Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 03, 2020 | Jun. 28, 2019 | |
Document And Entity Information [Abstract] | |||
Entity Registrant Name | LA JOLLA PHARMACEUTICAL CO | ||
Entity Central Index Key | 0000920465 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2019 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | false | ||
Entity Shell Company | false | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 190.2 | ||
Entity Common Stock, Shares Outstanding | 27,215,201 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash | $ 87,820 | $ 172,604 |
Accounts receivable, net | 2,960 | 1,381 |
Inventory, net | 2,211 | 2,020 |
Prepaid expenses and other current assets | 4,467 | 5,111 |
Total current assets | 97,458 | 181,116 |
Property and equipment, net | 18,389 | 22,267 |
Right-of-use lease asset | 15,491 | |
Restricted cash | 909 | 909 |
Restricted cash | 909 | |
Total assets | 132,247 | 204,292 |
Current liabilities: | ||
Accounts payable | 4,177 | 8,572 |
Accrued expenses | 9,312 | 8,485 |
Accrued payroll and related expenses | 8,332 | 7,509 |
Lease liability, current portion | 2,766 | |
Deferred rent, current portion | 0 | 1,370 |
Total current liabilities | 24,587 | 25,936 |
Lease liability, less current portion | 26,481 | |
Deferred rent, less current portion | 0 | 13,609 |
Deferred royalty obligation, net | 124,323 | |
Other noncurrent liabilities | 12,790 | 4,503 |
Total liabilities | 188,237 | 168,371 |
Commitments and contingencies (Note 10) | ||
Shareholders’ (deficit) equity: | ||
Common Stock, $0.0001 par value; 100,000,000 shares authorized, 27,195,469 and 26,259,254 shares issued and outstanding at December 31, 2019 and December 31, 2018, respectively | 3 | 3 |
Additional paid-in capital | 977,432 | 950,258 |
Accumulated deficit | (1,037,331) | (920,983) |
Total shareholders’ (deficit) equity | (55,990) | 35,921 |
Total liabilities and shareholders’ (deficit) equity | 132,247 | 204,292 |
Series C-1 Convertible Preferred Stock [Member] | ||
Shareholders’ (deficit) equity: | ||
Convertible preferred stock, value | 3,906 | 3,906 |
Series F Convertible Preferred Stock [Member] | ||
Shareholders’ (deficit) equity: | ||
Convertible preferred stock, value | $ 0 | $ 2,737 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Common stock, par value (usd per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 27,195,469 | 26,259,254 |
Common stock, shares outstanding (in shares) | 27,195,469 | 26,259,254 |
Series C-1 Convertible Preferred Stock [Member] | ||
Preferred stock, par value (usd per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 11,000 | 11,000 |
Preferred stock, shares issued (in shares) | 3,906 | 3,906 |
Preferred stock, shares outstanding (in shares) | 3,906 | 3,906 |
Liquidation preference | $ 3,906 | $ 3,906 |
Series F Convertible Preferred Stock [Member] | ||
Preferred stock, par value (usd per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 10,000 | 10,000 |
Preferred stock, shares issued (in shares) | 0 | 2,737 |
Preferred stock, shares outstanding (in shares) | 0 | 2,737 |
Liquidation preference | $ 0 | $ 2,737 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue | ||
Net product sales | $ 23,054 | $ 10,056 |
Total revenue | 23,054 | 10,056 |
Operating expenses | ||
Cost of product sales | 2,392 | 1,643 |
Research and development | 85,329 | 117,302 |
Selling, general and administrative | 45,134 | 85,162 |
Total operating expenses | 132,855 | 204,107 |
Loss from operations | (109,801) | (194,051) |
Interest expense | 10,774 | 7,303 |
Interest income | 2,128 | 1,885 |
Other income—related party | 1,939 | 0 |
Total other (expense) income, net | (6,707) | (5,418) |
Net loss | $ (116,508) | $ (199,469) |
Basic and diluted net loss per share (usd per share) | $ (4.30) | $ (7.85) |
Weighted-average common shares outstanding - basic and diluted (in shares) | 27,112 | 25,422 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands | Total | Preferred Stock [Member]Series C-1 Convertible Preferred Stock [Member] | Preferred Stock [Member]Series F Convertible Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] |
Beginning Balance (in shares) at Dec. 31, 2017 | 4,000 | 3,000 | 22,167,000 | |||
Beginning Balance at Dec. 31, 2017 | $ 88,202 | $ 3,906 | $ 2,737 | $ 2 | $ 803,071 | $ (721,514) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock issued during period (in shares) | 3,910,000 | |||||
Stock issued during period, value | 109,809 | $ 1 | 109,808 | |||
Share-based compensation expense | 35,080 | 35,080 | ||||
Exercise of stock options for common stock (in shares) | 150,000 | |||||
Issuance of common stock under 2013 Equity Plan | 1,908 | 1,908 | ||||
Issuance of common stock under ESPP (in shares) | 32,000 | |||||
Issuance of common stock under ESPP | 391 | 391 | ||||
Net loss | (199,469) | (199,469) | ||||
Ending Balance (in shares) at Dec. 31, 2018 | 4,000 | 3,000 | 26,259,000 | |||
Ending Balance at Dec. 31, 2018 | 35,921 | $ 3,906 | $ 2,737 | $ 3 | 950,258 | (920,983) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Cumulative-effect adjustment from adoption of ASU 2018-07 | 0 | |||||
Stock issued during period (in shares) | (3,000) | 782,000 | ||||
Stock issued during period, value | $ (2,737) | 2,737 | ||||
Share-based compensation expense | $ 23,733 | 23,733 | ||||
Exercise of stock options for common stock (in shares) | 5,211 | 5,000 | ||||
Issuance of common stock under 2013 Equity Plan | $ 31 | 31 | ||||
Issuance of common stock under ESPP (in shares) | 149,000 | |||||
Issuance of common stock under ESPP | 833 | 833 | ||||
Net loss | (116,508) | (116,508) | ||||
Ending Balance (in shares) at Dec. 31, 2019 | 4,000 | 0 | 27,195,000 | |||
Ending Balance at Dec. 31, 2019 | (55,990) | $ 3,906 | $ 0 | $ 3 | $ 977,432 | $ (1,037,331) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Cumulative-effect adjustment from adoption of ASU 2018-07 | $ (160) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Operating activities | ||
Net loss | $ (116,508) | $ (199,469) |
Adjustments to reconcile net loss to net cash used for operating activities: | ||
Share-based compensation expense | 23,733 | 35,151 |
Depreciation and amortization expense | 4,552 | 4,405 |
Loss on disposal of equipment | 24 | 236 |
Non-cash interest expense | 8,775 | 6,797 |
Non-cash rent expense | 1,307 | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (1,579) | (1,381) |
Inventory, net | (191) | (2,020) |
Prepaid expenses and other current assets | 644 | (1,964) |
Accounts payable | (4,395) | (2,912) |
Accrued expenses | 395 | 5,451 |
Accrued payroll and related expenses | 823 | 2,514 |
Lease liability | (2,530) | 0 |
Deferred rent | 0 | 824 |
Net cash used for operating activities | (84,950) | (152,368) |
Investing activities | ||
Purchase of property and equipment | (698) | (2,340) |
Net cash used for investing activities | (698) | (2,340) |
Financing activities | ||
Net proceeds from issuance of common stock under ESPP | 833 | 391 |
Net proceeds from issuance of common stock under 2013 Equity Plan | 31 | 1,908 |
Net proceeds from royalty financing | 0 | 124,289 |
Net proceeds from the issuance of common stock | 0 | 109,809 |
Net cash provided by financing activities | 864 | 236,397 |
Net (decrease) increase in cash and restricted cash | (84,784) | 81,689 |
Cash and restricted cash at beginning of period | 173,513 | 91,824 |
Cash and restricted cash at end of period | 88,729 | 173,513 |
Supplemental disclosure of non-cash investing and financing activities | ||
Conversion of Series F Convertible Preferred Stock into common stock | 2,737 | 0 |
Initial recognition of right-of-use lease asset | 16,798 | |
Interest paid | 1,999 | 506 |
Reconciliation of cash and restricted cash to the consolidated balance sheets | ||
Total cash and restricted cash | $ 88,729 | $ 173,513 |
Business
Business | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business | Business La Jolla Pharmaceutical Company (collectively with its wholly-owned subsidiaries, the “Company”) is dedicated to the development and commercialization of innovative therapies that improve outcomes in patients suffering from life-threatening diseases. In December 2017, GIAPREZA TM (angiotensin II) was approved by the U.S. Food and Drug Administration (“FDA”) as a vasoconstrictor indicated to increase blood pressure in adults with septic or other distributive shock. GIAPREZA U.S. net sales were $23.1 million in 2019 compared to $10.1 million in 2018 , an increase of 129% . In August 2019, GIAPREZA was approved by the European Commission (“EC”) for the treatment of refractory hypotension in adults with septic or other distributive shock who remain hypotensive despite adequate volume restitution and application of catecholamines and other available vasopressor therapies. LJPC-0118 (I.V. artesunate) is La Jolla’s investigational product for the treatment of severe malaria. As of December 31, 2019 and 2018 , the Company had cash of $87.8 million and $172.6 million , respectively. Based on the Company’s current operating plans and projections, the Company expects that its existing cash will be sufficient to fund operations for at least one year from the date this Annual Report on Form 10-K is filed with the U.S. Securities and Exchange Commission (the “SEC”). |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation and Use of Estimates The Company’s consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and include the accounts of the Company and its wholly-owned subsidiaries. All inter-company transactions and balances have been eliminated in consolidation. The preparation of the Company’s consolidated financial statements requires management to make estimates and assumptions that impact the reported amounts of assets, liabilities, revenue and expenses and the disclosure of contingent assets and liabilities in its consolidated financial statements and the accompanying notes. Actual results may differ materially from these estimates. Certain amounts previously reported in the financial statements have been reclassified to conform to the current year presentation. Such reclassifications did not affect net loss, shareholders’ (deficit) equity or cash flows. Summary of Significant Accounting Policies Cash and Restricted Cash The Company considers all highly liquid investments with maturities of three months or less when purchased as cash equivalents. The Company maintains its cash in checking and savings accounts. Income generated from cash held in savings accounts is recorded as interest income. The carrying value of the Company’s savings accounts is included in cash and approximates the fair value. Cash is classified as restricted cash when certain funds are reserved for a specific purpose and are not available for immediate or general business use. Accounts Receivable, Net Accounts receivable are recorded net of customers’ allowances for prompt-pay discounts, chargebacks and doubtful accounts. Allowances for prompt-pay discounts and chargebacks are based on contractual terms. The Company estimates the allowance for doubtful accounts based on existing contractual payment terms, actual payment patterns of its customers and individual customer circumstances. As of December 31, 2019 , the Company did not have any allowances for doubtful accounts. Inventory, Net Inventory is stated at the lower of cost or estimated net realizable value on a first-in, first-out (“FIFO”) basis. The Company periodically analyzes inventory levels and writes down inventory as cost of product sales when: inventory has become obsolete; inventory has a cost basis in excess of its estimated net realizable value; or inventory quantities are in excess of expected product sales. