Document_And_Entity_Informatio
Document And Entity Information | 3 Months Ended | |
Mar. 31, 2015 | Apr. 27, 2015 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 31-Mar-15 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | DYAX CORP | |
Entity Central Index Key | 907562 | |
Current Fiscal Year End Date | -19 | |
Entity Filer Category | Large Accelerated Filer | |
Trading Symbol | DYAX | |
Entity Common Stock, Shares Outstanding | 145,673,833 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $16,617 | $19,392 |
Short-term investments | 165,263 | 165,260 |
Accounts receivable, net | 9,645 | 12,221 |
Inventory | 4,585 | 4,504 |
Other current assets | 5,433 | 7,053 |
Total current assets | 201,543 | 208,430 |
Fixed assets, net | 4,434 | 4,631 |
Restricted cash | 1,100 | 1,100 |
Other assets | 4,268 | 2,972 |
Total assets | 211,345 | 217,133 |
Current liabilities: | ||
Accounts payable and accrued expenses | 15,400 | 17,373 |
Current portion of deferred revenue | 3,531 | 3,373 |
Other current liabilities | 1,276 | 1,159 |
Total current liabilities | 20,207 | 21,905 |
Deferred revenue | 4,056 | 4,201 |
Notes payable | 82,324 | 82,165 |
Deferred rent and other long-term liabilities | 2,917 | 3,059 |
Total liabilities | 109,504 | 111,330 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, $0.01 par value; 1,000,000 shares authorized; 0 shares issued and outstanding at March 31, 2015 and December 31, 2014, respectively | 0 | 0 |
Common stock, $0.01 par value; 200,000,000 shares authorized; 137,016,747 and 136,662,175 shares issued and outstanding at March 31, 2015 and December 31, 2014, respectively | 1,370 | 1,367 |
Additional paid-in capital | 653,539 | 650,249 |
Accumulated deficit | -553,112 | -545,841 |
Accumulated other comprehensive income | 44 | 28 |
Total stockholders' equity | 101,841 | 105,803 |
Total liabilities and stockholders' equity | $211,345 | $217,133 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Preferred stock, par value | $0.01 | $0.01 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 137,016,747 | 136,662,175 |
Common stock, shares outstanding | 137,016,747 | 136,662,175 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations and Comprehensive Loss (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Revenues: | ||
Product sales, net | $16,013 | $12,507 |
Development and license fees | 1,032 | 1,610 |
Royalty revenue | 3,373 | 0 |
Total revenues, net | 20,418 | 14,117 |
Costs and expenses: | ||
Cost of product sales | 2,096 | 785 |
Cost of royalty revenue | 1,687 | 0 |
Research and development expenses | 10,242 | 6,869 |
Selling, general and administrative expenses | 11,041 | 9,489 |
Total costs and expenses | 25,066 | 17,143 |
Loss from operations | -4,648 | -3,026 |
Other income (expense): | ||
Interest and other income | 88 | 38 |
Interest and other expenses | -2,711 | -2,723 |
Total other expense, net | -2,623 | -2,685 |
Net loss | -7,271 | -5,711 |
Other comprehensive income: | ||
Unrealized gain (loss) on investments | 16 | 50 |
Comprehensive loss | ($7,255) | ($5,661) |
Basic and diluted net loss per share | ($0.05) | ($0.05) |
Shares used in computing basic and diluted net loss per share | 136,837,152 | 124,618,519 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Cash flows from operating activities: | ||
Net loss | ($7,271) | ($5,711) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Amortization of purchased premium/discount | 208 | 92 |
Depreciation of fixed assets | 228 | 211 |
Non-cash interest expense | 159 | 162 |
Compensation expenses associated with stock-based compensation plans | 2,834 | 1,240 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 2,766 | 1,431 |
Other current assets | 1,619 | -379 |
Inventory | -1,361 | 133 |
Accounts payable and accrued expenses | -1,843 | -2,675 |
Deferred revenue | -178 | -196 |
Long-term deferred rent | -73 | -50 |
Other | -49 | 127 |
Net cash used in operating activities | -2,961 | -5,615 |
Cash flows from investing activities: | ||
Purchase of investments | -27,195 | -84,531 |
Proceeds from maturities of investments | 27,000 | 0 |
Purchase of fixed assets | -43 | -79 |
Net cash used in investing activities | -238 | -84,610 |
Cash flows from financing activities: | ||
Gross proceeds from common stock offering | 0 | 85,100 |
Fees associated with common stock offering | 0 | -5,106 |
Repayment of long-term obligations | 0 | -116 |
Proceeds from the issuance of common stock under employee stock purchase plan and exercise of stock options | 424 | 1,640 |
Net cash provided by financing activities | 424 | 81,518 |
Net decrease in cash and cash equivalents | -2,775 | -8,707 |
Cash and cash equivalents at beginning of the period | 19,392 | 68,085 |
Cash and cash equivalents at end of the period | 16,617 | 59,378 |
Supplemental disclosure of cash flow information: | ||
Interest paid | 2,427 | 2,468 |
Unpaid fees associated with common stock offering | $0 | $277 |
BUSINESS_OVERVIEW
BUSINESS OVERVIEW | 3 Months Ended | ||
Mar. 31, 2015 | |||
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |||
BUSINESS OVERVIEW | 1. BUSINESS OVERVIEW | ||
Dyax Corp. (“Dyax” or the “Company”) is a biopharmaceutical company focused on: | |||
· | Hereditary Angioedema and Other Plasma-Kallikrein-Mediated Disorders | ||
The Company develops and commercializes treatments for hereditary angioedema (HAE) and is working to identify other disorders that are mediated by plasma kallikrein (PKM disorders). | |||
The Company discovered and developed KALBITOR® (ecallantide), a plasma kallikrein inhibitor, and is selling it in the United States for the treatment of acute attacks of HAE. Additionally, the Company discovered and is developing DX-2930, a fully human monoclonal antibody inhibitor of plasma kallikrein, which is an investigational product candidate to treat HAE prophylactically. On March 31, 2015, the Company announced positive safety, pharmacokinetic, biomarker, and efficacy results from its Phase 1b clinical study of DX-2930. In addition, the Company announced receipt of Fast Track designation from the U.S. Food and Drug Administration (FDA) for the investigation of DX-2930 for HAE. | |||
The Company has also developed a biomarker assay that detects the activation of plasma kallikrein in patient blood. It intends to use this assay to expedite the development of DX-2930. | |||
· | Licensing and Funded Research Portfolio (LFRP) | ||
The Company has a portfolio of product candidates being developed by licensees based on its phage display technology. This portfolio currently includes one approved product, CYRAMZA® (ramucirumab) marketed by Eli Lilly & Company (Lilly), and multiple product candidates in various stages of clinical development for which the Company is eligible to receive future royalties and/or milestone payments. | |||
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||||||
Basis of Presentation | |||||||||||||||||
The accompanying unaudited interim condensed consolidated financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information. It is management’s opinion that the accompanying unaudited interim condensed consolidated financial statements reflect all adjustments (which are normal and recurring) necessary for a fair statement of the results for the interim periods. The financial statements should be read in conjunction with the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. The accompanying December 31, 2014 consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by GAAP. | |||||||||||||||||
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) disclosure of contingent assets and liabilities at the dates of the financial statements and (iii) the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. The results of operations for the three months ended March 31, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015. | |||||||||||||||||
Basis of Consolidation | |||||||||||||||||
The accompanying consolidated financial statements for the three months ended March 31, 2014 include the accounts of the Company and the Company's European subsidiaries Dyax S.A., Dyax BV and Dyax Holdings B.V. In 2014, Dyax S.A. and Dyax BV were dissolved and during the three months ended March 31, 2015, Dyax Holdings B.V. was dissolved. All inter-company accounts and transactions have been eliminated. | |||||||||||||||||
Use of Estimates | |||||||||||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the amounts of assets and liabilities reported and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. The significant estimates and assumptions in these financial statements include revenue recognition, product sales allowances, effective interest rate calculation, useful lives with respect to long-lived assets, valuation of stock options, accrued expenses and tax valuation reserves. Actual results could differ from those estimates. | |||||||||||||||||
Concentration of Credit Risk | |||||||||||||||||
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash, cash equivalents, short-term investments and trade accounts receivable. At March 31, 2015 and December 31, 2014, approximately 97% and 98%, respectively, of the Company's cash, cash equivalents and short-term investments were invested in money market funds backed by U.S. Treasury obligations, U.S. Treasury notes and bills, and obligations of United States government agencies held by one financial institution. The Company maintains balances in various operating accounts in excess of federally insured limits. | |||||||||||||||||
The Company provides most of its services and licenses its technology to pharmaceutical and biomedical companies worldwide, and makes all product sales to its distributors. Concentrations of credit risk with respect to trade receivable balances associated with the Company’s development and license fee revenue are usually limited on an ongoing basis, due to the diverse number of licensees and collaborators comprising the Company's customer base. Trade receivable balances associated with the Company’s product sales are comprised of a few customers, due to the Company’s limited distribution network. The Company conducts ongoing credit evaluations of its customers. As of March 31, 2015, five companies accounted for 35% (Lilly), 13% (Walgreens), 12% (US Bioservices), 11% (Accredo) and 11% (Prodigy) of the accounts receivable balance. The balance due from Lilly is made up of $3.4 million in unbilled accounts receivable related to estimated royalties earned during the period. As of December 31, 2014, three companies accounted for 27% (Lilly), 21% (US Bioservices) and 20% (Walgreens) of the accounts receivable balance. | |||||||||||||||||
Cash and Cash Equivalents | |||||||||||||||||
All highly liquid investments purchased with an original maturity of ninety days or less are considered to be cash equivalents. Cash and cash equivalents consist principally of cash, money market and U.S. Treasury funds. | |||||||||||||||||
Investments | |||||||||||||||||
Short-term investments primarily consist of investments with original maturities greater than ninety days and remaining maturities less than one year at period end. The Company has also classified its investments with maturities beyond one year as short-term, based on their highly liquid nature and because such marketable securities represent the investment of cash that is available for current operations. The Company considers its portfolio of investments as available-for-sale. Accordingly, these investments are recorded at fair value, which is based on quoted market prices. | |||||||||||||||||
Inventories | |||||||||||||||||
Inventories are stated at the lower of cost or market with cost determined under the first-in, first-out, or FIFO, basis. The Company evaluates inventory levels and would write-down inventory that is expected to expire prior to being sold, inventory that has a cost basis in excess of its expected net realizable value, inventory in excess of expected sales requirements, or inventory that fails to meet commercial sale specifications, through a charge to cost of product sales. Included in the cost of inventory are capitalized employee stock-based compensation costs for those employees dedicated to manufacturing efforts. Inventory on-hand that will be sold beyond the Company's normal operating cycle is classified as non-current and grouped with other assets on the Company's condensed consolidated balance sheet. | |||||||||||||||||
Inventories consist principally of raw materials and work-in-process. In certain circumstances, the Company will make advance payments to vendors for future inventory deliveries. These advance payments are recorded as other current assets on the condensed consolidated balance sheet. | |||||||||||||||||
Fixed Assets | |||||||||||||||||
Property and equipment are recorded at cost and depreciated over the estimated useful lives of the related assets using the straight-line method. Laboratory and production equipment, furniture and office equipment are depreciated over a three to seven year period. Leasehold improvements are stated at cost and are amortized over the lesser of the non-cancelable term of the related lease or their estimated useful lives. Leased equipment is amortized over the lesser of the life of the lease or their estimated useful lives. Maintenance and repairs are charged to expense as incurred. When assets are retired or otherwise disposed of, the cost of these assets and related accumulated depreciation and amortization are eliminated from the balance sheet and any resulting gains or losses are included in operations in the period of disposal. | |||||||||||||||||
The Company records all proceeds received from the lessor for tenant improvements under the terms of its operating lease as deferred rent. The amounts are amortized on a straight-line basis over the term of the lease as an offset to rent expense. | |||||||||||||||||
Impairment of Long-Lived Assets | |||||||||||||||||
The Company reviews its long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. Each impairment test is based on a comparison of the undiscounted cash flow to the recorded value of the asset. If impairment is indicated, the asset is written down to its estimated fair value, which is computed based on a discounted cash flow basis. | |||||||||||||||||
Revenue Recognition | |||||||||||||||||
The Company’s principal sources of revenue are product sales of KALBITOR, royalties, and development and license fees derived from collaboration and license agreements. In all instances, revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, collectability of the resulting receivable is reasonably assured and the Company has no further performance obligations. | |||||||||||||||||
Product Sales and Allowances | |||||||||||||||||
Product Sales. Product sales are generated from the sale of KALBITOR to the Company’s customers, primarily wholesale and specialty distributors, and are recorded upon delivery when title and risk of loss have passed to the customer. Product sales are recorded net of applicable reserves for distributors, prompt pay and other discounts, government rebates, patient financial assistance programs, product returns and other applicable allowances. | |||||||||||||||||
Under certain arrangements the Company has provided their distributors with extended payment terms. In these circumstances, revenue is not recognized until collectability is reasonably assured or payment from the distributor has been received. | |||||||||||||||||
Product Sales Allowances. The Company establishes reserves for trade distributor, prompt pay and volume discounts, government rebates, patient financial assistance programs, product returns and other applicable allowances. Reserves established for these discounts and allowances are classified as a reduction of accounts receivable (if the amount is payable to the customer) or a liability (if the amount is payable to a party other than the customer). | |||||||||||||||||
Allowances against receivable balances primarily relate to prompt payment discounts and are recorded at the time of sale, resulting in a reduction in product sales revenue. Accruals related to government rebates, patient financial assistance programs, product returns and other applicable allowances are recognized at the time of sale, resulting in a reduction in product sales revenue and an increase in accrued expenses. | |||||||||||||||||
