Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Feb. 25, 2022 | Jun. 30, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2021 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --12-31 | ||
Entity File Number | 1-36282 | ||
Entity Registrant Name | LA JOLLA PHARMACEUTICAL COMPANY | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 33-0361285 | ||
Entity Address, Address Line One | 201 Jones Road | ||
Entity Address, Address Line Two | Suite 400 | ||
Entity Address, City or Town | Waltham | ||
Entity Address, State or Province | MA | ||
Entity Address, Postal Zip Code | 02451 | ||
City Area Code | 617 | ||
Local Phone Number | 715-3600 | ||
Title of 12(b) Security | Common Stock, par value $0.0001 per share | ||
Trading Symbol | LJPC | ||
Security Exchange Name | NASDAQ | ||
Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 25,961,836 | ||
Entity Central Index Key | 0000920465 | ||
Amendment Flag | false | ||
Entity Public Float | $ 73.3 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
ICFR Auditor Attestation Flag | false | ||
Auditor Firm ID | 23 | ||
Auditor Name | BAKER TILLY US, LLP | ||
Auditor Location | San Diego, California | ||
Documents Incorporated by Reference | DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant’s definitive proxy statement for its 2022 Annual Meeting of Stockholders, which the registrant intends to file pursuant to Regulation 14A with the Securities and Exchange Commission not later than 120 days after the registrant’s fiscal year ended December 31, 2021, are incorporated by reference into Part III of this Annual Report on Form 10-K. |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 46,668 | $ 21,221 |
Accounts receivable, net | 8,610 | 5,834 |
Inventory, net | 6,281 | 6,013 |
Prepaid expenses and other current assets | 5,756 | 3,388 |
Total current assets | 67,315 | 36,456 |
Goodwill | 20,123 | 20,123 |
Intangible assets, net | 13,321 | 14,873 |
Right-of-use lease assets | 318 | 536 |
Property and equipment, net | 113 | 215 |
Restricted cash | 40 | 40 |
Total assets | 101,230 | 72,243 |
Current liabilities: | ||
Accounts payable | 2,278 | 2,762 |
Accrued expenses | 4,866 | 5,617 |
Accrued interest expense on deferred royalty obligation, current portion | 5,163 | 3,567 |
Deferred revenue | 2,849 | 188 |
Paycheck Protection Program loan, current portion | 2,325 | |
Lease liabilities, current portion | 154 | 204 |
Total current liabilities | 17,635 | 12,338 |
Deferred royalty obligation, net | 124,503 | 124,437 |
Accrued interest expense on deferred royalty obligation, less current portion | 24,590 | 19,111 |
Lease liabilities, less current portion | 164 | 332 |
Other noncurrent liabilities | 1,076 | 4,112 |
Total liabilities | 167,968 | 160,330 |
Commitments and contingencies (Note 6) | ||
Stockholders’ deficit: | ||
Common Stock, $0.0001 par value; 100,000,000 shares authorized, 26,783,544 and 27,402,648 shares issued and outstanding at December 31, 2021 and December 31, 2020, respectively | 3 | 3 |
Additional paid-in capital | 986,445 | 984,756 |
Accumulated deficit | (1,057,092) | (1,076,752) |
Total stockholders’ deficit | (66,738) | (88,087) |
Total liabilities and stockholders’ deficit | 101,230 | 72,243 |
Series C-1 Convertible Preferred Stock | ||
Stockholders’ deficit: | ||
Series C-12 Convertible Preferred Stock, $0.0001 par value; 11,000 shares authorized, 3,906 shares issued and outstanding at December 31, 2021 and December 31, 2020; and liquidation preference of $3,906 at December 31, 2021 and December 31, 2020 | $ 3,906 | $ 3,906 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
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) | 26,783,544 | 27,402,648 |
Common stock, shares outstanding (in shares) | 26,783,544 | 27,402,648 |
Series C-1 Convertible Preferred Stock | ||
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 |
Preferred stock, liquidation | $ 3,906 | $ 3,906 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue | ||
Total revenue | $ 75,720,000 | $ 33,419,000 |
Operating expenses | ||
Selling, general and administrative | 35,386,000 | 38,428,000 |
Research and development | 5,014,000 | 23,010,000 |
Total operating expenses | 53,889,000 | 69,257,000 |
Income (loss) from operations | 21,831,000 | (35,838,000) |
Other (expense) income | ||
Interest expense | (10,458,000) | (10,051,000) |
Interest income | 7,000 | 235,000 |
Other income—related party | 7,596,000 | 6,279,000 |
Other income (expense) | 733,000 | (46,000) |
Total other (expense) income, net | (2,122,000) | (3,583,000) |
Income (loss) before income taxes | 19,709,000 | (39,421,000) |
Provision for income taxes | 49,000 | 0 |
Net income (loss) | $ 19,660,000 | $ (39,421,000) |
Earnings (loss) per share | ||
Basic | $ 0.72 | $ (1.44) |
Diluted | $ 0.58 | $ (1.44) |
Shares used in computing earnings (loss) per share | ||
Basic | 27,436 | 27,329 |
Diluted | 34,179 | 27,329 |
Product Sales | ||
Revenue | ||
Revenue | $ 43,532,000 | $ 33,419,000 |
Operating expenses | ||
Cost of product sales, license revenue | 8,976,000 | $ 7,819,000 |
License and Other Revenue | ||
Revenue | ||
Revenue | 32,188,000 | |
Operating expenses | ||
Cost of product sales, license revenue | $ 4,513,000 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Deficit - USD ($) $ in Thousands | Total | Preferred StockSeries C-1 Convertible Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit |
Beginning Balance at Dec. 31, 2019 | $ (55,990) | $ 3,906 | $ 3 | $ 977,432 | $ (1,037,331) |
Beginning Balance (in shares) at Dec. 31, 2019 | 4 | 27,195 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Share-based compensation expense | 6,207 | 6,207 | |||
Issuance of common stock under 2013 Equity Plan | 605 | 605 | |||
Issuance of common stock under 2013 Equity Plan (in shares) | 94 | ||||
Issuance of common stock under ESPP | 512 | 512 | |||
Issuance of common stock under ESPP (in shares) | 114 | ||||
Net income (loss) | (39,421) | (39,421) | |||
Ending Balance at Dec. 31, 2020 | (88,087) | $ 3,906 | $ 3 | 984,756 | (1,076,752) |
Ending Balance (in shares) at Dec. 31, 2020 | 4 | 27,403 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Share-based compensation expense | 4,477 | 4,477 | |||
Issuance of common stock under 2013 Equity Plan | $ 156 | 156 | |||
Issuance of common stock under 2013 Equity Plan (in shares) | 29,677 | 30 | |||
Issuance of common stock under ESPP | $ 436 | 436 | |||
Issuance of common stock under ESPP (in shares) | 120 | ||||
Purchases of common stock under Stock Repurchase Plan | (3,380) | (3,380) | |||
Purchases of common stock under Stock Repurchase Plan (in shares) | (769) | ||||
Net income (loss) | 19,660 | 19,660 | |||
Ending Balance at Dec. 31, 2021 | $ (66,738) | $ 3,906 | $ 3 | $ 986,445 | $ (1,057,092) |
Ending Balance (in shares) at Dec. 31, 2021 | 4 | 26,784 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows $ in Thousands | 12 Months Ended | |
Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | |
Operating activities | ||
Net income (loss) | $ 19,660 | $ (39,421) |
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities: | ||
Non-cash interest expense | 7,141 | 6,379 |
Share-based compensation expense | 4,477 | 6,207 |
Amortization of intangible assets | 1,552 | 647 |
Amortization of right-of-use lease assets | 218 | 1,249 |
Depreciation expense | 111 | 2,188 |
Inventory fair value step-up adjustment included in cost of product sales | 850 | 2,458 |
Gain on change in fair value of contingent value rights | (734) | (800) |
Loss on short-term investments | 502 | |
Loss on disposal of property and equipment, net of gain on lease termination | 10 | |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (2,776) | (1,687) |
Inventory, net | (1,118) | (1,493) |
Prepaid expenses and other current assets | (2,368) | 2,297 |
Accounts payable | (484) | (2,815) |
Accrued expenses | (728) | (11,423) |
Deferred revenue | 2,661 | 188 |
Lease liabilities | (218) | (2,126) |
Net cash provided by (used for) operating activities | 28,244 | (37,640) |
Investing activities | ||
Acquisition of Tetraphase, net of cash, cash equivalents and restricted cash acquired | (33,513) | |
Proceeds from the sale of property and equipment | 3,070 | |
Purchases of property and equipment | (9) | |
Proceeds from the sale of short-term investments | 2,497 | |
Purchases of short-term investments | (2,999) | |
Net cash used for investing activities | (9) | (30,945) |
Financing activities | ||
Purchases of common stock under Stock Repurchase Plan | (3,380) | |
Net proceeds from issuance of common stock under ESPP | 436 | 512 |
Net proceeds from issuance of common stock under 2013 Equity Plan | 156 | 605 |
Net cash (used for) provided by financing activities | (2,788) | 1,117 |
Net increase (decrease) in cash, cash equivalents and restricted cash | 25,447 | (67,468) |
Cash, cash equivalents and restricted cash, beginning of period | 21,261 | 88,729 |
Cash, cash equivalents and restricted cash, end of period | 46,708 | 21,261 |
Supplemental disclosure of non-cash investing and financing activities | ||
Initial recognition of right-of-use lease asset | 536 | |
Reconciliation of cash, cash equivalents and restricted cash to the consolidated balance sheets | ||
Cash and cash equivalents | 46,668 | 21,221 |
Restricted cash | 40 | 40 |
Cash, cash equivalents and restricted cash, end of period | $ 46,708 | $ 21,261 |
Business
Business | 12 Months Ended |
Dec. 31, 2021 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Business | 1. Business La Jolla Pharmaceutical Company (collectively with its wholly owned subsidiaries, “La Jolla” or the “Company”) is dedicated to the commercialization of innovative therapies that improve outcomes in patients suffering from life-threatening diseases. GIAPREZA ® ® On July 28, 2020, La Jolla completed its acquisition of Tetraphase Pharmaceuticals, Inc. and its subsidiaries (“Tetraphase”), a biopharmaceutical company focused on commercializing XERAVA, for $43 million in upfront cash plus potential future cash payments of up to $16 million. The Company’s consolidated financial results exclude Tetraphase’s financial results prior to the acquisition closing date of July 28, 2020 (see Note 11). In January 2021, La Jolla and certain of its wholly owned subsidiaries entered into an exclusive license agreement with PAION AG to commercialize GIAPREZA and XERAVA in the European Economic Area, the United Kingdom and Switzerland. Pursuant to the agreement: (i) the Company has received an upfront cash payment of $22.5 million, less a 15% refundable withholding tax; and (ii) the Company is entitled to receive potential commercial milestone payments of up to $109.5 million and royalties on net sales of GIAPREZA and XERAVA. As of December 31, 2021 and 2020, the Company had cash and cash equivalents of $46.7 million and $21.2 million, respectively. Based on the Company’s current operating plans and projections, the Company expects that its existing cash and cash equivalents 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”) |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | 2. 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 income (loss), stockholders’ deficit or cash flows. Summary of Significant Accounting Policies Cash, Cash Equivalents 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. As of December 31, 2021 and 2020, the Company had $0.6 million of cash equivalents. Accounts Receivable, Net Accounts receivable, net 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, 2021 and 2020, the Company did not record an allowance for doubtful accounts. 