Cover
Cover - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 10, 2023 | Jun. 30, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 0-32405 | ||
Entity Registrant Name | SEAGEN INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 91-1874389 | ||
Entity Address, Address Line One | 21823 30th Drive SE | ||
Entity Address, City or Town | Bothell | ||
Entity Address, State or Province | WA | ||
Entity Address, 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 Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 24.2 | ||
Entity Common Stock, Shares Outstanding | 186,789,367 | ||
Documents Incorporated by Reference | Part III incorporates information by reference from the registrant's definitive proxy statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A, not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K, in connection with the registrant's 2023 Annual Meeting of Stockholders. | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001060736 |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2022 | |
Audit Information [Abstract] | |
Auditor Firm ID | 238 |
Auditor Name | PricewaterhouseCoopers LLP |
Auditor Location | Seattle, Washington |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 319,940 | $ 424,834 |
Short-term investments | 1,415,130 | 1,735,202 |
Accounts receivable, net | 501,912 | 389,256 |
Inventories | 427,211 | 200,663 |
Prepaid expenses and other current assets | 138,340 | 119,239 |
Total current assets | 2,802,533 | 2,869,194 |
Property and equipment, net | 248,179 | 210,073 |
Operating lease right-of-use assets | 46,738 | 57,889 |
Intangible assets, net | 237,516 | 260,593 |
Goodwill | 274,671 | 274,671 |
Other non-current assets | 64,895 | 47,184 |
Total assets | 3,674,532 | 3,719,604 |
Current liabilities: | ||
Accounts payable | 207,851 | 114,824 |
Accrued liabilities and other | 610,553 | 454,030 |
Total current liabilities | 818,404 | 568,854 |
Long-term liabilities: | ||
Operating lease liabilities, long-term | 43,474 | 56,665 |
Other long-term liabilities | 8,835 | 28,946 |
Total long-term liabilities | 52,309 | 85,611 |
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; 186,559 shares issued and outstanding at December 31, 2022 and 183,381 shares issued and outstanding at December 31, 2021 | 187 | 183 |
Additional paid-in capital | 4,954,469 | 4,607,816 |
Accumulated other comprehensive income | 3,510 | 1,179 |
Accumulated deficit | (2,154,347) | (1,544,039) |
Total stockholders' equity | 2,803,819 | 3,065,139 |
Total liabilities and stockholders' equity | $ 3,674,532 | $ 3,719,604 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
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) | 186,559,000 | 183,381,000 |
Common stock, shares outstanding (in shares) | 186,559,000 | 183,381,000 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive (Loss) Income - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues: | |||
Revenue | $ 1,962,412 | $ 1,574,371 | $ 2,175,536 |
Costs and expenses: | |||
Cost of sales | 410,058 | 311,565 | 217,720 |
Research and development | 1,344,361 | 1,228,672 | 827,129 |
Selling, general and administrative | 820,963 | 716,190 | 533,835 |
Total costs and expenses | 2,575,382 | 2,256,427 | 1,578,684 |
(Loss) income from operations | (612,970) | (682,056) | 596,852 |
Investment and other income, net | 10,655 | 6,351 | 18,849 |
(Loss) income before income taxes | (602,315) | (675,705) | 615,701 |
Provision (benefit) for income taxes | 7,993 | (1,234) | 2,031 |
Net (loss) income | $ (610,308) | $ (674,471) | $ 613,670 |
Net (loss) income per share - basic (in dollars per share) | $ (3.30) | $ (3.70) | $ 3.51 |
Net (loss) income per share - diluted (in dollars per share) | $ (3.30) | $ (3.70) | $ 3.37 |
Shares used in computation of per share amounts - basic (in shares) | 184,676 | 182,048 | 174,834 |
Shares used in computation of per share amounts - diluted (in shares) | 184,676 | 182,048 | 182,287 |
Comprehensive (loss) income: | |||
Net (loss) income | $ (610,308) | $ (674,471) | $ 613,670 |
Other comprehensive income: | |||
Unrealized loss on securities available-for-sale, net of income tax provision of $0, $0, and $0, respectively | (1,401) | (211) | (186) |
Foreign currency translation gain, net of income tax provision of $0, $0, and $0, respectively | 3,732 | 825 | 522 |
Total other comprehensive income | 2,331 | 614 | 336 |
Comprehensive (loss) income | (607,977) | (673,857) | 614,006 |
Net product sales | |||
Revenues: | |||
Revenue | 1,706,516 | 1,385,566 | 1,000,598 |
Royalty revenues | |||
Revenues: | |||
Revenue | 164,554 | 150,523 | 126,756 |
Collaboration and license agreement revenues | |||
Revenues: | |||
Revenue | $ 91,342 | $ 38,282 | $ 1,048,182 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive (Loss) Income (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | |||
Unrealized gain (loss) on securities available-for-sale, tax | $ 0 | $ 0 | $ 0 |
Foreign currency translation gain (loss), tax | $ 0 | $ 0 | $ 0 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common stock | Additional paid-in capital | Accumulated other comprehensive income | Accumulated deficit |
Balances, shares (in shares) at Dec. 31, 2019 | 171,994 | ||||
Balances, value at Dec. 31, 2019 | $ 1,876,287 | $ 172 | $ 3,359,124 | $ 229 | $ (1,483,238) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | 613,670 | 613,670 | |||
Other comprehensive income | 336 | 336 | |||
Issuance of common stock for stock option exercises and employee stock purchase plan (in shares) | 2,466 | ||||
Issuance of common stock for stock option exercises and employee stock purchase plan | 96,257 | $ 2 | 96,255 | ||
Restricted stock vested during the period, net (in shares) | 1,442 | ||||
Restricted stock vested during the period, net | 0 | $ 2 | (2) | ||
Issuance of common stock (in shares) | 5,000 | ||||
Issuance of common stock | 749,850 | $ 5 | 749,845 | ||
Share-based compensation | 151,700 | 151,700 | |||
Balances, shares (in shares) at Dec. 31, 2020 | 180,902 | ||||
Balances, value at Dec. 31, 2020 | 3,488,100 | $ 181 | 4,356,922 | 565 | (869,568) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | (674,471) | (674,471) | |||
Other comprehensive income | 614 | 614 | |||
Issuance of common stock for stock option exercises and employee stock purchase plan (in shares) | 1,545 | ||||
Issuance of common stock for stock option exercises and employee stock purchase plan | 77,779 | $ 1 | 77,778 | ||
Restricted stock vested during the period, net (in shares) | 934 | ||||
Restricted stock vested during the period, net | 0 | $ 1 | (1) | ||
Share-based compensation | $ 173,117 | 173,117 | |||
Balances, shares (in shares) at Dec. 31, 2021 | 183,381 | 183,381 | |||
Balances, value at Dec. 31, 2021 | $ 3,065,139 | $ 183 | 4,607,816 | 1,179 | (1,544,039) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | (610,308) | (610,308) | |||
Other comprehensive income | 2,331 | 2,331 | |||
Issuance of common stock for stock option exercises and employee stock purchase plan (in shares) | 2,281 | ||||
Issuance of common stock for stock option exercises and employee stock purchase plan | 125,360 | $ 3 | 125,357 | ||
Restricted stock vested during the period, net (in shares) | 897 | ||||
Restricted stock vested during the period, net | 0 | $ 1 | (1) | ||
Share-based compensation | $ 221,297 | 221,297 | |||
Balances, shares (in shares) at Dec. 31, 2022 | 186,559 | 186,559 | |||
Balances, value at Dec. 31, 2022 | $ 2,803,819 | $ 187 | $ 4,954,469 | $ 3,510 | $ (2,154,347) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating activities: | |||
Net (loss) income | $ (610,308) | $ (674,471) | $ 613,670 |
Adjustments to reconcile net (loss) income to net cash (used) provided by operating activities | |||
Share-based compensation | 221,297 | 173,117 | 147,233 |
Depreciation and amortization | 46,727 | 42,854 | 36,045 |
Amortization of intangible assets | 23,077 | 23,087 | 16,345 |
Amortization of right-of-use-assets | 12,354 | 12,685 | 10,994 |
Amortization of premiums, accretion of discounts, and (gains) losses on debt securities | (7,065) | 15,933 | 3,104 |
Loss (gain) on equity securities | 10,154 | (4,744) | (11,604) |
Gain on disposals of property and equipment | 0 | 0 | (26) |
Deferred income taxes | 553 | 548 | (2,053) |
Changes in operating assets and liabilities: | |||
Accounts receivable, net | (112,656) | (64,268) | (88,727) |
Inventories | (226,548) | (84,527) | (30,204) |
Prepaid expenses and other assets | (16,306) | (66,422) | (22,231) |
Lease liabilities | (15,509) | (14,388) | (11,271) |
Other liabilities | 220,479 | 141,589 | 195,293 |
Net cash (used) provided by operating activities | (453,751) | (499,007) | 856,568 |
Investing activities: | |||
Purchases of securities | (2,462,264) | (3,424,286) | (2,483,336) |
Proceeds from maturities of securities | 2,788,000 | 3,765,500 | 952,000 |
Proceeds from sales of securities | 0 | 0 | 194,733 |
Payments for lessor-owned assets | (20,159) | 0 | 0 |
Purchases of property and equipment | (77,340) | (52,330) | (82,409) |
Net cash provided (used) by investing activities | 228,237 | 288,884 | (1,419,012) |
Financing activities: | |||
Net proceeds from issuance of common stock | 0 | 0 | 749,850 |
Proceeds from exercise of stock options and employee stock purchase plan | 125,360 | 77,779 | 96,258 |
Net cash provided by financing activities | 125,360 | 77,779 | 846,108 |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | (1,194) | (1,246) | 198 |
Net (decrease) increase in cash, cash equivalents, and restricted cash | (101,348) | (133,590) | 283,862 |
Cash, cash equivalents, and restricted cash at beginning of year | 424,834 | 558,424 | 274,562 |
Cash, cash equivalents, and restricted cash at end of year | $ 323,486 | $ 424,834 | $ 558,424 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Organization and Summary of Significant Accounting Policies | Organization and Summary of Significant Accounting Policies Organization We are a biotechnology company that develops and commercializes targeted therapies to treat cancer. We are commercializing ADCETRIS®, or brentuximab vedotin, for the treatment of certain CD30-expressing lymphomas, PADCEV®, or enfortumab vedotin-ejfv, for the treatment of certain metastatic urothelial cancers, TIVDAK™, or tisotumab vedotin-tftv, for the treatment of certain metastatic cervical cancers, and TUKYSA®, or tucatinib, for treatment of certain metastatic HER2-positive breast cancers. We are also advancing a pipeline of novel therapies for solid tumors and blood-related cancers designed to address unmet medical needs and improve treatment outcomes for patients. Many of our programs, including ADCETRIS, PADCEV and TIVDAK, are based on our antibody-drug conjugate, or ADC, technology that utilizes the targeting ability of monoclonal antibodies to deliver cell-killing agents directly to cancer cells. Basis of presentation The accompanying consolidated financial statements reflect the accounts of Seagen Inc. and its wholly-owned subsidiaries (collectively "Seagen," "we," "our," or "us"). The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP. All intercompany transactions and balances have been eliminated. 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. Use of estimates The preparation of financial statements in accordance with GAAP requires us to make estimates, assumptions, and judgments that affect the amounts report ed in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Estimates include those used for revenue recognition, valuation of investments, inventory valuation, accrued liabilities, including those related to the long-term incentive plans and performance-based equity, clinical trials and contingencies, and stock option valuation. Cash and cash equivalents We consider all highly liquid investments with maturities of three months or less at the date of acquisition to be cash equivalents. Non-cash activities We had $20.1 million and $9.9 million of accrued capital expenditures as of December 31, 2022 and 2021, respectively. Accrued capital expenditures have been treated as a non-cash investing activity and, accordingly, have not been included in the consolidated statement of cash flows until such amounts have been paid in cash. During the years ended December 31, 2022, 2021 and 2020, we recorded $1.2 million, $9.1 million, and $7.2 million, respectively, of right-of-use assets in exchange for lease liabilities, which has been treated as a non-cash operating activity. See Note 3 for additional information. Investments We hold certain equity securities which are reported at estimated fair value based on quoted market prices. Chang es 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 (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, 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, net. Interest and dividends earned are included in investment and other income, net. Accrued interest receivable as of December 31, 2022 and 2021, were $5.2 million and $0.4 million, respectively, and were included in prepaid expenses and other current assets. 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, net. Fair value of financial instruments The recorded amounts of certain financial instruments, including cash and cash equivalents, interest receivable, accounts receivable, accounts payable and accrued liabilities approximate fair value due to their relatively short maturities. Investments that are classified as available-for-sale are recorded at estimated fair value. The estimated fair value for securities held is determined using quoted market prices, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency. Restricted Cash As of December 31, 2022, we had $3.5 million cash held in escrow restricted by a contractual agreement related to our Everett, Washington building construction project. The restricted cash was recorded in prepaid expenses and other current assets in the consolidated balance sheet. We determine classification based on the expected duration of the restriction. Our total cash, cash equivalents, and restricted cash, as presented in the consolidated statements of cash flows, was as follows: December 31, (dollars in thousands) 2022 2021 Cash and cash equivalents $ 319,940 $ 424,834 Restricted cash included in prepaid expenses and other current assets 3,546 — Total cash, cash equivalents, and restricted cash as presented in the consolidated statements of cash flows $ 323,486 $ 424,834 Leases We determine if an arrangement is a lease at inception d ate. All of our currently effective 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 a t 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. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Variable lease cost primarily includes building operating expenses as charged to us by our landlords. 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. Inventories We consider regulatory approval of product candidates to be uncertain. Accordingly, we charge manufacturing costs to research and development expense until such time as a product has received regulatory approval for commercial sale. Production costs for our marketed products are capitalized into inventory. Inventory that is deployed for clinical, research or development use is charged to research and development expense when it is no longer available for commercial sales. Production costs for our other product candidates are charged to research and development expense. We value our inventories at the lower of cost or market value. Cost is determined on a specific identification basis. Inventory includes the cost of materials, third-party contract manufacturing and overhead associated with the production of our commercialized products. In the event that we identify excess, obsolete or unsalable inventory, its value is written down to net realizable value. Property and equipment Property and equipment are stated at cost. Land is not depreciated, while all other property and equipment are depreciated using the straight-line method over the estimated useful lives of the assets, which are generally as follows: Years Building and improvements 20-30 Laboratory and manufacturing equipment 5-15 Furniture and fixtures 5 Computers, software and office equipment 3 Leasehold improvements are amortized over the shorter of the remaining term of the applicable lease or the useful life of the asset. Gains and losses from the disposal of property and equipment are reflected in income or loss at the time of disposition and have not been significant. Expenditures for additions and improvements to our facilities are capitalized and expenditures for maintenance and repairs are charged to expense as incurred. Intangible assets, net Our intangible assets are primarily comprised of acquired TUKYSA technology. Upon FDA approval and commercial launch of TUKYSA in April 2020, we classified in-process research and development costs related to the acquired TUKYSA technology as finite-lived intangible assets. The following table presents the balances of our finite-lived intangible assets for the periods presented: December 31, (dollars in thousands) 2022 2021 Gross carrying value $ 305,650 $ 305,650 Less: accumulated amortization (68,134) (45,057) Total $ 237,516 $ 260,593 The following table presents our amortization expense related to acquired TUKYSA technology costs, included in cost of sales in our consolidated statements of comprehensive income (loss), for the periods presented: Years ended December 31, (dollars in thousands ) 2022 2021 2020 Amortization expense $ 23,077 $ 23,087 $ 16,345 The weighted average useful life of our finite-lived intangible assets was 10 years as of December 31, 2022, and estimated future amortization expense related to acquired TUKYSA technology costs is $23.1 million for each of the years ending December 31, 2023 through December 31, 2027. Goodwill We evaluate 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 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. We have not recognized any impairment losses through December 31, 2022 as there have been no events warranting an impairment analysis. Impairment of long-lived assets We assess the impairment of long-lived assets, including intangible assets and property and equipment, whenever events or changes in business circumstances indicate that the carrying amounts of the assets may not be fully recoverable. When such events occur, we determine whether there has been an impairment in value by comparing the asset's carrying value with its fair value, as measured by the anticipated undiscounted net cash flows of the asset. If an impairment in value exists, the asset is written down to its estimated fair value. We have not recognized any impairment losses through December 31, 2022 as there have been no events warranting an impairment analysis. Our long-lived assets are primarily located in the U.S.; however, we have multiple subsidiaries in foreign jurisdictions, including several subsidiaries in Europe. Revenue recognition - Net product sales We sell our products primarily thr ough a limited number of specialty distributors and specialty pharmacies in the U.S, and to a lesser extent, internationally. The delivery of our products represents a single performance obligation for these transactions and we record net product sales at the point in time when control is transferred to the customer, which generally occurs upon receipt by the customer. The transaction price for net 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. Outside of the U.S., the transaction price for net product sales represents the amount we expect to receive, which is net of estimated discounts, estimated government mandated rebates, distribution fees, estimated product returns, and other deductions. Accruals are established for these deductions, and actual amounts incurred are offset against applicable accruals. These estimates involve judgment in estimating net product sales. U.S. 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 our products. 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 payor mix and our experience to-date. We have a Federal Supply Schedule, or FSS, agreement under which certain U.S. government purchasers receive a discount on eligible purchases of our products. 