The Company maintains service contracts with its distributors. These contracts include services such as inventory maintenance and patient support services, which have included call center and on-demand nursing services. Accounting standards related to consideration given by a vendor to a customer, including a reseller of a vendor’s product, specify that each consideration given by a vendor to a customer is presumed to be a reduction of the selling price. Consideration should be characterized as a cost if the company receives, or will receive, an identifiable benefit in exchange for the consideration, and fair value of the benefit can be reasonably estimated. The Company has established that patient support services are at fair value and represent a separate and identifiable benefit because these services could be provided by separate third-party vendors. Accordingly, these costs are classified as selling, general and administrative expense. | |||||||||||||||||
Fees paid to distributors for inventory maintenance are calculated as a percentage of the KALBITOR sales price and accordingly, are classified as a reduction in product sales revenue. | |||||||||||||||||
Prompt Payment and Other Discounts. The Company offers a prompt payment discount to its United States distributors. Since the Company expects that these distributors will take advantage of this discount, the Company accrues 100% of the prompt payment discount that is based on the gross amount of each invoice, at the time of sale. This accrual is adjusted quarterly to reflect actual earned discounts. The Company has also offered volume discounts to certain distributors which are accrued quarterly based on sales during the period. | |||||||||||||||||
Government Rebates and Chargebacks. The Company estimates reductions to product sales for Medicaid and Veterans' Administration (VA) programs and the Medicare Part D Coverage Gap Program, as well as for certain other qualifying federal and state government programs. The Company estimates the amount of these reductions based on available KALBITOR patient data, actual sales data and rebate claims. These allowances are adjusted each period based on actual experience. | |||||||||||||||||
Medicaid rebate reserves relate to the Company’s estimated obligations to state jurisdictions under the established reimbursement arrangements of each applicable state. Rebate accruals are recorded during the same period in which the related product sales are recognized. Actual rebate amounts are determined at the time of claim by the state, and the Company will generally make cash payments for such amounts after receiving billings from the state. | |||||||||||||||||
VA rebates or chargeback reserves represent the Company’s estimated obligations resulting from contractual commitments to sell products to qualified healthcare providers at a price lower than the list price charged to the Company’s distributor. The distributor will charge the Company for the difference between what the distributor pays for the product and the ultimate selling price to the qualified healthcare provider. Rebate accruals are established during the same period in which the related product sales are recognized. Actual chargeback amounts for Public Health Service are determined at the time of resale to the qualified healthcare provider from the distributor, and the Company will generally issue credits for such amounts after receiving notification from the distributor. | |||||||||||||||||
Although allowances and accruals are recorded at the time of product sale, certain rebates are typically paid out, on average, up to six months or longer after the sale. Reserve estimates are evaluated quarterly and if necessary, adjusted to reflect actual results. Any such adjustments will be reflected in the Company’s operating results in the period of the adjustment. | |||||||||||||||||
Product Returns. Allowances for product returns are recorded during the period in which the related product sales are recognized, resulting in a reduction to product revenue. The Company does not provide its distributors with a general right of product return. The Company permits returns if the product is damaged or defective when received by customers or if the product shelf life has expired. The Company estimates product returns based upon actual returns history and data provided by a distributor. | |||||||||||||||||
Patient Financial Assistance. The Company offers a financial assistance program for commercially insured KALBITOR patients in order to defray patients’ out-of-pocket expenses, including co-payments, to aid patients’ access to KALBITOR. The Company estimates its liability for this program based on actual but unpaid reimbursements, as well as, an estimated reserve for product sold to and held by distributors as of period end, based on the Company’s historical redemption rates. | |||||||||||||||||
An analysis of the amount of, and change in, reserves related to sales allowances is summarized as follows: | |||||||||||||||||
(In thousands) | Prompt pay | Patient | Government | Returns | Total | ||||||||||||
and other | Financial | rebates and | |||||||||||||||
discounts | assistance | chargebacks | |||||||||||||||
Balance, as of December 31, 2013 | $ | 484 | $ | 90 | $ | 1,634 | $ | 323 | $ | 2,531 | |||||||
Current provisions relating to sales in current year | 3,593 | 443 | 3,270 | 267 | 7,573 | ||||||||||||
Adjustments relating to prior years | 6 | 11 | -209 | 44 | -148 | ||||||||||||
Payments relating to sales in current year | -3,154 | -385 | -1,800 | — | -5,339 | ||||||||||||
Payments/returns relating to sales in prior years | -383 | -16 | -908 | -42 | -1,349 | ||||||||||||
Balance, as of December 31, 2014 | $ | 546 | $ | 143 | $ | 1,987 | $ | 592 | $ | 3,268 | |||||||
Current provisions relating to sales in current year | 877 | 40 | 772 | 23 | 1,712 | ||||||||||||
Adjustments relating to prior years | — | -28 | 60 | -260 | -228 | ||||||||||||
Payments relating to sales in current year | -531 | -71 | -47 | — | -649 | ||||||||||||
Payments/returns relating to sales in prior years | -440 | -21 | -470 | — | -931 | ||||||||||||
Balance, as of March 31, 2015 | $ | 452 | $ | 63 | $ | 2,302 | $ | 355 | $ | 3,172 | |||||||
Development and License Fee Revenues | |||||||||||||||||
Collaboration Agreements. The Company enters into collaboration agreements with other companies for the research and development of therapeutic and diagnostic products. The terms of the agreements may include non-refundable signing and licensing fees, funding for research and development, payments related to manufacturing services, milestone payments and royalties on any product sales derived from collaborations. These multiple element arrangements are analyzed to determine how the deliverables, which often include license and performance obligations such as research, steering committee and manufacturing services, are separated into units of accounting. | |||||||||||||||||
For agreements entered into prior to 2011, the Company evaluated license arrangements with multiple elements in accordance with Accounting Standards Codification (ASC), 605-25 Revenue Recognition – Multiple-Element Arrangements. Since 2011, the Company has applied the guidance of ASU 2009-13 to evaluate license arrangements with multiple elements. This guidance amended the accounting standards for certain multiple element arrangements to: | |||||||||||||||||
· | Provide updated guidance on whether multiple elements exist, how the elements in an arrangement should be separated and how the arrangement considerations should be allocated to the separate elements; | ||||||||||||||||
· | Require an entity to allocate arrangement consideration to each element based on a selling price hierarchy, also called the relative selling price method, where the selling price for an element is based on vendor-specific objective evidence (VSOE), if available; third-party evidence (TPE), if available and VSOE is not available; or the best estimate of selling price (BESP), if neither VSOE or TPE is available; and | ||||||||||||||||
· | Eliminate the use of the residual method and require an entity to allocate arrangement consideration using the selling price hierarchy. | ||||||||||||||||
The Company evaluates all deliverables within an arrangement to determine whether or not they provide value to the licensee on a stand-alone basis. Based on this evaluation, the deliverables are separated into units of accounting. If VSOE or vendor objective evidence (VOE) is not available to determine the fair value of a deliverable, the Company determines the best estimate of selling price associated with the deliverable. The arrangement consideration, including upfront license fees and funding for research and development, is allocated to the separate units based on relative fair value. | |||||||||||||||||
VSOE is based on the price charged when an element is sold separately and represents the actual price charged for that deliverable. When VSOE cannot be established, the Company attempts to establish the selling price of the elements of a license arrangement based on VOE. VOE is determined based on third party evidence for similar deliverables when sold separately. In circumstances when the Company charges a licensee for pass-through costs paid to external vendors for development services, these costs represent VOE. | |||||||||||||||||
When the Company is unable to establish the selling price of an element using VSOE or VOE, management determines BESP for that element. The objective of BESP is to determine the price at which the Company would transact a sale if the element within the license agreement was sold on a stand-alone basis. The Company’s process for establishing BESP involves management’s judgment and considers multiple factors including discounted cash flows, estimated direct expenses and other costs and available data. | |||||||||||||||||
Based on the value allocated to each unit of accounting within an arrangement, upfront fees and other guaranteed payments are allocated to each unit based on relative value. The appropriate revenue recognition method is applied to each unit and revenue is accordingly recognized as each unit is delivered. | |||||||||||||||||
For agreements entered into prior to 2011, revenue related to upfront license fees was spread over the full period of performance under the agreement, unless the license was determined to provide value to the licensee on a stand-alone basis and the fair value of the undelivered performance obligations, typically including research or steering committee services was determinable. | |||||||||||||||||
Steering committee services that were not inconsequential or perfunctory and were determined to be performance obligations were combined with other research services or performance obligations required under an arrangement, if any, to determine the level of effort required in an arrangement and the period over which the Company expected to complete its aggregate performance obligations. | |||||||||||||||||
Whenever the Company determined that an arrangement should be accounted for as a single unit of accounting, it determined the period over which the performance obligations would be completed. Revenue is recognized using either an efforts-based or time-based proportional performance (i.e. straight-line) method. The Company recognizes revenue using an efforts-based proportional performance method when the level of effort required to complete its performance obligations under an arrangement can be reasonably estimated and such performance obligations are provided on a best-efforts basis. Direct labor hours or full-time equivalents are typically used as the measurement of performance. | |||||||||||||||||
If the Company cannot reasonably estimate the level of effort to complete its performance obligations under an arrangement, then revenue under the arrangement is recognized on a straight-line basis over the period the Company is expected to complete its performance obligations. | |||||||||||||||||
Many of the Company's collaboration agreements entitle it to additional payments upon the achievement of performance-based milestones. Milestones that are tied to development or regulatory approval are not considered probable of being achieved until such approval is received. All milestones which are determined to be substantive milestones are recognized as revenue in the period in which they are met in accordance with Accounting Standards Update (ASU) No. 2010-17, Revenue Recognition – Milestone Method. Milestones tied to counter-party performance are not included in the Company’s revenue model until performance conditions are met. Milestones determined to be non-substantive are allocated to each unit of accounting within an arrangement when met. The allocation of the milestone to each unit is based on relative value and revenue related to each unit is recognized accordingly. | |||||||||||||||||
Costs of revenues related to licensees’ product development, including license fees and development and regulatory milestones are classified as research and development in the consolidated statements of operations and comprehensive loss. | |||||||||||||||||
Phage Display Library Licenses. Standard terms of the proprietary phage display library agreements generally include non-refundable signing fees, license maintenance fees, development milestone payments, product license payments and royalties on product sales. Signing fees and maintenance fees are generally recognized on a straight line basis over the term of the agreement as deliverables within these arrangements are determined to not provide the licensee with value on a stand-alone basis and therefore are accounted for as a single unit of accounting. As milestones are achieved under a phage display library license, a portion of the milestone payment, equal to the percentage of the performance period completed when the milestone is achieved, multiplied by the amount of the milestone payment, will be recognized. The remaining portion of the milestone will be recognized over the remaining performance period on a straight-line basis. If the Company has no future obligations under the license, milestone payments under these license arrangements are recognized as revenue when the milestone is achieved. Product license payments, which are optional to the licensee, are substantive and therefore are excluded from the initial allocation of the arrangement consideration. These payments are recognized as revenue when the license is issued upon exercise of the licensee’s option, if the Company has no future obligations under the agreement. If there are future obligations under the agreement, product license payments are recognized as revenue only to the extent of the fair value of the license. Amounts paid in excess of fair value are recognized in a manner similar to milestone payments. Payments received that have not met the appropriate criteria for revenue recognition are recorded as deferred revenue. | |||||||||||||||||
LFRP Milestones | |||||||||||||||||
Non-substantive Milestones. Under the LFRP licenses, the Company is eligible to receive clinical development, regulatory filing and marketing approval milestones, which vary from licensee to licensee. Achievement of these milestones is contingent upon each licensee’s efforts and involves risks and uncertainty related to drug development, regulatory approval and intellectual property that could lead to milestones never being met. | |||||||||||||||||
Based on information available to the Company regarding pre-clinical and clinical candidates in the LFRP developed using its technology and through intellectual property rights granted, it is estimated that the Company could receive up to $66 million in development milestones, $57 million in regulatory filing milestones and $83 million in marketing approval milestones. As achievement of these milestones is outside the control of the Company and is contingent upon the licensees’ efforts, they have been determined to be non-substantive milestones. | |||||||||||||||||
The Company recognized revenue of approximately $75,000 related to milestones under the LFRP for each of the three months ended March 31, 2015 and 2014. | |||||||||||||||||
