Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2016 | Jul. 28, 2016 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | CTIC | |
Entity Registrant Name | CTI BIOPHARMA CORP | |
Entity Central Index Key | 891,293 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 282,819,414 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 76,707 | $ 128,182 |
Accounts receivable, net | 559 | 282 |
Receivables from collaborative arrangements | 6,568 | 0 |
Inventory, net | 2,632 | 2,845 |
Prepaid expenses and other current assets | 2,438 | 3,666 |
Total current assets | 88,904 | 134,975 |
Property and equipment, net | 3,412 | 3,718 |
Other assets | 5,315 | 5,504 |
Total assets | 97,631 | 144,197 |
Current liabilities: | ||
Accounts payable | 14,031 | 10,584 |
Accrued expenses | 16,984 | 22,133 |
Current portion of deferred revenue | 467 | 578 |
Current portion of long-term debt | 7,498 | 37,371 |
Other current liabilities | 1,772 | 1,743 |
Total current liabilities | 40,752 | 72,409 |
Deferred revenue, less current portion | 783 | 1,110 |
Long-term debt, less current portion | 15,375 | 19,124 |
Other liabilities | 3,966 | 4,141 |
Total liabilities | 60,876 | 96,784 |
Commitments and contingencies | ||
Shareholders' equity: | ||
Common stock, no par value: Authorized shares - 415,000,000 and 315,000,000, Issued and outstanding shares - 282,870,635 and 280,461,097 at June 30, 2016 and December 31, 2015, respectively | 2,163,174 | 2,157,300 |
Accumulated other comprehensive loss | (6,451) | (6,952) |
Accumulated deficit | (2,114,771) | (2,098,317) |
Total CTI shareholders' equity | 41,952 | 52,031 |
Noncontrolling interest | (5,197) | (4,618) |
Total shareholders' equity | 36,755 | 47,413 |
Total liabilities and shareholders' equity | $ 97,631 | $ 144,197 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Common stock, no par value (in dollars per share) | $ 0 | $ 0 |
Common stock authorized (in shares) | 415,000,000 | 315,000,000 |
Common stock issued (in shares) | 282,870,635 | 280,461,097 |
Common stock outstanding (in shares) | 282,870,635 | 280,461,097 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Revenues: | ||||
Product sales, net | $ 1,051 | $ 852 | $ 2,274 | $ 1,664 |
License and contract revenue | 6,310 | 248 | 41,562 | 2,164 |
Total revenues | 7,361 | 1,100 | 43,836 | 3,828 |
Operating costs and expenses: | ||||
Cost of product sold | 160 | 183 | 350 | 373 |
Research and development | 16,697 | 19,320 | 37,543 | 36,791 |
Selling, general and administrative | 9,571 | 12,624 | 20,883 | 24,921 |
Other operating expense | 0 | 0 | 0 | 253 |
Total operating costs and expenses | 26,428 | 32,127 | 58,776 | 62,338 |
Loss from operations | (19,067) | (31,027) | (14,940) | (58,510) |
Non-operating income (expense): | ||||
Interest expense | (677) | (597) | (1,391) | (1,091) |
Amortization of debt discount and issuance costs | (38) | (131) | (139) | (311) |
Foreign exchange gain (loss) | (236) | 185 | (38) | (543) |
Other non-operating expense | (4) | (1,196) | (523) | (1,196) |
Total non-operating expense, net | (955) | (1,739) | (2,091) | (3,141) |
Net loss before noncontrolling interest | (20,022) | (32,766) | (17,031) | (61,651) |
Noncontrolling interest | 256 | 170 | 577 | 458 |
Net loss | $ (19,766) | $ (32,596) | $ (16,454) | $ (61,193) |
Basic and diluted net loss per common share (in dollars per share) | $ (0.07) | $ (0.19) | $ (0.06) | $ (0.35) |
Shares used in calculation of basic and diluted net loss per common share (in shares) | 279,604 | 175,458 | 278,767 | 174,706 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE 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 before noncontrolling interest | $ (20,022) | $ (32,766) | $ (17,031) | $ (61,651) |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments | 813 | (752) | (550) | 1,495 |
Unrealized foreign exchange gain (loss) on intercompany balance | (930) | 880 | 540 | (1,874) |
Other-than-temporary impairment on available-for-sale securities | 0 | 0 | 519 | 0 |
Net unrealized loss on available-for-sale securities | (9) | (13) | (8) | (8) |
Other comprehensive income (loss) | (126) | 115 | 501 | (387) |
Comprehensive loss | (20,148) | (32,651) | (16,530) | (62,038) |
Comprehensive loss attributable to noncontrolling interest | 256 | 170 | 577 | 458 |
Comprehensive loss attributable to CTI | $ (19,892) | $ (32,481) | $ (15,953) | $ (61,580) |
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 loss | $ (17,031) | $ (61,651) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Baxalta milestone revenue | (32,000) | 0 |
Share-based compensation expense | 6,157 | 7,109 |
Depreciation and amortization | 442 | 512 |
Loss on debt extinguishment | 0 | 1,211 |
Provision for bad debt | 345 | 0 |
Other-than-temporary impairment on available-for-sale securities | 519 | 0 |
Noncash interest expense | 139 | 311 |
Change in value of warrant liability | 0 | (15) |
Other | (222) | (195) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (622) | 973 |
Receivables from collaborative arrangements | (6,568) | 0 |
Inventory | 269 | 245 |
Prepaid expenses and other current assets | 1,336 | (1,192) |
Other assets | 285 | 1,198 |
Accounts payable | 3,726 | 4,976 |
Accrued expenses | (5,224) | (2,082) |
Deferred revenue | (437) | (328) |
Total adjustments | (31,855) | 12,723 |
Net cash used in operating activities | (48,886) | (48,928) |
Investing activities | ||
Purchases of property and equipment | (108) | (24) |
Net cash used in investing activities | (108) | (24) |
Financing activities | ||
Repayment of Hercules debt | (1,764) | (4,659) |
Payment of tax withholding obligations related to stock compensation | (304) | (544) |
Cash paid for preferred stock issuance costs | (314) | (227) |
Other | 20 | 22 |
Net cash (used in) provided by financing activities | (2,362) | 32,502 |
Effect of exchange rate changes on cash and cash equivalents | (119) | 381 |
Net decrease in cash and cash equivalents | (51,475) | (16,069) |
Cash and cash equivalents at beginning of period | 128,182 | 70,933 |
Cash and cash equivalents at end of period | 76,707 | 54,864 |
Supplemental disclosure of cash flow information | ||
Cash paid during the period for interest | 3,174 | 960 |
Cash paid during the period for taxes | 0 | 0 |
Supplemental disclosure of noncash financing and investing activities | ||
Baxalta milestone advance - earned in lieu of repayment | (32,000) | 0 |
Repayment and issuance of Hercules debt | 0 | 13,815 |
Hercules | ||
Financing activities | ||
Proceeds from debt | 0 | 5,910 |
Baxalta | ||
Financing activities | ||
Proceeds from debt | $ 0 | $ 32,000 |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Description of Business and Summary of Significant Accounting Policies | Description of Business and Summary of Significant Accounting Policies CTI BioPharma Corp., together with its wholly-owned subsidiaries, also referred to collectively in this Quarterly Report on Form 10-Q as “we,” “us,” “our,” the “Company” and “CTI”, is a biopharmaceutical company focused on the acquisition, development and commercialization of novel targeted therapies covering a spectrum of blood-related cancers that offer a unique benefit to patients and health care providers. Our goal is to build a profitable company by generating income from products we develop and commercialize, either alone or with partners. We are currently concentrating our efforts on treatments that target blood-related cancers where there is an unmet medical need. In particular, we are primarily focused on commercializing PIXUVRI in select countries in the European Union, or the E.U., for multiply relapsed or refractory aggressive B-cell non-Hodgkin lymphoma, or NHL, and evaluating pacritinib for the treatment of adult patients with myelofibrosis. We operate in a highly regulated and competitive environment. The manufacturing and marketing of pharmaceutical products require approval from, and are subject to, ongoing oversight by the Food and Drug Administration, or the FDA, in the United States, or the U.S., the European Medicines Agency, or the EMA, in the E.U. and comparable agencies in other countries. Obtaining approval for a new therapeutic product is never certain, may take many years and may involve expenditure of substantial resources. Basis of Presentation The accompanying unaudited financial information of CTI as of and for the three and six months ended June 30, 2016 and 2015 has been prepared in accordance with accounting principles generally accepted in the U.S. for interim financial information and with the instructions to Quarterly Report on Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, such financial information includes all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of our financial position at such date and the operating results and cash flows for such periods. Operating results for the three and six months ended June 30, 2016 are not necessarily indicative of the results that may be expected for the entire year or for any other subsequent interim period. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to the rules of the U.S. Securities and Exchange Commission, or the SEC. These unaudited financial statements and related notes should be read in conjunction with our audited annual financial statements for the year ended December 31, 2015 included in our Annual Report on Form 10-K filed with the SEC on February 17, 2016. The condensed consolidated balance sheet at December 31, 2015 has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by generally accepted accounting principles in the U.S. for complete financial statements. Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of CTI and its wholly-owned subsidiaries, which include Systems Medicine LLC and CTI Life Sciences Limited, or CTILS. We also retain ownership of our branch, CTI BioPharma Corp.– Sede Secondaria, or CTI (Europe); however, we ceased operations related to this branch in September 2009. As of June 30, 2016 , we also had an approximately 60% interest in our majority-owned subsidiary, Aequus Biopharma, Inc., or Aequus. The remaining interest in Aequus not held by CTI is reported as noncontrolling interest in the consolidated financial statements. All intercompany transactions and balances are eliminated in consolidation. Accounts Receivable Our accounts receivable balance includes trade receivables related to PIXUVRI sales. We estimate an allowance for doubtful accounts based upon the age of outstanding receivables and our historical experience of collections, which includes adjustments for risk of loss for specific customer accounts. We periodically review the estimation process and make changes to our assumptions as necessary. When it is deemed probable that a customer account is uncollectible, the account balance is written off against the existing allowance. We also consider the customers’ country of origin to determine if an allowance is required. We continue to monitor economic conditions, including the volatility associated with international economies, the sovereign debt crisis in certain European countries and associated impacts on the financial markets and our business. As of June 30, 2016 and December 31, 2015 , our accounts receivable did not include any balance from a customer in a country that has exhibited financial stress that would have had a material impact on our financial results. We recorded $24,000 of allowance for doubtful accounts as of June 30, 2016 and no allowance as of December 31, 2015 . Liquidity The accompanying consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business for the twelve-month period following the date of these consolidated financial statements. We will need to continue to conduct research, development, testing and regulatory compliance activities with respect to our compounds and ensure the procurement of manufacturing and drug supply services, the costs of which, together with projected general and administrative expenses, is expected to result in operating losses for the foreseeable future. We have incurred a net operating loss every year since our formation. As of June 30, 2016 , we had an accumulated deficit of $2.1 billion , and we expect to continue to incur net losses. Our available cash and cash equivalents were $76.7 million as of June 30, 2016 . We believe that our present financial resources, together with payments projected to be received under certain contractual agreements and our ability to control costs, will be sufficient to fund our operations at least through the next twelve months from the date these financial statements were issued. We may need to acquire additional funds in order to develop our business. We may seek to raise such capital through public or private equity financings, partnerships, collaborations, joint ventures, disposition of assets, debt financings or restructurings, bank borrowings or other sources of financing. Furthermore, we have a limited number of authorized shares of common stock available for issuance and additional funding may not be available on favorable terms or at all. If additional funds are raised by issuing equity securities, substantial dilution to existing shareholders may result. If we fail to obtain additional capital when needed, our ability to operate as a going concern will be harmed, and we may be required to delay, scale back or eliminate some or all of our research and development programs, reduce our selling, general and administrative expenses, be unable to attract and retain highly qualified personnel, be unable to obtain and maintain contracts necessary to continue our operations and at affordable rates with competitive terms, refrain from making our contractually required payments when due (including debt payments) and/or may be forced to cease operations, liquidate our assets and possibly seek bankruptcy protection. Value Added Tax Receivable Our European operations are subject to a value added tax, or VAT, which is usually applied to all goods and services purchased and sold throughout Europe. The VAT receivable was approximately $4.4 million and $4.7 million as of June 30, 2016 and December 31, 2015 , of which $4.3 million and $4.2 million was included in other assets and $0.1 million and $0.5 million was included in prepaid expenses and other current assets as of June 30, 2016 and December 31, 2015 , respectively. The collection period of VAT receivable for our European operations ranges from approximately three months to five years . For our Italian VAT receivable, the collection period is approximately three to five years. As of June 30, 2016 , the VAT receivable related to operations in Italy is approximately $4.4 million . We review our VAT receivable balance for impairment whenever events or changes in circumstances indicate the carrying amount might not be recoverable. Inventory We carry inventory at the lower of cost or market. The cost of finished goods and work in process is determined using the standard-cost method, which approximates actual cost based on a first-in, first-out method. Inventory includes the cost of materials, third-party contract manufacturing and overhead costs, quality control costs and shipping costs from the manufacturers to the final distribution warehouse associated with the distribution of PIXUVRI. Production costs for our other product candidates continue to be charged to research and development expense as incurred prior to regulatory approval or until our estimate for regulatory approval becomes probable. We review our inventories on a quarterly basis for impairment and reserves are established when necessary. Estimates of excess inventory consider our projected sales of the product and the remaining shelf lives of product. In the event we identify excess, obsolete or unsalable inventory, the value is written down to the net realizable value. Based on assessment of shelf lives and net realizable value of the product, a reserve balance of $1.1 million and $1.3 million was recorded as of June 30, 2016 and December 31, 2015 , respectively, for excess, obsolete or unsalable inventory. Revenue Recognition We currently have conditional marketing authorization for PIXUVRI in the E.U. Revenue is recognized when there is persuasive evidence of the existence of an agreement, delivery has occurred, prices are fixed or determinable, and collectability is assured. Product sales We primarily sell PIXUVRI through a limited number of wholesale distributors. We generally record product sales upon receipt of the product by the health care providers and certain distributors at which time title and risk of loss pass. Product sales are recorded net of distributor discounts, estimated government-mandated rebates, trade discounts, and estimated product returns. Reserves are established for these deductions and actual amounts incurred are offset against the applicable reserves. We reflect these reserves as either a reduction in the related account receivable or as an accrued liability depending on the nature of the sales deduction. These estimates are periodically reviewed and adjusted as necessary. Milestone payments Milestone payments under the collaboration agreement are generally aggregated into three categories for reporting purposes: (i) development milestones, (ii) regulatory milestones, and (iii) sales milestones. Development milestones are typically payable when a product candidate initiates or advances into different clinical trial phases. Regulatory milestones are typically payable upon submission for marketing approval with the FDA, or with the regulatory authorities of other countries, or on receipt of actual marketing approvals for the compound or for additional indications. Sales milestones are typically payable when annual sales reach certain levels. At the inception of each agreement that includes milestone payments, we evaluate whether each milestone is substantive and at risk to both parties on the basis of the contingent nature of the milestone. This evaluation includes an assessment of whether (a) the consideration is commensurate with either (1) the entity's performance to achieve the milestone, or (2) the enhancement of the value of the delivered item(s) as a result of a specific outcome resulting from the entity's performance to achieve the milestone, (b) the consideration relates solely to past performance and (c) the consideration is reasonable relative to all of the deliverables and payment terms within the arrangement. We evaluate factors such as the