Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Oct. 30, 2015 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 | |
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 | 231,723,931 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 46,355 | $ 70,933 |
Accounts receivable, net | 422 | 2,011 |
Inventory, net | 2,594 | 4,182 |
Prepaid expenses and other current assets | 3,968 | 3,379 |
Total current assets | 53,339 | 80,505 |
Property and equipment, net | 3,950 | 4,646 |
Other assets | 5,843 | 7,136 |
Total assets | 63,132 | 92,287 |
Current liabilities: | ||
Accounts payable | 13,381 | 6,356 |
Accrued expenses | 17,455 | 19,734 |
Warrant liability | 247 | |
Current portion of deferred revenue | 652 | 826 |
Current portion of long-term debt | 4,300 | 9,014 |
Other current liabilities | 453 | 410 |
Total current liabilities | 36,488 | 36,340 |
Deferred revenue, less current portion | 1,272 | 1,779 |
Long-term debt, less current portion | 47,351 | 8,363 |
Other liabilities | 5,538 | 5,882 |
Total liabilities | $ 90,649 | $ 52,364 |
Commitments and contingencies | ||
Common stock purchase warrants | $ 1,445 | |
Shareholders' equity (deficit): | ||
Common stock, no par value: Authorized shares - 315,000,000 and 215,000,000 at September 30,2015 and December 31,2014, respectively Issued and outstanding shares - 191,841,451 and 176,761,099 at September 30, 2015 and December 31, 2014, respectively | $ 2,053,087 | 2,023,949 |
Accumulated other comprehensive loss | (6,885) | (6,499) |
Accumulated deficit | (2,069,480) | (1,975,695) |
Total CTI shareholders' equity (deficit) | (23,278) | 41,755 |
Noncontrolling interest | (4,239) | (3,277) |
Total shareholders' equity (deficit) | (27,517) | 38,478 |
Total liabilities and shareholders' equity | $ 63,132 | $ 92,287 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2015 | Dec. 31, 2014 |
Statement Of Financial Position [Abstract] | ||
Common stock, no par value | ||
Common Stock, Authorized shares | 315,000,000 | 215,000,000 |
Common Stock, Issued shares | 191,841,451 | 176,761,099 |
Common Stock, outstanding shares | 191,841,451 | 176,761,099 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Revenues: | ||||
Product sales, net | $ 740 | $ 2,021 | $ 2,394 | $ 4,437 |
License and contract revenue | 224 | 37,513 | 2,398 | 37,851 |
Total revenues | 964 | 39,534 | 4,792 | 42,288 |
Operating costs and expenses: | ||||
Cost of product sold | 831 | 252 | 1,204 | 599 |
Research and development | 18,404 | 16,528 | 55,195 | 42,725 |
Selling, general and administrative | 13,682 | 12,563 | 38,603 | 43,104 |
Other operating expense | 2,719 | 253 | 2,719 | |
Total operating costs and expenses | 32,917 | 32,062 | 95,255 | 89,147 |
Income (loss) from operations | (31,953) | 7,472 | (90,463) | (46,859) |
Non-operating income (expense): | ||||
Interest expense | (1,288) | (472) | (2,379) | (1,403) |
Amortization of debt discount and issuance costs | (40) | (185) | (351) | (547) |
Foreign exchange loss | (18) | (2,455) | (561) | (2,621) |
Other non-operating income (expense) | 203 | (993) | (885) | |
Total non-operating expense, net | (1,143) | (3,112) | (4,284) | (5,456) |
Net income (loss) before noncontrolling interest | (33,096) | 4,360 | (94,747) | (52,315) |
Noncontrolling interest | 504 | 243 | 962 | 517 |
Net income (loss) | $ (32,592) | $ 4,603 | $ (93,785) | $ (51,798) |
Net income (loss) per common share: | ||||
Basic | $ (0.19) | $ 0.03 | $ (0.54) | $ (0.36) |
Diluted | $ (0.19) | $ 0.03 | $ (0.54) | $ (0.36) |
Shares used in calculation of earnings (loss) per common share: | ||||
Basic | 176,004 | 145,138 | 175,143 | 143,920 |
Diluted | 176,004 | 147,097 | 175,143 | 143,920 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net income (loss) before noncontrolling interest | $ (33,096) | $ 4,360 | $ (94,747) | $ (52,315) |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments | (33) | 1,214 | 1,462 | 1,261 |
Unrealized foreign exchange gain (loss) on intercompany balance | 42 | (1,832) | ||
Net unrealized income (loss) on securities available-for-sale: | (8) | 10 | (16) | (48) |
Other comprehensive income (loss) | 1 | 1,224 | (386) | 1,213 |
Comprehensive income (loss) | (33,095) | 5,584 | (95,133) | (51,102) |
Comprehensive loss attributable to noncontrolling interest | 504 | 243 | 962 | 517 |
Comprehensive loss attributable to CTI | $ (32,591) | $ 5,827 | $ (94,171) | $ (50,585) |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Operating activities | ||
Net loss | $ (94,747) | $ (52,315) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Share-based compensation expense | 12,997 | 17,022 |
Depreciation and amortization | 757 | 875 |
Loss on debt extinguishment | 1,211 | |
Provision for inventory reserve | 754 | |
Noncash interest expense | 351 | 547 |
Change in value of warrant liability | (135) | 886 |
Other | (128) | 317 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 1,253 | (1,033) |
Other receivable | (17,674) | |
Inventory | 510 | 115 |
Prepaid expenses and other current assets | (652) | 851 |
Other assets | 771 | (753) |
Accounts payable | 7,119 | 1,384 |
Accrued expenses | (2,504) | 6,106 |
Deferred revenue | (681) | 278 |
Other liabilities | 3 | (5) |
Total adjustments | 21,626 | 8,916 |
Net cash used in operating activities | (73,121) | (43,399) |
Investing activities | ||
Purchases of property and equipment | (31) | (258) |
Net cash used in investing activities | (31) | (258) |
Financing activities | ||
Proceeds from common stock offering | 15,700 | |
Proceeds from Hercules debt, net of issuance costs | 5,870 | (73) |
Repayment of Hercules debt | (4,659) | |
Proceeds from Baxalta milestone advance | 32,000 | |
Payment of tax withholding obligations related to stock compensation | (580) | (167) |
Other | 83 | 61 |
Net cash provided by (used in) financing activities | 48,187 | (179) |
Effect of exchange rate changes on cash and cash equivalents | 387 | 2,107 |
Net decrease in cash and cash equivalents | (24,578) | (41,729) |
Cash and cash equivalents at beginning of period | 70,933 | 71,639 |
Cash and cash equivalents at end of period | 46,355 | 29,910 |
Supplemental disclosure of cash flow information | ||
Cash paid during the period for interest | 1,507 | 1,383 |
Supplemental disclosure of noncash financing and investing activities | ||
Issuance of common stock upon exercise of common stock purchase warrants | $ 1,877 | |
Repayment and issuance of Hercules debt | 13,815 | |