Substantive Milestones. Under certain collaboration agreements, the Company performs funded research for various collaborators using its phage display technology and libraries. These arrangements typically include technical milestones that are based on agreed upon objectives to be met under the research campaign, which are considered to be commensurate with the Company’s performance and therefore have been determined to be substantive milestones. | |||||||||||||||||
There was no amount recognized for technical milestones during the three months ended March 31, 2015 and 2014. The Company is not eligible to receive any future technical milestones at this time. | |||||||||||||||||
Non-LFRP Milestones | |||||||||||||||||
In certain countries outside of the U.S., the Company has entered into licensing agreements for the development and commercialization of KALBITOR for the treatment of HAE and other angioedema indications. Under these agreements, the Company is eligible to receive certain development and sales milestones. There was no amount recognized for these milestones during the three months ended March 31, 2015 and 2014. | |||||||||||||||||
Royalty Revenue | |||||||||||||||||
Royalty revenue is recognized when it becomes determinable and collectability is reasonably assured. For royalties recognized related to CYRAMZA, the first therapeutic product in the LFRP, which is commercialized by Lilly, the Company is contractually entitled to receive a royalty report from Lilly subsequent to each quarter end. | |||||||||||||||||
Cost of Product Sales and Royalties | |||||||||||||||||
Cost of product sales includes costs to procure, manufacture and distribute KALBITOR and manufacturing royalties. Costs associated with the manufacture of KALBITOR prior to regulatory approval in the United States were expensed when incurred as a research and development cost. | |||||||||||||||||
Cost of royalties is derived from pass-through fees under the Company’s cross license agreement related to royalties from product sales by its LFRP licensees. | |||||||||||||||||
Research and Development | |||||||||||||||||
Research and development costs include all direct costs, including salaries and benefits for research and development personnel, outside consultants, costs of clinical trials, sponsored research, clinical trials insurance, other outside costs, depreciation and facility costs related to the development of drug candidates, as well as certain pass-through costs under the Company’s cross license agreements related to product development by its LFRP licensees, including license fees and development and regulatory milestones. | |||||||||||||||||
Income Taxes | |||||||||||||||||
The Company utilizes the asset and liability method of accounting for income taxes in accordance with ASC 740. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities using the enacted statutory tax rates. At March 31, 2015 and December 31, 2014, there were no unrecognized tax benefits. | |||||||||||||||||
The Company accounts for uncertain tax positions using a "more-likely-than-not" threshold for recognizing and resolving uncertain tax positions. The evaluation of uncertain tax positions is based on factors that include, but are not limited to, changes in tax law, the measurement of tax positions taken or expected to be taken in tax returns, the effective settlement of matters subject to audit, new audit activity and changes in facts or circumstances related to a tax position. The provision for income taxes includes the effects of any resulting tax reserves or unrecognized tax benefits that are considered appropriate as well as the related net interest and penalties, if any. The Company evaluates uncertain tax positions on a quarterly basis and adjusts the level of the liability to reflect any subsequent changes in the relevant facts surrounding the uncertain positions. | |||||||||||||||||
Translation of Foreign Currencies | |||||||||||||||||
Assets and liabilities of the Company's foreign subsidiaries are translated at period end exchange rates. Amounts included in the statements of operations are translated at the average exchange rate for the period. As the Company’s foreign subsidiaries are U.S. dollar functional currency denominated, local currency is remeasured in U.S. dollars and are recorded to other income (expense) in the consolidated statement of operations and comprehensive loss. The Company recorded other expense of $7,000 for the three months ended March 31, 2015 for the translation of foreign currency. The Company recorded no other income or expense for the three months ended March 31, 2014 | |||||||||||||||||
Share-Based Compensation | |||||||||||||||||
The Company’s share-based compensation program consists of share-based awards granted to employees in the form of stock options and restricted stock units (RSUs), as well as its 1998 Employee Stock Purchase Plan, as amended (the Purchase Plan). The Company’s share-based compensation expense is recorded in accordance with ASC 718. | |||||||||||||||||
Income or Loss Per Share | |||||||||||||||||
The Company follows the two-class method when computing net loss per share, as it had issued shares that met the definition of participating securities. The two-class method determines net loss per share for each class of common and participating securities according to dividends declared or accumulated and participation rights in undistributed earnings. The two-class method requires income available to common stockholders for the period to be allocated between common and participating securities based upon their respective rights to receive dividends, as if all income for the period had been distributed. | |||||||||||||||||
The Company presents two earnings or loss per share (EPS) amounts, basic and diluted in accordance with ASC 260. Basic earnings or loss per share is computed using the weighted average number of shares of common stock outstanding. The Company excluded the following common stock equivalents, outstanding as of March 31, 2015 and 2014, from the computation of diluted net loss per share attributable to common stockholders because they had an anti-dilutive impact due to the net loss attributable to common stockholders incurred for the periods: | |||||||||||||||||
Three Months Ended March 31, | |||||||||||||||||
2015 | 2014 | ||||||||||||||||
Options to purchase common stock | 13,008,149 | 11,123,840 | |||||||||||||||
Unvested restricted stock units | 530,541 | 341,452 | |||||||||||||||
Total | 13,538,690 | 11,465,292 | |||||||||||||||
Comprehensive Income (Loss) | |||||||||||||||||
The Company accounts for comprehensive income (loss) under ASC 220, Comprehensive Income, which established standards for reporting and displaying comprehensive income (loss) and its components in a full set of general purpose financial statements. The statement required that all components of comprehensive income (loss) be reported in a financial statement that is displayed with the same prominence as other financial statements. The Company is presenting comprehensive income (loss) as part of the consolidated statements of operations and comprehensive loss. | |||||||||||||||||
Business Segments | |||||||||||||||||
The Company discloses business segments under ASC 280, Segment Reporting. The statement established standards for reporting information about operating segments and disclosures about products and services, geographic areas and major customers. The Company operates in one business segment as a biopharmaceutical company within predominantly one geographic area. Long-lived assets consist entirely of property and equipment and are located in the United States for all periods presented. | |||||||||||||||||
Recent Accounting Pronouncements | |||||||||||||||||
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (FASB) or other standard setting bodies, which are adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption. | |||||||||||||||||
In April 2015, the FASB issued ASU 2015-03, “Interest - Imputation of Interest” (ASU 2015-03) that requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. This update is effective for annual reporting periods beginning on or after December 15, 2015 and interim periods within fiscal years beginning after December 15, 2016. The Company is currently assessing the impact that adoption of ASU 2015-03 might have on its consolidated financial statements. | |||||||||||||||||
In May 2014, the FASB issued a comprehensive new standard which amends revenue recognition principles and provides a single set of criteria for revenue recognition among all industries. The new standard provides a five step framework whereby revenue is recognized when promised goods or services are transferred to a customer at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard also requires enhanced disclosures pertaining to revenue recognition in both interim and annual periods. The standard is effective for interim and annual periods beginning after December 15, 2016 and allows for adoption using a full retrospective method, or a modified retrospective method. In April 2015, the FASB proposed a one year deferral of the effective date of this standard to annual periods ending after December 15, 2017, along with an option to permit companies to early adopt the standard for annual periods beginning after December 15, 2016. The proposed effective date deferral is not currently approved. The Company is currently assessing the method of adoption and the expected impact the new standard may have on its financial position and results of operations. | |||||||||||||||||
SIGNIFICANT_TRANSACTIONS
SIGNIFICANT TRANSACTIONS | 3 Months Ended |
Mar. 31, 2015 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
SIGNIFICANT TRANSACTIONS | 3. SIGNIFICANT TRANSACTIONS |
CVie | |
In 2013, the Company entered into an agreement with CVie Therapeutics (CVie), a subsidiary of Lee’s Pharmaceutical Holdings Ltd., to develop and commercialize KALBITOR for the treatment of HAE and other angioedema indications in China, Hong Kong and Macau. Under the terms of this exclusive license agreement, Dyax received a $1.0 million upfront payment and is eligible to receive up to $11 million in future regulatory and sales milestones. In September 2014, the contract was amended to expand CVIE’s territories to include the Republic of Korea, Taiwan and Singapore. The Company is eligible to receive royalties on net product sales in all licensed territories. CVie is solely responsible for all costs associated with development, regulatory activities and the commercialization of KALBITOR in its licensed territories. CVie will purchase drug product from the Company on a cost-plus basis for its commercial supply when and if KALBITOR is approved for commercial sale in the CVie territories. | |
The Company analyzed this multiple element arrangement in accordance with ASC 605 and evaluated whether the performance obligations under this agreement, including the product license, steering committee, and manufacturing services should be accounted for as a single unit or multiple units of accounting. Because of the risk associated with obtaining approval for commercial sale in the CVie territories, manufacturing services associated with commercial supply are considered a contingent deliverable and will be accounted for if and when performed. As CVie is required to obtain all drug product for both clinical development and commercial demand from the Company, all other deliverables under this arrangement were determined to provide no stand-alone value to the licensee. Accordingly, it was determined that the license, manufacturing services associated with clinical supply, and steering committee performance obligations under this agreement represent a single unit of accounting. | |
At this time, the Company cannot reasonably estimate the level of effort required to fulfill its obligations and, therefore, is recognizing revenue associated with the upfront payment on a straight-line basis through mid-2020, the estimated development period in the CVie territories. | |
The Company recognized revenue of $15,000 for the three months ended March 31, 2015 and no revenue was recorded for the three months ended March 31, 2014. As of March 31, 2015 and December 31, 2014, the Company has deferred $708,000 and $723,000, respectively of revenue related to this arrangement, which is recorded in deferred revenue on the accompanying condensed consolidated balance sheets. | |
Pint/Novellus | |
In 2013, the Company entered into an exclusive agreement with Novellus Biopharma AG (Novellus) to develop and commercialize KALBITOR for the treatment of HAE and other angioedema indications in select countries in Latin America, including Argentina, Brazil, Chile, Colombia, Mexico and Venezuela. In 2014, this agreement was assigned by Novellus to Pint Pharma (Pint) and amended to include the territories of Algeria, Tunisia, Morocco, and South Africa. Under the terms of the exclusive license agreement, the Company received upfront payments totaling $500,000 and is eligible to receive up to $5.2 million in future regulatory and sales milestones and royalties on net product sales. Pint is solely responsible for all costs associated with development, regulatory activities, and the commercialization of KALBITOR in their licensed territories. Pint will purchase drug product from the Company on a cost-plus basis for its commercial supply. | |
The Company analyzed this multiple element arrangement in accordance with ASC 605 and evaluated whether the performance obligations under this agreement, including the product license, steering committee, and manufacturing services should be accounted for as a single unit or multiple units of accounting. As Pint is required to obtain all drug product for both clinical and commercial demand from the Company, all other deliverables under this arrangement were determined to provide no stand-alone value to the licensee. Accordingly, it was determined that performance obligations under this agreement represent a single unit of accounting. | |
The Company will recognize revenue related to this arrangement, including the upfront payments, on a unit output basis, as products under clinical and commercial supply are provided to Pint. As no supply has been provided to Pint to date, no revenue has been recognized under this agreement. The Company has deferred recognition of the upfront payments of $500,000, which is recorded in deferred revenue on the accompanying consolidated balance sheets. | |
FAIR_VALUE_MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||
FAIR VALUE MEASUREMENTS | 4. FAIR VALUE MEASUREMENTS | |||||||||||||
The following tables present information about the Company's financial assets that have been measured at fair value as of March 31, 2015, and December 31, 2014, and indicate the fair value hierarchy of the valuation inputs utilized to determine such fair value. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. Fair values determined by Level 2 inputs utilize observable inputs other than Level 1 prices, such as quoted prices, for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities. Fair values determined by Level 3 inputs are unobservable data points for the asset or liability, and includes situations where there is little, if any, market activity for the asset or liability. | ||||||||||||||
Quoted | Significant | |||||||||||||
Prices in | Other | Significant | ||||||||||||
Active | Observable | Unobservable | ||||||||||||
March 31, | Markets | Inputs | Inputs | |||||||||||
Description (in thousands) | 2015 | (Level 1) | (Level 2) | (Level 3) | ||||||||||
Assets: | ||||||||||||||
Money Market Funds | $ | 11,704 | $ | 11,704 | $ | — | $ | — | ||||||
US Treasury Bills and Notes | 165,263 | — | 165,263 | — | ||||||||||
Total | $ | 176,967 | $ | 11,704 | $ | 165,263 | $ | — | ||||||
Quoted | Significant | |||||||||||||
Prices in | Other | Significant | ||||||||||||
Active | Observable | Unobservable | ||||||||||||
December 31, | Markets | Inputs | Inputs | |||||||||||
Description (in thousands) | 2014 | (Level 1) | (Level 2) | (Level 3) | ||||||||||
Assets: | ||||||||||||||
Money Market Funds | $ | 15,610 | $ | 15,610 | $ | — | $ | — | ||||||
US Treasury Bills and Notes | 165,260 | — | 165,260 | — | ||||||||||
Total | $ | 180,870 | $ | 15,610 | $ | 165,260 | $ | — | ||||||
The following tables summarize the Company’s marketable securities at March 31, 2015 and December 31, 2014: | ||||||||||||||
