Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2019 | Aug. 05, 2019 | |
cover page [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 001-35969 | |
Entity Registrant Name | PTC Therapeutics, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 04-3416587 | |
Entity Address, Address Line One | 100 Corporate Court | |
Entity Address, City or Town | South Plainfield, | |
Entity Address, State or Province | NJ | |
Entity Address, Postal Zip Code | 07080 | |
City Area Code | 908 | |
Local Phone Number | 222-7000 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Title of 12(b) Security | Common Stock, $0.001 par value per share | |
Trading Symbol | PTCT | |
Security Exchange Name | NASDAQ | |
Entity Common Stock, Shares Outstanding | 58,949,680 |
Cover DEI
Cover DEI | 6 Months Ended |
Jun. 30, 2019 | |
cover page [Abstract] | |
Entity Central Index Key | 0001070081 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2019 |
Document Fiscal Period Focus | Q2 |
Consolidated Balance Sheets (un
Consolidated Balance Sheets (unaudited) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 136,094 | $ 169,498 |
Marketable securities | 227,447 | 58,088 |
Trade receivables, net | 77,104 | 67,907 |
Inventory, net | 16,897 | 16,117 |
Prepaid expenses and other current assets | 17,424 | 9,247 |
Total current assets | 474,966 | 320,857 |
Fixed assets, net | 15,391 | 12,694 |
Intangible assets, net | 702,729 | 701,031 |
Goodwill | 82,341 | 82,341 |
Deposits and other assets | 16,145 | 2,299 |
Total assets | 1,291,572 | 1,119,222 |
Current liabilities: | ||
Accounts payable and accrued expenses | 122,375 | 128,199 |
Current portion of long-term debt | 20,000 | 11,667 |
Deferred revenue | 8,005 | 3,716 |
Other current liabilities | 4,179 | 3,814 |
Deferred consideration payable | 19,400 | 19,400 |
Total current liabilities | 173,959 | 166,796 |
Deferred revenue | 7,797 | 9,722 |
Long-term debt | 135,683 | 141,347 |
Contingent consideration payable | 336,200 | 310,240 |
Deferred consideration payable | 18,800 | 18,300 |
Deferred tax liability | 122,032 | 122,032 |
Other long-term liabilities | 8,416 | 58 |
Total liabilities | 802,887 | 768,495 |
Stockholders’ equity: | ||
Common stock, $0.001 par value. Authorized 125,000,000 shares; issued and outstanding 58,707,185 shares at June 30, 2019. Authorized 125,000,000 shares; issued and outstanding 50,606,147 shares at December 31, 2018. | 58 | 51 |
Additional paid-in capital | 1,539,530 | 1,288,137 |
Accumulated other comprehensive income | 1,922 | 1,462 |
Accumulated deficit | (1,052,825) | (938,923) |
Total stockholders’ equity | 488,685 | 350,727 |
Total liabilities and stockholders’ equity | $ 1,291,572 | $ 1,119,222 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (unaudited) (Parenthetical) - $ / shares | Jun. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized shares (in shares) | 125,000,000 | 125,000,000 |
Common stock, issued shares (in shares) | 58,707,185 | 50,606,147 |
Common stock, outstanding shares (in shares) | 57,707,185 | 50,606,147 |
Consolidated Statements of Oper
Consolidated Statements of Operations (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Performance obligations satisfied in current period | $ 85,476 | $ 68,170 | $ 138,530 | $ 124,151 |
Revenues: | ||||
Revenue | 85,522 | 68,743 | 139,105 | 124,805 |
Operating expenses: | ||||
Cost of product sales, excluding amortization of acquired intangible assets | 3,211 | 2,572 | 5,587 | 5,616 |
Amortization of acquired intangible assets | 6,575 | 5,593 | 12,652 | 11,022 |
Research and development | 59,979 | 32,607 | 112,544 | 63,970 |
Selling, general and administrative | 49,215 | 33,545 | 89,760 | 66,514 |
Change in the fair value of deferred and contingent consideration | 5,300 | 0 | 26,460 | 0 |
Total operating expenses | 124,280 | 74,317 | 247,003 | 147,122 |
Loss from operations | (38,758) | (5,574) | (107,898) | (22,317) |
Interest expense, net | (2,074) | (2,884) | (4,362) | (6,187) |
Other (expense) income, net | (183) | (673) | (292) | 332 |
Loss before income tax expense | (41,015) | (9,131) | (112,552) | (28,172) |
Income tax expense | (774) | (389) | (1,350) | (610) |
Net loss attributable to common stockholders | $ (41,789) | $ (9,520) | $ (113,902) | $ (28,782) |
Weighted-average shares outstanding: | ||||
Basic and diluted (in shares) | 55,912,748 | 46,137,833 | 57,113,141 | 46,257,397 |
Net loss per share-basic and diluted (in dollars per share) | ||||
Net loss per share—basic and diluted (in dollars per share) | $ (0.75) | $ (0.21) | $ (1.99) | $ (0.62) |
Net product revenue | ||||
Revenues: | ||||
Revenue | $ 68,170 | $ 138,530 | $ 124,151 | |
Collaboration and grant revenue | ||||
Revenues: | ||||