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist of cash. The Company maintains its cash in checking and savings accounts at federally insured financial institutions in excess of federally insured limits. In 2019 , 444 hospitals in the U.S. purchased GIAPREZA. Hospitals purchase our products through a network of specialty and wholesale distributors (“Customers”). The Company does not believe that the loss of one of these distributors would significantly impact the ability to distribute GIAPREZA, as the Company expects that sales volume would be absorbed by the remaining distributors. The following table includes the percentage of U.S. net product sales and accounts receivable balances for the Company’s three major Customers, each of which comprised 10% or more of its U.S. net product sales: U.S. Net Product Sales Accounts Receivable Year Ended December 31, 2019 As of December 31, 2019 Customer A 34 % 28 % Customer B 31 % 39 % Customer C 30 % 33 % Total 95 % 100 % Property and Equipment, Net Property and equipment is stated at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which range from two to seven years. Amortization of leasehold improvements is computed using the straight-line method over the shorter of the lease term or the estimated useful life of the related assets. Maintenance and repairs are charged to operating expense as incurred. When assets are sold, or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any gain or loss is included in operating expense. Leases At lease commencement, the Company records a lease liability based on the present value of lease payments over the expected lease term. The Company calculates the present value of lease payments using the discount rate implicit in the lease, unless that rate cannot be readily determined. In that case, the Company uses its incremental borrowing rate, which is the rate of interest that the Company would have to pay to borrow on a collateralized basis an amount equal to the lease payments over the expected lease term. The Company records a corresponding right-of-use lease asset based on the lease liability, adjusted for any lease incentives received and any initial direct costs paid to the lessor prior to the lease commencement date. After lease commencement, the Company measures its leases as follows: (i) the lease liability based on the present value of the remaining lease payments using the discount rate determined at lease commencement; and (ii) the right-of-use lease asset based on the remeasured lease liability, adjusted for any unamortized lease incentives received, any unamortized initial direct costs and the cumulative difference between rent expense and amounts paid under the lease agreement. Any lease incentives received and any initial direct costs are amortized on a straight-line basis over the expected lease term. Rent expense is recorded on a straight-line basis over the expected lease term. Revenue Recognition The Company adopted the Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“ASC”) Topic 606 – Revenue from Contracts with Customers (“ASC 606”) at the time of its first commercial shipment of GIAPREZA in the first quarter of 2018. The Company had no revenue from product sales prior to the first quarter of 2018. There have been no contract assets or liabilities recorded to date relating to product sales. Under ASC 606, the Company recognizes revenue when its customers obtain control of the Company’s product, which typically occurs on delivery. Revenue is recognized in an amount that reflects the consideration that the Company expects to receive in exchange for those goods. To determine revenue recognition for contracts with customers within the scope of ASC 606, the Company performs the following 5 steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies the relevant performance obligations. Revenue from product sales is recorded at the transaction price, net of estimates for variable consideration consisting of chargebacks, discounts, returns and administrative fees. Variable consideration is estimated using the expected-value amount method, which is the sum of probability-weighted amounts in a range of possible consideration amounts. Actual amounts of consideration ultimately received may differ from the Company’s estimates. If actual results vary materially from the Company’s estimates, the Company will adjust these estimates, which will affect revenue from product sales and earnings in the period such estimates are adjusted. These items include: • Chargebacks—Chargebacks are discounts the Company provides to distributors in the event that the sales prices to end users are below the distributors’ acquisition price. This may occur due to a direct contract with a health system, a group purchasing organization (“GPO”) agreement or a sale to a government facility. Chargebacks are estimated based on known chargeback rates and recorded as a reduction of revenue on delivery to the Company’s customers. • Discounts—The Company offers customers various forms of incentives and consideration, including prompt-pay and other discounts. The Company estimates discounts primarily based on contractual terms. These discounts are recorded as a reduction of revenue on delivery to the Company’s customers. • Returns—The Company offers customers a limited right of return, generally for damaged or expired product. The Company estimates returns based on an internal analysis, which includes actual experience. The estimates for returns are recorded as a reduction of revenue on delivery to the Company’s customers. • Administrative Fees—The Company pays administrative fees to GPOs for services and access to data. Additionally, the Company pays an Industrial Funding Fee as part of the U.S. General Services Administration’s Federal Supply Schedules program. These fees are based on contracted terms and are paid after the quarter in which the product was purchased by the applicable GPO or government agency. The Company will continue to assess its estimates of variable consideration as it accumulates additional historical data and will adjust these estimates accordingly. Shipping and Handling Expense Shipping and handling expense is included in cost of product sales. Research and Development Expense Research and development expense includes salaries and benefits, facilities and other overhead costs, research-related manufacturing costs, contract service and clinical and preclinical-related service costs performed by clinical research organizations, research institutions and other outside service providers. Research and development expense is charged to operations as incurred when the expenditures relate to the Company’s research and development efforts and have no alternative future uses. In accordance with certain research and development agreements, the Company is obligated to make certain upfront payments upon execution of the agreement. Advance payments, including nonrefundable amounts, for materials or services that will be used or rendered for future research and development activities are deferred and capitalized. Such amounts are recognized as an expense as the related goods are delivered or the related services are performed. Acquisition or milestone payments that the Company makes in connection with in-licensed technology are expensed as incurred when there is uncertainty in receiving future economic benefits from the licensed technology. The Company considers the future economic benefits from the licensed technology to be uncertain until such licensed technology is incorporated into products that are approved for marketing by the FDA or when other significant risk factors are abated. For accounting purposes, management has viewed future economic benefits for all of the Company’s licensed technology to be uncertain. Patent Costs Legal costs in connection with approved patents and patent applications are expensed as incurred, as recoverability of such expenditures is uncertain. These costs are recorded in selling, general and administrative expense in the consolidated statements of operations. Share-based Compensation The Company accounts for share-based payment arrangements in accordance with ASC 718, Compensation - Stock Compensation (“ASC 718”) , which requires the recognition of compensation expense, using a fair-value based method, for all costs related to share-based payments, including stock options and restricted stock awards. These standards require companies to estimate the fair value of share-based payment awards on the date of the grant using an option-pricing model. The Company has elected to account for forfeitures as they occur. Income Taxes The Company accounts for income taxes using the asset and liability method. Deferred tax assets and liabilities are determined based on the differences between the financial statement carrying amounts and the income tax basis of assets and liabilities. Deferred tax assets and liabilities are measured using enacted tax rates applicable to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rate is recognized in income in the period that includes the enactment date. A valuation allowance is applied against any deferred tax asset if, based on available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. For uncertain tax positions that meet a “more likely than not” threshold, the Company recognizes the benefit of uncertain tax positions in the consolidated financial statements. The Company’s practice is to recognize interest and penalties, if any, related to uncertain tax positions in income tax expense in the consolidated statements of operations. Interest Expense Interest expense and the amortization of issuance costs related to the deferred royalty obligation (see Note 7) are recognized over the expected repayment term of the deferred royalty obligation using the effective interest method. The assumptions used in determining the expected repayment term of the deferred royalty obligation require the Company to make estimates that could impact the effective interest rate. Each reporting period, the Company estimates the expected repayment term of the deferred royalty obligation based on forecasted net sales of GIAPREZA. Changes in interest expense resulting from changes in the effective interest rate, if any, are recorded on a prospective basis. Net Loss per Share Basic net loss per share is calculated by dividing net loss by the weighted-average number of common shares outstanding during the period, without consideration of potential common shares. Diluted net loss per share is calculated by dividing net loss by the weighted-average number of common shares outstanding plus potential common shares. Convertible preferred stock, stock options and warrants are considered potential common shares and are included in the calculation of diluted net loss per share using the treasury stock method when their effect is dilutive. Potential common shares are excluded from the calculation of diluted net loss per share when their effect is anti-dilutive. As of December 31, 2019 and 2018 , there were 12.4 million and 14.0 million potential common shares, respectively, that were excluded from the calculation of diluted net loss per share because their effect was anti-dilutive. Comprehensive Loss Comprehensive loss is defined as a change in equity during a period from transactions and other events and circumstances from non-owner sources. There have been no items qualifying as other comprehensive loss, and, therefore, comprehensive loss for the periods reported was comprised solely of the Company’s net loss. Segment Reporting Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. The Company views its operations and manages its business in one operating segment. Fair Value Measurements The Company follows the provisions of ASC 820-10, Fair Value Measurements and Disclosures (“ASC 820-10”), which defines fair value, establishes a framework for measuring fair value in GAAP and requires certain disclosures about fair value measurements. Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, ASC 820-10 establishes a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value as follows: Level 1 - observable inputs such as quoted prices in active markets; Level 2 - inputs other than the quoted prices in active markets that are observable either directly or indirectly; and Level 3 - unobservable inputs, in which there is little or no market data, which require the Company to develop its own assumptions. The hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. The Company’s financial instruments include cash, accounts receivable, inventory, prepaid expenses and other current assets, accounts payable and accrued expenses. The carrying amounts reported in the balance sheets for these financial instruments approximate fair value because of their short-term nature. In certain cases where there is limited activity or less transparency around inputs to valuation, the related assets or liabilities are classified as Level 3. The Company's deferred royalty obligation is classified as Level 3 in the ASC 820-10, three-tier fair value hierarchy, and its carrying value approximates fair value (see Note 7). Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements In June 2018, the FASB issued Accounting Standards Update (“ASU”) No. 2018-07, Stock Compensation (Topic 718): Improvements to Nonemployee Share-based Payment Accounting (“ASU 2018-07”). The standard expands the scope of ASC 718 to include share-based payment awards granted to nonemployees in exchange for goods and services. ASU 2018-07 is effective for annual and interim reporting periods beginning after December 15, 2018. In the first quarter of 2019, the Company adopted ASU 2018-07. Prior to the adoption of ASU 2018-07, share-based payments awards granted to nonemployees were measured at fair value on their grant date, subject to periodic remeasurement, and share-based compensation expense was recognized on a straight-line basis over their vesting terms. After the adoption of ASU 2018-07, the fair value of share-based payment awards granted to nonemployees is not required to be remeasured periodically and share-based compensation expense will continue to be recorded on a straight-line basis over their vesting period, consistent with share-based payment awards granted to employees. As a result of the adoption of ASU 2018-07, the Company remeasured all of its outstanding nonemployee share-based payment awards at fair value and recognized a cumulative-effect adjustment of $0.2 million to accumulated deficit as of January 1, 2019. In February 2016, the FASB issued ASU No. 2016-02, Leases (“ASU 2016-02”). This guidance requires lessees to recognize operating leases with a term greater than one year on the balance sheet as a right-of-use asset and corresponding lease liability. ASU 2016-02 is effective for annual and interim reporting periods beginning after December 15, 2018. Although ASU 2016-02 is required to be adopted at the earliest period presented using a modified retrospective approach, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements (“ASU 2018-11”), which allows for an alternative transition method of adoption by recognizing a cumulative-effect adjustment, if any, to the opening balance of retained earnings in the period of adoption. The Company adopted ASU 2016-02 on January 1, 2019 utilizing the alternative transition method allowed under ASU 2018-11. As a result, the Company recorded a lease liability and right-of-use lease asset of $31.8 million and $16.8 million , respectively, on its balance sheet as of January 1, 2019. The lease liability represents the present value of the remaining lease payments of the Company’s corporate headquarters lease (see Note 10), discounted using the Company’s incremental borrowing rate as of January 1, 2019. The corresponding right-of-use lease asset is recorded based on the lease liability, adjusted for the unamortized lease incentives received and the cumulative difference between rent expense and amounts paid under the corporate headquarters lease. The adoption of ASU 2016-02 did not have a material impact on either the statement of operations or statement of cash flows for the year ended December 31, 2019 . |
Balance Sheet Account Details
Balance Sheet Account Details | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Balance Sheet Account Details | Balance Sheet Details Inventory, Net Inventory, net consisted of the following (in thousands): December 31, 2019 2018 Work-in-process $ 1,505 $ 1,907 Finished goods 706 113 Total inventory, net $ 2,211 $ 2,020 As of December 31, 2019 and December 31, 2018 , total inventory is recorded net of $0.1 million and $0.8 million , respectively, of inventory reserves. Property and Equipment, Net Property and equipment, net consisted of the following (in thousands): December 31, 2019 2018 Lab equipment $ 9,665 $ 9,047 Furniture and fixtures 2,598 2,573 Computer hardware 1,296 1,296 Software 733 733 Leasehold improvements 14,504 14,504 Total property and equipment, gross 28,796 28,153 Accumulated depreciation and amortization (10,407 ) (5,886 ) Total property and equipment, net $ 18,389 $ 22,267 Accrued Expenses Accrued expenses consisted of the following (in thousands): December 31, 2019 2018 Accrued clinical study costs $ 3,496 $ 2,430 Accrued interest expense 2,692 2,260 Accrued manufacturing costs 1,339 1,823 Accrued other 1,785 1,972 Total accrued expenses $ 9,312 $ 8,485 |
Licensed Technology
Licensed Technology | 12 Months Ended |
Dec. 31, 2019 | |
Research and Development [Abstract] | |
Licensed Technology | In December 2014, the Company entered into a patent license agreement with George Washington University (“GW”), which was amended and restated on March 1, 2016 (the “GW License”) and subsequently assigned to La Jolla Pharma, LLC. Pursuant to the GW License, GW exclusively licensed to the Company certain intellectual property rights relating to GIAPREZA, including the exclusive rights to certain issued patents and patent applications covering GIAPREZA. Under the GW License, the Company is obligated to use commercially reasonable efforts to develop, commercialize, market and sell GIAPREZA. The Company has paid a one -time license initiation fee, annual maintenance fees, an amendment fee, additional payments following the achievement of certain development and regulatory milestones and royalties. As a result of the EC’s approval of GIAPREZA in August 2019, the Company made a milestone payment to GW in the amount of $0.5 million in the first quarter of 2020. The Company is obligated to pay a 6% royalty on net sales of GIAPREZA. The patents and patent applications covered by the GW License are expected to expire between 2029 and 2034 , and the obligation to pay royalties under this agreement extends through the last-to-expire patent covering GIAPREZA. |
Other Income - Related Party (N
Other Income - Related Party (Notes) | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Other Income - Related Party | Other Income — Related Party The Company has a non-voting profits interest in a related party, which provides the Company with the potential to receive a portion of the future distributions of profits, if any. Investment funds affiliated with the Chairman of the Company’s board of directors have a controlling interest in the related party. In the fourth quarter of 2019, the Company received distributions of $1.9 million in connection with this profits interest. |
Shareholders_ Equity
Shareholders’ Equity | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Shareholders’ Equity | Shareholders’ (Deficit) Equity Common Stock As of December 31, 2019 and 2018 , there were 27,195,469 and 26,259,254 shares of common stock, $0.0001 par value, issued and outstanding, respectively. In March 2018, the Company sold 3,910,000 shares of common stock in an underwritten public offering at a price of $29.50 per share for gross proceeds of approximately $115.3 million . The Company received proceeds of approximately $109.8 million , net of approximately $5.5 million in underwriting commissions, discounts and other issuance costs. Preferred Stock As of December 31, 2019 and 2018 , 3,906 shares of Series C-1 2 Convertible Preferred Stock (“Series C-1 2 Preferred”) were issued, outstanding and convertible into 6,735,378 shares of common stock. As of December 31, 2019 , no shares of Series F Convertible Preferred Stock (“Series F Preferred”) were issued and outstanding. As of December 31, 2018 , 2,737 shares of Series F Preferred were issued and outstanding, and, in January 2019, all of the these issued and outstanding shares of Series F Preferred were converted into 782,031 shares of common stock. The holders of Series C-1 2 Preferred and Series F Preferred do not have voting rights, other than for general protective rights required by the California General Corporation Law and are not entitled to special dividends. The Series C-1 2 Preferred have, and the Series F Preferred had, a liquidation preference in an amount equal to $1,000 per share. As of December 31, 2019 and 2018 , the Series C-1 2 Preferred liquidation preference was approximately $3.9 million . As of December 31, 2018 , the Series F Preferred liquidation preference was approximately $2.7 million . Equity Incentive Plans 2013 Equity Incentive Plan In September 2013, the Company adopted the 2013 Equity Incentive Plan (the “2013 Equity Plan”). The 2013 Equity Plan is an omnibus equity compensation plan that permits the issuance of various types of share-based compensation awards, including stock options, restricted stock awards, stock appreciation rights and restricted stock units, as well as cash awards, to employees, directors and eligible consultants. The 2013 Equity Plan has a 10 -year term and permits the issuance of incentive stock options under Section 422 of the Internal Revenue Code of 1986, as amended (“IRC”). The administrator under the plan has broad discretion to establish the terms of awards, including the size, term, exercise price and vesting conditions. Generally, grants to employees vest over four years, with 25% vesting on the one -year anniversary and the remainder vesting either quarterly or monthly thereafter; grants to non-employee directors generally vest over one year on the one -year anniversary. A total of 9,600,000 shares of common stock have been reserved for issuance under the 2013 Equity Plan. As of December 31, 2019 , 3,769,824 shares of common stock remained available for future grants under the 2013 Equity Plan. 2018 Employee Stock Purchase Plan In July 2018, the Company adopted the 2018 Employee Stock Purchase Plan (the “ESPP”). Under the ESPP, eligible employees may purchase shares of the Company’s common stock twice per month at a price equal to 85% of the closing price of shares of the Company’s common stock on the date of each purchase. Eligible employees purchasing shares under the ESPP are subject to an annual cap equal to the lesser of $25,000 or 10% of the employee’s annual cash compensation. Shares purchased under the ESPP cannot be sold for a period of one year following the purchase date (or such shorter period of time if the participating employee’s employment terminates before this one-year anniversary). A total of 750,000 shares of common stock have been reserved for issuance under the ESPP. As of December 31, 2019 , 568,728 shares of common stock remained available for future grants under the ESPP. Equity Awards The activity related to equity awards, which are comprised of stock options and inducement grants, during the year ended December 31, 2019 is summarized as follows: Equity Awards Weighted- average Exercise Price per Share Weighted- average Remaining Contractual Term Aggregate Outstanding at December 31, 2018 6,466,214 $ 23.26 Granted (1) 2,126,023 $ 6.33 Exercised (5,211 ) $ 6.00 Cancelled/forfeited (2,970,186 ) $ 18.29 Outstanding at December 31, 2019 5,616,840 $ 19.50 4.33 years $ — Exercisable at December 31, 2019 3,645,726 $ 22.76 4.48 years $ — (1) In March 2019, the Company issued a stock option grant to the Company’s recently appointed Chief Commercial Officer to purchase 80,000 shares of common stock. The grant was awarded as an inducement grant outside of the 2013 Equity Plan. On the first anniversary of the grant date, 25% of the underlying shares become exercisable with the remaining shares vesting on a monthly basis over the subsequent three years, subject to continued service during that time. The total intrinsic value of equity awards exercised during the years ended December 31, 2019 and 2018 were less than $0.1 million and $1.4 million , respectively. The total grant-date fair value of equity awards vested during the years ended December 31, 2019 and 2018 was $25.9 million and $38.0 million , respectively. Share-based Compensation Expense For the years ended December 31, 2019 and 2018 , respectively, the weighted-average grant date fair value per stock option was $4.99 and $20.52 , respectively. The Company estimates the fair value of each stock option grant on the grant date using the