred tax assets. The Company's judgments and tax strategies are subject to audit by various taxing authorities. While management believes the Company has provided adequately for its income tax liabilities in its consolidated financial statements, adverse determinations by these taxing authorities could have a material adverse effect on the Company's consolidated financial condition and results of operations. Variable Interest Entities The Company identifies an entity as a VIE if either: (1) the entity does not have sufficient equity investment at risk to permit the entity to finance its activities without additional subordinated financial support, or (2) the entity's equity investors lack the essential characteristics of a controlling financial interest. The Company performs ongoing qualitative assessment of its VIEs to determine whether the Company has a controlling financial interest in any VIE and therefore is the primary beneficiary. If the Company is the primary beneficiary of a VIE, it consolidates the VIE under applicable accounting guidance. If the Company is no longer the primary of a VIE or the entity is no longer considered as a VIE as facts and circumstances change, it deconsolidates the entity under the applicable accounting guidance. In May 2015, the Company deconsolidated Viking, a previously reported VIE, and elected to record its investment in Viking under the equity method of accounting as Viking is no longer considered a VIE and the Company does not have voting control or other elements of control that would require consolidation. The investment is subsequently adjusted for the Company’s share of Viking's operating results and if applicable, cash contributions and distributions, which is reported on a separate line in our condensed consolidated statement of operations called “Loss from Viking Therapeutics”. On the condensed consolidated balance sheet, the Company reports its investment in Viking on a separate line in the non-current assets section called “Investment in Viking Therapeutics”. See Note 4, Investment in Viking Therapeutics, for additional details. Convertible Debt In August 2014, the Company completed a $245.0 million offering of 2019 Convertible Senior Notes, which bears interest at 0.75% . The Company accounts for the 2019 Convertible Senior Notes by separating the liability and equity components of the instrument in a manner that reflects the Company's nonconvertible debt borrowing rate. As a result, the Company assigned a value to the debt component of the 2019 Convertible Senior Notes equal to the estimated fair value of similar debt instruments without the conversion feature, which resulted in the Company recording the debt instrument at a discount. The Company is amortizing the debt discount over the life of the 2019 Convertible Senior Notes as additional non-cash interest expense utilizing the effective interest method. Recent Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) , which supersedes the revenue recognition requirements in ASC 605, Revenue Recognition . The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new guidance establishes a five-step model to achieve that core principle and also requires additional disclosures about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts. ASU 2014-09 is effective for interim and annual reporting periods beginning after December 15, 2017. Early application is permitted after December 15, 2016. In March 2016, the FASB issued ASU 2016-08, Principal versus Agent Considerations (Reporting Revenue Gross versus Net) , which clarifies the implementation guidance on principal versus agent considerations, and ASU 2016-10, Identifying Performance Obligations and Licensing , which clarifies the identification of performance obligations and the licensing implementation guidance. In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers (Topic 606) - Narrow-Scope Improvements and Practical Expedients , which clarifies guidance on assessing collectibility, presenting sales taxes and other similar taxes collected from customers, measuring noncash consideration, and certain transition matters. The Company is currently evaluating the effect the adoption of ASU 2014-09, ASU 2015-14, ASU 2016-08, ASU 2016-10, and ASU 2016-12 will have on the Company's financial statements. In April 2015, FASB issued ASU 2015-03, Interest-Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs. This update was issued to simplify the presentation for debt issuance costs. Upon adoption, such costs shall be presented on our consolidated balance sheets as a direct deduction from the carrying amount of the related debt liability and not as a deferred charge presented in Other assets on our consolidated balance sheets. This amendment will be effective for interim and annual periods beginning on January 1, 2016, and is required to be retrospectively adopted. Management adopted the change in the presentation on our consolidated balance sheets accordingly (see Note 6 for details). In January 2016, the FASB issued ASU 2016-01 Recognition and Measurement of Financial Assets and Financial Liabilities that amends the accounting and disclosures of financial instruments, including a provision that requires equity investments (except for investments accounted for under the equity method of accounting) to be measured at fair value with changes in fair value recognized in current earnings. The new standard is effective for interim and annual periods beginning on January 1, 2018. We are currently evaluating the impact that this new standard will have on our consolidated financial statements. In February 2016, the FASB issued a new accounting standard that amends the guidance for the accounting and disclosure of leases. This new standard requires that lessees recognize the assets and liabilities that arise from leases on the balance sheet and disclose qualitative and quantitative information about their leasing arrangements. The new standard is effective for interim and annual periods beginning on January 1, 2019. We are currently evaluating the impact that this new standard will have on our consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation , which identifies areas for simplification involving several aspects of accounting for stock-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows. ASU No. 2016-09 is effective for reporting periods beginning after December 31, 2016. Early adoption is permitted. We are currently assessing the potential impact that the adoption of ASU No. 2016-09 will have in our condensed consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments which requires that expected credit losses relating to financial assets measured on an amortized cost basis and available-for-sale debt securities be recorded through an allowance for credit losses. ASU 2016-13 limits the amount of credit losses to be recognized for available-for-sale debt securities to the amount by which carrying value exceeds fair value and also requires the reversal of previously recognized credit losses if fair value increases. The new standard will be effective for us on January 1, 2020. Early adoption will be available on January 1, 2019. We are currently evaluating the effect that the updated standard will have on our consolidated financial statements. |
Business Combination
Business Combination | 6 Months Ended |
Jun. 30, 2016 | |
Business Combinations [Abstract] | |
Business Combination | Business Combination On January 8, 2016, the Company acquired substantially all of the assets and liabilities of OMT. OMT is a biotechnology company engaged in the genetic engineering of animals for the generation of human therapeutic antibodies through its OmniAb® technology, which currently offers three transgenic animal platforms for license, including OmniRat®, OmniMouse® and OmniFlic®. The transaction, which was accounted for as a business combination, initially added 16 partnerships to the Company's portfolio and provides the Company with opportunities for further licensing and collaborations in the area. The aggregate acquisition consideration was $173.4 million , consisting of (in thousands): Cash consideration $ 96,006 Total share consideration: Actual number of shares issued 790 Multiplied by: Ligand closing share price on January 8, 2016 $ 97.92 Total share consideration 77,373 Total consideration $ 173,379 The acquisition consideration is subject to certain customary post-closing adjustments up to 15 months from January 8, 2016, in accordance with the terms and subject to the conditions contained in the Merger Agreement between the Company and OMT. Cash and cash equivalents $ 3,504 Accounts receivable 5 Income tax receivable 140 Prepaid expenses and other current assets 2 Deferred tax liabilities, net (56,114 ) Intangible asset with finite life - core technology 167,000 Liabilities assumed (1,279 ) Goodwill 60,121 Total consideration $ 173,379 The fair value of the core technology, or OMT's OmniAb technology, was based on the discounted cash flow method that estimated the present value of a hypothetical royalty stream derived from the licensing of the OmniAb technology. These projected cash flows were discounted to present value using a discount rate of 15.5% . The fair value of the core technology is being amortized on a straight-line basis over the estimated useful life of 20 years. The excess of the acquisition date consideration over the fair values assigned to the assets acquired and the liabilities assumed and recorded $60.1 million as goodwill, which is not deductible for tax purposes and is primarily attributable to OMT’s potential revenue growth from combining the OMT and Ligand businesses and workforce, as well as the benefits of access to different markets and customers. The purchase price allocations were prepared on a preliminary basis and are subject to change as additional information becomes available concerning the fair value and tax basis of the assets acquired and liabilities assumed. Any measurement period adjustments to the OMT purchase price allocation will be made as soon as practicable but no later than one year from the date of acquisition. The following table presents supplemental pro forma information for the three and six months ended June 30, 2016 and June 30, 2015 , as if the acquisition of OMT had occurred on January 1, 2015 (in thousands except for EPS): Three months ended Six months ended June 30, June 30, 2016 2015 2016 2015 Revenue $ 21,997 $ 19,818 $ 51,645 $ 36,971 Net (loss) income $ (3,443 ) $ 19,483 $ 3,165 $ 18,166 Basic (loss) income per share: $ (0.17 ) $ 0.99 $ 0.15 $ 0.92 Diluted (loss) income per share: $ (0.17 ) $ 0.92 $ 0.14 $ 0.87 The unaudited pro forma consolidated results include pro forma adjustments that assume the acquisition occurred on January 1, 2015. The primary adjustments include: (i) the $0.3 million and $0.6 million for the three and six months ended June 30, 2015 , respectively, for share based compensation expenses related to the stock awards issued to the retained OMT employees after the acquisition, (ii) additional intangible amortization expense of $2.1 million and $4.2 million was included in the three and six months ended June 30, 2015 , respectively and (iii) a platform license fee of $3.0 million paid by OMT during the three and six months ended June 30, 2015 . The license agreement was terminated upon acquisition by Ligand. The adjustments also include $2.5 million license revenue recognized by OMT from January 1, 2016 to the acquisition date. The unaudited pro forma consolidated results are not necessarily indicative of what our consolidated results of operations actually would have been had we completed the acquisition on January 1, 2015. In addition, the unaudited pro forma consolidated results do not purport to project the future results of operations of the combined company nor do they reflect the expected realization of any cost savings associated with the acquisition. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The Company measures certain financial assets and liabilities at fair value on a recurring basis. Fair value is a market-based measurement that should be determined using assumptions that market participants would use in pricing an asset or liability. The Company establishes a three-level hierarchy to prioritize the inputs used in measuring fair value. The levels are described below with level 1 having the highest level input that is significant to the measurement and level 3 having the lowest: Level 1 - Quoted prices in active markets; Level 2 - Inputs other than the quoted prices in active markets that are observable either directly or indirectly; and Level 3 - Unobservable inputs in which there is little or no market data, which require the Company to develop its own assumptions. The following table provides a summary of the carrying value of assets and liabilities that are measured at fair value on a recurring basis as of June 30, 2016 (in thousands). There were no transfers between Level 1 and Level 2 securities during the six months ended June 30, 2016 : Fair Value Measurements at Reporting Date Using Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Total (Level 1) (Level 2) (Level 3) Assets: Short-term investments (2) $ 44,908 $ 4,829 $ 40,079 $ — Note receivable Viking (3) 3,207 — — 3,207 Investment in warrants (4) 532 532 — — Total assets $ 48,647 $ 5,361 $ 40,079 $ 3,207 Liabilities: Current contingent liabilities-CyDex (5) $ 5,337 $ — $ — $ 5,337 Long-term contingent liabilities-CyDex (5) 1,634 — — 1,634 Long-term contingent liabilities-Metabasis (6) 2,504 — 2,504 — Liability for amounts owed to former licensees (7) 611 611 — — Total liabilities $ 10,086 $ 611 $ 2,504 $ 6,971 The following table provides a summary of the assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2015 (in thousands): Fair Value Measurements at Reporting Date Using Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs * Significant Unobservable Inputs Total (Level 1) (Level 2) (Level 3) Assets: Cash equivalents (1) $ 3,015 $ — $ 3,015 $ — Short-term investments (2) 92,775 6,786 85,989 — Viking note receivable (3) 4,782 — — 4,782 Total assets $ 