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 our products. Under these agreements, eligible customers receive an applicable discount which is processed through the distributor as a chargeback to us for the difference between wholesale acquisition cost and the applicable discounted price. We 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 a specified number of days of its expiration date or that is damaged. We estimate product returns based on our experience to-date using the expected value approach. We provide financial assistance to qualifying patients that are underinsured or cannot cover the cost of commercial coinsurance amounts through our patient support programs. Estimated contributions for commercial coinsurance under our patient assistance program, 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. Revenue recognition - Royalty revenues Royalty revenues primarily reflect amounts earned under the ADCETRIS collaboration with Takeda Pharmaceutical Company Limited, or 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 annual net sales tiers. Takeda bears a portion of low single digit third-party royalty costs owed on its sales of ADCETRIS. This amount is included in royalty revenues. Amounts owed to our third-party licensors related to Takeda's sales of ADCETRIS are recorded in cost of sales. These amounts are recognized in the period in which the related sales by Takeda occur. Royalty revenues also reflect amounts from Genentech, Inc., a member of the Roche Group, or Genentech, earned on net sales of Polivy, and amounts from GlaxoSmithKline earned on net sales of Blenrep. Revenue recognition - Collaboration and license agreement revenues We have collaboration and license agreements for our technology with a number of biotechnology and pharmaceutical companies. Under these agreements, we typically receive or are entitled to receive upfront cash payments and progress- and sales-dependent milestones for the achievement by our licensees of certain events, and annual maintenance fees and support fees for research and development services and materials provided under the agreements. We also are entitled to receive royalties on net sales of any resulting products incorporating our technology. Generally, our licensees are solely responsible for research, product development, manufacturing and commercialization of any product candidates under these collaborations, which includes the achievement of the potential milestones. Since we may not take a substantive role or control the research, development or commercialization of any products generated by some of our licensees, we may not be able to reasonably estimate when, if at all, any potential future milestone payments or royalties may be payable to us by our licensees. As such, the potential future milestone payments associated with certain of our collaboration and license agreements involve a substantial degree of uncertainty and risk that they may never be received. Collaboration and license agreements 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 future reversal of cumulative revenue and, therefore, should be included in the transaction price. Assessing the recognition of variable consideration requires 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 collaboration and license agreements, 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 certain collaboration and license agreements is not distinct from the perspective of our customers at the time of initial transfer, since we often 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 may 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 certain collaboration and license agreements as evaluated at contract inception were not distinct and represented a single performance obligation. Upfront payments are 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. For agreements beyond the initial performance period, we have no remaining performance obligations. We may receive license maintenance fees and potential milestones and royalties based on collaborator development and regulatory progress, which are recorded in the period achieved in the case of milestones, and during the period of the related sales for royalties. When no performance obligations are required of us, or following the completion of the performance obligation period, such amounts are recognized 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. Research and development expenses Research and development, or R&D, expenses consist of salaries, benefits and other headcount-related costs of our R&D staff, preclinical activities, clinical trials and related manufacturing costs, lab supplies, contract and outside service fees and facilities and overhead expenses for research, development and preclinical studies focused on drug discovery, development and testing. R&D activities are expensed as incurred. Clinical trial expenses are a significant component of research and development expenses, and we outsource a significant portion of these costs to third parties. Third-party clinical trial expenses include investigator fees, site costs, clinical research organization costs, and costs for central laboratory testing and data management. Costs associated with activities performed under co-development collaborations are reflected in R&D expense. In-licensing fees, milestones, maintenance fees and other costs to acquire technologies utilized in R&D for product candidates that have not yet received regulatory approval and that are not expected to have alternative future use are expensed when incurred. Non-refundable advance payments for goods or services that will be used or rendered for future R&D activities are capitalized and recognized as expense as the related goods are delivered or the related services are performed. This results in the temporary deferral of recording expense for amounts incurred for research and development activities from the time payments are made until the time goods or services are provided. Advertising Advertising costs are expensed as incurred. We incurred $114.1 million, $88.8 million, and $59.3 million in advertising expenses during 2022, 2021, and 2020, respectively. Concentration of credit risk Cash, cash equivalents and investments are invested in accordance with our investment policy. The policy includes guidelines for the investment of cash reserves and is reviewed periodically to minimize credit risk. Most of our investments are in U.S. Treasury securities and are not federally insured. We have accounts receivable from the sale of our products from a small number of distributors, and from our collaborators. We do not require collateral on amounts due from our distributors or our collaborators and are therefore subject to credit risk. We maintain our cash, cash equivalents, and investments at accredited financial institutions that we believe are creditworthy. From time to time, these deposits may exceed federally insured limits. Allowance for doubtful accounts We estimate an allowance for doubtful accounts based on our assessment of the collectability of customer accounts. We regularly review the allowance by considering factors such as historical experience, credit quality, the age of the accounts receivable balances, and current economic conditions that may affect a customer's ability t o pay. As of December 31, 2022 and 2021, there was no allowance for doubtful accounts, and we recognized no credit losses during the years ended December 31, 2022, 2021, and 2020. Geographic and customer information Net product revenues are attributed to countries based on the location of the customer. Royalty revenues and collaboration and licenses agreements revenues are attributed to countries based on the location of the Company's subsidiary associated with the royalty or collaborative arrangement related to such revenues. Over 90% of our revenues and assets are related to operations in the U.S. for all periods presented; however, we have multiple subsidiaries in foreign jurisdictions, including several subsidiaries in Europe. We sell our products throug h a limited nu mber of d istributors and specialty pharmacies. The following table presents each major distributor or collaborator that comprised more than 10% of total revenue: Years ended December 31, 2022 2021 2020 Distributor A 34 % 36 % 18 % Distributor B 27 % 27 % 15 % Distributor C 16 % 17 % 10 % Collaborator B — % — % 45 % The following table presents each major distributor or collaborator that accounted for more than 10% of accounts receivable: December 31, 2022 2021 Distributor A 30 % 29 % Distributor B 28 % 22 % Distributor C 17 % 16 % Collaborator A 9 % 11 % Major suppliers The use of a relatively small number of contract manufacturers to supply drugs necessary for our commercial and clinical operations create a concentration of risk for us. For certain components of our approved products and our clinical product candidates we primarily use one source of supply, though other sources are available should we need to change suppliers. For PADCEV, in particular, we rely on Astellas for both commercial and clinical supply as Astellas oversees the manufacturing supply chain. As a form of reducing near-term risk, we endeavor to maintain reasonable levels of drug supply inventory across the supply chain. A change in suppliers or disruption at one of our suppliers, however, could cause a delay or interruption in delivery of drug or clinical trials. Such an event would adversely affect our business. Income taxes We recognize deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred tax assets and liabilities are determined based on the differences between the financial statement and tax bases of assets and liabilities using tax rates in effect for the year in which the differences are expected to reverse. We have provided a valuation allowance against substantially all our deferred tax assets for all periods presented. A valuation allowance is recorded when it is more likely than not that some portion or all of the net deferred tax asset will not be realized. Future realization of deferred tax assets is dependent upon a number of factors, including the existence of sufficient taxable income based on future earnings, the timing and amount of which is uncertain. The assessment regarding whether a valuation allowance is required considers the evaluation of both positive and negative evidence when concluding whether it is more likely than not that deferred tax assets are realizable. Based upon a review of all available evidence, we determined that it is not more likely than not that the U.S. deferred tax assets will be realized, and therefore the deferred tax assets have been fully offset by a valuation allowance. We follow the guidance related to accounting for uncertainty in income taxes, which requires the recognition of an uncertain tax position when it is more likely than not to be sustainable upon audit by the applicable taxing authority. If this threshold is met, the tax benefit is then measured and recognized at the largest amount that is greater than 50% likely of being realized upon ultimate settlement. Share-based compensation The Company recognizes compensation expense based upon the grant date fair value for our equity awards. The fair value of certain stock options is estimated using the Black-Scholes option pricing model and restricted stock units, or RSUs, is estimated based upon the fair value of our common stock. The fair value of stock options or RSUs, subject to market-based performance metrics, is estimated using a Monte Carlo simulation model. We use the graded-vesting attribution method for recognizing compensation expense for certain stock options and RSUs. Compensation expense is recognized over the requisite service periods on awards ultimately expected to vest and reduced for forfeitures that are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. For performance-based stock options and RSUs, subject to the achievement of pre-determined performance milestones, which may include regulatory milestones or revenue-based milestones, we record compensation expense over the requisite service period once the achievement of the performance-based milestone is considered probable. The vesting of performance-based awards generally includes vesting upon achievement of pre-determined regulatory milestones, revenue-based milestones, or market-based performance metrics, in addition to the passage of time. 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 any remaining compensation expense with respect to a milestone, over the estimated remaining requisite service period. For performance-based stock options and RSUs, subject to market-based performance metrics, which may include total shareholder return compared to our industry peer group or stock price targets, we record compensation expense over the requisite service periods irrespective of the probability of achieving the market-based condition and compensation expense is not reversed if the market condition is not satisfied. Comprehensive (loss) income Comprehensive (loss) income is the change in stockholders' equity from transactions and other events and circumstances other than those resulting from investments by stockholders and distributions to stockholders. Our comprehensive (loss) income is comprised of net (loss) income, unrealized gains and losses on available-for-sale securities, net of income tax provision and foreign currency translation adjustments, net of income tax provision. Loss contingencies We are involved in various legal proceedings in the normal course of business. A loss contingency is recorded if it is probable that an asset has been impaired or a liability has been incurred and the amount of the loss can be reasonably estimated. We evaluate, among other factors, the probability of an unfavorable outcome and our ability to make a reasonable estimate and the amount of the ultimate loss. Loss contingencies that are determined to be reasonably possible, but not probable, are disclosed but not recorded. Legal fees incurred as a result of our involvement in legal procedures are expensed as incurred. Certain risks and uncertainties Our revenues are derived from net product sale |
Revenue from contracts with cus
Revenue from contracts with customers | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from contracts with customers | Revenue from contracts with customers The following table presents our disaggregated revenue for the years presented. Years ended December 31, (dollars in thousands) 2022 2021 2020 ADCETRIS $ 839,272 $ 705,561 $ 658,577 PADCEV 451,427 339,918 222,436 TUKYSA 353,083 333,952 119,585 TIVDAK 62,734 6,135 — Net product sales $ 1,706,516 $ 1,385,566 $ 1,000,598 Royalty revenues $ 164,554 $ 150,523 $ 126,756 Collaboration and license agreement revenues $ 91,342 $ 38,282 $ 1,048,182 Total revenues $ 1,962,412 $ 1,574,371 $ 2,175,536 In 2020, collaboration and license agreement revenues included $975.2 million related to our LV and TUKYSA license and collaboration agreements with Merck. See Note 10 for further information. Contract balances and performance obligations We had no contract assets or liabilities as of December 31, 2022 and 2021. We recognized no collaboration and license agreement revenues during the years ended December 31, 2022, 2021, and 2020 that were included in deferred revenue as of the beginning of the respective years. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Leases | Leases We have operating leases for our office and laboratory facilities with terms that expire from 2023 through 2029. During the years ended December 31, 2022, 2021 and 2020, we recorded $1.2 million, $9.1 million and $7.2 million of right-of-use assets in exchange for lease liabilities, respectively. 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 December 31, 2022. In June 2021, we entered into a lease agreement for an approximately 258,000 square foot building complex to be constructed by the landlord on approximately 20.5 acres of land in Everett, Washington. We intend to use the building for future manufacturing, laboratory, and office space. Under the terms of the lease, base rent is payable at an initial rate of $4.0 million per year, subject to annual escalations of 3% during the initial term of 20 years. The lease commenced in January 2023 and we will record a lease liability and right-of-use assets on our consolidated balance sheet following the lease commencement date. We have an option to renew the lease for two additional terms of ten years each. In addition, we have an option to purchase the premises in the future. Supplemental operating lease information was as follows: Years ended December 31, (dollars in thousands, except term and rate ) 2022 2021 2020 Operating lease cost $ 15,812 $ 16,219 $ 15,013 Variable lease cost 4,454 4,227 3,937 Total lease cost $ 20,266 $ 20,446 $ 18,950 Cash paid for amounts included in measurement of lease liabilities $ 17,236 $ 16,814 $ 14,265 As of December 31, 2022 2021 Weighted average remaining lease term (in years) 5.25 5.87 Weighted average discount rate 4.9 % 5.0 % Rent expense attributable to non-cancelable operating leases totaled approximately $15.9 million, $16.5 million, and $16.6 million for the years ended December 31, 2022, 2021, and 2020, respectively. Operating lease liabilities were recorded in the following captions of our consolidated balance sheet as follows: As of December 31, (dollars in thousands ) 2022 2021 Accrued liabilities and other $ 14,517 $ 13,905 Operating lease liabilities, long-term 43,474 56,665 Total $ 57,991 $ 70,570 As of December 31, 2022, future minimum lease payments under the lease agreements were as follows: (dollars in thousands) Years ending December 31, 2023 $ 17,046 2024 12,714 2025 8,718 2026 8,053 2027 8,053 Thereafter 11,665 Total future minimum lease payments 66,249 Less: imputed interest (8,258) Total $ 57,991 |
Fair Value
Fair Value | 12 Months Ended |
Dec. 31, 2022 | |
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 Other Significant Total December 31, 2022 Short-term investments—U.S. Treasury securities $ 1,415,130 $ — $ — $ 1,415,130 Other non-current assets—equity securities 3,854 — — 3,854 Total $ 1,418,984 $ — $ — $ 1,418,984 December 31, 2021 Short-term investments—U.S. Treasury securities $ 1,735,202 $ — $ — $ 1,735,202 Other non-current assets—equity securities 14,009 — — 14,009 Total $ 1,749,211 $ — $ — $ 1,749,211 Our short-term debt investments portfolio only contains investments in U.S. Treasury and other U.S. government-backed securities. We review our portfolio based on the underlying risk profile of the securities and have a zero loss expectation for these investments. We also regularly review the securities in an unrealized loss position and evaluate the current expected credit loss by considering factors such as historical experience, market data, issuer-specific factors, and current economic conditions. During the years ended December 31, 2022, 2021 and 2020, we recognized no year-to-date credit loss related to our investments, and had no allowance for credit loss recorded as of December 31, 2022. Our debt securities consisted of the following: (dollars in thousands) Amortized Gross Gross Fair December 31, 2022 U.S. Treasury securities $ 1,416,717 $ 96 $ (1,683) $ 1,415,130 Contractual maturities (at date of purchase): Due in one year or less $ 1,400,852 $ 1,399,382 Due in one to two years 15,865 15,748 Total $ 1,416,717 $ 1,415,130 December 31, 2021 U.S. Treasury securities $ 1,735,388 $ 12 $ (198) $ 1,735,202 Contractual maturities (at date of purchase): Due in one year or less $ 1,635,307 $ 1,635,118 Due in one to two years 100,081 100,084 Total $ 1,735,388 $ 1,735,202 |
Investment and Other Income, Ne
Investment and Other Income, Net | 12 Months Ended |
Dec. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment and Other Income, Net | Investment and Other Income, Net Investment and other income, net consisted of the following: Years ended December 31, (dollars in thousands) 2022 2021 2020 (Loss) gain on equity securities $ (10,154) $ 4,744 $ 11,604 Investment and other income, net 20,809 1,607 7,245 Total investment and other income, net $ 10,655 $ 6,351 $ 18,849 (Loss) gain on equity securities includes the realized and unrealized holding gains and losses on our equity securities. At times, we hold equity investments in certain companies acquired in relation to a strategic partnership. Shares held at the end of reporting periods are marked to market in our consolidated financial statements, which can result in unrealized gains and losses. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consisted of the following: December 31, (dollars in thousands) 2022 2021 Raw materials $ 14,916 $ 12,181 Work in process 357,275 152,635 Finished goods 55,020 35,847 Total $ 427,211 $ 200,663 We capitalize our commercial inventory costs. Work in process represents inventory at various stages of the production process, which includes costs for materials, labor, and overhead applied during the production process. 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. |
Property and equipment
Property and equipment | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment | Property and equipment Property and equipment consisted of the following: December 31, (dollars in thousands) 2022 2021 Leasehold improvements $ 238,161 $ 193,635 Laboratory and manufacturing equipment 127,031 104,702 Building 49,942 49,806 Computers, software and office equipment 64,042 52,078 Furniture and fixtures 20,985 17,563 Land 4,771 4,771 504,932 422,555 Less: accumulated depreciation and amortization (256,753) (212,482) Total $ 248,179 $ 210,073 Depreciation and amortization expenses on property and equipment totaled $46.7 million, $42.9 million, and $36.0 million for the years ended December 31, 2022, 2021, and 2020, respectively. Leasehold improvements included $58.9 million and $44.0 million of construction in process at December 31, 2022 and 2021, respectively. |
Accrued liabilities
Accrued liabilities | 12 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
Accrued liabilities | Accrued liabilities Accrued liabilities consisted of the following : December 31, (dollars in thousands) 2022 2021 Clinical trial and related costs $ 194,006 $ 122,468 Employee compensation and benefits 175,506 139,052 Gross-to-net deductions and third-party royalties 119,289 81,316 Contract manufacturing 21,638 21,867 Other 100,114 89,327 Total $ 610,553 $ 454,030 |
Income taxes
