Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2014 | 5-May-14 | |
Document Information [Line Items] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 31-Mar-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
Trading Symbol | 'MNKD | ' |
Entity Registrant Name | 'MANNKIND CORP | ' |
Entity Central Index Key | '0000899460 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 388,615,163 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $35,759 | $70,790 |
Prepaid expenses and other current assets | 3,640 | 5,485 |
Total current assets | 39,399 | 76,275 |
Property and equipment - net | 176,337 | 176,557 |
State research and development credit exchange receivable - net of current portion | 380 | 298 |
Other assets | 8,437 | 5,516 |
Total | 224,553 | 258,646 |
Current liabilities: | ' | ' |
Accounts payable | 3,638 | 3,860 |
Accrued expenses and other current liabilities | 15,006 | 21,634 |
Facility financing obligation | 25,871 | 102,300 |
Total current liabilities | 44,515 | 127,794 |
Senior convertible notes | 98,662 | 98,439 |
Note payable to principal stockholder | 49,521 | 49,521 |
Other liabilities | 14,319 | 13,605 |
Total liabilities | 207,017 | 289,359 |
Commitments and contingencies | ' | ' |
Stockholders' equity (deficit): | ' | ' |
Undesignated preferred stock, $0.01 par value - 10,000,000 shares authorized; no shares issued or outstanding at March 31, 2014 and December 31, 2013 | ' | ' |
Common stock, $0.01 par value - 550,000,000 shares authorized at March 31, 2014 and December 31, 2013; 386,934,914 and 369,391,972 shares issued and outstanding at March 31, 2014 and December 31, 2013, respectively | 3,869 | 3,697 |
Additional paid-in capital | 2,362,129 | 2,261,996 |
Accumulated other comprehensive loss | -4 | -4 |
Deficit accumulated during the development stage | -2,348,458 | -2,296,402 |
Total stockholders' equity (deficit) | 17,536 | -30,713 |
Total | $224,553 | $258,646 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
Undesignated preferred stock, par value | $0.01 | $0.01 |
Undesignated preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Undesignated preferred stock, shares issued | ' | ' |
Undesignated preferred stock, shares outstanding | ' | ' |
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 550,000,000 | 550,000,000 |
Common stock, shares issued | 386,934,914 | 369,391,972 |
Common stock, shares outstanding | 386,934,914 | 369,391,972 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (USD $) | 3 Months Ended | 277 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 |
Revenue | ' | ' | $3,166 |
Operating expenses: | ' | ' | ' |
Research and development | 26,182 | 26,398 | 1,603,474 |
General and administrative | 15,229 | 10,039 | 500,615 |
In-process research and development costs | ' | ' | 19,726 |
Goodwill impairment | ' | ' | 151,428 |
Total operating expenses | 41,411 | 36,437 | 2,275,243 |
Loss from operations | -41,411 | -36,437 | -2,272,077 |
Other income (expense) | -5,890 | 23 | -8,792 |
Interest expense on note payable to principal stockholder | -714 | -1,689 | -45,848 |
Interest expense on notes | -4,042 | -2,863 | -59,128 |
Interest income | 1 | 1 | 37,005 |
Loss before benefit for income taxes | -52,056 | -40,965 | -2,348,840 |
Income tax benefit | ' | ' | 382 |
Net loss | -52,056 | -40,965 | -2,348,458 |
Deemed dividend related to beneficial conversion feature of convertible preferred stock | ' | ' | -22,260 |
Accretion on redeemable preferred stock | ' | ' | -952 |
Net loss applicable to common stockholders | ($52,056) | ($40,965) | ($2,371,670) |
Net loss per share applicable to common stockholders - basic and diluted | ($0.14) | ($0.15) | ' |
Shares used to compute basic and diluted net loss per share applicable to common stockholders | 368,784 | 280,058 | ' |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Comprehensive Loss (USD $) | 3 Months Ended | 277 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 |
Net loss | ($52,056) | ($40,965) | ($2,348,458) |
Other comprehensive loss: | ' | ' | ' |
Cumulative translation (loss) gain | ' | -2 | -4 |
Unrealized gain (loss) on investments: | ' | ' | ' |
Unrealized holding gain (loss) during the period | ' | ' | 48 |
Less: reclassification adjustment for gains (losses) included in net loss | ' | ' | -48 |
Net unrealized (loss) gain on investments | ' | ' | ' |
Other comprehensive loss | ' | -2 | -4 |
Comprehensive loss | ($52,056) | ($40,967) | ($2,348,462) |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | 277 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 |
CASH FLOWS FROM OPERATING ACTIVITIES: | ' | ' | ' |
Net loss | ($52,056) | ($40,965) | ($2,348,458) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' | ' |
Depreciation and accretion | 9,394 | 3,348 | 150,228 |
Stock-based compensation expense | 10,937 | 5,189 | 194,042 |
Stock expense for shares issued pursuant to research agreement | ' | ' | 3,018 |
(Gain) loss on sale, abandonment/disposal or impairment of property and equipment | ' | ' | 25,070 |
Accrued interest on investments, net of amortization of discounts | ' | ' | -191 |
In-process research and development | ' | ' | 19,726 |
Goodwill impairment | ' | ' | 151,428 |
Loss on available-for-sale securities | ' | ' | 990 |
Litigation settlement in stock | ' | ' | 6,494 |
Fair value of forward purchase contract | ' | ' | 1,237 |
Other, net | ' | -2 | 1,101 |
Changes in assets and liabilities: | ' | ' | ' |
State research and development credit exchange receivable | -82 | -78 | -379 |
Prepaid expenses and other current assets | 1,845 | 690 | -1,690 |
Other assets | ' | ' | -230 |
Accounts payable | -1,038 | -924 | 2,309 |
Accrued expenses and other current liabilities | -6,704 | 715 | 32,019 |
Other liabilities | 714 | ' | 1,303 |
Net cash used in operating activities | -36,990 | -32,027 | -1,761,983 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ' | ' | ' |
Purchase of marketable securities | ' | ' | -796,779 |
Sales and maturities of marketable securities | ' | ' | 796,393 |
Purchase of property and equipment | -1,409 | -1,459 | -337,142 |
Proceeds from sale of property and equipment | ' | ' | 454 |
Net cash used in investing activities | -1,409 | -1,459 | -337,074 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' | ' |
Issuance of common stock and warrants, net of issuance costs | 1,463 | 78 | 1,451,640 |
Collection of Series C convertible preferred stock subscriptions receivable | ' | ' | 50,000 |
Issuance of Series B convertible preferred stock for cash | ' | ' | 15,000 |
Cash received for common stock to be issued | ' | ' | 3,900 |
Repurchase of common stock | ' | ' | -1,028 |
Put shares sold to majority stockholder | ' | ' | 623 |
Exercise of warrants for common stock | 1,938 | ' | 96,085 |
Borrowings under lines of credit | ' | ' | 4,220 |
Payment of 2013 notes | ' | ' | -115,000 |
Proceeds from notes receivables | ' | ' | 1,742 |
Proceeds from issuance of facility financing obligation & milestone rights | ' | ' | 119,500 |
Facility financing obligation & milestone rights issuance costs | ' | ' | -598 |
Borrowings on notes payable to principal stockholder | ' | ' | 387,750 |
Principal payments on notes payable to principal stockholder | ' | ' | -70,000 |
Borrowings on notes payable | ' | ' | 3,460 |
Principal payments on notes payable | ' | ' | -1,667 |
Proceeds from senior convertible notes | ' | ' | 207,050 |
Payment of employment taxes related to vested restricted stock units | -33 | -427 | -17,861 |
Net cash provided by (used in) financing activities | 3,368 | -349 | 2,134,816 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | -35,031 | -33,835 | 35,759 |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 70,790 | 61,840 | ' |
CASH AND CASH EQUIVALENTS, END OF PERIOD | 35,759 | 28,005 | 35,759 |
SUPPLEMENTAL CASH FLOWS DISCLOSURES: | ' | ' | ' |
Cash paid for income taxes | ' | ' | 26 |
Interest paid in cash, net of amounts capitalized | 4,678 | 2,863 | 77,282 |
Accretion on redeemable convertible preferred stock | ' | ' | -952 |
Issuance of common stock upon conversion of notes payable | ' | ' | 3,331 |
Increase in additional paid-in capital resulting from merger | ' | ' | 171,154 |
Issuance of common stock for notes receivable | ' | ' | 2,758 |
Issuance of common stock pursuant to conversion of facility financing obligation | 86,000 | ' | 92,500 |
Issuance of put option by stockholder | ' | ' | -2,949 |
Put option redemption by stockholder | ' | ' | 1,921 |
Issuance of Series C convertible preferred stock subscriptions | ' | ' | 50,000 |
Issuance of Series A redeemable convertible preferred stock | ' | ' | 4,296 |
Conversion of Series A redeemable convertible preferred stock | ' | ' | -5,248 |
Non-cash construction in progress and property and equipment | 1,700 | 3,863 | 1,700 |
Capitalization of interest on note payable to principal stockholder | ' | ' | 22,105 |
Reduction of principal on note payable to principal stockholder upon issuance of common stock and exercise of warrants | ' | ' | 290,334 |
Forward purchase contract contribution to APIC | ' | ' | 29,317 |
Reclassification of forward purchase contract to APIC | ' | ' | 28,080 |
Tranche B Commitment Asset | $2,921 | ' | $2,921 |
Condensed_Consolidated_Stateme3
Condensed Consolidated Statements of Cash Flows (Parenthetical) (USD $) | 277 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2014 |
Conversion of convertible preferred stock amount converted | $5,248 |
Series B Preferred Stock | ' |
Conversion of convertible preferred stock amount converted | 15,000 |
Series C Preferred Stock | ' |
Conversion of convertible preferred stock amount converted | $50,000 |
Description_of_business_and_ba
Description of business and basis of presentation | 3 Months Ended |
Mar. 31, 2014 | |
Description of business and basis of presentation | ' |
1. Description of business and basis of presentation | |
The accompanying unaudited condensed consolidated financial statements of MannKind Corporation and its subsidiaries ( “MannKind” or the “Company”), have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The information included in this quarterly report on Form 10-Q should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2013 filed with the SEC on March 3, 2014 (the “Annual Report”). | |
In the opinion of management, all adjustments, consisting only of normal, recurring adjustments, considered necessary for a fair presentation of the results of these interim periods have been included. The results of operations for the three months ended March 31, 2014 may not be indicative of the results that may be expected for the full year. | |
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates or assumptions. The more significant estimates reflected in these accompanying financial statements involve assessing long-lived assets for impairment, accrued expenses, including clinical study expenses, valuation of forward purchase contracts, valuation of the facility financing obligation, commitment asset, milestone rights, valuation of stock-based compensation and the determination of the provision for income taxes and corresponding deferred tax assets and liabilities and any valuation allowance recorded against net deferred tax assets. The estimation process often may yield a range of potentially reasonable estimates of the ultimate future outcomes and management must select an amount that falls within that range of reasonable estimates. This process may result in actual results differing materially from those estimated amounts used in the preparation of the financial statements. | |
Business — The Company is a biopharmaceutical company focused on the discovery and development of therapeutic products for diseases such as diabetes. The Company’s lead product candidate, AFREZZA (insulin human [rDNA origin]) inhalation powder, is an ultra rapid-acting insulin therapy that is in late-stage clinical investigation for the treatment of adults with type 1 or type 2 diabetes for the control of hyperglycemia. | |
