Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2019 | Oct. 25, 2019 | |
Cover page. | ||
Amendment Flag | false | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001060736 | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 0-32405 | |
Entity Registrant Name | SEATTLE GENETICS INC /WA | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 91-1874389 | |
Entity Address | 21823 30th Drive SE | |
Entity Address, City or Town | Bothell | |
Entity Address, State or Province | WA | |
Postal Zip Code | 98021 | |
City Area Code | 425 | |
Local Phone Number | 527-4000 | |
Title of 12(b) Security | Common Stock, par value $0.001 | |
Trading Symbol | SGEN | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 171,385,656 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 193,466 | $ 78,186 |
Short-term investments | 676,847 | 332,486 |
Accounts receivable, net | 190,318 | 146,281 |
Inventories | 92,034 | 53,239 |
Prepaid expenses and other current assets | 43,694 | 43,403 |
Total current assets | 1,196,359 | 653,595 |
Property and equipment, net | 144,743 | 103,820 |
Operating lease right-of-use assets | 66,632 | |
Long-term investments | 0 | 49,194 |
In-process research and development | 300,000 | 300,000 |
Goodwill | 274,671 | 274,671 |
Other non-current assets | 115,132 | 122,049 |
Total assets | 2,097,537 | 1,503,329 |
Current liabilities: | ||
Accounts payable | 57,901 | 44,179 |
Accrued liabilities and other | 181,282 | 147,293 |
Current portion of deferred revenue | 7,028 | 33,600 |
Total current liabilities | 246,211 | 225,072 |
Long-term liabilities: | ||
Operating lease liabilities, long-term | 69,311 | |
Other long-term liabilities | 2,414 | 4,314 |
Total long-term liabilities | 71,725 | 4,314 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock, $0.001 par value, 5,000 shares authorized; none issued | 0 | 0 |
Common stock, $0.001 par value, 250,000 shares authorized; 171,108 shares issued and outstanding at September 30, 2019 and 160,262 shares issued and outstanding at December 31, 2018 | 171 | 160 |
Additional paid-in capital | 3,288,196 | 2,598,411 |
Accumulated other comprehensive income (loss) | 302 | (40) |
Accumulated deficit | (1,509,068) | (1,324,588) |
Total stockholders’ equity | 1,779,601 | 1,273,943 |
Total liabilities and stockholders’ equity | $ 2,097,537 | $ 1,503,329 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 250,000,000 | 250,000,000 |
Common stock, shares issued (in shares) | 171,108,000 | 160,262,000 |
Common stock, shares outstanding (in shares) | 171,108,000 | 160,262,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenues: | ||||
Total revenues | $ 213,263 | $ 169,424 | $ 626,909 | $ 480,187 |
Costs and expenses: | ||||
Research and development | 196,119 | 140,175 | 518,313 | 415,537 |
Selling, general and administrative | 96,101 | 57,155 | 258,703 | 181,629 |
Total costs and expenses | 303,047 | 214,998 | 809,040 | 649,874 |
Loss from operations | (89,784) | (45,574) | (182,131) | (169,687) |
Investment and other income (loss), net | (2,129) | (21,872) | (2,349) | 66,799 |
Net loss | $ (91,913) | $ (67,446) | $ (184,480) | $ (102,888) |
Net loss per share - basic and diluted (in dollars per share) | $ (0.55) | $ (0.42) | $ (1.13) | $ (0.66) |
Shares used in computation of per share amounts - basic and diluted (in shares) | 168,109 | 159,304 | 163,428 | 156,799 |
Comprehensive loss: | ||||
Net loss | $ (91,913) | $ (67,446) | $ (184,480) | $ (102,888) |
Other comprehensive income (loss): | ||||
Unrealized gain (loss) on securities available-for-sale, net of tax | (177) | (144) | 297 | (12) |
Foreign currency translation gain (loss) | (7) | 13 | 45 | (10) |
Total other comprehensive income (loss) | (184) | (131) | 342 | (22) |
Comprehensive loss | (92,097) | (67,577) | (184,138) | (102,910) |
Product [Member] | ||||
Revenues: | ||||
Total revenues | 167,582 | 126,976 | 461,563 | 344,776 |
Costs and expenses: | ||||
Cost of sales | 8,723 | 12,348 | 25,243 | 35,863 |
License and Service [Member] | ||||
Revenues: | ||||
Total revenues | 18,420 | 19,786 | 99,128 | 76,524 |
Royalty [Member] | ||||
Revenues: | ||||
Total revenues | 27,261 | 22,662 | 66,218 | 58,887 |
Costs and expenses: | ||||
Cost of sales | $ 2,104 | $ 5,320 | $ 6,781 | $ 16,845 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Accumulated Deficit [Member] |
Beginning (in shares) at Dec. 31, 2017 | 144,395 | ||||
Beginning at Dec. 31, 2017 | $ 677,569 | $ 144 | $ 1,806,159 | $ 63,836 | $ (1,192,570) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (111,715) | (111,715) | |||
Other comprehensive income | 19 | 19 | |||
Issuance of common stock for employee stock purchase plan (in shares) | 106 | ||||
Issuance of common stock for employee stock purchase plan | 4,424 | $ 0 | 4,424 | ||
Stock option exercises (in shares) | 375 | ||||
Stock option exercises | 7,404 | $ 1 | 7,403 | ||
Restricted stock vested during the period, net (in shares) | 24 | ||||
Restricted stock vested during the period, net | 0 | $ 0 | |||
Issuance of common stock (in shares) | 13,269 | ||||
Issuance of common stock | 658,242 | $ 13 | 658,229 | ||
Share-based compensation | 16,838 | 16,838 | |||
Ending (in shares) at Mar. 31, 2018 | 158,169 | ||||
Ending at Mar. 31, 2018 | 1,279,337 | $ 158 | 2,493,053 | (264) | (1,213,610) |
Beginning (in shares) at Dec. 31, 2017 | 144,395 | ||||
Beginning at Dec. 31, 2017 | 677,569 | $ 144 | 1,806,159 | 63,836 | (1,192,570) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (102,888) | ||||
Other comprehensive income | (22) | ||||
Ending (in shares) at Sep. 30, 2018 | 160,053 | ||||
Ending at Sep. 30, 2018 | 1,364,520 | $ 160 | 2,569,448 | (305) | (1,204,783) |
Beginning (in shares) at Mar. 31, 2018 | 158,169 | ||||
Beginning at Mar. 31, 2018 | 1,279,337 | $ 158 | 2,493,053 | (264) | (1,213,610) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | 76,273 | 76,273 | |||
Other comprehensive income | 90 | 90 | |||
Stock option exercises (in shares) | 418 | ||||
Stock option exercises | 11,222 | $ 1 | 11,221 | ||
Restricted stock vested during the period, net (in shares) | 59 | ||||
Restricted stock vested during the period, net | 0 | $ 0 | |||
Share-based compensation | 15,517 | 15,517 | |||
Ending (in shares) at Jun. 30, 2018 | 158,646 | ||||
Ending at Jun. 30, 2018 | 1,382,439 | $ 159 | 2,519,791 | (174) | (1,137,337) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (67,446) | (67,446) | |||
Other comprehensive income | (131) | (131) | |||
Issuance of common stock for employee stock purchase plan (in shares) | 100 | ||||
Issuance of common stock for employee stock purchase plan | 4,766 | $ 0 | 4,766 | ||
Stock option exercises (in shares) | 844 | ||||
Stock option exercises | 24,080 | $ 1 | 24,079 | ||
Restricted stock vested during the period, net (in shares) | 463 | ||||
Restricted stock vested during the period, net | (1) | $ 0 | (1) | ||
Share-based compensation | 20,813 | 20,813 | |||
Ending (in shares) at Sep. 30, 2018 | 160,053 | ||||
Ending at Sep. 30, 2018 | $ 1,364,520 | $ 160 | 2,569,448 | (305) | (1,204,783) |
Beginning (in shares) at Dec. 31, 2018 | 160,262 | 160,262 | |||
Beginning at Dec. 31, 2018 | $ 1,273,943 | $ 160 | 2,598,411 | (40) | (1,324,588) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (13,329) | (13,329) | |||
Other comprehensive income | 256 | 256 | |||
Issuance of common stock for employee stock purchase plan (in shares) | 104 | ||||
Issuance of common stock for employee stock purchase plan | 6,147 | $ 0 | 6,147 | ||
Stock option exercises (in shares) | 719 | ||||
Stock option exercises | 20,679 | $ 1 | 20,678 | ||
Restricted stock vested during the period, net (in shares) | 56 | ||||
Restricted stock vested during the period, net | 0 | $ 0 | |||
Share-based compensation | 25,715 | 25,715 | |||
Ending (in shares) at Mar. 31, 2019 | 161,141 | ||||
Ending at Mar. 31, 2019 | $ 1,313,411 | $ 161 | 2,650,951 | 216 | (1,337,917) |
Beginning (in shares) at Dec. 31, 2018 | 160,262 | 160,262 | |||
Beginning at Dec. 31, 2018 | $ 1,273,943 | $ 160 | 2,598,411 | (40) | (1,324,588) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (184,480) | ||||
Other comprehensive income | $ 342 | ||||
Ending (in shares) at Sep. 30, 2019 | 171,108 | 171,108 | |||
Ending at Sep. 30, 2019 | $ 1,779,601 | $ 171 | 3,288,196 | 302 | (1,509,068) |
Beginning (in shares) at Mar. 31, 2019 | 161,141 | ||||
Beginning at Mar. 31, 2019 | 1,313,411 | $ 161 | 2,650,951 | 216 | (1,337,917) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (79,238) | (79,238) | |||
Other comprehensive income | 270 | 270 | |||
Stock option exercises (in shares) | 393 | ||||
Stock option exercises | 11,226 | $ 1 | 11,225 | ||
Restricted stock vested during the period, net (in shares) | 104 | ||||
Restricted stock vested during the period, net | 0 | $ 0 | |||
Share-based compensation | 26,157 | 26,157 | |||
Ending (in shares) at Jun. 30, 2019 | 161,638 | ||||
Ending at Jun. 30, 2019 | 1,271,826 | $ 162 | 2,688,333 | 486 | (1,417,155) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (91,913) | (91,913) | |||
Other comprehensive income | (184) | (184) | |||
Issuance of common stock for employee stock purchase plan (in shares) | 85 | ||||
Issuance of common stock for employee stock purchase plan | 5,452 | $ 0 | 5,452 | ||
Stock option exercises (in shares) | 513 | ||||
Stock option exercises | 17,854 | $ 0 | 17,854 | ||
Restricted stock vested during the period, net (in shares) | 658 | ||||
Restricted stock vested during the period, net | 0 | $ 1 | (1) | ||
Issuance of common stock (in shares) | 8,214 | ||||
Issuance of common stock | 548,691 | $ 8 | 548,683 | ||
Share-based compensation | $ 27,875 | 27,875 | |||
Ending (in shares) at Sep. 30, 2019 | 171,108 | 171,108 | |||
Ending at Sep. 30, 2019 | $ 1,779,601 | $ 171 | $ 3,288,196 | $ 302 | $ (1,509,068) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Operating activities: | ||
Net loss | $ (184,480) | $ (102,888) |
Adjustments to reconcile net loss to net cash used by operating activities | ||
Share-based compensation | 79,747 | 53,168 |
Depreciation and amortization | 14,146 | 17,661 |
Amortization of right-of-use assets | 7,257 | |
(Gains) losses on equity securities | 10,258 | (62,882) |
Changes in operating assets and liabilities | ||
Accounts receivable, net | (44,037) | (51,472) |
Inventories | (38,795) | (15,194) |
Prepaid expenses and other assets | 3,414 | 4,183 |
Lease liability | (4,633) | |
Deferred revenue | (26,572) | (25,014) |
Other liabilities | 31,809 | 3,187 |
Net cash used by operating activities | (151,886) | (179,251) |
Investing activities: | ||
Purchases of securities | (666,120) | (374,356) |
Proceeds from maturities of securities | 375,000 | 270,721 |
Proceeds from sales of securities | 0 | 140,352 |