Revenue | $ 46 | $ 573 | $ 575 | $ 654 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (41,789) | $ (9,520) | $ (113,902) | $ (28,782) |
Other comprehensive income (loss): | ||||
Unrealized gain (loss) on marketable securities | 839 | 40 | 898 | (83) |
Foreign currency translation gain (loss) | 278 | (3,138) | (438) | (2,031) |
Comprehensive loss | $ (40,672) | $ (12,618) | $ (113,442) | $ (30,896) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) | Total | Common stock | Additional paid-in capital | AOCI Attributable to Parent | Accumulated deficit |
Balance (in shares) at Dec. 31, 2017 | 41,612,395 | ||||
Balance at the beginning of the period at Dec. 31, 2017 | $ 156,437,000 | $ 42,000 | $ 966,534,000 | $ 3,969,000 | $ (814,108,000) |
Increase (Decrease) in Stockholders' Equity | |||||
Issuance of common stock related to equity offering (in shares) | 4,600,000 | ||||
Issuance of common stock related to equity offering | 117,874,000 | $ 5,000 | 117,869,000 | ||
Exercised (in shares) | 260,879 | ||||
Exercise of options | 3,592,000 | $ 0 | 3,592,000 | ||
Issuance of restricted stock (in shares) | 119,691 | ||||
Restricted stock vesting and issuance | 0 | ||||
Issuance of common stock in connection with an employee stock purchase plan (in shares) | 87,517 | ||||
Issuance of common stock in connection with an employee stock purchase plan | 1,299,000 | $ 0 | 1,299,000 | ||
Share-based compensation expense | 15,831,000 | 15,831,000 | |||
Net loss | (28,782,000) | (28,782,000) | |||
Comprehensive income | (2,114,000) | (2,114,000) | |||
Balance (in shares) at Jun. 30, 2018 | 46,680,482 | ||||
Balance at the end of the period at Jun. 30, 2018 | 267,402,000 | $ 47,000 | 1,105,124,000 | 1,855,000 | (839,624,000) |
Balance (in shares) at Mar. 31, 2018 | 41,809,398 | ||||
Balance at the beginning of the period at Mar. 31, 2018 | 150,309,000 | $ 42,000 | 975,418,000 | 4,953,000 | (830,104,000) |
Increase (Decrease) in Stockholders' Equity | |||||
Issuance of common stock related to equity offering (in shares) | 4,600,000 | ||||
Issuance of common stock related to equity offering | 117,874,000 | $ 5,000 | 117,869,000 | ||
Exercised (in shares) | 183,567 | ||||
Exercise of options | 2,455,000 | 2,455,000 | |||
Restricted stock vesting and issuance | 0 | ||||
Issuance of common stock in connection with an employee stock purchase plan (in shares) | 87,517 | ||||
Issuance of common stock in connection with an employee stock purchase plan | 1,298,000 | $ 0 | 1,298,000 | ||
Share-based compensation expense | 8,084,000 | 8,084,000 | |||
Net loss | (9,520,000) | (9,520,000) | |||
Comprehensive income | (3,098,000) | (3,098,000) | |||
Balance (in shares) at Jun. 30, 2018 | 46,680,482 | ||||
Balance at the end of the period at Jun. 30, 2018 | 267,402,000 | $ 47,000 | 1,105,124,000 | 1,855,000 | (839,624,000) |
Increase (Decrease) in Stockholders' Equity | |||||
Adjustment to accumulated deficit | 3,265,000 | (1,000) | 3,266,000 | ||
Balance (in shares) at Dec. 31, 2018 | 50,606,147 | ||||
Balance at the beginning of the period at Dec. 31, 2018 | 350,727,000 | $ 51,000 | 1,288,137,000 | 1,462,000 | (938,923,000) |
Increase (Decrease) in Stockholders' Equity | |||||
Issuance of common stock related to equity offering (in shares) | 7,563,725 | ||||
Issuance of common stock related to equity offering | 224,545,000 | $ 7,000 | 224,538,000 | ||
Exercised (in shares) | 311,002 | ||||
Exercise of options | 4,129,000 | $ 0 | 4,129,000 | ||
Restricted stock vesting and issuance (in shares) | 171,592 | ||||
Restricted stock vesting and issuance | 0 | $ 0 | |||
Issuance of common stock in connection with an employee stock purchase plan (in shares) | 54,719 | ||||
Issuance of common stock in connection with an employee stock purchase plan | 1,564,000 | $ 0 | 1,564,000 | ||
Share-based compensation expense | 20,184,000 | 20,184,000 | |||
Adjustments to Additional Paid In Capital, Receivable from Investor | 978,000 | 978,000 | |||
Net loss | (113,902,000) | (113,902,000) | |||
Comprehensive income | 460,000 | 460,000 | |||
Balance (in shares) at Jun. 30, 2019 | 58,707,185 | ||||
Balance at the end of the period at Jun. 30, 2019 | 488,685,000 | $ 58,000 | 1,539,530,000 | 1,922,000 | (1,052,825,000) |
Balance (in shares) at Mar. 31, 2019 | 58,418,790 | ||||
Balance at the beginning of the period at Mar. 31, 2019 | 512,942,000 | $ 58,000 | 1,523,115,000 | 805,000 | (1,011,036,000) |
Increase (Decrease) in Stockholders' Equity | |||||
Issuance of common stock related to equity offering (in shares) | 0 | ||||
Issuance of common stock related to equity offering | 106,000 | $ 0 | 106,000 | ||
Exercised (in shares) | 230,176 | ||||
Exercise of options | 2,847,000 | $ 0 | 2,847,000 | ||