Last October, the Company resubmitted a New Drug Application (“NDA”) for AFREZZA to the U.S. Food and Drug Administration (“FDA”), which included data from two completed Phase 3 studies 171 and 175, both of which met their primary efficacy endpoints and safety objectives. On April 1, 2014 the Endocrinologic and Metabolic Drugs Advisory Committee (“EMDA”) of the FDA voted 13 to 1 to recommend that AFREZZA inhalation powder be granted approval by the FDA to improve glycemic control in adults with type 1 diabetes and voted 14 to 0 to recommend that AFREZZA be granted approval by the FDA to improve glycemic control in adults with type 2 diabetes. | |
Subsequent to the EMDA meeting, the FDA extended the Prescription Drug User Fee Act (“PDUFA”) date for AFREZZA by three months from April 15, 2014 to July 15, 2014 in order to provide time for a full review of information submitted by the Company in response to the FDA’s requests. | |
Basis of Presentation — The Company is considered to be in the development stage as its primary activities since incorporation have been establishing its facilities, recruiting personnel, conducting research and development, business development, business and financial planning, and raising capital. It is costly to develop therapeutic products and conduct clinical studies for these products. From its inception through March 31, 2014, the Company has reported accumulated net losses of $2.3 billion, which include a goodwill impairment charge of $151.4 million and cumulative negative cash flow from operations of $1.8 billion. At March 31, 2014, the Company’s capital resources consisted of cash and cash equivalents of $35.8 million. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of these uncertainties. | |
As of March 31, 2014, the Company had $30.1 million principal amount of available borrowings under its loan arrangement (the “Loan Arrangement”) with The Mann Group LLC (“The Mann Group”) although the Company anticipates using a portion of these available borrowings to capitalize accrued interest into principal as it becomes due and payable under the Loan Arrangement, upon mutual agreement of the parties. As of March 31, 2014, the Company had accrued $1.3 million of interest related to the Loan Arrangement. | |
On July 1, 2013, the Company entered into a facility agreement (the “Facility Agreement”) with Deerfield Private Design Fund II, L.P. (“Deerfield Private Design Fund”) and Deerfield Private Design International II, L.P. (collectively, “Deerfield”), providing for the sale of up to $160.0 million of Senior Convertible Notes due 2019 (the “2019 notes”) to Deerfield in four equal tranches of $40.0 million principal amount. As of March 31, 2014, Deerfield had purchased the first three tranches of 2019 notes in the aggregate principal amount of $120.0 million; therefore, only $40.0 million remain unsold. Deerfield’s obligation to purchase the fourth tranche of 2019 notes is subject to the receipt of marketing approval of AFREZZA by the FDA and the shares of common stock issuable upon conversion of all previously sold 2019 notes being freely tradable pursuant to an effective registration statement filed with the SEC or pursuant to Rule 144 under the Securities Act. On February 28, 2014, the Company entered into a First Amendment to Facility Agreement and Registration Rights Agreement (the “Amendment”). The Amendment modified the terms of the Facility Agreement that was entered into on July 1, 2013 with Deerfield to provide for the issuance of an additional tranche of notes (the “Tranche B notes”) to Deerfield in a maximum principal amount equal to (x) if the FDA approves the NDA for AFREZZA and Deerfield purchased the fourth tranche of 2019 notes, 150% of the aggregate principal amount of the 2019 notes that Deerfield has converted into the Company’s common stock on and after the effective date of the Amendment, up to $90.0 million, and (y) otherwise, 33.33% of the aggregate principal amount of the 2019 notes that Deerfield has converted into the Company’s common stock on and after the effective date of the Amendment, up to $20.0 million, in each case subject to the satisfaction of certain other conditions. The Facility Agreement contains a financial covenant that requires the Company’s cash and cash equivalents, which include available borrowings under the Loan Arrangement, on the last day of each fiscal quarter to not be less than $25 million. Based on its current expectations, the Company believes that its existing capital resources will enable it to continue planned operations at least into the third quarter of 2014. However, the Company cannot provide assurances that its plans will not change or that changed circumstances will not result in the depletion of its capital resources more rapidly than it currently anticipates. The Company will need to raise additional capital, whether through the sale of equity or debt securities, a strategic business collaboration with a pharmaceutical company, the establishment of other funding facilities, licensing arrangements, asset sales or other means, in order to continue the development of and to commercialize AFREZZA and other product candidates and to support its other ongoing activities. However, the Company cannot provide assurances that such additional capital will be available on favorable terms, or at all. | |
Capital resources potentially available to the Company include proceeds from the exercise of warrants issued in its February 2012 public offering, the Company’s at-the-market issuance sales agreements, and issuance of additional 2019 notes and/or Tranche B notes to Deerfield (see Note 11 – Facility financing agreement). | |
Fair Value of Financial Instruments — The carrying amounts reported in the accompanying financial statements for cash and cash equivalents, accounts payable and accrued liabilities approximate their fair value due to their relatively short maturities. The fair value of the cash equivalents, note payable to related party, senior convertible notes, and the Facility Agreement are discussed in Note 13, “Fair Value Measurements.” | |
Recently Issued Accounting Standards — In July 2013, the FASB issued ASU 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit when a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (a consensus of the FASB Emerging Issues Task Force). The amendments in this ASU provide guidance on the financial statements presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. An unrecognized tax benefit should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward with certain exceptions, in which case such an unrecognized tax benefit should be presented in the financial statements as a liability. The amendments in this ASU do not require new recurring disclosures. The amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. The adoption of the new requirement did not have a significant impact on the Company’s consolidated financial statements. | |
Accrued_expenses_and_other_cur
Accrued expenses and other current liabilities | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Accrued expenses and other current liabilities | ' | ||||||||
2. Accrued expenses and other current liabilities | |||||||||
Accrued expenses and other current liabilities are comprised of the following (in thousands): | |||||||||
March 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Salary and related expenses | $ | 6,650 | $ | 12,193 | |||||
Research and clinical trial costs | 1,304 | 1,311 | |||||||
Accrued interest | 958 | 2,082 | |||||||
Construction in progress | 370 | 342 | |||||||
Other | 5,724 | 5,706 | |||||||
Accrued expenses and other current liabilities | $ | 15,006 | $ | 21,634 | |||||
Accounting_for_stockbased_comp
Accounting for stock-based compensation | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Accounting for stock-based compensation | ' | ||||||||
3. Accounting for stock-based compensation | |||||||||
Total stock-based compensation expense recognized in the accompanying condensed consolidated statements of operations for the three months ended March 31, 2014 and 2013 was as follows (in thousands): | |||||||||
Three months ended | |||||||||
March 31, | |||||||||
2014 | 2013 | ||||||||
Stock-based compensation | $ | 10,937 | $ | 5,189 | |||||
The Company issued stock awards to employees during the three months ended March 31, 2014 with a four-year vesting schedule. The grant date fair value of the 46,400 restricted stock units and 17,700 stock options issued was $296,000 and $81,000, respectively, with a grant date fair value per share of $6.39 and $4.58, respectively. | |||||||||
As of March 31, 2014, there was $9.9 million and $14.0 million of unrecognized compensation cost related to options and restricted stock units, respectively, which are expected to be recognized over the remaining weighted average vesting period of 1.85 years. The Company evaluates stock awards with performance conditions as to the probability that the performance conditions will be met and estimates the date at which the performance conditions will be met in order to properly recognize stock-based compensation expense over the requisite service period. As of March 31, 2014, there were $107,000 and $3.7 million of unrecognized expenses related to performance options and restricted stock units, respectively, for milestones not considered probable of achievement. |
Net_loss_per_common_share
Net loss per common share | 3 Months Ended |
Mar. 31, 2014 | |
Net loss per common share | ' |
4. Net loss per common share | |
Basic net loss per share excludes dilution for potentially dilutive securities and is computed by dividing net loss applicable to common stockholders by the weighted average number of common shares outstanding during the period excluding the shares loaned to Bank of America, N.A. under a share lending arrangement (see Note 7 — Common and preferred stock). As of March 31, 2014, 9,000,000 shares of the Company’s common stock, which were loaned to Bank of America, N.A. pursuant to the terms of a share lending agreement as described in Note 7, were issued and are outstanding, and holders of the borrowed shares have all the rights of a holder of the Company’s common stock. However, because the share borrower must return all borrowed shares to the Company (or, in certain circumstances, the cash value thereof), the borrowed shares are not considered outstanding for the purpose of computing and reporting basic or diluted earnings (loss) per share. Diluted net loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. Potentially dilutive securities are excluded from the computation of diluted net loss per share for all of the periods presented in the accompanying condensed consolidated statements of operations because the reported net loss in each of these periods results in their inclusion being antidilutive. Antidilutive securities, which consist of stock options, restricted stock units, warrants, and shares that could be issued upon conversion of the senior convertible notes and conversion of the facility financing obligation, that are not included in the diluted net loss per share calculation consisted of an aggregate of 67,791,150 shares and 133,500,568 shares as of March 31, 2014 and 2013, respectively, and exclude the 9,000,000 shares loaned under the share lending arrangement. |
State_research_and_development
State research and development credit exchange receivable | 3 Months Ended |
Mar. 31, 2014 | |
State research and development credit exchange receivable | ' |
5. State research and development credit exchange receivable | |
The State of Connecticut provides certain companies with the opportunity to exchange certain research and development income tax credit carryforwards for cash in exchange for forgoing the carryforward of the research and development income tax credits. The program provides for an exchange of research and development income tax credits for cash equal to 65% of the value of corporation tax credit available for exchange. There were no current estimated amounts receivable under the program at March 31, 2014 and December 31, 2013, respectively. Long-term estimated amounts receivable under the program were $380,000 and $298,000 at March 31, 2014 and December 31, 2013, respectively. |