scientific, regulatory, commercial and other risks that must be overcome to achieve the respective milestone, the level of effort and investment required to achieve the respective milestone and whether the milestone consideration is reasonable relative to all deliverables and payment terms in the arrangement in making this assessment. Non-refundable development and regulatory milestones that are expected to be achieved as a result of our efforts during the period of substantial involvement are considered substantive and are recognized as revenue upon the achievement of the milestone, assuming all other revenue recognition criteria are met. Reimbursement Arrangements and Collaborative Arrangements We follow Accounting Standard Codification, or ASC, 605-25, Revenue Recognition – Multiple-Element Arrangements and ASC 808, Collaborative Arrangements, if applicable, to determine the accounting of reimbursement arrangements under our collaborative research and development and commercialization agreements. Cost of Product Sold Cost of product sold includes third-party manufacturing costs, shipping costs, contractual royalties and other costs of PIXUVRI product sold. Cost of product sold also includes allowances for excess inventory that may expire and become unsalable. Foreign Currency Translation and Transaction Gains and Losses We record foreign currency translation adjustments and transaction gains and losses in accordance with ASC 830, Foreign Currency Matters. For our operations that have a functional currency other than the U.S. dollar, gains and losses resulting from the translation of the functional currency into U.S. dollars for financial statement presentation are not included in determining net loss, but are accumulated in the cumulative foreign currency translation adjustment account as a separate component of shareholders’ equity (deficit), except for intercompany transactions that are of a short-term nature with entities that are consolidated, combined or accounted for by the equity method in our consolidated financial statements. We and our subsidiaries also have transactions in foreign currencies other than the functional currency. We record transaction gains and losses in our condensed consolidated statements of operations related to the recurring measurement and settlement of such transactions. The intercompany balance due from CTILS is considered to be of a long-term nature. An unrealized foreign exchange loss of $0.9 million and an unrealized foreign exchange gain of $0.5 million were recorded in cumulative foreign currency translation adjustment account for the three and six months ended June 30, 2016 , respectively, and an unrealized foreign exchange gain of $0.9 million and an unrealized foreign exchange loss of $1.9 million was recorded for the three and six months ended June 30, 2015 , respectively. As of June 30, 2016 , the intercompany balance due from CTILS was €28.4 million (or $31.5 million upon conversion from euros as of June 30, 2016 ). As of December 31, 2015 , the intercompany balance due from CTILS was €27.2 million (or $29.5 million upon conversion from euros as of December 31, 2015 ). Net Income (Loss) Per Share Basic net income (loss) per share, or EPS, is calculated based on the net income (loss) attributable to common shareholders divided by the weighted average number of shares outstanding for the period excluding any dilutive effects of options, warrants, unvested share awards and convertible securities. Diluted EPS assumes the conversion of all dilutive convertible securities, such as convertible debt and convertible preferred stock using the if-converted method, and assumes the exercise or vesting of other dilutive securities, such as options, warrants and restricted stock using the treasury stock method. Equity awards, warrants and unvested share rights aggregating 27.6 million and 14.7 million shares of common stock for the three months ended June 30, 2016 and 2015 , respectively, and 26.2 million and 14.6 million shares of common stock for the six months ended June 30, 2016 and 2015 , respectively, prior to the application of the treasury stock method, were excluded from the calculation of diluted EPS because they are anti-dilutive. Recently Adopted Accounting Standards In November 2015, the Financial Accounting Standards Board, or the FASB, issued new guidance on the balance sheet classification of deferred taxes. To simplify presentation, the new guidance requires that all deferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent on the balance sheet . The accounting standard is effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2016. Early adoption is permitted. The adoption of this guidance did not have an impact on our consolidated financial statements. In April 2015, the FASB issued a new accounting standard which changes the presentation of debt issuance costs in financial statements. Under the new standard, an entity presents such costs in the balance sheet as a direct deduction from the related debt liability rather than as an asset. Amortization of the costs is reported as interest expense. The accounting standard is effective for annual reporting periods beginning after December 15, 2015 and interim periods beginning after December 15, 2016. The adoption of this guidance did not have a material impact on our consolidated financial statements. Recently Issued Accounting Standards In May 2014, the FASB issued a new financial accounting standard which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes current revenue recognition guidance. In March 2016, the FASB issued an amendment to clarify the implementation guidance around considerations of whether an entity is a principal or an agent, impacting whether an entity reports revenue on a gross or net basis. In April 2016, the FASB issued an amendment to clarify guidance on identifying performance obligations and the implementation guidance on licensing. In May 2016, the FASB issued amendments to certain aspects of the new revenue guidance (including transition, collectability, noncash consideration and the presentation of sales and other similar taxes) and provided certain practical expedients. The accounting standard is effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2017. Early adoption is permitted as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. We are currently evaluating the impact of this accounting standard on our consolidated financial statements. In August 2014, the FASB issued a new accounting standard which requires management to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern for each annual and interim reporting period and to provide related footnote disclosures in certain circumstances. The accounting standard is effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2016. Early adoption is permitted. We are currently evaluating the impact of this accounting standard on our consolidated financial statements. In July 2015, the FASB issued a new accounting guidance on simplifying the measurement of inventory which requires that inventory within the scope of the guidance be measured at the lower of cost and net realizable value. Prior to the issuance of the standard, inventory was measured at the lower of cost or market (where market was defined as replacement cost, with a ceiling of net realizable value and floor of net realizable value less a normal profit margin). The accounting guidance is effective for annual reporting periods (including interim periods within those periods) beginning after December 15, 2016. Early adoption is permitted. We do not expect the adoption of this standard to have a material impact on our financial position or results of operations. In January 2016, the FASB issued a new accounting standard on recognition and measurement of financial assets and financial liabilities. The accounting standard primarily affects the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. In addition, it includes a clarification related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The accounting guidance is effective for annual reporting periods (including interim periods within those periods) beginning after December 15, 2017. Early adoption is permitted for the provision to record fair value changes for financial liabilities under the fair value option resulting from instrument-specific credit risk in other comprehensive income. We do not expect the adoption of this standard to have a material impact on our financial position or results of operations. In February 2016, the FASB issued a new accounting guidance on accounting for leases which requires the lessees to recognize virtually all of their leases on the balance sheet (other than leases that meet the definition of a short-term lease). The accounting guidance is effective for annual reporting periods (including interim periods within those periods) beginning after December 15, 2018. Early adoption is permitted. We are currently evaluating the impact of this accounting standard on our consolidated financial statements. In March 2016, the FASB issued a new accounting guidance for employee share-based payments accounting. The accounting standard primarily affects the accounting for forfeitures, minimum statutory tax withholding requirements, and income tax effects related to share-based payments at settlement (or expiration). The accounting guidance is effective for annual reporting periods beginning after December 15, 2017 and interim periods within annual reporting periods beginning after December 15, 2018. Early adoption is permitted. We are currently evaluating the impact of this accounting standard on our consolidated financial statements. Reclassifications Certain prior year items have been reclassified to conform to current year presentation. |