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 . During the year ended December 31, 2021 , and organizations generally U.S. Net Product Sales Accounts Receivable Year Ended December 31, 2021 As of December 31, 2021 Customer A 33 % 38 % Customer B 33 % 33 % Customer C 26 % 16 % Total 92 % 87 % Inventory, Net Inventory, net is stated at the lower of cost or estimated net realizable value on a first-in, first-out 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. Fair Value Measurements The Company follows the provisions of Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“ ASC”) Topic Fair Value Measurements and Disclosures 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 for which there are 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 and cash equivalents, 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. The Company's acquired intangible assets (see Note 11), deferred royalty obligation (see Note 5) and contingent value rights Business Combinations The Company accounts for business combinations using the acquisition method pursuant to FASB ASC Topic 805. This method requires, among other things, that results of operations of acquired companies are included in La Jolla’s financial results beginning on the respective acquisition dates, and that assets acquired and liabilities assumed are recognized at fair value as of the acquisition date. Intangible assets acquired in a business combination are recorded at fair value using a discounted cash flow model. The discounted cash flow model requires assumptions about the timing and amount of future net cash flows, the cost of capital and terminal values from the perspective of a market participant. Any excess of the fair value of consideration transferred (the “Purchase Price”) over the fair values of the net assets acquired is recognized as goodwill. Contingent consideration liabilities are recognized as part of the Purchase Price at the estimated fair value on the acquisition date. Subsequent changes to the fair value of contingent consideration liabilities will be included in other (expense) income, net in the consolidated statements of operations. The fair value of assets acquired and liabilities assumed in certain cases may be subject to revision based on the final determination of fair value during a period of time not to exceed 12 months from the acquisition date. Legal costs, due diligence costs, business valuation costs and all other acquisition-related costs are expensed when incurred . Intangible Assets, Net Intangible assets, net acquired in a business combination are initially recorded at fair value. Intangible assets with a definite useful life are amortized on a straight-line basis over the estimated useful life of the related assets. Intangible assets with an indefinite useful life are not amortized. The Company reviews its intangible assets for impairment at least annually or whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. If such circumstances are determined to exist, an estimate of undiscounted future cash flows produced by the asset, including its eventual residual value, is compared to the carrying value to determine whether impairment exists. In the event that such cash flows are not expected to be sufficient to recover the carrying amount of the assets, the assets are written down to their estimated fair values. Fair value is estimated through discounted cash flow models to project cash flows from the asset. The Company recognized no impairment charge for the years ended December 31, 2021 and 2020. Goodwill Goodwill represents the excess of the Purchase Price over the fair value of the net assets acquired as of the acquisition date. Goodwill has an indefinite useful life and is not amortized. The Company reviews its goodwill for impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount of the Company may exceed its fair value. The Company may first assess qualitative factors to determine whether it is more likely than not that the fair value of the Company is less than its carrying amount, including goodwill. If that is the case, the Company performs a quantitative impairment test, and, if the carrying amount of the Company exceeds its fair value, then the Company will recognize an impairment charge for the amount by which its carrying amount exceeds its fair value, not to exceed the carrying amount of the goodwill. The Company has an option to bypass the qualitative assessment and proceed directly to performing the quantitative impairment test. The Company recognized no impairment charge for the years ended December 31, 2021 and 2020. Property and Equipment, Net Property and equipment, net 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 Leases For operating leases other than short-term 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 Pursuant to FASB ASC Topic 606—Revenue from Contracts with Customers (“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. Product Sales Revenue from product sales is recorded at the transaction price, net of estimates for variable consideration consisting of chargebacks, discounts, returns, rebates 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. • Rebates—We participate in Medicaid rebate programs, which provide assistance to certain low-income patients based on each individual state’s guidelines regarding eligibility and services. Under the Medicaid rebate programs, we pay a rebate to each participating state, generally within three months after the quarter in which product was sold. Additionally, the Company may offer customers incentives and consideration in the form of volume-based or other rebates. The estimates for rebates 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. Administrative fees are recorded as a reduction of revenue on delivery to customers. The Company will continue to assess its estimates of variable consideration as it accumulates additional historical data and will adjust these estimates accordingly. License and Other Revenue We enter into out-license agreements with counterparties to develop and/or commercialize our products in territories outside of the U.S. in exchange for: (i) nonrefundable, upfront license fees; (ii) development and regulatory milestone payments; and/or (iii) sales-based royalties and milestones. If the license to our intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, we recognize revenue from nonrefundable, upfront fees allocated to the license when the license is transferred to the customer and the customer can benefit from the license. For licenses that are bundled with other performance obligations, management uses judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from nonrefundable, upfront fees. We evaluate the measure of progress each reporting period and, if necessary, adjust the measure of progress and related revenue recognition. At the inception of each arrangement that includes milestone and other payments, other than sales-based milestone payments and nonrefundable, upfront license fees, we evaluate whether achieving each milestone payment or other payment is considered probable and estimate the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the value of the associated milestone is included in the transaction price. Milestone payments that are not within our control, such as approvals from regulators or where attainment of the specified event is dependent on the development activities of a third party, are not considered probable of being achieved until those approvals are received or the specified event occurs. For arrangements that include sales-based royalties and milestone payments, and the license is deemed to be the predominant item to which the royalties relate, we recognize revenue at the later of : ( i ) when the related sales occur ; or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied or partially satisfied . We enter into commercial supply agreements with our out-licensees to supply our products in territories outside the U.S. in exchange for: (i) nonrefundable, upfront fees; and/or (ii) the reimbursement of manufacturing costs, plus a margin in certain cases. The Company is considered the principal in these arrangements for accounting purposes as it controls the promised goods before transferring these goods to the out-licensee. The Company recognizes revenue when out-licensees obtain control of the Company’s product, which typically occurs on delivery. 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-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 Expense The Company issues stock options to directors, officers, employees and certain consultants. Share-based compensation expense represents the estimated fair value of equity awards, which are comprised of stock options Interest Expense Interest expense and the amortization of issuance costs related to the deferred royalty obligation (see Note 5) 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. 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 its provision for income taxes in the consolidated statements of operations. Earnings (Loss) per Share Basic earnings (loss) per share is calculated by dividing net income (loss) by the weighted-average number of common shares outstanding during the period, without consideration of potential common shares. Diluted earnings (loss) per share is calculated by dividing net income (loss) by the weighted-average number of common shares outstanding plus potential common shares. Convertible preferred stock and stock options are considered potential common shares and are included in the calculation of diluted earnings (loss) per share using the if-converted method and treasury stock method, respectively, when their effect is dilutive. Potential common shares are excluded from the calculation of diluted earnings (loss) per share when their effect is anti-dilutive. Comprehensive Income (Loss) Comprehensive income (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 income (loss), and, therefore, comprehensive income (loss) for the periods reported was comprised solely of the Company’s net income (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. Recent Accounting Pronouncements The Company has considered all recently issued accounting pronouncements and has concluded that there are no recently issued accounting pronouncements that are expected to have a material impact on its results of operations, financial condition or cash flows based on current information. |
Earnings (Loss) per Share
Earnings (Loss) per Share | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) per Share | 3. Earnings (Loss) per Share Basic earnings (loss) per share is calculated by dividing net income (loss) by the weighted-average number of common shares outstanding during the period, without consideration of potential common shares. Diluted earnings (loss) per share is calculated by dividing net income (loss) by the weighted-average number of common shares outstanding plus potential common shares. Convertible preferred stock and stock options are considered potential common shares and are included in the calculation of diluted earnings (loss) per share using the if-converted method and treasury stock method, respectively, when their effect is dilutive. Potential common shares are excluded from the calculation of diluted earnings (loss) per share when their effect is anti-dilutive. For the year ended December 31, 2021, there were 6.7 million potential common shares that were included in the calculation of diluted earnings per share, which consists of: (i) 6.7 million shares of common stock issuable upon conversion of existing convertible preferred stock; and (ii) 8,000 stock options. For the years ended December 31, 2021 and 2020, there were 4.1 million and 10.9 million of potential common shares, respectively, that were excluded from the calculation of diluted earnings (loss) per share because their effect was anti-dilutive. |
Balance Sheet Details
Balance Sheet Details | 12 Months Ended |