Purchases of property and equipment | (51,763) | (14,941) |
Acquisition of Cascadian Therapeutics, Inc., net of cash acquired | 0 | (598,151) |
Net cash used by investing activities | (342,883) | (576,375) |
Financing activities: | ||
Net proceeds from issuance of common stock | 548,691 | 658,242 |
Proceeds from exercise of stock options and employee stock purchase plan | 61,358 | 51,896 |
Net cash provided by financing activities | 610,049 | 710,138 |
Net increase (decrease) in cash and cash equivalents | 115,280 | (45,488) |
Cash and cash equivalents at beginning of period | 78,186 | 160,945 |
Cash and cash equivalents at end of period | $ 193,466 | $ 115,457 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of significant accounting policies Basis of presentation The accompanying unaudited condensed consolidated financial statements reflect the accounts of Seattle Genetics, Inc. and its wholly-owned subsidiaries (collectively “Seattle Genetics,” “we,” “our,” or “us”). All intercompany transactions and balances have been eliminated. We acquired Cascadian Therapeutics, Inc., or Cascadian, in March 2018, as further described in Note 4. Management has determined that we operate in one segment: the development and sale of pharmaceutical products on our own behalf or in collaboration with others. Substantially all of our assets and revenues are related to operations in the U.S.; however, we have multiple subsidiaries in foreign jurisdictions, including several subsidiaries in Europe. The condensed consolidated balance sheet data as of December 31, 2018 were derived from audited financial statements not included in this quarterly report on Form 10-Q. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission, or SEC, and generally accepted accounting principles in the United States of America, or GAAP, for unaudited condensed consolidated financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The accompanying unaudited condensed consolidated financial statements reflect all adjustments consisting of normal recurring adjustments that, in the opinion of management, are necessary for a fair statement of our financial position and results of our operations as of and for the periods presented. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2018 , as filed with the SEC. The preparation of financial statements in accordance with GAAP requires us to make estimates, assumptions, and judgments that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. The results of our operations for the three and nine month periods ended September 30, 2019 are not necessarily indicative of the results to be expected for the full year or any other interim period. Non-cash financing and investing activities We had $11.7 million and $4.6 million of accrued capital expenditures as of September 30, 2019 and December 31, 2018 , respectively. Accrued capital expenditures have been treated as a non-cash investing activity and, accordingly, have not been included in the statement of cash flows until such amounts have been paid in cash. During the nine months ended September 30, 2019 , we recorded $39.2 million right-of-use assets in exchange for lease liabilities. Refer to Note 3. Investments We hold certain equity securities that we acquired in connection with strategic agreements, which are reported at estimated fair value. Changes in the fair value of equity securities are recorded in income or loss. The cost of equity securities for purposes of computing gains and losses is based on the specific identification method. We invest our available cash primarily in debt securities. These debt securities are classified as available-for-sale, which are reported at estimated fair value with unrealized gains and losses included in accumulated other comprehensive income and loss in stockholders’ equity. Realized gains, realized losses and declines in the value of debt securities judged to be other-than-temporary are included in investment and other income (loss), net . The cost of debt securities for purposes of computing realized and unrealized gains and losses is based on the specific identification method. Amortization of premiums and accretion of discounts on debt securities are included in investment and other income (loss), net . Interest and dividends earned are included in investment and other income (loss), net . We classify investments in debt securities maturing within one year of the reporting date, or where management’s intent is to use the investments to fund current operations or to make them available for current operations, as short-term investments. If the estimated fair value of a debt security is below its carrying value, we evaluate whether it is more likely than not that we will sell the security before its anticipated recovery in market value and whether evidence indicating that the cost of the investment is recoverable within a reasonable period of time outweighs evidence to the contrary. We also evaluate whether or not we intend to sell the investment. If the impairment is considered to be other-than-temporary, the security is written down to its estimated fair value. In addition, we consider whether credit losses exist for any securities. A credit loss exists if the present value of cash flows expected to be collected is less than the amortized cost basis of the security. Other-than-temporary declines in estimated fair value and credit losses are included in investment and other income (loss), net . Leases We adopted Accounting Standards Update, or "ASU 2016-02, Leases" on January 1, 2019. As a result of this standard, we recorded a liability to make lease payments and a right-of-use asset representing our right to use the underlying asset for the applicable lease term in our condensed consolidated balance sheet. We elected the modified retrospective method transition option, which permitted us not to restate the comparative period presented. We elected the "package of practical expedients", which permitted us not to reassess under the standard our prior conclusion about lease identification, lease classification and initial direct cost. We also elected the practical expedient to not separate lease and non-lease components for our real estate leases, and elected the short-term lease recognition exemption for our short-term leases, which allows us not to recognize lease liabilities and right-of-use assets on our condensed consolidated balance sheet for leases with an original term of twelve months or less. The standard had a material impact on our condensed consolidated balance sheet, did not have an impact on our condensed consolidated statement of comprehensive loss, and there was no cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Refer to Note 3 for additional information. We determine if an arrangement is a lease at inception date. All of our leases are classified as operating leases. Operating lease liabilities and the corresponding right-of-use assets are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. The operating lease right-of-use asset also excludes lease incentives and initial direct costs incurred. As our existing leases do not contain an implicit interest rate, we estimate our incremental borrowing rate based on information available at commencement date in determining the present value of future payments. We include options to extend the lease in our lease liability and right-of-use asset when it is reasonably certain that we will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. For our short-term leases, we recognize lease payments as an expense on a straight-line base over the lease term. Business combinations, including acquired in-process research and development and goodwill We account for business combinations using the acquisition method, recording the acquisition-date fair value of total consideration over the acquisition-date fair value of net assets acquired as goodwill. Fair value is typically estimated using an income approach based on the present value of future discounted cash flows. The significant estimates in the discounted cash flow model primarily include the discount rate, and rates of future revenue and expense growth and/or profitability of the acquired business. The discount rate considers the relevant risk associated with business-specific characteristics and the uncertainty related to the ability to achieve the projected cash flows. We may record adjustments to the fair values of assets acquired and liabilities assumed within the measurement period (up to one year from the acquisition date). In-process research and development assets are accounted for as indefinite-lived intangible assets and maintained on the balance sheet until either the underlying project is completed or the asset becomes impaired. If the project is completed, the carrying value of the related intangible asset is amortized to cost of sales over the remaining estimated life of the asset beginning in the period in which the project is completed. If the asset becomes impaired or is abandoned, the carrying value of the related intangible asset is written down to its fair value and an impairment charge is recorded in the period in which the impairment occurs. We evaluate indefinite-lived intangible assets and goodwill for impairment annually, as of October 1, or more frequently when events or circumstances indicate that impairment may have occurred. As part of the impairment evaluation, we may elect to perform an assessment of qualitative factors. If this qualitative assessment indicates that it is more likely than not that the fair value of the indefinite-lived intangible asset or the reporting unit (for goodwill) is less than its carrying value, we then would proceed with the quantitative impairment test to compare the fair value to the carrying value and record an impairment charge if the carrying value exceeds the fair value. Acquisition-related costs, including banking, legal, accounting, valuation, and other similar costs, are expensed in the period in which the costs are incurred. The results of operations of the acquired business are included in the consolidated financial statements from the acquisition date. Long-term incentive plans We have established Long-Term Incentive Plans, or LTIPs. The LTIPs provide eligible employees with the opportunity to receive performance-based incentive compensation, which may be comprised of cash, stock options, and/or RSUs. The payment of cash and the grant and/or vesting of equity are contingent upon the achievement of pre-determined regulatory milestones. We record compensation expense over the estimated service period for each milestone subject to the achievement of the milestone being considered probable in accordance