Restricted stock vesting and issuance (in shares) | 3,500 | ||||
Issuance of common stock in connection with an employee stock purchase plan (in shares) | 54,719 | ||||
Issuance of common stock in connection with an employee stock purchase plan | 1,564,000 | $ 0 | 1,564,000 | ||
Share-based compensation expense | 10,920,000 | 10,920,000 | |||
Adjustments to Additional Paid In Capital, Receivable from Investor | 978,000 | 978,000 | |||
Net loss | (41,789,000) | (41,789,000) | |||
Comprehensive income | 1,117,000 | 1,117,000 | |||
Balance (in shares) at Jun. 30, 2019 | 58,707,185 | ||||
Balance at the end of the period at Jun. 30, 2019 | $ 488,685,000 | $ 58,000 | $ 1,539,530,000 | $ 1,922,000 | $ (1,052,825,000) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash flows from operating activities | ||
Net loss | $ (113,902) | $ (28,782) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 14,760 | 12,243 |
Change in valuation of deferred and contingent consideration | 26,460 | 0 |
Unrealized gain on MRI investment | (129) | 0 |
Non-cash interest expense | 4,055 | 3,644 |
Loss on disposal of asset | (50) | 0 |
Amortization of discounts on investments, net | (907) | (230) |
Amortization of debt issuance costs | 280 | 256 |
Share-based compensation expense | 20,184 | 15,831 |
Unrealized foreign currency transaction gains, net | 62 | (764) |
Changes in operating assets and liabilities: | ||
Inventory | (852) | (3,393) |
Prepaid expenses and other current assets | (7,250) | 254 |
Trade receivables, net | (9,702) | (20,429) |
Deposits and other assets | (9,656) | (419) |
Accounts payable and accrued expenses | (7,546) | 2,225 |
Other liabilities | 8,651 | 485 |
Deferred revenue | 2,511 | 3,204 |
Net cash used in operating activities | (72,931) | (15,875) |
Cash flows from investing activities | ||
Purchases of fixed assets | (4,851) | (1,187) |
Purchases of equity investment in MRI | (4,000) | 0 |
Purchases of marketable securities | (226,261) | (28,656) |
Sale and redemption of marketable securities | 58,424 | 35,939 |
Acquisition of product rights and licenses | 11,981 | 0 |
Net cash used in (provided by) investing activities | (188,669) | 6,096 |
Cash flows from financing activities | ||
Proceeds from exercise of options | 4,129 | 3,592 |
Net proceeds from public offerings | 224,545 | 117,874 |
Repayments of Debt | 1,667 | 0 |
Proceeds from shares issued under employee stock purchase plan | 1,564 | 1,299 |
Net cash provided by financing activities | 228,571 | 122,765 |
Effect of exchange rate changes on cash | (375) | (990) |
Net (decrease) increase in cash and cash equivalents | (33,404) | 111,996 |
Cash and cash equivalents, beginning of period | 169,498 | 111,792 |
Cash and cash equivalents, end of period | 136,094 | 223,788 |
Supplemental disclosure of cash information | ||
Cash paid for interest | 3,111 | 3,838 |
Cash paid for income taxes | 1,013 | 758 |
Supplemental disclosure of non-cash investing and financing activity | ||
Unrealized gain (loss) on marketable securities | 898 | (83) |
Right-of-use assets obtained in exchange for lease obligations | 11,643 | 0 |
Noncash or Part Noncash Acquisition, Intangible Assets Acquired | $ 8,269 | $ 3,903 |
The Company
The Company | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
The Company | The Company PTC Therapeutics, Inc. (the “Company” or “PTC”) is a science-led global biopharmaceutical company focused on the discovery, development and commercialization of clinically-differentiated medicines that provide benefits to patients with rare disorders. The Company’s ability to globally commercialize products is the foundation that drives its continued investment in a robust pipeline of transformative medicines and its mission to provide access to best-in-class treatments for patients who have an unmet medical need. The Company has two products, Translarna ™ (ataluren) and Emflaza™ (deflazacort), for the treatment of Duchenne muscular dystrophy, or DMD, a rare, life threatening disorder. Translarna received marketing authorization from the European Commission in August 2014 for the treatment of nonsense mutation Duchenne muscular dystrophy, or nmDMD, in ambulatory patients aged five years and older in the 31 member states of the European Economic Area, or EEA. In July 2018, the European Commission approved a label-extension request to the marketing authorization for Translarna in the EEA to include patients from two to up to five years of age. Emflaza is approved in the United States for the treatment of DMD in patients two years and older. The Company has a pipeline of gene therapy product candidates, including PTC-AADC for the treatment of Aromatic L-Amino Acid Decarboxylase, or