Property_and_equipment
Property and equipment | 3 Months Ended | ||||||||||||
Mar. 31, 2014 | |||||||||||||
Property and equipment | ' | ||||||||||||
6. Property and equipment | |||||||||||||
Property and equipment — net consist of the following (dollar amounts in thousands): | |||||||||||||
Estimated | March 31, | December 31, | |||||||||||
Useful | 2014 | 2013 | |||||||||||
Life | |||||||||||||
(Years) | |||||||||||||
Land | — | $ | 5,273 | $ | 5,273 | ||||||||
Buildings | 39-40 | 54,948 | 54,948 | ||||||||||
Building improvements | May-40 | 114,099 | 114,099 | ||||||||||
Machinery and equipment | 15-Mar | 82,189 | 82,189 | ||||||||||
Furniture, fixtures and office equipment | 10-May | 5,046 | 5,046 | ||||||||||
Computer equipment and software | 3 | 11,306 | 11,289 | ||||||||||
Leasehold improvements | 4 | 17 | 17 | ||||||||||
Construction in progress | 17,041 | 14,756 | |||||||||||
289,919 | 287,617 | ||||||||||||
Less accumulated depreciation and amortization | (113,582 | ) | (111,060 | ) | |||||||||
Property and equipment — net | $ | 176,337 | $ | 176,557 | |||||||||
Leasehold improvements are amortized over four years which is the shorter of the term of the lease or the service lives of the improvements. | |||||||||||||
Depreciation and amortization expense related to property and equipment for the three months ended March 31, 2014 and 2013 was as follows (in thousands): | |||||||||||||
Three months ended | |||||||||||||
March 31, | |||||||||||||
2014 | 2013 | ||||||||||||
Depreciation and amortization expense | $ | 2,522 | $ | 2,990 | |||||||||
Common_and_preferred_stock
Common and preferred stock | 3 Months Ended |
Mar. 31, 2014 | |
Common and preferred stock | ' |
7. Common and preferred stock | |
The Company is authorized to issue 550,000,000 shares of common stock, par value $0.01 per share, and 10,000,000 shares of undesignated preferred stock, par value $0.01 per share, issuable in one or more series designated by the Company’s board of directors. No other class of capital stock is authorized. As of March 31, 2014 and December 31, 2013, 386,934,914 and 369,391,972 shares of common stock, respectively, were issued and outstanding and no shares of preferred stock were outstanding. Included in the common stock outstanding as of March 31, 2014 and December 31, 2013 are 9,000,000 shares of common stock loaned to Bank of America under a share lending agreement in connection with the offering of $100.0 million aggregate principal amount of 2015 notes (see Note 10 — Senior convertible notes). Bank of America is obligated to return the borrowed shares (or, in certain circumstances, the cash value thereof) to the Company on or about the 45th business day following the date as of which the entire principal amount of the 2015 notes ceases to be outstanding, subject to extension or acceleration in certain circumstances or early termination at Bank of America’s option. The Company did not receive any proceeds from the sale of the borrowed shares by Bank of America, but the Company did receive a nominal lending fee of $0.01 per share from Bank of America for the use of borrowed shares. | |
On July 1, 2013, the Company entered into the Facility Agreement with Deerfield providing for the sale of up to $160.0 million of 2019 notes to Deerfield in four equal tranches of $40.0 million principal amount. A portion of the principal amount of the 2019 notes were convertible into shares of the Company’s common stock at the note holder’s option. | |
On February 28, 2014, the Company amended the Facility Agreement to, among other things, allow Deerfield, subject to certain limitations, to convert up to an additional $60.0 million principal amount under the then-outstanding 2019 notes into common stock after the effective date of the Amendment, at a minimum conversion price of $5.00 per share unless the Company otherwise consents. The Company also agreed to register for resale up to 12,000,000 shares of common stock issuable upon conversion of the outstanding 2019 notes, with a minimum conversion price of $5.00 per share unless the Company otherwise consents. The conversion price will be determined by the average of the volume weighted average prices per share during the three trading days immediately preceding the election to convert. As of March 31, 2014, Deerfield had converted a portion of the outstanding 2019 notes into common stock (see Note 11 – Facility financing agreement). |
Commitments_and_contingencies
Commitments and contingencies | 3 Months Ended |
Mar. 31, 2014 | |
Commitments and contingencies | ' |
8. Commitments and contingencies | |
Guarantees and Indemnifications — In the ordinary course of its business, the Company makes certain indemnities, commitments and guarantees under which it may be required to make payments in relation to certain transactions. The Company, as permitted under Delaware law and in accordance with its Bylaws, indemnifies its officers and directors for certain events or occurrences, subject to certain limits, while the officer or director is or was serving at the Company’s request in such capacity. The term of the indemnification period is for the officer’s or director’s lifetime. The maximum amount of potential future indemnification is unlimited; however, the Company has a director and officer insurance policy that may enable it to recover a portion of any future amounts paid. The Company believes the fair value of these indemnification agreements is minimal. The Company has not recorded any liability for these indemnities in the accompanying condensed consolidated balance sheets. However, the Company accrues for losses for any known contingent liability, including those that may arise from indemnification provisions, when future payment is probable and the amount can be reasonably estimated. | |
Litigation — The Company is subject to legal proceedings and claims which arise in the ordinary course of its business. As of the date hereof, the Company believes that the final disposition of such matters will not have a material adverse effect on the financial position, results of operations or cash flows of the Company. The Company maintains liability insurance coverage to protect the Company’s assets from losses arising out of or involving activities associated with ongoing and normal business operations. In accordance with ASC 450 Contingencies, the Company would record a provision for a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. | |
Contingencies — In connection with the Facility Agreement, on July 1, 2013 the Company also entered into a Milestone Rights Purchase Agreement (the “Milestone Agreement”) with Deerfield Private Design Fund and Horizon Santé FLML SÁRL (collectively, the “Milestone Purchasers”), pursuant to which the Company sold the Milestone Purchasers certain rights (the “Milestone Rights”) to receive payments of up to $90.0 million upon the occurrence of specified strategic and sales milestones, including the first commercial sale of an AFREZZA product and the achievement of specified net sales figures (see Note 11 – Facility financing agreement). |
Relatedparty_arrangements
Related-party arrangements | 3 Months Ended |
Mar. 31, 2014 | |
Related-party arrangements | ' |
9. Related-party arrangements | |
In October 2007, the Company entered into a $350.0 million loan arrangement with its principal stockholder. The Loan Arrangement has been amended from time to time. On October 31, 2013, the promissory note underlying the Loan Arrangement was amended to, among other things, extend the maturity date of the loan to January 5, 2020, extend the date through which the Company can borrow under the Loan Arrangement to December 31, 2019, increase the aggregate borrowing amount under the Loan Arrangement from $350.0 million to $370.0 million and provide that repayments or cancellations of principal under the Loan Arrangement will not be available for reborrowing. | |
As of March 31, 2014, the total principal amount outstanding under the Loan Arrangement was $49.5 million, and the amount available for future borrowings was $30.1 million. Interest, at a fixed rate of 5.84%, is due and payable quarterly in arrears on the first day of each calendar quarter for the preceding quarter, or at such other time as the Company and The Mann Group mutually agree. All or any portion of accrued and unpaid interest that becomes due and payable may be paid-in-kind and capitalized as additional borrowings at any time and would be classified as non-current upon mutual agreement of both parties. As of March 31, 2014, the Company had accrued $1.3 million of interest in other liabilities related to the Loan Arrangement. The Mann Group can require the Company to prepay up to $200.0 million in advances that have been outstanding for at least 12 months (less approximately $105.0 million aggregate principal amount that has been cancelled in connection with two common stock purchase agreements). If The Mann Group exercises this right, the Company will have 90 days after The Mann Group provides written notice (or the number of days to maturity of the note if less than 90 days) to prepay such advances. However, pursuant to a letter agreement entered into in August 2010, The Mann Group has agreed to not require the Company to prepay amounts outstanding under the amended and restated promissory note if the prepayment would require the Company to use its working capital resources. In addition, The Mann Group entered into a subordination agreement with Deerfield pursuant to which The Mann Group agreed with Deerfield not to demand or accept any payment under the Loan Arrangement until the Company’s payment obligations to Deerfield under the Facility Agreement have been satisfied in full. Subject to the foregoing, in the event of a default under the Loan Arrangement, all unpaid principal and interest either becomes immediately due and payable or may be accelerated at The Mann Group’s option, and the interest rate will increase to the one-year LIBOR calculated on the date of the initial advance or in effect on the date of default, whichever is greater, plus 5% per annum. All borrowings under the Loan Arrangement are unsecured. The Loan Arrangement contains no financial covenants. | |
During the first quarter of 2014, there were no borrowings under or amendments to the Loan Arrangement. |
Senior_convertible_notes
Senior convertible notes | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Senior convertible notes | ' | ||||||||
10. Senior convertible notes | |||||||||
Senior convertible notes consist of the following (in thousands): | |||||||||
March 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
2015 notes | |||||||||
Principal amount | $ | 100,000 | $ | 100,000 | |||||
Unaccreted debt issuance expense | (1,338 | ) | (1,561 | ) | |||||
Net carrying amount | $ | 98,662 | $ | 98,439 | |||||