Black-Scholes option-pricing model (the “Black-Scholes model”) with the following assumptions: Year Ended December 31, 2019 2018 Volatility 97 % 114 % Expected life (years) 6.05 6.07 Risk-free interest rate 2.5 % 2.8 % Dividend yield — — Expected volatility is based on the historical volatility of shares of the Company’s common stock. In determining the expected life of employee stock options, the Company uses the “simplified” method. The expected life assumptions for stock options granted to nonemployees, other than nonemployee directors, are based upon the contractual term of the stock options. The risk-free interest rate is based on the U.S. Treasury yield for a period consistent with the expected term of the stock options in effect at the time of the grants. The dividend yield assumption is based on the expectation of no future dividend payments by the Company. In addition to assumptions used in the Black-Scholes model, the Company reduces share-based compensation expense based on actual forfeitures in the period that each forfeiture occurs. Under the ESPP, eligible employees may purchase shares of the Company’s common stock twice per month at a price equal to 85% of the closing price of shares of the Company’s common stock on the date of each purchase. The benefit received by the employees, which is equal to a 15% discount on the shares of the Company’s common stock purchased, is recognized as share-based compensation expense on the date of each purchase. The Company recorded $0.1 million and $0.2 million of share-based compensation related to the ESPP for the years ended December 31, 2019 and 2018 , respectively. As of December 31, 2019 , there was no unrecognized share-based compensation expense related to shares of common stock issued under the ESPP. The classification of share-based compensation expense is summarized as follows (in thousands): Year Ended December 31, 2019 2018 Research and development $ 14,861 $ 21,113 Selling, general and administrative 8,872 14,038 Total share-based compensation expense $ 23,733 $ 35,151 As of December 31, 2019 , $18.4 million of total unrecognized share-based compensation expense related to unvested stock options remains and is expected to be recognized over a weighted-average period of approximately 2.3 years . Third-party Share-based Compensation Expense The Company estimates the fair value of stock options and warrants issued to nonemployees, other than nonemployee directors, on the grant date using the Black-Scholes model. In December 2014, the Company granted warrants to purchase 51,000 shares of common stock to two outside third-parties at an exercise price equal to the fair market value of the stock on the grant dates. One grant vested 25% on each anniversary date over four years . The other grant vested 100% on the one-year anniversary of the grant. In January 2016, the Company granted warrants to purchase 17,000 shares of common stock to an outside third-party at an exercise price equal to the fair market value of the stock on the date of each grant. The grant vested 100% on the one-year anniversary of the grant. In January 2017, the Company granted warrants to purchase 25,013 shares of common stock to an outside third-party at an exercise price equal to the fair market value of the stock on the date of each grant. The grant vested 100% on the one-year anniversary of the grant. In March 2018, the Company issued 43,056 shares of common stock in a cashless exercise of 83,013 warrants to a third-party warrant holder. As of December 31, 2019 , the Company had outstanding warrants to purchase 10,000 shares of common stock and did not recognize share-based compensation expense for these outstanding warrants for the years ended December 31, 2019 and 2018 . |
Deferred Royalty Obligation
Deferred Royalty Obligation | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Deferred Royalty Obligation | Deferred Royalty Obligation In May 2018, the Company closed a $125.0 million royalty financing agreement (the “Royalty Agreement”) with HealthCare Royalty Partners (“HCR”). Under the terms of the Royalty Agreement, the Company received $125.0 million in exchange for tiered royalty payments on worldwide net sales of GIAPREZA. HCR is entitled to receive quarterly royalties on worldwide net sales of GIAPREZA beginning April 1, 2018. Quarterly payments to HCR under the Royalty Agreement start at a maximum royalty rate, with step-downs based on the achievement of annual net product sales thresholds. Through December 31, 2021, the royalty rate will be a maximum of 10% . Starting January 1, 2022, the maximum royalty rate may increase by 4% if an agreed-upon, cumulative net product sales threshold has not been met, and, starting January 1, 2024, the maximum royalty rate may increase by an additional 4% if a different agreed-upon, cumulative net product sales threshold has not been met. The Royalty Agreement is subject to maximum aggregate royalty payments to HCR of $225.0 million . The Royalty Agreement expires upon the first to occur of January 1, 2031 or when the maximum aggregate royalty payments have been made. The Royalty Agreement was entered into by the Company’s wholly-owned subsidiary, La Jolla Pharma, LLC, and HCR has no recourse under the Royalty Agreement against La Jolla Pharmaceutical Company or any assets other than GIAPREZA. On receipt of the $125.0 million payment from HCR, the Company recorded a deferred royalty obligation of $125.0 million , net of issuance costs of $0.7 million . For the years ended December 31, 2019 and 2018 , the Company recognized interest expense, including amortization of the obligation discount, of $10.8 million and $7.3 million , respectively. The carrying value of the deferred royalty obligation as of December 31, 2019 was $124.4 million , net of unamortized obligation discount of $0.6 million , and was classified as noncurrent. The related accrued interest expense liability was $15.5 million and $6.8 million as of December 31, 2019 and December 31, 2018 , respectively, of which $12.8 million and $4.5 million was classified as other noncurrent liabilities, respectively. For the years ended December 31, 2019 and 2018 , the Company made royalty payments to HCR of $2.0 million and $0.5 million , respectively, and, as of December 31, 2019 , the Company recorded royalty obligations payable of $0.7 million in accrued expenses. The deferred royalty obligation is classified as Level 3 in the ASC 820-10, three-tier fair value hierarchy, and its carrying value approximates fair value. Under the terms of the Royalty Agreement, La Jolla Pharma, LLC has certain obligations, including the obligation to use commercially reasonable and diligent efforts to commercialize GIAPREZA. If La Jolla Pharma, LLC is held to not have met these obligations, HCR would have the right to terminate the Royalty Agreement and demand payment from La Jolla Pharma, LLC of either $125.0 million or $225.0 million (depending on which obligation La Jolla Pharma, LLC is held to not have met), minus aggregate royalties already paid to HCR. In the event that La Jolla Pharma, LLC fails to timely pay such amount if and when due, HCR would have the right to foreclose on the GIAPREZA-related assets. The Company concluded that certain of these contract provisions that could result in an acceleration of amounts due under the Royalty Agreement are embedded derivatives that require bifurcation from the deferred royalty obligation and fair value recognition. The Company determined the fair value of each derivative by assessing the probability of each event occurring, as well as the potential repayment amounts and timing of such repayments that would result under various scenarios. As a result of this assessment, the Company determined that the fair value of the embedded derivatives is immaterial as of December 31, 2019 . Each reporting period, the Company estimates the fair value of the embedded derivatives until the features lapse and/or the termination of the Royalty Agreement. Any change in the fair value of the embedded derivatives will be recorded as either a gain or loss on the consolidated statements of operations. |
Defined Contribution Plan
Defined Contribution Plan | 12 Months Ended |
Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |
Defined Contribution Plan | Defined Contribution Plan The Company has a defined contribution plan (the “401(k) Plan”) covering substantially all of the Company’s employees. The 401(k) Plan is a tax-qualified retirement saving plan, pursuant to which all employees are able to contribute the lesser of 50% of their annual compensation (as defined) or the limit prescribed by the Internal Revenue Service to the 401(k) Plan on a before-tax basis. The Company matches employee contributions to the 401(k) Plan based on each participant’s contribution during the plan year, up to 3.5% of each participant’s annual compensation. For the years ended December 31, 2019 and 2018 , the Company made matching contributions to the 401(k) Plan of $0.9 million and $1.4 million , respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For the years ended December 31, 2019 and 2018 , the Company did not record a provision for income taxes, as the Company recorded a full valuation allowance against its deferred tax assets. Deferred tax assets are as follows (in thousands): December 31, 2019 2018 Deferred tax assets: Net operating loss carryforwards $ 81,406 $ 60,105 Research and development credits 24,011 21,262 Deferred royalty obligation 30,460 31,937 Share-based compensation expense 9,581 11,904 Depreciation and amortization expense — 1,033 Lease liability 7,127 — Other 1,263 1,004 Total gross deferred tax assets 153,848 127,245 Deferred tax liabilities: Depreciation and amortization (1,612 ) — Right-of-use lease asset (3,775 ) — Valuation allowance (148,461 ) (127,245 ) Net deferred tax assets $ — $ — The difference between income taxes computed using the U.S. federal income effective tax rate and the provision for income taxes is as follows (in thousands): Year Ended December 31, 2019 2018 Federal statutory rate $ (24,467 ) $ (41,888 ) State tax benefit (3,825 ) (14,449 ) Change in valuation allowance 102,583 55,167 Share-based compensation expense 7,532 4,041 State rate true-up 2,513 — Section 382 limited tax attributes/expired — 1,936 Establishment of NOLs and credits, post-Section 382 ownership change (81,368 ) — Research and development credits (2,599 ) (5,164 ) Foreign rate differential (62 ) (58 ) Other permanent differences (307 ) 415 Provision for income taxes $ — $ — As of December 31, 2019 and 2018 , the Company established a full valuation allowance against its federal and state deferred tax assets due to the uncertainty surrounding the realization of such assets. Pursuant to Section 382 and 383 of the IRC, utilization of the Company’s federal net operating loss (“NOL”) carryforwards and research and development credit carryforwards may be subject to annual limitations in the event of any significant changes in its ownership structure. These annual limitations may result in the expiration of net operating loss carryforwards and research and development credit carryforwards, unless utilized. The Company has completed an IRC Section 382 and 383 analysis regarding the limitation of net operating loss carryforwards and research and development credit carryforwards through March 31, 2019. As a result of a Section 382 ownership change in September 2013, the Company recorded a reduction to its federal and state net operating loss carryforwards of $341.3 million and $170.9 million , respectively. In addition, the Company recorded a reduction to its federal research and development credit carryforwards of $15.5 million . As of December 31, 2019 , the Company had federal and state net operating loss carryforwards of $305.6 million and $227.2 million , respectively. In addition, the Company had estimated federal and California research and development credit carryforwards of $10.8 million and $16.7 million , respectively. Federal net operating loss carryforwards of $183.8 million , state net operating loss carryforwards of $227.2 million and federal research and development credit carryforwards of $10.8 million will begin to expire in 2034, unless utilized. Federal net operating loss carryforwards of $121.8 million and California research and development credit carryforwards of $16.7 million will carry forward indefinitely, unless utilized. There were no unrecognized tax benefits as of December 31, 2019 and 2018 . The Company does not anticipate there will be a significant change in unrecognized tax benefits within the next 12 months. The Company had no accrual for interest or penalties on the Company’s consolidated balance sheets as of December 31, 2019 or December 31, 2018 , and has not recognized interest and/or penalties in the consolidated statements of operations for the years ended December 31, 2019 and 2018 . The Company is subject to taxation in the U.S. and various state jurisdictions. The Company’s tax returns since inception are subject to examination by the U.S. and various state tax authorities. The Company is not currently undergoing a tax audit in any federal or state jurisdiction. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Leases On December 29, 2016, the Company entered into an agreement with BMR-Axiom LP to lease office and laboratory space as its corporate headquarters located at 4550 Towne Centre Court, San Diego, California (the “Lease”) for a period of 10 years commencing on October 30, 2017 (the “Initial Lease Term”). The Company has an option to extend the Lease for an additional 5 years at the end of the Initial Lease Term. The Company provided a standby letter of credit for $0.9 million in lieu of a security deposit. This amount will decrease to $0.6 million after year two of the Initial Lease Term and decrease to $0.3 million after year 5 of the Initial Lease Term. As of December 31, 2019 , $0.9 million was pledged as collateral for such letter of credit and recorded as restricted cash. The annual rent under the Lease is subject to escalation during the term. In addition to rent, the Lease requires the Company to pay certain taxes, insurance and operating costs relating to the leased premises. The Lease contains customary default provisions, representations, warranties and covenants. The Lease is classified as an operating lease. Future minimum lease payments under the Lease as of December 31, 2019 are as follows (in thousands): 2020 $ 4,058 2021 4,174 2022 4,294 2023 4,417 2024 4,544 Thereafter 13,590 Total future minimum lease payments $ 35,077 Less: discount (5,830 ) Total lease liability $ 29,247 The Lease provided an allowance for tenant improvements of $13.7 million , which is classified as leasehold improvements on the Company’s consolidated balance sheet and is being amortized on a straight-line basis over the Initial Lease Term. The Company recorded a lease liability for the Lease based on the present value of the Lease payments over the Initial Lease Term, discounted using the Company’s incremental borrowing rate. The Company recorded a corresponding right-of-use lease asset based on the lease liability, adjusted for incentives received prior to the Lease commencement date. The option to extend the Initial Lease Term was not recognized as a part of either the Company’s lease liability or right-of-use lease asset. Lease expense was $2.8 million for the years ended December 31, 2019 and 2018 . Amortization for the right-of-use lease asset was $1.3 million for the year ended December 31, 2019 . Licensing Agreements In the normal course of business, the Company enters into licensing agreements under which the Company commits to certain annual maintenance payments. Annual future minimum licensing payments under the Company’s agreements as of December 31, 2019 are as follows (in thousands): 2020 $ 99 2021 99 2022 99 2023 99 2024 99 Total future minimum license payments $ 495 Supply Agreements In the normal course of business, the Company enters into agreements for the manufacturing and supply of GIAPREZA and LJPC-0118. In 2017, the Company entered into agreements arranging for the manufacture and supply of GIAPREZA through 2022. During this time, the Company is obligated to make certain minimum purchases. Annual future minimum payments for manufacturing and supply agreements as of December 31, 2019 are as follows (in thousands): 2020 $ 1,976 2021 1,976 2022 611 Total future minimum manufacturing and supply agreement payments $ 4,563 |
Restructuring (Notes)
Restructuring (Notes) | 12 Months Ended |
Dec. 31, 2019 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | On October 18, 2018, the Company effected a Company-wide realignment. For the year ended December 31, 2018, total expense for these activities was $4.0 million , with $1.6 million included in research and development expense and $2.4 million included in selling, general and administrative expense. Total expense was comprised of $7.7 million for severance costs, offset by a $3.7 million reversal of non-cash, share-based compensation expense related to forfeited, unvested equity awards. As of March 31, 2019, all severance costs had been paid. No expense for these activities was recorded for the year ended December 31, 2019. On December 2, 2019, the Board of Directors of the Company approved a restructuring plan that reduced the Company’s headcount (the “2019 Realignment”). The 2019 Realignment did not result in any reductions in headcount in the Company’s commercial organization supporting GIAPREZA. For the year ended December 31, 2019 , total expense for these activities was $4.9 million , $4.4 million of which is included in research and development expense and $0.5 million of which is included in general and administrative expense. Total expense was comprised of $5.8 million for one-time termination benefits to the affected employees, including severance and health care benefits, offset by a $0.9 million reversal of non-cash, share-based compensation expense related to forfeited, unvested equity awards. As of December 31, 2019 , the Company had paid $0.9 million of the $5.8 million cash severance and health care benefits charges, and the remaining $4.9 million of the cash severance and health care benefits charges were included in accrued payroll and related expenses. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation and Use of Estimates The Company’s consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and include the accounts of the Company and its wholly-owned subsidiaries. |
Principles of Consolidation | All inter-company transactions and balances have been eliminated in consolidation. |
Use of Estimates | The preparation of the Company’s consolidated financial statements requires management to make estimates and assumptions that impact the reported amounts of assets, liabilities, revenue and expenses and the disclosure of contingent assets and liabilities in its consolidated financial statements and the accompanying notes. Actual results may differ materially from these estimates. |
Reclassification | Certain amounts previously reported in the financial statements have been reclassified to conform to the current year presentation. Such reclassifications did not affect net loss, shareholders’ (deficit) equity or cash flows. |
Cash and Cash Equivalents | Cash and Restricted Cash The Company considers all highly liquid investments with maturities of three months or less when purchased as cash equivalents. The Company maintains its cash in checking and savings accounts. Income generated from cash held in savings accounts is recorded as interest income. The carrying value of the Company’s savings accounts is included in cash and approximates the fair value. Cash is classified as restricted cash when certain funds are reserved for a specific purpose and are not available for immediate or general business use. |
Accounts Receivables | Accounts Receivable, Net Accounts receivable are recorded net of customers’ allowances for prompt-pay discounts, chargebacks and doubtful accounts. Allowances for prompt-pay discounts and chargebacks are based on contractual terms. The Company estimates the allowance for doubtful accounts based on existing contractual payment terms, actual payment patterns of its customers and individual customer circumstances. As of December 31, 2019 , the Company did not have any allowances for doubtful accounts. |
Inventory | Inventory, Net Inventory is stated at the lower of cost or estimated net realizable value on a first-in, first-out (“FIFO”) basis. The Company periodically analyzes inventory levels and writes down inventory as cost of product sales when: inventory has become obsolete; inventory has a cost basis in excess of its estimated net realizable value; or inventory quantities are in excess of expected product sales. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist of cash. The Company maintains its cash in checking and savings accounts at federally insured financial institutions in excess of federally insured limits. In 2019 , 444 hospitals in the U.S. purchased GIAPREZA. Hospitals purchase our products through a network of specialty and wholesale distributors (“Customers”). The Company does not believe that the loss of one of these distributors would significantly impact the ability to distribute GIAPREZA, as the Company expects that sales volume would be absorbed by the remaining distributors. |
Property and Equipment | Property and Equipment, Net Property and equipment is stated at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which range from two to seven years. Amortization of leasehold improvements is computed using the straight-line method over the shorter of the lease term or the estimated useful life of the related assets. Maintenance and repairs are charged to operating expense as incurred. When assets are sold, or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any gain or loss is included in operating expense. Leases At lease commencement, the Company records a lease liability based on the present value of lease payments over the expected lease term. The Company calculates the present value of lease payments using the discount rate implicit in the lease, unless that rate cannot be readily determined. In that case, the Company uses its incremental borrowing rate, which is the rate of interest that the Company would have to pay to borrow on a collateralized basis an amount equal to the lease payments over the expected lease term. The Company records a corresponding right-of-use lease asset based on the lease liability, adjusted for any lease incentives received and any initial direct costs paid to the lessor prior to the lease commencement date. After lease commencement, the Company measures its leases as follows: (i) the lease liability based on the present value of the remaining lease payments using the discount rate determined at lease commencement; and (ii) the right-of-use lease asset based on the remeasured lease liability, adjusted for any unamortized lease incentives received, any unamortized initial direct costs and the cumulative difference between rent expense and amounts paid under the lease agreement. Any lease incentives received and any initial direct costs are amortized on a straight-line basis over the expected lease term. Rent expense is recorded on a straight-line basis over the expected lease term. |