Dec. 31, 2021 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Balance Sheet Account Details | 4. Balance Sheet Details Restricted Cash Restricted cash as of December 31, 2021 and 2020 consisted of a $40,000 security deposit for the Company’s corporate purchasing credit card. Inventory, Net Inventory, net consisted of the following (in thousands): December 31, December 31, 2021 2020 Raw materials $ 802 $ 802 Work-in-process 4,501 3,213 Finished goods 978 1,998 Total inventory, net $ 6,281 $ 6,013 As of December 31, 2021 and 2020, inventory, net included zero and $0.9 million, respectively, of the fair value step-up adjustment to Tetraphase’s inventory recorded in connection with the acquisition of Tetraphase (see Note 11). As of December 31, 2021 and 2020, total inventory is recorded net of inventory reserves of $0.8 million and $0.9 million, respectively. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets December 31, December 31, 2021 2020 Refundable withholding tax $ 3,375 $ - Prepaid insurance 473 505 Prepaid clinical costs 188 820 Prepaid manufacturing costs 113 930 Other prepaid expenses and current assets 1,607 1,133 Total prepaid expenses and other current assets $ 5,756 $ 3,388 Property and Equipment, Net Property and equipment, net consisted of the following (in thousands): December 31, December 31, 2021 2020 Computer hardware $ 319 $ 310 Furniture and fixtures 309 309 Software 203 733 Total property and equipment, gross 831 1,352 Accumulated depreciation and amortization (718 ) (1,137 ) Total property and equipment, net $ 113 $ 215 Intangible Assets, Net Intangible assets, net consisted of the following (in thousands): Useful Life December 31, December 31, (years) 2021 2020 Technology 10 $ 14,000 $ 14,000 Trade name 10 1,520 1,520 Total intangible assets, gross 15,520 15,520 Accumulated amortization (2,199 ) (647 ) Total intangible assets, net $ 13,321 $ 14,873 The intangible assets were recorded in connection with the acquisition of Tetraphase (see Note 11). Accrued Expenses Accrued expenses consisted of the following (in thousands): December 31, December 31, 2021 2020 Accrued payroll and related expenses $ 1,991 $ 2,878 Accrued royalties and in-license fees 1,299 685 Accrued professional fees 410 660 Accrued manufacturing costs 232 627 Accrued other 934 767 Total accrued expenses $ 4,866 $ 5,617 Other Noncurrent Liabilities Other noncurrent liabilities consisted of the following (in thousands): December 31, December 31, 2021 2020 Fair value of contingent value rights (see Note 11) $ 1,076 $ 1,810 Paycheck Protection Program loan, less current portion - 2,302 Total other noncurrent liabilities $ 1,076 $ 4,112 On April 22, 2020, the Company entered into a promissory note for million under the Paycheck Protection Program (the “PPP Loan”). The interest rate on the PPP Loan is per annum. The PPP Loan is unsecured and guaranteed by the U.S. Small Business Administration (the “SBA”). The principal amount of the PPP Loan may be forgiven under the Paycheck Protection Program, subject to certain requirements and to the extent that the PPP Loan proceeds are used to pay permitted expenses, including certain payroll, rent and utility payments. The Company applied for 100% forgiveness of the PPP Loan with the SBA on October 5, 2021. The Company will be obligated to make payment of principal and interest with respect to any unforgiven portion of the PPP Loan by April 22, 2022. The obligation to repay the PPP Loan may be accelerated upon the occurrence of an event of default |
Deferred Royalty Obligation
Deferred Royalty Obligation | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Deferred Royalty Obligation | 5. 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 maximum royalty rate was 10%. Starting January 1, 2022, the maximum royalty rate increased by 4%, and starting January 1, 2024, the maximum royalty rate may increase by an additional 4% if an 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, 2021 and 2020, the Company recognized interest expense, including amortization of the obligation discount, of $10.4 million and $10.0 million, respectively. The carrying value of the deferred royalty obligation as of December 31, 2021 and 2020 was $124.5 million and $124.4 million, respectively, net of unamortized obligation discount of $0.5 million and $0.6 million, respectively, which was classified as a noncurrent liability. The related accrued interest expense as of December 31, 2021 and 2020 was $29.8 million and $22.7 million, respectively, of which $24.6 million and $19.1 million was classified as noncurrent liabilities, respectively. During the years ended December 31, 2021 and 2020, the Company made royalty payments to HCR of $3.3 million and $2.8 million, respectively. As of December 31, 2021 and 2020, the Company recorded royalty obligations payable of $0.9 million in accrued expenses. The deferred royalty obligation is classified as Level 3 in the FASB ASC Topic 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, 2021 and 2020. 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 material change in the fair value of the embedded derivatives will be recorded as either a gain or loss on the consolidated statements of operations. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Commitments and Contingencies | 6. Commitments and Contingencies Lease Commitments Future minimum lease payments, excluding Lease Operating Costs (defined below), as of December 31, 2021 are as follows (in thousands): 2022 $ 181 2023 166 Thereafter - Total future minimum lease payments 347 Less: discount (29 ) Total lease liabilities $ 318 Lease expense under current and former leases was $0.3 million and $2.3 million for the years ended December 31, 2021 and 2020, respectively. Cash paid for amounts included in the measurement of lease liabilities was $0.2 million and $3.0 million for the years ended December 31, 2021 and 2020, respectively. As of December 31, 2021, the weighted-average remaining lease term and the weighted-average discount rate for the Company’s only operating lease, the Waltham Sublease, was 1.9 years and 3.3%, respectively. Waltham Sublease In December 2020, the Company entered into a sublease agreement for office space in Waltham, Massachusetts (the “Waltham Sublease”). The Waltham Sublease commenced on December 21, 2020 and expires on November 30, 2023. In addition to rent of approximately $15,000 per month, the Waltham Sublease requires the Company to pay certain taxes, insurance and operating costs relating to the leased premises (collectively, “Lease Operating Costs”). The Waltham Sublease contains customary default provisions, representations, warranties and covenants. The Waltham Sublease is classified as an operating lease. The Company recognizes the Waltham Sublease expense in the consolidated statements of operations and records a lease liability and right-of-use asset for this lease. The option to extend the Waltham Sublease was not recognized as part of the Company’s lease liabilities and right-of-use lease assets. San Diego Sublease In September 2020, the Company entered into a sublease agreement for office space in San Diego, California with an entity of which the Chairman of the Company’s board of directors is also the chairman and chief executive officer (the “San Diego Sublease”). The San Diego Sublease term was approximately 7 years, and the rent was approximately $12,000 per month. The San Diego Sublease was cancellable without penalty by either party with 30-days’ written notice. The San Diego Sublease was a short-term lease for accounting purposes. The Company made payments of approximately $0.2 million and $64,000 under the San Diego Sublease during the years ended December 31, 2021 and 2020, respectively. The Company recognized the San Diego Sublease payments in the consolidated statements of operations and did not record a lease liability or right-of-use asset for this lease . n connection with the termination, La Jolla will have no further obligations under the San Diego Sublease. Contingencies From time to time, the Company may become subject to claims and litigation arising in the ordinary course of business. The Company is not a party to any material legal proceedings, nor is it aware of any material pending or threatened litigation. |
Stockholders_ Deficit
Stockholders’ Deficit | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Stockholders’ Deficit | 7. Stockholders’ Deficit Preferred Stock As of December 31, 2021 and 2020, 3,906 shares of Series C-1 2 2 2 2 2 Stock Repurchase Plan On November 17, 2021, the Company announced that it would commence a stock repurchase plan for up to $10 million of the Company’s common stock. On March 7, 2022, the Board approved an increase of the stock repurchase plan for up to $15 million of the Company’s common stock . The plan has no time limit and can be discontinued at any time. |
Equity Incentive Plans
Equity Incentive Plans | 12 Months Ended |
Dec. 31, 2021 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Equity Incentive Plans | 8. Equity Incentive Plans 2013 Equity Incentive Plan In September 2013, the Company adopted the 2013 Equity Incentive Plan, which was subsequently four years one-year A total of 9,600,000 shares of common stock have been reserved for issuance under the La Jolla Pharmaceutical Company 2013 Equity Incentive Plan (the “2013 Equity Plan”). As of December 31, 2021 and 2020, 5,503,796 and 5,478,334 shares of common stock, respectively, 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 of the Company’s common stock 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 La Jolla Pharmaceutical Company 2018 Employee Stock Purchase Plan (the “ESPP”). As of December 31, 2021 and 2020, 335,473 and 455,768 Equity Awards The activity related to equity awards, which are comprised of stock options, during the year ended December 31, 2021 is summarized as follows: Equity Awards Weighted- average Exercise Price per Share Weighted- average Remaining Contractual Term ( 1) (years) Aggregate Intrinsic Value ( 2) (millions) Outstanding at December 31, 2020 4,121,666 $ 8.67 Granted 962,140 $ 4.60 Exercised (29,677 ) $ 5.21 Cancelled/forfeited (957,925 ) $ 10.18 Outstanding at December 31, 2021 4,096,204 $ 7.22 8.2 $ 1.0 Exercisable at December 31, 2021 1,738,026 $ 10.74 7.1 $ 0.3 (1) (2) The total intrinsic value of equity awards exercised during the years ended December 31, 2021 and 2020 was $0.1 million. The total grant-date fair value of equity awards vested during the years ended December 31, 2021 and 2020 was $5.0 million and $8.4 million, respectively. Share-based Compensation Expense For the years ended December 31, 2021 and 2020, the weighted-average grant date fair value per stock option was $3.47 and $3.48, 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, 2021 2020 Expected volatility 92.9 % 93.5 % Expected term (years) 6.08 6.07 Risk-free interest rate 0.9 % 0.7 % Dividend yield - - Expected volatility is based on the historical volatility of shares of the Company’s common stock. In determining the expected term of stock options, the Company uses the “simplified” method. Under this method, the expected term is presumed to be the midpoint between the average vesting date and the end of the contractual term. 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. For the years ended December 31, 2021 and 2020, the Company recorded $0.1 million of 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, 2021 2020 Selling, general and administrative $ 3,633 $ 2,808 Research and development 844 3,399 Total share-based compensation expense $ 4,477 $ 6,207 As of December 31, 2021, total unrecognized share-based compensation expense related to unvested equity awards was $7.1 million, which is expected to be recognized over a weighted-average period of 2.9 years. As of December 31, 2021, there was no unrecognized share-based compensation expense related to shares of common stock issued under the ESPP. |
Other Income-Related Party
Other Income-Related Party | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
Other Income-Related Party | 9. 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. During the years ended December 31, 2021 and 2020, the Company received distributions of $7.6 million and $6.3 million, respectively, in connection with this profits interest. |
License Agreements
License Agreements | 12 Months Ended |
Dec. 31, 2021 | |
Research And Development [Abstract] | |