Series 21 Preferred Stock | ||
Financing activities | ||
Cash paid for Series 21 preferred stock issuance costs | $ (227) |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Description of Business and Summary of Significant Accounting Policies | 1. 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 CTI, the Company, we, us or our, 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 ® 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 in 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 September 30, 2015 and for the three and nine months ended September 30, 2015 and 2014 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 nine months ended September 30, 2015 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, 2014 included in our Annual Report on Form 10-K filed with the SEC on March 12, 2015. The condensed consolidated balance sheet at December 31, 2014 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. In addition, CTI Commercial LLC, a wholly-owned subsidiary, was included in the consolidated financial statements until dissolution in March 2012. As of September 30, 2015, we also had a 61% 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 September 30, 2015 and December 31, 2014, 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. Our allowance for doubtful accounts balance was $0.2 million as of September 30, 2015 and $0.1 million as of December 31, 2014. Liquidity The accompanying condensed 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 condensed consolidated financial statements. However, we have incurred net losses since inception and expect to generate losses for the next few years primarily due to research and development costs for pacritinib, PIXUVRI, tosedostat and Opaxio. Our available cash and cash equivalents , and subsequent to period end, we raised approximately $46.5 million in net proceeds in an underwritten offering. Subsequent Events We expect that we will 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, 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 is approximately $4.6 million and $4.9 million as of September 30, 2015 and December 31, 2014, of which $4.4 million and $4.7 million is included in other assets prepaid expenses and other current assets 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 production and 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 $0.7 million reserve for excess, obsolete or unsalable inventory was recorded as of September 30, 2015. No reserve was recorded as of December 31, 2014. 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. Where the revenue recognition criteria are not met, we defer the recognition of revenue by recording deferred revenue until such time that all criteria under the provision are met. Product sales We sell PIXUVRI through a limited number of distributors and directly to health care providers in Austria, Denmark, Finland, Germany, Norway, Sweden and the United Kingdom. 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. Government-mandated discounts and rebates Our products are subject to certain programs with government entities in the E.U. whereby pricing on products is discounted below distributor list price to participating health care providers. These discounts are provided to participating health care providers either at the time of sale or through a claim by the participating health care providers for a rebate. Due to estimates and assumptions inherent in determining the amount of government-mandated discounts and rebates, the actual amount of future claims may be different from our estimates, at which time we would adjust our reserves accordingly. Product returns and other deductions At the time of sale, we also record estimates for certain sales deductions such as product returns and distributor discounts and incentives. We offer certain customers a limited right of return or replacement of product that is damaged in certain instances. When we cannot reasonably estimate the amount of future product returns and/or other sales deductions, we do not recognize revenue until the risk of product return and additional sales deductions have been substantially eliminated. Milestone payments In February 2015, under our exclusive license and collaboration agreement with Les Laboratoires Servier and Institut de Recherches Internationales Servier, or the Servier Agreement, we received a €1.5 million milestone payment (or $1.7 million upon conversion from euros as of the date we received the funds) relating to the attainment of reimbursement approval for PIXUVRI in Spain. We allocated the milestone payment based on the relative-selling-price percentages originally used to allocate the arrangement consideration under the Servier Agreement. This revenue was accounted for under the milestone method of accounting since this milestone was determined to be substantive at the inception of the arrangement. 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. During the three months ended March 31, 2015, we have determined that the intercompany balance due from CTILS may no longer be considered of a short-term nature. this change in accounting estimate, favourable unrealized foreign exchange gain of $42,000 and unfavourable unrealized foreign exchange loss of $1.8 million was recorded in cumulative foreign currency translation adjustment account for the three and nine months ended September 30, 2015, respectively. As of September 30, 2015, the intercompany balance due from CTILS was €23.3 million (or $26.0 million upon conversion from euros as of September 30, 2015). Net Income (Loss) Per Share Basic net income (loss) per share 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 net income (loss) per common share 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. Fair Value Measurement Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Fair value measurements are based on a three-tier hierarchy that prioritizes the inputs used to measure fair value. There are three levels of inputs used to measure fair value with Level 1 having the highest priority and Level 3 having the lowest: Level 1 - Observable inputs, such as unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 - Observable inputs other than Level 1 inputs, such as quoted prices for similar assets or liabilities, or other inputs that are observable directly or indirectly. Level 3 - Unobservable inputs that are supported by little or no market activity, requiring an entity to develop its own assumptions. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. Recently Issued Accounting Standards In May 2014, the Financial Accounting Standards Board, or 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. 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 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. Early adoption is allowed for all entities for financial statements that have not been previously issued. The adoption of this standard is not expected to have a material impact on our financial position or results of operations. In July 2015, 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. The adoption of this standard is not expected to have a material impact on our financial position or results of operations. Reclassifications Certain prior year items have been reclassified to conform to current year presentation. |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | 2. Earnings (Loss) Per Share The numerator for both basic and diluted earnings (loss) per share, or EPS, is net income (loss). The denominator for basic EPS (referred to as basic shares) is the weighted average number of common shares outstanding during the period, whereas the denominator for diluted EPS (referred to as diluted shares) also takes into account the dilutive effect of outstanding stock options and restricted stock awards using the treasury stock method. Basic and diluted shares as of the three and nine months ended September 30, 2015 are as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Basic shares 176,004 145,138 175,143 143,920 Effect of dilutive securities — 1,959 — — Diluted shares 176,004 147,097 175,143 143,920 The effect of dilutive securities included unexercised stock options and unvested restricted stock. Equity awards, warrants, and unvested share rights aggregating 14.9 million and 9.4 million shares for the three months ended September 30, 2015 and 2014, respectively, and 14.9 million and 15.1 million shares for the nine months ended September 30, 2015 and 2014, respectively, prior to the application of the treasury stock method, are excluded from the calculation of diluted EPS because they are anti-dilutive. |
Inventory
Inventory | 9 Months Ended |
Sep. 30, 2015 | |
Inventory Disclosure [Abstract] | |
Inventory | 3 . Inventory The components of PIXUVRI inventory consisted of the following as of September 30, 2015 and December 31, 2014 (in thousands): September 30, December 31, 2015 2014 Finished goods $ 1,122 $ 850 Work-in-process 2,185 3,332 Inventory, gross 3,307 4,182 Reserve for expiring inventory (713 ) — Inventory, net $ 2,594 $ 4,182 |
Long-term Debt
Long-term Debt | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Long-term Debt | 4 . Long-term Debt 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, have been assigned Baxter’s rights and obligations under the Original Pacritinib License Agreement. Pursuant to the Pacritinib License Amendment, two potential 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 development milestone payment payable in connection with the regulatory submission to the EMA with respect to pacritinib, or the EMA Milestone, and the $20.0 million development milestone payment payable in connection with the first treatment dosing of the last patient enrolled in PERSIST-2, or the PERSIST-2 Milestone. Under the Pacritinib License Amendment, each of the two milestone advances bears interest at an annual rate of 9% percent 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 event that pacritinib development is terminated due to certain specified reasons or the milestones are not achieved by respective deadlines (December 31, 2016 for the PERSIST-2 Milestone and March 31, 2017 for the EMA Milestone), we would be required to repay the respective advance to Baxalta in eight quarterly installments of $1.5 million relating to the EMA Milestone and $2.5 million relating to the PERSIST-2 Milestone, in each case beginning 30 days after the end of the calendar quarter of the first occurrence of such event, and a final payment equal to the remainder of the unpaid balance. Repayment of the advances will be accelerated in the event of the commencement of insolvency proceedings and certain other events of default. If a milestone is achieved, however, then we would remain entitled to the respective milestone payments. Additionally, in the event that we do not spend a specified amount on the development of pacritinib from the date of the amendment through February 29, 2016, payments to Baxalta in an amount equal to such deficiency may be required or credited against amounts owed to us under certain circumstances. In connection with this advance, we recorded debt issuance costs of $0.1 million. As of September 30, 2015, the outstanding balance of such advance was $32.0 million, and the unamortized issuance costs were $0.1 million. Hercules In June 2015, we entered into the Third Amendment, or the Third Amendment, to the Loan and Security Agreement, or the Loan Agreement, with Hercules Technology Growth Capital, Inc. and certain affiliates, or collectively, Hercules. Under the Third Amendment, Hercules agreed to provide term loans in an aggregate principal amount of up to $25.0 million, inclusive of the principal balance outstanding immediately prior to closing of the Third Amendment of $13.8 million, or collectively, the Term Loan Borrowings. We drew $6.2 million upon closing of the Third Amendment, resulting in a then-outstanding principal balance of $20.0 million under the Term Loan Borrowings. The remaining $5.0 million is available for borrowing at our option through June 30, 2016, subject to certain conditions. In connection with the Third Amendment, we paid a commitment fee of $15,000 and a facility charge of $0.3 million. The provision under the Loan Agreement requiring us to pay a fee to Hercules of $1.3 million on the date of repayment of the borrowings thereunder was amended pursuant to the Third Amendment, such that the fee will now be payable on the earliest to occur of (1) October 1, 2016, (2) the date on which the Term Loan Borrowings are prepaid in full or (3) the date on which the Term Loan Borrowings become due and payable in full. The interest rate on the Term Loan Borrowings floats at a rate per annum equal to 10.95% plus the amount by which the prime rate exceeds 3.25%. We are initially