Income taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Income taxes Our (loss) income before income taxes by jurisdiction consisted of the following: Years ended December 31, (dollars in thousands) 2022 2021 2020 U.S. $ (612,004) $ (680,398) $ 613,054 Foreign 9,689 4,693 2,647 Total $ (602,315) $ (675,705) $ 615,701 The provision (benefit) for income taxes consists of the following: Years ended December 31, (dollars in thousands) 2022 2021 2020 Current: Federal $ 527 $ — $ — State 3,965 (2,553) 3,744 Foreign 2,956 844 224 Total Current 7,448 (1,709) 3,968 Deferred: Foreign 545 475 (1,937) Total Deferred 545 475 (1,937) Provision (benefit) for income taxes $ 7,993 $ (1,234) $ 2,031 A reconciliation of the federal statutory income tax rate to the effective income tax rate is as follows: Years ended December 31, 2022 2021 2020 Statutory federal income tax rate 21.0 % 21.0 % 21.0 % Tax credits 3.8 7.2 (5.4) State income taxes and other 2.0 4.6 1.5 Valuation allowance (30.8) (35.7) (8.4) Stock compensation 2.7 3.1 (8.4) Effective tax rate (1.3) % 0.2 % 0.3 % For the year ended December 31, 2022, we recorded a tax expense of $8.0 million primarily related to taxable profits in the U.S. as a result of amendments to Internal Revenue Code (IRC) Section 174 pursuant to the 2017 Tax Cuts and Jobs Act, which took effect January 1, 2022. We had existing federal tax carryforwards sufficient to offset most of the federal liability; however, there were limitations on the use of existing state tax carryforwards. Our income tax provision also reflected taxable profits in foreign jurisdictions. For the year ended December 31, 2021, we recorded a tax benefit of $1.2 million, consisting of a current tax benefit of $1.7 million and a deferred tax expense of $0.5 million, primarily related to the generation of additional available state research and development tax credits. For the year ended December 31, 2020, we recorded a provision for income taxes of $2.0 million consisting primarily of $3.7 million of current state taxes offset by a net $1.7 million deferred foreign tax benefit primarily related to the release of a valuation allowance on our foreign deferred tax asset for net operating losses. We had existing federal tax carryforwards sufficient to offset any federal tax liability, and we incurred state tax liabilities of $3.7 million due to limitations on the use of existing state carryforwards against taxable income. As of December 31, 2022, unremitted earnings of our foreign subsidiaries will be retained indefinitely by the foreign subsidiaries for continuing investment. If foreign earnings were to be repatriated to the U.S., we could be subject to additional insignificant amount of foreign, federal and state income taxes. Our net deferred tax assets consisted of the following: December 31, (dollars in thousands) 2022 2021 Deferred tax assets: Net operating loss carryforwards $ 152,834 $ 331,284 Foreign net operating loss carryforwards 2,795 7,566 Tax credit carryforwards 305,151 278,925 Share-based compensation 46,695 41,087 Allowance and accruals 54,442 47,119 Operating lease liabilities 13,337 16,461 Inventory 34,214 14,629 Capitalized research and development 248,704 6,947 Intangibles and amortization 22,758 5,399 Outside basis difference in partnerships 28,828 — Other 3,124 — Total deferred tax assets 912,882 749,417 Less: valuation allowance (897,490) (730,130) Total deferred tax assets, net of valuation allowance 15,392 19,287 Deferred tax liability: Right-of-use assets (11,218) (13,434) Depreciation (3,222) (3,428) Other — (920) Net deferred tax assets $ 952 $ 1,505 A valuation allowance of $897.5 million and $730.1 million at December 31, 2022 and 2021, respectively, has been recognized to offset net deferred tax assets where realization of such assets is uncertain. The valuation allowance increased by $167.4 million in 2022, increased by $240.6 million in 2021, and decreased by $46.8 million in 2020, which was mostly related to the changes in our deferred tax asset balances. The 2022 increase in the valuation allowance was primarily related to deferred assets for tax credit carryforwards, share-based compensation, and capitalized research and development expense partially offset by net operating loss utilization. The 2021 increase in the valuation allowance was primarily due to the net operating loss and tax credit generation. The 2020 decrease in the valuation allowance was primarily due to the net operating loss utilization, partially offset by tax credit generation. At December 31, 2022, we had gross federal NOL carryforwards of $682 million of which $663 million may be carried forward indefinitely and $19 million expire from 2029 to 2036 if not utilized, gross state NOL carryforwards of $171.4 million, gross foreign NOL carryforwards of $33.7 million, and tax credit carryforwards of $328.2 million expiring from 2024 to 2042. Utilization of the NOL and tax credit carryforwards may be subject to a substantial annual limitation in the event of a change in ownership as set forth in Section 382 of the Internal Revenue Code of 1986, as amended. We have evaluated ownership changes through the year ended December 31, 2021 and believe that it is likely that utilization of NOLs would not be materially limited under Section 382 as of December 31, 2021. It is possible that there has been or may be a change in ownership after this date which would limit our ability to utilize our NOLs. Any limitation may result in the expiration of the NOLs and tax credit carryforwards before utilization. Unrecognized tax benefits arise when the estimated benefit recorded in the financial statements differs from the amounts taken or expected to be taken in a tax return because of uncertainties. The total amount of unrecognized tax benefit was $35.2 million and $30.3 million as of December 31, 2022 and 2021, respectively. Interest and penalties related to uncertain tax positions, if any, will be recognized as a component of income tax expense. We do not anticipate any significant changes to our unrecognized tax positions or benefits during the next twelve months. Tax years 2001 to 2022 remain subject to future examination for federal, state and foreign income taxes. A reconciliation of the beginning and ending amount of unrecognized tax benefits was as follows: Years ended December 31, (dollars in thousands) 2022 2021 2020 Balance at January 1 $ 30,306 $ 23,078 $ 24,018 (Decrease) increase related to prior year tax positions (661) 1,894 (4,008) Increase related to current year tax positions 5,600 5,334 3,068 Balance at December 31 $ 35,245 $ 30,306 $ 23,078 |
Collaboration and license agree
Collaboration and license agreements | 12 Months Ended |
Dec. 31, 2022 | |
Collaboration Arrangement Disclosure [Abstract] | |
Collaboration and license agreements | Collaboration and license agreements We have collaboration and license agreements with a number of pharmaceutical and biotechnology companies. Revenues recognized under these agreements are disclosed in Note 2. These agreements generally may be terminated due to material and uncured breaches, insolvency of either party, mutual written consent, unilateral decision of one or either party upon prior written notice, expiration of payment obligations, cessation of development or commercialization of the products, and/or challenges to patents which are subject to the related agreement. Each agreement is discussed in more detail in the following sections. Takeda ADCETRIS collaboration We have a collaboration agreement with Takeda ADCETRIS which provides for the global co-development of ADCETRIS and the commercialization of ADCETRIS by Takeda in its territory. We have commercial rights for ADCETRIS in the U.S. and its territories and in Canada. Takeda has commercial rights in the rest of the world. Under the collaboration, we and Takeda can each conduct development activities and equally co-fund the cost of certain mutually agreed development activities. Costs associated with co-development activities are included in research and development expense. We recognize payments received from Takeda, including progress-dependent development and regulatory milestone payments, reimbursement for drug supplied, and net development cost reimbursement payments, as collaboration and license agreement revenues upon transfer of control of the goods or services over the development period. When the performance of development activities under the collaboration results in us making a reimbursement payment to Takeda, that payment reduces collaboration and license agreement revenues. In addition, we recognize royalty revenues, where royalties are based on a percentage of Takeda’s net sales of ADCETRIS in its licensed territories, with percentages ranging from the mid-teens to the mid-twenties based on annual net sales tiers, and sales-based milestones. Takeda bears a portion of third-party royalty costs owed on its sales of ADCETRIS, which is included in royalty revenues. Astellas PADCEV collaboration We have a collaboration agreement with Agensys, Inc., which subsequently became an affiliate of Astellas, to jointly research, develop and commercialize ADCs for the treatment of several types of cancer. The collaboration encompasses combinations of our ADC technology with fully-human antibodies developed by Astellas to proprietary cancer targets. Under this collaboration, we and Astellas are co-funding all development costs for PADCEV. We rely on Astellas to supply PADCEV for commercial sales and for our clinical trials, and Astellas oversees the manufacturing supply chain for PADCEV. Costs associated with co-development activities are included in research and development expense and amounted to $132.8 million, $145.4 million, and $99.3 million for the years ended December 31, 2022, 2021, and 2020, respectively. In 2018, we and Astellas entered into a joint commercialization agreement to govern the global commercialization of PADCEV: • In the U.S., we and Astellas jointly promote PADCEV. We record sales of PADCEV in the U.S. and are responsible for all U.S. distribution activities. The companies each bear the costs of their own sales organizations in the U.S., equally share certain costs associated with commercializing PADCEV in the U.S., and equally share in any profits realized in the U.S. We and Astellas launched PADCEV in the U.S. in December 2019. Gross profit share payments owed to Astellas in the U.S. are recorded in cost of sales and totaled $207.7 million, $159.0 million, and $104.6 million during the years ended December 31, 2022, 2021, and 2020, respectively. • Outside the U.S., we have commercialization rights in all countries in North and South America, and Astellas has commercialization rights in the rest of the world, including Europe, Asia, Australia and Africa. The agreement is intended to provide that we and Astellas will effectively equally share in costs incurred and any profits realized in all of these markets. Cost and profit sharing in Canada, the United Kingdom, Germany, France, Spain and Italy are based on product sales and costs of commercialization. In the remaining markets, the commercializing party is responsible for bearing costs and paying the other party a royalty rate applied to net sales of the product based on a rate intended to approximate an equal profit share for both parties. Either party may opt out of co-development and profit-sharing under the collaboration agreement in return for receiving milestones and royalties from the continuing party. Astellas or its affiliates are responsible for overseeing the initial manufacturing supply chain for PADCEV for development and commercial use. However, we are responsible for packaging and labeling in countries in which we sell PADCEV. In addition, we are in the process of establishing a second source manufacturing supply chain, through a combination of internal manufacturing capacity and third parties. In this regard, our manufacturing facility in Bothell, Washington is used to support commercial production of PADCEV antibody. Genmab TIVDAK collaboration We have an agreement with Genmab to develop and commercialize ADCs targeting tissue factor, under which we previously exercised a co-development option for TIVDAK. In October 2020, we and Genmab entered into a joint commercialization agreement to govern the global commercialization of TIVDAK. The FDA granted accelerated approval of TIVDAK in September 2021 for the treatment of adult patients with recurrent or metastatic cervical cancer with disease progression on or after chemotherapy. • In the U.S., we and Genmab co-promote TIVDAK. We record sales of TIVDAK in the U.S. and are responsible for leading U.S. distribution activities. The companies will each hire and maintain 50% of the sales representatives and medical science liaisons, equally share those and certain other costs associated with commercializing TIVDAK in the U.S., and equally share in any profits realized in the U.S. Gross profit share payments owed to Genmab in the U.S. are recorded in cost of sales. • Outside the U.S., we have commercialization rights in the rest of the world except for Japan, where Genmab has commercialization rights, and certain territories where Zai Lab has commercialization rights, as further described below. In Europe, China, and Japan, we and Genmab equally share 50% of the costs associated with commercializing TIVDAK as well as any profits realized in these markets. In markets outside the U.S. other than Europe, China, and Japan, aside from certain costs specified in the agreement, we are solely responsible for all costs associated with commercializing TIVDAK and will pay Genmab a royalty based on a percentage of aggregate net sales ranging from the mid-teens to mid-twenties. In September 2022, we announced an exclusive collaboration and license agreement with Zai Lab for the development and commercialization of TIVDAK in mainland China, Hong Kong, Macau, and Taiwan. Under the terms of the agreement, we received an upfront payment of $30.0 million in October 2022 which was recorded in collaboration revenue for the year ended December 31, 2022, and are entitled to receive potential future development, regulatory, and commercial milestone payments, and tiered royalties on net sales of TIVDAK in the Zai Lab territory. Based on our existing collaboration with Genmab, the upfront payment, milestone payments, and royalties will be shared on a 50:50 basis with Genmab. Gross profit share payments owed to Genmab in the U.S. are recorded in cost of sales and totaled $45.8 million, $3.0 million, and $0.0 during the years ended December 31, 2022, 2021, and 2020, respectively. Costs associated with co-development activities are included in research and development expense and amounted $62.7 million, $63.7 million, and $50.1 million for the years ended December 31, 2022, 2021, and 2020, respectively. Either party may opt out of co-development and profit-sharing under the collaboration agreement in return for receiving milestones and royalties from the continuing party. Either party may also opt out of co-development and profit-sharing under the collaboration agreement in return for receiving milestones and royalties from the continuing party. The opt out provisions of the collaboration agreement may also be applied to the joint commercialization agreement. In addition, Genmab may elect to opt out of co-promotion of TIVDAK in the U.S. by providing us with prior written notice. Merck LV and TUKYSA license and collaboration agreements, and stock purchase agreement In September 2020, we entered into two license and collaboration agreements, and a stock purchase agreement, with Merck. Under one of the license and collaboration agreements, referred to as the LV Agreement, we are pursuing a broad joint development program evaluating ladiratuzumab vedotin, or LV, as monotherapy and in combination with Merck’s anti-PD-1 therapy KEYTRUDA® (pembrolizumab) in triple-negative breast cancer, hormone receptor-positive breast cancer and other LIV-1-expressing solid tumors. Pursuant to the LV Agreement, we granted to Merck a co-exclusive worldwide development and commercialization license for LV, and agreed to jointly develop and commercialize LV on a worldwide basis. We received an upfront cash payment of $600.0 million, and we are eligible to receive up to $850.0 million in milestone payments upon the initiation of certain clinical trials and regulatory approval in certain major markets, and up to an additional $1.75 billion in milestone payments upon the achievement of specified annual global net sales thresholds of LV. Each company is responsible for 50% of global costs to develop and commercialize LV and will receive 50% of potent ial future profits. In connection with the LV Agreement, we entered into a stock purchase agreement with Merck, referred to as the Purchase Agreement, pursuant to which we agreed to issue and sell, and Merck agreed to purchase 5,000,000 newly issued shares of our common stock, at a purchase price of $200 per share, for an aggregate purchase price of $1.0 billion. Under the other license and collaboration agreement, referred to as the TUKYSA Agreement, we granted Merck exclusive rights to commercialize TUKYSA in Asia, the Middle East and Latin America and other regions outside of the U.S., Canada and Europe. Pursuant to the TUKYSA Agreement, Merck is responsible for marketing applications for approval in its territory, supported by the results from the HER2CLIMB clinical trial. We retained commercial rights in the U.S., Canada and Europe, where we will record sales. Merck is also co-funding a portion of the TUKYSA global development plan, which encompasses several ongoing and planned trials across HER2-positive cancers. We will continue to lead ongoing TUKYSA global development operational execution. Merck will solely fund and conduct country-specific clinical trials necessary to support anticipated regulatory applications in its territories. We received an upfront cash payment from Merck of $125.0 million and also received $85.0 million in prepaid research and development funding to be applied to Merck’s global development cost sharing obligations. We are eligible to receive progress-dependent milestone payments of up to $65.0 million, and are entitled to receive tiered royalties on sales of T UKYSA by Merck that begin in the low twenty percent range and escalate based on sales volume by Merck in its territory. We owe a portion of any non-royalty payments received from sublicensing TUKYSA rights to a technology licensor, as well as a low double-digit royalty based on net sales of TUKYSA by us, and will owe a single-digit royalty based on net sales of TUKYSA by Merck in its territories. We determined that these agreements are within the scope of ASC 808. Pursuant to ASC 808, we considered other authoritative guidance for distinct units of account related to these agreements, including ASC 606. Our performance obligations within the scope of ASC 606 consisted of the delivery of the LV license and transfer of regulatory information to enable the LV collaboration, the delivery of the TUKYSA license and transfer of regulatory materials for use by Merck in its territory, and supply of commercial TUKYSA inventory to Merck for use in its territory. The LV license and TUKYSA license are functional intellectual property and distinct from the other promises made under the contract. Since we also determined that Merck can benefit from the LV license and the TUKYSA licenses at the time of conveyance, the related performance obligations were satisfied at that point in ti me. Therefore, we recognized the license revenue under ASC 606 of $725.0 million in collaboration and license agreement revenues during the year ended December 31, 2020. Potential development, regulatory, and sales-based milestones, and royalties, will be accounted for as variable transaction price related to the LV or TUKYSA licenses under ASC 606. Given the uncertain nature of these payments, we determined they were fully constrained upon entering the agreements and not included in the transaction price. We will re-evaluate the transaction price at each reporting period and as uncertain events are resolved or other changes in circumstances occur. We and Merck will share equally in LV global development costs and profits, if any, and Merck is co-funding a portion of the TUKYSA global development plan. We consider the collaborative activities associated with the global development and commercialization of LV, and the global development of TUKYSA, to be units of account within the scope of ASC 808. We recognize development cost sharing proportionately with the performance of the underlying activities, and record Merck’s reimbursement of our expenses as a reduction of research and development expenses. Merck’s prepayment of $85.0 million towards the TUKYSA global development plan was recorded as a co-development liability in other long-term liabilities on our consolidated balance sheet as of December 31, 2020. As joint development expenses are incurred, we recognize the portion of Merck’s prepayment as a reduction of our research and development expenses on our consolidated statements of comprehensive income (loss). As of December 31, 2021, $40.2 million and $15.1 million was the remaining co-development liability in accrued liabilities and other long-term liabilities, respectively. As of December 31, 2022, $15.5 million and $0.0 million was the