Cover Page
Cover Page - shares | 6 Months Ended | |
Jul. 03, 2020 | Jul. 27, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jul. 3, 2020 | |
Document Transition Report | false | |
Entity File Number | 000-30235 | |
Entity Registrant Name | EXELIXIS, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 04-3257395 | |
Entity Address, Address Line One | 1851 Harbor Bay Parkway | |
Entity Address, City or Town | Alameda, | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94502 | |
City Area Code | 650 | |
Local Phone Number | 837-7000 | |
Title of 12(b) Security | Common Stock $.001 Par Value per Share | |
Trading Symbol | EXEL | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 308,995,819 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Entity Central Index Key | 0000939767 | |
Current Fiscal Year End Date | --01-01 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jul. 03, 2020 | Jan. 03, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 527,143 | $ 266,501 |
Short-term investments | 685,895 | 585,742 |
Trade receivables, net | 121,080 | 119,073 |
Inventory | 16,608 | 12,886 |
Prepaid expenses and other current assets | 43,937 | 26,988 |
Total current assets | 1,394,663 | 1,011,190 |
Long-term investments | 327,141 | 536,385 |
Property and equipment, net | 52,323 | 48,892 |
Deferred tax assets, net | 148,235 | 172,374 |
Goodwill | 63,684 | 63,684 |
Other long-term assets | 60,502 | 53,145 |
Total assets | 2,046,548 | 1,885,670 |
Current liabilities: | ||
Accounts payable | 9,103 | 11,581 |
Accrued compensation and benefits | 33,156 | 37,364 |
Accrued clinical trial liabilities | 39,940 | 38,777 |
Rebates and fees due to customers | 16,957 | 18,719 |
Accrued collaboration liabilities | 10,695 | 11,856 |
Other current liabilities | 32,830 | 24,449 |
Total current liabilities | 142,681 | 142,746 |
Long-term portion of deferred revenues | 15,003 | 6,596 |
Long-term portion of operating lease liabilities | 48,334 | 48,011 |
Other long-term liabilities | 7,206 | 2,347 |
Total liabilities | 213,224 | 199,700 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock, $0.001 par value, 10,000 shares authorized and no shares issued | 0 | 0 |
Common stock, $0.001 par value; 400,000 shares authorized; issued and outstanding: 308,886 and 304,831 at June 30, 2020 and December 31, 2019, respectively | 309 | 305 |
Additional paid-in capital | 2,269,093 | 2,241,947 |
Accumulated other comprehensive income | 7,840 | 3,069 |
Accumulated deficit | (443,918) | (559,351) |
Total stockholders’ equity | 1,833,324 | 1,685,970 |
Total liabilities and stockholders’ equity | $ 2,046,548 | $ 1,885,670 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jul. 03, 2020 | Jan. 03, 2020 |
Preferred stock | ||
Par value (in dollars per share) | $ 0.001 | $ 0.001 |
Shares authorized (in shares) | 10,000,000 | 10,000,000 |
Shares issued (in shares) | 0 | 0 |
Common stock | ||
Par value (in dollars per share) | $ 0.001 | $ 0.001 |
Shares authorized (in shares) | 400,000,000 | 400,000,000 |
Shares issued (in shares) | 308,886,497 | 304,830,706 |
Shares outstanding (in shares) | 308,886,497 | 304,830,706 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 03, 2020 | Jun. 28, 2019 | Jul. 03, 2020 | Jun. 28, 2019 | |
Revenue from contract with customer | $ 259,479 | $ 240,275 | $ 486,394 | $ 455,762 |
Revenues | 259,479 | 240,275 | 486,394 | 455,762 |
Operating expenses: | ||||
Cost of goods sold | 9,221 | 7,539 | 18,510 | 15,040 |
Research and development | 114,933 | 81,932 | 216,810 | 145,221 |
Selling, general and administrative | 59,791 | 58,815 | 122,731 | 118,953 |
Total operating expenses | 183,945 | 148,286 | 358,051 | 279,214 |
Income from operations | 75,534 | 91,989 | 128,343 | 176,548 |
Interest income | 5,162 | 6,975 | 12,382 | 13,062 |
Other income, net | 0 | 803 | 6 | 828 |
Income before income taxes | 80,696 | 99,767 | 140,731 | 190,438 |
Provision for income taxes | 13,875 | 20,725 | 25,298 | 35,621 |
Net income | $ 66,821 | $ 79,042 | $ 115,433 | $ 154,817 |
Net income per share: | ||||
Basic (in dollars per share) | $ 0.22 | $ 0.26 | $ 0.38 | $ 0.51 |
Diluted (in dollars per share) | $ 0.21 | $ 0.25 | $ 0.36 | $ 0.49 |
Weighted-average common shares outstanding: | ||||
Basic (in shares) | 307,807 | 302,188 | 306,598 | 301,365 |
Diluted (in shares) | 318,144 | 314,911 | 316,992 | 314,786 |
Net product revenues | ||||
Revenue from contract with customer | $ 178,730 | $ 193,675 | $ 372,610 | $ 373,256 |
License revenues | ||||
Revenue from contract with customer | 59,234 | 37,742 | 80,113 | 63,306 |
Collaboration services revenues | ||||
Revenue not from contract with customer | $ 21,515 | $ 8,858 | $ 33,671 | $ 19,200 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 03, 2020 | Jun. 28, 2019 | Jul. 03, 2020 | Jun. 28, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 66,821 | $ 79,042 | $ 115,433 | $ 154,817 |
Other comprehensive income: | ||||
Net unrealized gains on available-for-sale debt securities, net of tax impact of $2,287, $413, $1,346 and $807, respectively | 8,062 | 1,479 | 4,771 | 2,908 |
Comprehensive income | $ 74,883 | $ 80,521 | $ 120,204 | $ 157,725 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 03, 2020 | Jun. 28, 2019 | Jul. 03, 2020 | Jun. 28, 2019 | |
Other comprehensive income: | ||||
Unrealized gains (losses) on available-for-sale securities, tax impact | $ 1,346 | $ 807 | $ 2,287 | $ 413 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit |
Beginning balance (in shares) at Dec. 28, 2018 | 299,876,000 | ||||
Beginning balance at Dec. 28, 2018 | $ 1,287,453 | $ 300 | $ 2,168,217 | $ (701) | $ (880,363) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 154,817 | 154,817 | |||
Other comprehensive income | 2,908 | 2,908 | |||
Issuance of common stock under equity incentive and stock purchase plans (in shares) | 2,909,000 | ||||
Issuance of common stock under equity incentive and stock purchase plans | 18,280 | $ 3 | 18,277 | ||
Stock transactions associated with taxes withheld on equity awards (in shares) | 0 | ||||
Stock transactions associated with taxes withheld on equity awards | (2,434) | $ 0 | (2,434) | ||
Stock-based compensation | 27,608 | 27,608 | |||
Ending balance (in shares) at Jun. 28, 2019 | 302,785,000 | ||||
Ending balance at Jun. 28, 2019 | 1,488,632 | $ 303 | 2,211,668 | 2,207 | (725,546) |
Beginning balance (in shares) at Mar. 29, 2019 | 301,520,000 | ||||
Beginning balance at Mar. 29, 2019 | 1,385,020 | $ 302 | 2,188,578 | 728 | (804,588) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 79,042 | 79,042 | |||
Other comprehensive income | 1,479 | 1,479 | |||
Issuance of common stock under equity incentive and stock purchase plans (in shares) | 1,265,000 | ||||
Issuance of common stock under equity incentive and stock purchase plans | 8,866 | $ 1 | 8,865 | ||
Stock transactions associated with taxes withheld on equity awards (in shares) | 0 | ||||
Stock transactions associated with taxes withheld on equity awards | (854) | $ 0 | (854) | ||
Stock-based compensation | 15,079 | 15,079 | |||
Ending balance (in shares) at Jun. 28, 2019 | 302,785,000 | ||||
Ending balance at Jun. 28, 2019 | $ 1,488,632 | $ 303 | 2,211,668 | 2,207 | (725,546) |
Beginning balance (in shares) at Jan. 03, 2020 | 304,830,706 | 304,831,000 | |||
Beginning balance at Jan. 03, 2020 | $ 1,685,970 | $ 305 | 2,241,947 | 3,069 | (559,351) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 115,433 | 115,433 | |||
Other comprehensive income | 4,771 | 4,771 | |||
Issuance of common stock under equity incentive and stock purchase plans (in shares) | 4,055,000 | ||||
Issuance of common stock under equity incentive and stock purchase plans | 17,955 | $ 4 | 17,951 | ||
Stock transactions associated with taxes withheld on equity awards (in shares) | 0 | ||||
Stock transactions associated with taxes withheld on equity awards | (20,941) | $ 0 | (20,941) | ||
Stock-based compensation | $ 30,136 | 30,136 | |||
Ending balance (in shares) at Jul. 03, 2020 | 308,886,497 | 308,886,000 | |||
Ending balance at Jul. 03, 2020 | $ 1,833,324 | $ 309 | 2,269,093 | 7,840 | (443,918) |
Beginning balance (in shares) at Apr. 03, 2020 | 305,780,000 | ||||
Beginning balance at Apr. 03, 2020 | 1,747,652 | $ 306 | 2,258,307 | (222) | (510,739) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 66,821 | 66,821 | |||
Other comprehensive income | 8,062 | 8,062 | |||
Issuance of common stock under equity incentive and stock purchase plans (in shares) | 3,106,000 | ||||
Issuance of common stock under equity incentive and stock purchase plans | 13,783 | $ 3 | 13,780 | ||
Stock transactions associated with taxes withheld on equity awards (in shares) | 0 | ||||
Stock transactions associated with taxes withheld on equity awards | (19,148) | $ 0 | (19,148) | ||
Stock-based compensation | $ 16,154 | 16,154 | |||
Ending balance (in shares) at Jul. 03, 2020 | 308,886,497 | 308,886,000 | |||
Ending balance at Jul. 03, 2020 | $ 1,833,324 | $ 309 | $ 2,269,093 | $ 7,840 | $ (443,918) |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jul. 03, 2020 | Jun. 28, 2019 | |
Statement of Cash Flows [Abstract] | ||
Net income | $ 115,433 | $ 154,817 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 4,376 | 3,998 |
Stock-based compensation | 30,136 | 27,608 |
Non-cash lease expense | 2,383 | 1,099 |
Deferred taxes | 22,793 | 33,067 |
Other, net | 726 | (98) |
Changes in operating assets and liabilities: | ||
Trade receivables, net | (2,014) | 65,230 |
Inventory | (7,049) | (2,514) |
Prepaid expenses and other assets | (18,954) | (9,278) |
Deferred revenue | 9,659 | 4,656 |
Accounts payable and other liabilities | 262 | 14,736 |
Net cash provided by operating activities | 157,751 | 293,321 |
Cash flows from investing activities: | ||
Purchases of property, equipment and other | (9,925) | (3,516) |
Purchases of investments | (433,154) | (518,268) |
Proceeds from maturities and sales of investments | 548,973 | 271,198 |
Net cash provided by (used in) investing activities | 105,894 | (250,586) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock under equity incentive and stock purchase plans | 17,938 | 14,735 |
Taxes paid related to net share settlement of equity awards | (20,941) | (2,434) |
Other, net | 0 | (22) |
Net cash (used in) provided by financing activities | (3,003) | 12,279 |
Net increase in cash, cash equivalents and restricted cash | 260,642 | 55,014 |
Cash, cash equivalents and restricted cash at beginning of period | 268,137 | 315,875 |
Cash, cash equivalents and restricted cash at end of period | 528,779 | 370,889 |
Supplemental cash flow disclosure: | ||
Right-of-use assets obtained in exchange for lease obligations | 1,824 | 11,338 |
Unpaid liabilities incurred for purchases of property and equipment | $ 804 | $ 1,350 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 6 Months Ended |
Jul. 03, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization Exelixis, Inc. (Exelixis, we, our or us) is an oncology-focused biotechnology company that strives to accelerate the discovery, development and commercialization of new medicines for difficult-to-treat cancers. Our drug discovery and development capabilities and commercialization platform are the foundations upon which we intend to bring to market novel, effective and tolerable therapies to provide cancer patients with additional treatment options. Since we were founded in 1994, four products resulting from our discovery efforts have progressed through clinical development, received regulatory approval and established a commercial presence in various geographies around the world. Two are derived from cabozantinib, our flagship molecule, an inhibitor of multiple tyrosine kinases including MET, AXL, VEGF receptors and RET. Our cabozantinib products are: CABOMETYX® (cabozantinib) tablets approved for advanced renal cell carcinoma and previously treated hepatocellular carcinoma; and COMETRIQ® (cabozantinib) capsules approved for progressive, metastatic medullary thyroid cancer. For these types of cancer, cabozantinib has become or is becoming a standard of care. Beyond these approved indications, cabozantinib is currently the focus of a broad clinical development program and is being investigated both alone and in combination with other therapies in a wide variety of cancers. The other two products resulting from our discovery efforts are: COTELLIC® (cobimetinib), an inhibitor of MEK, approved as part of multiple combination regimens to treat specific forms of advanced melanoma and marketed under a collaboration with Genentech, Inc. (a member of the Roche Group) (Genentech); and MINNEBRO® (esaxerenone), an oral, non-steroidal, selective blocker of the mineralocorticoid receptor, approved for the treatment of hypertension in Japan and licensed to Daiichi Sankyo Company, Limited (Daiichi Sankyo). Basis of Presentation The accompanying Condensed Consolidated Financial Statements include the accounts of Exelixis and those of our wholly-owned subsidiaries. These entities’ functional currency is the U.S. dollar. All intercompany balances and transactions have been eliminated. The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the U.S. for interim financial information and pursuant to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (SEC). Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In our opinion, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of our financial statements for the periods presented have been included. Operating results for the three and six months ended June 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020 or for any future period. The accompanying Condensed Consolidated Financial Statements and Notes thereto should be read in conjunction with our Consolidated Financial Statements and Notes thereto for the year ended December 31, 2019 , included in our Annual Report on Form 10-K filed with the SEC on February 25, 2020 . We have adopted a 52- or 53-week fiscal year policy that generally ends on the Friday closest to December 31 st . Fiscal year 2020, which is a 52-week fiscal year, will end on January 1, 2021 and fiscal year 2019, which was a 53-week fiscal year, ended on January 3, 2020. For convenience, references in this report as of and for the fiscal periods ended July 3, 2020 and June 28, 2019, and as of and for the fiscal years ending January 1, 2021, and ended January 3, 2020, are indicated as being as of and for the fiscal periods ended June 30, 2020 and June 30, 2019 and the years ending December 31, 2020 and ended December 31, 2019, respectively. Similarly, references in this report to the first day of the fiscal year ending January 1, 2021 are indicated as being as of January 1, 2020. Reclassifications Certain prior period amounts in the accompanying Condensed Consolidated Financial Statements have been reclassified to conform to the current period presentation. Such reclassifications did not impact previously reported total revenues, i ncome from operations , net income, total assets, total liabilities or total stockholders’ equity. Segment Information We operate in one business segment that focuses on the discovery, development and commercialization of new medicines for difficult-to-treat cancers . Our Chief Executive Officer, as the chief operating decision-maker, manages and allocates resources to our operations on a total consolidated basis. Consistent with this decision-making process, our Chief Executive Officer uses consolidated, single-segment financial information for purposes of evaluating performance, forecasting future period financial results, allocating resources and setting incentive targets. All of our long-lived assets are located in the U.S. See “Note 2. Revenues” for enterprise-wide disclosures about product sales, revenues from major customers and revenues by geographic region. Use of Estimates The preparation of the accompanying Condensed Consolidated Financial Statements conforms to accounting principles generally accepted in the U.S., which requires management to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities, equity, revenues and expenses, and related disclosures. We base our estimates on historical experience and on various other market-specific and other relevant assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ materially from those estimates. In March 2020, we received the 2020 preliminary fee notice from the Internal Revenue Service for the Branded Prescription Drug Fee for the 2018 sales year, which resulted in an increase in our estimate of such fees for the 2018 and 2019 sales years. Accordingly, we recorded an adjustment to increase selling, general and administrative expenses and our accrual for these fees by $5.4 million during the three months ended March 31, 2020 . T his adjustment resulted in a $0.02 decrease in basic and diluted earnings per share for the six months ended June 30, 2020 . Our total accrual for the Branded Prescription Drug Fee was $15.1 million and $6.0 million as of June 30, 2020 and December 31, 2019 , respectively, of which $8.6 million and $4.4 million was recorded in other current liabilities, and $6.5 million and $1.6 million was recorded in other long-term liabilities. Recently Adopted Accounting Pronouncements On January 1, 2020, we adopted Accounting Standards Update (ASU) No. 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606 (ASU 2018-18). ASU 2018-18 clarifies that certain transactions between collaborative arrangement participants should be accounted for as part of revenues under Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers (Topic 606) when the counterparty is a customer for a distinct good or service (i.e. a unit of account). For units of account that are in the scope of Topic 606, all of the guidance in Topic 606 should be applied, including the guidance on recognition, measurement, presentation and disclosure. ASU 2018-18 precludes entities from presenting amounts related to transactions with a counterparty in a collaborative arrangement that is not a customer as revenue from contracts with customers. If a portion of a distinct bundle of goods or services within an arrangement is not with a customer, then the unit of account is not within the scope of Topic 606, and the recognition and measurement of that unit of account shall be based on analogy to authoritative accounting literature or, if there is no appropriate analogy, a reasonable, rational, and consistently applied accounting policy election. Upon adoption of ASU 2018-18, we have presented revenues from performance obligations associated with our collaboration arrangements that are within the scope of Topic 606 (license revenues) separately from revenues from performance obligations that are not subject to Topic 606 (collaboration services revenues). The adoption of ASU 2018-18 was applied retrospectively, and prior periods have been restated to conform to the presentation prescribed by ASU 2018-18. The adoption of ASU 2018-18 did not impact total revenues for the prior period presented in the accompanying Condensed Consolidated Statements of Income. On January 1, 2020, we adopted ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (ASU 2017-04) . ASU 2017-04 simplifies goodwill impairment testing by eliminating the second step of the impairment test. The amended guidance requires an impairment charge to be recognized for the amount by which the carrying amount of a reporting unit exceeds its fair value under a one-step impairment test. The adoption of ASU 2017-04 did not impact the accompanying Condensed Consolidated Financial Statements. On January 1, 2020, we adopted ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326) (ASU 2016-13) . ASU 2016-13 implements an impairment model, known as the current expected credit loss model, that is based on expected losses rather than incurred losses. Under the new guidance, we will recognize our estimate of current expected credit losses as an allowance on financial assets measured at amortized cost, including accounts receivable, unbilled collaboration revenues, and investments classified as available for sale. Current expected credit losses were immaterial as of the date of adoption, and the adoption of ASU 2016-13 did not have a significant impact on the accompanying Condensed Consolidated Financial Statements. Investment Impairment Quarterly, we assess each of our investments in debt securities available-for-sale whose fair value is below its cost basis to determine if the investment’s impairment is due to credit-related factors or noncredit-related factors. Factors considered in determining whether an impairment is credit-related include the extent to which the investment’s fair value is less than its cost basis, declines in published credit ratings, issuer default on interest or principal payments, and declines in the financial condition and near-term prospects of the issuer. If we determine a credit-related impairment exists, we will measure the credit loss based on a discounted cash flows model. Credit-related impairments on debt securities available-for-sale are recognized as an allowance for credit losses with a corresponding adjustment to o ther income, net in the accompanying Condensed Consolidated Statements of Income. The portion of the impairment that is not credit-related is recorded, net of applicable taxes, as a reduction of other comprehensive income. We have elected to exclude accrued interest from both the fair value and the amortized cost basis of debt securities available-for-sale for the purposes of identifying and measuring an impairment. We write-off accrued interest as a reduction of interest income when an issuer has defaulted on interest payments due on a security. Accounts Receivable Trade receivables, net contain amounts billed to our customers for product sales, and amounts billed to our collaboration partners for development, regulatory and sales-based milestone payments, royalties on the sale of licensed products , profit-sharing arrangements, development cost reimbursements, and payments for product supply services . Our customers are primarily pharmaceutical and biotechnology companies that are located in the U.S., and collaboration partners that are located in Europe and Japan. We record trade receivables net of allowances for credit losses and chargebacks, and cash discounts for prompt payment. We apply an aging method to estimate credit losses and consider our historical loss information, adjusted to account for current conditions, and reasonable and supportable forecasts of future economic conditions affecting our customers . Goodwill We recorded goodwill amounts as the excess purchase price over tangible assets, liabilities and intangible assets acquired based on their estimated fair value. We review the carrying amount of goodwill for impairment annually and whenever events or changes in circumstance indicate that the carrying value may not be recoverable. We perform our annual assessment of the recoverability of our goodwill as of the first day of our fourth quarter. The assessment of recoverability may first consider qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of our reporting unit is less than its carrying amount. We perform a quantitative assessment if the qualitative assessment results in a more likely than not determination or if a qualitative assessment is not performed. The quantitative assessment determines whether the carrying amount of a reporting unit exceeds its fair value, in which case an impairment charge is recognized for the amount by which the carrying amount of a reporting unit exceeds its fair value, limited to the goodwill balance. We operate in one business segment, which is also considered to be our sole reporting unit and therefore, goodwill is tested for impairment at the enterprise level. We did no t recognize any impairment charges in any of the periods presented. Collaboration Agreements We assess whether our collaboration agreements are subject to ASC Topic 808, Collaborative Arrangements (Topic 808) based on whether they involve joint operating activities and whether both parties have active participation in the arrangement and are exposed to significant risks and rewards. To the extent that the arrangement falls within the scope of Topic 808, we apply the unit of account guidance under Topic 606 to identify distinct performance obligations, and then determine whether a customer relationship exists for each distinct performance obligation. If we determine a performance obligation within the arrangement is with a customer, we apply the guidance in Topic 606. If a portion of a distinct bundle of goods or services within an arrangement is not with a customer, then the unit of account is not within the scope of Topic 606 , and the recognition and measurement of that unit of account shall be based on analogy to authoritative accounting literature or, if there is no appropriate analogy, a reasonable, rational, and consistently applied accounting policy election. We enter into collaboration arrangements, under which we license certain rights to our intellectual property to third parties. The terms of these arrangements typically include payments to us for one or more of the following: non-refundable, up-front license fees; development, regulatory and sales-based milestone payments; product supply services; development cost reimbursements; profit-sharing arrangements; and royalties on net sales of licensed products. As part of the accounting for these arrangements, we develop assumptions that require judgment to determine the standalone selling price for each performance obligation identified in the contract. These key assumptions may include forecasted revenues, clinical development timelines and costs, reimbursement rates for personnel costs, discount rates and probabilities of technical and regulatory success. Up-front License Fees: If the license to our intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, we recognize revenues from nonrefundable, up-front fees allocated to the license when the license is transferred to the licensee and the licensee is able to use and benefit from the license, which happens at or near the inception of the contract. For licenses that are bundled with other promises, we utilize 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 revenues from non-refundable, up-front fees. We evaluate the measure of progress at the end of each reporting period and, if necessary, adjust the measure of performance and related revenue recognition. Regulatory and Development Milestone Payments: At the inception of each arrangement that includes development milestone payments, we evaluate whether the milestones are considered probable of being reached 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 associated milestone value is included in the transaction price. Milestone payments that are not within our or the licensee’s control, such as regulatory approvals, are not considered probable of being achieved until uncertainty associated with the approvals has been resolved. The transaction price is then allocated to each performance obligation, on a relative standalone selling price basis, for which we recognize revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, we re-evaluate the probability of achieving such development and regulatory milestones and any related constraint, and if necessary, adjust our estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis. Product Supply Services: Arrangements that include a promise for the future supply of drug product for either clinical development or commercial supply at the licensee’s discretion are generally considered as options. We assess if these options provide a material right to the licensee and if so, they are accounted for as separate performance obligations. Development Cost Reimbursements: Our collaboration arrangements may include promises of future clinical development and drug safety services, as well as participation on certain joint committees. When such services are provided to a customer, and they are distinct from the licenses provided to our collaboration partners, these promises are accounted for as a separate performance obligation which we estimate using internal development costs incurred and projections through the term of the arrangements. We record revenues for these services as the performance obligations are satisfied over time. However, if we conclude that our collaboration partner is not a customer for those collaborative research and development activities, we present such payments as a reduction of research and development expenses . Profit-sharing Arrangements: Under the terms of our collaboration agreement with Genentech for cobimetinib, we are entitled to a share of U.S. profits and losses received in connection with the commercialization of cobimetinib. We account for this arrangement in accordance with Topic 606. We have determined that we are an agent under the agreement and therefore revenues are recorded net of costs incurred. We record revenues for the variable consideration associated with the profits and losses under the collaboration agreement when it is probable that a significant reversal in the amount of cumulative revenues recognized will not occur. Royalty and Sales-based Milestone Payments: For arrangements that include royalties and sales-based milestone payments, including milestone payments earned for the first commercial sale of a product, the license is deemed to be the predominant item to which such payments relate and we recognize revenues at the later of when the related sales occur or when the performance obligation to which the royalty has been allocated has been satisfied. Recent Accounting Pronouncements Not Yet Adopted In December 2019, the Financial Accounting Standards Board issued ASU 2019-12, Income Taxes (Topic 740)-Simplifying the Accounting for Income Taxes (ASU 2019-12). ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions to the general principles in ASC Topic 740, Income Taxes and clarifying and amending existing guidance. ASU 2019-12 will be effective for us in the first quarter of 2021 with early adoption permitted. We are currently assessing the impact of ASU 2019-12 on our financial statements. |