required to make interest payments only on a monthly basis, followed by the 36 equal monthly installments of principal and interest (mortgage style) commencing on January 1, 2016. The interest-only period may be extended by up to six months at our option if we achieve certain milestones by certain specified deadlines. We may elect to prepay some or all of the Term Loan Borrowings at any time subject to a prepayment fee, if any, pursuant to the terms of the Third Amendment. Under certain circumstances, we may be required to prepay the Term Loan Borrowings with proceeds of asset dispositions. The Term Loan Borrowings are secured by a first priority security interest on substantially all of our personal property except our intellectual property and subject to certain other exceptions. In connection with the Third Amendment, we issued a warrant to Hercules to purchase shares of common stock. The warrant is exercisable for five years from the date of issuance for 0.3 million shares of common stock at an initial exercise price is $1.71 per share. The exercise price is subject to adjustment if, within six months after closing of the Third Amendment, we issue shares of common stock or securities that are exercisable or convertible into shares of common stock in transactions not registered under the Securities Act of 1933, as amended, under certain circumstances at an effective price per share of common stock that is less than the then-effective exercise price of the warrant. In such case, the exercise price shall automatically be reduced to equal the price per share of common stock in such transaction. The exercise price under the warrant and the number of shares for which the warrant is exercisable are each subject to certain customary adjustments as set forth in the agreement representing the warrant. Since the warrant does not meet the considerations necessary for equity classification under the applicable authoritative guidance, we determined the warrant is a liability instrument that is marked to fair value with changes in fair value recognized through earnings at each reporting period. The warrant is categorized as Level 2 in the fair value hierarchy as the significant inputs used in determining fair value are considered observable market data. As of the issuance date and September 30, 2015, we estimate the fair value of the warrant to be $0.4 million and $0.2 million, respectively. The modified terms under the Third Amendment are considered substantially different as compared to the terms of the Loan Agreement immediately prior to the Third Amendment, pursuant to ASC 470-50, Modification and Extinguishment other non-operating expense. As of September 30, 2015 and December 31, 2014, the outstanding principal balance under our Loan Agreement, as amended by the Third Amendment, was $20.0 million and $18.5 million, unamortized debt discount was $0.3 million and $1.1 million, and unamortized issuance costs were $0.1 million and $0.2 million, respectively. |
Common Stock
Common Stock | 9 Months Ended |
Sep. 30, 2015 | |
Equity [Abstract] | |
Common Stock | 5 . Common Stock In September 2015, we entered into a subscription agreement with certain affiliates of BVF Partners L.P., or, collectively, BVF. Pursuant to the Subscription Agreement, we issued to BVF an aggregate of 10,000,000 shares of common stock at a purchase price per share of $1.57. The shares of common stock were offered directly to BVF without a placement agent or underwriter. The net proceeds from the offering, after deducting offering expenses, were approximately $15.1 million. |
Legal Proceedings
Legal Proceedings | 9 Months Ended |
Sep. 30, 2015 | |
Commitments And Contingencies Disclosure [Abstract] | |
Legal Proceedings | 6 . Legal Proceedings As previously disclosed, o n December 10, 2009, the Commissione Nazionale per le Società e la Borsa (which is the public authority responsible for regulating the Italian securities markets), or CONSOB, sent us a notice claiming, among other things, violation of the provisions of Section 114, paragraph 1 of the Italian Legislative Decree no. 58/98 due to the asserted late disclosure of the contents of the opinion expressed by Stonefield Josephson, Inc., an independent registered public accounting firm, with respect to our 2008 financial statements. However, we understand that, according to applicable Italian law provisions as interpreted by applicable case law, CONSOB’s right to pursue a pecuniary administrative sanction is considered barred due to the passage of time. The Italian Tax Authority, or the ITA, issued notices of assessment to CTI (Europe) based on the ITA’s audit of CTI (Europe)’s value added tax, or 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 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 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 $10.5 On May 13, 2015, the Company (as nominal defendant) and our directors (as individual defendants) entered into a memorandum of understanding to settle the pending lawsuit in King County Superior Court in the State of Washington docketed as Lopez & Gilbert v. Nudelman, et al · We will cancel and the non-employee directors will agree to the rescission of all currently outstanding equity awards that we previously granted to non-employee directors that included performance-based vesting metrics and as to which the performance goals remained unsatisfied as of May 13, 2015; · Our current non-employee directors will agree to hold (not transfer or sell or encumber in any way) until September 14, 2015 shares of our stock that they currently own and that we awarded to them during 2011, or at any time after 2011 to the present, and that, at the time of the award by us, was fully-vested and unrestricted; · We will cap the total annual compensation provided by it to its non-employee directors for each of 2015 and 2016. Such annual compensation cap for each non-employee director for each of 2015 and 2016 will be the greater of (i) $375,000, plus, as to our Board Chairman, an additional $100,000, or (ii) the 75th percentile of compensation paid by a group of peer companies to their non-employee directors (and, in the case of our Chairman, the 75th percentile of compensation paid by such peers who have a non-employee director chair of their respective board of directors to such non-employee director chairs). The peer group for these purposes will be selected based on advice