AADC, deficiency, or AADC deficiency. The Company is preparing a biologics license application, or BLA, for PTC-AADC for the treatment of AADC deficiency in the United States, which it anticipates submitting to the U.S. Food and Drug Administration, or FDA, in the fourth quarter of 2019, with anticipated commercial launch in the United States in 2020, subject to approval. The Company is also preparing a marketing authorization application, or MAA, for PTC-AADC for the treatment of AADC deficiency in the European Union, or EU, for submission to the European Medicines Agency, or EMA, which will follow its BLA submission to the FDA. The Company holds the rights for the commercialization of Tegsedi™ (inotersen) and Waylivra™ (volanesorsen) for the treatment of rare diseases in countries in Latin America and the Caribbean. Tegsedi has received marketing authorization in the U.S., EU and Canada for the treatment of stage 1 or stage 2 polyneuropathy in adult patients with hATTR amyloidosis. The Company filed for marketing authorization with ANVISA, the Brazilian health regulatory authority, which granted priority review. It expects approval in Brazil by the end of 2019. Waylivra has received conditional marketing authorization in the EU for the treatment of familial chylomicronemia syndrome, or FCS. The Company also has a spinal muscular atrophy ("SMA") collaboration with F. Hoffman-La Roche Ltd and Hoffman-La Roche Inc., referred to collectively as Roche, and the Spinal Muscular Atrophy Foundation, or SMA Foundation. Currently, its collaboration has two pivotal clinical trials ongoing to evaluate the safety and effectiveness of risdiplam (RG7916, RO7034067), the lead compound in the SMA program. Roche is preparing an NDA and a MAA for risdiplam for the treatment of SMA in the United States and the EU, respectively, which Roche anticipates submitting to the FDA in the second half of 2019 and the EMA in the first half of 2020. In addition, the Company has a pipeline of product candidates and discovery programs that are in early clinical, pre-clinical and research and development stages focused on the development of new treatments for multiple therapeutic areas, including rare diseases and oncology. The Company’s marketing authorization for Translarna in the EEA is subject to annual review and renewal by the European Commission following reassessment by the EMA of the benefit-risk balance of the authorization, which the Company refers to as the annual EMA reassessment. This marketing authorization is further subject to the specific obligation to conduct and submit the results of a multi-center, randomized, double-blind, 18-month, placebo-controlled trial, followed by an 18-month open-label extension, according to an agreed protocol, in order to confirm the efficacy and safety of Translarna. The final report on the trial and open-label extension is to be submitted by the Company to the EMA by the end of the third quarter of 2022. The Company refers to the trial and open-label extension together as Study 041. The marketing authorization in the EEA was last renewed in July 2019 and is effective, unless extended, through August 5, 2020. The renewal was based on the Company’s commitment to conduct Study 041 and the totality of the clinical data available from its trials and studies of Translarna for the treatment of nmDMD, including the safety and efficacy results of the Phase 2b and Phase 3 clinical trials. The primary efficacy endpoint was not achieved in either trial within the pre-specified level of statistical significance. In June 2014, the Company initiated reimbursed early access programs, or EAP programs, for Translarna for nmDMD patients in selected territories in the EEA and recorded its first sales of Translarna in the third quarter of 2014 pursuant to an EAP program. In December 2014, the Company recorded its first commercial sales in Germany. As of June 30, 2019 , Translarna was available in over 40 countries on a commercial basis or pursuant to an EAP program. The Company expects to expand its commercial activities across the EEA pursuant to the marketing authorization granted by the EMA throughout 2019 and future years, subject to continued renewal of its marketing authorization following annual EMA reassessments and successful completion of pricing and reimbursement negotiations. Concurrently, the Company plans to continue to pursue EAP programs in select countries where those mechanisms exist, both within the EEA and in other countries that will reference the marketing authorization in the EEA. Translarna is an investigational new drug in the United States. During the first quarter of 2017, the Company filed a New Drug