License Agreements | 10. License Agreements In-license Agreements George Washington University In December 2014, the Company entered into a patent license agreement with George Washington University (“GW”), which was subsequently amended and restated (the “GW License”) and 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, La Jolla Pharma, LLC 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. The Company is obligated to pay a 6% royalty on net sales of GIAPREZA and 15% on payments received from sublicensees. The obligation to pay royalties under this agreement extends through the last-to-expire patent covering GIAPREZA. During the years ended December 31, 2021 and 2020, the Company made payments to GW of $4.3 million and $1.7 million, respectively. Harvard University In August 2006, the Company entered into a license agreement with Harvard University (“Harvard”), which was subsequently amended and restated (the “Harvard License”). Pursuant to the Harvard License, Harvard exclusively licensed to the Company certain intellectual property rights relating to tetracycline-based products, including XERAVA, including the exclusive rights to certain issued patents and patent applications covering such products. Under the Harvard License, the Company is obligated to use commercially reasonable efforts to develop, commercialize, market and sell tetracycline-based products, including XERAVA. For each product covered by the Harvard License, the Company is obligated to make certain payments for the following: (i) up to approximately upon the achievement of certain clinical development and regulatory milestones; (ii) a 5% royalty on direct U.S. net sales of XERAVA; (iii) a single-digit tiered royalty on direct ex-U.S. net sales of XERAVA, starting at a minimum royalty rate of 4.5%, with step-ups to a maximum royalty of 7.5% based on the achievement of annual net product sales thresholds; and (iv) 20% on payments received from sublicensees. The obligation to pay royalties under this agreement extends through the last-to-expire patent covering tetracycline-based products, including XERAVA. Company made payments to Harvard of $ 1.8 million, no ne of which related to clinical development and regulatory milestones. Subsequent to July 28, 2020 and through December 31, 2020, the Company made payments to Harvard of $ 0.2 million, no ne of which related to clinical development and regulatory milestones. Paratek Pharmaceuticals, Inc. In March 2019, the Company entered into a license agreement with Paratek Pharmaceuticals, Inc. (“Paratek”), which was subsequently amended and restated (the “Paratek License”). Pursuant to the Paratek License, Paratek non-exclusively licensed to the Company certain intellectual property rights relating to XERAVA, including non-exclusive rights to certain issued patents and patent applications covering XERAVA. The Company is obligated to pay Paratek a 2.25% royalty based on direct U.S. net sales of XERAVA. The Company’s obligation to pay royalties with respect to the licensed product is retroactive to the date of the first commercial sale of XERAVA and shall continue until there are no longer any valid claims of the Paratek patents, which will expire in October 2023. Subsequent to July 28, 2020 and through December 31, 2020, the Company made royalty payments to Paratek of $0.1 million. Out-license Agreements PAION AG In January 2021, La Jolla Pharmaceutical Company and certain of its wholly owned subsidiaries, including La Jolla Pharma, LLC and Tetraphase Pharmaceuticals, Inc., entered into an exclusive license agreement (the “PAION License”) with PAION AG and its wholly owned subsidiary (collectively, “PAION”). Pursuant to the PAION License, La Jolla granted PAION an exclusive license to commercialize GIAPREZA and XERAVA in the European Economic Area, the United Kingdom and Switzerland (collectively, the “PAION Territory”). La Jolla has received an upfront cash payment of $22.5 million, less a 15% refundable withholding tax, and is entitled to receive potential commercial milestone payments of up to $109.5 million and double-digit tiered royalty payments. La Jolla recognized the upfront cash payment of $22.5 million as license and other revenue for the year ended December 31, 2021, and the 15% refundable withholding tax of $3.4 million was recorded as an other current asset as of December 31, 2021. In addition, royalties payable under the PAION License will be subject to reduction on account of generic competition and after patent expiration in a jurisdiction. Pursuant to the PAION License, PAION will be solely responsible for the future development and commercialization of GIAPREZA and XERAVA in the PAION Territory. PAION is required to use commercially reasonable efforts to commercialize GIAPREZA and XERAVA in the PAION Territory. The Company has not received any payments from PAION related to either royalties or commercial milestones. In July 2021, the Company entered into a commercial supply agreement with PAION whereby the Company will supply PAION a minimum quantity of GIAPREZA and XERAVA through July 13, 2024. The supply agreement will automatically renew until the earlier of July 13, 2027, or until a new supply agreement is executed. During the initial 3-year term of the supply agreement, the Company will be reimbursed for direct and certain indirect manufacturing costs at cost. Everest Medicines Limited In February 2018, the Company entered into a license agreement with Everest, which was subsequently amended and restated (the “Everest License”). Pursuant to the Everest License, the Company granted Everest an exclusive license to develop and commercialize XERAVA for the treatment of cIAI and other indications in mainland China, Taiwan, Hong Kong, Macau, South Korea, Singapore, the Malaysian Federation, the Kingdom of Thailand, the Republic of Indonesia, the Socialist Republic of Vietnam and the Republic of the Philippines (collectively, the “Everest Territory”). The Company is eligible to receive an additional $8.0 million regulatory milestone payment and up to an aggregate of $20.0 million in sales milestone payments. The Company is also entitled to receive tiered royalties from Everest at percentages in the low double digits on sales, if any, in the Everest Territory of products containing eravacycline. Royalties are payable with respect to each jurisdiction in the Everest Territory until the latest to occur of: (i) the last-to-expire of specified patent rights in such jurisdiction in the Everest Territory; (ii) expiration of marketing or regulatory exclusivity in such jurisdiction in the Everest Territory; or (iii) 10 years after the first commercial sale of a product in such jurisdiction in the Everest Territory. In March 2021, the Company received a $3.0 million milestone payment associated with the submission of an NDA with the China National Medical Products Administration (“NMPA”) for XERAVA for the treatment of cIAI in patients in China. Amounts due under the Harvard License for this milestone payment were included as research and development expense on the consolidated statements of operations. XERAVA was approved in Singapore by the Health Science Authority in April 2020. In May 2021, the Company entered into a commercial supply agreement with Everest whereby the Company will supply Everest a minimum quantity of XERAVA through December 31, 2023 and will transfer to Everest certain XERAVA-related manufacturing know-how. Pursuant to the supply agreement: (i) the Company has received $6.8 million of upfront payments comprised of: (1) a $4.0 million upfront technology transfer payment; and (2) a $2.8 million partial prepayment for XERAVA that is expected to be delivered to Everest during 2022; (ii) the Company received an additional $1.0 million technology transfer payment in January 2022; and (iii) the Company will be reimbursed for direct and certain indirect manufacturing costs at 110% of cost through December 31, 2023. The Company recognized the $5.0 million of technology transfer-related payments as license and other revenue during the year ended December 31, 2021 as Everest obtained control of the XERAVA-related manufacturing know-how prior to December 31, 2021. The Company recognized the $2.8 million partial prepayment for XERAVA that is expected to be delivered to Everest during 2022 as deferred revenue as of December 31, 2021 as the performance obligation to deliver XERAVA has not yet been satisfied . |
Acquisition of Tetraphase Pharm
Acquisition of Tetraphase Pharmaceuticals, Inc | 12 Months Ended |
Dec. 31, 2021 | |
Business Combinations [Abstract] | |
Acquisition of Tetraphase Pharmaceuticals, Inc | 11. Acquisition of Tetraphase Pharmaceuticals, Inc. On June 24, 2020, La Jolla entered into an Agreement and Plan of Merger with Tetraphase, a biopharmaceutical company focused on commercializing its novel tetracycline XERAVA to treat serious and life‑threatening infections, and TTP Merger Sub, Inc., a wholly owned subsidiary of La Jolla. On July 28, 2020, La Jolla completed its acquisition of Tetraphase for $43 million in upfront cash plus potential future cash payments of up to $16 million pursuant to contingent value rights (“CVRs”). The holders of the CVRs are entitled to receive potential future cash payments of up to $16 million in the aggregate upon the achievement of certain net sales of XERAVA in the U.S. as follows: (i) $2.5 million if 2021 XERAVA U.S. net sales are at least $20 million; (ii) $4.5 million if XERAVA U.S. net sales are at least $35 million during any calendar year ending on or prior to December 31, 2024; and (iii) $9 million if XERAVA U.S. net sales are at least $55 million during any calendar year ending on or prior to December 31, 2024. Following the acquisition, Tetraphase became a wholly owned subsidiary of La Jolla. The acquisition of Tetraphase was accounted for as a business combination using the acquisition method pursuant to FASB ASC Topic 805. As the acquirer for accounting purposes, La Jolla has estimated the Purchase Price, assets acquired and liabilities assumed as of the acquisition date, with the excess of the Purchase Price over the fair value of net assets acquired recognized as goodwill. The Purchase Price is comprised of the upfront cash of $43 million and the estimated fair value of potential future cash payments pursuant to the CVRs. The estimated fair value of assets acquired was $54.7 million, and the estimated fair value of liabilities assumed was $9.1 million. The Purchase Price allocation as of the acquisition date is presented as follows (in thousands): July 28, 2020 Cash $ 42,990 Fair value of CVRs 2,610 Total Purchase Price $ 45,600 Cash and cash equivalents $ 8,778 Accounts receivable 1,187 Inventory 4,767 Prepaid expenses and other current assets 1,218 Property and equipment 58 Right-of-use lease assets 2,302 Restricted cash 699 Identifiable intangible assets 15,520 Goodwill 20,123 Accounts payable (1,400 ) Accrued expenses (2,979 ) Lease liabilities, current portion (967 ) Lease liabilities, less current portion (1,420 ) Other noncurrent liabilities (2,286 ) Total Purchase Price $ 45,600 The estimated fair value of potential future cash payments pursuant to the CVRs was based on a Monte Carlo simulation and is classified as Level 3 in the ASC Topic 820-10, three-tier fair value hierarchy. CVRs are measured at fair value on a recurring basis. During the year ended December 31, 2021, the Company recorded a gain of $0.7 million The Company recorded a $3.3 million fair value step-up adjustment to Tetraphase’s inventory as of the acquisition date. Raw material components and active pharmaceutical ingredients were recorded based on estimated replacement cost. Finished drug product was valued at estimated selling cost, adjusted for costs of selling effort and a reasonable profit allowance for such selling effort from the viewpoint of a market participant. This fair value step-up adjustment is recorded as cost of product sales when the inventory is sold to customers, approximately $0.9 million of which was included in cost of product sales during the year ended December 31 Identifiable intangible assets consist of certain technology and trade names acquired from Tetraphase, and include the value of the Harvard, Paratek and Everest Licenses (see Note 10). The acquired intangible assets have definite useful lives and are being amortized on a straight-line basis over an estimated useful life of 10 years. Goodwill represents the excess of the Purchase Price over the fair value of the net assets acquired as of the acquisition date. Goodwill represents the value of the stronger platform to increase patient access to the Company’s commercial products and the operational synergies of the combined Company. Goodwill has an indefinite useful life and is not amortized. The goodwill is only deductible for tax purposes if the Company makes a U.S. Internal Revenue Code Section 338 (“Section 338”) election. The Company did not make a Section 338 election. |
Company-wide Realignments
Company-wide Realignments | 12 Months Ended |
Dec. 31, 2021 | |
Restructuring And Related Activities [Abstract] | |
Company-wide Realignments | 12. Company-wide Realignments In May 2020, the Board of Directors of the Company approved a restructuring plan (the “2020 Realignment”) to align its organization with the Company’s sole focus on the commercialization of its products. The 2020 Realignment reduced the Company’s headcount. For the year ended December 31, 2020, total expense was comprised of $4.1 million for one-time termination benefits to the affected employees, including severance and health care benefits, offset by a $0.4 million reversal of non-cash, share-based compensation expense related to forfeited, unvested equity awards. As of December 31, 2021, the Company had made all of the payments related to the 2020 Realignment. In July 2020, following the acquisition of Tetraphase, the Company incurred one-time charges related to a reduction in the combined Company’s headcount. For the year ended December 31, 2020, total expense was comprised of $3.1 million for one-time termination benefits to the affected employees, including severance and health care benefits. As of December 31, 2021, the Company had made all of the payments related to this reduction in headcount. |