from the outside compensation consultant. For purposes of the compensation cap and the peer group comparison, compensation will be determined and measured consistent with the rules under Item 402 of Regulation S-K under the Securities Exchange Act of 1934, as amended, and based on publicly-available information at the applicable time · We will implement, if not already implemented, within 90 days following final approval of the Settlement by the court, and maintain until at least the end of calendar year 2017 the following: an annual board discussion of non-employee director compensation philosophy; the use of a compensation consultant to advise the Compensation Committee on material decisions concerning non-employee director compensation issues and compare our non-employee director compensation program to a group of our peers; the use of plain language in our compensation-related public filings; and obtain confirmation from our legal department and outside legal counsel advising on executive compensation matters that any contemplated non-employee director awards do not materially violate the applicable plan or materially fail to comply with applicable law. On September 24, 2015, the court issued an order granting preliminary approval to the Settlement. The court has scheduled a final hearing on December 10, 2015 to determine, among other things, whether it should issue an order for final approval of the Settlement We currently anticipate that we will be obligated to pay an amount for plaintiffs’ legal fees and expenses, which will ultimately be subject to court approval. However, in light of our existing insurance coverage, we do not anticipate that the payment of the ultimate fee award will have a material effect on our financial position or results of operations. The amount of our reasonable estimate of liability as of September 30, 2015, though immaterial, was accrued for in our financial statements as of September 30, 2015. |
Share-based Compensation Expens
Share-based Compensation Expense | 9 Months Ended |
Sep. 30, 2015 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Share-based Compensation Expense | 7 . Share-based Compensation Expense The following table summarizes share-based compensation expense for the three and nine months ended September 30, 2015 and 2014, which was allocated as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Research and development $ 1,430 $ 801 $ 3,168 $ 2,617 Selling, general and administrative 4,458 3,036 9,829 14,405 Total share-based compensation expense $ 5,888 $ 3,837 $ 12,997 $ 17,022 For the three and nine months ended September 30, 2015 and 2014, we incurred share-based compensation expense due to the following types of awards (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Performance rights $ 3,262 $ 427 $ 4,103 $ 1,121 Restricted stock 1,796 2,864 6,754 12,512 Options 830 546 2,140 3,389 Total share-based compensation expense $ 5,888 $ 3,837 $ 12,997 $ 17,022 |
Other Comprehensive Income (Los
Other Comprehensive Income (Loss) | 9 Months Ended |
Sep. 30, 2015 | |
Equity [Abstract] | |
Other Comprehensive Income (Loss) | 8 . Other Comprehensive Income (Loss) Total accumulated other comprehensive income (loss) consisted of the following (in thousands): Net Unrealized Loss on Securities Available-For- Sale Foreign Currency Translation Adjustments Unrealize d foreign exchange loss on intercompany balance Accumulated Other Comprehensive Loss December 31, 2014 $ (490 ) $ (6,009 ) $ — $ (6,499 ) Current period other comprehensive income (loss) (16 ) 1,462 (1,832 ) (386 ) September 30, 2015 $ (506 ) $ (4,547 ) $ (1,832 ) $ (6,885 ) |
Leases
Leases | 9 Months Ended |
Sep. 30, 2015 | |
Leases [Abstract] | |
Leases | 9 . Leases Our deferred rent balance was $4.1 million as of September 30, 2015, of which $0.5 million was included in other current liabilities other liabilities other current liabilities other liabilities |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | 10 . Subsequent Events In October 2015, in an underwritten public offering, we issued 50,000 shares of our Series N-1 convertible preferred stock, or Series N-1 Preferred Stock, for gross proceeds of $50.0 million b efore deducting underwriting commissions and discounts and other offering costs including $3.0 million in underwriting commissions and discounts The Series N-1 Preferred Stock was convertible at the holder’s option at an initial conversion price of $1.25 per share of common stock. Each share of Series N-1 Preferred Stock was entitled to a liquidation preference equal to the initial stated value of $1,000 per share of Series N-1 Preferred Stock, plus any declared and unpaid dividends, and any other payments that may be due on such shares, before any distribution of assets may be made to holders of capital stock ranking junior to the Series N-1 Preferred Stock. The Series N-1 Preferred Stock was not entitled to dividends except to share in any dividends actually paid on common stock or any pari passu In October 2015, all 50,000 shares of Series N-1 Preferred Stock were converted into 40.0 million shares of common stock. |
Description of Business and S17
Description of Business and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
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 CTI, the Company, we, us or our, 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 ® 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 in 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 September 30, 2015 and for the three and nine months ended September 30, 2015 and 2014 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 nine months ended September 30, 2015 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, 2014 included in our Annual Report on Form 10-K filed with the SEC on March 12, 2015. The condensed consolidated balance sheet at December 31, 2014 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. In addition, CTI Commercial LLC, a wholly-owned subsidiary, was included in the consolidated financial statements until dissolution in March 2012. As of September 30, 2015, we also had a 61% 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 September 30, 2015 and December 31, 2014, 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. Our allowance for doubtful accounts balance was $0.2 million as of September 30, 2015 and $0.1 million as of December 31, 2014. |