Inventory
Inventory | 6 Months Ended |
Jun. 30, 2016 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventory The components of PIXUVRI inventory consisted of the following as of June 30, 2016 and December 31, 2015 (in thousands): June 30, 2016 December 31, 2015 Finished goods $ 565 $ 724 Work-in-process 3,170 3,386 Inventory, gross 3,735 4,110 Reserve for expiring inventory (1,103 ) (1,265 ) Inventory, net $ 2,632 $ 2,845 |
Leases
Leases | 6 Months Ended |
Jun. 30, 2016 | |
Leases [Abstract] | |
Leases | Leases Our deferred rent balance was $3.8 million as of June 30, 2016 , of which $0.5 million was included in other current liabilities and $3.3 million was included in other liabilities . As of December 31, 2015 , our deferred rent balance was $4.0 million , of which $0.5 million was included in other current liabilities and $3.5 million was included in other liabilities . |
Milestone Payments
Milestone Payments | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Milestone Payments | Milestone Payments Baxalta In June 2015 , we entered into the First Amendment, or the Pacritinib License Amendment, to the Development, Commercialization and License Agreement, or the Original Pacritinib License Agreement, dated as of November 14, 2013, with Baxter International Inc., or Baxter. Baxalta Incorporated and its affiliates, or Baxalta, which is now part of Shire plc, have been assigned Baxter’s rights and obligations under the Original Pacritinib License Agreement. Pursuant to the Pacritinib License Amendment, two milestone payments in the aggregate amount of $32.0 million from Baxalta to us were accelerated from the schedule contemplated by the Original Pacritinib License Agreement relating to the following: the $12.0 million milestone payment payable in connection with the regulatory submission of the Marketing Authorization Application, or the MAA, to the EMA with respect to pacritinib, or the MAA Milestone, and the $20.0 million development milestone payment payable in connection with the first treatment dosing of the 300th patient enrolled per the protocol in PERSIST-2, or the PERSIST-2 Milestone. Under the Pacritinib License Amendment, each of the two milestone advances were bearing interest at an annual rate of 9% until the earlier of the date of the first occurrence of the respective milestone or the date that the respective advance plus accrued interest is repaid in full. In the first quarter of 2016 , we recorded $32.0 million in License and contract revenue upon the achievement of these two milestones. |
Share-based Compensation Expens
Share-based Compensation Expense | 6 Months Ended |
Jun. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-based Compensation Expense | Share-based Compensation Expense The following table summarizes share-based compensation expense for the three and six months ended June 30, 2016 and 2015 , which was allocated as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Research and development $ 635 $ 762 $ 1,421 $ 1,752 Selling, general and administrative 1,696 2,011 4,736 5,357 Total share-based compensation expense $ 2,331 $ 2,773 $ 6,157 $ 7,109 For the three and six months ended June 30, 2016 and 2015 , we incurred share-based compensation expense due to the following types of awards (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Performance rights $ 209 $ 423 $ 569 $ 841 Restricted stock 1,119 1,586 3,190 4,958 Options 1,003 764 2,398 1,310 Total share-based compensation expense $ 2,331 $ 2,773 $ 6,157 $ 7,109 |
Other Comprehensive Income (Los
Other Comprehensive Income (Loss) | 6 Months Ended |
Jun. 30, 2016 | |
Equity [Abstract] | |
Other Comprehensive Income (Loss) | Other Comprehensive Income (Loss) Total accumulated other comprehensive income (loss) consisted of the following (in thousands): Net Unrealized Gain (Loss) and Impairment on Available-For- Sale Securities Foreign Currency Translation Adjustments Unrealized Foreign Exchange Gain (Loss) on Intercompany Balance Accumulated Other Comprehensive Loss December 31, 2015 $ (518 ) $ (3,849 ) $ (2,585 ) $ (6,952 ) Current period other comprehensive income (loss) 511 (550 ) 540 501 June 30, 2016 $ (7 ) $ (4,399 ) $ (2,045 ) $ (6,451 ) In the first quarter of 2016, we recognized other-than-temporary impairment on available-for-sale securities of $0.5 million in our condensed consolidated statements of operations. The value of available-for-sale securities of $14,000 and $22,000 was included in Prepaid expenses and other current assets as of June 30, 2016 and December 31, 2015 , respectively. |
Legal Proceedings
Legal Proceedings | 6 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Proceedings | Legal Proceedings The Italian Tax Authority, or the ITA, issued notices of assessment to CTI (Europe) based on the ITA’s audit of CTI (Europe)’s VAT returns for the years 2003, 2005, 2006 and 2007, or, collectively, the VAT Assessments. The ITA audits concluded that CTI (Europe) did not collect and remit VAT on certain invoices issued to non-Italian clients for services performed by CTI (Europe). We believe that the services invoiced were non-VAT taxable consultancy services and that the VAT returns are correct as originally filed. We are defending ourselves against the assessments both on procedural grounds and on the merits of the case, although we can make no assurances regarding the ultimate outcomes of these cases. As of December 31, 2012, we reversed the entire reserve we had previously recorded relating to the VAT Assessments after having received favorable Provincial Tax Court rulings. The current status of the legal proceedings surrounding each respective VAT year return at issue is as follows: 2003. In June 2013, the Regional Tax Court issued decision no. 119/50/13 in regards to the 2003 VAT assessment, which accepted the appeal of the ITA and reversed the previous decision of the Provincial Tax Court. In January 2014, we were notified that the ITA requested partial payment of the 2003 VAT assessment in the amount of €0.4 million (or $0.6 million ), which we paid in March 2014. We believe that the decision of the Regional Tax Court did not carefully take into account our arguments and the documentation we filed, and in January 2014, we appealed such decision to the Italian Supreme Court both on procedural grounds and on the merits of the case. 2005, 2006 and 2007. The ITA has appealed to the Italian Supreme Court the decisions of the respective appellate Regional Tax Court, which ruled in our favor, with respect to each of the 2005, 2006 and 2007 VAT returns. If the final decisions of the Italian Supreme Court for the VAT Assessments are unfavorable to us, we may incur up to $10.4 million in losses for the VAT amount assessed plus collection fees, notification expenses and additional interest for the period lapsed between the date in which the assessments were issued and the date of effective payment upon conversion from euros as of June 30, 2016 . We are also in the process of providing documents in response to a subpoena received from the SEC in January 2016. The SEC's subpoena requests, among other things; internal and external communications related to pacritinib Phase 3 trials, including communications with the independent data monitoring committee, or IDMC, for pacritinib's Phase 3 trials, our steering committee, our board of directors, our audit committee, representatives of Baxter and Baxalta, and the FDA, and other documents related to pacritinib. We believe that the SEC is seeking to determine whether there have been possible violations of the antifraud and certain other provisions of the federal securities laws related to the Company's disclosures concerning, among other things, the clinical test results of pacritinib. The SEC Staff's letter sent with the subpoena stated that the investigation is a fact-finding inquiry, and the investigation and subpoena do not mean that the SEC has concluded that we or anyone else has violated any law. We are cooperating with this investigation. On February 10, 2016 and February 12, 2016, class action lawsuits entitled Ahrens v. CTI BioPharma Corp. et al , Case No. 1:16-cv-01044 and McGlothlin v. CTI BioPharma Corp. et al , Case No. C16-216, respectively, were filed in the United States District Court for the Southern District of New York and the United States District Court for the Western District of Washington, respectively, on behalf of shareholders that purchased or acquired the Company’s securities pursuant to our September 24, 2015 public offering and/or shareholders who otherwise acquired our stock between March 4, 2014 and February 9, 2016, inclusive. The complaints assert claims against the