On August 18, 2010, the Company completed a Rule 144A offering of $100.0 million aggregate principal amount of 5.75% Senior Convertible Notes due 2015 (the “2015 notes”). The 2015 notes are governed by the terms of an indenture dated as of August 24, 2010 (the “2015 Note Indenture”). The 2015 notes bear interest at the rate of 5.75% per year on the principal amount, payable in cash semi-annually in arrears on February 15 and August 15 of each year, beginning February 15, 2011. In connection with the 2015 notes, the Company had accrued interest of $1.0 million and $2.4 million as of March 31, 2014 and December 31, 2013, respectively. The 2015 notes are general, unsecured, senior obligations of the Company and effectively rank junior in right of payment to all of the Company’s secured debt, to the extent of the value of the assets securing such debt, and to the debt and all other liabilities of the Company’s subsidiaries. The maturity date of the 2015 notes is August 15, 2015 and payment is due in full on that date for unconverted securities. Holders of the 2015 notes may convert, at any time prior to the close of business on the business day immediately preceding the stated maturity date, any outstanding principal into shares of the Company’s common stock at an initial conversion rate of 147.0859 shares per $1,000 principal amount, which is equal to a conversion price of approximately $6.80 per share, subject to adjustment. Except in certain circumstances, if the Company undergoes a fundamental change: (1) the Company will pay a make-whole premium on the 2015 notes converted in connection with a fundamental change by increasing the conversion rate on such 2015 notes, which amount, if any, will be based on the Company’s common stock price and the effective date of the fundamental change, and (2) each holder of 2015 notes will have the option to require the Company to repurchase all or any portion of such holder’s 2015 notes at a repurchase price of 100% of the principal amount of the 2015 notes to be repurchased plus accrued and unpaid interest, if any. The Company may elect to redeem some or all of the 2015 notes if the closing stock price has equaled 150% of the conversion price for at least 20 of the 30 consecutive trading days ending on the trading day before the Company’s redemption notice. The redemption price will equal 100% of the principal amount of the 2015 notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, plus a make-whole payment equal to the sum of the present values of the remaining scheduled interest payments through and including August 15, 2015 (other than interest accrued up to, but excluding, the redemption date). The Company will be obligated to make the make-whole payment on all the 2015 notes called for redemption and converted during the period from the date the Company mailed the notice of redemption to and including the redemption date. The Company may elect to make the make-whole payment in cash or shares of its common stock, subject to certain limitations. Under the terms of the 2015 Note Indenture, the conversion option can be net-share settled and the maximum number of shares that could be required to be delivered under the contract, including the make-whole shares, is fixed and less than the number of authorized and unissued shares less the maximum number of shares that could be required to be delivered during the contract period under existing commitments. Applying the Company’s sequencing policy, the Company performed an analysis at the time of the offering of the 2015 notes and each reporting date since and has concluded that the number of available authorized shares at the time of the offering and each subsequent reporting date was sufficient to deliver the number of shares that could be required to be delivered during the contract period under existing commitments. | |||||||||
The Company incurred approximately $4.2 million in issuance costs which are recorded as an offset to the 2015 notes in the accompanying condensed consolidated balance sheets. These costs are being accreted to interest expense using the effective interest method over the term of the 2015 notes. | |||||||||
The 2015 notes provide that upon an acceleration of certain indebtedness, which would include the 2019 notes or the Tranche B notes described in Note 11, the holders may elect to accelerate the Company’s repayment obligations under the notes if such acceleration is not cured, waived, rescinded or annulled. There can be no assurance that the holders would not choose to exercise these rights in the event such events were to occur. | |||||||||
Accretion of debt issuance expense in connection with the 2015 notes during the three months ended March 31, 2014 and 2013 was $223,000 and $209,000, respectively. |
Facility_financing_agreement
Facility financing agreement | 3 Months Ended | ||||
Mar. 31, 2014 | |||||
Facility financing agreement | ' | ||||
11. Facility financing agreement | |||||
The components and activity from initial recording of the facility financing agreement recorded through March 31, 2014 consist of the following (in thousands): | |||||
March 31, | |||||
2014 | |||||
2019 notes | |||||
Initial principal amount | $ | 120,000 | |||
Principal converted to equity | (92,500 | ) | |||
Debt discount-net of amortization | (1,546 | ) | |||
Unaccreted debt issuance expense | (83 | ) | |||
Net carrying amount of facility financing agreement | $ | 25,871 | |||
Milestone Rights | |||||
Initial milestone rights fair value | $ | 16,276 | |||
Debt discount-net of amortization | (51 | ) | |||
Unaccreted debt issuance expense | (61 | ) | |||
Less current portion of milestone rights included in other current liabilities | (3,151 | ) | |||
Net carrying amount included in other liabilities | $ | 13,013 | |||
Commitment Asset | |||||
Initial commitment asset fair value | $ | 13,393 | |||
Tranche B commitment asset fair value | $ | 2,921 | |||
Less Tranche 2 portion of commitment asset | (3,656 | ) | |||
Less Tranche 3 portion of commitment asset | (4,580 | ) | |||
Commitment asset value included in other assets | $ | 8,078 | |||
Accretion of debt issuance cost and debt discount in connection with the Facility financing agreement during the three months ended March 31, 2014 are as follows (in thousands): | |||||
Three months ended | |||||
March 31, 2014 | |||||
Accretion expense- debt issuance cost | $ | 282 | |||
Accretion expense- debt discount | $ | 6,367 | |||
On July 1, 2013, the Company entered into the Facility Agreement providing for the sale of up to $160.0 million of 2019 notes to Deerfield in four equal tranches of $40.0 million principal amount. The 2019 notes accrue interest at a rate of 9.75% per annum until maturity in 2019 or their earlier repayment, repurchase, or conversion. As of March 31, 2014, Deerfield had purchased the first three tranches of 2019 notes in the aggregate principal amount of $120.0 million; therefore, only $40.0 million remain unsold. Deerfield’s obligation to purchase the fourth tranche of 2019 notes is subject to receipt of marketing approval of AFREZZA by the FDA and the shares of common stock issuable upon conversion of all previously sold 2019 notes being freely tradable pursuant to an effective registration statement filed with the SEC or pursuant to Rule 144 under the Securities Act. | |||||
On February 28, 2014, the Company entered into the Amendment, which modified the terms of the Facility Agreement to provide for the issuance of Tranche B notes to Deerfield in a maximum principal amount equal to (i) if the FDA approves the NDA for AFREZZA and Deerfield purchased the fourth tranche of 2019 notes, 150% of the aggregate principal amount of the 2019 notes that Deerfield has converted into the Company’s common stock on and after the effective date of the Amendment, up to $90.0 million, and (ii) otherwise, 33.33% of the aggregate principal amount of the 2019 notes that Deerfield has converted into the Company’s common stock on and after the effective date of the Amendment, up to $20.0 million, in each case subject to the satisfaction of certain other conditions. The Tranche B notes bear interest at the rate of 9.75% per year, subject to reduction to 8.75% if the Company enters into a collaboration with a third party to commercialize AFREZZA, on the outstanding principal amount, payable in cash quarterly in arrears on the last business day of March, June, September and December of each year. The Company is required to repay 25% of the original principal amount of any Tranche B notes on the third, fourth, fifth and sixth anniversaries of the applicable issue dates of such notes, provided that the entire outstanding principal amount of all Tranche B notes will become due and payable no later than December 31, 2019. The Tranche B notes can be prepaid without penalty or premium commencing two years after issuance thereof. | |||||
In addition, pursuant to the Amendment, the outstanding first tranche of 2019 notes (the “Tranche 1 notes”) and third tranche of 2019 notes (the “Tranche 3 notes”) held by Deerfield were amended and restated such that Deerfield may, subject to certain limitations, convert up to an additional $60.0 million principal amount under such 2019 notes into common stock after the effective date of the Amendment, at a minimum conversion price of $5.00 per share. The Company also agreed to register for resale up to 12,000,000 shares of common stock issuable upon conversion of the outstanding 2019 notes, as amended and restated, as of the date of the Amendment. | |||||
Commitment Asset | |||||
In connection with the issuance of the Tranche 1 notes and the Milestone Rights, the Company recorded a commitment asset, or the Commitment Asset, on July 1, 2013. As a result of the Amendment, the Company recorded an additional commitment asset with an estimated fair value equal to $2.9 million. The Commitment Asset remaining as of March 31, 2014 represents the right to receive $40.0 million funding under tranche 4 of 2019 notes and up to $90 million of funding under Tranche B notes, subject to the achievement of certain milestones, pursuant to the Facility Agreement, as amended. The Commitment Asset is derecognized and recorded as a debt discount on the 2019 notes and Tranche B notes when issued and amortized using the effective interest rate method over the life of the notes. Prior to derecognition occurring, the Company monitors the Commitment Asset on an ongoing basis to determine whether an impairment indicator is present that would result in a full or partial write down of the Commitment Asset as a result of events that may lead to the subsequent tranches of notes not being issued. Based on the monitoring procedures performed through March 31, 2014, the Company did not identify any indicators of impairment. | |||||
Amendment to the outstanding Tranche 1 and Tranche 3 notes | |||||
The amendment and restatement of the outstanding Tranche 1 and Tranche 3 notes, pursuant to the Amendment, did not represent a troubled debt restructuring in the notes because the Amendment did not result in Deerfield granting a concession to the Company. In addition, the Amendment did not result in a substantial modification to the terms of the Tranche 1 and Tranche 3 notes. | |||||
The impact of the Amendment to the Tranche 1 and Tranche 3 notes will be accounted for as a prospective yield adjustment. Specifically the value of the Tranche B Commitment Asset was considered a fee received from the creditor as consideration for the Amendment and will be amortized as an adjustment of interest expense over the remaining term of the Tranche 1 and Tranche 3 notes using the effective interest method. As a result of the Amendment, the value of the Tranche B Commitment Asset was allocated between the Tranche 1 and Tranche 3 notes, which decreased the amount of debt discount on the Tranche 1 and Tranche 3 notes. | |||||
Conversion Option | |||||
For accounting purposes, the Company evaluated the embedded conversion option in the 2019 notes as a redemption feature because the number of shares issuable upon conversion is based on the volume weighted average prices for specified periods prior to the conversion date (as opposed to being fixed). Accordingly, conversions by Deerfield were treated as redemptions of the 2019 notes and, as discussed below, the Company analyzed whether the conversion option required bifurcation as an embedded redemption feature. As of December 31, 2013, Deerfield had converted $6.5 million principal amount of the second tranche of 2019 notes (the “Tranche 2 notes”) for equity, resulting in an issuance of 1,293,224 shares of the Company’s common stock. Upon the conversion, the principal balance of the notes were recorded in equity and an expense was recognized in the Statement of Operations in the amount of $0.6 million for the difference between the principal amount of the notes converted and their carrying amount (which included unamortized discount and debt issuance costs). | |||||
During January 2014, Deerfield elected to convert the remaining $33.5 million of Tranche 2 notes, which resulted in the issuance of 6,559,251 shares of the Company’s common stock. During the three months ended March 31, 2014, the Company recorded an expense of $3.0 million for the difference between the principal amount of the notes converted and their carrying amount (which included unamortized discount and debt issuance costs). | |||||