Liquidity | Liquidity The accompanying condensed 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 condensed consolidated financial statements. However, we have incurred net losses since inception and expect to generate losses for the next few years primarily due to research and development costs for pacritinib, PIXUVRI, tosedostat and Opaxio. Our available cash and cash equivalents , and subsequent to period end, we raised approximately $46.5 million in net proceeds in an underwritten offering. Subsequent Events We expect that we will 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, 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 | 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 is approximately $4.6 million and $4.9 million as of September 30, 2015 and December 31, 2014, of which $4.4 million and $4.7 million is included in other assets prepaid expenses and other current assets |
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 production and 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 $0.7 million reserve for excess, obsolete or unsalable inventory was recorded as of September 30, 2015. No reserve was recorded as of December 31, 2014. |
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. Where the revenue recognition criteria are not met, we defer the recognition of revenue by recording deferred revenue until such time that all criteria under the provision are met. Product sales We sell PIXUVRI through a limited number of distributors and directly to health care providers in Austria, Denmark, Finland, Germany, Norway, Sweden and the United Kingdom. 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. Government-mandated discounts and rebates Our products are subject to certain programs with government entities in the E.U. whereby pricing on products is discounted below distributor list price to participating health care providers. These discounts are provided to participating health care providers either at the time of sale or through a claim by the participating health care providers for a rebate. Due to estimates and assumptions inherent in determining the amount of government-mandated discounts and rebates, the actual amount of future claims may be different from our estimates, at which time we would adjust our reserves accordingly. Product returns and other deductions At the time of sale, we also record estimates for certain sales deductions such as product returns and distributor discounts and incentives. We offer certain customers a limited right of return or replacement of product that is damaged in certain instances. When we cannot reasonably estimate the amount of future product returns and/or other sales deductions, we do not recognize revenue until the risk of product return and additional sales deductions have been substantially eliminated. Milestone payments In February 2015, under our exclusive license and collaboration agreement with Les Laboratoires Servier and Institut de Recherches Internationales Servier, or the Servier Agreement, we received a €1.5 million milestone payment (or $1.7 million upon conversion from euros as of the date we received the funds) relating to the attainment of reimbursement approval for PIXUVRI in Spain. We allocated the milestone payment based on the relative-selling-price percentages originally used to allocate the arrangement consideration under the Servier Agreement. This revenue was accounted for under the milestone method of accounting since this milestone was determined to be substantive at the inception of the arrangement. |
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. During the three months ended March 31, 2015, we have determined that the intercompany balance due from CTILS may no longer be considered of a short-term nature. this change in accounting estimate, favourable unrealized foreign exchange gain of $42,000 and unfavourable unrealized foreign exchange loss of $1.8 million was recorded in cumulative foreign currency translation adjustment account for the three and nine months ended September 30, 2015, respectively. As of September 30, 2015, the intercompany balance due from CTILS was €23.3 million (or $26.0 million upon conversion from euros as of September 30, 2015). |
Net Income (Loss) Per Share | Net Income (Loss) Per Share Basic net income (loss) per share 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 net income (loss) per common share 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. |
Fair Value Measurement | Fair Value Measurement Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Fair value measurements are based on a three-tier hierarchy that prioritizes the inputs used to measure fair value. There are three levels of inputs used to measure fair value with Level 1 having the highest priority and Level 3 having the lowest: Level 1 - Observable inputs, such as unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 - Observable inputs other than Level 1 inputs, such as quoted prices for similar assets or liabilities, or other inputs that are observable directly or indirectly. Level 3 - Unobservable inputs that are supported by little or no market activity, requiring an entity to develop its own assumptions. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In May 2014, the Financial Accounting Standards Board, or 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. 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 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. Early adoption is allowed for all entities for financial statements that have not been previously issued. The adoption of this standard is not expected to have a material impact on our financial position or results of operations. In July 2015, 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. The adoption of this standard is not expected to have a material impact on our financial position or results of operations. |
Reclassifications | Reclassifications Certain prior year items have been reclassified to conform to current year presentation. |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Shares | Basic and diluted shares as of the three and nine months ended September 30, 2015 are as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Basic shares 176,004 145,138 175,143 143,920 Effect of dilutive securities — 1,959 — — Diluted shares 176,004 147,097 175,143 143,920 |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Inventory Disclosure [Abstract] | |