Company and certain of our current and former directors and officers for violations of the federal securities laws under Sections 11 and 15 of the Securities Act of 1933, as amended, or the Securities Act, and Sections 10 and 20 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, Plaintiffs’ Securities Act claims allege that the Company’s Registration Statement and Prospectus for the September 24, 2015 public offering contained materially false and misleading statements and failed to disclose certain material adverse facts about the Company’s business, operations and prospects, including with respect to the clinical trials and prospects for pacritinib. Plaintiffs’ Exchange Act claims allege that the Company’s public disclosures were knowingly or recklessly false and misleading or omitted material adverse facts, again with a primary focus on the clinical trials and prospects for pacritinib. On May 2, 2016, the Company filed a motion to transfer the Ahrens case to the United States District Court for the Western District of Washington. The motion was unopposed and granted by the court on May 19, 2016. On June 3, 2016, the parties filed a joint motion to consolidate the McGlothlin case with the Ahrens case in order to proceed as a single consolidated proceeding. On June 13, 2016, the court granted the motion to consolidate with the action being captioned In re CTI BioPharma Corp. Securities Litigation, Master File No. 2:16-cv-00216-RSL. The lawsuit seeks damages in an unspecified amount. We believe that the allegations contained in the complaints are without merit and intend to vigorously defend ourselves against all claims asserted therein. A reasonable estimate of the amount of any possible loss or range of loss cannot be made at this time and, as such, we have not recorded an accrual for any possible loss. On March 14, 2016, a Company shareholder filed a derivative lawsuit on behalf of the Company seeking damages for alleged harm to the Company caused by certain current and former officers and directors. The suit, Wei v. James A. Bianco, et al , 16-2-05818-3, was filed in King County Superior Court, Washington, and names as individual defendants James A. Bianco, Louis A. Bianco, Jack W. Singer, Bruce J. Seeley, John H. Bauer, Phillip M. Nudelman, Reed V. Tuckson, Karen Ignagni, Richard L. Love, Mary O. Mundinger and Frederick W. Telling. Consistent with the requirements of a derivative action, the Company is named as a nominal defendant against which no monetary relief is sought. The complaint alleges four claims: (1) breach of fiduciary duty; (2) abuse of control; (3) gross mismanagement; and (4) unjust enrichment (receiving compensation that was unjust in light of the alleged conduct). Each is based on the assertion that the Company made materially false and misleading statements and omitted material information from its disclosures about pacritinib and its safety. Plaintiff did not make a pre-suit demand on the current Board to investigate whether to pursue claims against officers or directors, instead claiming demand is excused because the named defendants lack independence, are not disinterested because they lack impartiality, received and want to continue to receive their compensation, have longstanding personal and business relationships, and cannot evaluate a demand since they are facing personal liability. Plaintiff has requested the court to award the Company the damages allegedly sustained as a result of the conduct and to direct the Company and the individual defendants to reform and improve the Company’s corporate governance to avoid future damages. We understand that the individuals named as defendants believe the allegations contained in the complaint lack merit and plan to vigorously defend themselves against all claims asserted therein. A reasonable estimate of the amount of any possible loss or range of loss cannot be made at this time and, as such, we have not recorded an accrual for any possible loss. On May 24, 2016, two CTI shareholders filed a derivative lawsuit in the name of the Company seeking damages for alleged harm to the Company caused by officers and directors. The suit, Nahar v. James A. Bianco, et al , Case 2:16-cv-00756, was filed in the United States District Court for the Western District of Washington and names certain officers and directors as defendants. Consistent with the requirements of a derivative action, the Company is named as a nominal defendant. The complaint alleges three claims: 1) breach of fiduciary duty; 2) waste of corporate assets; and 3) gross mismanagement. Each is based on the assertion that the Company made materially false and misleading statements and omitted material information from its disclosures about pacritinib and its safety. Plaintiff did not make pre-suit demand on the current Board to investigate whether to pursue claims against officers or directors, instead claiming demand is excused because a majority of the current Board is predisposed to refuse demand because they lack independence and are not disinterested, have already determined that the allegations lack merit and are facing personal liability. Plaintiffs have requested the court determine and award the Company the damages sustained and to be sustained as a result of the alleged conduct, and directing the Company to reform its corporate governance and internal procedures to comply with applicable laws and protect the Company and its shareholders from reoccurrence of the alleged wrongful conduct. On July 14, 2016, the parties filed a stipulated motion to stay the case pending a resolution of the defendants’ motion to dismiss to be filed in In re CTI BioPharma Corp. Securities Litigation . That motion remains pending. We understand that the individuals named as defendants believe the allegations contained in the complaint lack merit and plan to vigorously defend themselves against all claims asserted therein. A reasonable estimate of the amount of any possible loss or range of loss cannot be made at this time and, as such, we have not recorded an accrual for any possible loss. On June 16, 2016 a CTI shareholder filed a derivative lawsuit in the name of the Company seeking damages for alleged harm to the Company caused by officers and directors. The suit, England v. James A. Bianco, et al , 16-2-14422-5, was filed in King County Superior Court and names certain officers and directors as defendants. Consistent with the requirements of a derivative action, the Company is named as a nominal defendant. The complaint alleges four claims: 1) breach of fiduciary duty; 2) abuse of control; 3) gross mismanagement; and 4) unjust enrichment (receiving compensation that was unjust in light of the alleged conduct). Each is based on the assertion that the company made materially false and misleading statements and omitted material information from its disclosures about pacritinib and its safety. Plaintiff did not make pre-suit demand on the current Board to investigate whether to pursue claims against officers or directors, instead claiming demand is excused because the named defendants lack independence and are not disinterested because they lack impartiality, received and want to continue to receive their compensation, have longstanding personal and business relationships and cannot evaluate a demand since they are facing personal liability. Plaintiff has requested the court determine and award the Company the damages sustained as a result of the alleged conduct, and directing the Company and the individual defendants reform and improve its corporate governance to avoid future damages. We understand that the individuals named as defendants believe the allegations contained in the complaint lack merit and plan to vigorously defend themselves against all claims asserted therein. A reasonable estimate of the amount of any possible loss or range of loss cannot be made at this time and, as such, we have not recorded an accrual for any possible loss. In addition to the items discussed above, we are from time to time subject to legal proceedings and claims arising in the ordinary course of business. |
Description of Business and S14
Description of Business and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Description of Business | CTI BioPharma Corp., together with its wholly-owned subsidiaries, also referred to collectively in this Quarterly Report on Form 10-Q as “we,” “us,” “our,” the “Company” and “CTI”, is a biopharmaceutical company focused on the acquisition, development and commercialization of novel targeted therapies covering a spectrum of blood-related cancers that offer a unique benefit to patients and health care providers. Our goal is to build a profitable company by generating income from products we develop and commercialize, either alone or with partners. We are currently concentrating our efforts on treatments that target blood-related cancers where there is an unmet medical need. In particular, we are primarily focused on commercializing PIXUVRI in select countries in the European Union, or the E.U., for multiply relapsed or refractory aggressive B-cell non-Hodgkin lymphoma, or NHL, and evaluating pacritinib for the treatment of adult patients with myelofibrosis. We operate in a highly regulated and competitive environment. The manufacturing and marketing of pharmaceutical products require approval from, and are subject to, ongoing oversight by the Food and Drug Administration, or the FDA, in the United States, or the U.S., the European Medicines Agency, or the EMA, in the E.U. and comparable agencies in other countries. Obtaining approval for a new therapeutic product is never certain, may take many years and may involve expenditure of substantial resources. |