In March 2014, following the Amendment, which allowed Deerfield to convert up to an additional $60 million principal amount under the outstanding Tranche 1 and Tranche 3 notes, Deerfield elected to convert the full $40.0 million of outstanding principal amount of the Tranche 3 notes and $12.5 million of principal amount of the Tranche 1 notes, pursuant to which the Company issued Deerfield 7,121,120 and 2,142,709 shares of the Company’s common stock, respectively. As a result of these conversions, the Company recorded the principal balance of the notes in equity and an expense of $3.0 million for the difference between the principal amount of the notes converted and their carrying amount (which included the unamortized discount and debt issuance costs) and the write-off of the derivative liability that was previously bifurcated from the Tranche 3 notes. | |||||
In addition, the Company considered whether the amendment to the 2019 notes would result in the bifurcation of the conversion option in the Tranche 1 notes. Upon the issuance of the Tranche 1 notes on July 1, 2013 and as of March 31, 2014, the Company concluded that the conversion option was not required to be separated primarily due to the discount in the Tranche 1 notes not being deemed substantial under ASC 815-15-25-26. | |||||
Income_taxes
Income taxes | 3 Months Ended |
Mar. 31, 2014 | |
Income taxes | ' |
12. Income taxes | |
As required by ASC 740 Income Taxes (“ASC 740”), management of the Company has evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets and concluded, in accordance with the applicable accounting standards, that net deferred tax assets should be fully reserved. | |
ASC 740-10-25 Income Taxes Recognition clarifies the accounting and disclosure for uncertainty in tax positions, as defined. This guidance seeks to reduce the diversity in practice associated with certain aspects of the recognition and measurement related to accounting for income taxes. The Company believes that its income tax filing positions and deductions will be sustained on audit and does not anticipate any adjustments that will result in a material change to its financial position. Therefore, no reserves for uncertain income tax positions have been recorded pursuant to this guidance. Tax years since 1993 remain subject to examination by the major tax jurisdictions in which the Company is subject to tax. |
Fair_Value_of_Financial_Instru
Fair Value of Financial Instruments | 3 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
Fair Value of Financial Instruments | ' | ||||||||||||||||
13. Fair Value of Financial Instruments | |||||||||||||||||
The Company applies various valuation approaches in determining the fair value of its financial assets and liabilities within a hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances. The fair value hierarchy is broken down into three levels based on the source of inputs as follows: | |||||||||||||||||
Level 1— Quoted prices for identical instruments in active markets. | |||||||||||||||||
Level 2— Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. | |||||||||||||||||
Level 3— Significant inputs to the valuation model are unobservable. | |||||||||||||||||
The availability of observable inputs can vary among the various types of financial assets and liabilities. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for financial statement disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is categorized is based on the lowest level input that is significant to the overall fair value measurement. | |||||||||||||||||
Cash and cash equivalents | |||||||||||||||||
Cash equivalents consist of highly liquid investments with original or remaining maturities of 90 days or less at the time of purchase, that are readily convertible into cash. As of March 31, 2014 and December 31, 2013, the Company held $35.8 million and $70.8 million, respectively, of cash and cash equivalents, consisting primarily of money market funds of $34.9 million and $67.7 million, respectively, and the remaining in non-interest bearing checking accounts. The fair value of these money market funds was determined by using quoted prices for identical investments in an active market (Level 1 in the fair value hierarchy). | |||||||||||||||||
The following is a summary of the carrying values and estimated fair values of the Company’s 5.75% Senior Convertible Notes due 2015 (the “2015 notes”) and the 2019 notes (in millions). | |||||||||||||||||
March 31, 2014 | December 31, 2013 | ||||||||||||||||
Carrying | Estimated | Carrying | Estimated | ||||||||||||||
value | fair value | value | fair value | ||||||||||||||
2015 notes | $ | 98.7 | $ | 95.1 | $ | 98.4 | $ | 102.2 | |||||||||
2019 notes | $ | 25.9 | $ | 25.7 | $ | 102.3 | $ | 107 | |||||||||
Senior Convertible Notes | |||||||||||||||||
The estimated fair value of the 2015 notes was calculated based on model-derived valuations whose inputs were observable, such as the Company’s stock price, and non-observable, such as the Company’s longer-term historical volatility (Level 3 in the fair value hierarchy). As there is no current observable market for the 2015 notes, the Company determined the estimated fair value using a convertible bond valuation model within a lattice framework. The convertible bond valuation model combined expected cash outflows with market-based assumptions regarding risk-adjusted yields, stock price volatility and recent price quotes and trading information regarding Company issued debt instruments and shares of common stock into which the notes are convertible. | |||||||||||||||||
Facility financing agreement | |||||||||||||||||
As discussed in Note 11 — Facility financing agreement, in connection with the Facility Agreement, the Company issued 2019 notes and Milestone Rights and recorded the Commitment Asset on July 1, 2013. As there is no current observable market for the 2019 notes, the Company determined the estimated fair value using a bond valuation model based on a discounted cash flow methodology. The bond valuation model combined expected cash flows associated with principal repayment and interest based on the contractual terms of the debt agreement discounted to present value using a selected market discount rate of 12.7% (Level 3 in the fair value hierarchy). On March 31, 2014, the market discount rate was recalculated at 12.5% for the Tranche 1 notes. The Tranche 2 and Tranche 3 notes were fully converted by the end of the first quarter. | |||||||||||||||||
The estimated fair value of the Milestone Rights was calculated using the income approach in which the cash flows associated with the specified contractual payments were adjusted for both the expected timing and the probability of achieving the milestones discounted to present value using a selected market discount rate (Level 3 in the fair value hierarchy). The expected timing and probability of achieving the milestones, starting in 2014, was developed with consideration given to both internal data, such as progress made to date and assessment of criteria required for achievement, and external data, such as market research studies. The discount rate (17.5%) was selected based on an estimation of required rate of returns for similar investment opportunities using available market data. | |||||||||||||||||
The fair value of the Commitment Asset was estimated using the income approach by estimating the fair value of the future tranches using a market debt rate (12%) commensurate with the risk of the future tranches and the fair value of the cash expected to be received by the Company and assessing the probability of the commitments being funded in the future based on the operational hurdles required for funding being met (Level 3 in the fair value hierarchy). | |||||||||||||||||
At March 31, 2014, as there had been no material changes to the established estimates, the carrying value of the Milestone Rights and Commitment Asset approximates their respective estimated fair values. | |||||||||||||||||
Also as discussed in Note 11 – Facility financing agreement, on February 28, 2014, the Company entered into the Amendment to Facility Agreement, and recorded an additional commitment asset which represented the increase in borrowing capacity that the Company received as consideration for the modifications made to the Facility Agreement and the Tranche 1 notes and Tranche 3 notes. The fair value of the additional commitment asset was estimated using a discounted cash flow analysis under the income approach. Specifically, the fair value of the additional commitment asset was determined by estimating the fair value of the future tranche using a market yield (11.9%) commensurate with the risk of the future tranche and the fair value of the cash expected to be received by the Company and assessing the probability of the commitment being funded in the future based on the operational hurdles required for funding being met as well as consideration of alternative funding options (Level 3 in the fair value hierarchy). As of February 28, 2014, the additional commitment asset was valued at $2.9 million. At March 31, 2014, as there have been no material changes to the established estimates, the carrying value of the Tranche B Commitment Asset approximates its respective estimated fair values. | |||||||||||||||||
There were no material re-measurements to fair value during the three months ended March 31, 2014 and 2013 of financial assets and liabilities that are not measured at fair value on a recurring basis. There were no transfers of assets or liabilities between the fair value measurement levels during the three months ended March 31, 2014 and 2013. |
Subsequent_Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2014 | |
Subsequent Events | ' |
14. Subsequent Events | |
On April 1, 2014 the EMDA voted 13 to 1 to recommend that AFREZZA inhalation powder be granted approval by the FDA to improve glycemic control in adults with type 1 diabetes and voted 14 to 0 to recommend that AFREZZA be granted approval by the FDA to improve glycemic control in adults with type 2 diabetes. | |
Subsequent to the EMDA meeting, the FDA extended the PDUFA date for AFREZZA by three months from April 15, 2014 to July 15, 2014 in order to provide time for a full review of information submitted by MannKind in response to the FDA’s requests. | |
On April 2, 2014, Deerfield elected to convert an aggregate of $7.5 million of principal amount of the Tranche 1 notes, pursuant to which the Company issued Deerfield 1,500,000 shares of the Company’s common stock. As a result of this election, Deerfield has fully exercised the conversion option under the Amendment by converting the additional $60.0 million of the Tranche 1 and Tranche 3 notes allowable, into 10,763,829 shares of the Company’s common stock in the aggregate. | |
On May 6, 2014, Deerfield purchased an aggregate principal amount of $20.0 million in Tranche B notes in accordance with the provisions of the Facility Agreement, as amended. |
Description_of_business_and_ba1
Description of business and basis of presentation (Policies) | 3 Months Ended |
Mar. 31, 2014 | |
Business | ' |
Business — The Company is a biopharmaceutical company focused on the discovery and development of therapeutic products for diseases such as diabetes. The Company’s lead product candidate, AFREZZA (insulin human [rDNA origin]) inhalation powder, is an ultra rapid-acting insulin therapy that is in late-stage clinical investigation for the treatment of adults with type 1 or type 2 diabetes for the control of hyperglycemia. | |
Last October, the Company resubmitted a New Drug Application (“NDA”) for AFREZZA to the U.S. Food and Drug Administration (“FDA”), which included data from two completed Phase 3 studies 171 and 175, both of which met their primary efficacy endpoints and safety objectives. On April 1, 2014 the Endocrinologic and Metabolic Drugs Advisory Committee (“EMDA”) of the FDA voted 13 to 1 to recommend that AFREZZA inhalation powder be granted approval by the FDA to improve glycemic control in adults with type 1 diabetes and voted 14 to 0 to recommend that AFREZZA be granted approval by the FDA to improve glycemic control in adults with type 2 diabetes. | |
