As of September 30, 2017,March 31, 2018, the Company had $120.8$154.4 million in cash and cash equivalents.equivalents, compared to $90.9 million in cash and cash equivalents as of December 31, 2017. On a pro-forma basis, adjusting for the net proceeds from the May 2018 royalty financing (see Note 5), the Company’s cash and cash equivalents as of March 31, 2018 were $279 million. Based on ourthe Company’s current operating plans and projections, management believes that available cash and cash equivalents are sufficient to fund operations for at least one year from the date this Quarterly Report on Form 10-Q is filed with the U.S. Securities and Exchange Commission (SEC). The Company was incorporated in 1989 as a Delaware corporation and reincorporated in California in 2012.

During the three and nine months ended September 30, 2017,March 31, 2018, there have been no changes to the Company’s significant accounting policies as described in the Annual Report on Form 10-K for the fiscal year ended December 31, 2016.2017, except as described below.

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of the SEC Regulation S-X. Accordingly, they should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 20162017 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, filed with the SEC on February 23, 2017.22, 2018. The accompanying unaudited condensed consolidated financial statements include the accounts of La Jolla Pharmaceutical Company and its wholly-owned subsidiaries. All significant inter-company transactions and balances have been eliminated in consolidation. The unaudited condensed consolidated financial statements contain all normal recurring accruals and adjustments that, in the opinion of management, are necessary to present fairly the condensed consolidated balance sheet of the Company at September 30, 2017,March 31, 2018, the condensed consolidated statement of operations for the three and nine months ended September 30, 2017March 31, 2018 and the condensed consolidated statement of cash flows for the ninethree months ended September 30, 2017.March 31, 2018. Estimates were made relating to useful lives of inventory, fixed assets, return and valuation allowances, impairment of assets, share-based compensation expense and accruals for clinical studies and research and development expenses.expense. Actual results could differ materially from those estimates. Certain amounts previously reported in the financial statements have been reclassified to conform to the current presentation. Such reclassifications did not affect net loss, shareholders’ equity or cash flows. The results of operations for the three and nine months ended September 30, 2017March 31, 2018 are not necessarily indicative of the results to be expected for the full year or any future interim periods. The accompanying condensed consolidated balance sheet at December 31, 20162017 has been derived from the audited consolidated balance sheet at December 31, 20162017 contained in the above referenced Annual Report on Form 10-K.

Comprehensive loss forInventory is stated at the periods reported was comprised solelylower of cost or estimated net realizable value, on a first-in, first-out (FIFO) basis. The Company periodically analyzes its inventory levels and writes down inventory as cost of product sales when: inventory has become obsolete; inventory has a cost basis in excess of its estimated net realizable value; or inventory quantities are in excess of expected sales.

Basic net loss per share is calculated based on the weighted-average number of common shares outstanding, excluding unvested restricted stock awards. Diluted net loss per share is calculated usingbased on the weighted-average number of common shares outstanding plus common stock equivalents. Convertible preferred stock, stock options, warrants and unvested restricted stock awards are considered common stock equivalents and are included in the calculation of diluted net loss per share using the treasury stock method when their effect is dilutive. Common stock equivalents are excluded from the calculation of diluted net loss per share when their effect is anti-dilutive. As of September 30,March 31, 2018 and 2017, and 2016, there were common stock equivalents of 11.914.1 million shares and 11.211.4 million shares, respectively, of common stock equivalents, which were excluded from the calculation of diluted net loss per share because they weretheir effect was anti-dilutive.

In May 2017, the Financial Accounting Standards Board (FASB)FASB issued Accounting Standard Update (ASU) 2017-09, Compensation - Stock Compensation (Topic 718), Scope of Modification Accounting. The new standard clarifies when to account for a change toin the terms or conditions of a share-based payment award as a modification. ASU 2017-09 will beThe standard is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2017. The Company adopted the Companystandard in the first quarter of 2018. Early adoption is permitted, including adoption in an interim period for which financial statements have not yet been issued. The Company plans to adopt the ASU in the first quarterAdoption of 2018 and expects the standard todid not have noa material impact on the Company’s financial position or results of operations.