100,572 $ 6,786 $ 89,004 $ 4,782 Liabilities: Current contingent liabilities-CyDex (5) $ 7,812 $ — $ — $ 7,812 Current contingent liabilities-Metabasis (6) 2,602 — 2,602 — Long-term contingent liabilities-Metabasis (6) 1,355 — 1,355 — Long-term contingent liabilities-CyDex (5) 1,678 — — 1,678 Liability for amounts owed to former licensees (7) 794 794 — — Total liabilities $ 14,241 $ 794 $ 3,957 $ 9,490 (1) Highly liquid investments with maturities less than 90 days from the purchase date are recorded as cash equivalents that are classified as Level 2 of the fair value hierarchy, as these investment securities are valued based upon quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market. (2) Investments in equity securities, which the Company received as a result of event-based and upfront payments from licensees, are classified as level 1 as the fair value is determined using quoted market prices in active markets for the same securities. Short-term investments in marketable securities with maturities greater than 90 days are classified as level 2 of the fair value hierarchy, as these investment securities are valued based upon quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market. (3) The fair value of the convertible note receivable from Viking was determined using a probability weighted option pricing model using a lattice methodology. The fair value is subjective and is affected by certain significant input to the valuation model such as the estimated volatility of the common stock, which was estimated to be 50% at June 30, 2016 . Changes in these assumptions may materially affect the fair value estimate. (4) Investment in warrants, which the Company received as a result of Viking’s partial repayment of the Viking note receivable and the Company’s purchase of Viking common stock and warrants in April 2016 , are classified as level 1 as the fair value is determined using quoted market prices in active markets for the same securities. (5) The fair value of the liabilities for CyDex contingent liabilities were determined based on the income approach using a Monte Carlo analysis. The fair value is subjective and is affected by changes in inputs to the valuation model including management’s assumptions regarding revenue volatility, probability of commercialization of products, estimates of timing and probability of achievement of certain revenue thresholds and developmental and regulatory milestones which may be achieved and affect amounts owed to former license holders and CVR holders. Changes in these assumptions can materially affect the fair value estimate. (6) The liability for CVRs for Metabasis are determined using quoted market prices in an inactive market for the underlying CVR. (7) The liability for amounts owed to former licensees are determined using quoted market prices in active markets for the underlying investment received from a partner, a portion of which is owed to former licensees. The following table represents significant unobservable inputs used in determining the fair value of contingent liabilities assumed in the acquisition of CyDex: June 30, 2016 December 31, 2015 Range of annual revenue subject to revenue sharing (1) $24.2 million $22.5 million Revenue volatility 25% 25% Average probability of commercialization 82% 73% Sales beta 0.30 0.40 Credit rating BB BB Equity risk premium 6% 6% (1) Revenue subject to revenue sharing represent management’s estimate of the range of total annual revenue subject to revenue sharing (i.e. annual revenues in excess of $15 million ) through December 31, 2016 , which is the term of the CVR agreement. A reconciliation of the level 3 financial instruments as of June 30, 2016 is as follows (in thousands): Assets: Fair value of level 3 financial instrument assets as of December 31, 2015 $ 4,782 Viking note receivable fair market value adjustment (215 ) Cash payment received as partial repayment of note receivable (300 ) Fair market value of stock received as partial repayment of note receivable (1,060 ) Fair value of level 3 financial instrument assets as of June 30, 2016 $ 3,207 Liabilities: Fair value of level 3 financial instrument liabilities as of December 31, 2015 $ 9,490 Payments to CVR and other former license holders (2,992 ) Fair value adjustments to contingent liabilities 473 Fair value of level 3 financial instrument liabilities as of June 30, 2016 $ 6,971 Other Fair Value Measurements 2019 Convertible Senior Notes In August 2014, the Company issued $245.0 million aggregate principal amount of its 2019 Convertible Senior Notes. The Company uses a quoted market rate in an inactive market, which is classified as a Level 2 input, to estimate the current fair value of its 2019 Convertible Senior Notes. The estimated fair value of the 2019 Senior Convertible Notes was $408.5 million as of June 30, 2016 . The carrying value of the notes does not reflect the market rate. See Note 6 Financing Arrangements for additional information. Viking Therapeutics The Company records its investment in Viking under the equity method of accounting. The investment is subsequently adjusted for the Company’s share of Viking's operating results, and if applicable, cash contributions and distributions. See Note 4 Investment in Viking Therapeutics for additional information. The market value of the Company's investment in Viking was $7.9 million as of June 30, 2016 . The carrying value of the investment in Viking does not reflect the market value. |
Investment in Viking Therapeuti
Investment in Viking Therapeutics | 6 Months Ended |
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Investment in Viking Therapeutics | Investment in Viking Therapeutics In 2014, the Company entered into a MLA with Viking to license the rights to five of the Company's programs to Viking. Under the terms of the MLA, no consideration was exchanged upon execution, but rather Viking agreed to issue shares of Viking common stock with an aggregate value of approximately $29.2 million upon consummation of Viking's IPO. As part of this transaction, the Company also extended a $2.5 million convertible loan to Viking under a LSA. As a result of these transactions, the Company determined it held a variable interest in Viking. The Company considered certain criteria in the accounting guidance for VIEs, and determined that Viking was a VIE and Ligand was the primary beneficiary of Viking. As a result, the Company consolidated Viking on its financial statements from May 2014 through May 2015, the effective date of Viking's IPO. The Company recorded 100% of the losses incurred as net loss attributable to noncontrolling interest because it was the primary beneficiary with no equity interest in the VIE. In May 2015, Viking completed the Viking IPO and issued the Company approximately 3.7 million shares of Viking common stock with an aggregate value of $29.2 million based on the IPO price of $8.00 per share. In connection with the Viking IPO, the Company purchased 1.1 million shares of Viking common stock for an aggregate price of $9.0 million at the initial public offering price. Upon completion of Viking’s IPO, the Company determined that Viking was no longer a VIE and the Company did not have any other element of control that would require consolidation of Viking. In May 2015 , the Company deconsolidated Viking and began to account for its equity investment in Viking under the equity method and records its proportional share of Viking gains and losses in Loss from Viking Therapeutics in the Company's consolidated statement of operations. The Company owned an aggregate of 32.7% of the outstanding common stock of Viking at June 30, 2016 . In January 2016 , the Company entered into an amendment to the LSA with Viking to extend the maturity of the convertible loan to May 2017 , reduce the interest rate from 5.0% to 2.5% , and extend the lock up period by one year such that the Company may not sell, transfer, or dispose of any Viking securities prior to January 23, 2017 . Additionally, upon the consummation of a subsequent capital financing transaction, Viking will be required to repay $1.5 million of the Viking Note obligation to the Company, with at least $0.3 million to be paid in cash and the remaining amount to be paid in the form and at the price of the Viking equity securities sold in the financing transaction. Upon maturity or further payments, the Company may elect to receive equity of Viking common stock or cash equal to 200% of the principal amount plus accrued and unpaid interest. The Company has opted to account for the Viking convertible note receivable at fair value. In April 2016, Viking closed its underwritten public offering of 7.5 million shares of common stock and warrants to purchase up to 7.5 million shares of its common stock at a price of $1.25 per share of its common stock and related warrants. The warrant has an exercise price of $1.50 per share, immediately exercisable and will expire on April 13, 2021 . As part of this public offering, the Company purchased 560,000 shares of common stock and warrants to purchase 560,000 shares of Viking's common stock for a total purchase price of $0.7 million . The purchased shares of common stock and warrants are subject to the same terms as the shares issued in this offering. In addition, on April 13, 2016 , pursuant to the terms of the amendment to the LSA that was entered in January 2016 between Ligand and Viking (see details in Note 4), Viking repaid $0.3 million of the convertible notes in cash, and issued the Company 960,000 shares of its common stock and warrants to purchase 960,000 shares of its common stock as repayment of $1.2 million of the convertible notes. The shares received as part of the repayment, like all Viking securities held by the Company, are subject to a lock-up period that ends on January 23, 2017 in accordance with the amended LSA. A gain of $0.5 million representing the fair market value of the warrants is included within other income for the quarter ended June 30, 2016 . As of June 30, 2016 , the aggregate fair market value of the note receivable was $3.2 million . The Company recorded a $0.2 million decrease in the fair value of the Viking convertible note for both the three and six months ended June 30, 2016 . See Note 3, Fair Value Measurements for additional details. The Company's ownership in Viking decreased to 32.7% after the public offering and the repayment of the convertible notes. Accordingly, the book value of the Company's equity method investment in Viking decreased by $10.0 million . The resulting net loss was recognized in Loss from Viking Therapeutics in the Company's consolidated statement of operations. |
Lease Obligations
Lease Obligations | 6 Months Ended |
Jun. 30, 2016 | |
Leases [Abstract] | |
Lease Obligations | Lease Obligations The Company leases office and laboratory facilities in California, Kansas and New Jersey. These leases expire between 2016 and 2023 , some of which are subject to annual rent increases which range from 3.0% to 3.5% . The Company currently subleases office and laboratory space in California and New Jersey. The following table provides a summary of operating lease obligations and payments expected to be received from sublease agreements as of June 30, 2016 (in thousands): Operating lease obligations: Lease Termination Date Less than 1 year 1-2 years 3-4 years Thereafter Total Corporate headquarters-San Diego, CA April 2023 $ 74 $ 263 $ 278 $ 270 $ 885 Vacated office and research facility- June 2019 708 1,474 — — 2,182 Bioscience and Technology Business Center- Lawrence, KS December 2017 54 27 — — 81 Vacated office and research facility- Cranbury, NJ August 2016 436 — — — 436 Total operating lease obligations $ 1,272 $ 1,764 $ 278 $ 270 $ 3,584 Sublease payments expected to be received: Vacated office and research facility- June 2019 $ 720 $ 1,400 $ — $ — $ 2,120 Office and research facility- Cranbury, NJ August 2016 35 — — — 35 Net operating lease obligations $ 517 $ 364 $ 278 $ 270 $ 1,429 As of June 30, 2016 and December 31, 2015 , the Company had lease exit obligations of $0.2 million and $0.9 million , respectively. For the three and six months ended June 30, 2016 , the Company made cash payments, net of sublease payments received of $0.6 million and $1.2 million , respectively. The Company recognized adjustments for accretion and changes in leasing assumptions of $0.3 million and $0.5 million for the three and six months ended June 30, 2016 , respectively. For the three and six months ended June 30, 2015 , the Company made cash payments, net of sublease payments received of $0.9 million and $1.9 million , respectively. The Company recognized adjustments for accretion and changes in leasing assumptions of $0.2 million and $0.4 million for the three and six months ended June 30, 2015 , respectively. |
Financing Arrangements