31-Mar-15 | ||||||||||||||
Gross | Gross | |||||||||||||
Amortized | Unrealized | Unrealized | ||||||||||||
Description (in thousands) | Cost | Gains | Losses | Fair Value | ||||||||||
US Treasury Bills and Notes (due within 1 year) | $ | 159,213 | $ | 38 | $ | — | $ | 159,251 | ||||||
US Treasury Bills and Notes (due after 1 year through 2 years) | 6,006 | 6 | 6,012 | |||||||||||
Total | $ | 165,219 | $ | 44 | $ | — | $ | 165,263 | ||||||
December 31, 2014 | ||||||||||||||
Gross | Gross | |||||||||||||
Amortized | Unrealized | Unrealized | ||||||||||||
Description (in thousands) | Cost | Gains | Losses | Fair Value | ||||||||||
US Treasury Bills and Notes (due within 1 year) | $ | 165,232 | $ | 28 | $ | — | $ | 165,260 | ||||||
Total | $ | 165,232 | $ | 28 | $ | — | $ | 165,260 | ||||||
As of March 31, 2015 and December 31, 2014, the Company's cash equivalents and short-term investments have been initially valued at the transaction price and subsequently valued utilizing a third party pricing service. The Company validates the prices provided by its third-party pricing service by understanding the models used and obtaining market values from other pricing sources. | ||||||||||||||
The Company classifies its investments with maturities beyond one year as short-term, based on their highly liquid nature and because such marketable securities represent the investment of cash that is available for current operations. | ||||||||||||||
The carrying amounts reflected in the consolidated balance sheets for cash, cash equivalents, accounts receivable, other current assets, accounts payable and accrued expenses and other current liabilities approximate fair value due to their short-term maturities. | ||||||||||||||
INVENTORY
INVENTORY | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Inventory Disclosure [Abstract] | ||||||||
INVENTORY | 5. INVENTORY | |||||||
Costs associated with the manufacture of KALBITOR are recorded as inventory. | ||||||||
Inventory that will be sold beyond the Company's normal operating cycle is classified as non-current and grouped with Other Assets on the Company's consolidated balance sheet. As of March 31, 2015 and December 31, 2014, approximately $4.0 million and $2.7 million of inventory, respectively, is classified as non-current. | ||||||||
Inventory consists of the following: | ||||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
(in thousands) | ||||||||
Raw Materials | $ | 3,008 | $ | 1,074 | ||||
Work in Progress | 2,098 | 3,872 | ||||||
Finished Goods | 3,518 | 2,282 | ||||||
Total | $ | 8,624 | $ | 7,228 | ||||
FIXED_ASSETS
FIXED ASSETS | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Property Plant And Equipment [Abstract] | ||||||||
FIXED ASSETS | 6. FIXED ASSETS | |||||||
Fixed assets consist of the following: | ||||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
(in thousands) | ||||||||
Laboratory equipment | $ | 4,137 | $ | 4,134 | ||||
Furniture and office equipment | 953 | 944 | ||||||
Software and computers | 3,090 | 3,071 | ||||||
Leasehold improvements | 4,554 | 4,554 | ||||||
Total | 12,734 | 12,703 | ||||||
Less: accumulated depreciation | -8,300 | -8,072 | ||||||
$ | 4,434 | $ | 4,631 | |||||
Depreciation expense for the three months ended March 31, 2015 and 2014 was approximately $228,000 and $211,000, respectively. | ||||||||
ACCOUNTS_PAYABLE_AND_ACCRUED_E
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Payables And Accruals [Abstract] | ||||||||
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 7. ACCOUNTS PAYABLE AND ACCRUED EXPENSES | |||||||
Accounts payable and accrued expenses consist of the following: | ||||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
(in thousands) | ||||||||
Accounts payable | $ | 1,204 | $ | 999 | ||||
Accrued employee compensation and related taxes. | 2,900 | 5,759 | ||||||
Accrued external research and development and sales expenses | 4,108 | 3,020 | ||||||
Accrued license fees | 1,687 | 3,165 | ||||||
Accrued legal | 639 | 262 | ||||||
Accrued sales allowances | 2,525 | 2,368 | ||||||
Other accrued liabilities | 2,337 | 1,800 | ||||||
Total | $ | 15,400 | $ | 17,373 | ||||
LONGTERM_OBLIGATIONS
LONG-TERM OBLIGATIONS | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Debt Disclosure [Abstract] | ||||||||
LONG-TERM OBLIGATIONS | 8. LONG-TERM OBLIGATIONS | |||||||
Notes Payable - HealthCare Royalty Partners | ||||||||
The Company has a loan agreement with an affiliate of HC Royalty with aggregate principal of $84.5 million as of March 31, 2015, consisting of a $22.8 million Tranche A Loan and a $61.7 million Tranche B Loan (collectively, the Loan). The Loan bears interest at a rate of 12% per annum, payable quarterly. The Loan will mature in August 2018, and can be repaid without penalty beginning in August 2015. | ||||||||
In connection with the Loan, the Company entered into a security agreement granting HC Royalty a security interest in the intellectual property related to the LFRP, and the revenues generated by the Company through the licenses of the intellectual property related to the LFRP. The security agreement does not apply to KALBITOR, the Company's internal drug development or to any of the Company's license arrangements for ecallantide. | ||||||||
Under the terms of the agreement, the Company is required to repay the Loan based on the annual net LFRP receipts. Until September 30, 2016, required payments are equal to the sum of 75% of the first $15.0 million in specified annual LFRP receipts and 25% of specified annual LFRP receipts over $15.0 million. After September 30, 2016, and until the maturity date or the complete repayment of the Loan, HC Royalty will receive 90% of all included LFRP receipts. If the HC Royalty portion of LFRP receipts for any quarter exceeds the interest for that quarter, then the principal balance will be reduced. Any unpaid principal will be due upon the maturity of the Loan. If the HC Royalty portion of LFRP revenues for any quarterly period is insufficient to cover the cash interest due for that period, the deficiency may be added to the outstanding principal or paid in cash by the Company. After five years from the dates of the Tranche A Loan and the Tranche B Loan, respectively, the Company must repay to HC Royalty all additional accumulated principal above the original loan amounts of $21.7 million and $58.8 million, respectively. | ||||||||
Activity under the Loan, adjusted for discounts associated with the debt issuance, including warrants and fees, is presented for financial reporting purposes for the three months ended March 31, 2015 and for the year ended December 31, 2014, as follows: | ||||||||
March 31, 2015 | December 31, 2014 | |||||||
(in thousands) | ||||||||
Beginning balance | $ | 82,165 | $ | 81,516 | ||||
Accretion of discount | 49 | 198 | ||||||
Loan activity: | ||||||||
Interest Expense | 2,644 | 10,588 | ||||||
Payments applied to principal | — | — | ||||||
Payments applied to interest | -1,258 | -8,978 | ||||||
Accrued interest payable | -1,276 | -1,159 | ||||||
Ending balance | $ | 82,324 | $ | 82,165 | ||||
The estimated fair value of the note payable was $85.8 million at March 31, 2015, which was calculated based on level 3 inputs due to the limited availability of comparable data points. The note payable was valued using expected cash flows discounted at our estimate of the currently available market interest rate. | ||||||||
Facility Lease | ||||||||
In 2012, the Company relocated its operations to Burlington, Massachusetts. The premises, consisting of approximately 45,000 rentable square feet of office and laboratory facilities, serve as the Company’s principal offices and corporate headquarters. The term of the Burlington lease is ten years, and the Company has rights to extend the term for an additional five years at fair market value subject to specified terms and conditions. The aggregate minimum lease commitment over the ten year term of the new lease is approximately $15.0 million. The Company has provided the landlord a Letter of Credit of $1.1 million to secure its obligations under the lease for which the Company has restricted cash recorded in the accompanying condensed consolidated balance sheet. Under the terms of the Burlington lease agreement, the landlord has provided the Company with a tenant improvement allowance of $2.6 million, and a loan totaling $671,000, which was used towards the cost of leasehold improvements. As of March 31, 2015 and December 31, 2014, the outstanding balance of the loan was $513,000 and $527,000. The Company has capitalized approximately $4.5 million in leasehold improvements associated with the Burlington facility. Costs reimbursed under the tenant improvement allowance have been recorded as deferred rent and are being amortized as a reduction to rent expense over the lease term. | ||||||||
STOCKHOLDERS_EQUITY_AND_STOCKB
STOCKHOLDER'S EQUITY AND STOCK-BASED COMPENSATION | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||||||||
STOCKHOLDERbS EQUITY AND STOCK-BASED COMPENSATION | 9. STOCKHOLDER’S EQUITY AND Stock-Based Compensation | |||||||
Issuance of Common Stock | ||||||||
In April 2015, the Company issued 8,510,000 shares of common stock at $27.00 per share in an underwritten public offering. Net proceeds from the offering were approximately $215.8 million, after deducting offering expenses. | ||||||||
In March 2014, the Company issued 9,200,000 shares of common stock at $9.25 per share in an underwritten public offering. Net proceeds from the offering were approximately $79.7 million, after deducting offering expenses. | ||||||||
In February 2014, the sole holder of 41,418 shares of preferred stock outstanding elected to convert this preferred stock into 4,141,800 shares of common stock. The Company has no remaining preferred stock outstanding. | ||||||||
Equity Incentive Plan | ||||||||
The Company's 1995 Equity Incentive Plan (the Equity Plan), as amended, is an equity plan under which equity awards, including awards of restricted stock, RSUs and incentive and nonqualified stock options to purchase shares of common stock may be granted to employees, consultants and directors of the Company by action of the Compensation Committee of the Board of Directors. Options are granted at the current fair market value on the date of grant, generally vest ratably over a 48-month period, and expire within ten years from date of grant. RSUs are valued at the current fair market value on the date of grant, and generally vest annually in equal installments over a four-year period. The Equity Plan is intended to attract and retain employees and to provide an incentive for employees, consultants and directors to assist the Company to achieve long-range performance goals and to enable them to participate in the long-term growth of the Company. | ||||||||
At March 31, 2015, a total of 6,895,709 shares were available for future grants under the Equity Plan. | ||||||||
The following table summarizes stock option and RSU activity for the period ended March 31, 2015: | ||||||||
Number of | Number of | |||||||
Options | RSUs | |||||||
Outstanding as of December 31, 2014 | 11,587,079 | 486,174 | ||||||
Granted/Awarded | 3,302,751 | 215,250 | ||||||
Options Exercised/Shares Issued | -201,395 | -153,177 | ||||||
Cancelled | -37,686 | -3,075 | ||||||
Outstanding as of March 31, 2015 | 14,650,749 | 545,172 | ||||||
Exercisable as of March 31, 2015 | 7,555,522 | — | ||||||
Employee Stock Purchase Plan | ||||||||
The Company's 1998 Employee Stock Purchase Plan (the Purchase Plan) allows employees to purchase shares of the Company's common stock at a discount from fair market value. Under the Purchase Plan, eligible employees may purchase shares during six-month offering periods commencing on June 1 and December 1 of each year at a price per share of 85% of the lower of the fair market value price per share on the first or last day of each six-month offering period. Participating employees may elect to have up to 10% of their base pay withheld and applied toward the purchase of such shares, subject to the limitation of 875 shares per participant per quarter. The rights of participating employees under the Purchase Plan terminate upon voluntary withdrawal from the Purchase Plan at any time or upon termination of employment. The compensation expense recognized in connection with the Plan was approximately $66,000 and $69,000 for the three months ended March 31, 2015 and 2014, respectively. There were no shares purchased under the Plan during the three months ended March 31, 2015 and 2014. | ||||||||
At March 31, 2015, a total of 702,752 shares were reserved and available for issuance under this Plan. | ||||||||
Stock-Based Compensation Expense | ||||||||
The Company measures compensation cost for all stock awards at fair value on date of grant and recognition of compensation over the service period for awards expected to vest. The fair value of stock options was determined using the Black-Scholes valuation model. Such value is recognized as expense over the service period, net of estimated forfeitures and adjusted for actual forfeitures. The estimation of stock awards that will ultimately vest requires significant judgment. The Company considers many factors when estimating expected forfeitures, including historical experience. Actual results and future changes in estimates may differ substantially from the Company's current estimates. | ||||||||
The following table reflects stock compensation expense recorded, net of amounts capitalized into inventory: | ||||||||
Three Months Ended March 31, | ||||||||
2015 | 2014 | |||||||
(in thousands) | ||||||||
Compensation expense related to: | ||||||||
Equity Incentive Plan | $ | 2,768 | $ | 1,171 | ||||
Employee Stock Purchase Plan | 66 | 69 | ||||||
$ | 2,834 | $ | 1,240 | |||||
Stock-based compensation expense charged to: | ||||||||
Research and development | $ | 1,138 | $ | 490 | ||||
Selling, general and administrative | $ | 1,696 | $ | 750 | ||||
Stock-based compensation charges of $35,000 and $4,000, which has been excluded from the chart above, was capitalized into inventory for the three months ended March 31, 2015 and 2014, respectively. Capitalized stock-based compensation is recognized into cost of product sales when the related product is sold. | ||||||||
INCOME_TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 10. INCOME TAXES |
Deferred tax assets and deferred tax liabilities are recognized based on temporary differences between the financial reporting and tax basis of assets and liabilities using future enacted rates. A valuation allowance is recorded against deferred tax assets for which the Company determines that it does not meet the criteria under ASC 740. | |
As of December 31, 2014, the Company had federal tax net operating loss carryforwards (NOLs) of $348.1 million, available to reduce future taxable income, which expire at various times beginning in 2018 through 2034. The Company also had federal research and experimentation and orphan drug credit carryforwards of approximately $68.1 million as of December 31 2014, available to reduce future tax liabilities which will expire at various dates beginning in 2018 through 2034. The Company had state tax net operating loss carryforwards of approximately $53.5 million as of December 31, 2014, available to reduce future state taxable income, which will expire at various dates beginning in 2029 through 2034. The Company also had state research and development and investment tax credit carryforwards of approximately $8.8 million as of December 31, 2014, available to reduce future tax liabilities which expire at various dates beginning in 2015 through 2029. | |
Included in the Company’s NOL carryforward of $348.1 million are approximately $16.7 million of tax deductions from the exercise of stock options at December 31, 2014. The Company has recorded a deferred tax asset of approximately $1.8 million at December 31, 2014 reflecting the benefit of the deduction from the exercise of stock options which has been fully reserved until it is more likely than not that the benefit will be realized. The benefit from these deductions will be recorded as a credit to additional paid-in capital if and when realized through a reduction of taxes paid in cash. | |