Revenue Recognition | Revenue Recognition The Company adopted the Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“ASC”) Topic 606 – Revenue from Contracts with Customers (“ASC 606”) at the time of its first commercial shipment of GIAPREZA in the first quarter of 2018. The Company had no revenue from product sales prior to the first quarter of 2018. There have been no contract assets or liabilities recorded to date relating to product sales. Under ASC 606, the Company recognizes revenue when its customers obtain control of the Company’s product, which typically occurs on delivery. Revenue is recognized in an amount that reflects the consideration that the Company expects to receive in exchange for those goods. To determine revenue recognition for contracts with customers within the scope of ASC 606, the Company performs the following 5 steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies the relevant performance obligations. Revenue from product sales is recorded at the transaction price, net of estimates for variable consideration consisting of chargebacks, discounts, returns and administrative fees. Variable consideration is estimated using the expected-value amount method, which is the sum of probability-weighted amounts in a range of possible consideration amounts. Actual amounts of consideration ultimately received may differ from the Company’s estimates. If actual results vary materially from the Company’s estimates, the Company will adjust these estimates, which will affect revenue from product sales and earnings in the period such estimates are adjusted. These items include: • Chargebacks—Chargebacks are discounts the Company provides to distributors in the event that the sales prices to end users are below the distributors’ acquisition price. This may occur due to a direct contract with a health system, a group purchasing organization (“GPO”) agreement or a sale to a government facility. Chargebacks are estimated based on known chargeback rates and recorded as a reduction of revenue on delivery to the Company’s customers. • Discounts—The Company offers customers various forms of incentives and consideration, including prompt-pay and other discounts. The Company estimates discounts primarily based on contractual terms. These discounts are recorded as a reduction of revenue on delivery to the Company’s customers. • Returns—The Company offers customers a limited right of return, generally for damaged or expired product. The Company estimates returns based on an internal analysis, which includes actual experience. The estimates for returns are recorded as a reduction of revenue on delivery to the Company’s customers. • Administrative Fees—The Company pays administrative fees to GPOs for services and access to data. Additionally, the Company pays an Industrial Funding Fee as part of the U.S. General Services Administration’s Federal Supply Schedules program. These fees are based on contracted terms and are paid after the quarter in which the product was purchased by the applicable GPO or government agency. The Company will continue to assess its estimates of variable consideration as it accumulates additional historical data and will adjust these estimates accordingly. |
Research and Development Expenses | Research and Development Expense Research and development expense includes salaries and benefits, facilities and other overhead costs, research-related manufacturing costs, contract service and clinical and preclinical-related service costs performed by clinical research organizations, research institutions and other outside service providers. Research and development expense is charged to operations as incurred when the expenditures relate to the Company’s research and development efforts and have no alternative future uses. In accordance with certain research and development agreements, the Company is obligated to make certain upfront payments upon execution of the agreement. Advance payments, including nonrefundable amounts, for materials or services that will be used or rendered for future research and development activities are deferred and capitalized. Such amounts are recognized as an expense as the related goods are delivered or the related services are performed. Acquisition or milestone payments that the Company makes in connection with in-licensed technology are expensed as incurred when there is uncertainty in receiving future economic benefits from the licensed technology. The Company considers the future economic benefits from the licensed technology to be uncertain until such licensed technology is incorporated into products that are approved for marketing by the FDA or when other significant risk factors are abated. For accounting purposes, management has viewed future economic benefits for all of the Company’s licensed technology to be uncertain. |
Patent Costs | Patent Costs Legal costs in connection with approved patents and patent applications are expensed as incurred, as recoverability of such expenditures is uncertain. These costs are recorded in selling, general and administrative expense in the consolidated statements of operations. |
Share-based Compensation | Share-based Compensation The Company accounts for share-based payment arrangements in accordance with ASC 718, Compensation - Stock Compensation (“ASC 718”) , which requires the recognition of compensation expense, using a fair-value based method, for all costs related to share-based payments, including stock options and restricted stock awards. These standards require companies to estimate the fair value of share-based payment awards on the date of the grant using an option-pricing model. The Company has elected to account for forfeitures as they occur. |
Income Taxes | Income Taxes The Company accounts for income taxes using the asset and liability method. Deferred tax assets and liabilities are determined based on the differences between the financial statement carrying amounts and the income tax basis of assets and liabilities. Deferred tax assets and liabilities are measured using enacted tax rates applicable to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rate is recognized in income in the period that includes the enactment date. A valuation allowance is applied against any deferred tax asset if, based on available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. For uncertain tax positions that meet a “more likely than not” threshold, the Company recognizes the benefit of uncertain tax positions in the consolidated financial statements. The Company’s practice is to recognize interest and penalties, if any, related to uncertain tax positions in income tax expense in the consolidated statements of operations. |
Interest Expense | Interest Expense Interest expense and the amortization of issuance costs related to the deferred royalty obligation (see Note 7) are recognized over the expected repayment term of the deferred royalty obligation using the effective interest method. The assumptions used in determining the expected repayment term of the deferred royalty obligation require the Company to make estimates that could impact the effective interest rate. Each reporting period, the Company estimates the expected repayment term of the deferred royalty obligation based on forecasted net sales of GIAPREZA. Changes in interest expense resulting from changes in the effective interest rate, if any, are recorded on a prospective basis. |
Net Loss Per Share | Net Loss per Share Basic net loss per share is calculated by dividing net loss by the weighted-average number of common shares outstanding during the period, without consideration of potential common shares. Diluted net loss per share is calculated by dividing net loss by the weighted-average number of common shares outstanding plus potential common shares. Convertible preferred stock, stock options and warrants are considered potential common shares and are included in the calculation of diluted net loss per share using the treasury stock method when their effect is dilutive. Potential common shares are excluded from the calculation of diluted net loss per share when their effect is anti-dilutive. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss is defined as a change in equity during a period from transactions and other events and circumstances from non-owner sources. |
Segment Reporting | Segment Reporting Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. The Company views its operations and manages its business in one operating segment. |
Fair Value Measurement | Fair Value Measurements The Company follows the provisions of ASC 820-10, Fair Value Measurements and Disclosures (“ASC 820-10”), which defines fair value, establishes a framework for measuring fair value in GAAP and requires certain disclosures about fair value measurements. Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, ASC 820-10 establishes a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value as follows: Level 1 - observable inputs such as quoted prices in active markets; Level 2 - inputs other than the quoted prices in active markets that are observable either directly or indirectly; and Level 3 - unobservable inputs, in which there is little or no market data, which require the Company to develop its own assumptions. The hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. The Company’s financial instruments include cash, accounts receivable, inventory, prepaid expenses and other current assets, accounts payable and accrued expenses. The carrying amounts reported in the balance sheets for these financial instruments approximate fair value because of their short-term nature. In certain cases where there is limited activity or less transparency around inputs to valuation, the related assets or liabilities are classified as Level 3. The Company's deferred royalty obligation is classified as Level 3 in the ASC 820-10, three-tier fair value hierarchy, and its carrying value approximates fair value (see Note 7). |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements In June 2018, the FASB issued Accounting Standards Update (“ASU”) No. 2018-07, Stock Compensation (Topic 718): Improvements to Nonemployee Share-based Payment Accounting (“ASU 2018-07”). The standard expands the scope of ASC 718 to include share-based payment awards granted to nonemployees in exchange for goods and services. ASU 2018-07 is effective for annual and interim reporting periods beginning after December 15, 2018. In the first quarter of 2019, the Company adopted ASU 2018-07. Prior to the adoption of ASU 2018-07, share-based payments awards granted to nonemployees were measured at fair value on their grant date, subject to periodic remeasurement, and share-based compensation expense was recognized on a straight-line basis over their vesting terms. After the adoption of ASU 2018-07, the fair value of share-based payment awards granted to nonemployees is not required to be remeasured periodically and share-based compensation expense will continue to be recorded on a straight-line basis over their vesting period, consistent with share-based payment awards granted to employees. As a result of the adoption of ASU 2018-07, the Company remeasured all of its outstanding nonemployee share-based payment awards at fair value and recognized a cumulative-effect adjustment of $0.2 million to accumulated deficit as of January 1, 2019. In February 2016, the FASB issued ASU No. 2016-02, Leases (“ASU 2016-02”). This guidance requires lessees to recognize operating leases with a term greater than one year on the balance sheet as a right-of-use asset and corresponding lease liability. ASU 2016-02 is effective for annual and interim reporting periods beginning after December 15, 2018. Although ASU 2016-02 is required to be adopted at the earliest period presented using a modified retrospective approach, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements (“ASU 2018-11”), which allows for an alternative transition method of adoption by recognizing a cumulative-effect adjustment, if any, to the opening balance of retained earnings in the period of adoption. The Company adopted ASU 2016-02 on January 1, 2019 utilizing the alternative transition method allowed under ASU 2018-11. As a result, the Company recorded a lease liability and right-of-use lease asset of $31.8 million and $16.8 million , respectively, on its balance sheet as of January 1, 2019. The lease liability represents the present value of the remaining lease payments of the Company’s corporate headquarters lease (see Note 10), discounted using the Company’s incremental borrowing rate as of January 1, 2019. The corresponding right-of-use lease asset is recorded based on the lease liability, adjusted for the unamortized lease incentives received and the cumulative difference between rent expense and amounts paid under the corporate headquarters lease. The adoption of ASU 2016-02 did not have a material impact on either the statement of operations or statement of cash flows for the year ended December 31, 2019 . |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedules of Concentration of Risk | The following table includes the percentage of U.S. net product sales and accounts receivable balances for the Company’s three major Customers, each of which comprised 10% or more of its U.S. net product sales: U.S. Net Product Sales Accounts Receivable Year Ended December 31, 2019 As of December 31, 2019 Customer A 34 % 28 % Customer B 31 % 39 % Customer C 30 % 33 % Total 95 % 100 % |