Revenues
Revenues | 6 Months Ended |
Jul. 03, 2020 | |
Revenue from Contract with Customer [Abstract] | |
REVENUES | REVENUES Revenues consisted of the following (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Product revenues: Gross product revenues $ 229,898 $ 240,418 $ 482,464 $ 464,168 Discounts and allowances (51,168 ) (46,743 ) (109,854 ) (90,912 ) Net product revenues 178,730 193,675 372,610 373,256 Collaboration revenues: License revenues 59,234 37,742 80,113 63,306 Collaboration services revenues 21,515 8,858 33,671 19,200 Total collaboration revenues 80,749 46,600 113,784 82,506 Total revenues $ 259,479 $ 240,275 $ 486,394 $ 455,762 Net product revenues and license revenues are recorded in accordance with Topic 606. License revenues include the recognition of the portion of milestones payments allocated to the transfer of intellectual property licenses for which it had become probable in the current period that the milestone would be achieved and a significant reversal of revenues would not occur, as well as royalty revenues and our share of profits under our collaboration agreement with Genentech. Collaboration services revenues were recorded in accordance with Topic 808 and by analogy to Topic 606. Collaboration services revenues include the recognition of deferred revenues for the portion of upfront and milestone payments allocated to our research and development services performance obligations, development cost reimbursements earned under our collaboration agreements, product supply revenues, net of product supply costs, and the royalties we paid to GlaxoSmithKline (GSK) on sales of products containing cabozantinib by our collaboration partners. Net product revenues by product were as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 CABOMETYX $ 173,610 $ 189,015 $ 362,826 $ 364,905 COMETRIQ 5,120 4,660 9,784 8,351 Net product revenues $ 178,730 $ 193,675 $ 372,610 $ 373,256 The percentage of total revenues by customer who individually accounted for 10% or more of our total revenues were as follows: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Ipsen Pharma SAS (Ipsen) 20 % 9 % 17 % 10 % Affiliates of CVS Health Corporation 13 % 15 % 15 % 15 % Affiliates of McKesson Corporation 11 % 13 % 13 % 12 % Affiliates of AmerisourceBergen Corporation 11 % 10 % 11 % 10 % Affiliates of Optum Specialty Pharmacy 10 % 8 % 11 % 8 % Takeda Pharmaceutical Company Limited (Takeda) 10 % 1 % 5 % 3 % Accredo Health, Incorporated 10 % 8 % 9 % 9 % Revenues by geographic region were as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 U.S. $ 181,231 $ 196,347 $ 377,827 $ 378,473 Europe 52,917 22,249 81,953 44,117 Japan 25,331 21,679 26,614 33,172 Total revenues $ 259,479 $ 240,275 $ 486,394 $ 455,762 Net product revenues are attributed to geographic region based on the ship-to location. License and collaboration services revenues are attributed to geographic region based on the location of our collaboration partners’ headquarters. Product Sales Discounts and Allowances The activities and ending reserve balances for each significant category of discounts and allowances, which constitute variable consideration, were as follows (in thousands): Chargebacks and Discounts for Prompt Payment Other Customer Credits/Fees and Co-pay Assistance Rebates Total Balance at December 31, 2019 $ 7,514 $ 3,497 $ 15,222 $ 26,233 Provision related to sales made in: Current period 72,874 8,339 28,226 109,439 Prior periods 39 (364 ) 740 415 Payments and customer credits issued (72,169 ) (9,111 ) (29,592 ) (110,872 ) Balance at June 30, 2020 $ 8,258 $ 2,361 $ 14,596 $ 25,215 The allowance for chargebacks and discounts for prompt payment is recorded as a reduction of trade receivables, net and the remaining reserves are recorded as rebates and fees due to customers in the accompanying Condensed Consolidated Balance Sheets. Contract Assets and Liabilities We receive payments from our collaboration partners based on billing schedules established in each contract. Amounts are recorded as accounts receivable when our right to consideration is unconditional. We may also recognize revenues in advance of the contractual billing schedule and such amounts are recorded , net of any allowance for credit losses, as a contract asset when recognized. Contract assets, which are presented in prepaid expenses and other current assets in the accompanying Condensed Consolidated Balance Sheets, were $13.8 million and $1.1 million as of June 30, 2020 and December 31, 2019 , respectively. We may be required to defer recognition of revenues for upfront and milestone payments until we perform our obligations under these arrangements, and such amounts are recorded as deferred revenues upon receipt or when due. Contract liabilities were $16.3 million and $6.6 million as of June 30, 2020 and December 31, 2019 , respectively. The current portion of the contract liabilities totaling $1.3 million and $0 as of June 30, 2020 and December 31, 2019 , respectively, are presented in other current liabilities and the remainder of the contract liabilities are presented in long-term portion of deferred revenues as of those dates in the accompanying Condensed Consolidated Balance Sheets. For those contracts that have multiple performance obligations, contract assets and liabilities are reported on a net basis at the contract level. Significant changes in contract assets during the six months ended June 30, 2020 include the impact of a $20.0 million development milestone from Ipsen we determined was probable of achievement, which was offset by the impact of a $10.0 million milestone from Takeda which was recognized as revenues during the year ended December 31, 2019 and was achieved, invoiced and collected during the current period . During the six months ended June 30, 2020 and 2019 , we recognized $3.4 million and $1.8 million , respectively, in revenues that were included in the beginning deferred revenues balance for those periods. During the three and six months ended June 30, 2020 , we recognized $62.0 million and $82.2 million , respectively, in revenues for performance obligations satisfied in previous periods as compared to $36.1 million and $61.4 million during the comparable periods in 2019 . Such revenues primarily related to milestone and royalty payments allocated to the license performance obligations for our collaborations with Ipsen, Takeda, Daiichi Sankyo and Genentech. As of June 30, 2020 , $71.4 million of the transaction price was allocated to performance obligations that had not yet been satisfied. See “Note 3. Collaboration Agreements - Cabozantinib Commercial Collaborations - Performance Obligations and Transaction Prices for our Ipsen and Takeda Collaborations” to our Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2019 for information about the expected timing to satisfy these performance obligations . |
Collaboration Agreements
Collaboration Agreements | 6 Months Ended |
Jul. 03, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
COLLABORATION AGREEMENTS | COLLABORATION AGREEMENTS We have established multiple collaborations with leading pharmaceutical companies for the commercialization and further development of cabozantinib. Additionally, consistent with our business strategy prior to the commercialization of cabozantinib, we entered into other collaborations with leading pharmaceutical companies for other compounds and programs in our portfolio. Under these collaborations, we are generally entitled to receive milestone and royalty payments, and for certain collaborations receive payments for product supply services, development cost reimbursements, and/or profit-sharing payments. See “Note 2. Revenues” for additional information on revenues recognized under our collaboration agreements. We have also established multiple collaborations with smaller, discovery-focused biotechnology companies to expand our product pipeline. Under these collaborations, we may be required to make milestone and royalty payments, and for certain collaborations make payments for development cost reimbursements and/or option exercise fees. See “Note 3. Collaboration Agreements” to our Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2019 for a description of each of our collaboration agreements. Cabozantinib Collaborations Ipsen Collaboration In February 2016, we entered into a collaboration agreement with Ipsen for the commercialization and further development of cabozantinib. Under the terms of the collaboration agreement, as amended, Ipsen received exclusive commercialization rights for current and potential future cabozantinib indications outside of the U.S. and Japan. We have also agreed to collaborate with Ipsen on the development of cabozantinib for current and potential future indications. The parties’ efforts are governed through a joint steering committee and appropriate subcommittees established to guide and oversee the collaboration’s operation and strategic direction; provided, however, that we retain final decision-making authority with respect to cabozantinib’s ongoing development. During the second quarter of 2020, Ipsen opted into and is now co-funding the development costs for CONTACT-01 and CONTACT-02, two phase 3 pivotal trials of cabozantinib in combination with atezolizumab in patients with previously treated, metastatic non-small cell lung cancer and metastatic castration-resistant prostate cancer, respectively, and the four remaining cohorts of COSMIC-021 it had not previously opted into. Revenues under the collaboration agreement with Ipsen were as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 License revenues $ 33,597 $ 14,946 $ 51,546 $ 28,909 Collaboration services revenues 19,320 7,303 30,407 15,208 Total $ 52,917 $ 22,249 $ 81,953 $ 44,117 Revenues for both the three and six months ended June 30, 2020 included $18.8 million in revenues recognized in connection with a $20.0 million development milestone from Ipsen we determined was probable of achievement. As of June 30, 2020 , $46.2 million of the transaction price was allocated to our research and development services performance obligation that has not yet been satisfied. Takeda Collaboration In January 2017, we entered into a collaboration agreement with Takeda. Under this collaboration agreement, as amended, Takeda has exclusive commercialization rights for current and potential future cabozantinib indications in Japan, and the parties have agreed to collaborate on the clinical development of cabozantinib in Japan. The operation and strategic direction of the parties’ collaboration is governed through a joint executive committee and appropriate subcommittees. Revenues under the collaboration agreement with Takeda were as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 License revenues $ 22,946 $ — $ 22,946 $ 9,056 Collaboration services revenues 2,195 1,565 3,264 4,002 Total $ 25,141 $ 1,565 $ 26,210 $ 13,058 Revenues for both the three and six months ended June 30, 2020 included $23.7 million in revenues recognized in connection with $31.0 million in milestones we achieved upon Takeda’s first commercial sale of CABOMETYX as a treatment for patients with curatively unresectable or metastatic renal cell carcinoma in Japan, as well as royalties earned related to sales of cabozantinib in Japan. As of June 30, 2020 , $25.1 million of the transaction price was allocated to our research and development services performance obligation that has not yet been satisfied. GSK In October 2002, we established a product development and commercialization collaboration agreement with GSK. We are required to pay a 3% royalty to GSK on the net sales of any product incorporating cabozantinib by us and our collaboration partners. Royalties earned by GSK in connection with the sales of cabozantinib are included in cost of goods sold for sales by us and as a reduction of collaboration services revenues for sales by our collaboration partners. Such royalties were $7.6 million and $15.7 million during the three and six months ended June 30, 2020 , respectively, as compared to $7.8 million and $15.1 million during the comparable periods in 2019 . Genentech Collaboration In December 2006, we out-licensed the development and commercialization of cobimetinib to Genentech under a worldwide collaboration agreement. In November 2015, the U.S. Food and Drug Administration (FDA) approved cobimetinib, under the brand name COTELLIC, in combination with Genentech’s Zelboraf (vemurafenib) as a treatment for patients with BRAF V600E or V600K mutation-positive advanced melanoma. COTELLIC in combination with Zelboraf has also been approved in the European Union and multiple additional countries for use in the same indication. In July 2020, the FDA also approved COTELLIC for use in combination with Zelboraf and Tecentriq (atezolizumab) as a treatment for BRAF V600-mutation positive advanced melanoma in previously untreated patients. License revenues under the collaboration agreement with Genentech were as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Profits on U.S. commercialization $ 1,376 $ 1,349 $ 2,783 $ 2,404 Royalty revenues on ex-U.S. sales $ 1,125 $ 1,323 $ 2,434 $ 2,813 |
Cash and Investments
Cash and Investments | 6 Months Ended |
Jul. 03, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