Basis of Presentation | Basis of Presentation The accompanying unaudited financial information of CTI as of and for the three and six months ended June 30, 2016 and 2015 has been prepared in accordance with accounting principles generally accepted in the U.S. for interim financial information and with the instructions to Quarterly Report on Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, such financial information includes all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of our financial position at such date and the operating results and cash flows for such periods. Operating results for the three and six months ended June 30, 2016 are not necessarily indicative of the results that may be expected for the entire year or for any other subsequent interim period. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to the rules of the U.S. Securities and Exchange Commission, or the SEC. These unaudited financial statements and related notes should be read in conjunction with our audited annual financial statements for the year ended December 31, 2015 included in our Annual Report on Form 10-K filed with the SEC on February 17, 2016. The condensed consolidated balance sheet at December 31, 2015 has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by generally accepted accounting principles in the U.S. for complete financial statements. |
Principles of Consolidation | Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of CTI and its wholly-owned subsidiaries, which include Systems Medicine LLC and CTI Life Sciences Limited, or CTILS. We also retain ownership of our branch, CTI BioPharma Corp.– Sede Secondaria, or CTI (Europe); however, we ceased operations related to this branch in September 2009. As of June 30, 2016 , we also had an approximately 60% interest in our majority-owned subsidiary, Aequus Biopharma, Inc., or Aequus. The remaining interest in Aequus not held by CTI is reported as noncontrolling interest in the consolidated financial statements. All intercompany transactions and balances are eliminated in consolidation. |
Accounts Receivable | Accounts Receivable Our accounts receivable balance includes trade receivables related to PIXUVRI sales. We estimate an allowance for doubtful accounts based upon the age of outstanding receivables and our historical experience of collections, which includes adjustments for risk of loss for specific customer accounts. We periodically review the estimation process and make changes to our assumptions as necessary. When it is deemed probable that a customer account is uncollectible, the account balance is written off against the existing allowance. We also consider the customers’ country of origin to determine if an allowance is required. We continue to monitor economic conditions, including the volatility associated with international economies, the sovereign debt crisis in certain European countries and associated impacts on the financial markets and our business. As of June 30, 2016 and December 31, 2015 , our accounts receivable did not include any balance from a customer in a country that has exhibited financial stress that would have had a material impact on our financial results. |
Liquidity | Liquidity The accompanying consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business for the twelve-month period following the date of these consolidated financial statements. We will need to continue to conduct research, development, testing and regulatory compliance activities with respect to our compounds and ensure the procurement of manufacturing and drug supply services, the costs of which, together with projected general and administrative expenses, is expected to result in operating losses for the foreseeable future. We have incurred a net operating loss every year since our formation. As of June 30, 2016 , we had an accumulated deficit of $2.1 billion , and we expect to continue to incur net losses. Our available cash and cash equivalents were $76.7 million as of June 30, 2016 . We believe that our present financial resources, together with payments projected to be received under certain contractual agreements and our ability to control costs, will be sufficient to fund our operations at least through the next twelve months from the date these financial statements were issued. We may need to acquire additional funds in order to develop our business. We may seek to raise such capital through public or private equity financings, partnerships, collaborations, joint ventures, disposition of assets, debt financings or restructurings, bank borrowings or other sources of financing. Furthermore, we have a limited number of authorized shares of common stock available for issuance and additional funding may not be available on favorable terms or at all. If additional funds are raised by issuing equity securities, substantial dilution to existing shareholders may result. If we fail to obtain additional capital when needed, our ability to operate as a going concern will be harmed, and we may be required to delay, scale back or eliminate some or all of our research and development programs, reduce our selling, general and administrative expenses, be unable to attract and retain highly qualified personnel, be unable to obtain and maintain contracts necessary to continue our operations and at affordable rates with competitive terms, refrain from making our contractually required payments when due (including debt payments) and/or may be forced to cease operations, liquidate our assets and possibly seek bankruptcy protection. |
Value Added Tax Receivable | We review our VAT receivable balance for impairment whenever events or changes in circumstances indicate the carrying amount might not be recoverable. Value Added Tax Receivable Our European operations are subject to a value added tax, or VAT, which is usually applied to all goods and services purchased and sold throughout Europe. |
Inventory | Inventory We carry inventory at the lower of cost or market. The cost of finished goods and work in process is determined using the standard-cost method, which approximates actual cost based on a first-in, first-out method. Inventory includes the cost of materials, third-party contract manufacturing and overhead costs, quality control costs and shipping costs from the manufacturers to the final distribution warehouse associated with the distribution of PIXUVRI. Production costs for our other product candidates continue to be charged to research and development expense as incurred prior to regulatory approval or until our estimate for regulatory approval becomes probable. We review our inventories on a quarterly basis for impairment and reserves are established when necessary. Estimates of excess inventory consider our projected sales of the product and the remaining shelf lives of product. In the event we identify excess, obsolete or unsalable inventory, the value is written down to the net realizable value. |
Revenue Recognition | Revenue Recognition We currently have conditional marketing authorization for PIXUVRI in the E.U. Revenue is recognized when there is persuasive evidence of the existence of an agreement, delivery has occurred, prices are fixed or determinable, and collectability is assured. Product sales We primarily sell PIXUVRI through a limited number of wholesale distributors. We generally record product sales upon receipt of the product by the health care providers and certain distributors at which time title and risk of loss pass. Product sales are recorded net of distributor discounts, estimated government-mandated rebates, trade discounts, and estimated product returns. Reserves are established for these deductions and actual amounts incurred are offset against the applicable reserves. We reflect these reserves as either a reduction in the related account receivable or as an accrued liability depending on the nature of the sales deduction. These estimates are periodically reviewed and adjusted as necessary. Milestone payments Milestone payments under the collaboration agreement are generally aggregated into three categories for reporting purposes: (i) development milestones, (ii) regulatory milestones, and (iii) sales milestones. Development milestones are typically payable when a product candidate initiates or advances into different clinical trial phases. Regulatory milestones are typically payable upon submission for marketing approval with the FDA, or with the regulatory authorities of other countries, or on receipt of actual marketing approvals for the compound or for additional indications. Sales milestones are typically payable when annual sales reach certain levels. At the inception of each agreement that includes milestone payments, we evaluate whether each