As required by ASC 740, management of the Company has evaluated the positive and negative evidence bearing upon the reliability of its deferred tax assets, which are comprised principally of NOL carry forwards, research and experimentation credit carryforwards, and capitalized start up expenditures and research and development expenditures amortizable over ten years straight-line. Management has determined at this time that it is more likely than not that the Company will not recognize the benefits of its federal and state deferred tax assets and, as a result, a valuation allowance of approximately $219.8 million has been established at December 31, 2014. | |
Utilization of the NOLs and tax credit carryforwards may be subject to a substantial annual limitation due to ownership change limitations that have occurred previously or that could occur in the future, as provided by Section 382 of the Internal Revenue Code of 1986 (Section 382), as well as similar state and foreign provisions. Ownership changes may limit the amount of NOLs and tax credit carryforwards that can be utilized annually to offset future taxable income and tax, respectively. In general, an ownership change, as defined by Section 382, results from transactions that increase the ownership of 5% shareholders or public groups in the stock of a corporation by more than 50 percent in the aggregate over a three-year period. The Company has completed studies through December 31, 2014, to determine whether any ownership change has occurred since the Company's formation and has determined that transactions have resulted in two ownership changes, as defined by Section 382. There could be additional ownership changes in the future that could further limit the amount of NOLs and tax credit carryforwards that the Company can utilize. | |
As of December 31, 2014, the Company’s federal tax NOLs available to reduce future taxable income without limitation are $280.9 million, which expire at various times beginning in 2024 through 2034. The Company’s federal research and experimentation and orphan drug credit carryforward as of December 31, 2014 available to reduce future tax liabilities without limitation are $63.3 million, which will expire at various dates beginning in 2024 through 2034. In addition, the Company has NOL and federal tax credits that are subject to limitation and expire at various times beginning in 2018 through 2024. These NOLs and federal tax credits of $67.2 and $4.8 million, respectively, may be utilized in part, subject to an annual limitation. The cumulative annual limitation as of December 31, 2014 was large enough to allow the Company to utilize the $67.2 and $4.8 million of NOL and federal tax credits to currently offset income until expiration. However, additional ownership changes after December 31, 2014 could restrict the use of the Company’s NOLs and federal tax credits. | |
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||
Basis of Presentation | Basis of Presentation | ||||||||||||||||
The accompanying unaudited interim condensed consolidated financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information. It is management’s opinion that the accompanying unaudited interim condensed consolidated financial statements reflect all adjustments (which are normal and recurring) necessary for a fair statement of the results for the interim periods. The financial statements should be read in conjunction with the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. The accompanying December 31, 2014 consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by GAAP. | |||||||||||||||||
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) disclosure of contingent assets and liabilities at the dates of the financial statements and (iii) the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. The results of operations for the three months ended March 31, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015. | |||||||||||||||||
Basis of Consolidation | Basis of Consolidation | ||||||||||||||||
The accompanying consolidated financial statements for the three months ended March 31, 2014 include the accounts of the Company and the Company's European subsidiaries Dyax S.A., Dyax BV and Dyax Holdings B.V. In 2014, Dyax S.A. and Dyax BV were dissolved and during the three months ended March 31, 2015, Dyax Holdings B.V. was dissolved. All inter-company accounts and transactions have been eliminated. | |||||||||||||||||
Use of Estimates | Use of Estimates | ||||||||||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the amounts of assets and liabilities reported and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. The significant estimates and assumptions in these financial statements include revenue recognition, product sales allowances, effective interest rate calculation, useful lives with respect to long-lived assets, valuation of stock options, accrued expenses and tax valuation reserves. Actual results could differ from those estimates. | |||||||||||||||||
Concentration of Credit Risk | Concentration of Credit Risk | ||||||||||||||||
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash, cash equivalents, short-term investments and trade accounts receivable. At March 31, 2015 and December 31, 2014, approximately 97% and 98%, respectively, of the Company's cash, cash equivalents and short-term investments were invested in money market funds backed by U.S. Treasury obligations, U.S. Treasury notes and bills, and obligations of United States government agencies held by one financial institution. The Company maintains balances in various operating accounts in excess of federally insured limits. | |||||||||||||||||
The Company provides most of its services and licenses its technology to pharmaceutical and biomedical companies worldwide, and makes all product sales to its distributors. Concentrations of credit risk with respect to trade receivable balances associated with the Company’s development and license fee revenue are usually limited on an ongoing basis, due to the diverse number of licensees and collaborators comprising the Company's customer base. Trade receivable balances associated with the Company’s product sales are comprised of a few customers, due to the Company’s limited distribution network. The Company conducts ongoing credit evaluations of its customers. As of March 31, 2015, five companies accounted for 35% (Lilly), 13% (Walgreens), 12% (US Bioservices), 11% (Accredo) and 11% (Prodigy) of the accounts receivable balance. The balance due from Lilly is made up of $3.4 million in unbilled accounts receivable related to estimated royalties earned during the period. As of December 31, 2014, three companies accounted for 27% (Lilly), 21% (US Bioservices) and 20% (Walgreens) of the accounts receivable balance. | |||||||||||||||||
Cash and Cash Equivalents | Cash and Cash Equivalents | ||||||||||||||||
All highly liquid investments purchased with an original maturity of ninety days or less are considered to be cash equivalents. Cash and cash equivalents consist principally of cash, money market and U.S. Treasury funds. | |||||||||||||||||
Investments | Investments | ||||||||||||||||
Short-term investments primarily consist of investments with original maturities greater than ninety days and remaining maturities less than one year at period end. The Company has also classified its investments with maturities beyond one year as short-term, based on their highly liquid nature and because such marketable securities represent the investment of cash that is available for current operations. The Company considers its portfolio of investments as available-for-sale. Accordingly, these investments are recorded at fair value, which is based on quoted market prices. | |||||||||||||||||
Inventories | Inventories | ||||||||||||||||
Inventories are stated at the lower of cost or market with cost determined under the first-in, first-out, or FIFO, basis. The Company evaluates inventory levels and would write-down inventory that is expected to expire prior to being sold, inventory that has a cost basis in excess of its expected net realizable value, inventory in excess of expected sales requirements, or inventory that fails to meet commercial sale specifications, through a charge to cost of product sales. Included in the cost of inventory are capitalized employee stock-based compensation costs for those employees dedicated to manufacturing efforts. Inventory on-hand that will be sold beyond the Company's normal operating cycle is classified as non-current and grouped with other assets on the Company's condensed consolidated balance sheet. | |||||||||||||||||
Inventories consist principally of raw materials and work-in-process. In certain circumstances, the Company will make advance payments to vendors for future inventory deliveries. These advance payments are recorded as other current assets on the condensed consolidated balance sheet. | |||||||||||||||||
Fixed Assets | Fixed Assets | ||||||||||||||||
Property and equipment are recorded at cost and depreciated over the estimated useful lives of the related assets using the straight-line method. Laboratory and production equipment, furniture and office equipment are depreciated over a three to seven year period. Leasehold improvements are stated at cost and are amortized over the lesser of the non-cancelable term of the related lease or their estimated useful lives. Leased equipment is amortized over the lesser of the life of the lease or their estimated useful lives. Maintenance and repairs are charged to expense as incurred. When assets are retired or otherwise disposed of, the cost of these assets and related accumulated depreciation and amortization are eliminated from the balance sheet and any resulting gains or losses are included in operations in the period of disposal. | |||||||||||||||||
The Company records all proceeds received from the lessor for tenant improvements under the terms of its operating lease as deferred rent. The amounts are amortized on a straight-line basis over the term of the lease as an offset to rent expense. | |||||||||||||||||
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets | ||||||||||||||||
The Company reviews its long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. Each impairment test is based on a comparison of the undiscounted cash flow to the recorded value of the asset. If impairment is indicated, the asset is written down to its estimated fair value, which is computed based on a discounted cash flow basis. | |||||||||||||||||
Revenue Recognition | Revenue Recognition | ||||||||||||||||
The Company’s principal sources of revenue are product sales of KALBITOR, royalties, and development and license fees derived from collaboration and license agreements. In all instances, revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, collectability of the resulting receivable is reasonably assured and the Company has no further performance obligations. | |||||||||||||||||
Product Sales and Allowances | Product Sales and Allowances | ||||||||||||||||
Product Sales. Product sales are generated from the sale of KALBITOR to the Company’s customers, primarily wholesale and specialty distributors, and are recorded upon delivery when title and risk of loss have passed to the customer. Product sales are recorded net of applicable reserves for distributors, prompt pay and other discounts, government rebates, patient financial assistance programs, product returns and other applicable allowances. | |||||||||||||||||
Under certain arrangements the Company has provided their distributors with extended payment terms. In these circumstances, revenue is not recognized until collectability is reasonably assured or payment from the distributor has been received. | |||||||||||||||||
Product Sales Allowances. The Company establishes reserves for trade distributor, prompt pay and volume discounts, government rebates, patient financial assistance programs, product returns and other applicable allowances. Reserves established for these discounts and allowances are classified as a reduction of accounts receivable (if the amount is payable to the customer) or a liability (if the amount is payable to a party other than the customer). | |||||||||||||||||
Allowances against receivable balances primarily relate to prompt payment discounts and are recorded at the time of sale, resulting in a reduction in product sales revenue. Accruals related to government rebates, patient financial assistance programs, product returns and other applicable allowances are recognized at the time of sale, resulting in a reduction in product sales revenue and an increase in accrued expenses. | |||||||||||||||||
The Company maintains service contracts with its distributors. These contracts include services such as inventory maintenance and patient support services, which have included call center and on-demand nursing services. Accounting standards related to consideration given by a vendor to a customer, including a reseller of a vendor’s product, specify that each consideration given by a vendor to a customer is presumed to be a reduction of the selling price. Consideration should be characterized as a cost if the company receives, or will receive, an identifiable benefit in exchange for the consideration, and fair value of the benefit can be reasonably estimated. The Company has established that patient support services are at fair value and represent a separate and identifiable benefit because these services could be provided by separate third-party vendors. Accordingly, these costs are classified as selling, general and administrative expense. | |||||||||||||||||
Fees paid to distributors for inventory maintenance are calculated as a percentage of the KALBITOR sales price and accordingly, are classified as a reduction in product sales revenue. | |||||||||||||||||
Prompt Payment and Other Discounts. The Company offers a prompt payment discount to its United States distributors. Since the Company expects that these distributors will take advantage of this discount, the Company accrues 100% of the prompt payment discount that is based on the gross amount of each invoice, at the time of sale. This accrual is adjusted quarterly to reflect actual earned discounts. The Company has also offered volume discounts to certain distributors which are accrued quarterly based on sales during the period. | |||||||||||||||||
Government Rebates and Chargebacks. The Company estimates reductions to product sales for Medicaid and Veterans' Administration (VA) programs and the Medicare Part D Coverage Gap Program, as well as for certain other qualifying federal and state government programs. The Company estimates the amount of these reductions based on available KALBITOR patient data, actual sales data and rebate claims. These allowances are adjusted each period based on actual experience. | |||||||||||||||||
Medicaid rebate reserves relate to the Company’s estimated obligations to state jurisdictions under the established reimbursement arrangements of each applicable state. Rebate accruals are recorded during the same period in which the related product sales are recognized. Actual rebate amounts are determined at the time of claim by the state, and the Company will generally make cash payments for such amounts after receiving billings from the state. | |||||||||||||||||
VA rebates or chargeback reserves represent the Company’s estimated obligations resulting from contractual commitments to sell products to qualified healthcare providers at a price lower than the list price charged to the Company’s distributor. The distributor will charge the Company for the difference between what the distributor pays for the product and the ultimate selling price to the qualified healthcare provider. Rebate accruals are established during the same period in which the related product sales are recognized. Actual chargeback amounts for Public Health Service are determined at the time of resale to the qualified healthcare provider from the distributor, and the Company will generally issue credits for such amounts after receiving notification from the distributor. | |||||||||||||||||
Although allowances and accruals are recorded at the time of product sale, certain rebates are typically paid out, on average, up to six months or longer after the sale. Reserve estimates are evaluated quarterly and if necessary, adjusted to reflect actual results. Any such adjustments will be reflected in the Company’s operating results in the period of the adjustment. | |||||||||||||||||