CASH AND INVESTMENTS | CASH AND INVESTMENTS Cash, Cash Equivalents and Restricted Cash Equivalents A reconciliation of cash, cash equivalents, and restricted cash equivalents reported in the accompanying Condensed Consolidated Balance Sheets to the amount reported within the accompanying Condensed Consolidated Statements of Cash Flows was as follows (in thousands): June 30, 2020 December 31, 2019 Cash and cash equivalents $ 527,143 $ 266,501 Restricted cash equivalents included in long-term investments 1,636 1,636 Cash, cash equivalents, and restricted cash equivalents as reported in the accompanying Condensed Consolidated Statements of Cash Flows $ 528,779 $ 268,137 Restricted cash equivalents consisted of certificates of deposit with original maturities of 90 days or less used to collateralize letters of credit. The long-term classification of restricted cash equivalents is based upon the remaining term of the underlying restriction . Cash and Investments Cash and investments consisted of the following (in thousands): June 30, 2020 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Debt securities available-for-sale: Commercial paper $ 239,685 $ 245 $ — $ 239,930 Corporate bonds 663,491 9,527 (150 ) 672,868 U.S. Treasury and government-sponsored enterprises 89,890 462 — 90,352 Municipal bonds 28,229 152 (1 ) 28,380 Total debt securities available-for-sale 1,021,295 10,386 (151 ) 1,031,530 Cash 52,053 — — 52,053 Money market funds 404,313 — — 404,313 Certificates of deposit 52,283 — — 52,283 Total cash and investments $ 1,529,944 $ 10,386 $ (151 ) $ 1,540,179 December 31, 2019 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Debt securities available-for-sale: Commercial paper $ 389,573 $ — $ — $ 389,573 Corporate bonds 752,295 3,934 (3 ) 756,226 U.S. Treasury and government-sponsored enterprises 166,483 187 (5 ) 166,665 Total debt securities available-for-sale 1,308,351 4,121 (8 ) 1,312,464 Cash 40,964 — — 40,964 Money market funds 2,467 — — 2,467 Certificates of deposit 32,728 5 — 32,733 Total cash and investments $ 1,384,510 $ 4,126 $ (8 ) $ 1,388,628 Interest receivable was $5.3 million and $6.2 million as of June 30, 2020 and December 31, 2019 , respectively, and is included in prepaid expenses and other current assets in the accompanying Condensed Consolidated Balance Sheets. Realized gains and losses on the sales of investments were insignificant during the three and six months ended June 30, 2020 and 2019 . We manage credit risk associated with our investment portfolio through our investment policy, which limits purchases to high-quality issuers and limits the amount of our portfolio that can be invested in a single issuer. The fair value and gross unrealized losses on debt securities available-for-sale in an unrealized loss position were as follows (in thousands): June 30, 2020 Fair Value Gross Unrealized Losses Corporate bonds $ 27,850 $ (150 ) U.S. Treasury and government-sponsored enterprises 4,997 — Municipal bonds 2,471 (1 ) Total $ 35,318 $ (151 ) December 31, 2019 Fair Value Gross Unrealized Losses Corporate bonds $ 14,529 $ (3 ) U.S. Treasury and government-sponsored enterprises 2,848 (5 ) Total $ 17,377 $ (8 ) All securities presented have been in an unrealized loss position less than 12 months. There were 17 and 9 investments in an unrealized loss position as of June 30, 2020 and December 31, 2019 , respectively. During the six months ended June 30, 2020 and 2019 , we did no t record an allowance for credit losses or other impairment charges on our investment securities. Based upon our quarterly impairment review, we determined that the unrealized losses were not attributed to credit risk but were primarily associated with changes in interest rates and market liquidity. Based on the scheduled maturities of our investments, we determined that it was more likely than not that we will hold these investments for a period of time sufficient for a recovery of our cost basis. The fair value of debt securities available-for-sale by contractual maturity was as follows (in thousands): June 30, 2020 December 31, 2019 Maturing in one year or less $ 720,089 $ 789,913 Maturing after one year through five years 311,441 522,551 Total debt securities available-for-sale $ 1,031,530 $ 1,312,464 |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jul. 03, 2020 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Fair value reflects the amounts that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy has the following three levels: • Level 1 - quoted prices (unadjusted) in active markets for identical assets and liabilities; • Level 2 - inputs other than level 1 that are observable either directly or indirectly, such as quoted prices in active markets for similar instruments or on industry models using data inputs, such as interest rates and prices that can be directly observed or corroborated in active markets; • Level 3 - unobservable inputs that are supported by little or no market activity that are significant to the fair value measurement The classifications within the fair value hierarchy of our financial assets that were measured and recorded at fair value on a recurring basis were as follows (in thousands): June 30, 2020 Level 1 Level 2 Total Commercial paper $ — $ 239,930 $ 239,930 Corporate bonds — 672,868 672,868 U.S. Treasury and government-sponsored enterprises — 90,352 90,352 Municipal bonds — 28,380 28,380 Total debt securities available-for-sale — 1,031,530 1,031,530 Money market funds 404,313 — 404,313 Certificates of deposit — 52,283 52,283 Total financial assets carried at fair value $ 404,313 $ 1,083,813 $ 1,488,126 December 31, 2019 Level 1 Level 2 Total Commercial paper $ — $ 389,573 $ 389,573 Corporate bonds — 756,226 756,226 U.S. Treasury and government-sponsored enterprises — 166,665 166,665 Total debt securities available-for-sale — 1,312,464 1,312,464 Money market funds 2,467 — 2,467 Certificates of deposit — 32,733 32,733 Total financial assets carried at fair value $ 2,467 $ 1,345,197 $ 1,347,664 When available, we value investments based on quoted prices for those financial instruments, which is a Level 1 input. Our remaining investments are valued using third-party pricing sources, which use observable market prices, interest rates and yield curves observable at commonly quoted intervals for similar assets as observable inputs for pricing, which is a Level 2 input. The carrying amount of our remaining financial assets and liabilities, which include cash, receivables and payables, approximate their fair values due to their short-term nature. |
Inventory
Inventory | 6 Months Ended |
Jul. 03, 2020 | |
Inventory Disclosure [Abstract] | |
INVENTORY | INVENTORY Inventory consisted of the following (in thousands): June 30, 2020 December 31, 2019 Raw materials $ 1,876 $ 2,709 Work in process 15,275 9,447 Finished goods 5,086 4,367 Total $ 22,237 $ 16,523 Balance Sheet classification: Current portion included in inventory $ 16,608 $ 12,886 Long-term portion included in other long-term assets 5,629 3,637 Total $ 22,237 $ 16,523 Write-downs related to excess and expiring inventory were $1.3 million and $0.4 million for the six months ended June 30, 2020 and 2019 , respectively. |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jul. 03, 2020 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION We allocated the stock-based compensation expense for our equity incentive plans and our 2000 Employee Stock Purchase Plan (ESPP) as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Research and development $ 6,112 $ 5,138 $ 11,198 $ 9,444 Selling, general and administrative 10,042 9,941 18,938 18,164 Total stock-based compensation $ 16,154 $ 15,079 $ 30,136 $ 27,608 As of June 30, 2020 , 25,749,356 shares were available for grant under the Exelixis, Inc. 2017 Equity Incentive Plan (as amended and restated, the 2017 Plan). The share reserve is reduced by 1 share for each share issued pursuant to a stock option or stock appreciation award and 1.5 shares for full value awards granted in the form of restricted stock units (RSUs). On May 20, 2020, at our 2020 Annual Meeting of Stockholders, our stockholders approved the amendment and restatement of the 2017 Plan. The amendment and restatement increased the share reserve under the 2017 Plan by 21,000,000 shares (the Additional Shares) , subject to adjustment for certain changes in our capitalization, which became effective immediately upon stockholder approval. The Additional Shares will be registered on a Form S-8 prior to grant . During the six months ended June 30, 2020 , we granted 839,318 stock options with a weighted average exercise price of $21.40 per share and a weighted average grant date fair value of $9.74 per share. As of June 30, 2020 , there were 16,655,274 stock options outstanding and $30.3 million unrecognized compensation expense. During the six months ended June 30, 2020 , we granted 889,023 RSUs with a weighted average grant date fair value of $21.43 per share. As of June 30, 2020 , there were 4,774,852 RSUs outstanding and $75.1 million unrecognized compensation expense. Stock options and RSUs granted to employees during the six months ended June 30, 2020 have vesting conditions and contractual lives of a similar nature to those described in “ Note 8. Employee Benefit Plans” of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019. During the year ended December 31, 2018, in connection with our long-term incentive compensation program, we granted 308,365 performance-based stock options (PSOs) to our President and Chief Executive Officer. In addition to the standard service-based vesting conditions included in our other stock options, these PSOs contain a market vesting condition such that they may not be exercised until, at any time after the grant date, the closing market price of our Common Stock is equal to or greater than 125% of the per share exercise price of the PSOs over a period of at least 30 consecutive calendar days. This market vesting condition was achieved during the three months ended June 30, 2020. The stock-based compensation expense for the PSOs is being recognized on an accelerated basis over the service period of the award, which commenced on the date of grant. The achievement of the market vesting condition did not impact the compensation expense recognized during the period. As of June 30, 2020 , there were 4,343,852 performance-based restricted stock units (PSUs) outstanding with $79.7 million in related unrecognized compensation expense. Expense recognition for PSUs commences when it is determined that achievement of the performance target is probable. Of the outstanding PSUs, 237,945 relate to awards for which we achieved the performance target during 2019 or had determined during 2019 that it was probable that we would achieve the performance target during 2020. During the three months ended June 30, 2020, we determined that it had become probable that we would achieve an additional performance target for 98,653 additional PSUs granted during 2018 resulting in $0.9 million in compensation expense during the period. For more information about our PSUs, see “ Note 8. Employee Benefit Plans” of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019. |
Income Taxes
Income Taxes | 6 Months Ended |
Jul. 03, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Our effective income tax rate was 17.2% and 18.0% during the three and six months ended June 30, 2020 , respectively, as compared to 20.8% and 18.7% for the comparable periods in 2019 . The effective tax rate for the three and six months ended June 30, 2020 and 2019 differed from the U.S. federal statutory rate of 21% primarily due to excess tax benefits related to the exercise of certain stock options during the periods. |
Net Income Per Share
Net Income Per Share | 6 Months Ended |
Jul. 03, 2020 | |
Earnings Per Share [Abstract] | |
NET INCOME PER SHARE | NET INCOME PER SHARE Net income per share - basic and diluted, were computed as follows (in thousands, except per share amounts): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Numerator: Net income $ 66,821 $ 79,042 $ 115,433 $ 154,817 Denominator: Weighted-average common shares outstanding - basic 307,807 302,188 306,598 301,365 Dilutive securities 10,337 12,723 10,394 13,421 Weighted-average common shares outstanding - diluted 318,144 314,911 316,992 314,786 Net income per share - basic $ 0.22 $ 0.26 $ 0.38 $ 0.51 Net income per share - diluted $ 0.21 $ 0.25 $ 0.36 $ 0.49 Dilutive securities included stock options, RSUs, PSUs and ESPP contributions. Certain potential common shares were excluded from our calculation of weighted-average common shares outstanding - diluted because either they would have had an anti-dilutive effect on net income per share or they were related to shares from PSOs and PSUs for which the contingent vesting condition had not been achieved. These excluded potential common shares were as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Anti-dilutive securities and contingently issuable shares excluded 8,812 5,935 10,413 5,625 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jul. 03, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES In September 2019, we received a notice letter regarding an Abbreviated New Drug Application (ANDA) submitted to the FDA by MSN Pharmaceuticals, Inc. (MSN), requesting approval to market a generic version of CABOMETYX tablets. MSN’s initial notice letter included a Paragraph IV certification with respect to our U.S. Patent Nos. 8,877,776, 9,724,342, 10,034,873 and 10,039,757, which are listed in the Approved Drug Products with Therapeutic Equivalence Evaluations, also referred to as the Orange Book. MSN’s initial notice letter did not provide a Paragraph IV certification against U.S. Patent No. 7,579,473, the composition of matter patent, or U.S. Patent No. 8,497,284, a method of use patent. On October 29, 2019, we filed a complaint in the United States District Court for the District of Delaware for patent infringement against MSN asserting U.S. Patent No. 8,877,776 arising from MSN’s ANDA filing with the FDA. On November 20, 2019, MSN filed its response to the complaint, alleging that U.S. Patent No. 8,877,776 is invalid and not infringed. On May 5, 2020, we received notice from MSN that it had amended its ANDA to assert additional Paragraph IV certifications. The ANDA now requests approval to market a generic version of CABOMETYX tablets prior to expiration of the two previously-unasserted CABOMETYX patents: U.S. Patent No. 7,579,473 and U.S. Patent No. 8,497,284. On May 11, 2020, we filed a complaint in the United States District Court for the District of Delaware for patent infringement against MSN asserting U.S. Patent No. 7,579,473 and U.S. Patent No. 8,497,284 arising from MSN’s amended ANDA filing with the FDA. On May 22, 2020, MSN filed its response to the complaint, alleging that each of U.S. Patent No. 7,579,473 and U.S. Patent No. 8,497,284 is invalid and not infringed. Neither of our complaints alleges infringement of U.S. Patent Nos. 9,724,342, 10,034,873 and 10,039,757. In our complaints, we are seeking, among other relief, an order that the effective date of any FDA approval of the ANDA would be a date no earlier than the expiration of all of U.S. Patent No. 7,579,473, U.S. Patent No. 8,497,284 and U.S. Patent No. 8,877,776, the latest of which expires on October 8, 2030, and equitable relief enjoining MSN from infringing these patents. These two lawsuits against MSN have been consolidated, and a bench trial has been scheduled for May 2022 . The sale of a generic version of CABOMETYX earlier than its patent expiration could significantly decrease our revenues and thereby materially harm our business, financial condition and results of operations. It is not possible at this time to determine the likelihood of an unfavorable outcome or estimate of the amount or range of any potential loss. We may also from time to time become a party or subject to various other legal proceedings and claims, either asserted or unasserted, which arise in the ordinary course of business. Some of these proceedings have involved, and may involve in the future, claims that are subject to substantial uncertainties and unascertainable damages. |