milestone is substantive and at risk to both parties on the basis of the contingent nature of the milestone. This evaluation includes an assessment of whether (a) the consideration is commensurate with either (1) the entity's performance to achieve the milestone, or (2) the enhancement of the value of the delivered item(s) as a result of a specific outcome resulting from the entity's performance to achieve the milestone, (b) the consideration relates solely to past performance and (c) the consideration is reasonable relative to all of the deliverables and payment terms within the arrangement. We evaluate factors such as the scientific, regulatory, commercial and other risks that must be overcome to achieve the respective milestone, the level of effort and investment required to achieve the respective milestone and whether the milestone consideration is reasonable relative to all deliverables and payment terms in the arrangement in making this assessment. Non-refundable development and regulatory milestones that are expected to be achieved as a result of our efforts during the period of substantial involvement are considered substantive and are recognized as revenue upon the achievement of the milestone, assuming all other revenue recognition criteria are met. Reimbursement Arrangements and Collaborative Arrangements We follow Accounting Standard Codification, or ASC, 605-25, Revenue Recognition – Multiple-Element Arrangements and ASC 808, Collaborative Arrangements, if applicable, to determine the accounting of reimbursement arrangements under our collaborative research and development and commercialization agreements. |
Cost of Product Sold | Cost of Product Sold Cost of product sold includes third-party manufacturing costs, shipping costs, contractual royalties and other costs of PIXUVRI product sold. Cost of product sold also includes allowances for excess inventory that may expire and become unsalable. |
Foreign Currency Translation and Transaction Gains and Losses | Foreign Currency Translation and Transaction Gains and Losses We record foreign currency translation adjustments and transaction gains and losses in accordance with ASC 830, Foreign Currency Matters. For our operations that have a functional currency other than the U.S. dollar, gains and losses resulting from the translation of the functional currency into U.S. dollars for financial statement presentation are not included in determining net loss, but are accumulated in the cumulative foreign currency translation adjustment account as a separate component of shareholders’ equity (deficit), except for intercompany transactions that are of a short-term nature with entities that are consolidated, combined or accounted for by the equity method in our consolidated financial statements. We and our subsidiaries also have transactions in foreign currencies other than the functional currency. We record transaction gains and losses in our condensed consolidated statements of operations related to the recurring measurement and settlement of such transactions. The intercompany balance due from CTILS is considered to be of a long-term nature. |
Net Income (Loss) Per Share | Net Income (Loss) Per Share Basic net income (loss) per share, or EPS, is calculated based on the net income (loss) attributable to common shareholders divided by the weighted average number of shares outstanding for the period excluding any dilutive effects of options, warrants, unvested share awards and convertible securities. Diluted EPS assumes the conversion of all dilutive convertible securities, such as convertible debt and convertible preferred stock using the if-converted method, and assumes the exercise or vesting of other dilutive securities, such as options, warrants and restricted stock using the treasury stock method. |
Recently Adopted and Issued Accounting Standards | Recently Adopted Accounting Standards In November 2015, the Financial Accounting Standards Board, or the FASB, issued new guidance on the balance sheet classification of deferred taxes. To simplify presentation, the new guidance requires that all deferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent on the balance sheet . The accounting standard is effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2016. Early adoption is permitted. The adoption of this guidance did not have an impact on our consolidated financial statements. In April 2015, the FASB issued a new accounting standard which changes the presentation of debt issuance costs in financial statements. Under the new standard, an entity presents such costs in the balance sheet as a direct deduction from the related debt liability rather than as an asset. Amortization of the costs is reported as interest expense. The accounting standard is effective for annual reporting periods beginning after December 15, 2015 and interim periods beginning after December 15, 2016. The adoption of this guidance did not have a material impact on our consolidated financial statements. Recently Issued Accounting Standards In May 2014, the FASB issued a new financial accounting standard which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes current revenue recognition guidance. In March 2016, the FASB issued an amendment to clarify the implementation guidance around considerations of whether an entity is a principal or an agent, impacting whether an entity reports revenue on a gross or net basis. In April 2016, the FASB issued an amendment to clarify guidance on identifying performance obligations and the implementation guidance on licensing. In May 2016, the FASB issued amendments to certain aspects of the new revenue guidance (including transition, collectability, noncash consideration and the presentation of sales and other similar taxes) and provided certain practical expedients. The accounting standard is effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2017. Early adoption is permitted as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. We are currently evaluating the impact of this accounting standard on our consolidated financial statements. In August 2014, the FASB issued a new accounting standard which requires management to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern for each annual and interim reporting period and to provide related footnote disclosures in certain circumstances. The accounting standard is effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2016. Early adoption is permitted. We are currently evaluating the impact of this accounting standard on our consolidated financial statements. In July 2015, the FASB issued a new accounting guidance on simplifying the measurement of inventory which requires that inventory within the scope of the guidance be measured at the lower of cost and net realizable value. Prior to the issuance of the standard, inventory was measured at the lower of cost or market (where market was defined as replacement cost, with a ceiling of net realizable value and floor of net realizable value less a normal profit margin). The accounting guidance is effective for annual reporting periods (including interim periods within those periods) beginning after December 15, 2016. Early adoption is permitted. We do not expect the adoption of this standard to have a material impact on our financial position or results of operations. In January 2016, the FASB issued a new accounting standard on recognition and measurement of financial assets and financial liabilities. The accounting standard primarily affects the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. In addition, it includes a clarification related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The accounting guidance is effective for annual reporting periods (including interim periods within those periods) beginning after December 15, 2017. Early adoption is permitted for the provision to record fair value changes for financial liabilities under the fair value option resulting from instrument-specific credit risk in other comprehensive income. We do not expect the adoption of this standard to have a material impact on our financial position or results of operations. In February 2016, the FASB issued a new accounting guidance on accounting for leases which requires the lessees to recognize virtually all of their leases on the balance sheet (other than leases that meet the definition of a short-term lease). The accounting guidance is effective for annual reporting periods (including interim periods within those periods) beginning after December 15, 2018. Early adoption is permitted. We are currently evaluating the impact of this accounting standard on our consolidated financial statements. In March 2016, the FASB issued a new accounting guidance for employee share-based payments accounting. The accounting standard primarily affects the accounting for forfeitures, minimum statutory tax withholding requirements, and income tax effects related to share-based payments at settlement (or expiration). The accounting guidance is effective for annual reporting periods beginning after December 15, 2017 and interim periods within annual reporting periods beginning after December 15, 2018. Early adoption is permitted. We are currently evaluating the impact of this accounting standard on our consolidated financial statements. |