with the provisions of Accounting Standards Codification Topic 450, Contingencies. At each reporting date, we assess whether achievement of a milestone is considered probable and, if so, record compensation expense based on the portion of the service period elapsed to date with respect to that milestone, with a cumulative catch-up, net of estimated forfeitures. We recognize compensation expense with respect to a milestone over the remaining estimated service period. As of September 30, 2019 , the estimated unrecognized compensation expense related to all LTIPs was $47.8 million . The total estimate of unrecognized compensation expense could change in the future for several reasons, including the addition or termination of employees, the recognition of LTIP compensation expense, or the addition, termination, or modification of an LTIP. Revenue recognition Our revenues are comprised of ADCETRIS net product sales, amounts earned under our collaboration and licensing agreements, and royalties. Revenue recognition occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration we expect to receive in exchange for those goods or services. The period between when we transfer control of promised goods or services and when we receive payment is expected to be one year or less, and that expectation is consistent with our historical experience. As such, we do not adjust our revenues for the effects of a significant financing component. Net product sales We sell ADCETRIS through a limited number of pharmaceutical distributors in the U.S. and Canada. Customers order ADCETRIS through these distributors, and we typically ship product directly to the customer. The delivery of ADCETRIS to the end-user site represents a single performance obligation for these transactions. We record product sales at the point in time when title and risk of loss pass, which generally occurs upon delivery of the product to the customer. The transaction price for product sales represents the amount we expect to receive, which is net of estimated government-mandated rebates and chargebacks, distribution fees, estimated product returns and other deductions. Accruals are established for these deductions, and actual amounts incurred are offset against applicable accruals. We reflect these accruals as either a reduction in the related account receivable from the distributor or as an accrued liability, depending on the nature of the sales deduction. Sales deductions are based on management’s estimates that consider payor mix in target markets and experience to-date. These estimates involve a substantial degree of judgment. We have applied a portfolio approach as a practical expedient for estimating net product sales from ADCETRIS. Government-mandated rebates and chargebacks: We have entered into a Medicaid Drug Rebate Agreement, or MDRA, with the Centers for Medicare & Medicaid Services. This agreement provides for a rebate based on covered purchases of ADCETRIS. Medicaid rebates are invoiced to us by the various state Medicaid programs. We estimate Medicaid rebates using the expected value approach, based on a variety of factors, including our experience to-date. We have also completed a Federal Supply Schedule, or FSS, agreement under which certain U.S. government purchasers receive a discount on eligible purchases of ADCETRIS. In addition, we have entered into a Pharmaceutical Pricing Agreement with the Secretary of Health and Human Services, which enables certain entities that qualify for government pricing under the Public Health Services Act, or PHS, to receive discounts on their qualified purchases of ADCETRIS. Under these agreements, distributors process a chargeback to us for the difference between wholesale acquisition cost and the applicable discounted price. As a result of our direct-ship distribution model, we can identify the entities purchasing ADCETRIS and this information enables us to estimate expected chargebacks for FSS and PHS purchases based on the expected value of each entity’s eligibility for the FSS and PHS programs. We also review historical rebate and chargeback information to further refine these estimates. Distribution fees, product returns and other deductions: Our distributors charge a volume-based fee for distribution services that they perform for us. We allow for the return of product that is within 30 days of its expiration date or that is damaged. We estimate product returns based on our experience to-date using the expected value approach. In addition, we consider our direct-ship distribution model, our belief that product is not typically held in the distribution channel, and the expected rapid use of the product by healthcare providers. We provide financial assistance to qualifying patients that are underinsured or cannot cover the cost of commercial coinsurance amounts through SeaGen Secure. SeaGen Secure is available to patients in the U.S. and its territories who meet various financial and treatment need criteria. Estimated contributions for commercial coinsurance under SeaGen Secure are deducted from gross sales and are based on an analysis of expected plan utilization. These estimates are adjusted as necessary to reflect our actual experience. Collaboration and license agreement revenues We have collaboration and license agreements with a number of biotechnology and pharmaceutical companies. Our proprietary technology for linking cytotoxic agents to monoclonal antibodies called antibody-drug conjugates, or ADCs, is the basis for many of these collaboration and license agreements, including the ADC collaborations that we have entered into in the ordinary course of business, under which we granted our collaborators research and commercial licenses to our technology and typically provide technology transfer services, technical advice, supplies and services for a period of time. Our collaboration and license agreements include contractual milestones. Generally, the milestone events coincide with the progression of the collaborators’ product candidates. These consist of development milestones (such as designation of a product candidate or initiation of preclinical studies and the initiation of phase 1, phase 2, or phase 3 clinical trials), regulatory milestones (such as the filing of regulatory applications for marketing approval), and commercialization milestones (such as first commercial sale in a particular market and product sales in excess of a pre-specified threshold). Our ADC collaborators are solely responsible for the development of their product candidates, and the achievement of milestones in any of the categories identified above is based solely on the collaborators’ efforts. Since we do not take a substantive role or control the research, development or commercialization of any products generated by our ADC collaborators, we are not able to reasonably estimate when, if at all, any potential future milestone payments or royalties may be payable to us by our ADC collaborators. As such, the potential future milestone payments associated with our ADC collaborations involve a substantial degree of uncertainty and risk that they may never be received. In the case of our ADCETRIS collaboration with Takeda Pharmaceutical Company Limited, or Takeda, we may be involved in certain development activities; however, the achievement of milestone events under the agreement is primarily based on activities undertaken by Takeda. ADC collaborations are initially evaluated as to whether the intellectual property licenses granted by us represent distinct performance obligations. If they are determined to be distinct, the value of the intellectual property licenses would be recognized up-front while the research and development service fees would be recognized as the performance obligations are satisfied. Variable consideration is assessed at each reporting period as to whether it is not subject to significant future reversal and, therefore, should be included in the transaction price at the inception of the contract. Assessing the recognition of variable consideration requires significant judgment. If a contract includes a fixed or minimum amount of research and development support, this also would be included in the transaction price. Changes to ADC collaborations, such as the extensions of the research term or increasing the number of targets or technology covered under an existing agreement, are assessed for whether they represent a modification or should be accounted for as a new contract. We have concluded that the license of intellectual property in our current ADC collaborations is not distinct from the perspective of our customers at the time of initial transfer, since we do not license intellectual property without related technology transfer and research and development support services. Such evaluation requires significant judgment since it is made from the customer's perspective. Our performance obligations under our collaborations include such things as providing intellectual property licenses, performing technology transfer, performing research and development consulting services, providing reagents, ADCs, and other materials, and notifying the customer of any enhancements to licensed technology or new technology that we discover, among others. We determined our performance obligations under our current ADC collaborations as evaluated at contract inception were not distinct and represented a single performance obligation. Revenue is recognized using a proportional performance model, representing the transfer of goods or services as activities are performed over the term of the agreement. Upfront payments are also amortized to revenue over the performance period. Upfront payment contract liabilities resulting from our collaborations do not represent a financing component as the payment is not financing the transfer of goods or services, and the technology underlying the licenses granted reflects research and development expenses already incurred by us. When no performance obligations are required of us, or following the completion of the performance obligation period, such amounts are recognized as revenue upon transfer of control of the goods or services to the customer. Generally, all amounts received or due other than sales-based milestones and royalties are classified as collaboration and license agreement revenues. Sales-based milestones and royalties are recognized as royalty revenue in the period the related sale occurred. We generally invoice our collaborators and licensees on a monthly or quarterly basis, or upon the completion of the effort or achievement of a milestone, based on the terms of each agreement. Deferred revenue arises from amounts received in advance of the