remaining co-development liability in accrued liabilities and other long-term liabilities, respectively. Sales of TUKYSA drug product supplied to Merck were included in collaboration and license agreement revenues. Costs associated with co-development activities for the LV and the TUKYSA agreements are included in research and development expense and amounted to $166.3 million, $123.1 million, and $21.8 million for the years ended December 31, 2022, 2021, and 2020, respectively. In addition, costs associated with co-development activities for the other cost sharing agreements related to PADCEV with Merck are included in research and development expense and amounted to $38.5 million, $32.0 million, and $14.0 million for the years ended December 31, 2022, 2021, and 2020, respectively. The fair market value of 5,000,000 shares of our common stock was $749.9 million, based on the closing price of the last trading day prior to the Purchase Agreement being executed. We accounted for the associated premium of $250.1 million as a freestanding equity-linked instrument under ASC 815. The premium was determined to be variable consideration in the calculation of the total transaction price related to the LV license, and was initially recorded in deferred revenue due to the substantive contingency associated with closing of the sale of shares under the Purchase Agreement. The closing of the sale of the shares pursuant to the Purchase Agreement occurred in October 2020. Upon closing, we recorded the fair market value of the shares issued in stockholders’ equity on our consolidated balance sheet. The variable consideration restraint was removed upon the closing of the sale of shares pursuant to the Purchase Agreement, and the premium was recognized in collaboration and license agreement revenues in the quarter and year ended December 31, 2020. RemeGen license agreement Effective in September 2021, we and RemeGen Co., Ltd., or RemeGen, entered into an exclusive worldwide licensing agreement to develop and commercialize disitamab vedotin, a novel HER2-targeted ADC. Disitamab vedotin combines the drug-linker technology originally developed by us with RemeGen’s novel HER2 antibody. Disitamab vedotin received FDA Breakthrough Therapy designation in 2020 for use in second-line treatment of patients with HER2-expressing, locally advanced or metastatic urothelial cancer who have previously received platinum-containing chemotherapy. Also in 2020, RemeGen announced FDA’s clearance of an Investigational New Drug application for a phase 2 clinical trial in locally advanced or metastatic urothelial cancer. Disitamab vedotin is conditionally approved for treating locally advanced metastatic gastric cancer in China, and in July 2021 the National Medical Products Administration of China also accepted a New Drug Application for disitamab vedotin in locally advanced or metastatic urothelial cancer. Under the terms of the agreement, we obtained exclusive license rights to disitamab vedotin for global development and commercialization outside of RemeGen’s territory for an upfront payment of $200.0 million. The license was accounted for as an asset acquisition and the upfront payment was included in research and development expenses for the year ended December 31, 2021. RemeGen retains development and commercialization rights for Asia, excluding Japan and Singapore. We will lead global development and RemeGen will fund and operationalize the portion of global clinical trials attributable to its territory. RemeGen will also be responsible for all clinical development and regulatory submissions specific to its territory. We may pay RemeGen up to $195.0 million in potential milestone payments across multiple indications and products based upon the achievement of specified development goals, and up to $2.2 billion in potential milestone payments based on the achievement of specified regulatory and commercialization goals. RemeGen will be entitled to a tiered, high single digit to mid-teen percentage royalty based on net sales of disitamab vedotin in our territory. Other collaboration and license agreements We have other collaboration and license agreements for our technology with a number of biotechnology and pharmaceutical companies. Under these agreements, we have granted research and commercial licenses to use our technology, most often in conjunction with the licensee's technology. In certain agreements, we also have agreed to conduct limited development activities and to provide other materials, supplies and services to our licensees during a specified term of the agreement. We typically receive upfront cash payments and progress- and sales-dependent milestones for the achievement by our licensees of certain events, and annual maintenance fees and support fees for research and development services and materials provided under the agreements. These amounts are recognized as revenue over the performance obligation period if the license is determined not to be distinct from other goods and services provided, or, if there is no performance obligation, upon transfer of control of the goods or services to the customer. We also are entitled to receive royalties on net sales of any resulting products incorporating our ADC technology. Our licensees are solely responsible for research, product development, manufacturing and commercialization of any product candidates under these agreements, which includes the achievement of the potential milestones. For agreements beyond the initial performance period, we have no remaining performance obligations. We may receive license maintenance fees and potential milestones and royalties based on collaborator development and regulatory progress, which are recorded in the period achieved in the case of milestones, and during the period of the related sales for royalties. In the first quarter of 2022, we entered into a collaboration with Sanofi to develop and potentially commercialize multiple novel ADCs. The agreement is an exclusive collaboration that will utilize Sanofi's proprietary monoclonal antibody technology and our proprietary ADC technology for up to three cancer targets. Under the terms of the collaboration, Sanofi will co-fund global development activities and share equally in any future profits. In the first quarter of 2022, the first, of up to three potential targets under the collaboration, was designated, for which Sanofi paid a license fee. |
In-license agreements
In-license agreements | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
In-license agreements | In-license agreements We have in-licensed antibodies, targets and enabling technologies from pharmaceutical and biotechnology companies and academic institutions for use in our pipeline programs and ADC technology. W e would potentially owe development, regulatory, and sales-based milestones, and royalties on net sales, as defined, of certain approved products. We were required to pay royalties in the low single digits on net sales of ADCETRIS under the terms of two exclusive license agreements, which expired in 2021. We are a party to a license agreement in which we were granted an exclusive license to develop, manufacture and commercialize TUKYSA. We pay the licensor a portion of any non-royalty payments received from sublicensing TUKYSA rights, a low double-digit royalty based on net sales of TUKYSA by us, and a single-digit royalty based on net sales of TUKYSA by our sublicensees. The term of the license agreement expires on a country-by-country basis upon the later of the expiration of the last valid claim covering TUKYSA within that country or 10 years after the first commercial sale of TUKYSA within that country. In September 2022, we entered into an agreement with LAVA Therapeutics to develop and commercialize LAVA-1223, also known as SGN-EGFRd2, a preclinical gamma delta bispecific T-cell engager for EGFR-expressing solid tumors. We received an exclusive global license for SGN-EGFRd2 and the opportunity to exclusively negotiate rights to apply LAVA's proprietary Gammabody™ platform on up to two additional tumor targets. We paid LAVA a $50 million upfront fee in October 2022 and have also agreed to pay LAVA up to approximately $650 million in potential development, regulatory and commercial milestones, as well as royalties ranging from the single digits to the mid-teens on future sales of any licensed products. The license was accounted for as an asset acquisition and the upfront payment was included in research and development expenses for the year ended December 31, 2022 . |
Commitments and contingencies
Commitments and contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Commitments and contingencies We have certain non-cancelable obligations under various agreements, including supply agreements relating to the manufacture of our commercial products, and our product candidates that contain annual minimum purchase commitments and other firm commitments when a binding forecast is provided. As of December 31, 2022, our future obligations related to supply and other agreements were as follows: (dollars in thousands) Years ending December 31, 2023 $ 259,731 2024 76,923 2025 45,198 2026 40,203 2027 3,778 Thereafter — Total $ 425,833 Non-cancelable obligations under these agreements do not include payments that are contingent upon achievement of certain progress-dependent milestones or royalties based on net sales of commercial products. These amounts have been excluded from the table because the events triggering the obligations have not yet occurred. See Note 3 for our future obligations related to operating leases as of December 31, 2022. |
Legal matters
Legal matters | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal matters | Legal matters We are engaged in multiple legal disputes with Daiichi Sankyo Co. Ltd., or Daiichi Sankyo. Dispute over ownership of intellectual property We have been in a dispute with Daiichi Sankyo regarding the ownership of certain technology used by Daiichi Sankyo in its cancer drug Enhertu (fam-trastuzumab deruxtecan-nxki) and certain product candidates. We believe that the linker and other ADC technology used in Enhertu and these drug candidates are improvements to our ADC technology, the ownership of which, we contended, was assigned to us under the terms of a 2008 collaboration agreement between us and Daiichi Sankyo, or the Daiichi Sankyo Collaboration Agreement. On November 4, 2019, Daiichi Sankyo filed a declaratory judgment action in the United States District Court for the District of Delaware, alleging that we are not entitled to the intellectual property rights under dispute, in an attempt to have the dispute adjudicated in federal court. The case has been stayed and administratively closed by court order. On November 12, 2019, we submitted an arbitration demand to the American Arbitration Association seeking, among other remedies, a declaration that we are the owner of the intellectual property rights under dispute, monetary damages, and a running royalty. On April 27, 2020, the arbitrator confirmed the dispute should be resolved in arbitration. The arbitration hearing was conducted in June 2021 and April 2022. On August 12, 2022, the arbitrator ruled in favor of Daiichi Sankyo, citing statute of limitations and disagreement with us on the interpretation of the contract. On November 10, 2022, we filed a motion to vacate the arbitration award in the U.S. District Court for the Western District of Washington. The Daiichi Sankyo Collaboration Agreement provides that judgment rendered by an arbitrator shall include costs of arbitration, reasonable attorneys' fees and reasonable costs for expert and other witnesses. On September 14, 2022, Daiichi Sankyo submitted a petition for approximately $58 million for reimbursement of its legal fees and costs associated with the arbitration. We filed an opposition to Daiichi Sankyo's request on October 12, 2022. While we oppose any fees being awarded to Daiichi Sankyo, a liability between approximately $14-58 million is reasonably estimable. We have recorded an estimate of our liability for these fees towards the low end of the range in accrued liabilities and selling, general and administrative expenses in our consolidated financial statements as of and for the year ended December 31, 2022. It is reasonably possible the arbitrator will render an award pursuant to Daiichi Sankyo's request that is different from what we have accrued or estimated and that we will need to adjust our estimate in future periods pursuant to the arbitrator's award. Patent infringement On October 19, 2020, we filed a complaint in the United States District Court for the Eastern District of Texas to commence an action for infringement of our U.S. Patent No. 10,808,039, or the '039 Patent, by Daiichi Sankyo's importation into, offer for sale, sale, and use in the United States of the cancer drug Enhertu. The remedies sought in this action include, among other remedies, a judgment that Daiichi Sankyo infringed one or more valid and enforceable claims of the '039 Patent, monetary damages and a running royalty. Daiichi Sankyo (as well as Daiichi Sankyo, Inc. and AstraZeneca Pharmaceuticals, LP, or AstraZeneca) subsequently filed an action on November 13, 2020 in the U.S. District Court for the District of Delaware seeking a declaratory judgment that Enhertu does not infringe the '039 Patent. The Delaware action has been stayed by court order. Daiichi Sankyo, Inc. and AstraZeneca also filed two petitions for post-grant review on December 23, 2020 and January 22, 2021 with the U.S. Patent and Trademark Office, or USPTO, seeking to have claims of the '039 Patent cancelled as unpatentable. On June 24, 2021, the USPTO issued a decision denying both petitions for post-grant review. On April 7, 2022, the USPTO granted a request on rehearing and instituted two post-grant review proceedings, but on July 15, 2022, the USPTO issued a new decision denying post-grant review of the claims asserted in the patent infringement action. On February 7, 2023, in response to Daiichi Sankyo and AstraZeneca’s second request for rehearing of the denial of the post-grant review to the USPTO and for Precedential Opinion Panel, or POP, review, the Precedential Opinion Panel issued an order denying the request for POP review but directing the USPTO panel evaluating the second rehearing request to make an explicit finding using its own discretion as to whether the post-grant review petition presents a “compelling” showing of invalidity as part of its ruling on the pending second rehearing request. The panel was also directed to rule on the second rehearing request within two weeks from the POP order. On February 14, 2023, the panel decided to institute the post-grant review of the claims of the ‘039 Patent asserted in the patent infringement action. On April 8, 2022, a jury in the United States District Court for the Eastern District of Texas found that Daiichi Sankyo willfully infringed the asserted claims of the '039 Patent with its Enhertu product, and also found that the asserted claims were not invalid. The jury further awarded damages of $41.8 million for infringement from October 20, 2020 through March 31, 2022. The U.S. District Court for the Eastern District of Texas also denied Daiichi Sankyo's claim that the '039 Patent should be unenforceable under the equitable theory of prosecution laches, entered judgment in favor of us based on the jury's verdict that Daiichi Sankyo willfully infringed the '039 Patent consisting of pre-trial damages in the sum of $41.8 million, and awarded us pre- and post-trial interest and costs. We have requested a royalty in the range of 10-12% on Daiichi Sankyo's future sales of Enhertu in the United States through November 5, 2024, the current expiration date of the '039 Patent, as well as $12 million for reimbursement of our reasonable attorneys' fees. Pursuant to ASC 450, awards of this nature must be either realized or realizable to be reflected in the company's financial statements. No amounts related to these patent infringement matters have been reflected in our consolidated financial statements as of December 31, 2022. |
Stockholders' equity
Stockholders' equity | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Stockholders' equity | Stockholders' equityIn October 2020, we closed the sale of the shares pursuant to the Purchase Agreement, and issued 5,000,000 shares of our common stock to Merck at a purchase price of $200 per share, for proceeds of $1.0 billion. As a result, we recorded $749.9 million in stockholders' equity on our consolidated balance sheet as of December 31, 2020 and recognized the $250.1 million premium attributed to the Purchase Agreement in collaboration and license agreement revenues for the year ended December 31, 2020. At December 31, 2022, shares of common stock reserved for future issuance are as follows: (in thousands) Stock options and RSUs outstanding 9,888 Shares available for future grant under the 2007 Equity Incentive Plan 4,325 Employee stock purchase plan shares available for future issuance 657 Total 14,870 |
Net (loss) income per share
Net (loss) income per share | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Net (loss) income per share | Net (loss) income per share Basic net (loss) income per share is computed by dividing net (loss) income by the weighted average number of common shares outstanding during the period. Diluted net (loss) income per share is computed by dividing net (loss) income by the weighted average number of common shares and potentially dilutive common shares outstanding during the period. Potentially dilutive 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. Years ended December 31, (dollars in thousands, except per share amounts) 2022 2021 2020 Net (loss) income $ (610,308) $ (674,471) $ 613,670 Weighted average common shares outstanding - basic 184,676 182,048 174,834 Effect of potentially dilutive common shares — — 7,453 Weighted average common shares outstanding - diluted 184,676 182,048 182,287 Net (loss) income per share - basic $ (3.30) $ (3.70) $ 3.51 Net (loss) income per share - diluted $ (3.30) $ (3.70) $ 3.37 We excluded the potential shares of common stock from the computation of diluted net (loss) income per share because their effect would have been antidilutive. The following table presents the weighted average number of shares that have been excluded for all periods presented: Years ended December 31, (in thousands) 2022 2021 2020 Stock options and RSUs 9,284 10,001 356 |
Share-based compensation