Defined Contribution Plan
Defined Contribution Plan | 12 Months Ended |
Dec. 31, 2021 | |
Compensation And Retirement Disclosure [Abstract] | |
Defined Contribution Plan | 13. Defined Contribution Plan La Jolla has a defined contribution plan (the “La Jolla 401(k) Plan”) covering substantially all of the Company’s employees. The La Jolla 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 eligible annual compensation (as defined) or the limit prescribed by the Internal Revenue Service (the “IRS”) to the La Jolla 401(k) Plan on a before-tax basis. The Company matches employee contributions to the La Jolla 401(k) Plan based on each participant’s contribution during the plan year, up to 3.5% of each participant’s annual compensation. Tetraphase had a defined contribution plan (the “Tetraphase 401(k) Plan”) covering substantially all of the former Tetraphase employees through December 31, 2020. The Tetraphase 401(k) Plan was a tax-qualified retirement saving plan, pursuant to which all employees were able to contribute the lesser of 92% of their eligible annual compensation (as defined) or the limit prescribed by the IRS to the Tetraphase 401(k) Plan on a before-tax basis. The Company matched 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. Subsequent to December 31, 2020, the Tetraphase 401(k) Plan was terminated, there were no further employee contributions and all underlying assets were transferred to the La Jolla 401(k) Plan. For the year ended December 31, 2021, the Company made matching contributions to the La Jolla 401(k) Plan of $ 0.4 million . F or the year ended December 31, 2020, the Company made total matching contributions to the La Jolla and Tetraphase 401(k) Plans of $ million. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 14. Income Taxes For the years ended December 31, 2021 and 2020, the Company recognized a provision for income taxes of $49,000 and zero, respectively. 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, 2021 2020 Federal statutory rate $ 4,139 $ (8,278 ) State tax benefit 812 (1,740 ) Change in valuation allowance (288 ) 787 Tetraphase net operating losses and other adjustments (4,670 ) - Share-based compensation expense 565 9,072 State rate true-up (369 ) 291 Research and development credits - (173 ) Other permanent differences (140 ) 41 Provision for income taxes $ 49 $ - Deferred tax assets are as follows (in thousands): December 31, 2021 2020 Deferred tax assets: Net operating loss carryforwards $ 84,571 $ 84,827 Research and development credits 24,015 24,179 Deferred royalty obligation 36,687 36,265 Share-based compensation expense 2,742 2,497 Depreciation and amortization expense 482 1,044 Lease liability 80 136 Capital loss carryforward 126 - Other 337 436 Total gross deferred tax assets 149,040 149,384 Deferred tax liabilities: Right-of-use lease asset (80 ) (136 ) Valuation allowance (148,960 ) (149,248 ) Net deferred tax assets $ - $ - As of December 31, 2021 and 2020, 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 federal and state net operating loss carryforwards and federal and state research and development carryforwards have been adjusted to reflect the Company’s estimate of the annual limitations under IRC Section 382 and 383. As of December 31, 20 2 1 , the Company had federal and state net operating loss carryforwards of $ million and $ million, respectively. In addition, the Company had estimated federal and state research and development credit carryforwards of $ 10.8 million and $ 16.7 million, respectively. Federal net operating loss carryforwards of $ million, state net operating loss carryforwards of $ million , federal research and development credit carryforwards of $ 10.8 million will begin to expire in 20 26 , unless utilized. Federal net operating loss carryforwards of $ 168.5 million , state net operating loss carryforwards of $ 34.5 million and California research and development credit carryforwards of $ million will carry forward indefinitely, unless utilized. There were no unrecognized tax benefits as of December 31, 2021 and 2020. 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 related to income taxes on the Company’s consolidated balance sheets as of December 31, 2021 or December 31, 2020, and has not recognized interest and/or penalties related to income taxes in the consolidated statements of operations for the years ended December 31, 2021 and 2020. 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. |
Subsequent Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Event | 15. Subsequent Event In January 2022, AcelRx Pharmaceuticals, Inc. (“AcelRx”) closed its acquisition of Lowell Therapeutics, Inc. (“Lowell”), a privately held company in which La Jolla held an approximately 15% non-controlling equity interest. Through December 31, 2021, La Jolla’s investment in Lowell was measured at its contributed cost of zero in the consolidated balance sheets in accordance with the measurement alternative pursuant to FASB ASC 321, Investments—Equity Securities |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation and Use of Estimates |
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 income (loss), stockholders’ deficit or cash flows. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents 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. As of December 31, 2021 and 2020, the Company had $0.6 million of cash equivalents. |
Accounts Receivable, Net | Accounts Receivable, Net Accounts receivable, net 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, 2021 and 2020, the Company did not record an allowance for doubtful accounts. |
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 . During the year ended December 31, 2021 , and organizations generally U.S. Net Product Sales Accounts Receivable Year Ended December 31, 2021 As of December 31, 2021 Customer A 33 % 38 % Customer B 33 % 33 % Customer C 26 % 16 % Total 92 % 87 % |
Inventory, Net | Inventory, Net Inventory, net is stated at the lower of cost or estimated net realizable value on a first-in, first-out 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. |
Fair Value Measurement | Fair Value Measurements The Company follows the provisions of Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“ ASC”) Topic Fair Value Measurements and Disclosures 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 for which there are 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 and cash equivalents, 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. The Company's acquired intangible assets (see Note 11), deferred royalty obligation (see Note 5) and contingent value rights |
Business Combinations | Business Combinations The Company accounts for business combinations using the acquisition method pursuant to FASB ASC Topic 805. This method requires, among other things, that results of operations of acquired companies are included in La Jolla’s financial results beginning on the respective acquisition dates, and that assets acquired and liabilities assumed are recognized at fair value as of the acquisition date. Intangible assets acquired in a business combination are recorded at fair value using a discounted cash flow model. The discounted cash flow model requires assumptions about the timing and amount of future net cash flows, the cost of capital and terminal values from the perspective of a market participant. Any excess of the fair value of consideration transferred (the “Purchase Price”) over the fair values of the net assets acquired is recognized as goodwill. Contingent consideration liabilities are recognized as part of the Purchase Price at the estimated fair value on the acquisition date. Subsequent changes to the fair value of contingent consideration liabilities will be included in other (expense) income, net in the consolidated statements of operations. The fair value of assets acquired and liabilities assumed in certain cases may be subject to revision based on the final determination of fair value during a period of time not to exceed 12 months from the acquisition date. Legal costs, due diligence costs, business valuation costs and all other acquisition-related costs are expensed when incurred . |
Intangible Assets, Net | Intangible Assets, Net Intangible assets, net acquired in a business combination are initially recorded at fair value. Intangible assets with a definite useful life are amortized on a straight-line basis over the estimated useful life of the related assets. Intangible assets with an indefinite useful life are not amortized. The Company reviews its intangible assets for impairment at least annually or whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. If such circumstances are determined to exist, an estimate of undiscounted future cash flows produced by the asset, including its eventual residual value, is compared to the carrying value to determine whether impairment exists. In the event that such cash flows are not expected to be sufficient to recover the carrying amount of the assets, the assets are written down to their estimated fair values. Fair value is estimated through discounted cash flow models to project cash flows from the asset. The Company recognized no impairment charge for the years ended December 31, 2021 and 2020. |
Goodwill | Goodwill Goodwill represents the excess of the Purchase Price over the fair value of the net assets acquired as of the acquisition date. Goodwill has an indefinite useful life and is not amortized. The Company reviews its goodwill for impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount of the Company may exceed its fair value. The Company may first assess qualitative factors to determine whether it is more likely than not that the fair value of the Company is less than its carrying amount, including goodwill. If that is the case, the Company performs a quantitative impairment test, and, if the carrying amount of the Company exceeds its fair value, then the Company will recognize an impairment charge for the amount by which its carrying amount exceeds its fair value, not to exceed the carrying amount of the goodwill. The Company has an option to bypass the qualitative assessment and proceed directly to performing the quantitative impairment test. The Company recognized no impairment charge for the years ended December 31, 2021 and 2020. |
Property and Equipment, Net | Property and Equipment, Net Property and equipment, net 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 |