Financing Arrangements | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Financing Arrangements | Financing Arrangements 0.75% Convertible Senior Notes Due 2019 In August 2014, the Company issued $245.0 million aggregate principal amount of its 2019 Convertible Senior Notes, resulting in net proceeds of $239.3 million . The 2019 Convertible Senior Notes are convertible into common stock at an initial conversion rate of 13.3251 shares per $1,000 principal amount of convertible notes, subject to adjustment upon certain events, which is equivalent to an initial conversion price of approximately $75.05 per share of common stock. The notes bear cash interest at a rate of 0.75% per year, payable semi-annually. Holders of the 2019 Convertible Senior Notes may convert the notes at any time prior to the close of business on the business day immediately preceding May 15, 2019, under any of the following circumstances: (1) during any fiscal quarter (and only during such fiscal quarter) commencing after December 31, 2014, if, for at least 20 trading days (whether or not consecutive) during the 30 consecutive trading day period ending on the last trading day of the immediately preceding fiscal quarter, the last reported sale price of the Company's common stock on such trading day is greater than 130% of the conversion price on such trading day; (2) during the five business day period immediately following any ten consecutive trading day period, in which the trading price per $1,000 principal amount of notes was less than 98% of the product of the last reported sale price of the Company's common stock on such trading day and the conversion rate on each such trading day; or (3) upon the occurrence of certain specified corporate events as specified in the indenture governing the notes. As of June 30, 2016 , the Company's last reported sale price has exceeded the 130% threshold described above and accordingly the Convertible Notes have been classified as a current liability as of June 30, 2016 . The determination of whether or not the Convertible Notes are convertible as described above is made each quarter until maturity, conversion or repurchase. It is possible that the Convertible Notes may not be convertible in future periods, in which case the Convertible Notes would be classified as long-term debt, unless one of the other conversion events described above were to occur. On or after May 15, 2019 until the close of business on the second scheduled trading day immediately preceding August 15, 2019, holders of the notes may convert all or a portion of their notes at any time, regardless of the foregoing circumstances. Upon conversion, Ligand must deliver cash to settle the principal and may deliver cash or shares of common stock, at the option of the Company, to settle any premium due upon conversion. In accordance with accounting guidance for debt related to conversion and other options, the Company separately accounted for the debt and equity components of the 2019 Convertible Senior Notes by allocating the $245.0 million total proceeds between the debt component and the embedded conversion option, or equity component, due to Ligand's ability to settle the 2019 Convertible Senior Notes in cash for the principal portion and to settle any premium in cash or common stock, at the Company's election. The debt allocation was performed in a manner that reflected the Company's non-convertible borrowing rate for similar debt of 5.83% derived from independent valuation analysis. The initial debt value of $192.5 million accretes at 5.83% to reach $245.0 million at the maturity date. The equity component of the 2019 Convertible Senior Notes was recognized as a debt discount and represents the difference between the $245.0 million proceeds at issuance of the 2019 Convertible Senior Notes and the fair value of the debt allocation on their respective issuance dates. The debt discount is amortized to interest expense using the effective interest method over the expected life of a similar liability without an equity component. The notes will have a dilutive effect to the extent the average market price per share of common stock for a given reporting period exceeds the conversion price of $75.05 . As of June 30, 2016 , the “if-converted value” exceeded the principal amount of the 2019 Convertible Senior Notes by $136.6 million . In connection with the issuance of the 2019 Convertible Senior Notes, the Company incurred $5.7 million of issuance costs, which primarily consisted of underwriting, legal and other professional fees. The portions of these costs allocated to the equity components totaling $1.2 million were recorded as a reduction to additional paid-in capital. The portions of these costs allocated to the liability components totaling $4.5 million are recorded net of the liability component on the balance sheet beginning in 2016 in accordance with ASU 2015-03, Interest-Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs . The portions allocated to the liability components are amortized to interest expense using the effective interest method over the expected life of the 2019 Convertible Senior Notes. The Company determined the expected life of the debt discount for the 2019 Convertible Senior Notes to be equal to the original five -year term of the notes. The carrying value of the equity component related to the 2019 Convertible Senior Notes as of June 30, 2016 and December 31, 2015 , net of issuance costs, was $51.3 million . Convertible Bond Hedge and Warrant Transactions In August 2014, in connection with the issuance of the 2019 Convertible Senior Notes, to minimize the impact of potential dilution to the Company's common stock upon conversion of such notes, the Company entered into convertible bond hedges and sold warrants covering approximately 3,264,643 shares of its common stock. The convertible bond hedges have an exercise price of $75.05 per share and are exercisable when and if the 2019 Convertible Senior Notes are converted. If upon conversion of the 2019 Convertible Senior Notes, the price of the Company's common stock is above the exercise price of the convertible bond hedges, the counterparties will deliver shares of common stock and/or cash with an aggregate value approximately equal to the difference between the price of common stock at the conversion date and the exercise price, multiplied by the number of shares of common stock related to the convertible bond hedge transaction being exercised. The convertible bond hedges and warrants described below are separate transactions entered into by the Company and are not part of the terms of the 2019 Convertible Senior Notes. Holders of the 2019 Convertible Senior Notes and warrants will not have any rights with respect to the convertible bond hedges. The Company paid $48.1 million for these convertible bond hedges and recorded the amount as a reduction to additional paid-in capital. Concurrently with the convertible bond hedge transactions, the Company entered into warrant transactions whereby it sold warrants to acquire, approximately 3,264,643 shares of common stock with an exercise price of approximately $125.08 per share, subject to certain adjustments. The warrants have various expiration dates ranging from November 13, 2019 to April 22, 2020. The warrants will have a dilutive effect to the extent the market price per share of common stock exceeds the applicable exercise price of the warrants, as measured under the terms of the warrant transactions. The Company received $11.6 million for these warrants and recorded this amount to additional paid-in capital. The common stock issuable upon exercise of the warrants will be in unregistered shares, and the Company does not have the obligation and does not intend to file any registration statement with the SEC registering the issuance of the shares under the warrants. The carrying values and the fixed contractual coupon rates of the Company's financing arrangements as of June 30, 2016 and December 31, 2015 were as follows (in thousands): June 30, 2016 December 31, 2015 2019 Convertible Senior Notes Principal amount outstanding $ 245,000 $ 245,000 Unamortized discount (34,673 ) (39,628 ) Net carrying amount 210,327 205,372 Less: Unamortized deferred financing costs 2,964 3,387 Total notes payable $ 207,363 $ 201,985 |
Income Tax
Income Tax | 6 Months Ended |
Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Tax | Income Tax The Company's income tax benefit from continuing operations for the three and six months ended June 30, 2016 was $3.9 million , or $0.19 per diluted share and $0.2 million or $0.01 per diluted share, respectively. The Company's income tax expense from discontinued operations for the six months ended June 30, 2016 was $0.4 million , or $0.02 per diluted share. The Company's income tax provision from continuing operations for both the three and six months ended June 30, 2015 was $0.3 million , or $0.01 per diluted share. The Company estimates its annual effective income tax rate for continuing operations to be approximately 40.6% for 2016, compared to the 1.1% effective income tax rate for 2015. The estimated effective tax rate for 2016 is different from the federal statutory rate primarily as a result of significant permanent book-to-tax differences and state taxes. The permanent differences include non-taxable contingent consideration income (expense) recorded related to the change in market value of contingent liabilities. Any significant contingent consideration expense or income will result in a significantly higher or lower effective tax rate because contingent consideration expense is largely not deductible for tax purposes and contingent consideration income is not taxable. Other permanent differences between financial statement income and taxable income relate to items such as stock compensation, meals and entertainment charges, and compensation of officers. The primary difference in the estimated effective tax rate in 2016 compared to 2015 relates to the release of the Company’s valuation allowance in 2015. Our estimated annual effective tax rate for the six months ended June 30, 2015 is primarily attributable to an increase in our deferred tax liability associated with the tax amortization of acquired indefinite lived IPR&D intangible assets. The Company maintains a valuation allowance in the amount of $8.9 million against certain U.S. state NOLs, federal NOLs arising from Pre-ASC 718 excess stock compensation benefits and federal research and development tax credits. Each reporting period, the Company evaluates the need for a valuation allowance on our deferred tax assets by jurisdiction and adjusts our estimates as more information becomes available. The Company will reassess the ability to realize the deferred tax assets on a quarterly basis. If it is more likely than not that it will not realize the recognized deferred tax assets, then all or a portion of the valuation allowance may need to be re-established, which would result in a charge to tax expense. Conversely if new events indicate that it is more likely than not that we will realize additional deferred tax assets, then all or a portion of the remaining valuation allowance may be released, which would result in a tax benefit. As of June 30, 2016 , the Company had unrecognized tax benefits of approximately $6.4 million related to uncertain tax positions that, if recognized, would result in adjustments to the related deferred tax assets and reduce our annual effective tax rate, subject to the remaining valuation allowance. The Company files income tax returns in the U.S. and in various state jurisdictions with varying statutes of limitations. The Company is no longer subject to income tax examination by tax authorities for years prior to 2011; however, its net operating loss and research credit carry-forwards arising prior to that year are subject to adjustment. It is the Company's policy to recognize interest expense and penalties related to income tax matters as a component of income tax expense. As of June 30, 2016 , there was no material accrued interest related to uncertain tax positions. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2016 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity The Company grants options and awards to employees and non-employee directors pursuant to a stockholder approved stock incentive plan, which is described in further detail in Note 8, Stockholders' Equity, of Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015. The following is a summary of the Company’s stock option and restricted stock activity and related information: Stock Options Restricted Stock Award Shares Weighted- Average Exercise Price Shares Weighted- Average Grant Date Fair Value Balance as of December 31, 2015 1,683,341 $ 34.23 130,749 $ 60.36 Granted 254,989 90.51 233,955 94.76 Exercised (77,243 ) 30.73 (41,833 ) 52.18 Forfeited (24,282 ) 61.99 (1,850 ) 71.48 Balance as of June 30, 2016 1,836,805 $ 41.83 321,021 $ 73.13 Net cash received from options exercised during the six months ended June 30, 2016 and 2015 was approximately $2.4 million and $5.3 million , respectively. Tax deductions for stock options and restricted stock which have exceeded stock based compensation expense in previous years have not been recognized by the Company. The Company will monitor the utilization of the net operating losses and recognize the excess tax deduction when that deduction reduces taxes payable. As of June 30, 2016 , 948,729 shares were available for future option grants or direct issuance under the Company's 2002 Stock Incentive Plan, as amended. Employee Stock Purchase Plan The Company's Amended ESPP allows participating employees to purchase up to 1,250 shares of Ligand common stock during each offering period, but in no event may a participant purchase more than 1,250 shares of common stock during any calendar year. The length of each offering period is six months, and employees are eligible to participate in the first offering period beginning after their hire date. This plan is described in further detail in Note 8, Stockholders' Equity, of Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015. There were 1,241 shares of common stock issued under the amended ESPP during the six months ended June 30, 2016 . There were no shares of common stock issued under the amended ESPP plan during the six months ended June 30, 2015 . As of June 30, 2016 , 71,126 shares were available for future purchases under the Amended ESPP. Issuance of common stock In conjunction with the acquisition of OMT, the Company issued 790,163 shares of its common stock based on a 20-day volume-weighted average price of $107.66 of its common stock calculated three days prior to closing. |
Litigation