Components of Inventories | The components of PIXUVRI inventory consisted of the following as of September 30, 2015 and December 31, 2014 (in thousands): September 30, December 31, 2015 2014 Finished goods $ 1,122 $ 850 Work-in-process 2,185 3,332 Inventory, gross 3,307 4,182 Reserve for expiring inventory (713 ) — Inventory, net $ 2,594 $ 4,182 |
Share-based Compensation Expe20
Share-based Compensation Expense (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Share-Based Compensation Expense | The following table summarizes share-based compensation expense for the three and nine months ended September 30, 2015 and 2014, which was allocated as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Research and development $ 1,430 $ 801 $ 3,168 $ 2,617 Selling, general and administrative 4,458 3,036 9,829 14,405 Total share-based compensation expense $ 5,888 $ 3,837 $ 12,997 $ 17,022 |
Share-Based Compensation Expense by Types of Awards | For the three and nine months ended September 30, 2015 and 2014, we incurred share-based compensation expense due to the following types of awards (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Performance rights $ 3,262 $ 427 $ 4,103 $ 1,121 Restricted stock 1,796 2,864 6,754 12,512 Options 830 546 2,140 3,389 Total share-based compensation expense $ 5,888 $ 3,837 $ 12,997 $ 17,022 |
Other Comprehensive Income (L21
Other Comprehensive Income (Loss) (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Equity [Abstract] | |
Total Accumulated Other Comprehensive Income (Loss) | Total accumulated other comprehensive income (loss) consisted of the following (in thousands): Net Unrealized Loss on Securities Available-For- Sale Foreign Currency Translation Adjustments Unrealize d foreign exchange loss on intercompany balance Accumulated Other Comprehensive Loss December 31, 2014 $ (490 ) $ (6,009 ) $ — $ (6,499 ) Current period other comprehensive income (loss) (16 ) 1,462 (1,832 ) (386 ) September 30, 2015 $ (506 ) $ (4,547 ) $ (1,832 ) $ (6,885 ) |
Description of Business and S22
Description of Business and Summary of Significant Accounting Policies - Additional Information (Detail) $ in Thousands, € in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||
Oct. 31, 2015USD ($) | Feb. 28, 2015USD ($) | Feb. 28, 2015EUR (€) | Sep. 30, 2015USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2015EUR (€) | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | Dec. 31, 2013USD ($) | |
Description Of Business And Significant Accounting Policies [Line Items] | |||||||||
Allowance for doubtful accounts | $ 200 | $ 200 | $ 100 | ||||||
Cash and cash equivalents | 46,355 | 46,355 | 70,933 | $ 29,910 | $ 71,639 | ||||
VAT receivable | 4,600 | 4,600 | 4,900 | ||||||
Reserve for excess, obsolete or unsalable inventory | 713 | 713 | 0 | ||||||
Unrealized foreign exchange gain (loss) on intercompany balance | 42 | (1,832) | |||||||
Intercompany foreign currency balance, amount | 26,000 | 26,000 | € 23.3 | ||||||
Other Assets | |||||||||
Description Of Business And Significant Accounting Policies [Line Items] | |||||||||
VAT receivable, non-current | 4,400 | 4,400 | 4,700 | ||||||
Prepaid Expenses and Other Current Assets | |||||||||
Description Of Business And Significant Accounting Policies [Line Items] | |||||||||
VAT receivable, current | 200 | $ 200 | $ 200 | ||||||
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 | $ 4,400 | |||||||
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 | ||||||||
Subsequent Event | |||||||||
Description Of Business And Significant Accounting Policies [Line Items] | |||||||||
Net proceeds in underwritten offering | $ 46,500 | ||||||||
Aequus Biopharma, Inc | Affiliated Entity | |||||||||
Description Of Business And Significant Accounting Policies [Line Items] | |||||||||
Interest in majority-owned subsidiary | 61.00% | 61.00% | 61.00% | ||||||
Servier | Collaborative Arrangement Product Agreement | Up-front Payment Arrangement | |||||||||
Description Of Business And Significant Accounting Policies [Line Items] | |||||||||
Total consideration received | $ 1,700 | € 1.5 |
Schedule of Basic and Diluted S
Schedule of Basic and Diluted Shares (Detail) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Earnings Per Share [Abstract] | ||||
Basic | 176,004 | 145,138 | 175,143 | 143,920 |
Effect of dilutive securities | 1,959 | |||
Diluted shares | 176,004 | 147,097 | 175,143 | 143,920 |
Earnings (Loss) Per Share - Add
Earnings (Loss) Per Share - Additional Information (Detail) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Earnings Per Share [Abstract] | ||||
Anti-dilutive securities excluded from computation of earnings per share amount | 14.9 | 9.4 | 14.9 | 15.1 |
Components of Inventories (Deta
Components of Inventories (Detail) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 1,122 | $ 850 |
Work-in-process | 2,185 | 3,332 |
Inventory, gross | 3,307 | 4,182 |
Reserve for expiring inventory | (713) | 0 |
Inventory, net | $ 2,594 | $ 4,182 |
Long-term Debt - Additional Inf
Long-term Debt - Additional Information (Detail) $ / shares in Units, shares in Millions | 1 Months Ended | 9 Months Ended | ||
Jun. 30, 2015USD ($)PaymentInstallment$ / sharesshares | Sep. 30, 2015USD ($) | May. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Debt Instrument [Line Items] | ||||
Loss on debt extinguishment | $ 1,211,000 | |||
Borrowing Associated With License Agreement | ||||
Debt Instrument [Line Items] | ||||
Debt outstanding | $ 32,000,000 | |||
Milestone advance interest rate | 9.00% | |||
Baxalta | Borrowing Associated With License Agreement | ||||
Debt Instrument [Line Items] | ||||
Number of milestone payments | Payment | 2 | |||
Frequency of periodic payment | Quarterly installments | |||
Period of milestone payment | 30 days | |||
Debt issuance cost | $ 100,000 | |||
Debt instrument outstanding amount | $ 32,000,000 | |||
Debt instrument unamortized issuance cost | 100,000 | |||
Baxalta | EMA Milestone | Borrowing Associated With License Agreement | ||||
Debt Instrument [Line Items] | ||||
Debt outstanding | $ 12,000,000 | |||
Milestone advance repayment number of quarterly installments | Installment | 8 | |||
Milestone advance quarterly repayment amount | $ 1,500,000 | |||
Baxalta | PERSIST-2 Milestone | Borrowing Associated With License Agreement | ||||
Debt Instrument [Line Items] | ||||
Debt outstanding | $ 20,000,000 | |||