Leases | Leases For operating leases other than short-term 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 Pursuant to FASB ASC Topic 606—Revenue from Contracts with Customers (“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. Product Sales Revenue from product sales is recorded at the transaction price, net of estimates for variable consideration consisting of chargebacks, discounts, returns, rebates 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. • Rebates—We participate in Medicaid rebate programs, which provide assistance to certain low-income patients based on each individual state’s guidelines regarding eligibility and services. Under the Medicaid rebate programs, we pay a rebate to each participating state, generally within three months after the quarter in which product was sold. Additionally, the Company may offer customers incentives and consideration in the form of volume-based or other rebates. The estimates for rebates 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. Administrative fees are recorded as a reduction of revenue on delivery to customers. The Company will continue to assess its estimates of variable consideration as it accumulates additional historical data and will adjust these estimates accordingly. License and Other Revenue We enter into out-license agreements with counterparties to develop and/or commercialize our products in territories outside of the U.S. in exchange for: (i) nonrefundable, upfront license fees; (ii) development and regulatory milestone payments; and/or (iii) sales-based royalties and milestones. If the license to our intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, we recognize revenue from nonrefundable, upfront fees allocated to the license when the license is transferred to the customer and the customer can benefit from the license. For licenses that are bundled with other performance obligations, management uses judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from nonrefundable, upfront fees. We evaluate the measure of progress each reporting period and, if necessary, adjust the measure of progress and related revenue recognition. At the inception of each arrangement that includes milestone and other payments, other than sales-based milestone payments and nonrefundable, upfront license fees, we evaluate whether achieving each milestone payment or other payment is considered probable and estimate the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the value of the associated milestone is included in the transaction price. Milestone payments that are not within our control, such as approvals from regulators or where attainment of the specified event is dependent on the development activities of a third party, are not considered probable of being achieved until those approvals are received or the specified event occurs. For arrangements that include sales-based royalties and milestone payments, and the license is deemed to be the predominant item to which the royalties relate, we recognize revenue at the later of : ( i ) when the related sales occur ; or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied or partially satisfied . We enter into commercial supply agreements with our out-licensees to supply our products in territories outside the U.S. in exchange for: (i) nonrefundable, upfront fees; and/or (ii) the reimbursement of manufacturing costs, plus a margin in certain cases. The Company is considered the principal in these arrangements for accounting purposes as it controls the promised goods before transferring these goods to the out-licensee. The Company recognizes revenue when out-licensees obtain control of the Company’s product, which typically occurs on delivery. |
Shipping and Handling Expense | Shipping and Handling Expense Shipping and handling expense is included in cost of product sales. |
Research and Development Expense | 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-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 Expense | Share-based Compensation Expense The Company issues stock options to directors, officers, employees and certain consultants. Share-based compensation expense represents the estimated fair value of equity awards, which are comprised of stock options |
Interest Expense | Interest Expense Interest expense and the amortization of issuance costs related to the deferred royalty obligation (see Note 5) 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. |
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 its provision for income taxes in the consolidated statements of operations. |
Earnings (Loss) per Share | Earnings (Loss) per Share Basic earnings (loss) per share is calculated by dividing net income (loss) by the weighted-average number of common shares outstanding during the period, without consideration of potential common shares. Diluted earnings (loss) per share is calculated by dividing net income (loss) by the weighted-average number of common shares outstanding plus potential common shares. Convertible preferred stock and stock options are considered potential common shares and are included in the calculation of diluted earnings (loss) per share using the if-converted method and treasury stock method, respectively, when their effect is dilutive. Potential common shares are excluded from the calculation of diluted earnings (loss) per share when their effect is anti-dilutive. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income (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 income (loss), and, therefore, comprehensive income (loss) for the periods reported was comprised solely of the Company’s net income (loss). |
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. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The Company has considered all recently issued accounting pronouncements and has concluded that there are no recently issued accounting pronouncements that are expected to have a material impact on its results of operations, financial condition or cash flows based on current information. |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Schedule of Concentration 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, 2021 As of December 31, 2021 Customer A 33 % 38 % Customer B 33 % 33 % Customer C 26 % 16 % Total 92 % 87 % |
Balance Sheet Details (Tables)
Balance Sheet Details (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Schedule of Inventory | Inventory, net consisted of the following (in thousands): December 31, December 31, 2021 2020 Raw materials $ 802 $ 802 Work-in-process 4,501 3,213 Finished goods 978 1,998 Total inventory, net $ 6,281 $ 6,013 |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets December 31, December 31, 2021 2020 Refundable withholding tax $ 3,375 $ - Prepaid insurance 473 505 Prepaid clinical costs 188 820 Prepaid manufacturing costs 113 930 Other prepaid expenses and current assets 1,607 1,133 Total prepaid expenses and other current assets $ 5,756 $ 3,388 |
Property, Plant and Equipment | Property and equipment, net consisted of the following (in thousands): December 31, December 31, 2021 2020 Computer hardware $ 319 $ 310 Furniture and fixtures 309 309 Software 203 733 Total property and equipment, gross 831 1,352 Accumulated depreciation and amortization (718 ) (1,137 ) Total property and equipment, net $ 113 $ 215 |
Schedule of Intangible Assets, Net | Intangible assets, net consisted of the following (in thousands): Useful Life December 31, December 31, (years) 2021 2020 Technology 10 $ 14,000 $ 14,000 Trade name 10 1,520 1,520 Total intangible assets, gross 15,520 15,520 Accumulated amortization (2,199 ) (647 ) Total intangible assets, net $ 13,321 $ 14,873 |
Accrued Expenses | Accrued expenses consisted of the following (in thousands): December 31, December 31, 2021 2020 Accrued payroll and related expenses $ 1,991 $ 2,878 Accrued royalties and in-license fees 1,299 685 Accrued professional fees 410 660 Accrued manufacturing costs 232 627 Accrued other 934 767 Total accrued expenses $ 4,866 $ 5,617 |
Schedule of Other Noncurrent Liabilities | Other noncurrent liabilities consisted of the following (in thousands): December 31, December 31, 2021 2020 Fair value of contingent value rights (see Note 11) $ 1,076 $ 1,810 Paycheck Protection Program loan, less current portion - 2,302 Total other noncurrent liabilities $ 1,076 $ 4,112 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Schedule of Future Minimum Lease Payments Excluding Operating Costs | Future minimum lease payments, excluding Lease Operating Costs (defined below), as of December 31, 2021 are as follows (in thousands): 2022 $ 181 2023 166 Thereafter - Total future minimum lease payments 347 Less: discount (29 ) Total lease liabilities $ 318 |
Equity Incentive Plans (Tables)
Equity Incentive Plans (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Equity Award Activity | The activity related to equity awards, which are comprised of stock options, during the year ended December 31, 2021 is summarized as follows: Equity Awards Weighted- average Exercise Price per Share Weighted- average Remaining Contractual Term ( 1) (years) Aggregate Intrinsic Value ( 2) (millions) Outstanding at December 31, 2020 4,121,666 $ 8.67 Granted 962,140 $ 4.60 Exercised (29,677 ) $ 5.21 Cancelled/forfeited (957,925 ) $ 10.18 Outstanding at December 31, 2021 4,096,204 $ 7.22 8.2 $ 1.0 Exercisable at December 31, 2021 1,738,026 $ 10.74 7.1 $ 0.3 (1) (2) |
Stock Options, Valuation Assumptions | 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, 2021 2020 Expected volatility 92.9 % 93.5 % Expected term (years) 6.08 6.07 Risk-free interest rate 0.9 % 0.7 % Dividend yield - - |
Share-based Compensation Expense | The classification of share-based compensation expense is summarized as follows (in thousands): Year Ended December 31, 2021 2020 Selling, general and administrative $ 3,633 $ 2,808 Research and development 844 3,399 Total share-based compensation expense $ 4,477 $ 6,207 |
Acquisition of Tetraphase Pha_2
Acquisition of Tetraphase Pharmaceuticals, Inc (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Business Combinations [Abstract] | |
Summary of Purchase Price Allocation as of Acquisition Date | The Purchase Price allocation as of the acquisition date is presented as follows (in thousands): July 28, 2020 Cash $ 42,990 Fair value of CVRs 2,610 Total Purchase Price $ 45,600 Cash and cash equivalents $ 8,778 Accounts receivable 1,187 Inventory 4,767 Prepaid expenses and other current assets 1,218 Property and equipment 58 Right-of-use lease assets 2,302 Restricted cash 699 Identifiable intangible assets 15,520 Goodwill 20,123 Accounts payable (1,400 ) Accrued expenses (2,979 ) Lease liabilities, current portion (967 ) Lease liabilities, less current portion (1,420 ) Other noncurrent liabilities (2,286 ) Total Purchase Price $ 45,600 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of 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, 2021 2020 Federal statutory rate $ 4,139 $ (8,278 ) State tax benefit 812 (1,740 ) Change in valuation allowance (288 ) 787 Tetraphase net operating losses and other adjustments (4,670 ) - Share-based compensation expense 565 9,072 State rate true-up (369 ) 291 Research and development credits - (173 ) Other permanent differences (140 ) 41 Provision for income taxes $ 49 $ - |
Schedule of Significant Components Deferred Tax Assets | Deferred tax assets are as follows (in thousands): December 31, 2021 2020 Deferred tax assets: Net operating loss carryforwards $ 84,571 $ 84,827 Research and development credits 24,015 24,179 Deferred royalty obligation 36,687 36,265 Share-based compensation expense 2,742 2,497 Depreciation and amortization expense 482 1,044 Lease liability 80 136 Capital loss carryforward 126 - Other 337 436 Total gross deferred tax assets 149,040 149,384 Deferred tax liabilities: Right-of-use lease asset (80 ) (136 ) Valuation allowance (148,960 ) (149,248 ) Net deferred tax assets $ - $ - |
Business - Additional Informati
Business - Additional Information (Details) - USD ($) $ in Thousands | Jan. 12, 2021 | Jul. 28, 2020 | Dec. 31, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | ||||
Cash and cash equivalents | $ 46,668 | $ 21,221 | ||
License Agreement Terms | ||||
Business Acquisition [Line Items] | ||||
Proceeds from upfront cash payment | $ 22,500 | |||
Percentage of refundable tax withholding | 15.00% | |||
Commercial milestone payments | $ 109,500 | |||
Tetraphase Pharmaceuticals, Inc. | ||||
Business Acquisition [Line Items] | ||||
Upfront cash for acquisition | $ 42,990 | |||
Future cash payments | $ 16,000 |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of Significant Accounting Policies - Additional Information (Details) | 12 Months Ended | |
Dec. 31, 2021USD ($)HospitalCustomerSegment | Dec. 31, 2020USD ($) | |
Concentration Risk [Line Items] | ||
Cash equivalents | $ 600,000 | $ 600,000 |
Allowances for doubtful accounts | $ 0 | 0 |
Number of major customers | Customer | 3 | |
Financial assets measured at fair value on recurring basis | $ 0 | 0 |
Financial liabilities measured at fair value on recurring basis | 0 | 0 |
Impairment of intangible assets | 0 | 0 |
Goodwill impairment charges | $ 0 | $ 0 |
Number of operating segments (segment) | Segment | 1 | |
Minimum | ||
Concentration Risk [Line Items] | ||
Estimated useful lives of the assets | 2 years | |
Maximum | ||
Concentration Risk [Line Items] | ||
Estimated useful lives of the assets | 7 years | |
U.S. | ||
Concentration Risk [Line Items] | ||
Number of hospitals purchased GIAPREZA | Hospital | 492 | |
Number of hospitals and other healthcare organizations purchased XERAVA | Hospital | 929 |
Basis of Presentation and Sum_5
Basis of Presentation and Summary of Significant Accounting Policies - Schedule of Concentration Risk (Details) - Customer Concentration Risk | 12 Months Ended |
Dec. 31, 2021 | |
Customer A | U.S. Net Product Sales | |
Concentration Risk [Line Items] | |
Concentration of credit risk | 33.00% |
Customer A | Accounts Receivable | |
Concentration Risk [Line Items] | |
Concentration of credit risk | 38.00% |
Customer B | U.S. Net Product Sales | |
Concentration Risk [Line Items] | |
Concentration of credit risk | 33.00% |
Customer B | Accounts Receivable | |
Concentration Risk [Line Items] | |
Concentration of credit risk | 33.00% |