Organization and Summary of S_2
Organization and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jul. 03, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Consolidation | The accompanying Condensed Consolidated Financial Statements include the accounts of Exelixis and those of our wholly-owned subsidiaries. These entities’ functional currency is the U.S. dollar. All intercompany balances and transactions have been eliminated. |
Basis of Presentation | The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the U.S. for interim financial information and pursuant to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (SEC). Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In our opinion, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of our financial statements for the periods presented have been included. Operating results for the three and six months ended June 30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020 or for any future period. The accompanying Condensed Consolidated Financial Statements and Notes thereto should be read in conjunction with our Consolidated Financial Statements and Notes thereto for the year ended December 31, 2019 , included in our Annual Report on Form 10-K filed with the SEC on February 25, 2020 . |
Fiscal Period | We have adopted a 52- or 53-week fiscal year policy that generally ends on the Friday closest to December 31 st . Fiscal year 2020, which is a 52-week fiscal year, will end on January 1, 2021 and fiscal year 2019, which was a 53-week fiscal year, ended on January 3, 2020. For convenience, references in this report as of and for the fiscal periods ended July 3, 2020 and June 28, 2019, and as of and for the fiscal years ending January 1, 2021, and ended January 3, 2020, are indicated as being as of and for the fiscal periods ended June 30, 2020 and June 30, 2019 and the years ending December 31, 2020 and ended December 31, 2019, respectively. Similarly, references in this report to the first day of the fiscal year ending January 1, 2021 are indicated as being as of January 1, 2020. |
Reclassifications | Certain prior period amounts in the accompanying Condensed Consolidated Financial Statements have been reclassified to conform to the current period presentation. Such reclassifications did not impact previously reported total revenues, i ncome from operations , net income, total assets, total liabilities or total stockholders’ equity. |
Segment Information | We operate in one business segment that focuses on the discovery, development and commercialization of new medicines for difficult-to-treat cancers . Our Chief Executive Officer, as the chief operating decision-maker, manages and allocates resources to our operations on a total consolidated basis. Consistent with this decision-making process, our Chief Executive Officer uses consolidated, single-segment financial information for purposes of evaluating performance, forecasting future period financial results, allocating resources and setting incentive targets. |
Use of Estimates | The preparation of the accompanying Condensed Consolidated Financial Statements conforms to accounting principles generally accepted in the U.S., which requires management to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities, equity, revenues and expenses, and related disclosures. We base our estimates on historical experience and on various other market-specific and other relevant assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ materially from those estimates. |
Recently Adopted Accounting Pronouncements and Recent Accounting Pronouncements Not Yet Adopted | Recently Adopted Accounting Pronouncements On January 1, 2020, we adopted Accounting Standards Update (ASU) No. 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606 (ASU 2018-18). ASU 2018-18 clarifies that certain transactions between collaborative arrangement participants should be accounted for as part of revenues under Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers (Topic 606) when the counterparty is a customer for a distinct good or service (i.e. a unit of account). For units of account that are in the scope of Topic 606, all of the guidance in Topic 606 should be applied, including the guidance on recognition, measurement, presentation and disclosure. ASU 2018-18 precludes entities from presenting amounts related to transactions with a counterparty in a collaborative arrangement that is not a customer as revenue from contracts with customers. If a portion of a distinct bundle of goods or services within an arrangement is not with a customer, then the unit of account is not within the scope of Topic 606, and the recognition and measurement of that unit of account shall be based on analogy to authoritative accounting literature or, if there is no appropriate analogy, a reasonable, rational, and consistently applied accounting policy election. Upon adoption of ASU 2018-18, we have presented revenues from performance obligations associated with our collaboration arrangements that are within the scope of Topic 606 (license revenues) separately from revenues from performance obligations that are not subject to Topic 606 (collaboration services revenues). The adoption of ASU 2018-18 was applied retrospectively, and prior periods have been restated to conform to the presentation prescribed by ASU 2018-18. The adoption of ASU 2018-18 did not impact total revenues for the prior period presented in the accompanying Condensed Consolidated Statements of Income. On January 1, 2020, we adopted ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (ASU 2017-04) . ASU 2017-04 simplifies goodwill impairment testing by eliminating the second step of the impairment test. The amended guidance requires an impairment charge to be recognized for the amount by which the carrying amount of a reporting unit exceeds its fair value under a one-step impairment test. The adoption of ASU 2017-04 did not impact the accompanying Condensed Consolidated Financial Statements. On January 1, 2020, we adopted ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326) (ASU 2016-13) . ASU 2016-13 implements an impairment model, known as the current expected credit loss model, that is based on expected losses rather than incurred losses. Under the new guidance, we will recognize our estimate of current expected credit losses as an allowance on financial assets measured at amortized cost, including accounts receivable, unbilled collaboration revenues, and investments classified as available for sale. Current expected credit losses were immaterial as of the date of adoption, and the adoption of ASU 2016-13 did not have a significant impact on the accompanying Condensed Consolidated Financial Statements. Investment Impairment Quarterly, we assess each of our investments in debt securities available-for-sale whose fair value is below its cost basis to determine if the investment’s impairment is due to credit-related factors or noncredit-related factors. Factors considered in determining whether an impairment is credit-related include the extent to which the investment’s fair value is less than its cost basis, declines in published credit ratings, issuer default on interest or principal payments, and declines in the financial condition and near-term prospects of the issuer. If we determine a credit-related impairment exists, we will measure the credit loss based on a discounted cash flows model. Credit-related impairments on debt securities available-for-sale are recognized as an allowance for credit losses with a corresponding adjustment to o ther income, net in the accompanying Condensed Consolidated Statements of Income. The portion of the impairment that is not credit-related is recorded, net of applicable taxes, as a reduction of other comprehensive income. We have elected to exclude accrued interest from both the fair value and the amortized cost basis of debt securities available-for-sale for the purposes of identifying and measuring an impairment. We write-off accrued interest as a reduction of interest income when an issuer has defaulted on interest payments due on a security. Accounts Receivable Trade receivables, net contain amounts billed to our customers for product sales, and amounts billed to our collaboration partners for development, regulatory and sales-based milestone payments, royalties on the sale of licensed products , profit-sharing arrangements, development cost reimbursements, and payments for product supply services . Our customers are primarily pharmaceutical and biotechnology companies that are located in the U.S., and collaboration partners that are located in Europe and Japan. We record trade receivables net of allowances for credit losses and chargebacks, and cash discounts for prompt payment. We apply an aging method to estimate credit losses and consider our historical loss information, adjusted to account for current conditions, and reasonable and supportable forecasts of future economic conditions affecting our customers . Goodwill We recorded goodwill amounts as the excess purchase price over tangible assets, liabilities and intangible assets acquired based on their estimated fair value. We review the carrying amount of goodwill for impairment annually and whenever events or changes in circumstance indicate that the carrying value may not be recoverable. We perform our annual assessment of the recoverability of our goodwill as of the first day of our fourth quarter. The assessment of recoverability may first consider qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of our reporting unit is less than its carrying amount. We perform a quantitative assessment if the qualitative assessment results in a more likely than not determination or if a qualitative assessment is not performed. The quantitative assessment determines whether the carrying amount of a reporting unit exceeds its fair value, in which case an impairment charge is recognized for the amount by which the carrying amount of a reporting unit exceeds its fair value, limited to the goodwill balance. We operate in one business segment, which is also considered to be our sole reporting unit and therefore, goodwill is tested for impairment at the enterprise level. We did no t recognize any impairment charges in any of the periods presented. Collaboration Agreements We assess whether our collaboration agreements are subject to ASC Topic 808, Collaborative Arrangements (Topic 808) based on whether they involve joint operating activities and whether both parties have active participation in the arrangement and are exposed to significant risks and rewards. To the extent that the arrangement falls within the scope of Topic 808, we apply the unit of account guidance under Topic 606 to identify distinct performance obligations, and then determine whether a customer relationship exists for each distinct performance obligation. If we determine a performance obligation within the arrangement is with a customer, we apply the guidance in Topic 606. If a portion of a distinct bundle of goods or services within an arrangement is not with a customer, then the unit of account is not within the scope of Topic 606 , and the recognition and measurement of that unit of account shall be based on analogy to authoritative accounting literature or, if there is no appropriate analogy, a reasonable, rational, and consistently applied accounting policy election. We enter into collaboration arrangements, under which we license certain rights to our intellectual property to third parties. The terms of these arrangements typically include payments to us for one or more of the following: non-refundable, up-front license fees; development, regulatory and sales-based milestone payments; product supply services; development cost reimbursements; profit-sharing arrangements; and royalties on net sales of licensed products. As part of the accounting for these arrangements, we develop assumptions that require judgment to determine the standalone selling price for each performance obligation identified in the contract. These key assumptions may include forecasted revenues, clinical development timelines and costs, reimbursement rates for personnel costs, discount rates and probabilities of technical and regulatory success. Up-front License Fees: If the license to our intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, we recognize revenues from nonrefundable, up-front fees allocated to the license when the license is transferred to the licensee and the licensee is able to use and benefit from the license, which happens at or near the inception of the contract. For licenses that are bundled with other promises, we utilize 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 revenues from non-refundable, up-front fees. We evaluate the measure of progress at the end of each reporting period and, if necessary, adjust the measure of performance and