culmination of the earnings process and is recognized as revenue in future periods as performance obligations are satisfied. Deferred revenue expected to be recognized within the next twelve months is classified as a current liability. Royalty revenues and cost of royalty revenues Royalty revenues primarily reflect amounts earned under the ADCETRIS collaboration with Takeda. These royalties include commercial sales-based milestones and sales royalties that relate predominantly to the license of intellectual property. Sales royalties are based on a percentage of Takeda’s net sales of ADCETRIS, with rates that range from the mid-teens to the mid-twenties based on sales volume. Takeda bears a portion of third-party royalty costs owed on its sales of ADCETRIS. This amount is included in royalty revenues. Cost of royalty revenues reflects amounts owed to our third-party licensors related to Takeda’s sales of ADCETRIS. These amounts are recognized in the period in which the related sales by Takeda occur. Recent accounting pronouncements not yet adopted In June 2016, Financial Accounting Standards Board, or FASB, issued “ASU 2016-13, Financial Instruments: Credit Losses”, as clarified in ASU 2019-04 and ASU 2019-05. The objective of the standard is to provide information about expected credit losses on financial instruments at each reporting date and to change how other-than-temporary impairments on investment securities are recorded. The standard will become effective for us beginning on January 1, 2020, with early adoption permitted. We are currently evaluating the guidance to determine the potential impact on our financial condition, results of operations, cash flows, and financial statement disclosures. In August 2018, FASB issued “ASU 2018-15, Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.” The objective of the standard is to align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The standard will become effective for us beginning on January 1, 2020, with early adoption permitted. We are currently evaluating the guidance to determine the potential impact on our financial condition, results of operations, cash flows, and financial statement disclosures. In November 2018, FASB issued “ASU 2018-18, Clarifying the Interaction between Topic 808 and Topic 606.” The objective of the standard is to clarify the interaction between Topic 808, Collaborative Arrangements, and Topic 606, Revenue from Contracts with Customers. Currently, Topic 808 does not provide comprehensive recognition or measurement guidance for collaborative arrangements, and the accounting for those arrangements is often based on an analogy to other accounting literature or an accounting policy election. Similarly, aspects of Topic 606 have resulted in uncertainty in practice about the effect of the revenue standard on the accounting for collaborative arrangements. The standard will become effective for us beginning on January 1, 2020, with early adoption permitted. We are currently evaluating the guidance to determine the potential impact on our financial condition, results of operations, cash flows, and financial statement disclosures. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | Revenue from contracts with customers We have one marketed product, ADCETRIS. Substantially all of our product revenues are recorded in the U.S. Substantially all of our royalty revenues are from our collaboration with Takeda. Collaboration and license agreement revenues by collaborator are summarized as follows: Three months ended September 30, Nine months ended September 30, (dollars in thousands) 2019 2018 2019 2018 Takeda $ 17,720 $ 18,805 $ 89,859 $ 41,122 Other 700 981 9,269 35,402 Collaboration and license agreement revenues $ 18,420 $ 19,786 $ 99,128 $ 76,524 Contract liabilities consist of deferred revenue primarily related to our remaining performance obligations under the Takeda ADCETRIS collaboration and are presented on the condensed consolidated balance sheets. Deferred revenue will be recognized as the remaining performance obligations are satisfied through November 2019. We recognized collaboration and license agreement revenues of $27.5 million during the nine months ended September 30, 2019 that were included in the deferred revenue balance as of December 31, 2018 . For the nine months ended September 30, 2019 , collaboration and license agreement revenues from Takeda also included substantially all of $37.5 million for two regulatory milestones achieved, which were related to additional approvals of ADCETRIS in frontline Hodgkin lymphoma received by Takeda. |
Operating Leases
Operating Leases | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Operating Leases | Operating leases We have operating leases for our office and laboratory facilities with terms that expire from 2021 through 2029. Upon adoption of Topic 842 on January 1, 2019, we recognized $35.2 million of operating lease liabilities and $34.7 million of operating lease right-of-use assets for our existing leases on our condensed consolidated balance sheet. As of September 30, 2019 , our operating lease liabilities and operating lease right-of-use assets were $78.0 million and $66.6 million , respectively. The increases in operating lease liabilities and operating lease right-of-use assets during the nine months ended September 30, 2019 reflected new facilities leases that commenced during the period. All of our significant leases include options for us to extend the lease term. None of our options to extend the rental term of any existing leases were considered reasonably certain as of September 30, 2019 . Supplemental operating lease information were as follows: (dollars in thousands) Three months ended September 30, 2019 Nine months ended September 30, 2019 Operating lease cost $ 3,479 $ 10,066 Variable lease cost 691 2,120 Total lease cost 4,170 12,186 Cash paid for amounts included in measurement of lease liabilities $ 2,732 $ 7,129 As of September 30, 2019 , the weighted average remaining lease term for our operating leases was 7.3 years, and the weighted average discount rate for our operating leases was 5.4% . Future minimum lease payments under the lease agreements as of September 30, 2019 were as follows: Years ending December 31, (dollars in thousands) 2019 (remaining three months) $ 3,002 2020 13,086 2021 14,028 2022 13,585 2023 13,478 Thereafter 38,701 Total future minimum lease payments $ 95,880 Less: imputed interest (17,907 ) Total $ 77,973 Operating lease liabilities were recorded in the following captions of our condensed consolidated balance sheet were as follows: (dollars in thousands) September 30, 2019 Accrued liabilities and other $ 8,662 Operating lease liabilities, long-term 69,311 Total $ 77,973 As of December 31, 2018 , our future obligations related to building leases were as follows: Years ending December 31, (dollars in thousands) 2019 $ 10,332 2020 11,863 2021 12,770 2022 12,288 2023 12,142 Thereafter 30,517 Total future minimum lease payments $ 89,912 |
Acquisition of Cascadian
Acquisition of Cascadian | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Acquisition of Cascadian | Acquisition of Cascadian In March 2018, we acquired all issued and outstanding shares of Cascadian Therapeutics, Inc., a clinical-stage biopharmaceutical company based in Seattle, Washington, for $10.00 per share in cash, or approximately $614.1 million , which was funded by an underwritten public offering as further described in Note 6. The acquisition of Cascadian expanded our late-stage pipeline, providing global rights to tucatinib, an investigational oral tyrosine kinase inhibitor, or TKI, that was being evaluated in a phase 2 trial called HER2CLIMB for patients with HER2 positive metastatic breast cancer who have been previously treated with HER2-targeted agents, including patients with or without brain metastases. The acquisition of Cascadian was accounted for as a business combination. During the nine months ended September 30, 2018 , we incurred $8.5 million in acquisition-related costs, which were recorded in selling, general and administrative expenses. The purchase price allocation of the assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date was as follows: (dollars in thousands) Cash and cash equivalents $ 15,919 Short-term and long-term investments 66,491 Prepaid expenses and other assets 2,215 Property and equipment 566 In-process research and development 300,000 Goodwill 274,671 Accounts payable and accrued liabilities (22,139 ) Deferred tax liability (23,653 ) Total purchase price $ 614,070 The amount allocated to in-process research and development was based on the present value of future discounted cash flows, which was based on significant estimates. These estimates included the number of potential patients and market price of a future tucatinib-based regimen, costs required to conduct clinical trials and potentially commercialize tucatinib, as well as estimates for probability of success and the discount rate. Goodwill primarily was attributed to tucatinib’s potential application in other treatment settings, intangible assets that do not qualify for separate recognition, and synergies with our existing pipeline and capabilities. Goodwill is not expected to be deductible for tax purposes. The financial information in the table below summarizes the combined results of operations of Seattle Genetics and Cascadian on a pro forma basis for the 2018 comparative period: (dollars in thousands) Three months ended September 30, 2018 Nine months ended September 30, 2018 Revenues $ 169,424 $ 480,187 Net loss (67,446 ) (131,822 ) |
Net Loss Per Share
Net Loss Per Share | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Net loss per share Basic net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted average number of common shares and dilutive potential common shares outstanding during the period. Dilutive potential common shares include incremental common shares issuable upon the vesting of unvested restricted stock units and the exercise of outstanding stock options, calculated using the treasury stock method. For the three and nine months ended September 30, 2019 and 2018 , we excluded all restricted stock units and stock options from the per share calculations as such securities were anti-dilutive. The weighted average number of restricted stock units and stock options that were excluded totaled approximately 12,618,000 and 13,258,000 for the three months ended September 30, 2019 and 2018 , respectively, and approximately 12,758,000 and 13,338,000 for the nine months ended September 30, 2019 and 2018 , respectively. |
Common Stock
Common Stock | 9 Months Ended |
Sep. 30, 2019 | |
Stockholders' Equity Note [Abstract] | |