Subsequent to the EMDA meeting, the FDA extended the Prescription Drug User Fee Act (“PDUFA”) date for AFREZZA by three months from April 15, 2014 to July 15, 2014 in order to provide time for a full review of information submitted by the Company in response to the FDA’s requests. | |
Basis of Presentation | ' |
Basis of Presentation — The Company is considered to be in the development stage as its primary activities since incorporation have been establishing its facilities, recruiting personnel, conducting research and development, business development, business and financial planning, and raising capital. It is costly to develop therapeutic products and conduct clinical studies for these products. From its inception through March 31, 2014, the Company has reported accumulated net losses of $2.3 billion, which include a goodwill impairment charge of $151.4 million and cumulative negative cash flow from operations of $1.8 billion. At March 31, 2014, the Company’s capital resources consisted of cash and cash equivalents of $35.8 million. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of these uncertainties. | |
As of March 31, 2014, the Company had $30.1 million principal amount of available borrowings under its loan arrangement (the “Loan Arrangement”) with The Mann Group LLC (“The Mann Group”) although the Company anticipates using a portion of these available borrowings to capitalize accrued interest into principal as it becomes due and payable under the Loan Arrangement, upon mutual agreement of the parties. As of March 31, 2014, the Company had accrued $1.3 million of interest related to the Loan Arrangement. | |
On July 1, 2013, the Company entered into a facility agreement (the “Facility Agreement”) with Deerfield Private Design Fund II, L.P. (“Deerfield Private Design Fund”) and Deerfield Private Design International II, L.P. (collectively, “Deerfield”), providing for the sale of up to $160.0 million of Senior Convertible Notes due 2019 (the “2019 notes”) to Deerfield in four equal tranches of $40.0 million principal amount. As of March 31, 2014, Deerfield had purchased the first three tranches of 2019 notes in the aggregate principal amount of $120.0 million; therefore, only $40.0 million remain unsold. Deerfield’s obligation to purchase the fourth tranche of 2019 notes is subject to the receipt of marketing approval of AFREZZA by the FDA and the shares of common stock issuable upon conversion of all previously sold 2019 notes being freely tradable pursuant to an effective registration statement filed with the SEC or pursuant to Rule 144 under the Securities Act. On February 28, 2014, the Company entered into a First Amendment to Facility Agreement and Registration Rights Agreement (the “Amendment”). The Amendment modified the terms of the Facility Agreement that was entered into on July 1, 2013 with Deerfield to provide for the issuance of an additional tranche of notes (the “Tranche B notes”) to Deerfield in a maximum principal amount equal to (x) if the FDA approves the NDA for AFFREZZA and Deerfield purchased the fourth tranche of 2019 notes, 150% of the aggregate principal amount of the 2019 notes that Deerfield has converted into the Company’s common stock on and after the effective date of the Amendment, up to $90.0 million, and (y) otherwise, 33.33% of the aggregate principal amount of the 2019 notes that Deerfield has converted into the Company’s common stock on and after the effective date of the Amendment, up to $20.0 million, in each case subject to the satisfaction of certain other conditions. The Facility Agreement contains a financial covenant that requires the Company’s cash and cash equivalents, which include available borrowings under the Loan Arrangement, on the last day of each fiscal quarter to not be less than $25 million. Based on its current expectations, the Company believes that its existing capital resources will enable it to continue planned operations at least into the third quarter of 2014. However, the Company cannot provide assurances that its plans will not change or that changed circumstances will not result in the depletion of its capital resources more rapidly than it currently anticipates. The Company will need to raise additional capital, whether through the sale of equity or debt securities, a strategic business collaboration with a pharmaceutical company, the establishment of other funding facilities, licensing arrangements, asset sales or other means, in order to continue the development of and to commercialize AFREZZA and other product candidates and to support its other ongoing activities. However, the Company cannot provide assurances that such additional capital will be available on favorable terms, or at all. | |
Capital resources potentially available to the Company include proceeds from the exercise of warrants issued in its February 2012 public offering, the Company’s at-the-market issuance sales agreements, and issuance of additional 2019 notes and/or Tranche B notes to Deerfield (see Note 11 – Facility financing agreement). | |
Fair Value of Financial Instruments | 'Fair Value of Financial Instruments — The carrying amounts reported in the accompanying financial statements for cash and cash equivalents, accounts payable and accrued liabilities approximate their fair value due to their relatively short maturities. The fair value of the cash equivalents, note payable to related party, senior convertible notes, and the Facility Agreement are discussed in Note 13, “Fair Value Measurements.” |
Recently Issued Accounting Standards | ' |
Recently Issued Accounting Standards — In July 2013, the FASB issued ASU 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit when a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (a consensus of the FASB Emerging Issues Task Force). The amendments in this ASU provide guidance on the financial statements presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. An unrecognized tax benefit should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward with certain exceptions, in which case such an unrecognized tax benefit should be presented in the financial statements as a liability. The amendments in this ASU do not require new recurring disclosures. The amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. The adoption of the new requirement did not have a significant impact on the Company’s consolidated financial statements. |
Accrued_expenses_and_other_cur1
Accrued expenses and other current liabilities (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Accrued Expenses and Other Current Liabilities | ' | ||||||||
Accrued expenses and other current liabilities are comprised of the following (in thousands): | |||||||||
March 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Salary and related expenses | $ | 6,650 | $ | 12,193 | |||||
Research and clinical trial costs | 1,304 | 1,311 | |||||||
Accrued interest | 958 | 2,082 | |||||||
Construction in progress | 370 | 342 | |||||||
Other | 5,724 | 5,706 | |||||||
Accrued expenses and other current liabilities | $ | 15,006 | $ | 21,634 | |||||
Accounting_for_stockbased_comp1
Accounting for stock-based compensation (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Stock-Based Compensation Expense Recognized in Condensed Consolidated Statements of Operations | ' | ||||||||
Total stock-based compensation expense recognized in the accompanying condensed consolidated statements of operations for the three months ended March 31, 2014 and 2013 was as follows (in thousands): | |||||||||
Three months ended | |||||||||
March 31, | |||||||||
2014 | 2013 | ||||||||
Stock-based compensation | $ | 10,937 | $ | 5,189 | |||||
Property_and_equipment_Tables
Property and equipment (Tables) | 3 Months Ended | ||||||||||||
Mar. 31, 2014 | |||||||||||||
Property and Equipment | ' | ||||||||||||
Property and equipment — net consist of the following (dollar amounts in thousands): | |||||||||||||
Estimated | March 31, | December 31, | |||||||||||
Useful | 2014 | 2013 | |||||||||||
Life | |||||||||||||
(Years) | |||||||||||||
Land | — | $ | 5,273 | $ | 5,273 | ||||||||
Buildings | 39-40 | 54,948 | 54,948 | ||||||||||
Building improvements | May-40 | 114,099 | 114,099 | ||||||||||
Machinery and equipment | 15-Mar | 82,189 | 82,189 | ||||||||||
Furniture, fixtures and office equipment | 10-May | 5,046 | 5,046 | ||||||||||
Computer equipment and software | 3 | 11,306 | 11,289 | ||||||||||
Leasehold improvements | 4 | 17 | 17 | ||||||||||
Construction in progress | 17,041 | 14,756 | |||||||||||
289,919 | 287,617 | ||||||||||||
Less accumulated depreciation and amortization | (113,582 | ) | (111,060 | ) | |||||||||
Property and equipment — net | $ | 176,337 | $ | 176,557 | |||||||||
Depreciation and Amortization Expense | ' | ||||||||||||
Depreciation and amortization expense related to property and equipment for the three months ended March 31, 2014 and 2013 was as follows (in thousands): | |||||||||||||
Three months ended | |||||||||||||
March 31, | |||||||||||||
2014 | 2013 | ||||||||||||
Depreciation and amortization expense | $ | 2,522 | $ | 2,990 | |||||||||
Senior_convertible_notes_Table
Senior convertible notes (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Summary of Senior Convertible Notes | ' | ||||||||
Senior convertible notes consist of the following (in thousands): | |||||||||
March 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
2015 notes | |||||||||
Principal amount | $ | 100,000 | $ | 100,000 | |||||
Unaccreted debt issuance expense | (1,338 | ) | (1,561 | ) | |||||
Net carrying amount | $ | 98,662 | $ | 98,439 | |||||
Facility_financing_agreement_T
Facility financing agreement (Tables) | 3 Months Ended | ||||
Mar. 31, 2014 | |||||
Components and Activity of Facility Agreement | ' | ||||
The components and activity from initial recording of the facility financing agreement recorded through March 31, 2014 consist of the following (in thousands): | |||||
March 31, | |||||
2014 | |||||
2019 notes | |||||
Initial principal amount | $ | 120,000 | |||
Principal converted to equity | (92,500 | ) | |||
Debt discount-net of amortization | (1,546 | ) | |||
Unaccreted debt issuance expense | (83 | ) | |||
Net carrying amount of facility financing agreement | $ | 25,871 | |||
Milestone Rights | |||||
Initial milestone rights fair value | $ | 16,276 | |||
Debt discount-net of amortization | (51 | ) | |||
Unaccreted debt issuance expense | (61 | ) | |||
Less current portion of milestone rights included in other current liabilities | (3,151 | ) | |||
Net carrying amount included in other liabilities | $ | 13,013 | |||
Commitment Asset | |||||
Initial commitment asset fair value | $ | 13,393 | |||
Tranche B commitment asset fair value | $ | 2,921 | |||
Less Tranche 2 portion of commitment asset | (3,656 | ) | |||
Less Tranche 3 portion of commitment asset | (4,580 | ) | |||
Commitment asset value included in other assets | $ | 8,078 | |||
Accretion of Debt Issuance Cost and Debt Discount | ' | ||||
Accretion of debt issuance cost and debt discount in connection with the Facility financing agreement during the three months ended March 31, 2014 are as follows (in thousands): | |||||
Three months ended | |||||
March 31, 2014 | |||||
Accretion expense- debt issuance cost | $ | 282 | |||
Accretion expense- debt discount | $ | 6,367 |
Fair_Value_of_Financial_Instru1
Fair Value of Financial Instruments (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
Summary of Carrying Values and Estimated Fair Values of Senior Convertible Notes and Facility Financing Obligation | ' | ||||||||||||||||
The following is a summary of the carrying values and estimated fair values of the Company’s 5.75% Senior Convertible Notes due 2015 (the “2015 notes”) and the 2019 notes (in millions). | |||||||||||||||||
March 31, 2014 | December 31, 2013 | ||||||||||||||||