Share-based compensation | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Share-based compensation | Share-based compensation 2007 Equity Incentive Plan Our 2007 Equity Incentive Plan, or the 2007 Plan, provides for the issuance of our common stock to employees, including our officers, directors and consultants and affiliates. The 2007 Plan was amended and restated in 2020 to reserve an additional 6,000,000 shares thereunder, such that an aggregate of 39,000,000 shares of our common stock were authorized for issuance as of December 31, 2022, and to extend the term of the 2007 Plan through May 2030 unless it is terminated earlier pursuant to its terms. Under the 2007 Plan, we may issue stock options (including incentive stock options and nonstatutory stock options), restricted stock, RSUs, stock appreciation rights and other similar types of awards. We have only issued options to purchase shares of common stock and RSUs under the 2007 Plan, including options and RSUs with time-based or performance-based vesting requirements. Incentive stock options under the 2007 Plan may be granted only to our employees. The exercise price of an incentive stock option or a nonstatutory stock option may not be less than 100% of the fair market value of the common stock on the date the option is granted, and the options generally have a maximum term of ten years from the date of grant. Generally, options granted to employees under the 2007 Plan vest 25% one year after the grant date and thereafter ratably each month over the following thirty-six months. Generally, RSUs granted to employees vest 25% each year beginning one year after the grant date. Option and RSU grants to non-employee members of our board of directors vest over one year. The 2007 Plan provides for (i) the full acceleration of vesting of equity awards upon a change in control if the successor company does not assume, substitute or otherwise replace the equity awards upon the change in control; and (ii) the full acceleration of vesting of any equity awards if at the time of, immediately prior to or within twelve months after a change in control of the Company, the holder of such equity awards is involuntarily terminated without cause or is constructively terminated by the successor company that assumed, substituted or otherwise replaced such stock awards in connection with the change in control. Employee Stock Purchase Plan Under the current terms of the Amended and Restated 2000 Employee Stock Purchase Plan, or the Employee Stock Purchase Plan, employees can purchase shares of our common stock based on a percentage of their compensation subject to certain limits. Shares are purchased at the lower of 85 percent of the fair market value of our common stock on either the first day or the last day of each six-month offering period. Share issuance activity under the Employee Stock Purchase Plan is disclosed in our consolidated statements of stockholders' equity. In May 2019, our stockholders approved an increase of 1,000,000 shares in the number of shares of common stock authorized for issuance under the Employee Stock Purchase Plan. Share-based compensation expense The following table presents our total share-based compensation expense for the periods presented: Years ended December 31, (dollars in thousands) 2022 2021 2020 Research and development $ 111,091 $ 79,715 $ 72,749 Selling, general and administrative 110,206 93,402 74,484 Total share-based compensation expense 221,297 173,117 147,233 We recognized a tax benefit of $12.6 million and $55.7 million related to share-based compensation expense for the years ended December 31, 2022 and 2020. No tax benefit was recognized for the year ended December 31, 2021 since there is no taxable income for that year and a valuation allowance is available to offset all potential tax benefits associated with its deferred tax assets. Valuation assumptions We calculate the fair value of each time-based stock option award on the date of grant using the Black-Scholes option pricing model. The following weighted-average assumptions were used for the periods indicated: 2007 Plan Employee Stock Purchase Plan Years ended December 31, Years ended December 31, 2022 2021 2020 2022 2021 2020 Risk-free interest rate 3.6 % 0.8 % 0.3 % 1.2 % 0.1 % 1.3 % Expected lives (in years) 5.6 5.7 5.7 0.5 0.5 0.5 Expected dividend 0 % 0 % 0 % 0 % 0 % 0 % Expected volatility 42 % 44 % 44 % 40 % 44 % 47 % The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for the expected life of the award. Our computation of expected life was determined based on our historical experience with similar awards, giving consideration to the contractual terms of the share-based awards, vesting schedules and expectations of future employee behavior. A forfeiture rate is estimated at the time of grant to reflect the amount of awards that are granted but are expected to be forfeited by the award holder prior to vesting. The estimated forfeiture rate applied to these amounts is derived from historical stock award forfeiture behavior. We have never paid cash dividends and do not currently intend to pay cash dividends. Our computation of expected volatility is based on the historical volatility of our stock price. The fair value of RSUs is determined based on the closing price of our common stock on the date of grant. Stock option activity A summary of stock option activity for time-based awards using the Black-Scholes option pricing model is as follows : Shares Weighted- Weighted-average Aggregate Balance at December 31, 2021 7,374,454 $ 79.53 Granted 388,124 $ 138.32 Exercised (2,098,224) $ 49.65 Forfeited/expired (247,267) $ 138.17 Balance at December 31, 2022 5,417,087 $ 92.62 5.93 $ 246,881 Expected to vest 5,297,800 $ 91.39 5.87 $ 246,625 Options exercisable 3,909,647 $ 73.69 4.98 $ 235,780 The weighted average grant-date fair values of options granted with exercise prices equal to market were $60.80 , $64.22, and $64.66 for the years ended December 31, 2022, 2021, and 2020, respectively. The aggregate intrinsic value in the table above is calculated as the difference between the exercise price of the underlying options and the quoted price of our common stock for all options that were in-the-money at December 31, 2022. The aggregate intrinsic value of options exercised was $185.5 million during 2022, $168.7 million during 2021, and $271.0 million during 2020, determined as of the date of option exercise. As of December 31, 2022, there was approximately $35.5 million of total unrecognized compensation cost related to unvested options, as adjusted for expected forfeitures. That cost is expected to be recognized over a weighted-average period of 1.15 years . We utilize newly issued shares to satisfy option exercises. Stock options subject to market-based performance metrics During 2022, we granted a total of 675,000 stock options subject to market-based performance metrics to our new Chief Executive Officer and President of Research and Development. These market-based stock options are subject to vesting in tranches tied to the Company's common stock achieving certain price targets. Each tranche will time-vest 1/3 on the date of achievement of the stock price target, 1/3 on the nine-month anniversary of achievement of the stock price target and 1/3 on the 18 month anniversary of achievement of the stock price target. In each case, the option awards are subject to continued employment with the Company. We estimated the fair value of the performance awards subject to market-based performance metrics on the date of grant using the Monte Carlo simulation model. For awards granted during 2022, the Monte-Carlo simulation model used the following assumptions to estimate the fair value: a risk-free interest rate of 4.1%, an expected life of 7.5 years, an expected volatility of 43% based upon historical volatility of our stock price, and a 0% expected dividend. A summary of stock option activity for stock options subject to marked-based performance metrics using the Monte Carlo simulation model is as follows : Shares Weighted- Weighted-average Aggregate Balance at December 31, 2021 — $ — Granted 675,000 $ 137.96 Exercised — $ — Forfeited/expired — $ — Balance at December 31, 2022 675,000 $ 137.96 9.86 $ — Expected to vest 675,000 $ 137.96 9.86 $ — Options exercisable — $ — 0.00 $ — For the market-based performance awards, the grant-date fair values of options granted with exercise prices equal to market were $67.94 for the year ended December 31, 2022. The aggregate intrinsic value in the table above is calculated as the difference between the exercise price of the underlying options and the quoted price of our common stock for all options that were in-the-money at December 31, 2022. The aggregate intrinsic value of options exercised was $0.0 million during 2022, determined as of the date of option exercise. As of December 31, 2022, there was approximately $43.2 million of total unrecognized compensation cost related to unvested performance options. That cost is expected to be recognized over a weighted-average period of 2.67 years. RSU activity A summary of RSU activ ity for time-based awards, excluding performance-based RSUs, is as f ollows: Share Weighted- Non-vested at December 31, 2021 2,358,261 $ 135.07 Granted 1,763,357 $ 161.22 Vested (784,527) $ 120.21 Forfeited (263,374) $ 143.14 Non-vested at December 31, 2022 3,073,717 $ 152.29 The weighted average grant-date fair values of RSUs granted were $161.22 , $157.45, and $159.51 for the years ended December 31, 2022, 2021, and 2020, respectively. The total fair value of RSUs that vested during 2022, 2021, and 2020 (measured on the date of vesting) was $123.0 million , $149.8 million, and $187.1 million, respectively. As of December 31, 2022, there was approximately $251.0 million of total unrecognized compensation cost related to non-vested RSU awards, excluding performance-based RSUs, as adjusted for expected forfeitures. That cost is expected to be recognized over a weighted-average period of 1.70 years. We utilize newly issued shares for RSUs that vest. Performance-based RSUs We have granted various performance-based RSU awards to certain senior leadership which includes vesting upon achievement of pre-determined regulatory milestones, revenue-based milestones, or market-based performance metrics. A summary of activity related to these performance-based RSUs is as follows: Share Weighted- Non-vested at December 31, 2021 802,721 $ 136.10 Granted 99,011 $ 170.01 Vested (112,592) $ 136.87 Forfeited (67,420) $ 147.05 Non-vested at December 31, 2022 721,720 $ 140.22 As of December 31, 2022, the estimated unrecognized compensation cost related to performance-based RSU awards was approximately $67 million . Separation Agreement with Former CEO On May 15, 2022, we entered into a separation agreement with our former CEO which modified certain terms of his previously granted equity awards. The agreement provided for the following equity considerations: acceleration of his outstanding and unvested restricted stock unit and stock option awards by an additional 18 months following his separation; the exercisability of his vested options would be extended to December 31, 2023 (or, if earlier, their 10-year expiration); and 5/6 of his outstanding and unvested restricted stock units subject to performance-based vesting conditions granted in 2019 remain eligible to vest on March 13, 2023, based on actual performance through December 31, 2022. Accounting for the equity awards impacted by the separation agreement resulted in $7.3 million of share-based compensation expense recorded in the second quarter of 2022, net of forfeitures for equity awards that will not vest, other than in the event that a change of control occurs on or prior to December 31, 2023. |
Employee benefit plan
Employee benefit plan | 12 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
Employee benefit plan | Employee benefit plan We have a 401(k) Plan for all of our U.S. employees. Eligible employees may contribute through payroll deductions, and we may match the employees' 401(k) contributions, at our discretion and not to exceed a prescribed annual limit. Under this matching program, we contributed $31.1 million in 2022, $24.8 million in 2021, and $18.0 million in 2020. |
Organization and Summary of S_2
Organization and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation |
Use of estimates | Use of estimates The preparation of financial statements in accordance with GAAP requires us to make estimates, assumptions, and judgments that affect the amounts report ed in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Estimates include those used for revenue recognition, valuation of investments, inventory valuation, accrued liabilities, including those related to the long-term incentive plans and performance-based equity, clinical trials and contingencies, and stock option valuation. |
Cash and cash equivalents | Cash and cash equivalents We consider all highly liquid investments with maturities of three months or less at the date of acquisition to be cash equivalents. |
Non-cash activities | Non-cash activities |
Investments | Investments We hold certain equity securities which are reported at estimated fair value based on quoted market prices. Chang es 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 (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, 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, net. Interest and dividends earned are included in investment and other income, net. Accrued interest receivable as of December 31, 2022 and 2021, were $5.2 million and $0.4 million, respectively, and were included in prepaid expenses and other current assets. 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, net. |
Fair value of financial instruments | Fair value of financial instruments The recorded amounts of certain financial instruments, including cash and cash equivalents, interest receivable, accounts receivable, accounts payable and accrued liabilities approximate fair value due to their relatively short maturities. Investments that are classified as available-for-sale are recorded at estimated fair value. The estimated fair value for securities held is determined using quoted market prices, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency. |
Restricted cash | Restricted Cash As of December 31, 2022, we had $3.5 million cash held in escrow restricted by a contractual agreement related to our Everett, Washington building construction project. The restricted cash was recorded in prepaid expenses and other current assets in the consolidated balance sheet. We determine classification based on the expected duration of the restriction. |
Leases | Leases We determine if an arrangement is a lease at inception d ate. All of our currently effective 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 a t 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. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Variable lease cost primarily includes building operating expenses as charged to us by our landlords. |
Inventories | Inventories We consider regulatory approval of product candidates to be uncertain. Accordingly, we charge manufacturing costs to research and development expense until such time as a product has received regulatory approval for commercial sale. Production costs for our marketed products are capitalized into inventory. Inventory that is deployed for clinical, research or development use is charged to research and development expense when it is no longer available for commercial sales. Production costs for our other product candidates are charged to research and development expense. We value our inventories at the lower of cost or market value. Cost is determined on a specific identification basis. Inventory includes the cost of materials, third-party contract manufacturing and overhead associated with the production of our commercialized products. In the event that we identify excess, obsolete or unsalable inventory, its value is written down to net realizable value. |
Property and equipment | Property and equipment Property and equipment are stated at cost. Land is not depreciated, while all other property and equipment are depreciated using the straight-line method over the estimated useful lives of the assets, which are generally as follows: Years Building and improvements 20-30 Laboratory and manufacturing equipment 5-15 Furniture and fixtures 5 Computers, software and office equipment 3 |
Intangible assets, net | Intangible assets, netOur intangible assets are primarily comprised of acquired TUKYSA technology. Upon FDA approval and commercial launch of TUKYSA in April 2020, we classified in-process research and development costs related to the acquired TUKYSA technology as finite-lived intangible assets. |
Goodwill | Goodwill We evaluate 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 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. We have not recognized any impairment losses through December 31, 2022 as there have been no events warranting an impairment analysis. |
Impairment of long-lived assets | Impairment of long-lived assetsWe assess the impairment of long-lived assets, including intangible assets and property and equipment, whenever events or changes in business circumstances indicate that the carrying amounts of the assets may not be fully recoverable. When such events occur, we determine whether there has been an impairment in value by comparing the asset's carrying value with its fair value, as measured by the anticipated undiscounted net cash flows of the asset. If an impairment in value exists, the asset is written down to its estimated fair value. |
Revenue recognition | Revenue recognition - Net product sales We sell our products primarily thr ough a limited number of specialty distributors and specialty pharmacies in the U.S, and to a lesser extent, internationally. The delivery of our products represents a single performance obligation for these transactions and we record net product sales at the point in time when control is transferred to the customer, which generally occurs upon receipt by the customer. The transaction price for net 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. Outside of the U.S., the transaction price for net product sales represents the amount we expect to receive, which is net of estimated discounts, estimated government mandated rebates, distribution fees, estimated product returns, and other deductions. Accruals are established for these deductions, and actual amounts incurred are offset against applicable accruals. These estimates involve judgment in estimating net product sales. U.S. 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 our products. 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 payor mix and our experience to-date. We have a Federal Supply Schedule, or FSS, agreement under which certain U.S. government purchasers receive a discount on eligible purchases of our products. 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 our products. Under these agreements, eligible customers receive an applicable discount which is processed through the distributor as a chargeback to us for the difference between wholesale acquisition cost and the applicable discounted price. We 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 a specified number of days of its expiration date or that is damaged. We estimate product returns based on our experience to-date using the expected value approach. We provide financial assistance to qualifying patients that are underinsured or cannot cover the cost of commercial coinsurance amounts through our patient support programs. Estimated contributions for commercial coinsurance under our patient assistance program, 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. Revenue recognition - Royalty revenues Royalty revenues primarily reflect amounts earned under the ADCETRIS collaboration with Takeda Pharmaceutical Company Limited, or 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 annual net sales tiers. Takeda bears a portion of low single digit third-party royalty costs owed on its sales of ADCETRIS. This amount is included in royalty revenues. Amounts owed to our third-party licensors related to Takeda's sales of ADCETRIS are recorded in cost of sales. These amounts are recognized in the period in which the related sales by Takeda occur. Royalty revenues also reflect amounts from Genentech, Inc., a member of the Roche Group, or Genentech, earned on net sales of Polivy, and amounts from GlaxoSmithKline earned on net sales of Blenrep. Revenue recognition - Collaboration and license agreement revenues We have collaboration and license agreements for our technology with a number of biotechnology and pharmaceutical companies. Under these agreements, we typically receive or are entitled to receive upfront cash payments and progress- and sales-dependent milestones for the achievement by our licensees of certain events, and annual maintenance fees and support fees for research and development services and materials provided under the agreements. We also are entitled to receive royalties on net sales of any resulting products incorporating our technology. Generally, our licensees are solely responsible for research, product development, manufacturing and commercialization of any product candidates under these collaborations, which includes the achievement of the potential milestones. Since we may not take a substantive role or control the research, development or commercialization of any products generated by some of our licensees, we may not be able to reasonably estimate when, if at all, any potential future milestone payments or royalties may be payable to us by our licensees. As such, the potential future milestone payments associated with certain of our collaboration and license agreements involve a substantial degree of uncertainty and risk that they may never be received. Collaboration and license agreements 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 future reversal of cumulative revenue and, therefore, should be included in the transaction price. Assessing the recognition of variable consideration requires 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 collaboration and license agreements, 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 certain collaboration and license agreements is not distinct from the perspective of our customers at the time of initial transfer, since we often 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 may 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 certain collaboration and license agreements as evaluated at contract inception were not distinct and represented a single performance obligation. Upfront payments are 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. For agreements beyond the initial performance period, we have no remaining performance obligations. We may receive license maintenance fees and potential milestones and royalties based on collaborator development and regulatory progress, which are recorded in the period achieved in the case of milestones, and during the period of the related sales for royalties. When no performance obligations are required of us, or following the completion of the performance obligation period, such amounts are recognized 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. |
Research and development expenses | Research and development expenses Research and development, or R&D, expenses consist of salaries, benefits and other headcount-related costs of our R&D staff, preclinical activities, clinical trials and related manufacturing costs, lab supplies, contract and outside service fees and facilities and overhead expenses for research, development and preclinical studies focused on drug discovery, development and testing. R&D activities are expensed as incurred. Clinical trial expenses are a significant component of research and development expenses, and we outsource a significant portion of these costs to third parties. Third-party clinical trial expenses include investigator fees, site costs, clinical research organization costs, and costs for central laboratory testing and data management. Costs associated with activities performed under co-development collaborations are reflected in R&D expense. In-licensing fees, milestones, maintenance fees and other costs to acquire technologies utilized in R&D for product candidates that have not yet received regulatory approval and that are not expected to have alternative future use are expensed when incurred. Non-refundable advance payments for goods or services that will be used or rendered for future R&D activities are capitalized and recognized as expense as the related goods are delivered or the related services are performed. This results in the temporary deferral of recording expense for amounts incurred for research and development activities from the time payments are made until the time goods or services are provided. |