related revenue recognition. Regulatory and Development Milestone Payments: At the inception of each arrangement that includes development milestone payments, we evaluate whether the milestones are considered probable of being reached 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 associated milestone value is included in the transaction price. Milestone payments that are not within our or the licensee’s control, such as regulatory approvals, are not considered probable of being achieved until uncertainty associated with the approvals has been resolved. The transaction price is then allocated to each performance obligation, on a relative standalone selling price basis, for which we recognize revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, we re-evaluate the probability of achieving such development and regulatory milestones and any related constraint, and if necessary, adjust our estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis. Product Supply Services: Arrangements that include a promise for the future supply of drug product for either clinical development or commercial supply at the licensee’s discretion are generally considered as options. We assess if these options provide a material right to the licensee and if so, they are accounted for as separate performance obligations. Development Cost Reimbursements: Our collaboration arrangements may include promises of future clinical development and drug safety services, as well as participation on certain joint committees. When such services are provided to a customer, and they are distinct from the licenses provided to our collaboration partners, these promises are accounted for as a separate performance obligation which we estimate using internal development costs incurred and projections through the term of the arrangements. We record revenues for these services as the performance obligations are satisfied over time. However, if we conclude that our collaboration partner is not a customer for those collaborative research and development activities, we present such payments as a reduction of research and development expenses . Profit-sharing Arrangements: Under the terms of our collaboration agreement with Genentech for cobimetinib, we are entitled to a share of U.S. profits and losses received in connection with the commercialization of cobimetinib. We account for this arrangement in accordance with Topic 606. We have determined that we are an agent under the agreement and therefore revenues are recorded net of costs incurred. We record revenues for the variable consideration associated with the profits and losses under the collaboration agreement when it is probable that a significant reversal in the amount of cumulative revenues recognized will not occur. Royalty and Sales-based Milestone Payments: For arrangements that include royalties and sales-based milestone payments, including milestone payments earned for the first commercial sale of a product, the license is deemed to be the predominant item to which such payments relate and we recognize revenues at the later of when the related sales occur or when the performance obligation to which the royalty has been allocated has been satisfied. Recent Accounting Pronouncements Not Yet Adopted In December 2019, the Financial Accounting Standards Board issued ASU 2019-12, Income Taxes (Topic 740)-Simplifying the Accounting for Income Taxes (ASU 2019-12). ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions to the general principles in ASC Topic 740, Income Taxes and clarifying and amending existing guidance. ASU 2019-12 will be effective for us in the first quarter of 2021 with early adoption permitted. We are currently assessing the impact of ASU 2019-12 on our financial statements. |
Revenues | The allowance for chargebacks and discounts for prompt payment is recorded as a reduction of trade receivables, net and the remaining reserves are recorded as rebates and fees due to customers in the accompanying Condensed Consolidated Balance Sheets. Contract Assets and Liabilities We receive payments from our collaboration partners based on billing schedules established in each contract. Amounts are recorded as accounts receivable when our right to consideration is unconditional. We may also recognize revenues in advance of the contractual billing schedule and such amounts are recorded , net of any allowance for credit losses, as a contract asset when recognized. Contract assets, which are presented in prepaid expenses and other current assets in the accompanying Condensed Consolidated Balance Sheets, were $13.8 million and $1.1 million as of June 30, 2020 and December 31, 2019 , respectively. We may be required to defer recognition of revenues for upfront and milestone payments until we perform our obligations under these arrangements, and such amounts are recorded as deferred revenues upon receipt or when due. Contract liabilities were $16.3 million and $6.6 million as of June 30, 2020 and December 31, 2019 , respectively. The current portion of the contract liabilities totaling $1.3 million and $0 as of June 30, 2020 and December 31, 2019 , respectively, are presented in other current liabilities and the remainder of the contract liabilities are presented in long-term portion of deferred revenues as of those dates in the accompanying Condensed Consolidated Balance Sheets. For those contracts that have multiple performance obligations, contract assets and liabilities are reported on a net basis at the contract level. Net product revenues and license revenues are recorded in accordance with Topic 606. License revenues include the recognition of the portion of milestones payments allocated to the transfer of intellectual property licenses for which it had become probable in the current period that the milestone would be achieved and a significant reversal of revenues would not occur, as well as royalty revenues and our share of profits under our collaboration agreement with Genentech. Collaboration services revenues were recorded in accordance with Topic 808 and by analogy to Topic 606. Collaboration services revenues include the recognition of deferred revenues for the portion of upfront and milestone payments allocated to our research and development services performance obligations, development cost reimbursements earned under our collaboration agreements, product supply revenues, net of product supply costs, and the royalties we paid to GlaxoSmithKline (GSK) on sales of products containing cabozantinib by our collaboration partners. Net product revenues are attributed to geographic region based on the ship-to location. License and collaboration services revenues are attributed to geographic region based on the location of our collaboration partners’ headquarters. |
Revenues (Tables)
Revenues (Tables) | 6 Months Ended |
Jul. 03, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | Revenues consisted of the following (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Product revenues: Gross product revenues $ 229,898 $ 240,418 $ 482,464 $ 464,168 Discounts and allowances (51,168 ) (46,743 ) (109,854 ) (90,912 ) Net product revenues 178,730 193,675 372,610 373,256 Collaboration revenues: License revenues 59,234 37,742 80,113 63,306 Collaboration services revenues 21,515 8,858 33,671 19,200 Total collaboration revenues 80,749 46,600 113,784 82,506 Total revenues $ 259,479 $ 240,275 $ 486,394 $ 455,762 Net product revenues by product were as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 CABOMETYX $ 173,610 $ 189,015 $ 362,826 $ 364,905 COMETRIQ 5,120 4,660 9,784 8,351 Net product revenues $ 178,730 $ 193,675 $ 372,610 $ 373,256 The percentage of total revenues by customer who individually accounted for 10% or more of our total revenues were as follows: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Ipsen Pharma SAS (Ipsen) 20 % 9 % 17 % 10 % Affiliates of CVS Health Corporation 13 % 15 % 15 % 15 % Affiliates of McKesson Corporation 11 % 13 % 13 % 12 % Affiliates of AmerisourceBergen Corporation 11 % 10 % 11 % 10 % Affiliates of Optum Specialty Pharmacy 10 % 8 % 11 % 8 % Takeda Pharmaceutical Company Limited (Takeda) 10 % 1 % 5 % 3 % Accredo Health, Incorporated 10 % 8 % 9 % 9 % Revenues by geographic region were as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 U.S. $ 181,231 $ 196,347 $ 377,827 $ 378,473 Europe 52,917 22,249 81,953 44,117 Japan 25,331 21,679 26,614 33,172 Total revenues $ 259,479 $ 240,275 $ 486,394 $ 455,762 |
Schedule of Activities and Ending Reserve Balances for Significant Categories of Discounts and Allowances | The activities and ending reserve balances for each significant category of discounts and allowances, which constitute variable consideration, were as follows (in thousands): Chargebacks and Discounts for Prompt Payment Other Customer Credits/Fees and Co-pay Assistance Rebates Total Balance at December 31, 2019 $ 7,514 $ 3,497 $ 15,222 $ 26,233 Provision related to sales made in: Current period 72,874 8,339 28,226 109,439 Prior periods 39 (364 ) 740 415 Payments and customer credits issued (72,169 ) (9,111 ) (29,592 ) (110,872 ) Balance at June 30, 2020 $ 8,258 $ 2,361 $ 14,596 $ 25,215 |
Collaboration Agreements (Table
Collaboration Agreements (Tables) | 6 Months Ended |
Jul. 03, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Collaborative Revenues Under Collaboration Agreement | Revenues under the collaboration agreement with Ipsen were as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 License revenues $ 33,597 $ 14,946 $ 51,546 $ 28,909 Collaboration services revenues 19,320 7,303 30,407 15,208 Total $ 52,917 $ 22,249 $ 81,953 $ 44,117 Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Profits on U.S. commercialization $ 1,376 $ 1,349 $ 2,783 $ 2,404 Royalty revenues on ex-U.S. sales $ 1,125 $ 1,323 $ 2,434 $ 2,813 Revenues under the collaboration agreement with Takeda were as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 License revenues $ 22,946 $ — $ 22,946 $ 9,056 Collaboration services revenues 2,195 1,565 3,264 4,002 Total $ 25,141 $ 1,565 $ 26,210 $ 13,058 |
Cash and Investments (Tables)
Cash and Investments (Tables) | 6 Months Ended |
Jul. 03, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Reconciliation of Cash, Cash Equivalents, and Restricted Cash | A reconciliation of cash, cash equivalents, and restricted cash equivalents reported in the accompanying Condensed Consolidated Balance Sheets to the amount reported within the accompanying Condensed Consolidated Statements of Cash Flows was as follows (in thousands): June 30, 2020 December 31, 2019 Cash and cash equivalents $ 527,143 $ 266,501 Restricted cash equivalents included in long-term investments 1,636 1,636 Cash, cash equivalents, and restricted cash equivalents as reported in the accompanying Condensed Consolidated Statements of Cash Flows $ 528,779 $ 268,137 |
Schedule of Reconciliation of Cash, Cash Equivalents, and Restricted Cash | A reconciliation of cash, cash equivalents, and restricted cash equivalents reported in the accompanying Condensed Consolidated Balance Sheets to the amount reported within the accompanying Condensed Consolidated Statements of Cash Flows was as follows (in thousands): June 30, 2020 December 31, 2019 Cash and cash equivalents $ 527,143 $ 266,501 Restricted cash equivalents included in long-term investments 1,636 1,636 Cash, cash equivalents, and restricted cash equivalents as reported in the accompanying Condensed Consolidated Statements of Cash Flows $ 528,779 $ 268,137 |
Schedule of Investments by Security Type | Cash and investments consisted of the following (in thousands): June 30, 2020 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Debt securities available-for-sale: Commercial paper $ 239,685 $ 245 $ — $ 239,930 Corporate bonds 663,491 9,527 (150 ) 672,868 U.S. Treasury and government-sponsored enterprises 89,890 462 — 90,352 Municipal bonds 28,229 152 (1 ) 28,380 Total debt securities available-for-sale 1,021,295 10,386 (151 ) 1,031,530 Cash 52,053 — — 52,053 Money market funds 404,313 — — 404,313 Certificates of deposit 52,283 — — 52,283 Total cash and investments $ 1,529,944 $ 10,386 $ (151 ) $ 1,540,179 December 31, 2019 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Debt securities available-for-sale: Commercial paper $ 389,573 $ — $ — $ 389,573 Corporate bonds 752,295 3,934 (3 ) 756,226 U.S. Treasury and government-sponsored enterprises 166,483 187 (5 ) 166,665 Total debt securities available-for-sale 1,308,351 4,121 (8 ) 1,312,464 Cash 40,964 — — 40,964 Money market funds 2,467 — — 2,467 Certificates of deposit 32,728 5 — 32,733 Total cash and investments $ 1,384,510 $ 4,126 $ (8 ) $ 1,388,628 |
Schedule of Fair Value and Gross Unrealized Losses of Investments Available-for-Sale in an Unrealized Loss Position | The fair value and gross unrealized losses on debt securities available-for-sale in an unrealized loss position were as follows (in thousands): June 30, 2020 Fair Value Gross Unrealized Losses Corporate bonds $ 27,850 $ (150 ) U.S. Treasury and government-sponsored enterprises 4,997 — Municipal bonds 2,471 (1 ) Total $ 35,318 $ (151 ) December 31, 2019 Fair Value Gross Unrealized Losses Corporate bonds $ 14,529 $ (3 ) U.S. Treasury and government-sponsored enterprises 2,848 (5 ) Total $ 17,377 $ (8 ) |
Schedule of Fair Value of Cash Equivalents and Investments by Contractual Maturity | The fair value of debt securities available-for-sale by contractual maturity was as follows (in thousands): June 30, 2020 December 31, 2019 Maturing in one year or less $ 720,089 $ 789,913 Maturing after one year through five years 311,441 522,551 Total debt securities available-for-sale $ 1,031,530 $ 1,312,464 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jul. 03, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Classification of Financial Assets Measured and Recorded at Fair Value on a Recurring Basis | The classifications within the fair value hierarchy of our financial assets that were measured and recorded at fair value on a recurring basis were as follows (in thousands): June 30, 2020 Level 1 Level 2 Total Commercial paper $ — $ 239,930 $ 239,930 Corporate bonds — 672,868 672,868 U.S. Treasury and government-sponsored enterprises — 90,352 90,352 Municipal bonds — 28,380 28,380 Total debt securities available-for-sale — 1,031,530 1,031,530 Money market funds 404,313 — 404,313 Certificates of deposit — 52,283 52,283 Total financial assets carried at fair value $ 404,313 $ 1,083,813 $ 1,488,126 December 31, 2019 Level 1 Level 2 Total Commercial paper $ — $ 389,573 $ 389,573 Corporate bonds — 756,226 756,226 U.S. Treasury and government-sponsored enterprises — 166,665 166,665 Total debt securities available-for-sale — 1,312,464 1,312,464 Money market funds 2,467 — 2,467 Certificates of deposit — 32,733 32,733 Total financial assets carried at fair value $ 2,467 $ 1,345,197 $ 1,347,664 |