Carrying | Estimated | Carrying | Estimated | ||||||||||||||
value | fair value | value | fair value | ||||||||||||||
2015 notes | $ | 98.7 | $ | 95.1 | $ | 98.4 | $ | 102.2 | |||||||||
2019 notes | $ | 25.9 | $ | 25.7 | $ | 102.3 | $ | 107 |
Recovered_Sheet1
Description of Business and Basis of Presentation - Additional Information (Detail) (USD $) | 277 Months Ended | 0 Months Ended | 0 Months Ended | |||||||||
Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Jun. 30, 2013 | Mar. 31, 2014 | Feb. 28, 2014 | Feb. 28, 2014 | |
Senior convertible notes due December 31, 2019 | Senior convertible notes due December 31, 2019 | Senior convertible notes due December 31, 2019 | Senior convertible notes due December 31, 2019 | Senior convertible notes due December 31, 2019 | Senior convertible notes due December 31, 2019 | Senior convertible notes due December 31, 2019 | Senior convertible notes due December 31, 2019 | |||||
Deerfield | Deerfield | Deerfield | Deerfield | Deerfield | Deerfield | |||||||
Facility Agreement | Notes Issued in Four Equal Tranches | Notes Issued in Four Equal Tranches | Tranche B notes | Tranche B notes | ||||||||
Maximum | Tranche | Scenario 1 | Scenario 2 | |||||||||
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deficit accumulated during the development stage | $2,348,458,000 | $2,296,402,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Goodwill impairment | 151,428,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash flow from operation since inception | -1,761,983,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash and cash equivalents | 35,759,000 | 70,790,000 | 28,005,000 | 61,840,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Available borrowings under loan agreement | 30,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accrued interest on loan arrangement | 1,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt facility principal amount | ' | ' | ' | ' | 120,000,000 | ' | ' | ' | 160,000,000 | 120,000,000 | 90,000,000 | 20,000,000 |
Number of equal tranches | ' | ' | ' | ' | ' | ' | ' | ' | 4 | ' | ' | ' |
Debt facility periodic principal amount | ' | ' | ' | ' | ' | ' | ' | ' | 40,000,000 | ' | ' | ' |
Debt facility carrying amount | ' | ' | ' | ' | 25,900,000 | 102,300,000 | 40,000,000 | ' | ' | 40,000,000 | ' | ' |
Percentage of principal amount converted in to common stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 150.00% | 33.33% |
Maximum available amount of credit facility under covenant restrictions | ' | ' | ' | ' | ' | ' | ' | $25,000,000 | ' | ' | ' | ' |
Recovered_Sheet2
Accrued Expenses and Other Current Liabilities (Detail) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Accrued Expenses and Other Current Liabilities [Line Items] | ' | ' |
Salary and related expenses | $6,650 | $12,193 |
Research and clinical trial costs | 1,304 | 1,311 |
Accrued interest | 958 | 2,082 |
Construction in progress | 370 | 342 |
Other | 5,724 | 5,706 |
Accrued expenses and other current liabilities | $15,006 | $21,634 |
StockBased_Compensation_Expens
Stock-Based Compensation Expense Recognized in Condensed Consolidated Statements of Operations (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Stock-based compensation | $10,937 | $5,189 |
Accounting_for_Stock_Based_Com
Accounting for Stock- Based Compensation - Additional Information (Detail) (USD $) | 3 Months Ended |
Mar. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Share based payment award , vesting period | '4 years |
Fair value of restricted stock units | 46,400 |
Number of restricted stock options | 17,700 |
Weighted average vesting period for unrecognized compensation cost | '1 year 10 months 6 days |
Restricted Stock Units (RSUs) | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Fair value of Restricted stock options granted , value | 296,000 |
Weighted average grant date fair value of the stock options granted | 6.39 |
Unrecognized compensation cost related to non vested stock options | 9,900,000 |
Stock Options | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Fair value of the stock options granted , value | 81,000 |
Weighted average grant date fair value of the stock options granted | 4.58 |
Unrecognized compensation cost related to non vested stock options | 14,000,000 |
Performance Based Restricted Stock Units | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Unrecognized compensation cost related to non vested stock options | 107,000 |
Performance Based Stock Options | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Unrecognized compensation cost related to non vested stock options | 3,700,000 |
Net_Loss_per_Common_Share_Addi
Net Loss per Common Share - Additional Information (Detail) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Net Income Loss Per Common Share [Line Items] | ' | ' |
Companies common stock share outstanding | 9,000,000 | ' |
Antidilutive securities | 67,791,150 | 133,500,568 |
Shares loaned under the share lending arrangement | 9,000,000 | 9,000,000 |
Recovered_Sheet3
State Research and Development Credit Exchange Receivable - Additional Information (Detail) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Dec. 31, 2013 | |
Accounts and Other Receivables [Line Items] | ' | ' |
Percentage of credit exchange receivable | 65.00% | ' |
Estimated amounts receivable under program | $380,000 | $298,000 |
Property_and_Equipment_Detail
Property and Equipment (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Dec. 31, 2013 |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment - gross | $289,919 | $287,617 |
Less accumulated depreciation and amortization | -113,582 | -111,060 |
Property and equipment - net | 176,337 | 176,557 |
Land | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment - gross | 5,273 | 5,273 |
Buildings | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment - gross | 54,948 | 54,948 |
Buildings | Minimum | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Estimated Useful Life (Years) | '39 years | ' |
Buildings | Maximum | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Estimated Useful Life (Years) | '40 years | ' |
Building Improvements | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment - gross | 114,099 | 114,099 |
Building Improvements | Minimum | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Estimated Useful Life (Years) | '5 years | ' |
Building Improvements | Maximum | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Estimated Useful Life (Years) | '40 years | ' |
Machinery and Equipment | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment - gross | 82,189 | 82,189 |
Machinery and Equipment | Minimum | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Estimated Useful Life (Years) | '3 years | ' |
Machinery and Equipment | Maximum | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Estimated Useful Life (Years) | '15 years | ' |
Furniture, fixtures and office equipment | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment - gross | 5,046 | 5,046 |
Furniture, fixtures and office equipment | Minimum | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Estimated Useful Life (Years) | '5 years | ' |
Furniture, fixtures and office equipment | Maximum | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Estimated Useful Life (Years) | '10 years | ' |
Computer Equipment and Software | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Estimated Useful Life (Years) | '3 years | ' |
Property and equipment - gross | 11,306 | 11,289 |
Leasehold Improvements | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Estimated Useful Life (Years) | '4 years | ' |
Property and equipment - gross | 17 | 17 |
Construction in Progress | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment - gross | $17,041 | $14,756 |
Property_and_Equipment_Additio
Property and Equipment - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2014 | |
Depreciation and Other Amortization Expenses [Line Items] | ' |
Amortization period of lease hold improvements | '4 years |
Depreciation_and_Amortization_
Depreciation and Amortization Expense (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Property, Plant and Equipment [Line Items] | ' | ' |
Depreciation and amortization expense | $2,522 | $2,990 |
Common_and_Preferred_Stock_Add
Common and Preferred Stock - Additional Information (Detail) (USD $) | 3 Months Ended | 0 Months Ended | |||||||
Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Aug. 18, 2010 | Mar. 31, 2014 | Feb. 28, 2014 | Jun. 30, 2013 | Mar. 31, 2014 | |
Senior convertible notes due August 15, 2015 | Senior convertible notes due August 15, 2015 | Senior convertible notes due August 15, 2015 | Senior convertible notes due December 31, 2019 | Deerfield | Deerfield | Deerfield | |||
Senior convertible notes due December 31, 2019 | Senior convertible notes due December 31, 2019 | Senior convertible notes due December 31, 2019 | |||||||
Notes Issued in Four Equal Tranches | Notes Issued in Four Equal Tranches | ||||||||
Tranche | |||||||||
Class of Stock [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock, shares authorized | 550,000,000 | 550,000,000 | ' | ' | ' | ' | ' | ' | ' |
Common stock, par value | $0.01 | $0.01 | ' | ' | ' | ' | ' | ' | ' |
Undesignated preferred stock, shares authorized | 10,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Undesignated preferred stock, par value | $0.01 | $0.01 | ' | ' | ' | ' | ' | ' | ' |
Common stock, shares issued | 386,934,914 | 369,391,972 | ' | ' | ' | ' | ' | ' | ' |
Common stock, shares outstanding | 386,934,914 | 369,391,972 | ' | ' | ' | ' | ' | ' | ' |
Common stock loaned under share lending agreement, shares | 9,000,000 | 9,000,000 | ' | ' | ' | ' | ' | ' | ' |
Principal amount | ' | ' | $100,000,000 | $100,000,000 | $100,000,000 | $120,000,000 | ' | $160,000,000 | $120,000,000 |
Nominal lending fee | $0.01 | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum sales amount under the agreement | ' | ' | ' | ' | ' | ' | ' | 160,000,000 | ' |
Number of equal tranches | ' | ' | ' | ' | ' | ' | ' | 4 | ' |
Debt facility periodic principal amount | ' | ' | ' | ' | ' | ' | ' | 40,000,000 | ' |
Aggregate principal amount of convertible notes | ' | ' | ' | ' | ' | ' | $60,000,000 | ' | ' |
Common shares issuable upon conversion | ' | ' | ' | ' | ' | ' | 12,000,000 | ' | ' |
Conversion price of shares | ' | ' | ' | ' | $6.80 | ' | $5 | ' | ' |
Commitments_and_Contingencies_
Commitments and Contingencies - Additional Information (Detail) (Deerfield, Milestone Rights Liability, Maximum, USD $) | Jul. 01, 2013 |
In Millions, unless otherwise specified | |
Deerfield | Milestone Rights Liability | Maximum | ' |
Commitments and Contingencies [Line Items] | ' |
Contingent liability for milestone payments | $90 |
RelatedParty_Arrangements_Addi
Related-Party Arrangements - Additional Information (Detail) (USD $) | Mar. 31, 2014 | Oct. 31, 2013 | Oct. 31, 2007 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Oct. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 |
In Millions, unless otherwise specified | Principal stockholder | Principal stockholder | Principal stockholder | Principal stockholder | Principal stockholder | Principal stockholder | Related Party Debt | Related Party Debt | |
Loan Arrangement | Loan Arrangement | Loan Arrangement | Amended Agreement | Letter Agreement | Letter Agreement | ||||
Maximum | Minimum | LIBOR | |||||||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loan agreement with related party | ' | $370 | $350 | ' | ' | ' | ' | ' | ' |
Promissory note maturity date | ' | ' | ' | ' | ' | ' | 5-Jan-20 | ' | ' |
Principal amount outstanding under credit facility | ' | ' | ' | 49.5 | ' | ' | ' | ' | ' |
Amount available for future borrowings | 30.1 | ' | ' | 30.1 | ' | ' | ' | ' | ' |
Fixed borrowing rate | ' | ' | ' | 5.84% | ' | ' | ' | ' | ' |
Interest payable | 1.3 | ' | ' | 1.3 | ' | ' | ' | ' | ' |
Amount prepaid for cancellation of indebtedness | ' | ' | ' | ' | 200 | ' | ' | ' | ' |
Number of months advances outstanding | ' | ' | ' | ' | ' | '12 months | ' | ' | ' |