Product Returns. Allowances for product returns are recorded during the period in which the related product sales are recognized, resulting in a reduction to product revenue. The Company does not provide its distributors with a general right of product return. The Company permits returns if the product is damaged or defective when received by customers or if the product shelf life has expired. The Company estimates product returns based upon actual returns history and data provided by a distributor. | |||||||||||||||||
Patient Financial Assistance. The Company offers a financial assistance program for commercially insured KALBITOR patients in order to defray patients’ out-of-pocket expenses, including co-payments, to aid patients’ access to KALBITOR. The Company estimates its liability for this program based on actual but unpaid reimbursements, as well as, an estimated reserve for product sold to and held by distributors as of period end, based on the Company’s historical redemption rates. | |||||||||||||||||
An analysis of the amount of, and change in, reserves related to sales allowances is summarized as follows: | |||||||||||||||||
(In thousands) | Prompt pay | Patient | Government | Returns | Total | ||||||||||||
and other | Financial | rebates and | |||||||||||||||
discounts | assistance | chargebacks | |||||||||||||||
Balance, as of December 31, 2013 | $ | 484 | $ | 90 | $ | 1,634 | $ | 323 | $ | 2,531 | |||||||
Current provisions relating to sales in current year | 3,593 | 443 | 3,270 | 267 | 7,573 | ||||||||||||
Adjustments relating to prior years | 6 | 11 | -209 | 44 | -148 | ||||||||||||
Payments relating to sales in current year | -3,154 | -385 | -1,800 | — | -5,339 | ||||||||||||
Payments/returns relating to sales in prior years | -383 | -16 | -908 | -42 | -1,349 | ||||||||||||
Balance, as of December 31, 2014 | $ | 546 | $ | 143 | $ | 1,987 | $ | 592 | $ | 3,268 | |||||||
Current provisions relating to sales in current year | 877 | 40 | 772 | 23 | 1,712 | ||||||||||||
Adjustments relating to prior years | — | -28 | 60 | -260 | -228 | ||||||||||||
Payments relating to sales in current year | -531 | -71 | -47 | — | -649 | ||||||||||||
Payments/returns relating to sales in prior years | -440 | -21 | -470 | — | -931 | ||||||||||||
Balance, as of March 31, 2015 | $ | 452 | $ | 63 | $ | 2,302 | $ | 355 | $ | 3,172 | |||||||
Development and License Fee Revenues | Development and License Fee Revenues | ||||||||||||||||
Collaboration Agreements. The Company enters into collaboration agreements with other companies for the research and development of therapeutic and diagnostic products. The terms of the agreements may include non-refundable signing and licensing fees, funding for research and development, payments related to manufacturing services, milestone payments and royalties on any product sales derived from collaborations. These multiple element arrangements are analyzed to determine how the deliverables, which often include license and performance obligations such as research, steering committee and manufacturing services, are separated into units of accounting. | |||||||||||||||||
For agreements entered into prior to 2011, the Company evaluated license arrangements with multiple elements in accordance with Accounting Standards Codification (ASC), 605-25 Revenue Recognition – Multiple-Element Arrangements. Since 2011, the Company has applied the guidance of ASU 2009-13 to evaluate license arrangements with multiple elements. This guidance amended the accounting standards for certain multiple element arrangements to: | |||||||||||||||||
· | Provide updated guidance on whether multiple elements exist, how the elements in an arrangement should be separated and how the arrangement considerations should be allocated to the separate elements; | ||||||||||||||||
· | Require an entity to allocate arrangement consideration to each element based on a selling price hierarchy, also called the relative selling price method, where the selling price for an element is based on vendor-specific objective evidence (VSOE), if available; third-party evidence (TPE), if available and VSOE is not available; or the best estimate of selling price (BESP), if neither VSOE or TPE is available; and | ||||||||||||||||
· | Eliminate the use of the residual method and require an entity to allocate arrangement consideration using the selling price hierarchy. | ||||||||||||||||
The Company evaluates all deliverables within an arrangement to determine whether or not they provide value to the licensee on a stand-alone basis. Based on this evaluation, the deliverables are separated into units of accounting. If VSOE or vendor objective evidence (VOE) is not available to determine the fair value of a deliverable, the Company determines the best estimate of selling price associated with the deliverable. The arrangement consideration, including upfront license fees and funding for research and development, is allocated to the separate units based on relative fair value. | |||||||||||||||||
VSOE is based on the price charged when an element is sold separately and represents the actual price charged for that deliverable. When VSOE cannot be established, the Company attempts to establish the selling price of the elements of a license arrangement based on VOE. VOE is determined based on third party evidence for similar deliverables when sold separately. In circumstances when the Company charges a licensee for pass-through costs paid to external vendors for development services, these costs represent VOE. | |||||||||||||||||
When the Company is unable to establish the selling price of an element using VSOE or VOE, management determines BESP for that element. The objective of BESP is to determine the price at which the Company would transact a sale if the element within the license agreement was sold on a stand-alone basis. The Company’s process for establishing BESP involves management’s judgment and considers multiple factors including discounted cash flows, estimated direct expenses and other costs and available data. | |||||||||||||||||
Based on the value allocated to each unit of accounting within an arrangement, upfront fees and other guaranteed payments are allocated to each unit based on relative value. The appropriate revenue recognition method is applied to each unit and revenue is accordingly recognized as each unit is delivered. | |||||||||||||||||
For agreements entered into prior to 2011, revenue related to upfront license fees was spread over the full period of performance under the agreement, unless the license was determined to provide value to the licensee on a stand-alone basis and the fair value of the undelivered performance obligations, typically including research or steering committee services was determinable. | |||||||||||||||||
Steering committee services that were not inconsequential or perfunctory and were determined to be performance obligations were combined with other research services or performance obligations required under an arrangement, if any, to determine the level of effort required in an arrangement and the period over which the Company expected to complete its aggregate performance obligations. | |||||||||||||||||
Whenever the Company determined that an arrangement should be accounted for as a single unit of accounting, it determined the period over which the performance obligations would be completed. Revenue is recognized using either an efforts-based or time-based proportional performance (i.e. straight-line) method. The Company recognizes revenue using an efforts-based proportional performance method when the level of effort required to complete its performance obligations under an arrangement can be reasonably estimated and such performance obligations are provided on a best-efforts basis. Direct labor hours or full-time equivalents are typically used as the measurement of performance. | |||||||||||||||||
If the Company cannot reasonably estimate the level of effort to complete its performance obligations under an arrangement, then revenue under the arrangement is recognized on a straight-line basis over the period the Company is expected to complete its performance obligations. | |||||||||||||||||
Many of the Company's collaboration agreements entitle it to additional payments upon the achievement of performance-based milestones. Milestones that are tied to development or regulatory approval are not considered probable of being achieved until such approval is received. All milestones which are determined to be substantive milestones are recognized as revenue in the period in which they are met in accordance with Accounting Standards Update (ASU) No. 2010-17, Revenue Recognition – Milestone Method. Milestones tied to counter-party performance are not included in the Company’s revenue model until performance conditions are met. Milestones determined to be non-substantive are allocated to each unit of accounting within an arrangement when met. The allocation of the milestone to each unit is based on relative value and revenue related to each unit is recognized accordingly. | |||||||||||||||||
Costs of revenues related to licensees’ product development, including license fees and development and regulatory milestones are classified as research and development in the consolidated statements of operations and comprehensive loss. | |||||||||||||||||
Phage Display Library Licenses. Standard terms of the proprietary phage display library agreements generally include non-refundable signing fees, license maintenance fees, development milestone payments, product license payments and royalties on product sales. Signing fees and maintenance fees are generally recognized on a straight line basis over the term of the agreement as deliverables within these arrangements are determined to not provide the licensee with value on a stand-alone basis and therefore are accounted for as a single unit of accounting. As milestones are achieved under a phage display library license, a portion of the milestone payment, equal to the percentage of the performance period completed when the milestone is achieved, multiplied by the amount of the milestone payment, will be recognized. The remaining portion of the milestone will be recognized over the remaining performance period on a straight-line basis. If the Company has no future obligations under the license, milestone payments under these license arrangements are recognized as revenue when the milestone is achieved. Product license payments, which are optional to the licensee, are substantive and therefore are excluded from the initial allocation of the arrangement consideration. These payments are recognized as revenue when the license is issued upon exercise of the licensee’s option, if the Company has no future obligations under the agreement. If there are future obligations under the agreement, product license payments are recognized as revenue only to the extent of the fair value of the license. Amounts paid in excess of fair value are recognized in a manner similar to milestone payments. Payments received that have not met the appropriate criteria for revenue recognition are recorded as deferred revenue. | |||||||||||||||||
LFRP Milestones | |||||||||||||||||
Non-substantive Milestones. Under the LFRP licenses, the Company is eligible to receive clinical development, regulatory filing and marketing approval milestones, which vary from licensee to licensee. Achievement of these milestones is contingent upon each licensee’s efforts and involves risks and uncertainty related to drug development, regulatory approval and intellectual property that could lead to milestones never being met. | |||||||||||||||||
Based on information available to the Company regarding pre-clinical and clinical candidates in the LFRP developed using its technology and through intellectual property rights granted, it is estimated that the Company could receive up to $66 million in development milestones, $57 million in regulatory filing milestones and $83 million in marketing approval milestones. As achievement of these milestones is outside the control of the Company and is contingent upon the licensees’ efforts, they have been determined to be non-substantive milestones. | |||||||||||||||||
The Company recognized revenue of approximately $75,000 related to milestones under the LFRP for each of the three months ended March 31, 2015 and 2014. | |||||||||||||||||
Substantive Milestones. Under certain collaboration agreements, the Company performs funded research for various collaborators using its phage display technology and libraries. These arrangements typically include technical milestones that are based on agreed upon objectives to be met under the research campaign, which are considered to be commensurate with the Company’s performance and therefore have been determined to be substantive milestones. | |||||||||||||||||
There was no amount recognized for technical milestones during the three months ended March 31, 2015 and 2014. The Company is not eligible to receive any future technical milestones at this time. | |||||||||||||||||
Non-LFRP Milestones | |||||||||||||||||
In certain countries outside of the U.S., the Company has entered into licensing agreements for the development and commercialization of KALBITOR for the treatment of HAE and other angioedema indications. Under these agreements, the Company is eligible to receive certain development and sales milestones. There was no amount recognized for these milestones during the three months ended March 31, 2015 and 2014. | |||||||||||||||||
Royality Revenues | Royalty Revenue | ||||||||||||||||
Royalty revenue is recognized when it becomes determinable and collectability is reasonably assured. For royalties recognized related to CYRAMZA, the first therapeutic product in the LFRP, which is commercialized by Lilly, the Company is contractually entitled to receive a royalty report from Lilly subsequent to each quarter end. | |||||||||||||||||
Cost of Product Sales and Royalties | Cost of Product Sales and Royalties | ||||||||||||||||
Cost of product sales includes costs to procure, manufacture and distribute KALBITOR and manufacturing royalties. Costs associated with the manufacture of KALBITOR prior to regulatory approval in the United States were expensed when incurred as a research and development cost. | |||||||||||||||||
Cost of royalties is derived from pass-through fees under the Company’s cross license agreement related to royalties from product sales by its LFRP licensees. | |||||||||||||||||
Research and Development | Research and Development | ||||||||||||||||
Research and development costs include all direct costs, including salaries and benefits for research and development personnel, outside consultants, costs of clinical trials, sponsored research, clinical trials insurance, other outside costs, depreciation and facility costs related to the development of drug candidates, as well as certain pass-through costs under the Company’s cross license agreements related to product development by its LFRP licensees, including license fees and development and regulatory milestones. | |||||||||||||||||
Income Taxes | Income Taxes | ||||||||||||||||
The Company utilizes the asset and liability method of accounting for income taxes in accordance with ASC 740. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities using the enacted statutory tax rates. At March 31, 2015 and December 31, 2014, there were no unrecognized tax benefits. | |||||||||||||||||
The Company accounts for uncertain tax positions using a "more-likely-than-not" threshold for recognizing and resolving uncertain tax positions. The evaluation of uncertain tax positions is based on factors that include, but are not limited to, changes in tax law, the measurement of tax positions taken or expected to be taken in tax returns, the effective settlement of matters subject to audit, new audit activity and changes in facts or circumstances related to a tax position. The provision for income taxes includes the effects of any resulting tax reserves or unrecognized tax benefits that are considered appropriate as well as the related net interest and penalties, if any. The Company evaluates uncertain tax positions on a quarterly basis and adjusts the level of the liability to reflect any subsequent changes in the relevant facts surrounding the uncertain positions. | |||||||||||||||||