Reclassifications | Reclassifications Certain prior year items have been reclassified to conform to current year presentation. |
Inventory (Tables)
Inventory (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Inventory Disclosure [Abstract] | |
Components of Inventory | The components of PIXUVRI inventory consisted of the following as of June 30, 2016 and December 31, 2015 (in thousands): June 30, 2016 December 31, 2015 Finished goods $ 565 $ 724 Work-in-process 3,170 3,386 Inventory, gross 3,735 4,110 Reserve for expiring inventory (1,103 ) (1,265 ) Inventory, net $ 2,632 $ 2,845 |
Share-based Compensation Expe16
Share-based Compensation Expense (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Share-Based Compensation Expense | The following table summarizes share-based compensation expense for the three and six months ended June 30, 2016 and 2015 , which was allocated as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Research and development $ 635 $ 762 $ 1,421 $ 1,752 Selling, general and administrative 1,696 2,011 4,736 5,357 Total share-based compensation expense $ 2,331 $ 2,773 $ 6,157 $ 7,109 |
Share-Based Compensation Expense by Types of Awards | For the three and six months ended June 30, 2016 and 2015 , we incurred share-based compensation expense due to the following types of awards (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Performance rights $ 209 $ 423 $ 569 $ 841 Restricted stock 1,119 1,586 3,190 4,958 Options 1,003 764 2,398 1,310 Total share-based compensation expense $ 2,331 $ 2,773 $ 6,157 $ 7,109 |
Other Comprehensive Income (L17
Other Comprehensive Income (Loss) (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Equity [Abstract] | |
Total Accumulated Other Comprehensive Income (Loss) | Total accumulated other comprehensive income (loss) consisted of the following (in thousands): Net Unrealized Gain (Loss) and Impairment on Available-For- Sale Securities Foreign Currency Translation Adjustments Unrealized Foreign Exchange Gain (Loss) on Intercompany Balance Accumulated Other Comprehensive Loss December 31, 2015 $ (518 ) $ (3,849 ) $ (2,585 ) $ (6,952 ) Current period other comprehensive income (loss) 511 (550 ) 540 501 June 30, 2016 $ (7 ) $ (4,399 ) $ (2,045 ) $ (6,451 ) |
Description of Business and S18
Description of Business and Summary of Significant Accounting Policies (Detail) € in Millions, shares in Millions | 3 Months Ended | 6 Months Ended | |||||||
Jun. 30, 2016USD ($)shares | Jun. 30, 2015USD ($)shares | Jun. 30, 2016USD ($)shares | Jun. 30, 2015USD ($)shares | Jun. 30, 2016EUR (€) | Jun. 30, 2016USD ($) | Dec. 31, 2015EUR (€) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Description Of Business And Significant Accounting Policies [Line Items] | |||||||||
Allowance for doubtful accounts | $ 24,000 | $ 0 | |||||||
Accumulated deficit | 2,114,771,000 | 2,098,317,000 | |||||||
Cash and cash equivalents | $ 54,864,000 | $ 54,864,000 | 76,707,000 | 128,182,000 | $ 70,933,000 | ||||
VAT receivable | 4,400,000 | 4,700,000 | |||||||
Reserve for excess, obsolete or unsalable inventory | 1,103,000 | 1,265,000 | |||||||
Unrealized foreign exchange gain (loss) on intercompany balance | $ (930,000) | $ 880,000 | $ 540,000 | $ (1,874,000) | |||||
Intercompany foreign currency balance, amount | € 28.4 | 31,500,000 | € 27.2 | 29,500,000 | |||||
Anti-dilutive securities excluded from computation of earnings per share amount | shares | 27.6 | 14.7 | 26.2 | 14.6 | |||||
Europe | Minimum | |||||||||
Description Of Business And Significant Accounting Policies [Line Items] | |||||||||
VAT receivable, collection period | 3 months | ||||||||
Europe | Maximum | |||||||||
Description Of Business And Significant Accounting Policies [Line Items] | |||||||||
VAT receivable, collection period | 5 years | ||||||||
Italy | |||||||||
Description Of Business And Significant Accounting Policies [Line Items] | |||||||||
VAT receivable | 4,400,000 | ||||||||
Italy | Minimum | |||||||||
Description Of Business And Significant Accounting Policies [Line Items] | |||||||||
VAT receivable, collection period | 3 years | ||||||||
Italy | Maximum | |||||||||
Description Of Business And Significant Accounting Policies [Line Items] | |||||||||
VAT receivable, collection period | 5 years | ||||||||
Other Assets | |||||||||
Description Of Business And Significant Accounting Policies [Line Items] | |||||||||
VAT receivable, non-current | 4,300,000 | 4,200,000 | |||||||
Prepaid Expenses and Other Current Assets | |||||||||
Description Of Business And Significant Accounting Policies [Line Items] | |||||||||
VAT receivable, current | $ 100,000 | $ 500,000 | |||||||
Aequus Biopharma, Inc | Affiliated Entity | |||||||||
Description Of Business And Significant Accounting Policies [Line Items] | |||||||||
Interest in majority-owned subsidiary | 60.00% | 60.00% |
Inventory (Detail)
Inventory (Detail) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 565 | $ 724 |
Work-in-process | 3,170 | 3,386 |
Inventory, gross | 3,735 | 4,110 |
Reserve for expiring inventory | (1,103) | (1,265) |
Inventory, net | $ 2,632 | $ 2,845 |
Leases (Detail)
Leases (Detail) - USD ($) $ in Millions | Jun. 30, 2016 | Dec. 31, 2015 |
Leases [Abstract] | ||
Deferred rent balance | $ 3.8 | $ 4 |
Deferred rent balance, other current Liabilities | 0.5 | 0.5 |
Deferred rent balance, other liabilities | $ 3.3 | $ 3.5 |
Milestone Payments (Detail)
Milestone Payments (Detail) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Jun. 30, 2015USD ($)Payment | Jun. 30, 2016USD ($) | Jun. 30, 2015USD ($)Payment | |
Debt Instrument [Line Items] | |||||
License and contract revenue | $ 6,310 | $ 248 | $ 41,562 | $ 2,164 | |
Borrowing Associated With License Agreement | |||||
Debt Instrument [Line Items] | |||||
Milestone payment | $ 32,000 | $ 32,000 | |||
Milestone advance interest rate | 9.00% | 9.00% | |||
Baxalta | Borrowing Associated With License Agreement | |||||
Debt Instrument [Line Items] | |||||
Number of milestone payments | Payment | 2 | 2 | |||
License and contract revenue | $ 32,000 | ||||
Baxalta | PERSIST-2 Milestone | Borrowing Associated With License Agreement | |||||
Debt Instrument [Line Items] | |||||
Milestone payment | $ 20,000 | $ 20,000 | |||
Baxalta | European Medicines Agency Milestone [Member] | Borrowing Associated With License Agreement | |||||
Debt Instrument [Line Items] | |||||
Milestone payment | $ 12,000 | $ 12,000 |
Share-based Compensation Expe22
Share-based Compensation Expense - Summary of Share-based Compensation Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | $ 2,331 | $ 2,773 | $ 6,157 | $ 7,109 |
Research and development | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 635 | 762 | 1,421 | 1,752 |
Selling, general and administrative | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | $ 1,696 | $ 2,011 | $ 4,736 | $ 5,357 |
Share-based Compensation Expe23
Share-based Compensation Expense - Share-based Compensation Expense by Types of Awards (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 2,331 | $ 2,773 | $ 6,157 | $ 7,109 |
Performance rights | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Share-based compensation expense | 209 | 423 | 569 | 841 |
Restricted stock | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Share-based compensation expense | 1,119 | 1,586 | 3,190 | 4,958 |
Options | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 1,003 | $ 764 | $ 2,398 | $ 1,310 |
Other Comprehensive Income (L24
Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2016 | Mar. 31, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||||
Beginning balance | $ (6,952) | $ (6,952) | ||||
Current period other comprehensive income (loss) | $ (126) | $ 115 | 501 | $ (387) | ||
Ending balance | (6,451) | (6,451) | ||||
Other-than-temporary impairment loss on available-for-sale securities | 0 | 500 | $ 0 | 519 | $ 0 | |
AFS included in prepaid expenses and other current assets | 2,438 | 2,438 | $ 3,666 | |||
Net Unrealized Gain (Loss) and Impairment on Available-For- Sale Securities | ||||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||||
Beginning balance | (518) | (518) | ||||
Current period other comprehensive income (loss) | 511 | |||||
Ending balance | (7) | (7) | ||||
AFS included in prepaid expenses and other current assets | 14 | 14 | $ 22 | |||
Foreign Currency Translation Adjustments | ||||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||||
Beginning balance | (3,849) | (3,849) | ||||
Current period other comprehensive income (loss) | (550) | |||||
Ending balance | (4,399) | (4,399) | ||||
Unrealized Foreign Exchange Gain (Loss) on Intercompany Balance | ||||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||||
Beginning balance | $ (2,585) | (2,585) | ||||
Current period other comprehensive income (loss) | 540 | |||||
Ending balance | $ (2,045) | $ (2,045) |
Legal Proceedings (Detail)
Legal Proceedings (Detail) - VAT Assessments € in Millions, $ in Millions | 1 Months Ended | ||
Mar. 31, 2014EUR (€) | Mar. 31, 2014USD ($) | Jun. 30, 2016USD ($) | |
Loss Contingencies [Line Items] | |||
VAT assessment paid | € 0.4 | $ 0.6 | |
Range of possible loss, maximum | $ 10.4 |