Inventory (Tables)
Inventory (Tables) | 6 Months Ended |
Jul. 03, 2020 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventory consisted of the following (in thousands): June 30, 2020 December 31, 2019 Raw materials $ 1,876 $ 2,709 Work in process 15,275 9,447 Finished goods 5,086 4,367 Total $ 22,237 $ 16,523 Balance Sheet classification: Current portion included in inventory $ 16,608 $ 12,886 Long-term portion included in other long-term assets 5,629 3,637 Total $ 22,237 $ 16,523 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jul. 03, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Allocated Employee Stock-Based Compensation Expense | We allocated the stock-based compensation expense for our equity incentive plans and our 2000 Employee Stock Purchase Plan (ESPP) as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Research and development $ 6,112 $ 5,138 $ 11,198 $ 9,444 Selling, general and administrative 10,042 9,941 18,938 18,164 Total stock-based compensation $ 16,154 $ 15,079 $ 30,136 $ 27,608 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 6 Months Ended |
Jul. 03, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic and Diluted Net Income Per Share | Net income per share - basic and diluted, were computed as follows (in thousands, except per share amounts): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Numerator: Net income $ 66,821 $ 79,042 $ 115,433 $ 154,817 Denominator: Weighted-average common shares outstanding - basic 307,807 302,188 306,598 301,365 Dilutive securities 10,337 12,723 10,394 13,421 Weighted-average common shares outstanding - diluted 318,144 314,911 316,992 314,786 Net income per share - basic $ 0.22 $ 0.26 $ 0.38 $ 0.51 Net income per share - diluted $ 0.21 $ 0.25 $ 0.36 $ 0.49 |
Schedule of Potential Shares of Common Stock Not Included in the Computation of Diluted Net Income (Loss) Per Share | These excluded potential common shares were as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Anti-dilutive securities and contingently issuable shares excluded 8,812 5,935 10,413 5,625 |
Organization and Summary of S_3
Organization and Summary of Significant Accounting Policies (Details) | 3 Months Ended | 6 Months Ended | ||||
Jul. 03, 2020USD ($) | Apr. 03, 2020USD ($) | Jun. 28, 2019USD ($) | Jul. 03, 2020USD ($)segmentproduct$ / shares | Jun. 28, 2019USD ($) | Jan. 03, 2020USD ($) | |
Organization And Summary Of Significant Policies [Line Items] | ||||||
Number of business segments | segment | 1 | |||||
Selling, general and administrative | $ 59,791,000 | $ 58,815,000 | $ 122,731,000 | $ 118,953,000 | ||
Branded prescription drug fee, accrual | 15,100,000 | 15,100,000 | $ 6,000,000 | |||
Branded prescription drug fee, accrual, current | 8,600,000 | 8,600,000 | 4,400,000 | |||
Branded prescription drug fee, accrual, noncurrent | $ 6,500,000 | 6,500,000 | $ 1,600,000 | |||
Goodwill impairment | $ 0 | |||||
Resulting from discovery efforts | ||||||
Organization And Summary Of Significant Policies [Line Items] | ||||||
Number of products that entered in the commercial marketplace | product | 4 | |||||
Products derived from cabozantinib | ||||||
Organization And Summary Of Significant Policies [Line Items] | ||||||
Number of products that entered in the commercial marketplace | product | 2 | |||||
Products derived from other compounds | ||||||
Organization And Summary Of Significant Policies [Line Items] | ||||||
Number of products that entered in the commercial marketplace | product | 2 | |||||
New information | ||||||
Organization And Summary Of Significant Policies [Line Items] | ||||||
Selling, general and administrative | $ 5,400,000 | |||||
Decrease in earnings per share due to change in accounting estimate (USD per share) | $ / shares | $ 0.02 |
Revenues - Revenues by Disaggre
Revenues - Revenues by Disaggregated Category (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 03, 2020 | Jun. 28, 2019 | Jul. 03, 2020 | Jun. 28, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | $ 259,479 | $ 240,275 | $ 486,394 | $ 455,762 |
Revenues | 259,479 | 240,275 | 486,394 | 455,762 |
Net product revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | 178,730 | 193,675 | 372,610 | 373,256 |
Gross product revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | 229,898 | 240,418 | 482,464 | 464,168 |
Discounts and allowances | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | (51,168) | (46,743) | (109,854) | (90,912) |
Total collaboration revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 80,749 | 46,600 | 113,784 | 82,506 |
License revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | 59,234 | 37,742 | 80,113 | 63,306 |
Collaboration services revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue not from contract with customer | $ 21,515 | $ 8,858 | $ 33,671 | $ 19,200 |
Revenues - Net Product Revenues
Revenues - Net Product Revenues Disaggregated by Product (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 03, 2020 | Jun. 28, 2019 | Jul. 03, 2020 | Jun. 28, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Net product revenues | $ 259,479 | $ 240,275 | $ 486,394 | $ 455,762 |
Net product revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Net product revenues | 178,730 | 193,675 | 372,610 | 373,256 |
CABOMETYX | ||||
Disaggregation of Revenue [Line Items] | ||||
Net product revenues | 173,610 | 189,015 | 362,826 | 364,905 |
COMETRIQ | ||||
Disaggregation of Revenue [Line Items] | ||||
Net product revenues | $ 5,120 | $ 4,660 | $ 9,784 | $ 8,351 |
Revenues - Revenues Disaggregat
Revenues - Revenues Disaggregated by Significant Customer (Details) - Revenue - Customer Concentration Risk | 3 Months Ended | 6 Months Ended | ||
Jul. 03, 2020 | Jun. 28, 2019 | Jul. 03, 2020 | Jun. 28, 2019 | |
Ipsen Pharma SAS (Ipsen) | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Percent of total revenues | 20.00% | 9.00% | 17.00% | 10.00% |
Affiliates of CVS Health Corporation | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Percent of total revenues | 13.00% | 15.00% | 15.00% | 15.00% |
Affiliates of McKesson Corporation | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Percent of total revenues | 11.00% | 13.00% | 13.00% | 12.00% |
Affiliates of AmerisourceBergen Corporation | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Percent of total revenues | 11.00% | 10.00% | 11.00% | 10.00% |
Affiliates of Optum Specialty Pharmacy | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Percent of total revenues | 10.00% | 8.00% | 11.00% | 8.00% |
Takeda Pharmaceutical Company Limited (Takeda) | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Percent of total revenues | 10.00% | 1.00% | 5.00% | 3.00% |
Accredo Health, Incorporated | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Percent of total revenues | 10.00% | 8.00% | 9.00% | 9.00% |
Revenues - Revenues Disaggreg_2
Revenues - Revenues Disaggregated by Geographic Region (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 03, 2020 | Jun. 28, 2019 | Jul. 03, 2020 | Jun. 28, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | $ 259,479 | $ 240,275 | $ 486,394 | $ 455,762 |
U.S. | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | 181,231 | 196,347 | 377,827 | 378,473 |
Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | 52,917 | 22,249 | 81,953 | 44,117 |
Japan | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customer | $ 25,331 | $ 21,679 | $ 26,614 | $ 33,172 |
Revenues - Activities and Endin
Revenues - Activities and Ending Reserve Balances for Significant Categories of Discounts and Allowances (Details) $ in Thousands | 6 Months Ended |
Jul. 03, 2020USD ($) | |
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |
Balance at December 31, 2019 | $ 26,233 |
Provision related to sales made in: | |
Current period | 109,439 |
Prior periods | 415 |
Payments and customer credits issued | (110,872) |
Balance at June 30, 2020 | 25,215 |
Chargebacks and Discounts for Prompt Payment | |
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |
Balance at December 31, 2019 | 7,514 |
Provision related to sales made in: | |
Current period | 72,874 |
Prior periods | 39 |
Payments and customer credits issued | (72,169) |
Balance at June 30, 2020 | 8,258 |
Other Customer Credits/Fees and Co-pay Assistance | |
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |
Balance at December 31, 2019 | 3,497 |
Provision related to sales made in: | |
Current period | 8,339 |
Prior periods | (364) |
Payments and customer credits issued | (9,111) |
Balance at June 30, 2020 | 2,361 |
Rebates | |
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |
Balance at December 31, 2019 | 15,222 |
Provision related to sales made in: | |
Current period | 28,226 |
Prior periods | 740 |
Payments and customer credits issued | (29,592) |
Balance at June 30, 2020 | $ 14,596 |
Revenues - Contract Assets and
Revenues - Contract Assets and Liabilities (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jul. 03, 2020 | Jun. 28, 2019 | Jul. 03, 2020 | Jun. 28, 2019 | Jan. 03, 2020 | |
Disaggregation of Revenue [Line Items] | |||||
Contract assets | $ 13.8 | $ 13.8 | $ 1.1 | ||
Contract with customer, liability | 16.3 | 16.3 | 6.6 | ||
Contract with customer, liability, current | 1.3 | 1.3 | $ 0 | ||
Amount of revenues recognized included in the beginning contract liability balance | 3.4 | $ 1.8 | |||
Revenues recognized for performance obligations satisfied in previous periods | 62 | $ 36.1 | 82.2 | $ 61.4 | |
Remaining performance obligation | 71.4 | 71.4 | |||
Takeda | |||||
Disaggregation of Revenue [Line Items] | |||||
Reduction related to a milestone | $ 10 | $ 10 |
Collaboration Agreements - Coll
Collaboration Agreements - Collaboration Revenues under the Collaboration Agreement with Ipsen (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 03, 2020 | Jun. 28, 2019 | Jul. 03, 2020 | Jun. 28, 2019 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Revenue from contract with customer | $ 259,479 | $ 240,275 | $ 486,394 | $ 455,762 |
Revenues | 259,479 | 240,275 | 486,394 | 455,762 |
Collaborative Arrangement with Ipsen | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Revenues | 52,917 | 22,249 | 81,953 | 44,117 |
License revenues | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Revenue from contract with customer | 59,234 | 37,742 | 80,113 | 63,306 |
License revenues | Collaborative Arrangement with Ipsen | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Revenue from contract with customer | 33,597 | 14,946 | 51,546 | 28,909 |
Collaboration services revenues | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Revenue not from contract with customer | 21,515 | 8,858 | 33,671 | 19,200 |
Collaboration services revenues | Collaborative Arrangement with Ipsen | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Revenue not from contract with customer | $ 19,320 | $ 7,303 | $ 30,407 | $ 15,208 |
Collaboration Agreements - Ipse
Collaboration Agreements - Ipsen Collaboration (Details) $ in Millions | 3 Months Ended | 6 Months Ended |
Jul. 03, 2020USD ($) | Jul. 03, 2020USD ($) | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Remaining performance obligation | $ 71.4 | $ 71.4 |
Collaborative Arrangement with Ipsen | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Milestone payments earned | 18.8 | 18.8 |
Eligible payment from collaboration for development and regulatory milestone achievement under collaborations agreement | 20 | 20 |
Remaining performance obligation | $ 46.2 | $ 46.2 |
Collaboration Agreements - Co_2
Collaboration Agreements - Collaboration Revenues under the Collaboration Agreement with Takeda (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 03, 2020 | Jun. 28, 2019 | Jul. 03, 2020 | Jun. 28, 2019 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Revenue from contract with customer | $ 259,479 | $ 240,275 | $ 486,394 | $ 455,762 |
Revenues | 259,479 | 240,275 | 486,394 | 455,762 |
Collaborative Arrangement with Takeda | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Revenues | 25,141 | 1,565 | 26,210 | 13,058 |
License revenues | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Revenue from contract with customer | 59,234 | 37,742 | 80,113 | 63,306 |
License revenues | Collaborative Arrangement with Takeda | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Revenue from contract with customer | 22,946 | 0 | 22,946 | 9,056 |
Collaboration services revenues | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Revenue not from contract with customer | 21,515 | 8,858 | 33,671 | 19,200 |
Collaboration services revenues | Collaborative Arrangement with Takeda | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Revenue not from contract with customer | $ 2,195 | $ 1,565 | $ 3,264 | $ 4,002 |
Collaboration Agreements - Take
Collaboration Agreements - Takeda Collaboration (Details) $ in Millions | 3 Months Ended | 6 Months Ended |
Jul. 03, 2020USD ($) | Jul. 03, 2020USD ($) | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Remaining performance obligation | $ 71.4 | $ 71.4 |
Collaborative Arrangement with Takeda | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Milestone payments earned | 23.7 | 23.7 |
Eligible payment from collaboration for development and regulatory milestone achievement under collaborations agreement | 31 | 31 |
Remaining performance obligation | $ 25.1 | $ 25.1 |
Collaboration Agreements - GSK
Collaboration Agreements - GSK (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 03, 2020 | Jun. 28, 2019 | Jul. 03, 2020 | Jun. 28, 2019 | |
Collaboration Agreement with GlaxoSmithKline | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Royalty expense | $ 7.6 | $ 7.8 | $ 15.7 | $ 15.1 |
GSK | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Percent of royalty on net sale | 3.00% |
Collaboration Agreements - Roya
Collaboration Agreements - Royalty Revenues under the Collaboration Agreement with Genentech (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 03, 2020 | Jun. 28, 2019 | Jul. 03, 2020 | Jun. 28, 2019 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Royalty revenues on ex-U.S. sales | $ 259,479 | $ 240,275 | $ 486,394 | $ 455,762 |