Litigation | 6 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation | Litigation The Company records an estimate of a loss when the loss is considered probable and estimable. Where a liability is probable and there is a range of estimated loss and no amount in the range is more likely than any other number in the range, The Company records the minimum estimated liability related to the claim in accordance with FASB ASC Topic 450 Contingencies. As additional information becomes available, the Company assesses the potential liability related to its pending litigation and revises its estimates. Revisions in the Company's estimates of potential liability could materially impact its results of operations. Securities Litigation In 2012, a federal securities class action and shareholder derivative lawsuit was filed in Pennsylvania alleging that the Company and its CEO assisted various breaches of fiduciary duties based on the Company’s purchase of a licensing interest in a development-stage pharmaceutical program from the Genaera Liquidating Trust in 2010 and the Company’s subsequent sale of half of its interest in the transaction to Biotechnology Value Fund, Inc. Plaintiff filed a second amended complaint in February 2015, which the Company moved to dismiss in March 2015. The district court granted the motion to dismiss on November 11, 2015. The plaintiff has appealed that ruling to the Third Circuit. The Company intends to continue to vigorously defend against the claims against the Company and its CEO. The outcome of the matter is not presently determinable. Paragraph IV Certification by Par Pharmaceuticals On January 7, 2016, the Company received a paragraph IV certification from Par Sterile Products, LLC, a subsidiary of Par Pharmaceuticals, Inc., or Par, advising us that it had filed an ANDA with the FDA seeking approval to market a generic version of Merck’s NOXAFIL-IV product. The paragraph IV certification states it is Par’s position that Merck’s U.S. Patent No. 9,023,790 related to NOXAFIL-IV and the Company's U.S. Patent No. 8,410,077 related to Captisol are invalid and/or will not be infringed by Par’s manufacture, use or sale of the product for which the ANDA was submitted. On February 19, 2016, Merck filed an action against Par in the United States District Court for the District of New Jersey, asserting that Par’s manufacture, use or sale of the product for which the ANDA was submitted would infringe Merck’s U.S. Patent No. 9,023,790. Subsequently, U.S. Patent No. 9,358,297 issued to Merck, Merck listed this patent in the Orange Book, Par amended its ANDA to include a certification that this patent was invalid, unenforceable and/or will not be infringed by Par’s ANDA product, and Par sent a supplemental Notice Letter to Merck. On July 29, 2016, Merck filed an Amended Complaint adding an assertion that Par’s ANDA filing infringed U.S. Patent No. 9,358,297. The case against Par is captioned Merck Sharpe & Dohme Corp. v. Par Sterile Products, LLC, Par Pharmaceuticals, Inc., Par Pharmaceutical Companies, Inc., and Par Pharmaceutical Holdings, Inc., No.16-cv-00948-PGS-DEA. |
Subsequent Event
Subsequent Event | 6 Months Ended |
Jun. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent event | Subsequent Event On July 28, 2016 the Company acquired less than 20% ownership interest in Nucorion, Inc., an early stage company leveraging Ligand's Liver Targeting Prodrug technology focused on developing anti-cancer and anti-viral agents initially directed to China, for $1.0 million in cash. |
Significant Accounting Polici17
Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include Ligand and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. |
Basis of Presentation | Basis of Presentation The Company’s accompanying unaudited condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial information. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the financial position and results of operations of the Company and its subsidiaries, have been included. Interim financial results are not necessarily indicative of the results that may be expected for the full year. These financial statements should be read in conjunction with the consolidated financial statements and notes therein included in the Company’s annual report on Form 10-K for the year ended December 31, 2015 . |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires the use of estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and the accompanying notes. Actual results may differ from those estimates. |
Reclassifications | Reclassifications Certain reclassifications have been made to the previously issued balance sheet and statement of operations for the three and six months ended June 30, 2015 for comparability purposes. These reclassifications had no effect on the reported net income, stockholders' equity, and operating cash flows as previously reported. |
Income (Loss) Per Share | Income (Loss) Per Share Basic income (loss) per share is calculated by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted income (loss) per share is computed by dividing net income by the weighted-average number of common shares and common stock equivalents of all dilutive securities calculated using the treasury stock method and the if-converted method. |
Cash Equivalents and Short-term Investments | Cash Equivalents Cash equivalents consist of all investments with maturities of three months or less from the date of acquisition. Short-term Investments Short-term investments primarily consist of investments in debt securities that have effective maturities greater than three months and less than twelve months from the date of acquisition. The Company classifies its short-term investments as "available-for-sale". Such investments are carried at fair value, with unrealized gains and losses included in the statement of comprehensive income (loss). The Company determines the cost of investments based on the specific identification method. |
Inventory | Inventory Inventory, which consists of finished goods, is stated at the lower of cost or market value. The Company determines cost using the first-in, first-out method. Inventory levels are analyzed periodically and written down to its net realizable value if it has become obsolete, has a cost basis in excess of its expected net realizable value or is in excess of expected requirements. |
Goodwill and Other Identifiable Intangible Assets | Amortization of definite-lived intangible assets is computed using the straight-line method over the estimated useful life of the asset of 20 years . |
Commercial license rights | Commercial license rights represent a portfolio of future milestone and royalty payment rights acquired from Selexis in April 2013 and April 2015 and CorMatrix in May 2016. Individual commercial license rights acquired are carried at allocated cost and approximate fair value. The carrying value of the license rights will be reduced on a pro-rata basis as revenue is realized over the term of the agreement. Declines in the fair value of individual license rights below their carrying value that are deemed to be other than temporary are reflected in earnings in the period such determination is made. |
Property and Equipment | Depreciation of equipment is computed using the straight-line method over the estimated useful lives of the assets, which range from three to ten years. Leasehold improvements are amortized using the straight-line method over the shorter of the estimated useful lives or the related lease term. |
Contingent Liabilities | Contingent Liabilities In connection with the Company’s acquisition of CyDex in January 2011, the Company recorded a contingent liability, for amounts potentially due to holders of the CyDex CVRs and former license holders. The liability is periodically assessed based on events and circumstances related to the underlying milestones, royalties and material sales. Any change in fair value is recorded in the Company’s consolidated statement of operations. The carrying amount of the liability may fluctuate significantly and actual amounts paid under the CVR agreements may be materially different than the carrying amount of the liability. The fair value of the liability at June 30, 2016 and December 31, 2015 was $7.0 million and $9.5 million , respectively. The Company recorded a fair-value adjustment to increase the liability by $0.2 million and $0.5 million for the three and six months ended June 30, 2016 , respectively. The Company recorded a fair-value adjustment to increase the liability by $1.0 million and $2.2 million for the three and six months ended June 30, 2015 , respectively. The Company paid CyDex CVR holders $3.0 million and $3.2 million during the six months ended June 30, 2016 and 2015 , respectively. In connection with the Company’s acquisition of Metabasis in January 2010 , the Company issued to Metabasis stockholders four tradable CVRs, one CVR from each of four respective series of CVR, for each Metabasis share. The CVRs will entitle Metabasis stockholders to potential cash payments as frequently as every six months as cash is received by the Company from proceeds from the sale or partnering of any of the Metabasis drug development programs, among other triggering events. The fair values of the CVRs are remeasured at each reporting date through the term of the related agreement. Any change in fair value is recorded in the Company’s consolidated statement of operations. The carrying amount of the liability may fluctuate significantly based upon quoted market prices and actual amounts paid under the agreements may be materially different than the carrying amount of the liability. |
Revenue Recognition | Revenue Recognition Royalties on sales of products commercialized by the Company’s partners are recognized in the quarter reported to Ligand by the respective partner. Generally, the Company receives royalty reports from its licensees approximately one quarter in arrears due to the fact that its agreements require partners to report product sales between 30 and 60 days after the end of the quarter. The Company recognizes royalty revenues when it can reliably estimate such amounts and collectability is reasonably assured. Under this accounting policy, the royalty revenues reported are not based upon estimates and such royalty revenues are typically reported to the Company by its partners in the same period in which payment is received. Revenue from material sales of Captisol is recognized upon transfer of title, which normally passes upon shipment to the customer, provided all other revenue recognition criteria have been met. All product returns are subject to the Company's credit and exchange policy, approval by the Company and a 20% restocking fee. To date, product returns by customers have not been material to net material sales in any related period. The Company records revenue net of product returns, if any, and sales tax collected and remitted to government authorities during the period. The Company analyzes its revenue arrangements and other agreements to determine whether there are multiple elements that should be separated and accounted for individually or as a single unit of accounting. For multiple element contracts, arrangement consideration is allocated at the inception of the arrangement to all deliverables on the basis of relative selling price, using a hierarchy to determine selling price. Management first considers VSOE, then TPE and if neither VSOE nor TPE exist, the Company uses its best estimate of selling price. Many of the Company's revenue arrangements for Captisol involve a license agreement with the supply of manufactured Captisol product. Licenses may be granted to pharmaceutical companies for the use of Captisol product in the development of pharmaceutical compounds. The supply of the Captisol product may be for all phases of clinical trials and through commercial availability of the host drug or may be limited to certain phases of the clinical trial process. Management believes that the Company's licenses have stand-alone value at the outset of an arrangement because the customer obtains the right to use Captisol in its formulations without any additional input by the Company. Other nonrefundable, upfront license fees are recognized as revenue upon delivery of the license, if the license is determined to have standalone value that is not dependent on any future performance by the Company under the applicable collaboration agreement. Nonrefundable contingent event-based payments are recognized as revenue when the contingent event is met, which is usually the earlier of when payments are received or collections are assured, provided that it does not require future performance by the Company. The Company occasionally has sub-license obligations related to arrangements for which it receives license fees, milestones and royalties. The Company evaluates the determination of gross versus net reporting based on each individual agreement. Sales-based contingent payments from partners are accounted for similarly to royalties, with revenue recognized upon achievement of the sales targets assuming all other revenue recognition criteria for milestones are met. Revenue from development and regulatory milestones is recognized when earned, as evidenced by written acknowledgement from the collaborator, provided that (1) the milestone event is substantive, its achievability was not reasonably assured at the inception of the agreement, and the Company has no further performance obligations relating to that event, and (2) collectability is reasonably assured. If these criteria are not met, the milestone payment is recognized over the remaining period of the Company’s performance obligations under the arrangement. Revenue from research funding under our collaboration agreements is earned and recognized on a percentage-of completion basis as research hours are incurred in accordance with the provisions of each agreement. |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation expense for awards to employees and non-employee directors is recognized on a straight-line basis over the vesting period until the last tranche vests. |