Advertising | Advertising |
Concentration of credit risk | Concentration of credit riskCash, cash equivalents and investments are invested in accordance with our investment policy. The policy includes guidelines for the investment of cash reserves and is reviewed periodically to minimize credit risk. Most of our investments are in U.S. Treasury securities and are not federally insured. We have accounts receivable from the sale of our products from a small number of distributors, and from our collaborators. We do not require collateral on amounts due from our distributors or our collaborators and are therefore subject to credit risk. We maintain our cash, cash equivalents, and investments at accredited financial institutions that we believe are creditworthy. From time to time, these deposits may exceed federally insured limits. |
Allowance for doubtful accounts | Allowance for doubtful accounts We estimate an allowance for doubtful accounts based on our assessment of the collectability of customer accounts. We regularly review the allowance by considering factors such as historical experience, credit quality, the age of the accounts receivable balances, and current economic conditions that may affect a customer's ability to pay. |
Geographic and customer information | Geographic and customer information Net product revenues are attributed to countries based on the location of the customer. Royalty revenues and collaboration and licenses agreements revenues are attributed to countries based on the location of the Company's subsidiary associated with the royalty or collaborative arrangement related to such revenues. Over 90% of our revenues and assets are related to operations in the U.S. for all periods presented; however, we have multiple subsidiaries in foreign jurisdictions, including several subsidiaries in Europe. We sell our products throug h a limited nu mber of d |
Major suppliers | Major suppliers The use of a relatively small number of contract manufacturers to supply drugs necessary for our commercial and clinical operations create a concentration of risk for us. For certain components of our approved products and our clinical product candidates we primarily use one source of supply, though other sources are available should we need to change suppliers. For PADCEV, in particular, we rely on Astellas for both commercial and clinical supply as Astellas oversees the manufacturing supply chain. As a form of reducing near-term risk, we endeavor to maintain reasonable levels of drug supply inventory across the supply chain. A change in suppliers or disruption at one of our suppliers, however, could cause a delay or interruption in delivery of drug or clinical trials. Such an event would adversely affect our business. |
Income taxes | Income taxes We recognize deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred tax assets and liabilities are determined based on the differences between the financial statement and tax bases of assets and liabilities using tax rates in effect for the year in which the differences are expected to reverse. We have provided a valuation allowance against substantially all our deferred tax assets for all periods presented. A valuation allowance is recorded when it is more likely than not that some portion or all of the net deferred tax asset will not be realized. Future realization of deferred tax assets is dependent upon a number of factors, including the existence of sufficient taxable income based on future earnings, the timing and amount of which is uncertain. The assessment regarding whether a valuation allowance is required considers the evaluation of both positive and negative evidence when concluding whether it is more likely than not that deferred tax assets are realizable. Based upon a review of all available evidence, we determined that it is not more likely than not that the U.S. deferred tax assets will be realized, and therefore the deferred tax assets have been fully offset by a valuation allowance. We follow the guidance related to accounting for uncertainty in income taxes, which requires the recognition of an uncertain tax position when it is more likely than not to be sustainable upon audit by the applicable taxing authority. If this threshold is met, the tax benefit is then measured and recognized at the largest amount that is greater than 50% likely of being realized upon ultimate settlement. |
Share-based compensation | Share-based compensation The Company recognizes compensation expense based upon the grant date fair value for our equity awards. The fair value of certain stock options is estimated using the Black-Scholes option pricing model and restricted stock units, or RSUs, is estimated based upon the fair value of our common stock. The fair value of stock options or RSUs, subject to market-based performance metrics, is estimated using a Monte Carlo simulation model. We use the graded-vesting attribution method for recognizing compensation expense for certain stock options and RSUs. Compensation expense is recognized over the requisite service periods on awards ultimately expected to vest and reduced for forfeitures that are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. For performance-based stock options and RSUs, subject to the achievement of pre-determined performance milestones, which may include regulatory milestones or revenue-based milestones, we record compensation expense over the requisite service period once the achievement of the performance-based milestone is considered probable. The vesting of performance-based awards generally includes vesting upon achievement of pre-determined regulatory milestones, revenue-based milestones, or market-based performance metrics, in addition to the passage of time. 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 any remaining compensation expense with respect to a milestone, over the estimated remaining requisite service period. For performance-based stock options and RSUs, subject to market-based performance metrics, which may include total shareholder return compared to our industry peer group or stock price targets, we record compensation expense over the requisite service periods irrespective of the probability of achieving the market-based condition and compensation expense is not reversed if the market condition is not satisfied. |
Comprehensive (loss) income | Comprehensive (loss) income Comprehensive (loss) income is the change in stockholders' equity from transactions and other events and circumstances other than those resulting from investments by stockholders and distributions to stockholders. Our comprehensive (loss) income is comprised of net (loss) income, unrealized gains and losses on available-for-sale securities, net of income tax provision and foreign currency translation adjustments, net of income tax provision. |
Loss contingencies | Loss contingencies We are involved in various legal proceedings in the normal course of business. A loss contingency is recorded if it is probable that an asset has been impaired or a liability has been incurred and the amount of the loss can be reasonably estimated. We evaluate, among other factors, the probability of an unfavorable outcome and our ability to make a reasonable estimate and the amount of the ultimate loss. Loss contingencies that are determined to be reasonably possible, but not probable, are disclosed but not recorded. Legal fees incurred as a result of our involvement in legal procedures are expensed as incurred. |
Certain risks and uncertainties | Certain risks and uncertainties Our revenues are derived from net product sales, royalties, and from collaboration and license agreements. Our products are subject to regulation by the FDA in the U.S. and other regulatory agencies outside the U.S., as well as competition by other pharmaceutical companies. Our collaboration and license agreement revenues are derived from a relatively small number of agreements. Each of these agreements can be terminated by our collaborators at their discretion. We are also subject to risks common to companies in the pharmaceutical industry, including risks and uncertainties related to commercial success and acceptance of our products and our potential future products by patients, physicians and payers, competition from other products, regulatory approvals, regulatory requirements, business combinations and product or product candidate acquisition and in-licensing transactions, and protection of intellectual property. Also, drug development is a lengthy process characterized by a relatively low rate of success. We may commit substantial resources toward developing product candidates that never result in further development, achieve regulatory approvals or achieve commercial success. Likewise, we have committed and expect to continue to commit substantial resources towards additional clinical development of our products in an effort to continue to expand our products' labeled indications of use, and there can be no assurance that we and/or our partners will obtain and maintain the necessary regulatory approvals to market our products for any additional indications. |
Guarantees | Guarantees In the normal course of business, we indemnify our directors, certain employees and other parties, including distributors, collaboration partners, lessors and other parties that perform certain work on behalf of, or for us to take licenses to our technologies. We have agreed to hold these parties harmless against losses arising from our breach of representations or covenants, intellectual property infringement or other claims made against these parties in performance of their work with us. These agreements typically limit the time within which the party may seek indemnification by us and the amount of the claim. It is not possible to prospectively determine the maximum potential amount of liability under these indemnification agreements. Further, each potential claim would be based on the unique facts and circumstances of the claim and the particular provisions of each agreement. |
Recent accounting pronouncements adopted | Recent accounting pronouncements adopted In December 2019, the FASB issued “ASU 2019-12, Simplifying the Accounting for Income Taxes.” The objective of the standard is to improve areas of GAAP by removing certain exceptions permitted by ASC Topic 740-- Income Taxes and clarifying existing guidance to facilitate consistent application. We adopted the standard on January 1, 2021. The adoption of this ASU did not have a material impact on our financial condition, results of operations, cash flows, or financial statement disclosures. |
Organization and Summary of S_3
Organization and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Cash and Cash Equivalents | Our total cash, cash equivalents, and restricted cash, as presented in the consolidated statements of cash flows, was as follows: December 31, (dollars in thousands) 2022 2021 Cash and cash equivalents $ 319,940 $ 424,834 Restricted cash included in prepaid expenses and other current assets 3,546 — Total cash, cash equivalents, and restricted cash as presented in the consolidated statements of cash flows $ 323,486 $ 424,834 |
Schedule of Cash, Cash Equivalents, and Restricted Cash | Our total cash, cash equivalents, and restricted cash, as presented in the consolidated statements of cash flows, was as follows: December 31, (dollars in thousands) 2022 2021 Cash and cash equivalents $ 319,940 $ 424,834 Restricted cash included in prepaid expenses and other current assets 3,546 — Total cash, cash equivalents, and restricted cash as presented in the consolidated statements of cash flows $ 323,486 $ 424,834 |
Schedule of Property and Equipment, Estimated Useful Lives | Property and equipment are stated at cost. Land is not depreciated, while all other property and equipment are depreciated using the straight-line method over the estimated useful lives of the assets, which are generally as follows: Years Building and improvements 20-30 Laboratory and manufacturing equipment 5-15 Furniture and fixtures 5 Computers, software and office equipment 3 Property and equipment consisted of the following: December 31, (dollars in thousands) 2022 2021 Leasehold improvements $ 238,161 $ 193,635 Laboratory and manufacturing equipment 127,031 104,702 Building 49,942 49,806 Computers, software and office equipment 64,042 52,078 Furniture and fixtures 20,985 17,563 Land 4,771 4,771 504,932 422,555 Less: accumulated depreciation and amortization (256,753) (212,482) Total $ 248,179 $ 210,073 |
Schedule of Finite-lived Intangible Assets | The following table presents the balances of our finite-lived intangible assets for the periods presented: December 31, (dollars in thousands) 2022 2021 Gross carrying value $ 305,650 $ 305,650 Less: accumulated amortization (68,134) (45,057) Total $ 237,516 $ 260,593 |
Schedule of Amortization Expense | The following table presents our amortization expense related to acquired TUKYSA technology costs, included in cost of sales in our consolidated statements of comprehensive income (loss), for the periods presented: Years ended December 31, (dollars in thousands ) 2022 2021 2020 Amortization expense $ 23,077 $ 23,087 $ 16,345 |
Schedule of Percent of Revenue Associated with Each Major Distributor or Collaborator | The following table presents each major distributor or collaborator that comprised more than 10% of total revenue: Years ended December 31, 2022 2021 2020 Distributor A 34 % 36 % 18 % Distributor B 27 % 27 % 15 % Distributor C 16 % 17 % 10 % Collaborator B — % — % 45 % |
Schedule of Concentration of Accounts Receivable Attributable to Certain Major Distributors | The following table presents each major distributor or collaborator that accounted for more than 10% of accounts receivable: December 31, 2022 2021 Distributor A 30 % 29 % Distributor B 28 % 22 % Distributor C 17 % 16 % Collaborator A 9 % 11 % |
Revenue from contracts with c_2
Revenue from contracts with customers (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Collaboration and License Agreement Revenues by Collaborator | The following table presents our disaggregated revenue for the years presented. Years ended December 31, (dollars in thousands) 2022 2021 2020 ADCETRIS $ 839,272 $ 705,561 $ 658,577 PADCEV 451,427 339,918 222,436 TUKYSA 353,083 333,952 119,585 TIVDAK 62,734 6,135 — Net product sales $ 1,706,516 $ 1,385,566 $ 1,000,598 Royalty revenues $ 164,554 $ 150,523 $ 126,756 Collaboration and license agreement revenues $ 91,342 $ 38,282 $ 1,048,182 Total revenues $ 1,962,412 $ 1,574,371 $ 2,175,536 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Summary of Supplemental Operating Lease Information | Supplemental operating lease information was as follows: Years ended December 31, (dollars in thousands, except term and rate ) 2022 2021 2020 Operating lease cost $ 15,812 $ 16,219 $ 15,013 Variable lease cost 4,454 4,227 3,937 Total lease cost $ 20,266 $ 20,446 $ 18,950 Cash paid for amounts included in measurement of lease liabilities $ 17,236 $ 16,814 $ 14,265 As of December 31, 2022 2021 Weighted average remaining lease term (in years) 5.25 5.87 Weighted average discount rate 4.9 % 5.0 % |
Summary of Operating Lease Assets and Liabilities | Operating lease liabilities were recorded in the following captions of our consolidated balance sheet as follows: As of December 31, (dollars in thousands ) 2022 2021 Accrued liabilities and other $ 14,517 $ 13,905 Operating lease liabilities, long-term 43,474 56,665 Total $ 57,991 $ 70,570 |
Schedule of Future Minimum Lease Payments | As of December 31, 2022, future minimum lease payments under the lease agreements were as follows: (dollars in thousands) Years ending December 31, 2023 $ 17,046 2024 12,714 2025 8,718 2026 8,053 2027 8,053 Thereafter 11,665 Total future minimum lease payments 66,249 Less: imputed interest (8,258) Total $ 57,991 |
Fair Value (Tables)
Fair Value (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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 Other Significant Total December 31, 2022 Short-term investments—U.S. Treasury securities $ 1,415,130 $ — $ — $ 1,415,130 Other non-current assets—equity securities 3,854 — — 3,854 Total $ 1,418,984 $ — $ — $ 1,418,984 December 31, 2021 Short-term investments—U.S. Treasury securities $ 1,735,202 $ — $ — $ 1,735,202 Other non-current assets—equity securities 14,009 — — 14,009 Total $ 1,749,211 $ — $ — $ 1,749,211 |
Available-for-Sale Securities | Our debt securities consisted of the following: (dollars in thousands) Amortized Gross Gross Fair December 31, 2022 U.S. Treasury securities $ 1,416,717 $ 96 $ (1,683) $ 1,415,130 Contractual maturities (at date of purchase): Due in one year or less $ 1,400,852 $ 1,399,382 Due in one to two years 15,865 15,748 Total $ 1,416,717 $ 1,415,130 December 31, 2021 U.S. Treasury securities $ 1,735,388 $ 12 $ (198) $ 1,735,202 Contractual maturities (at date of purchase): Due in one year or less $ 1,635,307 $ 1,635,118 Due in one to two years 100,081 100,084 Total $ 1,735,388 $ 1,735,202 |
Investment and Other Income, _2
Investment and Other Income, Net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Investment and Other Income, Net | Investment and other income, net consisted of the following: Years ended December 31, (dollars in thousands) 2022 2021 2020 (Loss) gain on equity securities $ (10,154) $ 4,744 $ 11,604 Investment and other income, net 20,809 1,607 7,245 Total investment and other income, net $ 10,655 $ 6,351 $ 18,849 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consisted of the following: December 31, (dollars in thousands) 2022 2021 Raw materials $ 14,916 $ 12,181 Work in process 357,275 152,635 Finished goods 55,020 35,847 Total $ 427,211 $ 200,663 |
Property and equipment (Tables)
Property and equipment (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment are stated at cost. Land is not depreciated, while all other property and equipment are depreciated using the straight-line method over the estimated useful lives of the assets, which are generally as follows: Years Building and improvements 20-30 Laboratory and manufacturing equipment 5-15 Furniture and fixtures 5 Computers, software and office equipment 3 Property and equipment consisted of the following: December 31, (dollars in thousands) 2022 2021 Leasehold improvements $ 238,161 $ 193,635 Laboratory and manufacturing equipment 127,031 104,702 Building 49,942 49,806 Computers, software and office equipment 64,042 52,078 Furniture and fixtures 20,985 17,563 Land 4,771 4,771 504,932 422,555 Less: accumulated depreciation and amortization (256,753) (212,482) Total $ 248,179 $ 210,073 |
Accrued liabilities (Tables)
Accrued liabilities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued liabilities | Accrued liabilities consisted of the following : December 31, (dollars in thousands) 2022 2021 Clinical trial and related costs $ 194,006 $ 122,468 Employee compensation and benefits 175,506 139,052 Gross-to-net deductions and third-party royalties 119,289 81,316 Contract manufacturing 21,638 21,867 Other 100,114 89,327 Total $ 610,553 $ 454,030 |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Company's Pre-tax (Loss) Income by Jurisdiction | Our (loss) income before income taxes by jurisdiction consisted of the following: Years ended December 31, (dollars in thousands) 2022 2021 2020 U.S. $ (612,004) $ (680,398) $ 613,054 Foreign 9,689 4,693 2,647 Total $ (602,315) $ (675,705) $ 615,701 |
Schedule of Provision (Benefit) for Income Taxes | The provision (benefit) for income taxes consists of the following: Years ended December 31, (dollars in thousands) 2022 2021 2020 Current: Federal $ 527 $ — $ — State 3,965 (2,553) 3,744 Foreign 2,956 844 224 Total Current 7,448 (1,709) 3,968 Deferred: Foreign 545 475 (1,937) Total Deferred 545 475 (1,937) Provision (benefit) for income taxes $ 7,993 $ (1,234) $ 2,031 |
Schedule of Effective Income Tax Rate | A reconciliation of the federal statutory income tax rate to the effective income tax rate is as follows: Years ended December 31, 2022 2021 2020 Statutory federal income tax rate 21.0 % 21.0 % 21.0 % Tax credits 3.8 7.2 (5.4) State income taxes and other 2.0 4.6 1.5 Valuation allowance (30.8) (35.7) (8.4) Stock compensation 2.7 3.1 (8.4) Effective tax rate (1.3) % 0.2 % 0.3 % |