Common Stock | Common stock In February 2018, we completed an underwritten public offering of 13,269,230 shares of our common stock at a public offering price of $52.00 per share. The offering resulted in net proceeds to us of $658.2 million , after deducting underwriting discounts, commissions, and other offering expenses. The primary use of the net proceeds was to fund the acquisition of Cascadian. In July 2019, we completed an underwritten public offering of 8,214,286 shares of our common stock at a public offering price of $70.00 per share. The offering resulted in net proceeds to us of $548.7 million |
Fair Value
Fair Value | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Fair value We have certain assets that are measured at fair value on a recurring basis according to a fair value hierarchy that prioritizes the inputs, assumptions and valuation techniques used to measure fair value. The three levels of the fair value hierarchy are: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Level 2: Quoted prices in markets that are not active or financial instruments for which all significant inputs are observable, either directly or indirectly. Level 3: Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. The determination of a financial instrument’s level within the fair value hierarchy is based on an assessment of the lowest level of any input that is significant to the fair value measurement. We consider observable data to be market data which is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market. The fair value hierarchy of assets carried at fair value and measured on a recurring basis was as follows: Fair value measurement using: (dollars in thousands) Quoted prices in active markets for identical assets (Level 1) Other observable inputs (Level 2) Significant unobservable inputs (Level 3) Total September 30, 2019 Short-term investments—U.S. Treasury securities $ 676,847 $ — $ — $ 676,847 Other non-current assets—equity securities 103,554 — — 103,554 Total $ 780,401 $ — $ — $ 780,401 December 31, 2018 Short-term investments—U.S. Treasury securities $ 332,486 $ — $ — $ 332,486 Long-term investments—U.S. Treasury securities 49,194 — — 49,194 Other non-current assets—equity securities 113,812 — — 113,812 Total $ 495,492 $ — $ — $ 495,492 Our equity securities primarily consisted of holdings in common stock of Immunomedics, Inc., acquired in connection with a strategic collaboration with the company in 2017. The collaboration agreement with Immunomedics was subsequently terminated in 2017. Our debt securities consisted of the following: (dollars in thousands) Amortized cost Gross unrealized gains Gross unrealized losses Fair value September 30, 2019 U.S. Treasury securities $ 676,543 $ 340 $ (36 ) $ 676,847 Contractual maturities (at date of purchase): Due in one year or less $ 583,989 $ 584,056 Due in one to two years 92,554 92,791 Total $ 676,543 $ 676,847 December 31, 2018 U.S. Treasury securities $ 381,673 $ 133 $ (126 ) $ 381,680 Contractual maturities (at date of purchase): Due in one year or less $ 246,440 $ 246,402 Due in one to two years 135,233 135,278 Total $ 381,673 $ 381,680 |
Investment and Other Income (Lo
Investment and Other Income (Loss), Net | 9 Months Ended |
Sep. 30, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment and Other Income (Loss), Net | Investment and other income (loss), net Investment and other income (loss), net consisted of the following: Three months ended September 30, Nine months ended September 30, (dollars in thousands) 2019 2018 2019 2018 Gain (loss) on equity securities $ (5,690 ) $ (23,765 ) $ (10,258 ) $ 62,882 Investment income, net 3,561 1,893 7,909 3,917 Total investment and other income (loss), net $ (2,129 ) $ (21,872 ) $ (2,349 ) $ 66,799 Gain (loss) on equity securities includes the realized and unrealized holding gains and losses on our equity securities. Our equity securities are described in more detail in Note 7. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories The following table presents our inventories of ADCETRIS: (dollars in thousands) September 30, 2019 December 31, 2018 Raw materials $ 84,717 $ 43,986 Finished goods 7,317 9,253 Total $ 92,034 $ 53,239 We capitalize ADCETRIS inventory costs. ADCETRIS inventory that is deployed into clinical, research or development use is charged to research and development expense when it is no longer available for use in commercial sales. We do not capitalize manufacturing costs for any of our product candidates. |
Legal Matters
Legal Matters | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Matters | Legal matters On March 8, 2018, three purported stockholders of Cascadian filed a Verified Complaint to Compel Inspection of Books and Records under 8 Del. C. §220 in the Delaware Court of Chancery against Cascadian, seeking to inspect books and records in order to determine whether wrongdoing or mismanagement has taken place such that it would be appropriate to file claims for breach of fiduciary duty, and to investigate the independence and disinterestedness of the former Cascadian directors with respect to our acquisition of Cascadian. We filed our answer to this complaint on March 28, 2018. On February 20, 2019, we entered into an agreement regarding production and confidentiality of books and records with plaintiffs, pursuant to which we produced relevant books and records on April 22, 2019. As a result of this lawsuit, we may incur litigation and indemnification expenses. In addition, from time to time in the ordinary course of business we become involved in various lawsuits, claims and proceedings relating to the conduct of our business, including those pertaining to the defense and enforcement of our patent or other intellectual property rights and our contractual rights. These proceedings are costly and time consuming. Additionally, successful challenges to our patent or other intellectual property rights through these proceedings could result in a loss of rights in the relevant jurisdiction and may allow third parties to use our proprietary technologies without a license from us or our collaborators. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The accompanying unaudited condensed consolidated financial statements reflect the accounts of Seattle Genetics, Inc. and its wholly-owned subsidiaries (collectively “Seattle Genetics,” “we,” “our,” or “us”). All intercompany transactions and balances have been eliminated. We acquired Cascadian Therapeutics, Inc., or Cascadian, in March 2018, as further described in Note 4. Management has determined that we operate in one segment: the development and sale of pharmaceutical products on our own behalf or in collaboration with others. Substantially all of our assets and revenues are related to operations in the U.S.; however, we have multiple subsidiaries in foreign jurisdictions, including several subsidiaries in Europe. The condensed consolidated balance sheet data as of December 31, 2018 were derived from audited financial statements not included in this quarterly report on Form 10-Q. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission, or SEC, and generally accepted accounting principles in the United States of America, or GAAP, for unaudited condensed consolidated financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The accompanying unaudited condensed consolidated financial statements reflect all adjustments consisting of normal recurring adjustments that, in the opinion of management, are necessary for a fair statement of our financial position and results of our operations as of and for the periods presented. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2018 , as filed with the SEC. The preparation of financial statements in accordance with GAAP requires us to make estimates, assumptions, and judgments that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. The results of our operations for the three and nine month periods ended September 30, 2019 are not necessarily indicative of the results to be expected for the full year or any other interim period. |
Non-cash financing and investing activities | Non-cash financing and investing activities We had $11.7 million and $4.6 million of accrued capital expenditures as of September 30, 2019 and December 31, 2018 |
Investments | Investments We hold certain equity securities that we acquired in connection with strategic agreements, which are reported at estimated fair value. Changes in the fair value of equity securities are recorded in income or loss. The cost of equity securities for purposes of computing gains and losses is based on the specific identification method. We invest our available cash primarily in debt securities. These debt securities are classified as available-for-sale, which are reported at estimated fair value with unrealized gains and losses included in accumulated other comprehensive income and loss in stockholders’ equity. Realized gains, realized losses and declines in the value of debt securities judged to be other-than-temporary are included in investment and other income (loss), net . The cost of debt securities for purposes of computing realized and unrealized gains and losses is based on the specific identification method. Amortization of premiums and accretion of discounts on debt securities are included in investment and other income (loss), net . Interest and dividends earned are included in investment and other income (loss), net . We classify investments in debt securities maturing within one year of the reporting date, or where management’s intent is to use the investments to fund current operations or to make them available for current operations, as short-term investments. If the estimated fair value of a debt security is below its carrying value, we evaluate whether it is more likely than not that we will sell the security before its anticipated recovery in market value and whether evidence indicating that the cost of the investment is recoverable within a reasonable period of time outweighs evidence to the contrary. We also evaluate whether or not we intend to sell the investment. If the impairment is considered to be other-than-temporary, the security is written down to its estimated fair value. In addition, we consider whether credit losses exist for any securities. A credit loss exists if the present value of cash flows expected to be collected is less than the amortized cost basis of the security. Other-than-temporary declines in estimated fair value and credit losses are included in investment and other income (loss), net . |