Income Taxes | Income Taxes Income taxes are accounted for under the liability method. This approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of differences between the tax basis of assets or liabilities and their carrying amounts in the consolidated financial statements. The Company provides a valuation allowance for deferred tax assets if it is more likely than not that these items will expire before it is able to realize their benefit. The Company calculates the valuation allowance in accordance with the authoritative guidance relating to income taxes under ASC 740, Income Taxes, which requires an assessment of both positive and negative evidence that is available regarding the reliability of these deferred tax assets, when measuring the need for a valuation allowance. Developing the provision for income taxes requires significant judgment and expertise in federal and state income tax laws, regulations and strategies, including the determination of deferred tax assets and liabilities and, if necessary, any valuation allowances that may be required for deferred tax assets. The Company's judgments and tax strategies are subject to audit by various taxing authorities. While management believes the Company has provided adequately for its income tax liabilities in its consolidated financial statements, adverse determinations by these taxing authorities could have a material adverse effect on the Company's consolidated financial condition and results of operations. |
Variable Interest Entities | Variable Interest Entities The Company identifies an entity as a VIE if either: (1) the entity does not have sufficient equity investment at risk to permit the entity to finance its activities without additional subordinated financial support, or (2) the entity's equity investors lack the essential characteristics of a controlling financial interest. The Company performs ongoing qualitative assessment of its VIEs to determine whether the Company has a controlling financial interest in any VIE and therefore is the primary beneficiary. If the Company is the primary beneficiary of a VIE, it consolidates the VIE under applicable accounting guidance. If the Company is no longer the primary of a VIE or the entity is no longer considered as a VIE as facts and circumstances change, it deconsolidates the entity under the applicable accounting guidance. In May 2015, the Company deconsolidated Viking, a previously reported VIE, and elected to record its investment in Viking under the equity method of accounting as Viking is no longer considered a VIE and the Company does not have voting control or other elements of control that would require consolidation. The investment is subsequently adjusted for the Company’s share of Viking's operating results and if applicable, cash contributions and distributions, which is reported on a separate line in our condensed consolidated statement of operations called “Loss from Viking Therapeutics”. On the condensed consolidated balance sheet, the Company reports its investment in Viking on a separate line in the non-current assets section called “Investment in Viking Therapeutics”. |
Convertible Debt | Convertible Debt In August 2014, the Company completed a $245.0 million offering of 2019 Convertible Senior Notes, which bears interest at 0.75% . The Company accounts for the 2019 Convertible Senior Notes by separating the liability and equity components of the instrument in a manner that reflects the Company's nonconvertible debt borrowing rate. As a result, the Company assigned a value to the debt component of the 2019 Convertible Senior Notes equal to the estimated fair value of similar debt instruments without the conversion feature, which resulted in the Company recording the debt instrument at a discount. The Company is amortizing the debt discount over the life of the 2019 Convertible Senior Notes as additional non-cash interest expense utilizing the effective interest method. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) , which supersedes the revenue recognition requirements in ASC 605, Revenue Recognition . The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new guidance establishes a five-step model to achieve that core principle and also requires additional disclosures about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts. ASU 2014-09 is effective for interim and annual reporting periods beginning after December 15, 2017. Early application is permitted after December 15, 2016. In March 2016, the FASB issued ASU 2016-08, Principal versus Agent Considerations (Reporting Revenue Gross versus Net) , which clarifies the implementation guidance on principal versus agent considerations, and ASU 2016-10, Identifying Performance Obligations and Licensing , which clarifies the identification of performance obligations and the licensing implementation guidance. In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers (Topic 606) - Narrow-Scope Improvements and Practical Expedients , which clarifies guidance on assessing collectibility, presenting sales taxes and other similar taxes collected from customers, measuring noncash consideration, and certain transition matters. The Company is currently evaluating the effect the adoption of ASU 2014-09, ASU 2015-14, ASU 2016-08, ASU 2016-10, and ASU 2016-12 will have on the Company's financial statements. In April 2015, FASB issued ASU 2015-03, Interest-Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs. This update was issued to simplify the presentation for debt issuance costs. Upon adoption, such costs shall be presented on our consolidated balance sheets as a direct deduction from the carrying amount of the related debt liability and not as a deferred charge presented in Other assets on our consolidated balance sheets. This amendment will be effective for interim and annual periods beginning on January 1, 2016, and is required to be retrospectively adopted. Management adopted the change in the presentation on our consolidated balance sheets accordingly (see Note 6 for details). In January 2016, the FASB issued ASU 2016-01 Recognition and Measurement of Financial Assets and Financial Liabilities that amends the accounting and disclosures of financial instruments, including a provision that requires equity investments (except for investments accounted for under the equity method of accounting) to be measured at fair value with changes in fair value recognized in current earnings. The new standard is effective for interim and annual periods beginning on January 1, 2018. We are currently evaluating the impact that this new standard will have on our consolidated financial statements. In February 2016, the FASB issued a new accounting standard that amends the guidance for the accounting and disclosure of leases. This new standard requires that lessees recognize the assets and liabilities that arise from leases on the balance sheet and disclose qualitative and quantitative information about their leasing arrangements. The new standard is effective for interim and annual periods beginning on January 1, 2019. We are currently evaluating the impact that this new standard will have on our consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation , which identifies areas for simplification involving several aspects of accounting for stock-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows. ASU No. 2016-09 is effective for reporting periods beginning after December 31, 2016. Early adoption is permitted. We are currently assessing the potential impact that the adoption of ASU No. 2016-09 will have in our condensed consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments which requires that expected credit losses relating to financial assets measured on an amortized cost basis and available-for-sale debt securities be recorded through an allowance for credit losses. ASU 2016-13 limits the amount of credit losses to be recognized for available-for-sale debt securities to the amount by which carrying value exceeds fair value and also requires the reversal of previously recognized credit losses if fair value increases. The new standard will be effective for us on January 1, 2020. Early adoption will be available on January 1, 2019. We are currently evaluating the effect that the updated standard will have on our consolidated financial statements. |
Significant Accounting Polici18
Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of computation of basic and diluted net income (loss) per share | The following table presents the computation of basic and diluted net income (loss) per share for the periods indicated (in thousands, except per share amounts): Three months ended Six months ended June 30, June 30, 2016 2015 2016 2015 Net (loss) income from continuing operations $ (5,763 ) $ 23,564 $ 114 $ 24,318 Net income from discontinued operations — — 731 — Net (loss) income $ (5,763 ) $ 23,564 $ 845 $ 24,318 Shares used to compute basic income per share 20,831,809 19,725,410 20,765,053 19,668,183 Dilutive potential common shares: Restricted stock — 42,836 86,419 52,187 Stock options — 1,044,926 785,921 1,001,147 2019 convertible senior notes — 463,232 977,339 231,617 Shares used to compute diluted income per share 20,831,809 21,276,404 22,614,732 20,953,134 Basic per share amounts: (Loss) income from continuing operations $ (0.28 ) $ 1.19 $ 0.01 $ 1.24 Income from discontinued operations — — 0.03 — Basic net (loss) income per share $ (0.28 ) $ 1.19 $ 0.04 $ 1.24 Diluted per share amounts: (Loss) income from continuing operations $ (0.28 ) $ 1.11 $ 0.01 $ 1.16 Income from discontinued operations — — 0.03 — Diluted net (loss) income per share $ (0.28 ) $ 1.11 $ 0.04 $ 1.16 |
Summary of investment categories | The following table summarizes the various investment categories at June 30, 2016 and December 31, 2015 (in thousands): Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value June 30, 2016 Short-term investments Bank deposits $ 10,000 $ 28 $ — $ 10,028 Corporate bonds 23,210 174 (1 ) 23,383 Commercial paper 6,665 3 — 6,668 Asset backed securities 695 — — 695 Corporate equity securities 1,700 3,129 — 4,829 $ 42,270 $ 3,334 $ (1 ) $ 45,603 December 31, 2015 Short-term investments Bank deposits $ 43,043 $ — $ (4 ) $ 43,039 Corporate bonds 41,238 — (35 ) 41,203 Commercial paper 1,747 — — 1,747 Asset backed securities 10,020 — (5 ) 10,015 Corporate equity securities 1,843 4,944 — 6,787 $ 97,891 $ 4,944 $ (44 ) $ 102,791 |
Summary of goodwill and other identifiable intangible assets | Goodwill and other identifiable intangible assets consist of the following (in thousands): June 30, December 31, 2016 2015 Indefinite lived intangible assets Acquired IPR&D $ 12,556 $ 12,556 Goodwill 72,360 12,238 Definite lived intangible assets Complete technology 182,267 15,267 Less: Accumulated amortization (8,161 ) (3,762 ) Trade name 2,642 2,642 Less: Accumulated amortization (718 ) (652 ) Customer relationships 29,600 29,600 Less: Accumulated amortization (8,044 ) (7,304 ) Total goodwill and other identifiable intangible assets, net $ 282,502 $ 60,585 |
Schedule of commercial license rights | Commercial License Rights consist of the following (in thousands): June 30, December 31, 2016 2015 CorMatrix $ 17,692 $ — Selexis 8,602 8,602 26,294 8,602 Less: accumulated amortization (153 ) (48 ) Total commercial rights, net $ 26,141 $ 8,554 |
Summary of property and equipment | Property and equipment is stated at cost and consists of the following (in thousands): June 30, December 31, 2016 2015 Lab and office equipment $ 1,063 $ 2,248 Leasehold improvements 929 273 Computer equipment and software 692 632 2,684 3,153 Less accumulated depreciation and amortization (1,503 ) (2,781 ) Total property and equipment, net $ 1,181 $ 372 |
Summary of other current assets | Other current assets consist of the following (in thousands): June 30, December 31, 2016 2015 Prepaid expenses $ 2,122 $ 1,177 Other receivables 480 731 Total other current assets $ 2,602 $ 1,908 |
Summary of accrued liabilities | Accrued liabilities consist of the following (in thousands): June 30, December 31, 2016 2015 Compensation $ 1,463 $ 1,711 Professional fees 828 726 Amounts owed to former licensees 852 915 Royalties owed to third parties 1,037 823 Other 771 1,222 Total accrued liabilities $ 4,951 $ 5,397 |
Summary of other long-term liabilities | Other long-term liabilities consist of the following (in thousands): June 30, December 31, 2016 2015 Deposits $ 42 $ 268 Deferred rent 326 — Other 30 29 Total other long-term liabilities $ 398 $ 297 |
Schedule for accounting for share-based compensation | The following table summarizes stock-based compensation expense recorded as components of research and development expenses and general and administrative expenses for the periods indicated (in thousands): Three months ended Six months ended June 30, June 30, 2016 2015 2016 2015 Stock-based compensation expense as a component of: Research and development expenses $ 1,682 $ 1,253 $ 3,267 $ 2,174 General and administrative expenses 2,558 2,507 5,092 4,501 $ 4,240 $ 3,760 $ 8,359 $ 6,675 |
Summary of fair-value options awarded to employees and directors | The fair-value for options that were awarded to employees and directors was estimated at the date of grant using the Black-Scholes option valuation model with the following weighted-average assumptions: Three months ended Six months ended June 30, June 30, 2016 2015 2016 2015 Risk-free interest rate 1.7% 1.7% 1.5% 1.8% Dividend yield — — — — Expected volatility 49% 58% 50% 58% Expected term 6.7 6.6 6.6 6.6 Forfeiture rate 5.0% 8.5% 5.0% 8.5% |
Business Combination (Tables)
Business Combination (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions by Acquisition, Consideration Transferred | The aggregate acquisition consideration was $173.4 million , consisting of (in thousands): Cash consideration $ 96,006 Total share consideration: Actual number of shares issued 790 Multiplied by: Ligand closing share price on January 8, 2016 $ 97.92 Total share consideration 77,373 Total consideration $ 173,379 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | he acquisition consideration was preliminarily allocated to the acquisition date fair values of acquired assets and assumed liabilities as follows (in thousands): Cash and cash equivalents $ 3,504 Accounts receivable 5 Income tax receivable 140 Prepaid expenses and other current assets 2 Deferred tax liabilities, net (56,114 ) Intangible asset with finite life - core technology 167,000 Liabilities assumed (1,279 ) Goodwill 60,121 Total consideration $ 173,379 |