Milestone advance repayment number of quarterly installments | Installment | 8 | |||
Milestone advance quarterly repayment amount | $ 2,500,000 | |||
Hercules Technology Growth Capital, Inc | Secured Debt | ||||
Debt Instrument [Line Items] | ||||
Warrant exercisable period | 5 years | |||
Number of warrant issued | shares | 0.3 | |||
Warrant exercise price | $ / shares | $ 1.71 | |||
Hercules Technology Growth Capital, Inc | Secured Debt | Warrant | ||||
Debt Instrument [Line Items] | ||||
Warrant liability | $ 400,000 | 200,000 | ||
Hercules Technology Growth Capital, Inc | Term Loan | Secured Debt | ||||
Debt Instrument [Line Items] | ||||
Debt instrument outstanding amount | 20,000,000 | 20,000,000 | $ 13,800,000 | $ 18,500,000 |
Debt instrument unamortized issuance cost | $ 100,000 | 200,000 | ||
Loan agreement, maximum borrowing capacity | 25,000,000 | |||
Drew upon closing amendment | 6,200,000 | |||
Remaining available for borrowing | 5,000,000 | |||
Commitment fee | 15,000 | |||
Facility charge | 300,000 | |||
Fee amount on term loan | $ 1,300,000 | |||
Interest rate terms | The interest rate on the Term Loan Borrowings floats at a rate per annum equal to 10.95% plus the amount by which the prime rate exceeds 3.25%. | |||
Debt instrument stated interest rate percentage, minimum | 10.95% | |||
Debt instrument number of monthly installments | Installment | 36 | |||
Principal and interest payment commencing date | Jan. 1, 2016 | |||
Interest-only extension period | 6 months | |||
Debt instrument unamortized discount | $ 300,000 | $ 1,100,000 | ||
Hercules Technology Growth Capital, Inc | Term Loan | Secured Debt | Other Non-operating Income Expense | ||||
Debt Instrument [Line Items] | ||||
Loss on debt extinguishment | $ 1,200,000 | |||
Hercules Technology Growth Capital, Inc | Term Loan | Secured Debt | Prime Rate | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, basis spread on variable rate | 3.25% |
Common Stock - Additional Infor
Common Stock - Additional Information (Detail) $ / shares in Units, $ in Millions | 1 Months Ended |
Sep. 30, 2015USD ($)$ / sharesshares | |
Equity [Abstract] | |
Stock issued during period, shares | shares | 10,000,000 |
Stock issued during period purchase price, per share | $ / shares | $ 1.57 |
Proceeds from common stock offering | $ 15.1 |
Legal Proceedings - Additional
Legal Proceedings - Additional Information (Detail) € in Millions | May. 13, 2015USD ($) | Mar. 31, 2014USD ($) | Mar. 31, 2014EUR (€) | Sep. 30, 2015USD ($) |
Directors | ||||
Loss Contingencies [Line Items] | ||||
Non-employee annual compensation subsequent to litigation settlement | $ 375,000 | |||
Non-Employee Director | ||||
Loss Contingencies [Line Items] | ||||
Non-employee annual compensation subsequent to litigation settlement | 375,000 | |||
Non-employee additional compensation subsequent to litigation settlement | $ 100,000 | |||
VAT Assessments | ||||
Loss Contingencies [Line Items] | ||||
Taxes paid | $ 600,000 | € 0.4 | ||
Range of possible loss, maximum | $ 10,500,000 |
Summary of Share-Based Compensa
Summary of Share-Based Compensation Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | $ 5,888 | $ 3,837 | $ 12,997 | $ 17,022 |
Research and development | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 1,430 | 801 | 3,168 | 2,617 |
Selling, general and administrative | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | $ 4,458 | $ 3,036 | $ 9,829 | $ 14,405 |
Share-Based Compensation Expe30
Share-Based Compensation Expense by Types of Awards (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 5,888 | $ 3,837 | $ 12,997 | $ 17,022 |
Performance Rights | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Share-based compensation expense | 3,262 | 427 | 4,103 | 1,121 |
Restricted stock | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Share-based compensation expense | 1,796 | 2,864 | 6,754 | 12,512 |
Stock Options | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 830 | $ 546 | $ 2,140 | $ 3,389 |
Total Accumulated Other Compreh
Total Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Beginning balance | $ (6,499) | |||
Current period other comprehensive income (loss) | $ 1 | $ 1,224 | (386) | $ 1,213 |
Ending balance | (6,885) | (6,885) | ||
Net Unrealized Loss on Securities Available-for-sale | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Beginning balance | (490) | |||
Current period other comprehensive income (loss) | (16) | |||
Ending balance | (506) | (506) | ||
Foreign Currency Translation Adjustments | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Beginning balance | (6,009) | |||
Current period other comprehensive income (loss) | 1,462 | |||
Ending balance | (4,547) | (4,547) | ||
Unrealized Foreign Exchange Loss on Intercompany Balance | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Current period other comprehensive income (loss) | (1,832) | |||
Ending balance | $ (1,832) | $ (1,832) |
Leases - Additional Information
Leases - Additional Information (Detail) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Leases [Abstract] | ||
Deferred rent credit | $ 4.1 | $ 4.4 |
Deferred rent credit, other current Liabilities | 0.5 | 0.4 |
Deferred rent credit, other Liabilities | $ 3.6 | $ 4 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | |
Oct. 31, 2015 | Sep. 30, 2015 | |
Subsequent Event [Line Items] | ||
Stock issued during period, shares | 10,000,000 | |
Subsequent Event | Series N-1 Preferred Stock | ||
Subsequent Event [Line Items] | ||
Stock issued during period, shares | 50,000 | |
Proceed from issuance of preferred stock | $ 50 | |
Issuance Costs | $ 3.5 | |
Conversion Price per Share | $ 1.25 | |
Preferred stock, description of liquidation preference | Each share of Series N-1 Preferred Stock was entitled to a liquidation preference equal to the initial stated value of $1,000 per share of Series N-1 Preferred Stock, plus any declared and unpaid dividends, and any other payments that may be due on such shares, before any distribution of assets may be made to holders of capital stock ranking junior to the Series N-1 Preferred Stock. | |
Preferred stock stated value | $ 1,000 | |
Number of preferred stock converted to common stock | 50,000 | |
Conversion of preferred stock to common stock (in shares) | 40,000,000 | |
Subsequent Event | Series N-1 Preferred Stock | Underwriting Commissions and Discounts | ||
Subsequent Event [Line Items] | ||
Issuance Costs | $ 3 |