Customer C | U.S. Net Product Sales | |
Concentration Risk [Line Items] | |
Concentration of credit risk | 26.00% |
Customer C | Accounts Receivable | |
Concentration Risk [Line Items] | |
Concentration of credit risk | 16.00% |
Three Major Customers | U.S. Net Product Sales | |
Concentration Risk [Line Items] | |
Concentration of credit risk | 92.00% |
Three Major Customers | Accounts Receivable | |
Concentration Risk [Line Items] | |
Concentration of credit risk | 87.00% |
Earnings (Loss) per Share - Add
Earnings (Loss) per Share - Additional Information (Details) - shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Earnings Per Share [Abstract] | ||
Potentially dilutive common shares related to the outstanding preferred stock, stock options, restricted stock units and warrants (in shares) | 4,100,000 | 10,900,000 |
Potential common shares that were included in calculation of diluted earnings per share | 6,700,000 | |
Issuance of common stock up on conversion of preferred stock | 6,700,000 | |
Stock options | 8,000 |
Balance Sheet Details - Additio
Balance Sheet Details - Additional Information (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Oct. 05, 2021 | Apr. 22, 2020 | |
Restricted Cash And Cash Equivalents Items [Line Items] | ||||
Restricted cash | $ 40,000 | $ 40,000 | ||
Inventory, net | 6,281,000 | 6,013,000 | ||
Inventory reserves | 800,000 | 900,000 | ||
Amortization expense | 1,552,000 | 647,000 | ||
Estimated aggregate amortization expense, year one | 1,600,000 | |||
Estimated aggregate amortization expense, year two | 1,600,000 | |||
Estimated aggregate amortization expense, year three | 1,600,000 | |||
Estimated aggregate amortization expense, year four | 1,600,000 | |||
Estimated aggregate amortization expense, year five | $ 1,600,000 | |||
Promissory Note | Paycheck Protection Program (PPP Loan) | ||||
Restricted Cash And Cash Equivalents Items [Line Items] | ||||
Promissory note | $ 2,300,000 | |||
Debt instrument, interest rate | 1.00% | |||
Forgiveness percentage | 100.00% | |||
Unforgiven portion interest and principle payments end date | Apr. 22, 2022 | |||
Tetraphase Pharmaceuticals, Inc. | Fair Value Step-Up Adjustment to Inventory | ||||
Restricted Cash And Cash Equivalents Items [Line Items] | ||||
Inventory, net | $ 0 | 900,000 | ||
Credit Card | ||||
Restricted Cash And Cash Equivalents Items [Line Items] | ||||
Restricted cash | $ 40,000 | $ 40,000 |
Balance Sheet Details - Schedul
Balance Sheet Details - Schedule of Inventory (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ||
Raw materials | $ 802 | $ 802 |
Work-in-process | 4,501 | 3,213 |
Finished goods | 978 | 1,998 |
Total inventory, net | $ 6,281 | $ 6,013 |
Balance Sheet Details - Sched_2
Balance Sheet Details - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Prepaid Expense and Other Assets [Abstract] | ||
Refundable withholding tax | $ 3,375 | |
Prepaid insurance | 473 | $ 505 |
Prepaid clinical costs | 188 | 820 |
Prepaid manufacturing costs | 113 | 930 |
Other prepaid expenses and current assets | 1,607 | 1,133 |
Total prepaid expenses and other current assets | $ 5,756 | $ 3,388 |
Balance Sheet Details - Propert
Balance Sheet Details - Property Plant and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Property Plant And Equipment [Line Items] | ||
Total property and equipment, gross | $ 831 | $ 1,352 |
Accumulated depreciation and amortization | (718) | (1,137) |
Total property and equipment, net | 113 | 215 |
Computer Hardware [Member] | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment, gross | 319 | 310 |
Furniture and Fixtures [Member] | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment, gross | 309 | 309 |
Software [Member] | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment, gross | $ 203 | $ 733 |
Balance Sheet Details - Sched_3
Balance Sheet Details - Schedule of Intangible Assets, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Finite Lived Intangible Assets [Line Items] | ||
Total intangible assets, gross | $ 15,520 | $ 15,520 |
Accumulated amortization | (2,199) | (647) |
Total intangible assets, net | 13,321 | 14,873 |
Technology | ||
Finite Lived Intangible Assets [Line Items] | ||
Total intangible assets, gross | $ 14,000 | $ 14,000 |
Useful Life (years) | 10 years | 10 years |
Trade Name | ||
Finite Lived Intangible Assets [Line Items] | ||
Total intangible assets, gross | $ 1,520 | $ 1,520 |
Useful Life (years) | 10 years | 10 years |
Balance Sheet Details - Summary
Balance Sheet Details - Summary of Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ||
Accrued payroll and related expenses | $ 1,991 | $ 2,878 |
Accrued royalties and in-license fees | 1,299 | 685 |
Accrued professional fees | 410 | 660 |
Accrued manufacturing costs | 232 | 627 |
Accrued other | 934 | 767 |
Total accrued expenses | $ 4,866 | $ 5,617 |
Balance Sheet Details - Sched_4
Balance Sheet Details - Schedule of Other Noncurrent Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Other Liabilities Noncurrent [Abstract] | ||
Fair value of contingent value rights (see Note 11) | $ 1,076 | $ 1,810 |
Paycheck Protection Program loan, less current portion | 2,302 | |
Total other noncurrent liabilities | $ 1,076 | $ 4,112 |
Deferred Royalty Obligation - A
Deferred Royalty Obligation - Additional Information (Details) - USD ($) $ in Thousands | May 10, 2018 | Dec. 31, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | |||
Deferred royalty obligation, net | $ 124,503 | $ 124,437 | |
Interest expense | 10,400 | 10,000 | |
Royalty obligation payable | 900 | 900 | |
HealthCare Royalty Partners | |||
Debt Instrument [Line Items] | |||
Proceeds from royalty agreement | $ 125,000 | ||
Required payment for breach of agreement, payment two | 225,000 | ||
Required payment for breach of agreement, payment one | 125,000 | ||
HealthCare Royalty Partners | Royalty Financing Agreement | Loans Payable | |||
Debt Instrument [Line Items] | |||
Deferred royalty obligation, net | 125,000 | 124,500 | 124,400 |
Debt issuance costs | $ 700 | ||
Unamortized debt discount | 500 | 600 | |
Accrued interest expense | 29,800 | 22,700 | |
Royalty payments | 3,300 | 2,800 | |
HealthCare Royalty Partners | Royalty Financing Agreement | Loans Payable | Other Noncurrent Liabilities | |||
Debt Instrument [Line Items] | |||
Accrued interest expense | $ 24,600 | $ 19,100 | |
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% |
Commitments and Contingencies -
Commitments and Contingencies - Future Minimum Lease Payments Excluding Operating Costs (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Leases [Abstract] | |
2022 | $ 181 |
2023 | 166 |
Total future minimum lease payments | 347 |
Less: discount | (29) |
Total lease liabilities | $ 318 |
Commitments and Contingencies_2
Commitments and Contingencies - Additional Information (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Dec. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Lessee Lease Description [Line Items] | ||||
Lease expense | $ 300,000 | $ 2,300,000 | ||
Operating lease, cash payments | $ 200,000 | 3,000,000 | ||
Operating lease weighted-average remaining lease term | 1 year 10 months 24 days | |||
Operating lease weighted-average discount rate | 3.30% | |||
Waltham Sublease | ||||
Lessee Lease Description [Line Items] | ||||
Expiration date | Nov. 30, 2023 | |||
Sublease rent per month | $ 15,000 | |||
San Diego Sublease | ||||
Lessee Lease Description [Line Items] | ||||
Sublease rent per month | $ 12,000 | |||
Sublease term | 7 years | |||
Sublease cancellable written notice period | 30 days | |||
Payments of sublease | $ 200,000 | $ 64,000 |
Stockholders' Deficit - Additio
Stockholders' Deficit - Additional Information (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2021 | Mar. 07, 2022 | Nov. 17, 2021 | Dec. 31, 2020 | |
Stock Repurchase Plan | Common Stock | ||||
Class Of Stock [Line Items] | ||||
Number of shares repurchased | 800,000 | |||
Share repurchased value including commissions | $ 3,400,000 | |||
Stock Repurchase Plan | Common Stock | Maximum | ||||
Class Of Stock [Line Items] | ||||
Stock repurchase plan authorized amount | $ 10,000,000 | |||
Subsequent Events | Stock Repurchase Plan | Common Stock | Maximum | ||||
Class Of Stock [Line Items] | ||||
Stock repurchase plan authorized amount | $ 15,000,000 | |||
Series C-1 Convertible Preferred Stock | ||||
Class Of Stock [Line Items] | ||||
Preferred stock, shares issued (in shares) | 3,906 | 3,906 | ||
Preferred stock, shares outstanding (in shares) | 3,906 | 3,906 | ||
Convertible Preferred Stock, Shares Reserved for Future Issuance | 6,735,378 | 6,735,378 | ||
Preferred stock, liquidation | $ 3,906,000 | $ 3,906,000 |
Equity Incentive Plans - Narrat
Equity Incentive Plans - Narrative (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Jul. 31, 2018 | Sep. 30, 2013 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Intrinsic value of stock options exercised | $ 100,000 | $ 100,000 | ||
Total fair value of equity awards vested | $ 5,000,000 | $ 8,400,000 | ||
Weighted-average grant date fair values of stock options granted (in dollars per share) | $ 3.47 | $ 3.48 | ||
Share-based compensation expense | $ 4,477,000 | $ 6,207,000 | ||
Unamortized share-based compensation expense | $ 7,100,000 | |||
Recognized weighted average period | 2 years 10 months 24 days | |||
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 | |||
Number of shares reserved for issuance | 9,600,000 | |||
Shares available for grant (in shares) | 5,503,796 | 5,478,334 | ||
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] | Share-based Payment Arrangement, Option [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares reserved for issuance | 750,000 | |||
Shares available for grant (in shares) | 335,473 | 455,768 | ||
Percent of employee's annual cash compensation | 85.00% | |||
Maximum number of shares per employee | $ 25,000 | |||
Percentage of benefit received by employees is equal to discount on the shares of common stock purchased | 15.00% | |||
Share-based compensation expense | $ 100,000 | $ 100,000 | ||
Unrecognized share-based compensation expense | $ 0 |
Equity Incentive Plans - Stock
Equity Incentive Plans - Stock Option Activity (Details) $ / shares in Units, $ in Millions | 12 Months Ended | |
Dec. 31, 2021USD ($)$ / sharesshares | ||
Shares Underlying Stock Options | ||
Outstanding beginning balance, Shares underlying stock options and restricted stock awards (in shares) | shares | 4,121,666 | |
Granted, Shares underlying stock options and restricted stock awards (in shares) | shares | 962,140 | |
Exercised, Shares underlying stock options and restricted stock awards (in shares) | shares | (29,677) | |
Cancelled/Forfeited, Shares underlying stock options and restricted stock awards (in shares) | shares | (957,925) | |
Outstanding ending balance, Shares underlying stock options and restricted stock awards (in shares) | shares | 4,096,204 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Shares | shares | 1,738,026 | |
Weighted- Average Exercise Price per Share | ||
Outstanding beginning balance, Weighted - average exercise price (usd per share) | $ / shares | $ 8.67 | |
Granted, Weighted - average exercise price (usd per share) | $ / shares | 4.60 | |
Exercised, Weighted - average exercise price (usd per share) | $ / shares | 5.21 | |
Cancelled/forfeited, Weighted - average exercise price (usd per share) | $ / shares | 10.18 | |
Outstanding ending balance, Weighted - average exercise price (usd per share) | $ / shares | 7.22 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $ / shares | $ 10.74 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 8 years 2 months 12 days | [1] |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term | 7 years 1 month 6 days | [1] |
Outstanding, Aggregate Intrinsic Value | $ | $ 1 | [2] |
Exercisable, Aggregate Intrinsic Value | $ | $ 0.3 | [2] |
[1] | Represents the weighted-average remaining contractual term of stock options | |
[2] | Aggregate intrinsic value represents the product of the number of equity awards outstanding or equity awards exercisable multiplied by the difference between the Company’s closing stock price per share on the last trading day of the period, which was $4.65 as of December 31, 2021, and the exercise price. |
Equity Incentive Plans - Stoc_2
Equity Incentive Plans - Stock Option Activity (Parenthetical) (Details) | 12 Months Ended |
Dec. 31, 2021$ / shares | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Change of equity awards outstanding or equity awards, exercise price | $ 4.65 |