Application, or NDA, over protest with the FDA, for which the FDA granted a standard review. In October 2017, the Office of Drug Evaluation I of the FDA issued a complete response letter for the NDA, stating that it was unable to approve the application in its current form. In response, the Company filed a formal dispute resolution request with the Office of New Drugs of the FDA. In February 2018, the Office of New Drugs of the FDA denied PTC’s appeal of the Complete Response Letter. In its response, the Office of New Drugs recommended a possible path forward for the ataluren NDA submission based on the accelerated approval pathway. This would involve a re-submission of an NDA containing the current data on effectiveness of ataluren with new data to be generated on dystrophin production in nmDMD patients’ muscles. The Company intends to follow the FDA’s recommendation and will collect, using newer technologies via procedures and methods that the Company designed, such dystrophin data in a new study, Study 045, which the Company initiated in the fourth quarter of 2018. The Company expects that a potential re-submission of an NDA could occur in 2020. Additionally, should a re-submission of an NDA receive accelerated approval, the Office of New Drugs stated that Study 041, which is currently enrolling, could serve as the confirmatory post-approval trial required in connection with the accelerated approval framework. Emflaza was initially approved in the United States for the treatment of DMD in patients five years and older. In June 2019, the FDA approved the Company's label expansion request for Emflaza for patients two to five years of age. On April 20, 2017, the Company completed its acquisition of all rights to Emflaza, or the Transaction. Emflaza is approved in the United States for the treatment of DMD in patients two years and older. The Transaction was completed pursuant to an asset purchase agreement, dated March 15, 2017, as amended on April 20, 2017, (the "Asset Purchase Agreement"), by and between the Company and Marathon Pharmaceuticals, LLC (now known as Complete Pharma Holdings, LLC), or Marathon. The Transaction was accounted for as an asset acquisition. The assets acquired by the Company in the Transaction include intellectual property rights related to Emflaza, inventories of Emflaza, and certain contractual rights related to Emflaza. The Company assumed certain liabilities and obligations in the Transaction arising out of, or relating to, the assets acquired in the Transaction. Upon the closing of the Transaction, the Company paid to Marathon total upfront consideration comprised of $75.0 million in cash, funded through cash on hand, and 6,683,598 shares of the Company’s common stock. The number of shares of common stock issued at closing was determined by dividing $65.0 million by the volume-weighted average price per share of the Company’s common stock on the Nasdaq Stock Market for the 15 trading-day period ending on the third trading day immediately preceding the closing. Marathon is entitled to receive contingent payments from the Company based on annual net sales of Emflaza, up to a specified aggregate maximum amount over the expected commercial life of the asset, and a single $50.0 million sales-based milestone, in each case subject to the terms and conditions of the Asset Purchase Agreement. On August 23, 2018, the Company completed its acquisition of Agilis Biotherapeutics, Inc., or Agilis, pursuant to an Agreement and Plan of Merger, dated as of July 19, 2018 (the “Merger Agreement”), by and among the Company, Agility Merger Sub, Inc., a Delaware corporation and the Company's wholly owned, indirect subsidiary, Agilis and, solely in its capacity as the representative, agent and attorney-in-fact of the equityholders of Agilis, Shareholder Representative Services LLC (the "Merger"). Upon the closing of the Merger, the Company paid to Agilis equityholders total upfront consideration comprised of $49.2 million in cash and 3,500,907 shares of the Company’s common stock (the “Closing Stock Consideration”). The Closing Stock Consideration was determined by dividing $150.0 million by the volume-weighted average price per share of the Company’s common stock on the Nasdaq Global Select Market for the 10 consecutive trading-day period ending on the second trading-day immediately preceding the closing of the Merger. Agilis equityholders may become entitled to receive contingent payments from the Company based on the achievement of certain development, regulatory and net sales milestones as well as based upon a percentage of net sales of certain products. Under the Merger Agreement, the Company is required to pay $40.0 million of the