Balance Sheet Account Details (
Balance Sheet Account Details (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Inventory | Inventory, net consisted of the following (in thousands): December 31, 2019 2018 Work-in-process $ 1,505 $ 1,907 Finished goods 706 113 Total inventory, net $ 2,211 $ 2,020 |
Property and Equipment | Property and equipment, net consisted of the following (in thousands): December 31, 2019 2018 Lab equipment $ 9,665 $ 9,047 Furniture and fixtures 2,598 2,573 Computer hardware 1,296 1,296 Software 733 733 Leasehold improvements 14,504 14,504 Total property and equipment, gross 28,796 28,153 Accumulated depreciation and amortization (10,407 ) (5,886 ) Total property and equipment, net $ 18,389 $ 22,267 |
Accrued Expenses | Accrued expenses consisted of the following (in thousands): December 31, 2019 2018 Accrued clinical study costs $ 3,496 $ 2,430 Accrued interest expense 2,692 2,260 Accrued manufacturing costs 1,339 1,823 Accrued other 1,785 1,972 Total accrued expenses $ 9,312 $ 8,485 |
Shareholders_ Equity (Tables)
Shareholders’ Equity (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Stock Option Activity and Related Data | Equity Awards Weighted- average Exercise Price per Share Weighted- average Remaining Contractual Term Aggregate Outstanding at December 31, 2018 6,466,214 $ 23.26 Granted (1) 2,126,023 $ 6.33 Exercised (5,211 ) $ 6.00 Cancelled/forfeited (2,970,186 ) $ 18.29 Outstanding at December 31, 2019 5,616,840 $ 19.50 4.33 years $ — Exercisable at December 31, 2019 3,645,726 $ 22.76 4.48 years $ — |
Stock Options, Valuation Assumptions | Year Ended December 31, 2019 2018 Volatility 97 % 114 % Expected life (years) 6.05 6.07 Risk-free interest rate 2.5 % 2.8 % Dividend yield — — |
Summary of Share-based Compensation Expense | Year Ended December 31, 2019 2018 Research and development $ 14,861 $ 21,113 Selling, general and administrative 8,872 14,038 Total share-based compensation expense $ 23,733 $ 35,151 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Significant components deferred tax assets | eferred tax assets are as follows (in thousands): December 31, 2019 2018 Deferred tax assets: Net operating loss carryforwards $ 81,406 $ 60,105 Research and development credits 24,011 21,262 Deferred royalty obligation 30,460 31,937 Share-based compensation expense 9,581 11,904 Depreciation and amortization expense — 1,033 Lease liability 7,127 — Other 1,263 1,004 Total gross deferred tax assets 153,848 127,245 Deferred tax liabilities: Depreciation and amortization (1,612 ) — Right-of-use lease asset (3,775 ) — Valuation allowance (148,461 ) (127,245 ) Net deferred tax assets $ — $ — |
Provision for income taxes | The difference between income taxes computed using the U.S. federal income effective tax rate and the provision for income taxes is as follows (in thousands): Year Ended December 31, 2019 2018 Federal statutory rate $ (24,467 ) $ (41,888 ) State tax benefit (3,825 ) (14,449 ) Change in valuation allowance 102,583 55,167 Share-based compensation expense 7,532 4,041 State rate true-up 2,513 — Section 382 limited tax attributes/expired — 1,936 Establishment of NOLs and credits, post-Section 382 ownership change (81,368 ) — Research and development credits (2,599 ) (5,164 ) Foreign rate differential (62 ) (58 ) Other permanent differences (307 ) 415 Provision for income taxes $ — $ — |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future minimum annual lease payments under lease agreements | uture minimum lease payments under the Lease as of December 31, 2019 are as follows (in thousands): 2020 $ 4,058 2021 4,174 2022 4,294 2023 4,417 2024 4,544 Thereafter 13,590 Total future minimum lease payments $ 35,077 Less: discount (5,830 ) Total lease liability $ 29,247 |
Annual future minimum licensing payments | Annual future minimum licensing payments under the Company’s agreements as of December 31, 2019 are as follows (in thousands): 2020 $ 99 2021 99 2022 99 2023 99 2024 99 Total future minimum license payments $ 495 |
Annual future minimum payments for manufacturing and supply agreements | Annual future minimum payments for manufacturing and supply agreements as of December 31, 2019 are as follows (in thousands): 2020 $ 1,976 2021 1,976 2022 611 Total future minimum manufacturing and supply agreement payments $ 4,563 |
Business (Details)
Business (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Cash | $ 87,820 | $ 172,604 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Narrative) (Details) $ in Thousands, shares in Millions | 12 Months Ended | ||
Dec. 31, 2019USD ($)segmentshares | Dec. 31, 2018shares | Jan. 01, 2019USD ($) | |
Property, Plant and Equipment [Line Items] | |||
Potentially dilutive common shares related to the outstanding preferred stock, stock options, restricted stock units and warrants | shares | 12.4 | 14 | |
Number of operating segments (segment) | segment | 1 | ||
Right-of-use lease asset | $ 15,491 | ||
Minimum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives of the assets | 2 years | ||
Maximum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives of the assets | 7 years | ||
Accounting Standards Update 2016-02 | |||
Property, Plant and Equipment [Line Items] | |||
Right-of-use lease asset | $ 16,800 | ||
Operating lease, liability | $ 31,800 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Schedule of Concentration Risk) (Details) | 12 Months Ended |
Dec. 31, 2019 | |
U.S. Net Product Sales | |
Concentration Risk [Line Items] | |
Concentration risk | 95.00% |
As of December 31, 2019 | |
Concentration Risk [Line Items] | |
Concentration risk | 100.00% |
Customer A | U.S. Net Product Sales | |
Concentration Risk [Line Items] | |
Concentration risk | 34.00% |
Customer A | As of December 31, 2019 | |
Concentration Risk [Line Items] | |
Concentration risk | 28.00% |
Customer B | U.S. Net Product Sales | |
Concentration Risk [Line Items] | |
Concentration risk | 31.00% |
Customer B | As of December 31, 2019 | |
Concentration Risk [Line Items] | |
Concentration risk | 39.00% |
Customer C | U.S. Net Product Sales | |
Concentration Risk [Line Items] | |
Concentration risk | 30.00% |
Customer C | As of December 31, 2019 | |
Concentration Risk [Line Items] | |
Concentration risk | 33.00% |
Balance Sheet Account Details_2
Balance Sheet Account Details (Schedule of Inventory) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Work-in-process | $ 1,505 | $ 1,907 |
Finished goods | 706 | 113 |
Total inventory, net | $ 2,211 | $ 2,020 |
Balance Sheet Account Details_3
Balance Sheet Account Details (Narrative) (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Inventory reserves | $ 0.1 | $ 0.8 |
Balance Sheet Account Details_4
Balance Sheet Account Details (Property and Equipment) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | $ 28,796 | $ 28,153 |
Accumulated depreciation and amortization | (10,407) | (5,886) |
Total property and equipment, net | 18,389 | 22,267 |
Lab equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 9,665 | 9,047 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 2,598 | 2,573 |
Computer hardware | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 1,296 | 1,296 |
Software | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 733 | 733 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | $ 14,504 | $ 14,504 |
Balance Sheet Account Details_5
Balance Sheet Account Details (Accrued Expenses) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accrued interest expense | $ 2,692 | $ 2,260 |
Accrued clinical trials | 3,496 | 2,430 |
Accrued manufacturing costs | 1,339 | 1,823 |
Accrued other | 1,785 | 1,972 |
Total accrued expenses | $ 9,312 | $ 8,485 |
Licensed Technology (Narrative)
Licensed Technology (Narrative) (Details) - USD ($) $ in Millions | May 10, 2018 | Dec. 31, 2019 |
GeorgeWashington [Member] | ||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||
Research and Development Expense (Excluding Acquired in Process Cost) | $ 0.5 | |
HealthCare Royalty Partners | ||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||
Proceeds from royalty agreement | $ 125 |
Other Income - Related Party _2
Other Income - Related Party (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Related Party Transactions [Abstract] | ||
Other income for profit interest distributions | $ 1,939 | $ 0 |
Shareholders_ Equity (Narrative
Shareholders’ Equity (Narrative) (Details) | 1 Months Ended | 12 Months Ended | |||||||||
Mar. 31, 2019shares | Jul. 31, 2018USD ($)shares | Mar. 31, 2018USD ($)shares | Jan. 31, 2017shares | Jan. 31, 2016shares | Dec. 31, 2014partyshares | Sep. 30, 2013 | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | Jan. 31, 2019shares | Dec. 31, 2017shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Granted, Shares underlying stock options and restricted stock awards (in shares) | 2,126,023 | ||||||||||
Weighted-average grant date fair values of stock options granted (in dollars per share) | $ / shares | $ 4.99 | $ 20.52 | |||||||||
Unamortized share-based compensation expense | $ | $ 18,400,000 | ||||||||||
Recognized weighted average period | 2 years 3 months 3 days | ||||||||||
Stock options exercised (in shares) | 5,211 | ||||||||||
Intrinsic value of stock options exercised | $ | $ 100,000 | $ 1,427,976 | |||||||||
Total fair value of equity awards vested | $ | 25,900,000 | 38,000,000 | |||||||||
Warrants granted to purchase common stock (in shares) | 51,000 | ||||||||||
Warrants issued, number of third party recipients (party) | party | 2 | ||||||||||
Share-based compensation expense | $ | $ 24,000 | 35,000 | |||||||||
Grant One [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Warrant vesting period | 4 years | ||||||||||
Chief Commercial Officer [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Granted, Shares underlying stock options and restricted stock awards (in shares) | 80,000 | ||||||||||
Chief Commercial Officer [Member] | Employee Stock Option [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Award vesting rights, percentage | 25.00% | ||||||||||
Period of share-based payment awards | 3 years | ||||||||||
One-year Anniversary Date of Grant [Member] | Grant One [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Warrant vesting rights percentage | 25.00% | ||||||||||
One-year Anniversary Date of Grant [Member] | Grant Two [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Warrant vesting rights percentage | 100.00% | 100.00% | 100.00% | ||||||||
2013 Equity Plan [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Equity plan, term | 10 years | ||||||||||
Period of share-based payment awards | 4 years | ||||||||||
Shares of common stock authorized for issuance (in shares) | 9,600,000 | ||||||||||
Shares available for grant (in shares) | 3,769,824 | ||||||||||
2013 Equity Plan [Member] | Director [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Period of share-based payment awards | 1 year | ||||||||||
2013 Equity Plan [Member] | One-year Anniversary Date of Grant [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Award vesting rights, percentage | 25.00% | ||||||||||
2018 Employee Stock Purchase Plan [Member] | Employee Stock Option [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Shares available for grant (in shares) | 750,000 | 568,728 | |||||||||
Maximum number of shares per employee | $ | $ 25,000 | ||||||||||
Percent of employee's annual cash compensation | 85.00% | ||||||||||
Share-based compensation expense | $ | $ 100,000 | $ 200,000 | |||||||||
Common Stock [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Stock options exercised (in shares) | 5,000 | 150,000 | |||||||||
Shares of common stock issued (in shares) | 43,056 | 782,000 | 3,910,000 | ||||||||
Warrants exercised during period (in shares) | 83,013 | ||||||||||
Warrants outstanding (in shares) | 10,000 | ||||||||||
Series C-1 Convertible Preferred Stock [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Preferred stock, shares authorized (in shares) | 11,000 | 11,000 | |||||||||
Preferred stock, par value (usd per share) | $ / shares | $ 0.0001 | $ 0.0001 | |||||||||