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. The new standard update clarifies the presentation of restricted cash and cash equivalents and requires companies to include restricted cash and cash equivalents in the beginning and ending balances of cash and cash equivalents on the statement of cash flows. AdditionalThe standard also requires additional disclosures will be required to describe the amount and detail of the restriction by balance sheet line item. ASU 2016-18 will beThe standard is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2017. The Company adopted the Companystandard in the first quarter of 2018. Early adoptionAccordingly, restricted cash is permitted, including adoption in an interim period usingincluded as a retrospective transition method to each period presented. The Company plans to adopt the ASUcomponent of cash, cash equivalents and restricted cash in the first quarterunaudited condensed consolidated statement of 2018.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). The new standard is based on the principle that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Since its initial release, the FASB has issued several amendments to the standard, which include clarification of accounting guidance related to identification of performance obligations and principal versus agent considerations. Topic 606The Company adopted the standard in the first quarter of 2018. Refer to the revenue recognition disclosure above.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The standard requires lessees to recognize most leases on their balance sheets as lease liabilities with corresponding right-of-use assets and eliminates certain real estate-specific provisions. ASU 2016-02 will be effective for the Company in the first quarter of 20182019 and allows for full retrospective or awill be adopted with modified retrospective adoption approach. We currently do notapplication for the Company’s 10-year lease agreement for its corporate headquarters, which commenced October 30, 2017. This lease will be recognized on the balance sheet as a lease liability with a corresponding right-of-use asset, which will require modified retrospective application back to the fourth quarter of 2017 and for all of 2018. All of the Company’s other leases will have any products or revenues from customers. Accordingly,ended by the adoptionfirst quarter of this standard2019 and, therefore, will not have a material impact onrequire modified retrospective disclosures applied within the Company’sconsolidated financial position or results of operations. The Company plans to implement the requirements prospectivelystatements upon recognition of the first revenue from customers, and there will not be any retrospective impact to our financial statements. The Contract Revenue - Related Party reported in our results of operations for 2015 and 2016, which represents expense reimbursements from a related party, will not be impacted by the adoption of the new guidance.    standard.

DuringRestricted cash as of March 31, 2018 represents a standby letter of credit for the year ended DecemberCompany’s building lease in lieu of a security deposit during the term of such lease. There is a requirement to maintain a $0.9 million collateral cash account pledged as security for such letter of credit. Restricted cash as of March 31, 2015,2017 represents collateral cash pledged for the Company entered intoCompany’s credit card arrangements of $0.2 million and a services agreement withstandby letter of credit for the Company’s prior lease in lieu of a related party. Pursuant tosecurity deposit during the services agreement, the Company provides certain services to this related party, including, but not limited to, research and development and clinical study design and management for projects undertaken. In exchange for providing such services, the Company receives payments at a negotiated, arms-length rate. As a result, the consideration received by the Company for its services is considered to be no less favorable to the Company than comparable terms that the Company could

In March 2017, the Company offered and sold an aggregate of 3,731,344 shares of common stock in an underwritten public offering at a price of $33.50 per share withfor gross proceeds of approximately $125.0 million. The Company received proceeds of approximately $117.5 million, net of approximately $7.5 million in underwriting commissions, discounts and other issuance costs.

Total share-based compensation expense related to all share-based awardsIn March 2018, the Company offered and sold 3,910,000 shares of common stock in an underwritten public offering at a price of $29.50 per share for the three and nine months ended September 30, 2017 and 2016 was comprisedgross proceeds of the following (in thousands):

The Company’s 2013 Equity Plan stock option activity under its option plans for the ninethree months ended September 30, 2017March 31, 2018 was comprised of the following:

As of September 30, 2017,March 31, 2018, there were 3,673,8831,258,010 shares of common stock available for future grants under the 2013 Equity Plan,its option plans, and the Company has reserved an additional 4,201,4376,621,170 shares of common stock for future issuance upon exercise of all outstanding stock options granted under the 2013 Equity Plan.its option plans.

During the ninethree months ended September 30, 2017,March 31, 2018, stock options to purchase 152,34233,854 shares of common stock were exercised with an intrinsic value of $2.9$0.5 million.

In this report, all references to “we,” “our,” “us,” “La Jolla” and the “Company”“the Company” refer to La Jolla Pharmaceutical Company, a California corporation, and its subsidiaries.subsidiaries on a consolidated basis.

There are approximately 800,000 distributive shock cases in classthe U.S. each year. Of these cases, an estimated 90% are septic shock patients. Approximately 300,000 patients do not achieve adequate blood pressure response with initial vasopressor that leverages the RAAS. LJPC-501 is being developedtherapy and require additional therapy for the treatment of hypotension in adult patients with distributive or vasodilatory shock (dangerously low blood pressure with adequate cardiac function) who remain hypotensive despite fluid and vasopressor therapy (catecholamines and/or vasopressin).

The analysis of the primary efficacy endpoint, defined as the percentage of patients achieving a pre-specified target blood pressure response, was highly statistically significant: 23% of the 158 placebo-treated patients had a blood pressure response compared to 70% of the 163 LJPC-501-treatedGIAPREZA-treated patients (p<0.00001). In addition, a trend toward longer survival was observed: 22% reduction in mortality risk through day 28 [hazard ratio=0.78 (0.57-1.07), p=0.12] for LJPC-501-treatedGIAPREZA-treated patients.

Throughout ATHOS-3, safety outcomes were followed by an independent Data Safety Monitoring Board (DSMB). The DSMB recommended that the study continue as originally planned. In this critically ill patient population: 92% of placebo-treated patients compared to 87% of LJPC-501-treatedGIAPREZA-treated patients experienced at least one adverse event, and 22% of placebo-treated patients compared to 14% of LJPC-501-treatedGIAPREZA-treated patients discontinued treatment due to an adverse event.

In August 2017, the FDA accepted for review our NDA for LJPC-501 for the treatment of hypotension in adult patients with distributive or vasodilatory shock who remain hypotensive despite fluid and vasopressor therapy. The review classification for the NDA is Priority, and the user fee goal date under the Prescription Drug User Fee Act (PDUFA) is February 28, 2018. In its letter to us, the FDA stated that it does not currently plan to hold an advisory committee meeting to discuss this application.