development milestone payments no later than the second anniversary of the closing of the Merger, regardless of whether the applicable milestones have been achieved. As of June 30, 2019 , the Company had an accumulated deficit of approximately $1,052.8 million . The Company has financed its operations to date primarily through the private offering in August 2015 of 3.0% convertible senior notes due 2022 (see Note 10), public offerings of common stock in February 2014, October 2014, April 2018 and January 2019, its initial public offering of common stock in June 2013, private placements of its convertible preferred stock, collaborations, bank debt, convertible debt financings, grant funding and clinical trial support from governmental and philanthropic organizations and patient advocacy groups in the disease area addressed by the Company’s product candidates. Since 2014, the Company has also relied on revenue generated from net sales of Translarna for the treatment of nmDMD in territories outside of the United States, and since May 2017, the Company has generated revenue from net sales of Emflaza for the treatment of DMD in the United States. The Company expects that cash flows from the sales of its products, together with the Company’s cash, cash equivalents and marketable securities, will be sufficient to fund its operations for at least the next twelve months. |
Summary of significant accounti
Summary of significant accounting policies | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of significant accounting policies | Summary of significant accounting policies The Company’s complete listing of significant accounting policies is set forth in Note 2 of the notes to the Company’s audited financial statements as of December 31, 2018 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the "SEC") on March 1, 2019 (the " 2018 Form 10-K"). Additional significant accounting policies adopted during the six month period ended June 30, 2019 are discussed in further detail below. Basis of presentation The accompanying financial information as of June 30, 2019 and for the three and six months ended June 30, 2019 and 2018 has been prepared by the Company, without audit, pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States ("GAAP") have been condensed or omitted pursuant to such rules and regulations. These interim financial statements should be read in conjunction with the Company’s audited financial statements as of December 31, 2018 and notes thereto included in the 2018 Form 10-K. In the opinion of management, the unaudited financial information as of June 30, 2019 and for the three and six months ended June 30, 2019 and 2018 reflects all adjustments, which are normal recurring adjustments, necessary to present a fair statement of financial position, results of operations, stockholders' equity, and cash flows. The results of operations for the three and six month period ended June 30, 2019 are not necessarily indicative of the results to be expected for the year ended December 31, 2019 or for any other interim period or for any other future year. Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant estimates in these consolidated financial statements have been made in connection with the calculation of net product sales, certain accruals related to the Company’s research and development expenses, stock-based compensation, valuation procedures for the convertible notes, allowance for doubtful accounts, inventory, acquired intangible assets, fair value of the contingent consideration, and the provision for or benefit from income taxes. Actual results could differ from those estimates. Changes in estimates are reflected in reported results in the period in which they become known. Inventory and cost of product sales Inventory Inventories are stated at the lower of cost and net realizable value with cost determined on a first-in, first-out basis by product. The Company capitalizes inventory costs associated with products following regulatory approval when future commercialization is considered probable and the future economic benefit is expected to be realized. Translarna and Emflaza product which may be used in clinical development programs are included in inventory and charged to research and development expense when the product enters the research and development process and no longer can be used for commercial purposes. Inventory used for marketing efforts are charged to selling, general and administrative expense. The following table summarizes the components of the Company’s inventory for the periods indicated: June 30, 2019 December 31, 2018 Raw materials $ 2,089 $ 1,431 Work in progress 8,341 9,324 Finished goods 6,467 5,362 