Translation of Foreign Currencies | Translation of Foreign Currencies | ||||||||||||||||
Assets and liabilities of the Company's foreign subsidiaries are translated at period end exchange rates. Amounts included in the statements of operations are translated at the average exchange rate for the period. As the Company’s foreign subsidiaries are U.S. dollar functional currency denominated, local currency is remeasured in U.S. dollars and are recorded to other income (expense) in the consolidated statement of operations and comprehensive loss. The Company recorded other expense of $7,000 for the three months ended March 31, 2015 for the translation of foreign currency. The Company recorded no other income or expense for the three months ended March 31, 2014 | |||||||||||||||||
Share-Based Compensation | Share-Based Compensation | ||||||||||||||||
The Company’s share-based compensation program consists of share-based awards granted to employees in the form of stock options and restricted stock units (RSUs), as well as its 1998 Employee Stock Purchase Plan, as amended (the Purchase Plan). The Company’s share-based compensation expense is recorded in accordance with ASC 718. | |||||||||||||||||
Income or Loss Per Share | Income or Loss Per Share | ||||||||||||||||
The Company follows the two-class method when computing net loss per share, as it had issued shares that met the definition of participating securities. The two-class method determines net loss per share for each class of common and participating securities according to dividends declared or accumulated and participation rights in undistributed earnings. The two-class method requires income available to common stockholders for the period to be allocated between common and participating securities based upon their respective rights to receive dividends, as if all income for the period had been distributed. | |||||||||||||||||
The Company presents two earnings or loss per share (EPS) amounts, basic and diluted in accordance with ASC 260. Basic earnings or loss per share is computed using the weighted average number of shares of common stock outstanding. The Company excluded the following common stock equivalents, outstanding as of March 31, 2015 and 2014, from the computation of diluted net loss per share attributable to common stockholders because they had an anti-dilutive impact due to the net loss attributable to common stockholders incurred for the periods: | |||||||||||||||||
Three Months Ended March 31, | |||||||||||||||||
2015 | 2014 | ||||||||||||||||
Options to purchase common stock | 13,008,149 | 11,123,840 | |||||||||||||||
Unvested restricted stock units | 530,541 | 341,452 | |||||||||||||||
Total | 13,538,690 | 11,465,292 | |||||||||||||||
Comprehensive Income (Loss) | Comprehensive Income (Loss) | ||||||||||||||||
The Company accounts for comprehensive income (loss) under ASC 220, Comprehensive Income, which established standards for reporting and displaying comprehensive income (loss) and its components in a full set of general purpose financial statements. The statement required that all components of comprehensive income (loss) be reported in a financial statement that is displayed with the same prominence as other financial statements. The Company is presenting comprehensive income (loss) as part of the consolidated statements of operations and comprehensive loss. | |||||||||||||||||
Business Segments | Business Segments | ||||||||||||||||
The Company discloses business segments under ASC 280, Segment Reporting. The statement established standards for reporting information about operating segments and disclosures about products and services, geographic areas and major customers. The Company operates in one business segment as a biopharmaceutical company within predominantly one geographic area. Long-lived assets consist entirely of property and equipment and are located in the United States for all periods presented. | |||||||||||||||||
Recent Accounting Pronouncements | Recent Accounting Pronouncements | ||||||||||||||||
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (FASB) or other standard setting bodies, which are adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption. | |||||||||||||||||
In April 2015, the FASB issued ASU 2015-03, “Interest - Imputation of Interest” (ASU 2015-03) that requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. This update is effective for annual reporting periods beginning on or after December 15, 2015 and interim periods within fiscal years beginning after December 15, 2016. The Company is currently assessing the impact that adoption of ASU 2015-03 might have on its consolidated financial statements. | |||||||||||||||||
In May 2014, the FASB issued a comprehensive new standard which amends revenue recognition principles and provides a single set of criteria for revenue recognition among all industries. The new standard provides a five step framework whereby revenue is recognized when promised goods or services are transferred to a customer at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard also requires enhanced disclosures pertaining to revenue recognition in both interim and annual periods. The standard is effective for interim and annual periods beginning after December 15, 2016 and allows for adoption using a full retrospective method, or a modified retrospective method. In April 2015, the FASB proposed a one year deferral of the effective date of this standard to annual periods ending after December 15, 2017, along with an option to permit companies to early adopt the standard for annual periods beginning after December 15, 2016. The proposed effective date deferral is not currently approved. The Company is currently assessing the method of adoption and the expected impact the new standard may have on its financial position and results of operations. | |||||||||||||||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||
Reserves Related to Sales Allowances | An analysis of the amount of, and change in, reserves related to sales allowances is summarized as follows: | ||||||||||||||||
(In thousands) | Prompt pay | Patient | Government | Returns | Total | ||||||||||||
and other | Financial | rebates and | |||||||||||||||
discounts | assistance | chargebacks | |||||||||||||||
Balance, as of December 31, 2013 | $ | 484 | $ | 90 | $ | 1,634 | $ | 323 | $ | 2,531 | |||||||
Current provisions relating to sales in current year | 3,593 | 443 | 3,270 | 267 | 7,573 | ||||||||||||
Adjustments relating to prior years | 6 | 11 | -209 | 44 | -148 | ||||||||||||
Payments relating to sales in current year | -3,154 | -385 | -1,800 | — | -5,339 | ||||||||||||
Payments/returns relating to sales in prior years | -383 | -16 | -908 | -42 | -1,349 | ||||||||||||
Balance, as of December 31, 2014 | $ | 546 | $ | 143 | $ | 1,987 | $ | 592 | $ | 3,268 | |||||||
Current provisions relating to sales in current year | 877 | 40 | 772 | 23 | 1,712 | ||||||||||||
Adjustments relating to prior years | — | -28 | 60 | -260 | -228 | ||||||||||||
Payments relating to sales in current year | -531 | -71 | -47 | — | -649 | ||||||||||||
Payments/returns relating to sales in prior years | -440 | -21 | -470 | — | -931 | ||||||||||||
Balance, as of March 31, 2015 | $ | 452 | $ | 63 | $ | 2,302 | $ | 355 | $ | 3,172 | |||||||
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The Company excluded the following common stock equivalents, outstanding as of March 31, 2015 and 2014, from the computation of diluted net loss per share attributable to common stockholders because they had an anti-dilutive impact due to the net loss attributable to common stockholders incurred for the periods: | ||||||||||||||||
Three Months Ended March 31, | |||||||||||||||||
2015 | 2014 | ||||||||||||||||
Options to purchase common stock | 13,008,149 | 11,123,840 | |||||||||||||||
Unvested restricted stock units | 530,541 | 341,452 | |||||||||||||||
Total | 13,538,690 | 11,465,292 | |||||||||||||||
FAIR_VALUE_MEASUREMENTS_Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||
Financial Assets Measured at Fair Value | Fair values determined by Level 3 inputs are unobservable data points for the asset or liability, and includes situations where there is little, if any, market activity for the asset or liability. | |||||||||||||
Quoted | Significant | |||||||||||||
Prices in | Other | Significant | ||||||||||||
Active | Observable | Unobservable | ||||||||||||
March 31, | Markets | Inputs | Inputs | |||||||||||
Description (in thousands) | 2015 | (Level 1) | (Level 2) | (Level 3) | ||||||||||
Assets: | ||||||||||||||
Money Market Funds | $ | 11,704 | $ | 11,704 | $ | — | $ | — | ||||||
US Treasury Bills and Notes | 165,263 | — | 165,263 | — | ||||||||||
Total | $ | 176,967 | $ | 11,704 | $ | 165,263 | $ | — | ||||||
Quoted | Significant | |||||||||||||
Prices in | Other | Significant | ||||||||||||
Active | Observable | Unobservable | ||||||||||||
December 31, | Markets | Inputs | Inputs | |||||||||||
Description (in thousands) | 2014 | (Level 1) | (Level 2) | (Level 3) | ||||||||||
Assets: | ||||||||||||||
Money Market Funds | $ | 15,610 | $ | 15,610 | $ | — | $ | — | ||||||
US Treasury Bills and Notes | 165,260 | — | 165,260 | — | ||||||||||
Total | $ | 180,870 | $ | 15,610 | $ | 165,260 | $ | — | ||||||
Marketable Securities | The following tables summarize the Company’s marketable securities at March 31, 2015 and December 31, 2014: | |||||||||||||
31-Mar-15 | ||||||||||||||
Gross | Gross | |||||||||||||
Amortized | Unrealized | Unrealized | ||||||||||||
Description (in thousands) | Cost | Gains | Losses | Fair Value | ||||||||||
US Treasury Bills and Notes (due within 1 year) | $ | 159,213 | $ | 38 | $ | — | $ | 159,251 | ||||||
US Treasury Bills and Notes (due after 1 year through 2 years) | 6,006 | 6 | 6,012 | |||||||||||
Total | $ | 165,219 | $ | 44 | $ | — | $ | 165,263 | ||||||
December 31, 2014 | ||||||||||||||
Gross | Gross | |||||||||||||
Amortized | Unrealized | Unrealized | ||||||||||||
Description (in thousands) | Cost | Gains | Losses | Fair Value | ||||||||||
US Treasury Bills and Notes (due within 1 year) | $ | 165,232 | $ | 28 | $ | — | $ | 165,260 | ||||||
Total | $ | 165,232 | $ | 28 | $ | — | $ | 165,260 | ||||||
INVENTORY_Tables
INVENTORY (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Inventory Disclosure [Abstract] | ||||||||
Components of Inventory | Inventory consists of the following: | |||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
(in thousands) | ||||||||
Raw Materials | $ | 3,008 | $ | 1,074 | ||||
Work in Progress | 2,098 | 3,872 | ||||||
Finished Goods | 3,518 | 2,282 | ||||||
Total | $ | 8,624 | $ | 7,228 | ||||
FIXED_ASSETS_Tables
FIXED ASSETS (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Property Plant And Equipment [Abstract] | ||||||||
Components of Fixed Assets | Fixed assets consist of the following: | |||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
(in thousands) | ||||||||
Laboratory equipment | $ | 4,137 | $ | 4,134 | ||||
Furniture and office equipment | 953 | 944 | ||||||
Software and computers | 3,090 | 3,071 | ||||||
Leasehold improvements | 4,554 | 4,554 | ||||||
Total | 12,734 | 12,703 | ||||||
Less: accumulated depreciation | -8,300 | -8,072 | ||||||
$ | 4,434 | $ | 4,631 | |||||
ACCOUNTS_PAYABLE_AND_ACCRUED_E1
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Payables And Accruals [Abstract] | ||||||||
Components of Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses consist of the following: | |||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
(in thousands) | ||||||||
Accounts payable | $ | 1,204 | $ | 999 | ||||
Accrued employee compensation and related taxes. | 2,900 | 5,759 | ||||||
Accrued external research and development and sales expenses | 4,108 | 3,020 | ||||||
Accrued license fees | 1,687 | 3,165 | ||||||
Accrued legal | 639 | 262 | ||||||
Accrued sales allowances | 2,525 | 2,368 | ||||||
Other accrued liabilities | 2,337 | 1,800 | ||||||
Total | $ | 15,400 | $ | 17,373 | ||||
LONGTERM_OBLIGATIONS_Tables
LONG-TERM OBLIGATIONS (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Debt Disclosure [Abstract] | ||||||||
Activity under Loan Presented for Financial Reporting Purposes | Activity under the Loan, adjusted for discounts associated with the debt issuance, including warrants and fees, is presented for financial reporting purposes for the three months ended March 31, 2015 and for the year ended December 31, 2014, as follows: | |||||||
March 31, 2015 | December 31, 2014 | |||||||
(in thousands) | ||||||||
Beginning balance | $ | 82,165 | $ | 81,516 | ||||
Accretion of discount | 49 | 198 | ||||||
Loan activity: | ||||||||
Interest Expense | 2,644 | 10,588 | ||||||
Payments applied to principal | — | — | ||||||
Payments applied to interest | -1,258 | -8,978 | ||||||
Accrued interest payable | -1,276 | -1,159 | ||||||
Ending balance | $ | 82,324 | $ | 82,165 | ||||
STOCKHOLDERS_EQUITY_AND_STOCKB1
STOCKHOLDER'S EQUITY AND STOCK-BASED COMPENSATION (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||||||||
Stock Options Activity | The following table summarizes stock option and RSU activity for the period ended March 31, 2015: | |||||||
Number of | Number of | |||||||
Options | RSUs | |||||||
Outstanding as of December 31, 2014 | 11,587,079 | 486,174 | ||||||
Granted/Awarded | 3,302,751 | 215,250 | ||||||
Options Exercised/Shares Issued | -201,395 | -153,177 | ||||||
Cancelled | -37,686 | -3,075 | ||||||
Outstanding as of March 31, 2015 | 14,650,749 | 545,172 | ||||||
Exercisable as of March 31, 2015 | 7,555,522 | — | ||||||
Stock Compensation Expense | The following table reflects stock compensation expense recorded, net of amounts capitalized into inventory: | |||||||
Three Months Ended March 31, | ||||||||
2015 | 2014 | |||||||
(in thousands) | ||||||||
Compensation expense related to: | ||||||||
Equity Incentive Plan | $ | 2,768 | $ | 1,171 | ||||
Employee Stock Purchase Plan | 66 | 69 | ||||||
$ | 2,834 | $ | 1,240 | |||||
Stock-based compensation expense charged to: | ||||||||
Research and development | $ | 1,138 | $ | 490 | ||||
Selling, general and administrative | $ | 1,696 | $ | 750 | ||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Significant Accounting Policies [Line Items] | |||
Stock options and warrants purchase | 0 | ||
Foreign Exchange | |||
Significant Accounting Policies [Line Items] | |||
Other Expenses | 7,000 | ||
Customers Segment Location | |||
Significant Accounting Policies [Line Items] | |||
Percentage of prompt payment discount accrued at the time of sale | 100.00% | ||
Standard product warranty description | Although allowances and accruals are recorded at the time of product sale, certain rebates are typically paid out, on average, up to six months or longer after the sale. Reserve estimates are evaluated quarterly and if necessary, adjusted to reflect actual results. | ||
Number of business segment | 1 | ||
Number of geographic area within which the company operates predominantly | 1 | ||
Not Substantive Milestones | |||
Significant Accounting Policies [Line Items] | |||
Milestones payment receipt | 75,000 | 75,000 | |
Development Milestones | |||
Significant Accounting Policies [Line Items] | |||
Milestones payment receipt | 66,000,000 | ||
Regulatory Filing Milestones | |||
Significant Accounting Policies [Line Items] | |||
Milestones payment receipt | 57,000,000 | ||
Marketing Approval Milestones | |||
Significant Accounting Policies [Line Items] | |||
Milestones payment receipt | 83,000,000 | ||
Accounts Receivable | |||
Significant Accounting Policies [Line Items] | |||
Number of companies | 5 | 3 | |
Maximum | |||
Significant Accounting Policies [Line Items] | |||
Estimated useful life of property plant and equipment | 7 years | ||
Minimum | |||
Significant Accounting Policies [Line Items] | |||
Estimated useful life of property plant and equipment | 3 years | ||
Walgreens Infusion Services, Inc. | |||
Significant Accounting Policies [Line Items] | |||
Concentration risk percentage | 13.00% | 20.00% | |
US Bioservices Corporation | |||
Significant Accounting Policies [Line Items] | |||
Concentration risk percentage | 12.00% | 21.00% | |