Cotellic | Collaborative Arrangement with Genentech | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Profits on U.S. commercialization | 1,376 | 1,349 | 2,783 | 2,404 |
Royalty revenues on ex-U.S. sales | $ 1,125 | $ 1,323 | $ 2,434 | $ 2,813 |
Cash and Investments - Reconcil
Cash and Investments - Reconciliation of Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands | Jul. 03, 2020 | Jan. 03, 2020 | Jun. 28, 2019 | Dec. 28, 2018 |
Cash and Cash Equivalents [Abstract] | ||||
Cash and cash equivalents | $ 527,143 | $ 266,501 | ||
Restricted cash equivalents included in long-term investments | 1,636 | 1,636 | ||
Cash, cash equivalents, and restricted cash equivalents as reported in the accompanying Condensed Consolidated Statements of Cash Flows | $ 528,779 | $ 268,137 | $ 370,889 | $ 315,875 |
Cash and Investments - Investme
Cash and Investments - Investments by Security Type (Details) - USD ($) $ in Thousands | Jul. 03, 2020 | Jan. 03, 2020 |
Debt Securities, Available-for-sale [Line Items] | ||
Investments, available-for-sale, amortized cost | $ 1,021,295 | $ 1,308,351 |
Investments available-for-sale, gross unrealized gains | 10,386 | 4,121 |
Investments available-for-sale, gross unrealized losses | (151) | (8) |
Investments available-for-sale, fair value | 1,031,530 | 1,312,464 |
Cash, cash equivalents, restricted cash and restricted cash equivalents and available-for-sale debt securities, amortized cost | 1,529,944 | 1,384,510 |
Cash, cash equivalents, restricted cash and restricted cash equivalents and available-for-sale debt securities, gross unrealized gains | 10,386 | 4,126 |
Cash, cash equivalents, restricted cash and restricted cash equivalents and available-for-sale debt securities, gross unrealized losses | (151) | (8) |
Cash, cash equivalents, restricted cash and restricted cash equivalents and available-for-sale debt securities | 1,540,179 | 1,388,628 |
Commercial paper | ||
Debt Securities, Available-for-sale [Line Items] | ||
Investments, available-for-sale, amortized cost | 239,685 | 389,573 |
Investments available-for-sale, gross unrealized gains | 245 | 0 |
Investments available-for-sale, gross unrealized losses | 0 | 0 |
Investments available-for-sale, fair value | 239,930 | 389,573 |
Corporate bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Investments, available-for-sale, amortized cost | 663,491 | 752,295 |
Investments available-for-sale, gross unrealized gains | 9,527 | 3,934 |
Investments available-for-sale, gross unrealized losses | (150) | (3) |
Investments available-for-sale, fair value | 672,868 | 756,226 |
U.S. Treasury and government-sponsored enterprises | ||
Debt Securities, Available-for-sale [Line Items] | ||
Investments, available-for-sale, amortized cost | 89,890 | 166,483 |
Investments available-for-sale, gross unrealized gains | 462 | 187 |
Investments available-for-sale, gross unrealized losses | 0 | (5) |
Investments available-for-sale, fair value | 90,352 | 166,665 |
Municipal bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Investments, available-for-sale, amortized cost | 28,229 | |
Investments available-for-sale, gross unrealized gains | 152 | |
Investments available-for-sale, gross unrealized losses | (1) | |
Investments available-for-sale, fair value | 28,380 | |
Cash | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cash, cash equivalents, restricted cash and restricted cash equivalents, amortized cost | 52,053 | 40,964 |
Cash, cash equivalents, restricted cash and restricted cash equivalents, gross unrealized gain | 0 | 0 |
Cash, cash equivalents, restricted cash and restricted cash equivalents, gross unrealized loss | 0 | 0 |
Cash, cash equivalents, restricted cash and restricted cash equivalents | 52,053 | 40,964 |
Money market funds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cash, cash equivalents, restricted cash and restricted cash equivalents, amortized cost | 404,313 | 2,467 |
Cash, cash equivalents, restricted cash and restricted cash equivalents, gross unrealized gain | 0 | 0 |
Cash, cash equivalents, restricted cash and restricted cash equivalents, gross unrealized loss | 0 | 0 |
Cash, cash equivalents, restricted cash and restricted cash equivalents | 404,313 | 2,467 |
Certificates of deposit | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cash, cash equivalents, restricted cash and restricted cash equivalents, amortized cost | 52,283 | 32,728 |
Cash, cash equivalents, restricted cash and restricted cash equivalents, gross unrealized gain | 0 | 5 |
Cash, cash equivalents, restricted cash and restricted cash equivalents, gross unrealized loss | 0 | 0 |
Cash, cash equivalents, restricted cash and restricted cash equivalents | $ 52,283 | $ 32,733 |
Cash and Investments - Narrativ
Cash and Investments - Narrative (Details) | 3 Months Ended | 6 Months Ended | |||
Jul. 03, 2020USD ($)investment | Jun. 28, 2019USD ($) | Jul. 03, 2020USD ($)investment | Jun. 28, 2019USD ($) | Jan. 03, 2020USD ($)investment | |
Investments, Debt and Equity Securities [Abstract] | |||||
Interest receivable | $ 5,300,000 | $ 5,300,000 | $ 6,200,000 | ||
Gain (loss) on sales of investments available-for-sale | $ 0 | $ 0 | $ 0 | $ 0 | |
Number of investments in an unrealized loss position | investment | 17 | 17 | 9 | ||
Allowance for credit losses | $ 0 | $ 0 | $ 0 | $ 0 |
Cash and Investments - Fair Val
Cash and Investments - Fair Value and Gross Unrealized Losses of Investments Available-for-Sale in an Unrealized Loss Position (Details) - USD ($) $ in Thousands | Jul. 03, 2020 | Jan. 03, 2020 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Fair Value | $ 35,318 | $ 17,377 |
Gross Unrealized Losses | (151) | (8) |
Corporate bonds | ||
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Fair Value | 27,850 | 14,529 |
Gross Unrealized Losses | (150) | (3) |
U.S. Treasury and government-sponsored enterprises | ||
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Fair Value | 4,997 | 2,848 |
Gross Unrealized Losses | 0 | $ (5) |
Municipal bonds | ||
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Fair Value | 2,471 | |
Gross Unrealized Losses | $ (1) |
Cash and Investments - Fair V_2
Cash and Investments - Fair Value of Cash Equivalents and Investments by Contractual Maturity (Details) - USD ($) $ in Thousands | Jul. 03, 2020 | Jan. 03, 2020 |
Investments, Debt and Equity Securities [Abstract] | ||
Maturing in one year or less | $ 720,089 | $ 789,913 |
Maturing after one year through five years | 311,441 | 522,551 |
Total debt securities available-for-sale | $ 1,031,530 | $ 1,312,464 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Jul. 03, 2020 | Jan. 03, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments available-for-sale | $ 1,031,530 | $ 1,312,464 |
Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments available-for-sale | 1,031,530 | 1,312,464 |
Total financial assets carried at fair value | 1,488,126 | 1,347,664 |
Level 1 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments available-for-sale | 0 | 0 |
Total financial assets carried at fair value | 404,313 | 2,467 |
Level 2 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments available-for-sale | 1,031,530 | 1,312,464 |
Total financial assets carried at fair value | 1,083,813 | 1,345,197 |
Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments available-for-sale | 239,930 | 389,573 |
Commercial paper | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments available-for-sale | 239,930 | 389,573 |
Commercial paper | Level 1 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments available-for-sale | 0 | 0 |
Commercial paper | Level 2 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments available-for-sale | 239,930 | 389,573 |
Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments available-for-sale | 672,868 | 756,226 |
Corporate bonds | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments available-for-sale | 672,868 | 756,226 |
Corporate bonds | Level 1 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments available-for-sale | 0 | 0 |
Corporate bonds | Level 2 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments available-for-sale | 672,868 | 756,226 |
U.S. Treasury and government-sponsored enterprises | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments available-for-sale | 90,352 | 166,665 |
U.S. Treasury and government-sponsored enterprises | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments available-for-sale | 90,352 | 166,665 |
U.S. Treasury and government-sponsored enterprises | Level 1 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments available-for-sale | 0 | 0 |
U.S. Treasury and government-sponsored enterprises | Level 2 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments available-for-sale | 90,352 | 166,665 |
Municipal bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments available-for-sale | 28,380 | |
Municipal bonds | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments available-for-sale | 28,380 | |
Municipal bonds | Level 1 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments available-for-sale | 0 | |
Municipal bonds | Level 2 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total investments available-for-sale | 28,380 | |
Money market funds | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 404,313 | 2,467 |
Money market funds | Level 1 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 404,313 | 2,467 |
Money market funds | Level 2 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Certificates of deposit | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 52,283 | 32,733 |
Certificates of deposit | Level 1 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Certificates of deposit | Level 2 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | $ 52,283 | $ 32,733 |
Inventory (Details)
Inventory (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jul. 03, 2020 | Jun. 28, 2019 | Jan. 03, 2020 | |
Inventory [Line Items] | |||
Raw materials | $ 1,876 | $ 2,709 | |
Work in process | 15,275 | 9,447 | |
Finished goods | 5,086 | 4,367 | |
Total | 22,237 | 16,523 | |
Inventory write-down | 1,300 | $ 400 | |
Current portion included in inventory | |||
Inventory [Line Items] | |||
Total | 16,608 | 12,886 | |
Long-term portion included in other long-term assets | |||
Inventory [Line Items] | |||
Total | $ 5,629 | $ 3,637 |
Stock-Based Compensation - Allo
Stock-Based Compensation - Allocated Employee Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 03, 2020 | Jun. 28, 2019 | Jul. 03, 2020 | Jun. 28, 2019 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation | $ 16,154 | $ 15,079 | $ 30,136 | $ 27,608 |
Research and development | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation | 6,112 | 5,138 | 11,198 | 9,444 |
Selling, general and administrative | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation | $ 10,042 | $ 9,941 | $ 18,938 | $ 18,164 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | May 20, 2020 | Jul. 03, 2020 | Jun. 28, 2019 | Jul. 03, 2020 | Jun. 28, 2019 | Dec. 28, 2018 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based compensation arrangement by share-based payment award, number of shares available for grant (in shares) | 25,749,356 | 25,749,356 | ||||
Reduction in share reserve after stock option or stock appreciation award (in shares) | 1 | |||||
Reduction in share reserve after all other awards (in shares) | 1.5 | |||||
Increase in share reserve under 2017 plan (in shares) | 21,000,000 | |||||
Options granted in the period (in shares) | 839,318 | |||||
Options granted in the period (in dollars per share) | $ 21.40 | |||||
Weighted average grant-date fair value (in dollars per share) | $ 9.74 | |||||
Options outstanding (in shares) | 16,655,274 | 16,655,274 | ||||
Stock-based compensation | $ 16,154 | $ 15,079 | $ 30,136 | $ 27,608 | ||
Stock Options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Unrecognized compensation expense | 30,300 | 30,300 | ||||
RSUs | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Unrecognized compensation expense | $ 75,100 | $ 75,100 | ||||
RSUs awarded (in shares) | 889,023 | |||||
Weighted average grant date fair value, awarded (in dollars per share) | $ 21.43 | |||||
Number of awards outstanding (in shares) | 4,774,852 | 4,774,852 | ||||
Performance Share Options (PSO) | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Options granted in the period (in shares) | 308,365 | |||||
Share-based compensation arrangement by share-based payment award, options, percent of common stock share price triggering PSO exercises | 125.00% | |||||
Performance Shares | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Unrecognized compensation expense | $ 79,700 | $ 79,700 | ||||
Number of awards outstanding (in shares) | 4,343,852 | 4,343,852 | ||||
Stock-based compensation | $ 900 | |||||
Performance Shares | Achieved | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of awards outstanding (in shares) | 237,945 | 237,945 | ||||
Performance Shares | Probable | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of awards outstanding (in shares) | 98,653 | 98,653 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | 6 Months Ended | ||
Jul. 03, 2020 | Jun. 28, 2019 | Jul. 03, 2020 | Jun. 28, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | 17.20% | 20.80% | 18.00% | 18.70% |
U.S. federal statutory rate | 21.00% |
Net Income Per Share - Computat
Net Income Per Share - Computation of Basic and Diluted Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 03, 2020 | Jun. 28, 2019 | Jul. 03, 2020 | Jun. 28, 2019 | |
Numerator: | ||||
Net income | $ 66,821 | $ 79,042 | $ 115,433 | $ 154,817 |
Denominator: | ||||
Weighted-average common shares outstanding - basic (in shares) | 307,807 | 302,188 | 306,598 | 301,365 |
Dilutive securities (in shares) | 10,337 | 12,723 | 10,394 | 13,421 |
Weighted-average common shares outstanding - diluted (in shares) | 318,144 | 314,911 | 316,992 | 314,786 |
Net income per share - basic (in dollars per share) | $ 0.22 | $ 0.26 | $ 0.38 | $ 0.51 |
Net income per share - diluted (in dollars per share) | $ 0.21 | $ 0.25 | $ 0.36 | $ 0.49 |
Net Income Per Share - Potentia
Net Income Per Share - Potential Shares of Common Stock Not Included in the Computation of Diluted Net Income (Loss) Per Share (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 03, 2020 | Jun. 28, 2019 | Jul. 03, 2020 | Jun. 28, 2019 | |
Anti-dilutive securities and contingently issuable shares excluded | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive shares (in shares) | 8,812 | 5,935 | 10,413 | 5,625 |