Schedule of Pro Forma Information | The following table presents supplemental pro forma information for the three and six months ended June 30, 2016 and June 30, 2015 , as if the acquisition of OMT had occurred on January 1, 2015 (in thousands except for EPS): Three months ended Six months ended June 30, June 30, 2016 2015 2016 2015 Revenue $ 21,997 $ 19,818 $ 51,645 $ 36,971 Net (loss) income $ (3,443 ) $ 19,483 $ 3,165 $ 18,166 Basic (loss) income per share: $ (0.17 ) $ 0.99 $ 0.15 $ 0.92 Diluted (loss) income per share: $ (0.17 ) $ 0.92 $ 0.14 $ 0.87 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Summary of the assets and liabilities measured at fair value on recurring basis | The following table provides a summary of the carrying value of assets and liabilities that are measured at fair value on a recurring basis as of June 30, 2016 (in thousands). There were no transfers between Level 1 and Level 2 securities during the six months ended June 30, 2016 : Fair Value Measurements at Reporting Date Using Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Total (Level 1) (Level 2) (Level 3) Assets: Short-term investments (2) $ 44,908 $ 4,829 $ 40,079 $ — Note receivable Viking (3) 3,207 — — 3,207 Investment in warrants (4) 532 532 — — Total assets $ 48,647 $ 5,361 $ 40,079 $ 3,207 Liabilities: Current contingent liabilities-CyDex (5) $ 5,337 $ — $ — $ 5,337 Long-term contingent liabilities-CyDex (5) 1,634 — — 1,634 Long-term contingent liabilities-Metabasis (6) 2,504 — 2,504 — Liability for amounts owed to former licensees (7) 611 611 — — Total liabilities $ 10,086 $ 611 $ 2,504 $ 6,971 The following table provides a summary of the assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2015 (in thousands): Fair Value Measurements at Reporting Date Using Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs * Significant Unobservable Inputs Total (Level 1) (Level 2) (Level 3) Assets: Cash equivalents (1) $ 3,015 $ — $ 3,015 $ — Short-term investments (2) 92,775 6,786 85,989 — Viking note receivable (3) 4,782 — — 4,782 Total assets $ 100,572 $ 6,786 $ 89,004 $ 4,782 Liabilities: Current contingent liabilities-CyDex (5) $ 7,812 $ — $ — $ 7,812 Current contingent liabilities-Metabasis (6) 2,602 — 2,602 — Long-term contingent liabilities-Metabasis (6) 1,355 — 1,355 — Long-term contingent liabilities-CyDex (5) 1,678 — — 1,678 Liability for amounts owed to former licensees (7) 794 794 — — Total liabilities $ 14,241 $ 794 $ 3,957 $ 9,490 (1) Highly liquid investments with maturities less than 90 days from the purchase date are recorded as cash equivalents that are classified as Level 2 of the fair value hierarchy, as these investment securities are valued based upon quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market. (2) Investments in equity securities, which the Company received as a result of event-based and upfront payments from licensees, are classified as level 1 as the fair value is determined using quoted market prices in active markets for the same securities. Short-term investments in marketable securities with maturities greater than 90 days are classified as level 2 of the fair value hierarchy, as these investment securities are valued based upon quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market. (3) The fair value of the convertible note receivable from Viking was determined using a probability weighted option pricing model using a lattice methodology. The fair value is subjective and is affected by certain significant input to the valuation model such as the estimated volatility of the common stock, which was estimated to be 50% at June 30, 2016 . Changes in these assumptions may materially affect the fair value estimate. (4) Investment in warrants, which the Company received as a result of Viking’s partial repayment of the Viking note receivable and the Company’s purchase of Viking common stock and warrants in April 2016 , are classified as level 1 as the fair value is determined using quoted market prices in active markets for the same securities. (5) The fair value of the liabilities for CyDex contingent liabilities were determined based on the income approach using a Monte Carlo analysis. The fair value is subjective and is affected by changes in inputs to the valuation model including management’s assumptions regarding revenue volatility, probability of commercialization of products, estimates of timing and probability of achievement of certain revenue thresholds and developmental and regulatory milestones which may be achieved and affect amounts owed to former license holders and CVR holders. Changes in these assumptions can materially affect the fair value estimate. (6) The liability for CVRs for Metabasis are determined using quoted market prices in an inactive market for the underlying CVR. (7) The liability for amounts owed to former licensees are determined using quoted market prices in active markets for the underlying investment received from a partner, a portion of which is owed to former licensees. |
CyDex Acquisition | The following table represents significant unobservable inputs used in determining the fair value of contingent liabilities assumed in the acquisition of CyDex: June 30, 2016 December 31, 2015 Range of annual revenue subject to revenue sharing (1) $24.2 million $22.5 million Revenue volatility 25% 25% Average probability of commercialization 82% 73% Sales beta 0.30 0.40 Credit rating BB BB Equity risk premium 6% 6% (1) Revenue subject to revenue sharing represent management’s estimate of the range of total annual revenue subject to revenue sharing (i.e. annual revenues in excess of $15 million ) through December 31, 2016 , which is the term of the CVR agreement. |
Reconciliation of level 3 financial instruments | A reconciliation of the level 3 financial instruments as of June 30, 2016 is as follows (in thousands): Assets: Fair value of level 3 financial instrument assets as of December 31, 2015 $ 4,782 Viking note receivable fair market value adjustment (215 ) Cash payment received as partial repayment of note receivable (300 ) Fair market value of stock received as partial repayment of note receivable (1,060 ) Fair value of level 3 financial instrument assets as of June 30, 2016 $ 3,207 Liabilities: Fair value of level 3 financial instrument liabilities as of December 31, 2015 $ 9,490 Payments to CVR and other former license holders (2,992 ) Fair value adjustments to contingent liabilities 473 Fair value of level 3 financial instrument liabilities as of June 30, 2016 $ 6,971 |
Lease Obligations (Tables)
Lease Obligations (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Leases [Abstract] | |
Payments expected to received from sublease agreements | The following table provides a summary of operating lease obligations and payments expected to be received from sublease agreements as of June 30, 2016 (in thousands): Operating lease obligations: Lease Termination Date Less than 1 year 1-2 years 3-4 years Thereafter Total Corporate headquarters-San Diego, CA April 2023 $ 74 $ 263 $ 278 $ 270 $ 885 Vacated office and research facility- June 2019 708 1,474 — — 2,182 Bioscience and Technology Business Center- Lawrence, KS December 2017 54 27 — — 81 Vacated office and research facility- Cranbury, NJ August 2016 436 — — — 436 Total operating lease obligations $ 1,272 $ 1,764 $ 278 $ 270 $ 3,584 Sublease payments expected to be received: Vacated office and research facility- June 2019 $ 720 $ 1,400 $ — $ — $ 2,120 Office and research facility- Cranbury, NJ August 2016 35 — — — 35 Net operating lease obligations $ 517 $ 364 $ 278 $ 270 $ 1,429 |
Financing Arrangements (Tables)
Financing Arrangements (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Summary of carrying values and coupon rates on financing arrangements | The carrying values and the fixed contractual coupon rates of the Company's financing arrangements as of June 30, 2016 and December 31, 2015 were as follows (in thousands): June 30, 2016 December 31, 2015 2019 Convertible Senior Notes Principal amount outstanding $ 245,000 $ 245,000 Unamortized discount (34,673 ) (39,628 ) Net carrying amount 210,327 205,372 Less: Unamortized deferred financing costs 2,964 3,387 Total notes payable $ 207,363 $ 201,985 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Equity [Abstract] | |
Stock option plan activity | The following is a summary of the Company’s stock option and restricted stock activity and related information: Stock Options Restricted Stock Award Shares Weighted- Average Exercise Price Shares Weighted- Average Grant Date Fair Value Balance as of December 31, 2015 1,683,341 $ 34.23 130,749 $ 60.36 Granted 254,989 90.51 233,955 94.76 Exercised (77,243 ) 30.73 (41,833 ) 52.18 Forfeited (24,282 ) 61.99 (1,850 ) 71.48 Balance as of June 30, 2016 1,836,805 $ 41.83 321,021 $ 73.13 |
Restricted stock activity | The following is a summary of the Company’s stock option and restricted stock activity and related information: Stock Options Restricted Stock Award Shares Weighted- Average Exercise Price Shares Weighted- Average Grant Date Fair Value Balance as of December 31, 2015 1,683,341 $ 34.23 130,749 $ 60.36 Granted 254,989 90.51 233,955 94.76 Exercised (77,243 ) 30.73 (41,833 ) 52.18 Forfeited (24,282 ) 61.99 (1,850 ) 71.48 Balance as of June 30, 2016 1,836,805 $ 41.83 321,021 $ 73.13 |
Significant Accounting Polici24
Significant Accounting Policies (Narrative) (Details) shares in Millions | Jan. 08, 2016USD ($) | Jan. 31, 2010right | Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2016USD ($)segment | Jun. 30, 2015USD ($)shares | Dec. 31, 2015USD ($) | Aug. 31, 2014USD ($) |
Property, Plant and Equipment [Line Items] | ||||||||
Number of operating segments | segment | 1 | |||||||
Earnings (Loss) Per Share | ||||||||
Common shares excluded from computation | shares | 3.5 | |||||||
Cash, Cash Equivalents and Short-term Investments | ||||||||
Maturity period of cash and cash equivalents, maximum | 3 months | |||||||
Maturity period of short term investments, minimum | 3 months | |||||||
Inventory, Net [Abstract] | ||||||||
Inventory write downs | $ 0 | $ 0 | $ 0 | $ 0 | ||||
Goodwill and Other Identifiable Intangible Assets | ||||||||
Finite-lived intangible asset, useful life | 20 years | |||||||
Amortization expense | 2,700,000 | 600,000 | $ 5,200,000 | 1,200,000 | ||||
Impairment of goodwill | $ 0 | |||||||
Property and Equipment | ||||||||
Depreciation | 100,000 | 100,000 | ||||||
Contingent Liabilities | ||||||||
Purchase of commercial license rights | $ 92,504,000 | 0 | ||||||
Revenue Recognition | ||||||||
Restocking fee (percent) | 20.00% | |||||||
Minimum | ||||||||
Revenue Recognition | ||||||||
Period when partner sales reports are received after end of quarter | 30 days | |||||||
Maximum | ||||||||
Revenue Recognition | ||||||||
Period when partner sales reports are received after end of quarter | 60 days | |||||||
Equipment | Minimum | ||||||||
Property and Equipment | ||||||||
Estimated useful life of assets | 3 years | |||||||
Equipment | Maximum | ||||||||
Property and Equipment | ||||||||
Estimated useful life of assets | 10 years | |||||||
OMT, Inc. | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Goodwill acquired | $ 60,100,000 | |||||||
Finite-lived intangible assets | $ 167,000,000 | |||||||
Cydex Pharmaceuticals, Inc | ||||||||
Contingent Liabilities | ||||||||
Fair value of liability | 7,000,000 | $ 7,000,000 | 9,500,000 | |||||
Contingent liability change in amount | (200,000) | (1,000,000) | (500,000) | (2,200,000) | ||||
Cydex Pharmaceuticals, Inc | Revenue Sharing | ||||||||
Contingent Liabilities | ||||||||
Purchase of commercial license rights | 3,000,000 | 3,200,000 | ||||||
Metabasis Therapeutics | ||||||||
Contingent Liabilities | ||||||||
Fair value of liability | 2,500,000 | 2,500,000 | 4,000,000 | |||||
Contingent liability change in amount | 100,000 | $ 6,400,000 | 1,200,000 | 5,300,000 | ||||
Number of contingent value rights | right | 4 | |||||||
Number of contingent value rights per series of contingent value rights | right | 1 | |||||||
Number of contingent value rights issued for each share | right | 4 | |||||||
Contingent value rights, frequency of cash payment | 6 months | |||||||
Contingent liability, cash payment | 2,600,000 | $ 0 | ||||||
2019 convertible senior notes | ||||||||
Convertible Debt | ||||||||
Principal amount outstanding | $ 245,000,000 | $ 245,000,000 | $ 245,000,000 | |||||
2019 convertible senior notes | Senior Notes | ||||||||
Convertible Debt | ||||||||
Principal amount outstanding | $ 245,000,000 | |||||||
Interest rate | 0.75% | |||||||
Director [Member] | ||||||||
Relationships between the CorMatrix Parties | ||||||||
Mr. Aryeh's owenership percentage in CorMatrix (percent) | 0.56% | 0.56% |
Significant Accounting Polici25
Significant Accounting Policies (Earnings (Loss) Per Share) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Summary of computation of basic and diluted net income (loss) per share | ||||
Net (loss) income from continuing operations | $ (5,763) | $ 23,564 | $ 114 | $ 24,318 |
Net income from discontinued operations | 0 | 0 | 731 | 0 |
Net (loss) income | $ (5,763) | $ 23,564 | $ 845 | $ 24,318 |
Shares used to compute basic income per share | 20,831,809 | 19,725,410 | 20,765,053 | 19,668,183 |
Dilutive potential common shares: | ||||
Restricted stock | 0 | 42,836 | 86,419 | 52,187 |
Stock options | 0 | 1,044,926 | 785,921 | 1,001,147 |
2019 convertible senior notes | 0 | 463,232 | 977,339 | 231,617 |
Shares used to compute diluted income per share | 20,831,809 | 21,276,404 | 22,614,732 | 20,953,134 |
Basic per share amounts: | ||||
(Loss) income from continuing operations (in usd per share) | $ (0.28) | $ 1.19 | $ 0.01 | $ 1.24 |
Income from discontinued operations (in usd per share) | 0 | 0 | 0.03 | 0 |
Basic net (loss) income per share (in usd per share) | (0.28) | 1.19 | 0.04 | 1.24 |
Diluted per share amounts: | ||||
(Loss) income from continuing operations (in usd per share) | (0.28) | 1.11 | 0.01 | 1.16 |
Income from discontinued operations (in usd per share) | 0 | 0 | 0.03 | 0 |
Diluted net (loss) income per share (in usd per share) | $ (0.28) | $ 1.11 | $ 0.04 | $ 1.16 |
Significant Accounting Polici26
Significant Accounting Policies (Investment Categories) (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Summary of investment categories | ||
Amortized cost | $ 42,270 | $ 97,891 |
Gross unrealized gains | 3,334 | 4,944 |