Equity Incentive Plans - Stoc_3
Equity Incentive Plans - Stock Options, Valuation Assumptions (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||
Expected volatility | 92.90% | 93.50% |
Expected term (years) | 6 years 29 days | 6 years 25 days |
Risk-free interest rate | 0.90% | 0.70% |
Equity Incentive Plans - Share-
Equity Incentive Plans - Share-based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Share-based compensation expense | $ 4,477 | $ 6,207 |
Selling, General and Administrative Expenses [Member] | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Share-based compensation expense | 3,633 | 2,808 |
Research and development [Member] | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Share-based compensation expense | $ 844 | $ 3,399 |
Other Income-Related Party - Ad
Other Income-Related Party - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Related Party Transactions [Abstract] | ||
Other income—related party | $ 7,596 | $ 6,279 |
License Agreements - Additional
License Agreements - Additional Information (Details) - USD ($) | 1 Months Ended | 5 Months Ended | 12 Months Ended | |||||
Jul. 31, 2021 | May 31, 2021 | Mar. 31, 2021 | Jan. 31, 2021 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
License and Other Revenue | ||||||||
Research And Development Arrangement Contract To Perform For Others [Line Items] | ||||||||
Revenue | $ 32,188,000 | |||||||
George Washington | ||||||||
Research And Development Arrangement Contract To Perform For Others [Line Items] | ||||||||
Percentage of royalty on net sales | 6.00% | |||||||
Percentage of payments from sublicensee | 15.00% | |||||||
Royalty payments | $ 4,300,000 | $ 1,700,000 | ||||||
Harvard | ||||||||
Research And Development Arrangement Contract To Perform For Others [Line Items] | ||||||||
Percentage of royalty on net sales | 5.00% | |||||||
Percentage of payments from sublicensee | 20.00% | |||||||
Clinical development and regulatory milestones amount payable | $ 15,100,000 | |||||||
Percentage of minimum royalty rate | 4.50% | |||||||
Percentage of maximum royalty based on achievement of annual net product sales thresholds | 7.50% | |||||||
Royalties payments | $ 200,000 | $ 1,800,000 | ||||||
Payments related to clinical development and regulatory milestones | 0 | 0 | ||||||
Paratek | ||||||||
Research And Development Arrangement Contract To Perform For Others [Line Items] | ||||||||
Percentage of royalty on net sales | 2.25% | |||||||
Royalties payments | $ 100,000 | $ 200,000 | ||||||
Claim expiration | 2023-10 | |||||||
PAION AG | ||||||||
Research And Development Arrangement Contract To Perform For Others [Line Items] | ||||||||
Milestone payment | $ 109,500,000 | |||||||
Upfront cash payment | $ 22,500,000 | |||||||
Percentage of refundable tax withholding | 15.00% | |||||||
Supply agreement term | 3 years | |||||||
PAION AG | Other Current Assets | ||||||||
Research And Development Arrangement Contract To Perform For Others [Line Items] | ||||||||
Percentage of refundable tax withholding | 15.00% | |||||||
Refundable tax withholding amount | $ 3,400,000 | |||||||
PAION AG | License and Other Revenue | ||||||||
Research And Development Arrangement Contract To Perform For Others [Line Items] | ||||||||
Upfront cash payment | 22,500,000 | |||||||
Everest Medicines Limited | ||||||||
Research And Development Arrangement Contract To Perform For Others [Line Items] | ||||||||
Additional regulatory milestone payments receivable | 8,000,000 | |||||||
Sales milestone payments receivable | $ 20,000,000 | |||||||
Royalties payable description | Royalties are payable with respect to each jurisdiction in the Everest Territory until the latest to occur of: (i) the last-to-expire of specified patent rights in such jurisdiction in the Everest Territory; (ii) expiration of marketing or regulatory exclusivity in such jurisdiction in the Everest Territory; or (iii) 10 years after the first commercial sale of a product in such jurisdiction in the Everest Territory. | |||||||
Royalties payable period after first commercial sale of product | 10 years | |||||||
Milestone payments received | $ 3,000,000 | |||||||
Everest Medicines Limited | Commercial Supply Agreement | ||||||||
Research And Development Arrangement Contract To Perform For Others [Line Items] | ||||||||
Proceeds from upfront payments | $ 6,800,000 | |||||||
Proceeds from upfront technology transfer payment | 4,000,000 | |||||||
Proceeds from partial prepayment for XERAVA | 2,800,000 | |||||||
Additional technology transfer payment receivable by January 30, 2022 | $ 1,000,000 | |||||||
Percentage of reimbursed for direct and certain indirect manufacturing costs through December 31, 2023 | 110.00% | |||||||
Deferred revenue | $ 2,800,000 | |||||||
Everest Medicines Limited | License and Other Revenue | Commercial Supply Agreement | ||||||||
Research And Development Arrangement Contract To Perform For Others [Line Items] | ||||||||
Revenue | $ 5,000,000 |
Acquisition of Tetraphase Pha_3
Acquisition of Tetraphase Pharmaceuticals, Inc. Additional Information (Details) - USD ($) $ in Thousands | Jul. 28, 2020 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | ||||
Inventory fair value step up adjustment | $ 850 | $ 2,458 | ||
Tetraphase Pharmaceuticals, Inc. | ||||
Business Acquisition [Line Items] | ||||
Business acquisition, date of acquisition agreement | Jun. 24, 2020 | |||
Upfront cash for acquisition | $ 42,990 | |||
Future cash payments | 16,000 | |||
Additional aggregate payments | 16,000 | |||
Business acquisition, description | The holders of the CVRs are entitled to receive potential future cash payments of up to $16 million in the aggregate upon the achievement of certain net sales of XERAVA in the U.S. as follows: (i) $2.5 million if 2021 XERAVA U.S. net sales are at least $20 million; (ii) $4.5 million if XERAVA U.S. net sales are at least $35 million during any calendar year ending on or prior to December 31, 2024; and (iii) $9 million if XERAVA U.S. net sales are at least $55 million during any calendar year ending on or prior to December 31, 2024 | |||
Estimated fair value of assets acquired | 54,700 | |||
Estimated fair value of liabilities assumed | 9,100 | |||
Gain recorded as other income resulting from the change in fair value of CVRs | $ 800 | $ 700 | ||
Inventory fair value step up adjustment | $ 3,300 | |||
Definite-lived intangible assets estimated useful life | 10 years | |||
Tetraphase Pharmaceuticals, Inc. | Cost of Product Sales | ||||
Business Acquisition [Line Items] | ||||
Inventory fair value step up adjustment | $ 2,500 | $ 900 | ||
Tetraphase Pharmaceuticals, Inc. | Agreement 1 | ||||
Business Acquisition [Line Items] | ||||
Proceeds from businesses and interest in affiliates | $ 2,500 | |||
Net sales from related parties | 20,000 | |||
Tetraphase Pharmaceuticals, Inc. | Agreement 2 | ||||
Business Acquisition [Line Items] | ||||
Proceeds from businesses and interest in affiliates | 4,500 | |||
Net sales from related parties | 35,000 | |||
Tetraphase Pharmaceuticals, Inc. | Agreement 3 | ||||
Business Acquisition [Line Items] | ||||
Proceeds from businesses and interest in affiliates | 9,000 | |||
Net sales from related parties | $ 55,000 |
Acquisition of Tetraphase Pha_4
Acquisition of Tetraphase Pharmaceuticals, Inc - Summary of Purchase Price Allocation as of Acquisition Date (Details) - USD ($) $ in Thousands | Jul. 28, 2020 | Dec. 31, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | |||
Goodwill | $ 20,123 | $ 20,123 | |
Tetraphase Pharmaceuticals, Inc. | |||
Business Acquisition [Line Items] | |||
Cash | $ 42,990 | ||
Fair value of CVRs | 2,610 | ||
Total Purchase Price | 45,600 | ||
Cash and cash equivalents | 8,778 | ||
Accounts receivable | 1,187 | ||
Inventory | 4,767 | ||
Prepaid expenses and other current assets | 1,218 | ||
Property and equipment | 58 | ||
Right-of-use lease assets | 2,302 | ||
Restricted cash | 699 | ||
Identifiable intangible assets | 15,520 | ||
Goodwill | 20,123 | ||
Accounts payable | (1,400) | ||
Accrued expenses | (2,979) | ||
Lease liabilities, current portion | (967) | ||
Lease liabilities, less current portion | (1,420) | ||
Other noncurrent liabilities | $ (2,286) |
Company-wide Realignments - Add
Company-wide Realignments - Additional Information (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Restructuring Cost And Reserve [Line Items] | |
Reversal of non-cash-stock-based compensation expense | $ 0.4 |
Restructuring costs | 4.1 |
Tetraphase Pharmaceuticals, Inc. | |
Restructuring Cost And Reserve [Line Items] | |
Restructuring costs | $ 3.1 |
Defined Contribution Plan - Add
Defined Contribution Plan - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Defined Contribution Plan Disclosure [Line Items] | ||
Matching contributions made | $ 0.4 | $ 0.5 |
La Jolla Plan | ||
Defined Contribution Plan Disclosure [Line Items] | ||
Employer 401(k) matching contribution to employee percentage | 3.50% | |
Tetraphase Plan | ||
Defined Contribution Plan Disclosure [Line Items] | ||
Employer 401(k) matching contribution to employee percentage | 3.50% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Line Items] | ||
Provision for income taxes | $ 49,000 | $ 0 |
Unrecognized tax benefits | 0 | 0 |
Accrual for interest or penalties | 0 | 0 |
Recognized interest and penalties | 0 | $ 0 |
Domestic Tax Authority | ||
Income Tax Disclosure [Line Items] | ||
Income tax net operating loss carryforwards | 327,200,000 | |
Domestic Tax Authority | Research Tax Credit Carryforward | ||
Income Tax Disclosure [Line Items] | ||
California research and development tax credit carryforwards | 10,800,000 | |
Domestic Tax Authority | Expiring 2026 | ||
Income Tax Disclosure [Line Items] | ||
Income tax net operating loss carryforwards | 158,700,000 | |
California research and development tax credit carryforwards | 10,800,000 | |
Domestic Tax Authority | Carryforward Indefinitely | ||
Income Tax Disclosure [Line Items] | ||
Income tax net operating loss carryforwards | 168,500,000 | |
State and Local Jurisdiction | ||
Income Tax Disclosure [Line Items] | ||
Income tax net operating loss carryforwards | 245,100,000 | |
State and Local Jurisdiction | Research Tax Credit Carryforward | ||
Income Tax Disclosure [Line Items] | ||
California research and development tax credit carryforwards | 16,700,000 | |
State and Local Jurisdiction | Expiring 2026 | ||
Income Tax Disclosure [Line Items] | ||
Income tax net operating loss carryforwards | 210,600,000 | |
State and Local Jurisdiction | Carryforward Indefinitely | ||
Income Tax Disclosure [Line Items] | ||
Income tax net operating loss carryforwards | 34,500,000 | |
California research and development tax credit carryforwards | $ 16,700,000 |
Income Taxes - Schedule of Prov
Income Taxes - Schedule of Provision for Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Federal statutory rate | $ 4,139,000 | $ (8,278,000) |
State tax benefit | 812,000 | (1,740,000) |
Change in valuation allowance | (288,000) | 787,000 |
Tetraphase net operating losses and other adjustments | (4,670,000) | |
Share-based compensation expense | 565,000 | 9,072,000 |
State rate true-up | (369,000) | 291,000 |
Research and development credits | (173,000) | |
Other permanent differences | (140,000) | 41,000 |
Provision for income taxes | $ 49,000 | $ 0 |
Income Taxes - Schedule of Sign
Income Taxes - Schedule of Significant Components Deferred Tax Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforwards | $ 84,571 | $ 84,827 |
Research and development credits | 24,015 | 24,179 |
Deferred royalty obligation | 36,687 | 36,265 |
Share-based compensation expense | 2,742 | 2,497 |
Depreciation and amortization expense | 482 | 1,044 |
Lease liability | 80 | 136 |
Capital loss carryforward | 126 | |
Other | 337 | 436 |
Total gross deferred tax assets | 149,040 | 149,384 |
Right-of-use lease asset | (80) | (136) |
Valuation allowance | $ (148,960) | $ (149,248) |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - Subsequent Events - La Jolla - AcelRx | 1 Months Ended |
Jan. 31, 2022USD ($) | |
Subsequent Event [Line Items] | |
Non-controlling equity interest, ownership percentage | 15.00% |
Investment measured at contributed cost | $ 0 |
Business acquisition, common stock issued value | 1,400,000 |
Contingent value rights to be paid upon the achievement of certain regulatory and sales-based milestones | 3,900,000 |
Contingent value rights to be paid upon satisfaction of certain obligations | $ 200,000 |