In September 2017, we reported that the European Medicines Agency’s (EMA) Committee for Medicinal Products for Human Use (CHMP) issued favorable Scientific Advice regarding the EU regulatory pathway for LJPC-501.GIAPREZA. Based on this Advice, we intend to submit a Marketing Authorization Application (MAA) for LJPC-501GIAPREZA in the third quarter of 2018.

LJPC-401, a clinical-stage investigational product, is our proprietary formulation of synthetic human hepcidin. Hepcidin, an endogenous peptide hormone, is the body’s naturally occurring regulator of iron absorption and distribution. In healthy individuals, hepcidin prevents excessive iron accumulation in vital organs, such as the liver and heart, where it can cause significant damage and even result in death.

HH is a disease characterized by a genetic deficiency in hepcidin. HH is the most common genetic disease in Caucasians and causes liver cirrhosis, liver cancer, heart disease and/or failure, diabetes, arthritis and joint pain. There are no FDA approved therapies for HH and the current standard treatment for HH is a blood removal procedure known as phlebotomy. Each phlebotomy procedure, which is usually conducted at a hospital, medical office or blood center, typically involves the removal of approximately one pint of blood. The required frequency of procedures varies by patient but often ranges from one to two times per week for an initial period after diagnosis and once every one to three months for life. Since most of the body’s iron is stored in red blood cells, chronic removal of blood can effectively lower iron levels if a phlebotomy regimen is adhered to. However, phlebotomy procedures may cause and may be associated with pain, bruising and scarring at the venous puncture site, fatigue and dizziness during and following the procedure and disruption of daily activities. Furthermore, phlebotomy is not appropriate in patients with poor venous access, anemia or heart disease.

Beta thalassemia, SCD and MDS are genetic diseases of the blood that can cause life-threatening anemia and usually require frequent and life-long blood transfusions. These blood transfusions cause excessive iron accumulation in the body, which is toxic to vital organs, such as the liver and heart. In addition, the underlying anemia causes excessive iron accumulation independent of blood transfusions.

In 2015, the EMA Committee for Orphan Medicinal Products (COMP) designated LJPC-401 as an orphan medicinal product for the treatment of beta thalassemia intermedia and major. In 2016, the EMA COMP designated LJPC-401 as an orphan medicinal product for the treatment of SCD.

In September 2016, we reported positive results from a Phase 1 study of LJPC-401 in patients at risk of iron overload suffering from HH, thalassemia and SCD. Single,In this study, single, escalating doses of LJPC-401 were associated with a dose-dependent, statistically significant reduction in serum iron. LJPC-401 was well-tolerated with no dose-limiting toxicities. Injection-site reactions were the most commonly reported adverse event and were all mild or moderate in severity, self-limiting and fully resolved.

In September 2016, we announced that we reached agreement with the EMA on the design of a pivotal study of LJPC-401. The pivotal study will be a randomized, controlled, multicenter study inLJPC-401 for the treatment of beta thalassemia patients suffering from iron overload, a major unmet need in an orphan patient population. This study, which we refer to as LJ401-BT01, was initiated in December 2017. LJ401-BT01 is designed to enroll approximately 100 patients across 9 countries, including the U.S. Patients will be randomized 1:1 to receive either: (i) weekly subcutaneous injections of LJPC‑401, while continuing standard-of-care chelation therapy (LJPC‑401 treatment arm); or (ii) a continuation of standard-of-care chelation therapy only (observation arm). After 6 months of treatment, patients randomized to the observation arm will cross over to receive LJPC‑401 (plus standard-of-care chelation therapy) for 6 months, while patients randomized to the LJPC-401 treatment arm will continue with LJPC-401 (plus standard-of-care chelation therapy) for an additional 6 months (for a total of one year). The primary efficacy endpoint will be a clinically relevant measurement directly related to iron overload. We plan to initiateof this study is the change in iron content in the fourth quarter of 2017.heart after 6 months, as measured by cardiac magnetic resonance imaging (MRI). If this study is successful, we would anticipate filing an MAA for LJPC-401 in Europe.

In March 2018, we announced the yearcommercial availability of GIAPREZA.

We are exposed to financial market risks, including changes in interest rates. There were no material changes to our market risks in the ninethree months ended September 30, 2017,March 31, 2018, when compared to the disclosures in Item 7A of our Annual Report Form 10-K for the year ended December 31, 2016,2017, filed with the SEC on February 23, 2017.

ThereOther than controls implemented in connection with the newly adopted inventory and revenue recognition policies as disclosed in Note 2 to the accompanying unaudited condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q, there has been no change in our internal control over financial reporting during our most recent quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

No material changes to risk factors have occurred as previously disclosed in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2016,2017, filed with the SEC on February 23, 2017, as supplemented by those risk factors set forth under the caption “Risk Factors” in our Prospectus Supplement, dated March 22, 2017, filed with the SEC on March 24, 2017 pursuant to Rule 424(b), which are incorporated herein by reference.2018.

None.

None.

Not applicable.

None.