Preferred stock, shares issued (in shares) | 3,906 | 3,906 | |||||||||
Preferred stock, shares outstanding (in shares) | 3,906 | 3,906 | |||||||||
Shares reserved for future issuance (in shares) | 6,735,378 | 6,735,378 | |||||||||
Liquidation preference per share (in dollars per share) | $ / shares | $ 1,000 | ||||||||||
Liquidation preference | $ | $ 3,906,000 | $ 3,906,000 | |||||||||
Series F Preferred Stock [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Preferred stock, shares authorized (in shares) | 10,000 | 10,000 | |||||||||
Preferred stock, par value (usd per share) | $ / shares | $ 0.0001 | $ 0.0001 | |||||||||
Preferred stock, shares issued (in shares) | 0 | 2,737 | |||||||||
Preferred stock, shares outstanding (in shares) | 0 | 2,737 | |||||||||
Shares reserved for future issuance (in shares) | 782,032 | ||||||||||
Liquidation preference per share (in dollars per share) | $ / shares | $ 1,000 | ||||||||||
Liquidation preference | $ | $ 0 | $ 2,737,000 | |||||||||
Common Stock [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Shares issued upon conversion, per share (in shares) | 782,031 | ||||||||||
Warrant granted to purchase common stock (in shares) | 25,013 | 17,000 | |||||||||
Underwriting Agreement [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Shares of common stock to be issued and sold in underwriting agreement (in shares) | 3,910,000 | ||||||||||
Price per share of shares sold (usd per share) | $ / shares | $ 29.50 | ||||||||||
Proceeds from the underwriting agreement, including additional shares sold, gross | $ | $ 115,300,000 | ||||||||||
Proceeds from the underwriting agreement, including additional shares sold, net of cost | $ | 109,800,000 | ||||||||||
Issuance costs | $ | $ 5,500,000 |
Shareholders_ Equity (Stock Opt
Shareholders’ Equity (Stock Option and Restricted Stock Award Activity) (Details) | 12 Months Ended |
Dec. 31, 2019USD ($)$ / sharesshares | |
Equity Awards | |
Outstanding beginning balance, Shares underlying stock options and restricted stock awards (in shares) | shares | 6,466,214 |
Granted, Shares underlying stock options and restricted stock awards (in shares) | shares | 2,126,023 |
Exercised, Shares underlying stock options and restricted stock awards (in shares) | shares | (5,211) |
Forfeited, Shares underlying stock options and restricted stock awards (in shares) | shares | (2,970,186) |
Outstanding ending balance, Shares underlying stock options and restricted stock awards (in shares) | shares | 5,616,840 |
Exercisable ending balance, Shares underlying stock options (in shares) | shares | 3,645,726 |
Weighted- average Exercise Price per Share | |
Outstanding beginning balance, Weighted - average exercise price (in dollars per share) | $ / shares | $ 23.26 |
Granted, Weighted - average exercise price (in dollars per share) | $ / shares | 6.33 |
Exercised, Weighted - average exercise price (in dollars per share) | $ / shares | 6 |
Forfeited, Weighted - average exercise price (in dollars per share) | $ / shares | 18.29 |
Outstanding ending balance, Weighted - average exercise price (in dollars per share) | $ / shares | 19.50 |
Exercisable ending balance, Weighted - average exercise price (in dollars per share) | $ / shares | $ 22.76 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |
Outstanding ending balance, Weighted - average remaining contractual term (yrs) | 4 years 4 months |
Exercisable ending balance, Weighted - average remaining contractual term (yrs) | 4 years 5 months 22 days |
Exercisable ending balance, Aggregate intrinsic value | $ | $ 0 |
Shareholders_ Equity (Stock O_2
Shareholders’ Equity (Stock Options, Valuation Assumptions) (Details) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Volatility | 97.00% | 114.00% |
Expected life (years) | 6 years 18 days | 6 years 26 days |
Risk-free interest rate | 2.50% | 2.80% |
Dividend yield | 0.00% | 0.00% |
Shareholders_ Equity (Share-bas
Shareholders’ Equity (Share-based Compensation Expense) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Share-based compensation expense | $ 24,000 | $ 35,000 |
General and administrative [Member] | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Share-based compensation expense | 8,872 | 14,038 |
Warrant [Member] | Research and development [Member] | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Share-based compensation expense | $ 14,861 | $ 21,113 |
Deferred Royalty Obligation (De
Deferred Royalty Obligation (Details) - USD ($) | May 10, 2018 | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | |||
Deferred royalty obligation, net | $ 124,323,000 | ||
Royalty obligation payable | $ 700,000 | ||
HealthCare Royalty Partners | |||
Debt Instrument [Line Items] | |||
Proceeds from royalty agreement | $ 125,000,000 | ||
Required payment for breach of agreement, payment one | 125,000,000 | ||
Required payment for breach of agreement, payment two | 225,000,000 | ||
HealthCare Royalty Partners | Loans Payable | Royalty Financing Agreement | |||
Debt Instrument [Line Items] | |||
Deferred royalty obligation, net | 125,000,000 | 124,400,000 | |
Debt issuance costs | $ 700,000 | ||
Interest expense | 10,800,000 | 7,300,000 | |
Unamortized debt discount | 600,000 | ||
Accrued interest expense | 15,500,000 | 6,800,000 | |
Royalty payments | 2,000,000 | 500,000 | |
HealthCare Royalty Partners | Period One | |||
Debt Instrument [Line Items] | |||
Maximum potential royalty payout | 10.00% | ||
HealthCare Royalty Partners | Period Two | |||
Debt Instrument [Line Items] | |||
Increase in maximum potential payout percent | 4.00% | ||
HealthCare Royalty Partners | Payout Period | |||
Debt Instrument [Line Items] | |||
Increase in maximum potential payout percent | 4.00% | ||
Other Noncurrent Liabilities [Member] | HealthCare Royalty Partners | Loans Payable | Royalty Financing Agreement | |||
Debt Instrument [Line Items] | |||
Accrued interest expense | $ 12,800,000 | $ 4,500,000 |
Defined Contribution Plan (Narr
Defined Contribution Plan (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Retirement Benefits [Abstract] | ||
Matching contributions made | $ 0.9 | $ 1.4 |
Income Taxes (Significant Compo
Income Taxes (Significant Components of Deferred Tax Assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforwards | $ 81,406 | $ 60,105 |
Research and development credits | 24,011 | 21,262 |
Deferred royalty obligation | 30,460 | 31,937 |
Share-based compensation expense | 9,581 | 11,904 |
Depreciation and amortization expense | 0 | 1,033 |
Lease liability | 7,127 | 0 |
Other | 1,263 | 1,004 |
Deferred Tax Assets, Gross | 153,848 | 127,245 |
Depreciation and amortization | (1,612) | 0 |
Right-of-use lease asset | (3,775) | 0 |
Valuation allowance | (148,461) | (127,245) |
Net deferred tax assets | $ 0 | $ 0 |
Income Taxes (Provision for Inc
Income Taxes (Provision for Income Taxes) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Federal statutory rate | $ (24,467) | $ (41,888) |
Change in valuation allowance | 102,583 | 55,167 |
Share-based compensation expense | 7,532 | 4,041 |
Section 382 limited tax attributes/expired | 0 | 1,936 |
Establishment of NOL’s and credits (post 382 change) | (81,368) | 0 |
Research and development credits | (2,599) | (5,164) |
Foreign rate differential | (62) | (58) |
Other permanent differences | (307) | 415 |
Provision for income taxes | $ 0 | $ 0 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Line Items] | ||
Unrecognized tax benefits | $ 0 | $ 0 |
Accrual for interest or penalties | 0 | 0 |
Recognized interest and penalties | 0 | $ 0 |
Domestic Tax Authority [Member] | ||
Income Tax Disclosure [Line Items] | ||
Reduction of operating losses and credits | 341,300,000 | |
Income tax net operating loss carryforwards | 305,600,000 | |
Domestic Tax Authority [Member] | Research Tax Credit Carryforward [Member] | ||
Income Tax Disclosure [Line Items] | ||
Reduction of operating losses and credits | 15,500,000 | |
California research and development tax credit carryforwards | 10,800,000 | |
Domestic Tax Authority [Member] | Expiring 2034 [Member] | ||
Income Tax Disclosure [Line Items] | ||
Income tax net operating loss carryforwards | 183,800,000 | |
Domestic Tax Authority [Member] | Carryforward Indefinitely [Member] | ||
Income Tax Disclosure [Line Items] | ||
Income tax net operating loss carryforwards | 121,800,000 | |
State and Local Jurisdiction [Member] | ||
Income Tax Disclosure [Line Items] | ||
Reduction of operating losses and credits | 170,900,000 | |
Income tax net operating loss carryforwards | 227,200,000 | |
State and Local Jurisdiction [Member] | Research Tax Credit Carryforward [Member] | ||
Income Tax Disclosure [Line Items] | ||
California research and development tax credit carryforwards | $ 16,700,000 |
Commitments and Contingencies_2
Commitments and Contingencies (Narrative) (Details) - USD ($) | 12 Months Ended | 24 Months Ended | 60 Months Ended | ||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2021 | Oct. 30, 2021 | Oct. 30, 2019 | Dec. 29, 2016 | |
Property Subject to or Available for Operating Lease [Line Items] | |||||||
Asset pledged as collateral | $ 909,000 | $ 909,000 | |||||
Leasehold improvements | $ 13,700,000 | ||||||
Lease expense | 2,800,000 | 2,800,000 | |||||
Amortization of right of use asset | 1,300,000 | ||||||
Restricted cash | 909,000 | $ 909,000 | $ 909,000 | ||||
4550 Towne Centre Court, San Diego, California [Member] | |||||||
Property Subject to or Available for Operating Lease [Line Items] | |||||||
Term of lease agreement | 10 years | ||||||
Term for option to extend lease agreement | 5 years | ||||||
4550 Towne Centre Court, San Diego, California [Member] | Letter of Credit [Member] | |||||||
Property Subject to or Available for Operating Lease [Line Items] | |||||||
Past term of contract | 2 years | ||||||
4550 Towne Centre Court, San Diego, California [Member] | Letter of Credit [Member] | Scenario, Forecast [Member] | |||||||
Property Subject to or Available for Operating Lease [Line Items] | |||||||
Security deposit | $ 303,000 | $ 606,000 | |||||
Past term of contract | 5 years | ||||||
Financial Standby Letter of Credit [Member] | 4550 Towne Centre Court, San Diego, California [Member] | Letter of Credit [Member] | |||||||
Property Subject to or Available for Operating Lease [Line Items] | |||||||
Stand by letter of credit | $ 900,000 |
Commitments and Contingencies_3
Commitments and Contingencies (Annual Future Minimum Payments Under Operating Leases) (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2019 | $ 4,058 |
2020 | 4,174 |
2021 | 4,294 |
2022 | 4,417 |
2023 | 4,544 |
Thereafter | 13,590 |
Total future minimum lease payments | 35,077 |
Less: discount | (5,830) |
Total lease liability | $ 29,247 |
Commitments and Contingencies_4
Commitments and Contingencies (Annual Future Minimum Licensing Payments) (Details) - Licensing Agreements [Member] $ in Thousands | Dec. 31, 2019USD ($) |
Unrecorded Unconditional Purchase Obligation [Line Items] | |
2019 | $ 99 |
2020 | 99 |
2021 | 99 |
2022 | 99 |
2023 | 99 |
Total future minimum license payments | $ 495 |
Commitments and Contingencies_5
Commitments and Contingencies (Annual Future Minimum Payments for Manufacturing and Supply Agreements) (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2019 | $ 1,976 |
2020 | 1,976 |
2021 | 611 |
Total future minimum manufacturing and supply agreement payments | $ 4,563 |
Restructuring (Details)
Restructuring (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | $ 4,900,000 | $ 4,000,000 |
Reversal of non-cash-stock-based compensation expense | 900,000 | 3,700,000 |
Payments for restructuring | 900,000 | |
Restructuring costs | 5,800,000 | |
Research and development [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 4,400,000 | 1,600,000 |
Selling, General and Administrative Expenses [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 2,400,000 | |
Employee Severance | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 0 | $ 7,700,000 |
Accrued Payroll | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | $ 4,900,000 |
Uncategorized Items - ljpc-2019
Label | Element | Value |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 160,000 |
Additional Paid-in Capital [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (160,000) |