Accredo | |||
Significant Accounting Policies [Line Items] | |||
Concentration risk percentage | 11.00% | ||
Lilly | |||
Significant Accounting Policies [Line Items] | |||
Concentration risk percentage | 35.00% | 27.00% | |
Unbilled Accounts Receivable | 3,400,000 | ||
Prodigy | |||
Significant Accounting Policies [Line Items] | |||
Concentration risk percentage | 11.00% | ||
Cash and Cash Equivalents | |||
Significant Accounting Policies [Line Items] | |||
Concentration risk percentage | 97.00% | 98.00% | |
Number of financial institution in which financial instruments invested | 1 | ||
Short term investment maturity period | 90 days | ||
Short-term Investments | Maximum | |||
Significant Accounting Policies [Line Items] | |||
Short term investment maturity period | 1 year | ||
Short-term Investments | Minimum | |||
Significant Accounting Policies [Line Items] | |||
Short term investment maturity period | 90 days |
RESERVES_RELATED_TO_SALES_ALLO
RESERVES RELATED TO SALES ALLOWANCES (Detail) (USD $) | 3 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
Valuation Allowance [Line Items] | ||
Beginning balance | $3,268 | $2,531 |
Current provisions relating to sales in current year | 1,712 | 7,573 |
Adjustments relating to prior years | -228 | -148 |
Payments relating to sales in current year | -649 | -5,339 |
Payments/returns relating to sales in prior years | -931 | -1,349 |
Ending balance | 3,172 | 3,268 |
Prompt pay and other discounts | ||
Valuation Allowance [Line Items] | ||
Beginning balance | 546 | 484 |
Current provisions relating to sales in current year | 877 | 3,593 |
Adjustments relating to prior years | 0 | 6 |
Payments relating to sales in current year | -531 | -3,154 |
Payments/returns relating to sales in prior years | -440 | -383 |
Ending balance | 452 | 546 |
Patient financial assistance | ||
Valuation Allowance [Line Items] | ||
Beginning balance | 143 | 90 |
Current provisions relating to sales in current year | 40 | 443 |
Adjustments relating to prior years | -28 | 11 |
Payments relating to sales in current year | -71 | -385 |
Payments/returns relating to sales in prior years | -21 | -16 |
Ending balance | 63 | 143 |
Government rebates and chargebacks | ||
Valuation Allowance [Line Items] | ||
Beginning balance | 1,987 | 1,634 |
Current provisions relating to sales in current year | 772 | 3,270 |
Adjustments relating to prior years | 60 | -209 |
Payments relating to sales in current year | -47 | -1,800 |
Payments/returns relating to sales in prior years | -470 | -908 |
Ending balance | 2,302 | 1,987 |
Returns | ||
Valuation Allowance [Line Items] | ||
Beginning balance | 592 | 323 |
Current provisions relating to sales in current year | 23 | 267 |
Adjustments relating to prior years | -260 | 44 |
Payments relating to sales in current year | 0 | 0 |
Payments/returns relating to sales in prior years | 0 | -42 |
Ending balance | $355 | $592 |
COMPUTATION_OF_ANTIDILUTIVE_NE
COMPUTATION OF ANTI-DILUTIVE NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS (Detail) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 13,538,690 | 11,465,292 |
Options To Purchase Common Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 13,008,149 | 11,123,840 |
Unvested restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 530,541 | 341,452 |
SIGNIFICANT_TRANSACTIONS_Addit
SIGNIFICANT TRANSACTIONS - Additional Information (Detail) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Significant Transactions [Line Items] | |||
Revenue | $20,418,000 | $14,117,000 | |
CVie Therapeutics | |||
Significant Transactions [Line Items] | |||
Collaboration arrangement receivable | 11,000,000 | ||
Revenue | 15,000 | ||
Deferred revenue | 708,000 | 723,000 | |
CVie Therapeutics | Up-front Payment Arrangement | |||
Significant Transactions [Line Items] | |||
Collaboration arrangement payment | 1,000,000 | ||
Novellus Plan | |||
Significant Transactions [Line Items] | |||
Deferred revenue | 500,000 | ||
Novellus Plan | Up-front Payment Arrangement | |||
Significant Transactions [Line Items] | |||
Collaboration arrangement payment | 500,000 | ||
Collaboration arrangement receivable | $5,200,000 |
FINANCIAL_ASSETS_MEASURED_AT_F
FINANCIAL ASSETS MEASURED AT FAIR VALUE (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Financial Assets Measured at Fair Value [Line Items] | ||
Assets fair value disclosure Recurring | $176,967 | $180,870 |
Quoted Prices in Active Markets (Level 1) | ||
Financial Assets Measured at Fair Value [Line Items] | ||
Assets fair value disclosure Recurring | 11,704 | 15,610 |
Significant Other Observable Inputs (Level 2) | ||
Financial Assets Measured at Fair Value [Line Items] | ||
Assets fair value disclosure Recurring | 165,263 | 165,260 |
Significant Unobservable Inputs (Level 3) | ||
Financial Assets Measured at Fair Value [Line Items] | ||
Assets fair value disclosure Recurring | 0 | 0 |
Money Market Funds | ||
Financial Assets Measured at Fair Value [Line Items] | ||
Assets fair value disclosure Recurring | 11,704 | 15,610 |
Money Market Funds | Quoted Prices in Active Markets (Level 1) | ||
Financial Assets Measured at Fair Value [Line Items] | ||
Assets fair value disclosure Recurring | 11,704 | 15,610 |
Money Market Funds | Significant Other Observable Inputs (Level 2) | ||
Financial Assets Measured at Fair Value [Line Items] | ||
Assets fair value disclosure Recurring | 0 | 0 |
Money Market Funds | Significant Unobservable Inputs (Level 3) | ||
Financial Assets Measured at Fair Value [Line Items] | ||
Assets fair value disclosure Recurring | 0 | 0 |
US Treasury Bills and Notes | ||
Financial Assets Measured at Fair Value [Line Items] | ||
Assets fair value disclosure Recurring | 165,263 | 165,260 |
US Treasury Bills and Notes | Quoted Prices in Active Markets (Level 1) | ||
Financial Assets Measured at Fair Value [Line Items] | ||
Assets fair value disclosure Recurring | 0 | 0 |
US Treasury Bills and Notes | Significant Other Observable Inputs (Level 2) | ||
Financial Assets Measured at Fair Value [Line Items] | ||
Assets fair value disclosure Recurring | 165,263 | 165,260 |
US Treasury Bills and Notes | Significant Unobservable Inputs (Level 3) | ||
Financial Assets Measured at Fair Value [Line Items] | ||
Assets fair value disclosure Recurring | $0 | $0 |
MARKETABLE_SECURITIES_Detail
MARKETABLE SECURITIES (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Marketable Securities [Line Items] | ||
Amortized Cost | $165,219 | $165,232 |
Gross Unrealized Gains | 44 | 28 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 165,263 | 165,260 |
Due In One Year Or Less | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 159,213 | 165,232 |
Gross Unrealized Gains | 38 | 28 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 159,251 | 165,260 |
Due After One Year Through Two Years | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 6,006 | |
Gross Unrealized Gains | 6 | |
Gross Unrealized Losses | 0 | |
Fair Value | $6,012 |
INVENTORY_Additional_Informati
INVENTORY - Additional Information (Detail) (Other Noncurrent Assets, USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, unless otherwise specified | ||
Other Noncurrent Assets | ||
Inventory [Line Items] | ||
Inventory classified as non-current | $4 | $2.70 |
COMPONENTS_OF_INVENTORY_Detail
COMPONENTS OF INVENTORY (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Inventory [Line Items] | ||
Raw Materials | $3,008 | $1,074 |
Work in Progress | 2,098 | 3,872 |
Finished Goods | 3,518 | 2,282 |
Total | $8,624 | $7,228 |
FIXED_ASSETS_Additional_Inform
FIXED ASSETS - Additional Information (Detail) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Fixed Assets [Line Items] | ||
Depreciation expense | $228,000 | $211,000 |
COMPONENTS_OF_FIXED_ASSETS_Det
COMPONENTS OF FIXED ASSETS (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||
Fixed Assets [Line Items] | |||
Laboratory equipment | $4,137 | $4,134 | |
Furniture and office equipment | 953 | 944 | |
Software and computers | 3,090 | 3,071 | |
Leasehold improvements | 4,554 | 4,554 | 4,500 |
Total | 12,734 | 12,703 | |
Less: accumulated depreciation | -8,300 | -8,072 | |
Property, plant and equipment, Net | $4,434 | $4,631 |
COMPONENTS_OF_ACCOUNT_PAYABLE_
COMPONENTS OF ACCOUNT PAYABLE AND ACCRUED EXPENSES (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Accounts Payable and Accrued Liabilities [Line Items] | ||
Accounts payable | $1,204 | $999 |
Accrued employee compensation and related taxes. | 2,900 | 5,759 |
Accrued liabilities | 1,687 | 3,165 |
Accrued legal | 639 | 262 |
Total | 15,400 | 17,373 |
Research and Development Operations | ||
Accounts Payable and Accrued Liabilities [Line Items] | ||
Accrued liabilities | 4,108 | 3,020 |
Sales Allowances | ||
Accounts Payable and Accrued Liabilities [Line Items] | ||
Accrued liabilities | 2,525 | 2,368 |
Other Accrued Liabilities | ||
Accounts Payable and Accrued Liabilities [Line Items] | ||
Accrued liabilities | $2,337 | $1,800 |
LONGTERM_OBLIGATIONS_Additiona
LONG-TERM OBLIGATIONS - Additional Information (Detail) (USD $) | 12 Months Ended | 3 Months Ended | |
Dec. 31, 2012 | Mar. 31, 2015 | Dec. 31, 2014 | |
sqft | |||
Debt Disclosure [Line Items] | |||
Principal amount of Loan | 513,000 | $527,000 | |
Proceed from unsecured loan | 671,000 | ||
Fair value of note payable | 85,800,000 | ||
Lease agreement term | 10 years | ||
Rentable square feet of office and laboratory facilities | 45,000 | ||
Aggregate minimum lease commitment over payment lease term | 15,000,000 | ||
Letter of Credit given to landlord to secure lease obligation | 1,100,000 | ||
Capitalized leasehold improvements | 4,500,000 | 4,554,000 | 4,554,000 |
Maximum | |||
Debt Disclosure [Line Items] | |||
Tenant improvement allowance | 2,600,000 | ||
Extended Term | |||
Debt Disclosure [Line Items] | |||
Lease agreement term | 5 years | ||
Healthcare Royalty Partners | |||
Debt Disclosure [Line Items] | |||
Loan principal balance | 84,500,000 | ||
Healthcare Royalty Partners | Tranche A and Tranche B Loans (Original Loan) | |||
Debt Disclosure [Line Items] | |||
Debt instrument maturity date | 30-Sep-16 | ||
Percentage of required payment for partial repayment of debt | 90.00% | ||
Healthcare Royalty Partners | Tranche A and Tranche B Loans (Original Loan) | Phase 3 Trials | |||
Debt Disclosure [Line Items] | |||
Percentage of required payment for partial repayment of debt | 75.00% | ||
Annual net LFRP receipts amount used as a basis for repayment of loan | 15,000,000 | ||
Healthcare Royalty Partners | Tranche A and Tranche B Loans (Original Loan) | Group Two | |||
Debt Disclosure [Line Items] | |||
Percentage of required payment for partial repayment of debt | 25.00% | ||
Healthcare Royalty Partners | Tranche A and Tranche B Loans (Original Loan) | Group Two | Minimum | |||
Debt Disclosure [Line Items] | |||
Annual net LFRP receipts amount used as a basis for repayment of loan | 15,000,000 | ||
Healthcare Royalty Partners | Tranche A Loan | |||
Debt Disclosure [Line Items] | |||
Principal amount of Loan | 21,700,000 | ||
Healthcare Royalty Partners | Tranche B Loan | |||
Debt Disclosure [Line Items] | |||
Principal amount of Loan | 58,800,000 | ||
Healthcare Royalty Partners | LFRP | Tranche A and Tranche B Loans (Original Loan) | |||
Debt Disclosure [Line Items] | |||
Debt Instrument, Maturity, Month and Year | Aug-18 | ||
Interest on lease | 12.00% | ||
Healthcare Royalty Partners | LFRP | Tranche A Loan | |||
Debt Disclosure [Line Items] | |||
Secured Loan | 22,800,000 | ||
Healthcare Royalty Partners | LFRP | Tranche B Loan | |||
Debt Disclosure [Line Items] | |||
Secured Loan | 61,700,000 |
ACTIVITY_UNDER_LOAN_PRESENTED_
ACTIVITY UNDER LOAN PRESENTED FOR FINANCIAL REPORTING PURPOSES (Detail) (USD $) | 3 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
Debt Instrument [Line Items] | ||
Beginning balance | $82,165 | $81,516 |
Accretion of discount | 49 | 198 |
Loan activity: | ||
Interest Expense | 2,644 | 10,588 |
Payments applied to principal | 0 | 0 |
Payments applied to interest | -1,258 | -8,978 |
Accrued interest payable | -1,276 | -1,159 |
Ending balance | $82,324 | $82,165 |
STOCKHOLDERS_EQUITY_AND_STOCKB2
STOCKHOLDER'S EQUITY AND STOCK-BASED COMPENSATION - Additional Information (Detail) (USD $) | 1 Months Ended | 3 Months Ended | 1 Months Ended | ||
Mar. 31, 2014 | Feb. 28, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | Apr. 30, 2015 | |
Stockholders Equity Note [Line Items] | |||||
Common stock, shares issued | 9,200,000 | ||||
Common stock, per share | $9.25 | $9.25 | |||
Proceed from offering | $79,700,000 | ||||
Number of preferred stock converted to common stock | 41,418 | ||||
Number of common stock issued upon conversion of preferred stock | 4,141,800 | ||||
Compensation expense | 2,834,000 | 1,240,000 | |||
Subsequent Event [Member] | |||||
Stockholders Equity Note [Line Items] | |||||
Common stock, shares issued | 8,510,000 | ||||
Common stock, per share | $27 | ||||
Proceed from offering | 215,800,000 | ||||
Employee Stock Purchase Plans | |||||
Stockholders Equity Note [Line Items] | |||||
Percentage of price per share | 85.00% | ||||
Employee stock purchase plan offering period | 6 months | ||||
Contribution of employee in percentage | 10.00% | ||||
Contribution of employee in shares | 875 | ||||
Compensation expense | 66,000 | 69,000 | |||
Number of shares reserved and available for issuance | 702,752 | ||||
1995 Equity Incentive Plan (the Equity Plan) | |||||
Stockholders Equity Note [Line Items] | |||||
Compensation expense | 2,768,000 | 1,171,000 | |||
Number of shares reserved and available for issuance | 6,895,709 | ||||
Stock Compensation Plan | |||||
Stockholders Equity Note [Line Items] | |||||
Stock based compensation capitalized into inventory | $35,000 | $4,000 | |||
Stock Options | 1995 Equity Incentive Plan (the Equity Plan) | |||||
Stockholders Equity Note [Line Items] | |||||
Vesting period | 48 months | ||||
Contractual life of option | 10 years | ||||
Restricted Stock Units (RSUs) | 1995 Equity Incentive Plan (the Equity Plan) | |||||
Stockholders Equity Note [Line Items] | |||||
Vesting period | 4 years |
STOCK_OPTION_and_RSU_ACTIVITY_
STOCK OPTION and RSU ACTIVITY (Detail) | 3 Months Ended |
Mar. 31, 2015 | |
Stock Options | |
Number of Options | |
Beginning balance | 11,587,079 |
Granted/Awarded | 3,302,751 |
Options Exercised/Shares Issued | -201,395 |
Cancelled | -37,686 |
Ending balance | 14,650,749 |
Exercisable at end of period | 7,555,522 |
Restricted Stock Units (RSUs) | |
Number of RSUs | |
Beginning balance | 486,174 |
Granted/Awarded | 215,250 |
Options Exercised/Shares Issued | -153,177 |
Cancelled | -3,075 |
Ending balance | 545,172 |
Exercisable at end of period | 0 |
STOCK_COMPENSATION_EXPENSE_Det
STOCK COMPENSATION EXPENSE (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Compensation expenses | $2,834 | $1,240 |
Research and Development | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Allocation of stock-based compensation expense | 1,138 | 490 |
Selling, General and Administrative | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Allocation of stock-based compensation expense | 1,696 | 750 |
Equity Incentive Plan | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Compensation expenses | 2,768 | 1,171 |
Employee Stock Purchase Plan | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Compensation expenses | $66 | $69 |
INCOME_TAXES_Additional_Inform
INCOME TAXES - Additional Information (Detail) (USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2014 |
Income Taxes [Line Items] | |
Deferred tax asset, exercise of stock options | $1.80 |
Deferred tax assets valuation allowance | 219.8 |
Federal tax net operating loss carryforward | 348.1 |
Federal research and experimentation and orphan drug credit carryforward | 68.1 |
State and Local Income Tax Expense (Benefit), Continuing Operations | 53.5 |
Federal Tax | |
Income Taxes [Line Items] | |
Federal tax net operating loss carryforward | 280.9 |
Federal research and experimentation and orphan drug credit carryforward | 63.3 |
Restricted NOLs | 67.2 |
Federal tax credits | 4.8 |
Stock Option | |
Income Taxes [Line Items] | |
Federal tax net operating loss carryforward | 16.7 |
Research and Development Credit Carryforwards | |
Income Taxes [Line Items] | |
Federal research and experimentation and orphan drug credit carryforward | $8.80 |