Schedule of Deferred Tax Assets | Our net deferred tax assets consisted of the following: December 31, (dollars in thousands) 2022 2021 Deferred tax assets: Net operating loss carryforwards $ 152,834 $ 331,284 Foreign net operating loss carryforwards 2,795 7,566 Tax credit carryforwards 305,151 278,925 Share-based compensation 46,695 41,087 Allowance and accruals 54,442 47,119 Operating lease liabilities 13,337 16,461 Inventory 34,214 14,629 Capitalized research and development 248,704 6,947 Intangibles and amortization 22,758 5,399 Outside basis difference in partnerships 28,828 — Other 3,124 — Total deferred tax assets 912,882 749,417 Less: valuation allowance (897,490) (730,130) Total deferred tax assets, net of valuation allowance 15,392 19,287 Deferred tax liability: Right-of-use assets (11,218) (13,434) Depreciation (3,222) (3,428) Other — (920) Net deferred tax assets $ 952 $ 1,505 |
Schedule of Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits was as follows: Years ended December 31, (dollars in thousands) 2022 2021 2020 Balance at January 1 $ 30,306 $ 23,078 $ 24,018 (Decrease) increase related to prior year tax positions (661) 1,894 (4,008) Increase related to current year tax positions 5,600 5,334 3,068 Balance at December 31 $ 35,245 $ 30,306 $ 23,078 |
Commitments and contingencies (
Commitments and contingencies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Noncancelable Obligations | As of December 31, 2022, our future obligations related to supply and other agreements were as follows: (dollars in thousands) Years ending December 31, 2023 $ 259,731 2024 76,923 2025 45,198 2026 40,203 2027 3,778 Thereafter — Total $ 425,833 |
Stockholders' equity (Tables)
Stockholders' equity (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Schedule of Common Stock Reserved for Future Issuance | At December 31, 2022, shares of common stock reserved for future issuance are as follows: (in thousands) Stock options and RSUs outstanding 9,888 Shares available for future grant under the 2007 Equity Incentive Plan 4,325 Employee stock purchase plan shares available for future issuance 657 Total 14,870 |
Net (loss) income per share (Ta
Net (loss) income per share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Net (Loss) Income Per Share | Years ended December 31, (dollars in thousands, except per share amounts) 2022 2021 2020 Net (loss) income $ (610,308) $ (674,471) $ 613,670 Weighted average common shares outstanding - basic 184,676 182,048 174,834 Effect of potentially dilutive common shares — — 7,453 Weighted average common shares outstanding - diluted 184,676 182,048 182,287 Net (loss) income per share - basic $ (3.30) $ (3.70) $ 3.51 Net (loss) income per share - diluted $ (3.30) $ (3.70) $ 3.37 |
Schedule of Weighted-Average Shares Excluded from Number of Shares Used to Calculate Basic and Diluted Net Loss Per Share | The following table presents the weighted average number of shares that have been excluded for all periods presented: Years ended December 31, (in thousands) 2022 2021 2020 Stock options and RSUs 9,284 10,001 356 |
Share-based compensation (Table
Share-based compensation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Share-based Compensation | The following table presents our total share-based compensation expense for the periods presented: Years ended December 31, (dollars in thousands) 2022 2021 2020 Research and development $ 111,091 $ 79,715 $ 72,749 Selling, general and administrative 110,206 93,402 74,484 Total share-based compensation expense 221,297 173,117 147,233 |
Schedule of Stock Options Valuation Assumptions | We calculate the fair value of each time-based stock option award on the date of grant using the Black-Scholes option pricing model. The following weighted-average assumptions were used for the periods indicated: 2007 Plan Employee Stock Purchase Plan Years ended December 31, Years ended December 31, 2022 2021 2020 2022 2021 2020 Risk-free interest rate 3.6 % 0.8 % 0.3 % 1.2 % 0.1 % 1.3 % Expected lives (in years) 5.6 5.7 5.7 0.5 0.5 0.5 Expected dividend 0 % 0 % 0 % 0 % 0 % 0 % Expected volatility 42 % 44 % 44 % 40 % 44 % 47 % |
Schedule of Stock Option Activity And Performance Options Awards | A summary of stock option activity for time-based awards using the Black-Scholes option pricing model is as follows : Shares Weighted- Weighted-average Aggregate Balance at December 31, 2021 7,374,454 $ 79.53 Granted 388,124 $ 138.32 Exercised (2,098,224) $ 49.65 Forfeited/expired (247,267) $ 138.17 Balance at December 31, 2022 5,417,087 $ 92.62 5.93 $ 246,881 Expected to vest 5,297,800 $ 91.39 5.87 $ 246,625 Options exercisable 3,909,647 $ 73.69 4.98 $ 235,780 A summary of stock option activity for stock options subject to marked-based performance metrics using the Monte Carlo simulation model is as follows : Shares Weighted- Weighted-average Aggregate Balance at December 31, 2021 — $ — Granted 675,000 $ 137.96 Exercised — $ — Forfeited/expired — $ — Balance at December 31, 2022 675,000 $ 137.96 9.86 $ — Expected to vest 675,000 $ 137.96 9.86 $ — Options exercisable — $ — 0.00 $ — |
Schedule of Non-Vested Restricted Stock Units | A summary of RSU activ ity for time-based awards, excluding performance-based RSUs, is as f ollows: Share Weighted- Non-vested at December 31, 2021 2,358,261 $ 135.07 Granted 1,763,357 $ 161.22 Vested (784,527) $ 120.21 Forfeited (263,374) $ 143.14 Non-vested at December 31, 2022 3,073,717 $ 152.29 A summary of activity related to these performance-based RSUs is as follows: Share Weighted- Non-vested at December 31, 2021 802,721 $ 136.10 Granted 99,011 $ 170.01 Vested (112,592) $ 136.87 Forfeited (67,420) $ 147.05 Non-vested at December 31, 2022 721,720 $ 140.22 |
Organization and Summary of S_4
Organization and Summary of Significant Accounting Policies - Additional Information (Details) | 12 Months Ended | ||
Dec. 31, 2022 USD ($) segment | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | |||
Number of reporting segment operated | segment | 1 | ||
Accrued capital expenditures | $ 20,100,000 | $ 9,900,000 | |
Right-of-use assets in exchange for lease liabilities | 1,200,000 | 9,100,000 | $ 7,200,000 |
Accrued interest receivable | 5,200,000 | 400,000 | |
Cash held in escrow restricted by a contractual agreement | 3,546,000 | 0 | |
Estimated future amortization expense, 2023 | 23,100,000 | ||
Estimated future amortization expense, 2024 | 23,100,000 | ||
Estimated future amortization expense, 2025 | 23,100,000 | ||
Estimated future amortization expense, 2026 | 23,100,000 | ||
Estimated future amortization expense, 2027 | 23,100,000 | ||
Goodwill, impairment | 0 | ||
Impairment losses recognized | 0 | ||
Advertising expenses | 114,100,000 | 88,800,000 | 59,300,000 |
Allowance for doubtful accounts | 0 | 0 | |
Bad debt expense | $ 0 | $ 0 | $ 0 |
Geographic Concentration Risk | Sales Revenue | United States | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Concentration risk, percentage | 90% | 90% | 90% |
Geographic Concentration Risk | Assets | United States | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Concentration risk, percentage | 90% | 90% | 90% |
Weighted Average | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Intangible asset useful life | 10 years |
Organization and Summary of S_5
Organization and Summary of Significant Accounting Policies - Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 319,940 | $ 424,834 | ||
Restricted cash included in prepaid expenses and other current assets | 3,546 | 0 | ||
Total cash, cash equivalents, and restricted cash as presented in the consolidated statements of cash flows | $ 323,486 | $ 424,834 | $ 558,424 | $ 274,562 |
Organization and Summary of S_6
Organization and Summary of Significant Accounting Policies - Schedule of Property and Equipment, Estimated Useful Lives (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Furniture and fixtures | |
Property, Plant and Equipment [Line Items] | |
Useful life | 5 years |
Computers, software and office equipment | |
Property, Plant and Equipment [Line Items] | |
Useful life | 3 years |
Minimum | Building and improvements | |
Property, Plant and Equipment [Line Items] | |
Useful life | 20 years |
Minimum | Laboratory and manufacturing equipment | |
Property, Plant and Equipment [Line Items] | |
Useful life | 5 years |
Maximum | Building and improvements | |
Property, Plant and Equipment [Line Items] | |
Useful life | 30 years |
Maximum | Laboratory and manufacturing equipment | |
Property, Plant and Equipment [Line Items] | |
Useful life | 15 years |
Organization and Summary of S_7
Organization and Summary of Significant Accounting Policies - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Accounting Policies [Abstract] | ||
Gross carrying value | $ 305,650 | $ 305,650 |
Less: accumulated amortization | (68,134) | (45,057) |
Total | $ 237,516 | $ 260,593 |
Organization and Summary of S_8
Organization and Summary of Significant Accounting Policies - Amortization Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | |||
Amortization of intangible assets | $ 23,077 | $ 23,087 | $ 16,345 |
TUKYSA technology costs | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization of intangible assets | $ 23,077 | $ 23,087 | $ 16,345 |
Organization and Summary of S_9
Organization and Summary of Significant Accounting Policies - Schedule of Percent of Revenue Associated with Each Major Distributor or Collaborator (Details) - Customer Concentration Risk - Sales Revenue | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Distributor A | |||
Concentration Risk [Line Items] | |||
Percent of total revenues | 34% | 36% | 18% |
Distributor B | |||
Concentration Risk [Line Items] | |||
Percent of total revenues | 27% | 27% | 15% |
Distributor C | |||
Concentration Risk [Line Items] | |||
Percent of total revenues | 16% | 17% | 10% |
Collaborator B | |||
Concentration Risk [Line Items] | |||
Percent of total revenues | 0% | 0% | 45% |
Organization and Summary of _10
Organization and Summary of Significant Accounting Policies - Schedule of Concentration of Accounts Receivable Attributable to Certain Major Distributors (Details) - Credit Concentration Risk - Accounts Receivable, Net | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Distributor A | ||
Concentration Risk [Line Items] | ||
Percent of total accounts receivable | 30% | 29% |
Distributor B | ||
Concentration Risk [Line Items] | ||
Percent of total accounts receivable | 28% | 22% |
Distributor C | ||
Concentration Risk [Line Items] | ||
Percent of total accounts receivable | 17% | 16% |
Collaborator A | ||
Concentration Risk [Line Items] | ||
Percent of total accounts receivable | 9% | 11% |
Revenue from contracts with c_3
Revenue from contracts with customers - Summary of Collaboration and License Agreement Revenues by Collaborator (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | |||
Revenue | $ 1,962,412 | $ 1,574,371 | $ 2,175,536 |
Net product sales | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 1,706,516 | 1,385,566 | 1,000,598 |
Net product sales | ADCETRIS | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 839,272 | 705,561 | 658,577 |
Net product sales | PADCEV | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 451,427 | 339,918 | 222,436 |
Net product sales | TUKYSA | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 353,083 | 333,952 | 119,585 |
Net product sales | TIVDAK | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 62,734 | 6,135 | 0 |
Royalty revenues | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 164,554 | 150,523 | 126,756 |
Collaboration and license agreement revenues | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | $ 91,342 | $ 38,282 | $ 1,048,182 |
Revenue from contracts with c_4
Revenue from contracts with customers - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | |||
Revenue | $ 1,962,412,000 | $ 1,574,371,000 | $ 2,175,536,000 |
Contract asset | 0 | 0 | |
Contract liability | 0 | 0 | |
Collaboration and License Agreement | |||
Disaggregation of Revenue [Line Items] | |||
Deferred revenue recognized | 0 | 0 | 0 |
Collaboration and license agreement revenues | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | $ 91,342,000 | $ 38,282,000 | 1,048,182,000 |
Collaboration and license agreement revenues | Collaboration and License Agreement | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | $ 975,200,000 |
Leases - Additional Information
Leases - Additional Information (Details) ft² in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 USD ($) a ft² term | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Leases [Abstract] | ||||
Right-of-use assets in exchange for lease liabilities | $ 1,200 | $ 9,100 | $ 7,200 | |
Lease agreement | ft² | 258 | |||
Rentable building and complex constructed | a | 20.5 | |||
Initial rate | $ 4,000 | 17,236 | 16,814 | 14,265 |
Annual escalations | 3% | |||
Initial term | 20 years | |||
Option to extend | term | 2 | |||
Renewal term | 10 years | |||
Rent expense | $ 15,900 | $ 16,500 | $ 16,600 |
Leases - Supplemental Informati
Leases - Supplemental Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Leases [Abstract] | ||||
Operating lease cost | $ 15,812 | $ 16,219 | $ 15,013 | |
Variable lease cost | 4,454 | 4,227 | 3,937 | |
Total lease cost | 20,266 | 20,446 | 18,950 | |
Cash paid for amounts included in measurement of lease liabilities | $ 4,000 | $ 17,236 | $ 16,814 | $ 14,265 |
Weighted average remaining lease term (in years) | 5 years 3 months | 5 years 10 months 13 days | ||
Weighted average discount rate | 4.90% | 5% |
Leases - Balance Sheet Informat
Leases - Balance Sheet Information (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
Accrued liabilities and other extensible list | Accrued liabilities and other | Accrued liabilities and other |
Accrued liabilities and other | $ 14,517 | $ 13,905 |
Operating lease liabilities, long-term | 43,474 | 56,665 |
Total | $ 57,991 | $ 70,570 |
Leases - Future Minimum Payment
Leases - Future Minimum Payments (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
2023 | $ 17,046 | |
2024 | 12,714 | |
2025 | 8,718 | |
2026 | 8,053 | |
2027 | 8,053 | |
Thereafter | 11,665 | |
Total future minimum lease payments | 66,249 | |
Less: imputed interest | (8,258) | |
Total | $ 57,991 | $ 70,570 |
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 - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | $ 1,418,984 | $ 1,749,211 |
US Treasury Securities | Short-term Investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 1,415,130 | 1,735,202 |
Equity Securities | Other Non-current Assets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 3,854 | 14,009 |
Quoted prices in active markets for identical assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 1,418,984 | 1,749,211 |
Quoted prices in active markets for identical assets (Level 1) | US Treasury Securities | Short-term Investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 1,415,130 | 1,735,202 |
Quoted prices in active markets for identical assets (Level 1) | Equity Securities | Other Non-current Assets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 3,854 | 14,009 |
Other observable inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Other observable inputs (Level 2) | US Treasury Securities | Short-term Investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Other observable inputs (Level 2) | Equity Securities | Other Non-current Assets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Significant unobservable inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Significant unobservable inputs (Level 3) | US Treasury Securities | Short-term Investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | 0 | 0 |
Significant unobservable inputs (Level 3) | Equity Securities | Other Non-current Assets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments | $ 0 | $ 0 |
Fair Value - Additional Informa
Fair Value - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |||
Credit loss | $ 0 | $ 0 | $ 0 |
Allowance for credit loss | $ 0 |
Fair Value - Summary of Debt Se
Fair Value - Summary of Debt Securities (Details) - US Treasury Securities - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized cost | $ 1,416,717 | $ 1,735,388 |
Gross unrealized gains | 96 | 12 |
Gross unrealized losses | (1,683) | (198) |
Fair value | 1,415,130 | 1,735,202 |
Debt securities, due in one year or less, amortized cost | 1,400,852 | 1,635,307 |
Debt securities, due in one year or less, fair value | 1,399,382 | 1,635,118 |
Debt securities, due in one to two years, amortized cost | 15,865 | 100,081 |
Debt securities, due in one to two years, fair value | $ 15,748 | $ 100,084 |
Investment and Other Income, _3
Investment and Other Income, Net - Schedule of Investment and Other Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |||
(Loss) gain on equity securities | $ (10,154) | $ 4,744 | $ 11,604 |
Investment and other income, net | 20,809 | 1,607 | 7,245 |
Total investment and other income, net | $ 10,655 | $ 6,351 | $ 18,849 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 14,916 | $ 12,181 |
Work in process | 357,275 | 152,635 |
Finished goods | 55,020 | 35,847 |
Total | $ 427,211 | $ 200,663 |
Property and equipment - Schedu
Property and equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 504,932 | $ 422,555 |
Less: accumulated depreciation and amortization | (256,753) | (212,482) |
Total | 248,179 | 210,073 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 238,161 | 193,635 |
Laboratory and manufacturing equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 127,031 | 104,702 |
Building | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 49,942 | 49,806 |
Computers, software and office equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 64,042 | 52,078 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 20,985 | 17,563 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 4,771 | $ 4,771 |
Property and equipment - Additi
Property and equipment - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation and amortization expenses | $ 46.7 | $ 42.9 | $ 36 |
Construction in process included in Leasehold improvements | $ 58.9 | $ 44 |
Accrued liabilities (Details)
Accrued liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Clinical trial and related costs | $ 194,006 | $ 122,468 |
Employee compensation and benefits | 175,506 | 139,052 |
Gross-to-net deductions and third-party royalties | 119,289 | 81,316 |
Contract manufacturing | 21,638 | 21,867 |
Other | 100,114 | 89,327 |
Total | $ 610,553 | $ 454,030 |
Income taxes - Schedule of Comp
Income taxes - Schedule of Company's Pre-tax Loss by Jurisdiction (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest [Abstract] | |||
U.S. | $ (612,004) | $ (680,398) | $ 613,054 |
Foreign | 9,689 | 4,693 | 2,647 |
(Loss) income before income taxes | $ (602,315) | $ (675,705) | $ 615,701 |
Income taxes - Schedule of Prov
Income taxes - Schedule of Provision (Benefit) for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current: | |||
Federal | $ 527 | $ 0 | $ 0 |
State | 3,965 | (2,553) | 3,744 |
Foreign | 2,956 | 844 | 224 |
Total Current | 7,448 | (1,709) | 3,968 |
Deferred: | |||
Foreign | 545 | 475 | (1,937) |
Deferred income taxes | 545 | 475 | (1,937) |
Provision (benefit) for income taxes | $ 7,993 | $ (1,234) | $ 2,031 |
Income taxes - Schedule of Effe
Income taxes - Schedule of Effective Income Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Effective Income Tax Rate Reconciliation, Other Reconciling Items, Percent [Abstract] | |||
Statutory federal income tax rate | 21% | 21% | 21% |
Tax credits | 3.80% | 7.20% | (5.40%) |
State income taxes and other | 2% | 4.60% | 1.50% |
Valuation allowance | (30.80%) | (35.70%) | (8.40%) |
Stock compensation | 2.70% | 3.10% | (8.40%) |
Effective tax rate | (1.30%) | 0.20% | 0.30% |
Income taxes - Additional Infor
Income taxes - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Taxes [Line Items] | ||||
Provision (benefit) for income taxes | $ 7,993 | $ (1,234) | $ 2,031 | |
Current tax benefit | (7,448) | 1,709 | (3,968) | |
Deferred income taxes | 545 | 475 | (1,937) | |
State | 3,965 | (2,553) | 3,744 | |
Foreign tax benefit | 1,700 | |||
Valuation allowance | 897,490 | 730,130 | ||
Increase (decrease) in the valuation allowance | 167,400 | 240,600 | (46,800) | |
Tax credit carryforward | 328,200 | |||
Total unrecognized tax benefit | 35,245 | $ 30,306 | 23,078 | $ 24,018 |
State | ||||
Income Taxes [Line Items] | ||||
State tax liabilities | $ 3,700 | |||
Gross net operating loss carryforwards | 171,400 | |||
Federal | ||||
Income Taxes [Line Items] | ||||
Gross net operating loss carryforwards | 682,000 | |||
Indefinite operating loss carryforwards | 663,000 | |||
Operating loss carryforwards, subject to expiration | 19,000 | |||
Foreign | ||||
Income Taxes [Line Items] | ||||
Gross net operating loss carryforwards | $ 33,700 |
Income taxes - Schedule of Defe
Income taxes - Schedule of Deferred Tax Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 152,834 | $ 331,284 |
Foreign net operating loss carryforwards | 2,795 | 7,566 |
Tax credit carryforwards | 305,151 | 278,925 |
Share-based compensation | 46,695 | 41,087 |
Allowance and accruals | 54,442 | 47,119 |
Operating lease liabilities | 13,337 | 16,461 |
Inventory | 34,214 | 14,629 |
Capitalized research and development | 248,704 | 6,947 |
Intangibles and amortization | 22,758 | 5,399 |
Outside basis difference in partnerships | 28,828 | 0 |
Other | 3,124 | 0 |
Total deferred tax assets | 912,882 | 749,417 |
Less: valuation allowance | (897,490) | (730,130) |
Total deferred tax assets, net of valuation allowance | 15,392 | 19,287 |
Deferred tax liability: | ||
Right-of-use assets | (11,218) | (13,434) |