Gross unrealized losses | (1) | (44) |
Estimated fair value | 45,603 | 102,791 |
Bank deposits | ||
Summary of investment categories | ||
Amortized cost | 10,000 | 43,043 |
Gross unrealized gains | 28 | 0 |
Gross unrealized losses | 0 | (4) |
Estimated fair value | 10,028 | 43,039 |
Corporate bonds | ||
Summary of investment categories | ||
Amortized cost | 23,210 | 41,238 |
Gross unrealized gains | 174 | 0 |
Gross unrealized losses | (1) | (35) |
Estimated fair value | 23,383 | 41,203 |
Commercial paper | ||
Summary of investment categories | ||
Amortized cost | 6,665 | 1,747 |
Gross unrealized gains | 3 | 0 |
Gross unrealized losses | 0 | 0 |
Estimated fair value | 6,668 | 1,747 |
Asset backed securities | ||
Summary of investment categories | ||
Amortized cost | 695 | 10,020 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | 0 | (5) |
Estimated fair value | 695 | 10,015 |
Corporate equity securities | ||
Summary of investment categories | ||
Amortized cost | 1,700 | 1,843 |
Gross unrealized gains | 3,129 | 4,944 |
Gross unrealized losses | 0 | 0 |
Estimated fair value | $ 4,829 | $ 6,787 |
Significant Accounting Polici27
Significant Accounting Policies (Goodwill and Other Identifiable Intangible Assets) (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Summary of Goodwill and Other Identifiable Intangible Assets | ||
Goodwill | $ 72,360 | $ 12,238 |
Total goodwill and other identifiable intangible assets, net | 282,502 | 60,585 |
Complete technology | ||
Summary of Goodwill and Other Identifiable Intangible Assets | ||
Definite lived intangible assets | 182,267 | 15,267 |
Less: Accumulated amortization | (8,161) | (3,762) |
Trade name | ||
Summary of Goodwill and Other Identifiable Intangible Assets | ||
Definite lived intangible assets | 2,642 | 2,642 |
Less: Accumulated amortization | (718) | (652) |
Customer relationships | ||
Summary of Goodwill and Other Identifiable Intangible Assets | ||
Definite lived intangible assets | 29,600 | 29,600 |
Less: Accumulated amortization | (8,044) | (7,304) |
Commercial license rights | ||
Summary of Goodwill and Other Identifiable Intangible Assets | ||
Definite lived intangible assets | 26,294 | 8,602 |
Less: Accumulated amortization | (153) | (48) |
Total goodwill and other identifiable intangible assets, net | 26,141 | 8,554 |
Acquired in-process research and development | ||
Summary of Goodwill and Other Identifiable Intangible Assets | ||
Acquired in-process research and development | 12,556 | 12,556 |
CorMatrix | Commercial license rights | ||
Summary of Goodwill and Other Identifiable Intangible Assets | ||
Definite lived intangible assets | 17,692 | 0 |
Selexis | Commercial license rights | ||
Summary of Goodwill and Other Identifiable Intangible Assets | ||
Definite lived intangible assets | $ 8,602 | $ 8,602 |
Significant Accounting Polici28
Significant Accounting Policies (Property and Equipment) (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Summary of Property and equipment | ||
Property and equipment , gross | $ 2,684 | $ 3,153 |
Less accumulated depreciation and amortization | (1,503) | (2,781) |
Total property and equipment, net | 1,181 | 372 |
Lab and office equipment | ||
Summary of Property and equipment | ||
Property and equipment , gross | 1,063 | 2,248 |
Leasehold improvements | ||
Summary of Property and equipment | ||
Property and equipment , gross | 929 | 273 |
Computer equipment and software | ||
Summary of Property and equipment | ||
Property and equipment , gross | $ 692 | $ 632 |
Significant Accounting Polici29
Significant Accounting Policies (Other Current Assets) (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Summary of other current assets | ||
Prepaid expenses | $ 2,122 | $ 1,177 |
Other receivables | 480 | 731 |
Total current assets | $ 2,602 | $ 1,908 |
Significant Accounting Polici30
Significant Accounting Policies (Accrued Liabilities and Other Long-Term Liabilities) (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Accrued Liabilities | ||
Compensation | $ 1,463 | $ 1,711 |
Professional fees | 828 | 726 |
Amounts owed to former licensees | 852 | 915 |
Royalties owed to third parties | 1,037 | 823 |
Other | 771 | 1,222 |
Total accrued liabilities | 4,951 | 5,397 |
Other Long-Term Liabilities | ||
Deposits | 42 | 268 |
Deferred rent | 326 | 0 |
Other | 30 | 29 |
Total other long-term liabilities | $ 398 | $ 297 |
Significant Accounting Polici31
Significant Accounting Policies (Accounting for Share-Based Compensation) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Basis of Presentation [Line Items] | ||||
Share-based compensation expense total | $ 4,240 | $ 3,760 | $ 8,359 | $ 6,675 |
Research and development expenses | ||||
Basis of Presentation [Line Items] | ||||
Share-based compensation expense total | 1,682 | 1,253 | 3,267 | 2,174 |
General and administrative expenses | ||||
Basis of Presentation [Line Items] | ||||
Share-based compensation expense total | $ 2,558 | $ 2,507 | $ 5,092 | $ 4,501 |
Significant Accounting Polici32
Significant Accounting Policies (Fair Value Valuation Assumptions) (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Summary of fair-value options awarded to employees and directors | ||||
Risk-free interest rate | 1.70% | 1.70% | 1.50% | 1.80% |
Dividend yield | 0.00% | 0.00% | 0.00% | 0.00% |
Expected volatility | 49.00% | 58.00% | 50.00% | 58.00% |
Expected term | 6 years 8 months 5 days | 6 years 6 months 22 days | 6 years 7 months 6 days | 6 years 7 months 6 days |
Forfeiture rate | 5.00% | 8.50% | 5.00% | 8.50% |
Business Combination (Details)
Business Combination (Details) $ in Thousands | Jan. 08, 2016USD ($)programplatform | Jun. 30, 2016USD ($) | Dec. 31, 2015USD ($) |
Business Acquisition [Line Items] | |||
Finite-lived intangible asset, useful life | 20 years | ||
Goodwill | $ 72,360 | $ 12,238 | |
OMT, Inc. | |||
Business Acquisition [Line Items] | |||
Number of transgenic animal platforms | platform | 3 | ||
Number of partnered programs added | program | 16 | ||
Consideration transferred | $ 173,400 | ||
Period for certain post-closing adjustments | 15 months | ||
Goodwill | $ 60,121 | ||
Core Technology | OMT, Inc. | |||
Business Acquisition [Line Items] | |||
Projected cash flow discount rate (percent) | 15.50% | ||
Finite-lived intangible asset, useful life | 20 years |
Business Combination - Consider
Business Combination - Consideration Transferred (Details) - OMT, Inc. $ / shares in Units, $ in Thousands | Jan. 08, 2016USD ($)$ / sharesshares |
Business Acquisition [Line Items] | |
Cash consideration | $ 96,006 |
Total share consideration: | |
Actual number of shares issued (shares) | shares | 790,163 |
Multiplied by: Ligand closing share price on January 8, 2016 | $ / shares | $ 97.92 |
Total share consideration | $ 77,373 |
Total consideration | $ 173,379 |
Business Combination - Assets A
Business Combination - Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Jan. 08, 2016 | Dec. 31, 2015 |
Business Acquisition [Line Items] | |||
Goodwill | $ 72,360 | $ 12,238 | |
OMT, Inc. | |||
Business Acquisition [Line Items] | |||
Cash and cash equivalents | $ 3,504 | ||
Accounts receivable | 5 | ||
Income tax receivable | 140 | ||
Prepaid expenses and other current assets | 2 | ||
Deferred tax liabilities, net | (56,114) | ||
Intangible asset with finite life - core technology | 167,000 | ||
Liabilities assumed | (1,279) | ||
Goodwill | 60,121 | ||
Total consideration | $ 173,379 |
Business Combination - Pro Form
Business Combination - Pro Forma Information (Details) - OMT, Inc. - USD ($) $ / shares in Units, $ in Thousands | Jan. 07, 2016 | Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 |
Business Acquisition [Line Items] | |||||
Revenue | $ 21,997 | $ 19,818 | $ 51,645 | $ 36,971 | |
Net (loss) income | $ (3,443) | $ 19,483 | $ 3,165 | $ 18,166 | |
Basic (loss) income per share (in USD per share): | $ (0.17) | $ 0.99 | $ 0.15 | $ 0.92 | |
Diluted (loss) income per share (in USD per share): | $ (0.17) | $ 0.92 | $ 0.14 | $ 0.87 | |
Pro forma adjustment for share-based compensation expense of OMT | $ 300 | $ 600 | |||
Pro forma adjustment for additional intangible amortization expense | 2,100 | 4,200 | |||
Pro forma adjustment for platform license fee paid | $ 3,000 | $ 3,000 | |||
Pro forma adjustment for license revenue recognized by OMT in the current period prior to the acquisition | $ 2,500 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) | 6 Months Ended | ||
Jun. 30, 2016 | Dec. 31, 2015 | Aug. 31, 2014 | |
2019 convertible senior notes | |||
Liabilities: | |||
Principal amount outstanding | $ 245,000,000 | $ 245,000,000 | |
2019 convertible senior notes | Senior Notes | |||
Liabilities: | |||
Principal amount outstanding | $ 245,000,000 | ||
Estimated fair value of debt | 408,500,000 | ||
Recurring | |||
Assets: | |||
Assets, fair value | 48,647,000 | 100,572,000 | |
Liabilities: | |||
Liabilities, fair value | 10,086,000 | 14,241,000 | |
Recurring | Current contingent liabilities-CyDex | |||
Liabilities: | |||
Liabilities, fair value | 5,337,000 | 7,812,000 | |
Recurring | Current contingent liabilities-Metabasis | |||
Liabilities: | |||
Liabilities, fair value | 2,602,000 | ||
Recurring | Long-term contingent liabilities-Metabasis | |||
Liabilities: | |||
Liabilities, fair value | 2,504,000 | 1,355,000 | |
Recurring | Long-term contingent liabilities-CyDex | |||
Liabilities: | |||
Liabilities, fair value | 1,634,000 | 1,678,000 | |
Recurring | Liability for amounts owed to former licensees | |||
Liabilities: | |||
Liabilities, fair value | 611,000 | 794,000 | |
Recurring | Cash Equivalents | |||
Assets: | |||
Assets, fair value | 3,015,000 | ||
Recurring | Short-term investments | |||
Assets: | |||
Assets, fair value | $ 44,908,000 | 92,775,000 | |
Recurring | Note receivable Viking Therapeutics, Inc. | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Estimated volatility of common stock | 50.00% | ||
Assets: | |||
Assets, fair value | $ 3,207,000 | 4,782,000 | |
Recurring | Investment in warrants | |||
Assets: | |||
Assets, fair value | 532,000 | ||
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Assets: | |||
Assets, fair value | 5,361,000 | 6,786,000 | |
Liabilities: | |||
Liabilities, fair value | 611,000 | 794,000 | |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Current contingent liabilities-CyDex | |||
Liabilities: | |||
Liabilities, fair value | 0 | 0 | |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Current contingent liabilities-Metabasis | |||
Liabilities: | |||
Liabilities, fair value | 0 | ||
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Long-term contingent liabilities-Metabasis | |||
Liabilities: | |||
Liabilities, fair value | 0 | 0 | |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Long-term contingent liabilities-CyDex | |||
Liabilities: | |||
Liabilities, fair value | 0 | 0 | |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Liability for amounts owed to former licensees | |||
Liabilities: | |||
Liabilities, fair value | 611,000 | 794,000 | |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Cash Equivalents | |||
Assets: | |||
Assets, fair value | 0 | ||
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Short-term investments | |||
Assets: | |||
Assets, fair value | 4,829,000 | 6,786,000 | |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Note receivable Viking Therapeutics, Inc. | |||
Assets: | |||
Assets, fair value | 0 | 0 | |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Investment in warrants | |||
Assets: | |||
Assets, fair value | 532,000 | ||
Recurring | Significant Other Observable Inputs (Level 2) | |||
Assets: | |||
Assets, fair value | 40,079,000 | 89,004,000 | |
Liabilities: | |||
Liabilities, fair value | 2,504,000 | 3,957,000 | |
Recurring | Significant Other Observable Inputs (Level 2) | Current contingent liabilities-CyDex | |||
Liabilities: | |||
Liabilities, fair value | 0 | 0 | |
Recurring | Significant Other Observable Inputs (Level 2) | Current contingent liabilities-Metabasis | |||
Liabilities: | |||
Liabilities, fair value | 2,602,000 | ||
Recurring | Significant Other Observable Inputs (Level 2) | Long-term contingent liabilities-Metabasis | |||
Liabilities: | |||
Liabilities, fair value | 2,504,000 | 1,355,000 | |
Recurring | Significant Other Observable Inputs (Level 2) | Long-term contingent liabilities-CyDex | |||
Liabilities: | |||
Liabilities, fair value | 0 | 0 | |
Recurring | Significant Other Observable Inputs (Level 2) | Liability for amounts owed to former licensees | |||
Liabilities: | |||
Liabilities, fair value | 0 | 0 | |
Recurring | Significant Other Observable Inputs (Level 2) | Cash Equivalents | |||
Assets: | |||
Assets, fair value | 3,015,000 | ||
Recurring | Significant Other Observable Inputs (Level 2) | Short-term investments | |||
Assets: | |||
Assets, fair value | 40,079,000 | 85,989,000 | |
Recurring | Significant Other Observable Inputs (Level 2) | Note receivable Viking Therapeutics, Inc. | |||
Assets: | |||
Assets, fair value | 0 | 0 | |
Recurring | Significant Other Observable Inputs (Level 2) | Investment in warrants | |||
Assets: | |||
Assets, fair value | 0 | ||
Recurring | Significant Unobservable Inputs (Level 3) | |||
Assets: | |||
Assets, fair value | 3,207,000 | 4,782,000 | |
Liabilities: | |||
Liabilities, fair value | 6,971,000 | 9,490,000 | |
Recurring | Significant Unobservable Inputs (Level 3) | Current contingent liabilities-CyDex | |||
Liabilities: | |||
Liabilities, fair value | 5,337,000 | 7,812,000 | |
Recurring | Significant Unobservable Inputs (Level 3) | Current contingent liabilities-Metabasis | |||
Liabilities: | |||
Liabilities, fair value | 0 | ||
Recurring | Significant Unobservable Inputs (Level 3) | Long-term contingent liabilities-Metabasis | |||
Liabilities: | |||
Liabilities, fair value | 0 | 0 | |
Recurring | Significant Unobservable Inputs (Level 3) | Long-term contingent liabilities-CyDex | |||
Liabilities: | |||
Liabilities, fair value | 1,634,000 | 1,678,000 | |
Recurring | Significant Unobservable Inputs (Level 3) | Liability for amounts owed to former licensees | |||
Liabilities: | |||
Liabilities, fair value | 0 | 0 | |