Leases | Leases We adopted Accounting Standards Update, or "ASU 2016-02, Leases" on January 1, 2019. As a result of this standard, we recorded a liability to make lease payments and a right-of-use asset representing our right to use the underlying asset for the applicable lease term in our condensed consolidated balance sheet. We elected the modified retrospective method transition option, which permitted us not to restate the comparative period presented. We elected the "package of practical expedients", which permitted us not to reassess under the standard our prior conclusion about lease identification, lease classification and initial direct cost. We also elected the practical expedient to not separate lease and non-lease components for our real estate leases, and elected the short-term lease recognition exemption for our short-term leases, which allows us not to recognize lease liabilities and right-of-use assets on our condensed consolidated balance sheet for leases with an original term of twelve months or less. The standard had a material impact on our condensed consolidated balance sheet, did not have an impact on our condensed consolidated statement of comprehensive loss, and there was no cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Refer to Note 3 for additional information. |
Business combinations, including acquired in-process research and development and goodwill | Business combinations, including acquired in-process research and development and goodwill We account for business combinations using the acquisition method, recording the acquisition-date fair value of total consideration over the acquisition-date fair value of net assets acquired as goodwill. Fair value is typically estimated using an income approach based on the present value of future discounted cash flows. The significant estimates in the discounted cash flow model primarily include the discount rate, and rates of future revenue and expense growth and/or profitability of the acquired business. The discount rate considers the relevant risk associated with business-specific characteristics and the uncertainty related to the ability to achieve the projected cash flows. We may record adjustments to the fair values of assets acquired and liabilities assumed within the measurement period (up to one year from the acquisition date). In-process research and development assets are accounted for as indefinite-lived intangible assets and maintained on the balance sheet until either the underlying project is completed or the asset becomes impaired. If the project is completed, the carrying value of the related intangible asset is amortized to cost of sales over the remaining estimated life of the asset beginning in the period in which the project is completed. If the asset becomes impaired or is abandoned, the carrying value of the related intangible asset is written down to its fair value and an impairment charge is recorded in the period in which the impairment occurs. We evaluate indefinite-lived intangible assets and goodwill for impairment annually, as of October 1, or more frequently when events or circumstances indicate that impairment may have occurred. As part of the impairment evaluation, we may elect to perform an assessment of qualitative factors. If this qualitative assessment indicates that it is more likely than not that the fair value of the indefinite-lived intangible asset or the reporting unit (for goodwill) is less than its carrying value, we then would proceed with the quantitative impairment test to compare the fair value to the carrying value and record an impairment charge if the carrying value exceeds the fair value. Acquisition-related costs, including banking, legal, accounting, valuation, and other similar costs, are expensed in the period in which the costs are incurred. The results of operations of the acquired business are included in the consolidated financial statements from the acquisition date. |
Long-term incentive plans | Long-term incentive plans |
Revenue recognition | Revenue recognition Our revenues are comprised of ADCETRIS net product sales, amounts earned under our collaboration and licensing agreements, and royalties. Revenue recognition occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration we expect to receive in exchange for those goods or services. The period between when we transfer control of promised goods or services and when we receive payment is expected to be one year or less, and that expectation is consistent with our historical experience. As such, we do not adjust our revenues for the effects of a significant financing component. Net product sales We sell ADCETRIS through a limited number of pharmaceutical distributors in the U.S. and Canada. Customers order ADCETRIS through these distributors, and we typically ship product directly to the customer. The delivery of ADCETRIS to the end-user site represents a single performance obligation for these transactions. We record product sales at the point in time when title and risk of loss pass, which generally occurs upon delivery of the product to the customer. The transaction price for product sales represents the amount we expect to receive, which is net of estimated government-mandated rebates and chargebacks, distribution fees, estimated product returns and other deductions. Accruals are established for these deductions, and actual amounts incurred are offset against applicable accruals. We reflect these accruals as either a reduction in the related account receivable from the distributor or as an accrued liability, depending on the nature of the sales deduction. Sales deductions are based on management’s estimates that consider payor mix in target markets and experience to-date. These estimates involve a substantial degree of judgment. We have applied a portfolio approach as a practical expedient for estimating net product sales from ADCETRIS. Government-mandated rebates and chargebacks: We have entered into a Medicaid Drug Rebate Agreement, or MDRA, with the Centers for Medicare & Medicaid Services. This agreement provides for a rebate based on covered purchases of ADCETRIS. Medicaid rebates are invoiced to us by the various state Medicaid programs. We estimate Medicaid rebates using the expected value approach, based on a variety of factors, including our experience to-date. We have also completed a Federal Supply Schedule, or FSS, agreement under which certain U.S. government purchasers receive a discount on eligible purchases of ADCETRIS. In addition, we have entered into a Pharmaceutical Pricing Agreement with the Secretary of Health and Human Services, which enables certain entities that qualify for government pricing under the Public Health Services Act, or PHS, to receive discounts on their qualified purchases of ADCETRIS. Under these agreements, distributors process a chargeback to us for the difference between wholesale acquisition cost and the applicable discounted price. As a result of our direct-ship distribution model, we can identify the entities purchasing ADCETRIS and this information enables us to estimate expected chargebacks for FSS and PHS purchases based on the expected value of each entity’s eligibility for the FSS and PHS programs. We also review historical rebate and chargeback information to further refine these estimates. Distribution fees, product returns and other deductions: Our distributors charge a volume-based fee for distribution services that they perform for us. We allow for the return of product that is within 30 days of its expiration date or that is damaged. We estimate product returns based on our experience to-date using the expected value approach. In addition, we consider our direct-ship distribution model, our belief that product is not typically held in the distribution channel, and the expected rapid use of the product by healthcare providers. We provide financial assistance to qualifying patients that are underinsured or cannot cover the cost of commercial coinsurance amounts through SeaGen Secure. SeaGen Secure is available to patients in the U.S. and its territories who meet various financial and treatment need criteria. Estimated contributions for commercial coinsurance under SeaGen Secure are deducted from gross sales and are based on an analysis of expected plan utilization. These estimates are adjusted as necessary to reflect our actual experience. Collaboration and license agreement revenues We have collaboration and license agreements with a number of biotechnology and pharmaceutical companies. Our proprietary technology for linking cytotoxic agents to monoclonal antibodies called antibody-drug conjugates, or ADCs, is the basis for many of these collaboration and license agreements, including the ADC collaborations that we have entered into in the ordinary course of business, under which we granted our collaborators research and commercial licenses to our technology and typically provide technology transfer services, technical advice, supplies and services for a period of time. Our collaboration and license agreements include contractual milestones. Generally, the milestone events coincide with the progression of the collaborators’ product candidates. These consist of development milestones (such as designation of a product candidate or initiation of preclinical studies and the initiation of phase 1, phase 2, or phase 3 clinical trials), regulatory milestones (such as the filing of regulatory applications for marketing approval), and commercialization milestones (such as first commercial sale in a particular market and product sales in excess of a pre-specified threshold). Our ADC collaborators are solely responsible for the development of their product candidates, and the achievement of milestones in any of the categories identified above is based solely on the collaborators’ efforts. Since we do not take a substantive role or control the research, development or commercialization of any products generated by our ADC collaborators, we are not able to reasonably estimate when, if at all, any potential future milestone payments or royalties may be payable to us by our ADC collaborators. As such, the potential future milestone payments associated with our ADC collaborations involve a substantial degree of uncertainty and risk that they may never be received. In the case of our ADCETRIS collaboration with Takeda Pharmaceutical Company Limited, or Takeda, we may be involved in certain development activities; however, the achievement of milestone events under the agreement is primarily based on activities undertaken by Takeda. ADC collaborations are initially evaluated as to whether the intellectual property licenses granted by us represent distinct performance obligations. If they are determined to be distinct, the value of the intellectual property licenses would be recognized up-front while the research