Depreciation | (3,222) | (3,428) |
Other | 0 | (920) |
Net deferred tax assets | $ 952 | $ 1,505 |
Income taxes - Schedule of Reco
Income taxes - Schedule of Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Balance at January 1 | $ 30,306 | $ 23,078 | $ 24,018 |
(Decrease) increase related to prior year tax positions | (661) | (4,008) | |
(Decrease) increase related to prior year tax positions | 1,894 | ||
Increase related to current year tax positions | 5,600 | 5,334 | 3,068 |
Balance at December 31 | $ 35,245 | $ 30,306 | $ 23,078 |
Collaboration and license agr_2
Collaboration and license agreements (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||
Oct. 31, 2022 USD ($) | Oct. 31, 2020 USD ($) $ / shares shares | Sep. 30, 2020 USD ($) agreement | Mar. 31, 2022 target | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Sep. 30, 2021 USD ($) | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||
Cost of sales | $ 410,058 | $ 311,565 | $ 217,720 | |||||
Number of agreements entered into | agreement | 2 | |||||||
Shares issued (in shares) | shares | 5,000,000 | |||||||
Price per share (in dollars per share) | $ / shares | $ 200 | |||||||
Proceeds from sale of stock | $ 1,000,000 | |||||||
Revenue | 1,962,412 | 1,574,371 | 2,175,536 | |||||
Fair value of shares issued | 749,900 | 749,850 | ||||||
Number of cancer targets | target | 3 | |||||||
Collaboration and license agreement revenues | ||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||
Revenue | 91,342 | 38,282 | 1,048,182 | |||||
Collaboration and License Agreement | Collaboration and license agreement revenues | ||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||
Revenue | 975,200 | |||||||
Collaborative Arrangement | RemGen Co | ||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||
Upfront payment to collaborator | $ 200,000 | |||||||
Collaborative Arrangement | RemGen Co | Development Goals | ||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||
Potential milestone payments to collaborator | 195,000 | |||||||
Collaborative Arrangement | RemGen Co | Regulatory and Commercialization Goals | ||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||
Potential milestone payments to collaborator | $ 2,200,000 | |||||||
Astellas Collaboration and License Agreements | ||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||
Third party research and development expenses incurred | 132,800 | 145,400 | 99,300 | |||||
PADCEV | ||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||
Third party research and development expenses incurred | 38,500 | 32,000 | 14,000 | |||||
Cost of sales | 207,700 | 159,000 | 104,600 | |||||
TIVDAK collaborations | ||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||
Third party research and development expenses incurred | 62,700 | 63,700 | 50,100 | |||||
Cost of sales | $ 45,800 | 3,000 | 0 | |||||
TIVDAK collaborations | Collaboration and License Agreement | ||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||
Percentage of sales representatives and medical science liaisons maintained by company | 50% | |||||||
Percentage of costs entity is responsible for | 50% | |||||||
Upfront cash payment received | $ 30,000 | |||||||
Percentage of profits to be received | 50% | |||||||
L V Agreement | Collaboration and License Agreement | ||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||
Percentage of costs entity is responsible for | 50% | |||||||
Upfront cash payment received | $ 600,000 | |||||||
Percentage of profits to be received | 50% | |||||||
Milestone payment (up to) | $ 850,000 | |||||||
Milestone payment upon achievement of annual sales threshold (up to) | 1,750,000 | |||||||
TUKYSA Agreement | ||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||
Third party research and development expenses incurred | $ 166,300 | 123,100 | 21,800 | |||||
TUKYSA Agreement | Collaboration and License Agreement | ||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||
Upfront cash payment received | 125,000 | |||||||
Milestone payment (up to) | 65,000 | |||||||
Prepaid research and development expense | $ 85,000 | 85,000 | ||||||
Minimum royalty received on sale | 20% | |||||||
Revenue | 725,000 | |||||||
TUKYSA Agreement | Collaboration and License Agreement | Accrued Liabilities | ||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||
Co-development liability | 15,500 | 40,200 | ||||||
TUKYSA Agreement | Collaboration and License Agreement | Other Long-Term Liabilities | ||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||
Co-development liability | $ 0 | $ 15,100 | ||||||
Purchase Agreement | Collaboration and license agreement revenues | ||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||
Revenue | $ 250,100 | $ 250,100 |
In-license agreements (Details)
In-license agreements (Details) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 USD ($) target | Dec. 31, 2022 | Dec. 31, 2021 agreement | Oct. 31, 2022 USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Number of licensing agreements | agreement | 2 | |||
License agreement expiration term | 10 years | |||
Number of additional tumor targets | target | 2 | |||
License agreement, upfront fee paid | $ 50 | |||
License agreement, contingent milestone payments agreed to pay | $ 650 |
Commitments and contingencies_2
Commitments and contingencies (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Contractual Obligation, Fiscal Year Maturity [Abstract] | |
2023 | $ 259,731 |
2024 | 76,923 |
2025 | 45,198 |
2026 | 40,203 |
2027 | 3,778 |
Thereafter | 0 |
Total | $ 425,833 |
Legal matters (Details)
Legal matters (Details) $ in Millions | 1 Months Ended | ||||
Sep. 14, 2022 USD ($) | Apr. 08, 2022 USD ($) | Jan. 22, 2021 petition | Dec. 31, 2022 USD ($) | Apr. 07, 2022 proceeding | |
Loss Contingencies [Line Items] | |||||
Number of petitions filed | petition | 2 | ||||
Number of post-grant review proceedings request granted | proceeding | 2 | ||||
Dispute over ownership of intellectual property | |||||
Loss Contingencies [Line Items] | |||||
Loss contingency, damages sought | $ 58 | ||||
Dispute over ownership of intellectual property | Minimum | |||||
Loss Contingencies [Line Items] | |||||
Loss contingency accrual | $ 14 | ||||
Dispute over ownership of intellectual property | Maximum | |||||
Loss Contingencies [Line Items] | |||||
Loss contingency accrual | $ 58 | ||||
Patent infringement | |||||
Loss Contingencies [Line Items] | |||||
Awarded damages for past infringement | $ 41.8 | ||||
Reimbursement of attorney fees requested | $ 12 | ||||
Patent infringement | Minimum | |||||
Loss Contingencies [Line Items] | |||||
Royalty fee percentage requested | 10% | ||||
Patent infringement | Maximum | |||||
Loss Contingencies [Line Items] | |||||
Royalty fee percentage requested | 12% |
Stockholders' equity - Addition
Stockholders' equity - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Oct. 31, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Subsidiary, Sale of Stock [Line Items] | ||||
Shares issued (in shares) | 5,000,000 | |||
Price per share (in dollars per share) | $ 200 | |||
Proceeds from sale of stock | $ 1,000,000 | |||
Fair value of shares issued | $ 749,900 | $ 749,850 | ||
Revenue | $ 1,962,412 | $ 1,574,371 | $ 2,175,536 |
Stockholders' equity - Schedule
Stockholders' equity - Schedule of Common Stock Reserved for Future Issuance (Details) shares in Thousands | Dec. 31, 2022 shares |
Equity [Abstract] | |
Stock options and RSUs outstanding (in shares) | 9,888 |
Shares available for future grant under the 2007 Equity Incentive Plan (in shares) | 4,325 |
Employee stock purchase plan shares available for future issuance (in shares) | 657 |
Total common stock reserved for future issuance (in shares) | 14,870 |
Net (loss) income per share - S
Net (loss) income per share - Schedule of Net (Loss) Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |||
Net (loss) income | $ (610,308) | $ (674,471) | $ 613,670 |
Weighted average common shares outstanding - basic (in shares) | 184,676 | 182,048 | 174,834 |
Effect of potentially dilutive common shares (in shares) | 0 | 0 | 7,453 |
Weighted average common shares outstanding - diluted (in shares) | 184,676 | 182,048 | 182,287 |
Net (loss) income per share - basic (in dollars per share) | $ (3.30) | $ (3.70) | $ 3.51 |
Net (loss) income per share - diluted (in dollars per share) | $ (3.30) | $ (3.70) | $ 3.37 |
Net (loss) income per share - A
Net (loss) income per share - Antidilutive Shares (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Stock options and RSUs | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Weighted-average shares that have been excluded (in shares) | 9,284 | 10,001 | 356 |
Share-based compensation - 2007
Share-based compensation - 2007 Equity Incentive Plan Additional Information (Details) - shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Additional shares reserved for issuance by plan amendment (in shares) | 6,000,000 | |
2007 Equity Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock reserved for issuance (in shares) | 39,000,000 | |
Minimum percentage of exercise price stock at grant date fair market value | 100% | |
Maximum term from date of grant, years | 10 years | |
2007 Equity Incentive Plan | Share-based Payment Arrangement, Employee | Share-based Payment Arrangement, Option | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Initial vesting period, percentage | 25% | |
Initial vesting period, years | 1 year | |
Subsequent vesting period, years | 36 months | |
2007 Equity Incentive Plan | Share-based Payment Arrangement, Employee | Restricted Stock Units (RSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Initial vesting period, percentage | 25% | |
2007 Equity Incentive Plan | Share-based Payment Arrangement, Nonemployee | Restricted Stock Units (RSUs) | Board Of Directors | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 1 year |
Share-based compensation - Empl
Share-based compensation - Employee Stock Purchase Plan Additional Information (Details) - shares | 1 Months Ended | 12 Months Ended | |
May 31, 2019 | Dec. 31, 2022 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Additional shares reserved for issuance (in shares) | 6,000,000 | ||
Employee Stock Purchase Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Discounted stock purchase price, percent of market value | 85% | ||
Share-based compensation offering period | 6 months | ||
Additional shares reserved for issuance (in shares) | 1,000,000 |
Share-based compensation - Shar
Share-based compensation - Share-Based Compensation Expense (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share based compensation cost | $ 221,297,000 | $ 173,117,000 | $ 147,233,000 |
Share-based compensation tax benefit | 12,600,000 | 0 | 55,700,000 |
Research and development | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share based compensation cost | 111,091,000 | 79,715,000 | 72,749,000 |
Selling, general and administrative | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share based compensation cost | $ 110,206,000 | $ 93,402,000 | $ 74,484,000 |
Share-based compensation - Sche
Share-based compensation - Schedule of Stock Options Valuation Assumptions (Details) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
2007 Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate | 3.60% | 0.80% | 0.30% |
Expected lives (in years) | 5 years 7 months 6 days | 5 years 8 months 12 days | 5 years 8 months 12 days |
Expected dividend | 0% | 0% | 0% |
Expected volatility | 42% | 44% | 44% |
Employee Stock Purchase Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate | 1.20% | 0.10% | 1.30% |
Expected lives (in years) | 6 months | 6 months | 6 months |
Expected dividend | 0% | 0% | 0% |
Expected volatility | 40% | 44% | 47% |
Share-based compensation - Sc_2
Share-based compensation - Schedule of Stock Option Activity & Stock Options Subject to Market-based Performance Awards (Details) $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) $ / shares shares | |
Option Plan | |
Shares | |
Beginning balance (in shares) | shares | 7,374,454 |
Granted (in shares) | shares | 388,124 |
Exercised (in shares) | shares | (2,098,224) |
Forfeited/expired (in shares) | shares | (247,267) |
Ending balance (in shares) | shares | 5,417,087 |
Expected to vest, shares (in shares) | shares | 5,297,800 |
Options exercisable, shares (in shares) | shares | 3,909,647 |
Weighted- average exercise price per share | |
Beginning balance (in dollars per share) | $ / shares | $ 79.53 |
Granted (in dollars per share) | $ / shares | 138.32 |
Exercised (in dollars per share) | $ / shares | 49.65 |
Forfeited/expired (in dollars per share) | $ / shares | 138.17 |
Ending balance (in dollars per share) | $ / shares | 92.62 |
Expected to vest, weighted-average exercise price per share (in dollars per share) | $ / shares | 91.39 |
Options exercisable, weighted-average exercise price per share (in dollars per share) | $ / shares | $ 73.69 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |
Outstanding, weighted-average remaining contractual term (in years) | 5 years 11 months 4 days |
Expected to vest, weighted-average remaining contractual term (in years) | 5 years 10 months 13 days |
Options exercisable, weighted-average remaining contractual term (in years) | 4 years 11 months 23 days |
Options outstanding, aggregate intrinsic value | $ | $ 246,881 |
Expected to vest, aggregate intrinsic value | $ | 246,625 |
Options exercisable, aggregate intrinsic value | $ | $ 235,780 |
Stock Options, Market-based Performance Award | |
Shares | |
Beginning balance (in shares) | shares | 0 |
Granted (in shares) | shares | 675,000 |
Exercised (in shares) | shares | 0 |
Forfeited/expired (in shares) | shares | 0 |
Ending balance (in shares) | shares | 675,000 |
Expected to vest, shares (in shares) | shares | 675,000 |
Options exercisable, shares (in shares) | shares | 0 |
Weighted- average exercise price per share | |
Beginning balance (in dollars per share) | $ / shares | $ 0 |
Granted (in dollars per share) | $ / shares | 137.96 |
Exercised (in dollars per share) | $ / shares | 0 |
Forfeited/expired (in dollars per share) | $ / shares | 0 |
Ending balance (in dollars per share) | $ / shares | 137.96 |
Expected to vest, weighted-average exercise price per share (in dollars per share) | $ / shares | 137.96 |
Options exercisable, weighted-average exercise price per share (in dollars per share) | $ / shares | $ 0 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |
Outstanding, weighted-average remaining contractual term (in years) | 9 years 10 months 9 days |
Expected to vest, weighted-average remaining contractual term (in years) | 9 years 10 months 9 days |
Options exercisable, weighted-average remaining contractual term (in years) | 0 years |
Options outstanding, aggregate intrinsic value | $ | $ 0 |
Expected to vest, aggregate intrinsic value | $ | 0 |
Options exercisable, aggregate intrinsic value | $ | $ 0 |
Share-based compensation - Stoc
Share-based compensation - Stock Option Activity Additional Information (Details) - Option Plan - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average grant-date fair values of options granted (in dollars per share) | $ 60.80 | $ 64.22 | $ 64.66 |
Aggregate intrinsic value of options exercised | $ 185.5 | $ 168.7 | $ 271 |
Unrecognized compensation cost related to unvested share-based compensation | $ 35.5 | ||
Unrecognized compensation of weighted-average period, years | 1 year 1 month 24 days |
Share-based compensation - St_2
Share-based compensation - Stock Options Subject to Market-based Performance Awards Narrative (Details) $ / shares in Units, $ in Millions | 12 Months Ended |
Dec. 31, 2022 USD ($) $ / shares shares | |
Stock Options, Market-based Performance Award | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Granted (in shares) | shares | 675,000 |
Risk-free interest rate | 4.10% |
Expected lives (in years) | 7 years 6 months |
Expected volatility | 43% |
Expected dividend | 0% |
Weighted average grant-date fair values of options granted (in dollars per share) | $ / shares | $ 67.94 |
Aggregate intrinsic value of options exercised | $ 0 |
Unrecognized compensation cost related to unvested share-based compensation | $ 43.2 |
Unrecognized compensation of weighted-average period, years | 2 years 8 months 1 day |
Stock Options, Market-based Performance Award | On the date of achievement of the stock price | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Performance option awards vesting rights, percentage | 33.33% |
Stock Options, Market-based Performance Award | On the nine month anniversary of achievement of the stock price | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Performance option awards vesting rights, percentage | 33.33% |
Vesting period | 9 months |
Stock Options, Market-based Performance Award | On the 18 month anniversary of achievement of the stock price | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Performance option awards vesting rights, percentage | 33.33% |
Vesting period | 18 months |
Restricted Stock Unit And Stock Option Awards | On the date of achievement of the stock price | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Performance option awards vesting rights, percentage | 83% |
Restricted Stock Unit And Stock Option Awards | On the nine month anniversary of achievement of the stock price | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Performance option awards vesting rights, percentage | 16.70% |
Share-based compensation - Sc_3
Share-based compensation - Schedule of Non-Vested Restricted Stock Units (Details) - Restricted Stock Units (RSUs) - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share equivalent | |||
Non-vested beginning balance, share equivalent (in shares) | 2,358,261 | ||
Granted, share equivalent (in shares) | 1,763,357 | ||
Vested, share equivalent (in shares) | (784,527) | ||
Forfeited, share equivalent (in shares) | (263,374) | ||
Non-vested, ending balance, share equivalent (in shares) | 3,073,717 | 2,358,261 | |
Weighted- average grant date fair value | |||
Non-vested, weighted-average grant date fair value (in dollars per share) | $ 135.07 | ||
Granted, weighted-average grant date fair value (in dollars per share) | 161.22 | $ 157.45 | $ 159.51 |
Vested, weighted-average grant date fair value (in dollars per share) | 120.21 | ||
Forfeited, weighted-average grant date fair value (in dollars per share) | 143.14 | ||
Non-vested, weighted-average grant date fair value (in dollars per share) | $ 152.29 | $ 135.07 |
Share-based compensation - RSU
Share-based compensation - RSU Activity Additional Information (Details) - Restricted Stock Units (RSUs) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Granted, weighted-average grant date fair value (in dollars per share) | $ 161.22 | $ 157.45 | $ 159.51 |
Value of stock awards vested during the period | $ 123 | $ 149.8 | $ 187.1 |
Unrecognized compensation cost related to unvested share-based compensation | $ 251 | ||
Unrecognized compensation of weighted-average period, years | 1 year 8 months 12 days |
Share-based compensation - Sc_4
Share-based compensation - Schedule of Performance-based RSUs Activity (Details) - Performance-based RSUs | 12 Months Ended |
Dec. 31, 2022 $ / shares shares | |
Share equivalent | |
Non-vested beginning balance, share equivalent (in shares) | shares | 802,721 |
Granted, share equivalent (in shares) | shares | 99,011 |
Vested, share equivalent (in shares) | shares | (112,592) |
Forfeited, share equivalent (in shares) | shares | (67,420) |
Non-vested, ending balance, share equivalent (in shares) | shares | 721,720 |
Weighted- average grant date fair value | |
Non-vested, weighted-average grant date fair value (in dollars per share) | $ / shares | $ 136.10 |
Granted, weighted-average grant date fair value (in dollars per share) | $ / shares | 170.01 |
Vested, weighted-average grant date fair value (in dollars per share) | $ / shares | 136.87 |
Forfeited, weighted-average grant date fair value (in dollars per share) | $ / shares | 147.05 |
Non-vested, weighted-average grant date fair value (in dollars per share) | $ / shares | $ 140.22 |
Share-based compensation - Perf
Share-based compensation - Performance-based RSUs Additional Information (Details) $ in Millions | Dec. 31, 2022 USD ($) |
Performance-based RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation cost related to unvested share-based compensation | $ 67 |
Share-based compensation - Sepa
Share-based compensation - Separation Agreement with Former CEO (Details) - Restricted Stock Unit And Stock Option Awards - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
May 15, 2022 | Jun. 30, 2022 | Dec. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Acceleration period following separation | 18 months | ||
Maximum term from date of grant, years | 10 years | ||
Share-based payment arrangement, plan modification, incremental cost | $ 7.3 | ||
Share-Based Payment Arrangement, Tranche One | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Performance option awards vesting rights, percentage | 83% | ||
Share-Based Payment Arrangement, Tranche Two | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Performance option awards vesting rights, percentage | 16.70% |
Employee benefit plan (Details)
Employee benefit plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |||
Total contribution made by employer under matching program | $ 31.1 | $ 24.8 | $ 18 |