Related party transaction prepayment period | ' | ' | ' | '90 days | ' | ' | ' | ' | ' |
Aggregate principal amount cancelled | ' | ' | ' | $105 | ' | ' | ' | ' | ' |
Interest rate (LIBOR) | ' | ' | ' | ' | ' | ' | ' | ' | 5.00% |
Description of variable rate interest | ' | ' | ' | ' | ' | ' | ' | 'The interest rate will increase to the one-year LIBOR calculated on the date of the initial advance or in effect on the date of default, whichever is greater, plus 5% per annum. | ' |
Summary_of_Senior_Convertible_
Summary of Senior Convertible Notes (Detail) (Senior convertible notes due August 15, 2015, USD $) | Mar. 31, 2014 | Dec. 31, 2013 | Aug. 18, 2010 |
In Thousands, unless otherwise specified | |||
Senior convertible notes due August 15, 2015 | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Principal amount | $100,000 | $100,000 | $100,000 |
Unaccreted debt issuance expense | -1,338 | -1,561 | ' |
Net carrying amount | $98,662 | $98,439 | ' |
Senior_Convertible_Notes_Addit
Senior Convertible Notes - Additional Information (Detail) (USD $) | 3 Months Ended | 0 Months Ended | |||
Mar. 31, 2014 | Mar. 31, 2013 | Aug. 18, 2010 | Mar. 31, 2014 | Dec. 31, 2013 | |
Senior convertible notes due August 15, 2015 | Senior convertible notes due August 15, 2015 | Senior convertible notes due August 15, 2015 | |||
D | |||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' |
Principal amount | ' | ' | $100,000,000 | $100,000,000 | $100,000,000 |
Senior notes, effective interest rate | ' | ' | 5.75% | 5.75% | ' |
Accrued interest | 1,300,000 | ' | ' | 1,000,000 | 2,400,000 |
No of convertible shares | ' | ' | 147.0859 | ' | ' |
Principal amount per share | ' | ' | $1,000 | ' | ' |
Conversion price of shares | ' | ' | $6.80 | ' | ' |
Percentage of repurchase price | ' | ' | 100.00% | ' | ' |
Percentage of conversion price equaling stock price | ' | ' | 150.00% | ' | ' |
Trading days | ' | ' | 20 | ' | ' |
Consecutive trading days | ' | ' | '30 days | ' | ' |
Issuance cost | ' | ' | 4,200,000 | ' | ' |
Accretion of debt issuance costs | $223,000 | $209,000 | ' | ' | ' |
Components_and_Activity_of_Fac
Components and Activity of Facility Agreement (Detail) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | Jul. 01, 2013 |
In Thousands, unless otherwise specified | |||
Securities Financing Transaction [Line Items] | ' | ' | ' |
Net carrying amount of facility financing agreement | $25,871 | $102,300 | ' |
Initial commitment asset fair value | 13,393 | ' | ' |
Commitment asset value included in other assets | 8,078 | ' | ' |
Tranche B notes | ' | ' | ' |
Securities Financing Transaction [Line Items] | ' | ' | ' |
Tranche B commitment asset fair value | 2,921 | ' | ' |
Tranche Two | ' | ' | ' |
Securities Financing Transaction [Line Items] | ' | ' | ' |
Less portion of commitment asset | -3,656 | ' | ' |
Tranche Three | ' | ' | ' |
Securities Financing Transaction [Line Items] | ' | ' | ' |
Less portion of commitment asset | -4,580 | ' | ' |
Senior convertible notes due December 31, 2019 | ' | ' | ' |
Securities Financing Transaction [Line Items] | ' | ' | ' |
Initial principal amount | 120,000 | ' | ' |
Principal converted to equity | -92,500 | ' | ' |
Debt discount-net of amortization | -1,546 | ' | ' |
Unaccreted debt issuance expense | -83 | ' | ' |
Net carrying amount of facility financing agreement | 25,871 | ' | ' |
Net carrying amount included in other liabilities | 25,900 | 102,300 | ' |
Tranche B commitment asset fair value | ' | ' | 2,900 |
Milestone Rights Liability | ' | ' | ' |
Securities Financing Transaction [Line Items] | ' | ' | ' |
Initial principal amount | 16,276 | ' | ' |
Debt discount-net of amortization | -51 | ' | ' |
Unaccreted debt issuance expense | -61 | ' | ' |
Less current portion of milestone rights included in other current liabilities | -3,151 | ' | ' |
Net carrying amount included in other liabilities | $13,013 | ' | ' |
Accretion_of_Debt_Issuance_Cos
Accretion of Debt Issuance Cost and Debt Discount in Connection with Deerfield Financing (Detail) (Deerfield, USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2014 |
Deerfield | ' |
Debt Instrument [Line Items] | ' |
Accretion expense- debt issuance cost | $282 |
Accretion expense- debt discount | $6,367 |
Facility_Financing_Agreement_A
Facility Financing Agreement - Additional Information (Detail) (USD $) | 277 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | 1 Months Ended | 3 Months Ended | ||||||||||||||||
Mar. 31, 2014 | Feb. 28, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Jul. 01, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Feb. 28, 2014 | Feb. 28, 2014 | Feb. 28, 2014 | Feb. 28, 2014 | Feb. 28, 2014 | Jun. 30, 2013 | Mar. 31, 2014 | Feb. 28, 2014 | Feb. 28, 2014 | Jan. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | |
Tranche B notes | Tranche B notes | Senior convertible notes due December 31, 2019 | Senior convertible notes due December 31, 2019 | Senior convertible notes due December 31, 2019 | Senior convertible notes due December 31, 2019 | Senior convertible notes due December 31, 2019 | Deerfield | Deerfield | Deerfield | Deerfield | Deerfield | Deerfield | Deerfield | Deerfield | Deerfield | Deerfield | Deerfield | Deerfield | Deerfield | Deerfield | Deerfield | ||
Fourth Tranche | Tranche B notes | Senior convertible notes due December 31, 2019 | Senior convertible notes due December 31, 2019 | Senior convertible notes due December 31, 2019 | Senior convertible notes due December 31, 2019 | Senior convertible notes due December 31, 2019 | Senior convertible notes due December 31, 2019 | Senior convertible notes due December 31, 2019 | Senior convertible notes due December 31, 2019 | Senior convertible notes due December 31, 2019 | Senior convertible notes due December 31, 2019 | Senior convertible notes due December 31, 2019 | Senior convertible notes due December 31, 2019 | Senior convertible notes due December 31, 2019 | Senior convertible notes due December 31, 2019 | Senior convertible notes due December 31, 2019 | |||||||
Maximum | Tranche B notes | Tranche B notes | Tranche B notes | Tranche B notes | Notes Issued in Four Equal Tranches | Notes Issued in Four Equal Tranches | Tranche B notes | Tranche B notes | Tranche Two | Tranche Two | Tranche One and Tranche Three | Tranche Three | Tranche One | ||||||||||
Scenario 1 | Scenario 2 | If the Company enters into a collaboration with a third party to commercialize AFFREZZA | Tranche | Scenario 1 | Scenario 2 | Minimum | |||||||||||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount of common shares issued upon conversion | ' | ' | ' | $120,000,000 | ' | ' | ' | ' | ' | ' | ' | $90,000,000 | $20,000,000 | ' | $160,000,000 | $120,000,000 | $90,000,000 | $20,000,000 | ' | ' | ' | ' | ' |
Number of equal tranches | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4 | ' | ' | ' | ' | ' | ' | ' | ' |
Debt facility periodic principal amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 40,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Debt facility carrying amount | ' | ' | ' | 25,900,000 | 102,300,000 | ' | ' | ' | 40,000,000 | ' | ' | ' | ' | ' | ' | 40,000,000 | ' | ' | ' | ' | ' | ' | ' |
Senior notes, effective interest rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9.75% | ' | ' | 8.75% | 9.75% | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of principal amount converted in to common stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 150.00% | 33.33% | ' | ' | ' | 150.00% | 33.33% | ' | ' | ' | ' | ' |
Repayment as a percentage of original principal amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt instrument maturity date | ' | 31-Dec-19 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate principal amount of convertible notes | ' | ' | ' | ' | ' | ' | ' | ' | ' | 60,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common shares issuable upon conversion | ' | ' | ' | ' | ' | ' | ' | ' | ' | 12,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion price of shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | $5 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Commitment asset at fair value | ' | ' | 2,921,000 | ' | ' | 2,900,000 | 40,000,000 | 90,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount of common shares issued upon conversion | 3,331,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 33,500,000 | 6,500,000 | 60,000,000 | 40,000,000 | 12,500,000 |
Common shares issued upon conversion | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6,559,251 | 1,293,224 | ' | 7,121,120 | 2,142,709 |
Loss on debt conversion | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 600,000 | ' | ' | ' |
Debt extinguishment costs | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $3,000,000 | ' | $3,000,000 | ' |
Fair_Value_of_Financial_Instru2
Fair Value of Financial Instruments - Additional Information (Detail) (USD $) | 3 Months Ended | 0 Months Ended | 3 Months Ended | |||||||||
Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Jul. 01, 2013 | Feb. 28, 2014 | Jul. 01, 2013 | Jul. 01, 2013 | Mar. 31, 2014 | Aug. 18, 2010 | Mar. 31, 2014 | Mar. 31, 2014 | |
Senior convertible notes due December 31, 2019 | Senior convertible notes due December 31, 2019 | Senior convertible notes due December 31, 2019 | Senior convertible notes due December 31, 2019 | Senior convertible notes due August 15, 2015 | Senior convertible notes due August 15, 2015 | Commitment Asset | Milestone Rights Liability | |||||
Fair Value, Inputs, Level 3 | Fair Value, Inputs, Level 3 | Fair Value, Inputs, Level 3 | Fair Value, Inputs, Level 3 | Fair Value, Inputs, Level 3 | ||||||||
Income Approach Valuation Technique | Income Approach Valuation Technique | Income Approach Valuation Technique | Income Approach Valuation Technique | |||||||||
Tranche One | ||||||||||||
Fair Value of Financial Instruments [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash equivalents | $35,759,000 | $28,005,000 | $70,790,000 | $61,840,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Cash equivalents, money market funds | 34,900,000 | ' | 67,700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Senior notes, effective interest rate | ' | ' | ' | ' | ' | ' | ' | ' | 5.75% | 5.75% | ' | ' |
Market discount rate | ' | ' | ' | ' | ' | ' | 12.70% | 12.50% | ' | ' | 12.00% | 17.50% |
Additional commitment asset | ' | ' | ' | ' | 2,900,000 | 2,900,000 | ' | ' | ' | ' | ' | ' |
Percentage of market yield | ' | ' | ' | ' | ' | 11.90% | ' | ' | ' | ' | ' | ' |
Transfers of assets between fair value measurement | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Transfers of liabilities between fair value measurement | $0 | $0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Summary_of_Carrying_Values_and
Summary of Carrying Values and Estimated Fair Values of Senior Convertible Notes (Detail) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
Senior convertible notes due August 15, 2015 | ' | ' |
Convertible Debt [Line Items] | ' | ' |
Carrying value | $98,662,000 | $98,439,000 |
Estimated fair value | 95,100,000 | 102,200,000 |
Senior convertible notes due December 31, 2019 | ' | ' |
Convertible Debt [Line Items] | ' | ' |
Carrying value | 25,900,000 | 102,300,000 |
Estimated fair value | $25,700,000 | $107,000,000 |
Subsequent_Event_Additional_In
Subsequent Event - Additional Information (Detail) (USD $) | 277 Months Ended | 3 Months Ended | 0 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2014 | 6-May-14 | Apr. 02, 2014 | Apr. 02, 2014 | |
Tranche One | Subsequent Event | Subsequent Event | Subsequent Event | ||
Senior convertible notes due December 31, 2019 | Tranche B notes | Tranche One | Tranche One and Tranche Three | ||
Deerfield | Senior convertible notes due December 31, 2019 | Senior convertible notes due December 31, 2019 | |||
Deerfield | Deerfield | ||||
Subsequent Event [Line Items] | ' | ' | ' | ' | ' |
Amount of common shares issued upon conversion | $3,331,000 | $12,500,000 | ' | $7,500,000 | $60,000,000 |
Common shares issued upon conversion | ' | 2,142,709 | ' | 1,500,000 | 10,763,829 |
Principal amount of notes purchased | ' | ' | $20,000,000 | ' | ' |