and development service fees would be recognized as the performance obligations are satisfied. Variable consideration is assessed at each reporting period as to whether it is not subject to significant future reversal and, therefore, should be included in the transaction price at the inception of the contract. Assessing the recognition of variable consideration requires significant judgment. If a contract includes a fixed or minimum amount of research and development support, this also would be included in the transaction price. Changes to ADC collaborations, such as the extensions of the research term or increasing the number of targets or technology covered under an existing agreement, are assessed for whether they represent a modification or should be accounted for as a new contract. We have concluded that the license of intellectual property in our current ADC collaborations is not distinct from the perspective of our customers at the time of initial transfer, since we do not license intellectual property without related technology transfer and research and development support services. Such evaluation requires significant judgment since it is made from the customer's perspective. Our performance obligations under our collaborations include such things as providing intellectual property licenses, performing technology transfer, performing research and development consulting services, providing reagents, ADCs, and other materials, and notifying the customer of any enhancements to licensed technology or new technology that we discover, among others. We determined our performance obligations under our current ADC collaborations as evaluated at contract inception were not distinct and represented a single performance obligation. Revenue is recognized using a proportional performance model, representing the transfer of goods or services as activities are performed over the term of the agreement. Upfront payments are also amortized to revenue over the performance period. Upfront payment contract liabilities resulting from our collaborations do not represent a financing component as the payment is not financing the transfer of goods or services, and the technology underlying the licenses granted reflects research and development expenses already incurred by us. When no performance obligations are required of us, or following the completion of the performance obligation period, such amounts are recognized as revenue upon transfer of control of the goods or services to the customer. Generally, all amounts received or due other than sales-based milestones and royalties are classified as collaboration and license agreement revenues. Sales-based milestones and royalties are recognized as royalty revenue in the period the related sale occurred. We generally invoice our collaborators and licensees on a monthly or quarterly basis, or upon the completion of the effort or achievement of a milestone, based on the terms of each agreement. Deferred revenue arises from amounts received in advance of the culmination of the earnings process and is recognized as revenue in future periods as performance obligations are satisfied. Deferred revenue expected to be recognized within the next twelve months is classified as a current liability. Royalty revenues and cost of royalty revenues Royalty revenues primarily reflect amounts earned under the ADCETRIS collaboration with Takeda. These royalties include commercial sales-based milestones and sales royalties that relate predominantly to the license of intellectual property. Sales royalties are based on a percentage of Takeda’s net sales of ADCETRIS, with rates that range from the mid-teens to the mid-twenties based on sales volume. Takeda bears a portion of third-party royalty costs owed on its sales of ADCETRIS. This amount is included in royalty revenues. Cost of royalty revenues reflects amounts owed to our third-party licensors related to Takeda’s sales of ADCETRIS. These amounts are recognized in the period in which the related sales by Takeda occur. |
Recent accounting pronouncements not yet adopted | Recent accounting pronouncements not yet adopted In June 2016, Financial Accounting Standards Board, or FASB, issued “ASU 2016-13, Financial Instruments: Credit Losses”, as clarified in ASU 2019-04 and ASU 2019-05. The objective of the standard is to provide information about expected credit losses on financial instruments at each reporting date and to change how other-than-temporary impairments on investment securities are recorded. The standard will become effective for us beginning on January 1, 2020, with early adoption permitted. We are currently evaluating the guidance to determine the potential impact on our financial condition, results of operations, cash flows, and financial statement disclosures. In August 2018, FASB issued “ASU 2018-15, Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.” The objective of the standard is to align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The standard will become effective for us beginning on January 1, 2020, with early adoption permitted. We are currently evaluating the guidance to determine the potential impact on our financial condition, results of operations, cash flows, and financial statement disclosures. In November 2018, FASB issued “ASU 2018-18, Clarifying the Interaction between Topic 808 and Topic 606.” The objective of the standard is to clarify the interaction between Topic 808, Collaborative Arrangements, and Topic 606, Revenue from Contracts with Customers. Currently, Topic 808 does not provide comprehensive recognition or measurement guidance for collaborative arrangements, and the accounting for those arrangements is often based on an analogy to other accounting literature or an accounting policy election. Similarly, aspects of Topic 606 have resulted in uncertainty in practice about the effect of the revenue standard on the accounting for collaborative arrangements. The standard will become effective for us beginning on January 1, 2020, with early adoption permitted. We are currently evaluating the guidance to determine the potential impact on our financial condition, results of operations, cash flows, and financial statement disclosures. |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Collaboration and License Agreement Revenues by Collaborator | Collaboration and license agreement revenues by collaborator are summarized as follows: Three months ended September 30, Nine months ended September 30, (dollars in thousands) 2019 2018 2019 2018 Takeda $ 17,720 $ 18,805 $ 89,859 $ 41,122 Other 700 981 9,269 35,402 Collaboration and license agreement revenues $ 18,420 $ 19,786 $ 99,128 $ 76,524 |
Operating Leases (Tables)
Operating Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Components of Lease Cost and Cash Flows | Supplemental operating lease information were as follows: (dollars in thousands) Three months ended September 30, 2019 Nine months ended September 30, 2019 Operating lease cost $ 3,479 $ 10,066 Variable lease cost 691 2,120 Total lease cost 4,170 12,186 Cash paid for amounts included in measurement of lease liabilities $ 2,732 $ 7,129 |
Schedule of Future Minimum Lease Payments | As of December 31, 2018 , our future obligations related to building leases were as follows: Years ending December 31, (dollars in thousands) 2019 $ 10,332 2020 11,863 2021 12,770 2022 12,288 2023 12,142 Thereafter 30,517 Total future minimum lease payments $ 89,912 Future minimum lease payments under the lease agreements as of September 30, 2019 were as follows: Years ending December 31, (dollars in thousands) 2019 (remaining three months) $ 3,002 2020 13,086 2021 14,028 2022 13,585 2023 13,478 Thereafter 38,701 Total future minimum lease payments $ 95,880 Less: imputed interest (17,907 ) Total $ 77,973 |
Summary of Balance Sheet Information | Operating lease liabilities were recorded in the following captions of our condensed consolidated balance sheet were as follows: (dollars in thousands) September 30, 2019 Accrued liabilities and other $ 8,662 Operating lease liabilities, long-term 69,311 Total $ 77,973 |
Acquisition of Cascadian (Table
Acquisition of Cascadian (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Schedule of Purchase Price Allocation of Assets Acquired and Liabilities Assumed | The purchase price allocation of the assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date was as follows: (dollars in thousands) Cash and cash equivalents $ 15,919 Short-term and long-term investments 66,491 Prepaid expenses and other assets 2,215 Property and equipment 566 In-process research and development 300,000 Goodwill 274,671 Accounts payable and accrued liabilities (22,139 ) Deferred tax liability (23,653 ) Total purchase price $ 614,070 |
Schedule of Pro Forma Information | The financial information in the table below summarizes the combined results of operations of Seattle Genetics and Cascadian on a pro forma basis for the 2018 comparative period: (dollars in thousands) Three months ended September 30, 2018 Nine months ended September 30, 2018 Revenues $ 169,424 $ 480,187 Net loss (67,446 ) (131,822 ) |
Fair Value (Tables)
Fair Value (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Summary of Fair Value Hierarchy of Assets Carried at Fair Value and Measured on a Recurring Basis | The fair value hierarchy of assets carried at fair value and measured on a recurring basis was as follows: Fair value measurement using: (dollars in thousands) Quoted prices in active markets for identical assets (Level 1) Other observable inputs (Level 2) Significant unobservable inputs (Level 3) Total September 30, 2019 Short-term investments—U.S. Treasury securities $ 676,847 $ — $ — $ 676,847 Other non-current assets—equity securities 103,554 — — 103,554 Total $ 780,401 $ — $ — $ 780,401 December 31, 2018 Short-term investments—U.S. Treasury securities $ 332,486 $ — $ — $ 332,486 Long-term investments—U.S. Treasury securities 49,194 — — 49,194 Other non-current assets—equity securities 113,812 — — 113,812 Total $ 495,492 $ — $ — $ 495,492 |
Summary of Debt Securities | Our debt securities consisted of the following: (dollars in thousands) Amortized cost Gross unrealized gains Gross unrealized losses Fair value September 30, 2019 U.S. Treasury securities $ 676,543 $ 340 $ (36 ) $ 676,847 Contractual maturities (at date of purchase): Due in one year or less $ 583,989 $ 584,056 Due in one to two years 92,554 92,791 Total $ 676,543 $ 676,847 December 31, 2018 U.S. Treasury securities $ 381,673 $ 133 $ (126 ) $ 381,680 Contractual maturities (at date of purchase): Due in one year or less $ 246,440 $ 246,402 Due in one to two years 135,233 135,278 Total $ 381,673 $ 381,680 |
Investment and Other Income (_2