Recurring | Significant Unobservable Inputs (Level 3) | Cash Equivalents | |||
Assets: | |||
Assets, fair value | 0 | ||
Recurring | Significant Unobservable Inputs (Level 3) | Short-term investments | |||
Assets: | |||
Assets, fair value | 0 | 0 | |
Recurring | Significant Unobservable Inputs (Level 3) | Note receivable Viking Therapeutics, Inc. | |||
Assets: | |||
Assets, fair value | 3,207,000 | $ 4,782,000 | |
Recurring | Significant Unobservable Inputs (Level 3) | Investment in warrants | |||
Assets: | |||
Assets, fair value | 0 | ||
Viking Therapeutics, Inc. | |||
Liabilities: | |||
Market value of investment in Viking | $ 7,900,000 |
Fair Value Measurements (Acquis
Fair Value Measurements (Acquisition of CyDex) (Details) - Cydex Pharmaceuticals, Inc - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Credit Derivatives [Line Items] | ||
Amount Of Revenue For Contingent Consideration | $ 15 | |
Contingent Consideration Classified as Equity | ||
Credit Derivatives [Line Items] | ||
Range of annual revenue subject to revenue sharing | $ 24.2 | $ 22.5 |
Revenue volatility | 25.00% | 25.00% |
Average of probability of commercialization | 82.00% | 73.00% |
Sales beta | 0.30 | 0.40 |
Credit rating | BB | BB |
Equity risk premium | 6.00% | 6.00% |
Fair Value Measurements (Level
Fair Value Measurements (Level 3 Reconciliation) (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Assets: | ||
Fair value of level 3 financial instrument assets as of December 31, 2015 | $ 4,782 | |
Viking note receivable fair market value adjustment | (215) | |
Cash payment received as partial repayment of note receivable | (300) | $ 0 |
Fair market value of stock received as partial repayment of note receivable | (1,060) | |
Fair value of level 3 financial instrument assets as of June 30, 2016 | 3,207 | |
Liabilities: | ||
Fair value of level 3 financial instrument liabilities as of December 31, 2015 | 9,490 | |
Payments to CVR and other former license holders | (2,992) | |
Fair value adjustments to contingent liabilities | 473 | |
Fair value of level 3 financial instrument liabilities as of June 30, 2016 | $ 6,971 |
Investment in Viking Therapeu40
Investment in Viking Therapeutics (Details) $ / shares in Units, $ in Thousands | Apr. 13, 2016USD ($)shares | Apr. 30, 2016USD ($)$ / sharesshares | Jan. 31, 2016USD ($) | May 31, 2015USD ($)$ / sharesshares | May 31, 2014USD ($)program | Jun. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($) | May 31, 2015$ / shares | Dec. 31, 2015USD ($) | Aug. 31, 2014$ / sharesshares |
Schedule of Equity Method Investments [Line Items] | |||||||||||
Payments to acquire IPO shares | $ 700 | $ 9,000 | |||||||||
Warrants issued in public offering (shares) | shares | 3,264,643 | ||||||||||
Exercise price | $ / shares | $ 125.08 | ||||||||||
Proceeds received from repayment of Viking note receivable | 300 | $ 0 | |||||||||
Note receivable from Viking Therapeutics | $ 3,207 | 3,207 | $ 4,782 | ||||||||
Change in fair value of the Viking convertible debt receivable and warrants | $ (200) | $ (200) | |||||||||
Viking | |||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||
Number of programs licensed | program | 5 | ||||||||||
Loss percentage recorded | 100.00% | ||||||||||
Debt | Viking | |||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||
Convertible loan facility | $ 2,500 | ||||||||||
Viking Therapeutics, Inc. | |||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||
Shares issued in IPO (shares) | shares | 7,500,000 | ||||||||||
IPO share price (USD per share) | $ / shares | $ 1.25 | ||||||||||
IPO shares purchased by the Company (shares) | shares | 560,000 | ||||||||||
Payments to acquire IPO shares | $ 700 | ||||||||||
Equity interest in outstanding common stock of Viking (percent) | 32.70% | 32.70% | 32.70% | ||||||||
Note receivable, stated interest rate (percent) | 2.50% | 5.00% | |||||||||
LSA, lock-up period extension | 1 year | ||||||||||
Note receivable, amount due upon consummation of capital financing transaction | $ 1,500 | ||||||||||
Note receivable, cash due upon consummation of capital financing transaction | $ 300 | ||||||||||
Note receivable, repayment in equity (percent) | 200.00% | ||||||||||
Warrants issued in public offering (shares) | shares | 7,500,000 | ||||||||||
Exercise price | $ / shares | $ 1.50 | ||||||||||
Public offering warrants purchased by the Company (USD per share) | shares | 560,000 | ||||||||||
Proceeds received from repayment of Viking note receivable | $ 300 | ||||||||||
Shares received for repayment of note receivable (shares) | shares | 960,000 | ||||||||||
Equity Method Investment, Warrants Received, Licensing Agreement | shares | 960,000 | ||||||||||
Value of shares and warrants received for repayment of note receivable | $ 1,200 | ||||||||||
Decrease in investment in Viking | $ (10,000) | ||||||||||
Common Stock | |||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||
Aggregate value of shares received under licensing agreement | $ 29,200 | ||||||||||
IPO shares purchased by the Company (shares) | shares | 1,100,000 | ||||||||||
Payments to acquire IPO shares | $ 9,000 | ||||||||||
Common Stock | Viking Therapeutics, Inc. | IPO | |||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||
Shares issued in IPO (shares) | shares | 3,700,000 | ||||||||||
IPO aggregate offering price | $ 29,200 | ||||||||||
IPO share price (USD per share) | $ / shares | $ 8 | $ 8 | |||||||||
Other Income | |||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||
Short term investment gain | $ 500 |
Lease Obligations (Narrative) (
Lease Obligations (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Operating Leased Assets [Line Items] | |||||
Lease expiration year, minimum | 2,016 | ||||
Lease expiration year, maximum | 2,023 | ||||
Percentage of increase in annual base rent, minimum | 3.00% | 3.00% | |||
Percentage of increase in annual base rent, maximum | 3.50% | 3.50% | |||
Lease exit costs | $ 374 | $ 218 | $ 618 | $ 441 | |
Rent expense, net sublease income | 600 | 900 | 1,200 | 1,900 | |
Adjustment for accretion and changes in lease assumptions | $ 300 | $ 200 | 500 | $ 400 | |
Contract Termination | |||||
Operating Leased Assets [Line Items] | |||||
Lease exit costs | $ 200 | $ 900 |
Lease Obligations (Lease Obliga
Lease Obligations (Lease Obligations) (Details) $ in Thousands | Jun. 30, 2016USD ($) |
Operating Leased Assets [Line Items] | |
Operating lease obligations, Less than 1 year | $ 1,272 |
Operating lease obligations, 1-2 years | 1,764 |
Operating lease obligations, 3-4 years | 278 |
Operating lease obligations, Thereafter | 270 |
Operating lease obligations, Total | 3,584 |
Payments expected to received from sublease agreements | |
Sublease payments expected to be received, Less than 1 year | 517 |
Sublease payments expected to be received, 1-2 years | 364 |
Sublease payments expected to be received, 3-4 years | 278 |
Sublease payments expected to be received, Thereafter | 270 |
Sublease payments expected to be received, Total | 1,429 |
CALIFORNIA | Corporate Headquarters - San Diego, CA | |
Operating Leased Assets [Line Items] | |
Operating lease obligations, Less than 1 year | 74 |
Operating lease obligations, 1-2 years | 263 |
Operating lease obligations, 3-4 years | 278 |
Operating lease obligations, Thereafter | 270 |
Operating lease obligations, Total | 885 |
CALIFORNIA | Vacated Office and Research Facility - La Jolla | |
Operating Leased Assets [Line Items] | |
Operating lease obligations, Less than 1 year | 708 |
Operating lease obligations, 1-2 years | 1,474 |
Operating lease obligations, Total | 2,182 |
Payments expected to received from sublease agreements | |
Sublease payments expected to be received, Less than 1 year | 720 |
Sublease payments expected to be received, 1-2 years | 1,400 |
Sublease payments expected to be received, Total | 2,120 |
KANSAS | Bioscience and Technology Business Center - Lawrence, KS | |
Operating Leased Assets [Line Items] | |
Operating lease obligations, Less than 1 year | 54 |
Operating lease obligations, 1-2 years | 27 |
Operating lease obligations, Total | 81 |
NEW JERSEY | Vacated Office Office and Research Facility - Cranbury, NJ | |
Operating Leased Assets [Line Items] | |
Operating lease obligations, Less than 1 year | 436 |
Operating lease obligations, Total | 436 |
NEW JERSEY | Office and Research Facility Cranbury | |
Payments expected to received from sublease agreements | |
Sublease payments expected to be received, Less than 1 year | 35 |
Sublease payments expected to be received, Total | $ 35 |
Financing Arrangements (Narrati
Financing Arrangements (Narrative) (Details) | 1 Months Ended | 6 Months Ended | |
Aug. 31, 2014USD ($)d$ / sharesshares | Jun. 30, 2016USD ($) | Dec. 31, 2015USD ($) | |
Debt Instrument [Line Items] | |||
Initial debt value | $ 0 | $ 201,985,000 | |
Common stock, shares available to be issued | shares | 3,264,643 | ||
Exercise price of convertible bond hedge | $ / shares | $ 75.05 | ||
Exercise price | $ / shares | $ 125.08 | ||
Proceeds from issuance of warrants | $ 11,600,000 | ||
2019 convertible senior notes | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount outstanding | 245,000,000 | 245,000,000 | |
Initial debt value | 210,327,000 | 205,372,000 | |
Senior Notes | |||
Debt Instrument [Line Items] | |||
Payment for convertible bond hedges | $ 48,100,000 | ||
Senior Notes | 2019 convertible senior notes | |||
Debt Instrument [Line Items] | |||
Interest rate | 0.75% | ||
Aggregate principal amount outstanding | $ 245,000,000 | ||
Net proceeds from note after debt issuance costs | $ 239,300,000 | ||
Initial conversion rate | 0.0133251 | ||
Initial conversion price | $ / shares | $ 75.05 | ||
Proceeds from issuance of debt | $ 245,000,000 | ||
Debt discount rate | 5.83% | ||
Initial debt value | $ 192,500,000 | ||
If-converted value in excess of principal | 136,600,000 | ||
Debt issuance costs | 5,700,000 | ||
Equity component of convertible debt recorded as a reduction to additional paid-in capital | 1,200,000 | ||
Long-term debt issuance costs | $ 4,500,000 | ||
Term of notes | 5 years | ||
Carrying value of the equity component of debt, net of issuance costs | $ 51,300,000 | $ 51,300,000 | |
Senior Notes | 2019 convertible senior notes | Debt Instrument, Redemption, Period One | |||
Debt Instrument [Line Items] | |||
Threshold trading days | d | 20 | ||
Consecutive trading days | 30 days | ||
Percentage of stock price trigger to classify convertible debt as current | 130.00% | 130.00% | |
Senior Notes | 2019 convertible senior notes | Debt Instrument, Redemption, Period Two | |||
Debt Instrument [Line Items] | |||
Threshold trading days | d | 5 | ||
Consecutive trading days | 10 days | ||
Maximum threshold percentage of debt trading price trigger | 98.00% |
Financing Arrangements (Notes P
Financing Arrangements (Notes Payable) (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Notes Payable, Current and Noncurrent [Abstract] | ||
Net carrying amount | $ 0 | $ 201,985 |
2019 convertible senior notes | ||
Notes Payable, Current and Noncurrent [Abstract] | ||
Principal amount outstanding | 245,000 | 245,000 |
Unamortized discount | (34,673) | (39,628) |
Net carrying amount | 210,327 | 205,372 |
Less: Unamortized deferred financing costs | 2,964 | 3,387 |
Total notes payable | $ 207,363 | $ 201,985 |
Income Tax (Details)
Income Tax (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Income Tax Disclosure [Abstract] | ||||
Income tax provision | $ (3,881) | $ 265 | $ (187) | $ 279 |
Income tax provision, per diluted share (in USD per share) | $ 0.19 | $ 0.01 | $ 0.01 | $ 0.01 |
Income tax provision from discontinued operation | $ 400 | |||
Income tax provision, discontinued operation, per diluted share (in USD per share) | $ 0.02 | |||
Effective income tax rate, continuing operations (percent) | 40.60% | 1.10% | ||
Valuation allowance | $ 8,900 | $ 8,900 | ||
Unrecognized tax benefits | $ 6,400 | $ 6,400 |
Stockholders' Equity (Stock Opt
Stockholders' Equity (Stock Option Plan and Restricted Stock Activity) (Details) | 6 Months Ended |
Jun. 30, 2016$ / sharesshares | |
Stock Options: | |
Balance as of December 31, 2015 | shares | 1,683,341 |
Granted | shares | 254,989 |
Exercised | shares | (77,243) |
Forfeited | shares | (24,282) |
Balance as of June 30, 2016 | shares | 1,836,805 |
Weighted Average Exercise Price (in USD per share) | |
Balance as of December 31, 2015 | $ / shares | $ 34.23 |
Granted | $ / shares | 90.51 |
Exercised | $ / shares | 30.73 |
Forfeited | $ / shares | 61.99 |
Balance as of June 30, 2016 | $ / shares | $ 41.83 |
Restricted Stock [Member] | |
Restricted Shares: | |
Nonvested at December 31, 2015 | shares | 130,749 |
Granted | shares | 233,955 |
Exercised | shares | (41,833) |
Forfeited | shares | (1,850) |
Nonvested at June 30, 2016 | shares | 321,021 |
Weighted- Average Grant Date Fair Value (in USD per share) | |
Nonvested at December 31, 2015 | $ / shares | $ 60.36 |
Granted | $ / shares | 94.76 |
Exercised | $ / shares | 52.18 |
Forfeited | $ / shares | 71.48 |
Nonvested at March 31, 2016 | $ / shares | $ 73.13 |
Stockholders' Equity (Narrative
Stockholders' Equity (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions | Jan. 08, 2016 | Jun. 30, 2016 | Jun. 30, 2015 |
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Net proceeds from employee stock purchase plan | $ 2.4 | $ 5.3 | |
2002 Stock Incentive Plan | Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares available for future option grants | 948,729 | ||
Employee Stock Purchase Plan | |||
Employee Stock Purchase Plan | |||
Shares allowed to purchase in employee stock purchase plan | 1,250 | ||
Shares issued in period | 1,241 | 0 | |
Shares available for future purchases | 71,126 | ||
OMT, Inc. | |||
Employee Stock Purchase Plan | |||
Common stock issued in acquisition (shares) | 790,163 | ||
20-day volume-weighted average price of common stock issued in acquisition (usd per share) | $ 107.66 |
Subsequent Event (Details)
Subsequent Event (Details) - Nucorion, Inc. - Subsequent Event $ in Millions | Jul. 28, 2016USD ($) |
Subsequent Event [Line Items] | |
Ownership interest (percent, less than) | 20.00% |
Investment amount | $ 1 |