Investment and Other Income (Loss), Net (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Summary of Investment and Other Income (Loss), Net | Investment and other income (loss), net consisted of the following: Three months ended September 30, Nine months ended September 30, (dollars in thousands) 2019 2018 2019 2018 Gain (loss) on equity securities $ (5,690 ) $ (23,765 ) $ (10,258 ) $ 62,882 Investment income, net 3,561 1,893 7,909 3,917 Total investment and other income (loss), net $ (2,129 ) $ (21,872 ) $ (2,349 ) $ 66,799 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | The following table presents our inventories of ADCETRIS: (dollars in thousands) September 30, 2019 December 31, 2018 Raw materials $ 84,717 $ 43,986 Finished goods 7,317 9,253 Total $ 92,034 $ 53,239 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019USD ($)Segment | Dec. 31, 2018USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | ||
Number of reporting segment operated | Segment | 1 | |
Accrued capital expenditures | $ 11.7 | $ 4.6 |
Right-of-use asset acquired in exchange for lease liability | $ 39.2 | |
Number of days allowed to the customer to return product for expiration or damage | 30 days | |
Long Term Incentive Plans [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
LTIP estimated unrecognized compensation expense | $ 47.8 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Additional Information (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2019USD ($)Product | |
ADCETRIS [Member] | |
Revenue from Contracts with Customers [Line Items] | |
Number of marketed product | Product | 1 |
Collaboration and License Agreement Revenues [Member] | |
Revenue from Contracts with Customers [Line Items] | |
Deferred revenue recognized | $ 27.5 |
Collaboration and License Agreement Revenues [Member] | Takeda Collaboration and License Agreement [Member] | |
Revenue from Contracts with Customers [Line Items] | |
Milestone payment revenue | $ 37.5 |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Summary of Collaboration and License Agreement Revenues by Collaborator (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Collaboration and license agreement revenues | $ 213,263 | $ 169,424 | $ 626,909 | $ 480,187 |
License and Service [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Collaboration and license agreement revenues | 18,420 | 19,786 | 99,128 | 76,524 |
License and Service [Member] | Takeda Collaboration and License Agreement [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Collaboration and license agreement revenues | 17,720 | 18,805 | 89,859 | 41,122 |
License and Service [Member] | Other Collaboration and License Agreement [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Collaboration and license agreement revenues | $ 700 | $ 981 | $ 9,269 | $ 35,402 |
Operating Leases - Additional I
Operating Leases - Additional Information (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 01, 2019 |
Leases [Abstract] | ||
Operating lease liabilities | $ 77,973 | $ 35,200 |
Operating lease right-of-use assets | $ 66,632 | $ 34,700 |
Weighted average remaining lease term | 7 years 3 months 18 days | |
Weighted average discount rate | 5.40% |
Operating Leases - Lease Cost (
Operating Leases - Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Leases [Abstract] | ||
Operating lease cost | $ 3,479 | $ 10,066 |
Variable lease cost | 691 | 2,120 |
Total lease cost | 4,170 | 12,186 |
Cash paid for amounts included in measurement of lease liabilities | $ 2,732 | $ 7,129 |
Operating Leases - Future Minim
Operating Leases - Future Minimum Lease Payments (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Leases [Abstract] | |||
2019 (remaining three months) | $ 3,002 | ||
2020 | 13,086 | ||
2021 | 14,028 | ||
2022 | 13,585 | ||
2023 | 13,478 | ||
Thereafter | 38,701 | ||
Total future minimum lease payments | 95,880 | ||
Less: imputed interest | (17,907) | ||
Total | $ 77,973 | $ 35,200 | |
2019 | $ 10,332 | ||
2020 | 11,863 | ||
2021 | 12,770 | ||
2022 | 12,288 | ||
2023 | 12,142 | ||
Thereafter | 30,517 | ||
Total future minimum lease payments | $ 89,912 |
Operating Leases - Summary of B
Operating Leases - Summary of Balance Sheet Information (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 01, 2019 |
Leases [Abstract] | ||
Accrued liabilities and other | $ 8,662 | |
Operating lease liabilities, long-term | 69,311 | |
Total | $ 77,973 | $ 35,200 |
Acquisition of Cascadian - Addi
Acquisition of Cascadian - Additional Information (Details) - Cascadian Therapeutics [Member] - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 9 Months Ended |
Mar. 31, 2018 | Sep. 30, 2018 | |
Business Acquisition [Line Items] | ||
Share price (in dollars per share) | $ 10 | |
Payments to acquire business | $ 614.1 | |
Acquisition-related costs | $ 8.5 |
Acquisition of Cascadian - Sche
Acquisition of Cascadian - Schedule of Purchase Price Allocation of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 | Mar. 31, 2018 |
Business Acquisition [Line Items] | |||
Goodwill | $ 274,671 | $ 274,671 | |
Cascadian Therapeutics [Member] | |||
Business Acquisition [Line Items] | |||
Cash and cash equivalents | $ 15,919 | ||
Short-term and long-term investments | 66,491 | ||
Prepaid expenses and other assets | 2,215 | ||
Property and equipment | 566 | ||
In-process research and development | 300,000 | ||
Goodwill | 274,671 | ||
Accounts payable and accrued liabilities | (22,139) | ||
Deferred tax liability | (23,653) | ||
Total purchase price | $ 614,070 |
Acquisition of Cascadian - Sc_2
Acquisition of Cascadian - Schedule of Business Acquisition, Unaudited Pro Forma Information (Detail) - Cascadian Therapeutics [Member] - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2018 | Sep. 30, 2018 | |
Business Acquisition [Line Items] | ||
Revenues | $ 169,424 | $ 480,187 |
Net loss | $ (67,446) | $ (131,822) |
Net Loss Per Share - Additional
Net Loss Per Share - Additional Information (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Stock Options and RSUs [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Weighted-average shares that have been excluded from the number of shares used to calculate basic and diluted net loss per share (in shares) | 12,618 | 13,258 | 12,758 | 13,338 |
Common Stock (Details)
Common Stock (Details) - Underwritten Public Offering [Member] - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | |
Jul. 31, 2019 | Feb. 28, 2018 | |
Subsidiary, Sale of Stock [Line Items] | ||
Number of shares issued (in shares) | 8,214,286 | 13,269,230 |
Offering price (in dollars per share) | $ 70 | $ 52 |
Net proceeds from stock offering | $ 548.7 | $ 658.2 |
Fair Value - Summary of Fair Va
Fair Value - Summary of Fair Value Hierarchy of Assets Carried at Fair Value and Measured on a Recurring Basis (Details) - Fair Value Measurements Recurring [Member] - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | $ 780,401 | $ 495,492 |
US Treasury Securities [Member] | Short-term Investments [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 676,847 | 332,486 |
US Treasury Securities [Member] | US Treasury Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 49,194 | |
Equity Securities [Member] | Other Non-current Assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 103,554 | 113,812 |
Quoted prices in active markets for identical assets (Level 1) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 780,401 | 495,492 |
Quoted prices in active markets for identical assets (Level 1) [Member] | US Treasury Securities [Member] | Short-term Investments [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 676,847 | 332,486 |
Quoted prices in active markets for identical assets (Level 1) [Member] | US Treasury Securities [Member] | US Treasury Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 49,194 | |
Quoted prices in active markets for identical assets (Level 1) [Member] | Equity Securities [Member] | Other Non-current Assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 103,554 | 113,812 |
Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Other Observable Inputs (Level 2) [Member] | US Treasury Securities [Member] | Short-term Investments [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Other Observable Inputs (Level 2) [Member] | US Treasury Securities [Member] | US Treasury Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | |
Other Observable Inputs (Level 2) [Member] | Equity Securities [Member] | Other Non-current Assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Significant Unobservable Inputs (Level 3) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Significant Unobservable Inputs (Level 3) [Member] | US Treasury Securities [Member] | Short-term Investments [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Significant Unobservable Inputs (Level 3) [Member] | US Treasury Securities [Member] | US Treasury Securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | |
Significant Unobservable Inputs (Level 3) [Member] | Equity Securities [Member] | Other Non-current Assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | $ 0 | $ 0 |
Fair Value - Summary of Debt Se
Fair Value - Summary of Debt Securities (Details) - US Treasury Securities [Member] - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized cost | $ 676,543 | $ 381,673 |
Gross unrealized gains | 340 | 133 |
Gross unrealized losses | (36) | (126) |
Fair value | 676,847 | 381,680 |
Debt securities, due in one year or less, amortized cost | 583,989 | 246,440 |
Debt securities, due in one year or less, fair value | 584,056 | 246,402 |
Debt securities, due in one to two years, amortized cost | 92,554 | 135,233 |
Debt securities, due in one to two years, fair value | $ 92,791 | $ 135,278 |
Investment and Other Income (_3
Investment and Other Income (Loss), Net (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Investments, Debt and Equity Securities [Abstract] | ||||
Gain (loss) on equity securities | $ (5,690) | $ (23,765) | $ (10,258) | $ 62,882 |
Investment income, net | 3,561 | 1,893 | 7,909 | 3,917 |
Total investment and other income (loss), net | $ (2,129) | $ (21,872) | $ (2,349) | $ 66,799 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 84,717 | $ 43,986 |
Finished goods | 7,317 | 9,253 |
Total | $ 92,034 | $ 53,239 |
Legal Matters (Details)
Legal Matters (Details) | Mar. 08, 2018stockholder |
Commitments and Contingencies Disclosure [Abstract] | |
Number of stockholders | 3 |
Uncategorized Items - a10q2019q
Label | Element | Value |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 26,556,000 |
AOCI Attributable to Parent [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (64,119,000) |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 90,675,000 |