Total inventory $ 16,897 $ 16,117 The Company periodically reviews its inventories for excess amounts or obsolescence and writes down obsolete or otherwise unmarketable inventory to its estimated net realizable value. No write downs were recorded for the three and six month periods ended June 30, 2019 and 2018 . Additionally, though the Company’s product is subject to strict quality control and monitoring which it performs throughout the manufacturing processes, certain batches or units of product may not meet quality specifications resulting in a charge to cost of product sales. For the three and six month periods ended June 30, 2019 and 2018 , these amounts were immaterial. Cost of product sales Costs of product sales consists of the cost of inventory sold, manufacturing and supply chain costs, including personnel costs, storage costs, amortization of the acquired intangible asset and royalty payments associated with net product sales. Revenue recognition In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-9, “Revenue from Contracts with Customers (Topic 606)”. ASU No. 2014-9 eliminated transaction- and industry-specific revenue recognition guidance under FASB Accounting Standards Codification (“ASC”) Subtopic 605-15, Revenue Recognition-Products (Topic 605) and replaced it with a principle-based approach for determining revenue recognition. ASC Topic 606 requires entities to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Net product revenue The Company's net product revenue primarily consists of sales of Translarna in territories outside of the U.S. for the treatment of nmDMD and sales of Emflaza in the U.S. for the treatment of DMD. The Company recognizes revenue when its performance obligations with its customers have been satisfied. The Company’s performance obligations are to provide Translarna or Emflaza based on customer orders from distributors, hospitals, specialty pharmacies or retail pharmacies. The performance obligations are satisfied at a point in time when the Company’s customer obtains control of either Translarna or Emflaza, which is typically upon delivery. The Company invoices its customers after the products have been delivered and invoice payments are generally due within 30 to 90 days of the invoice date. The Company determines the transaction price based on fixed consideration in its contractual agreements. Contract liabilities arise in certain circumstances when consideration is due for goods the Company has yet to provide. As the Company has identified only one distinct performance obligation, the transaction price is allocated entirely to either product sales of Translarna or Emflaza. In determining the transaction price, a significant financing component does not exist since the timing from when the Company delivers product to when the customers pay for the product is typically less than one year. Customers in certain countries pay in advance of product delivery. In those instances, payment and delivery typically occur in the same month. The Company records product sales net of any variable consideration, which includes discounts, allowances, rebates and distribution fees. The Company uses the expected value or most likely amount method when estimating its variable consideration, unless discount or rebate terms are specified within contracts. Historically, returns of Translarna and Emflaza are immaterial to the financial statements, except as related to labeling changes and changes in specialty pharmacies. The identified variable consideration is recorded as a reduction of revenue at the time revenues from product sales are recognized. These estimates for variable consideration are adjusted to reflect known changes in factors and may impact such estimates in the quarter those changes are known. Revenue recognized does not include amounts of variable consideration that are constrained. In relation to customer contracts, the Company incurs costs to fulfill a contract but does not incur costs to obtain a contract. These costs to fulfill a contract do not meet the criteria for capitalization and are expensed as incurred. Upon adoption of ASC Topic 606 on January 1, 2018, the Company elected the following practical expedients: • Portfolio Approach - the Company applied the Portfolio Approach to contract reviews within its identified revenue streams that have similar characteristics and the Company believes this approach would not differ materially than if applying ASC Topic 606 to each individual contract. • Significant Financing Component - the Company expects the period between when it transfers a promised good to a customer and when the customer pays for the good or service to be one year or less. • Immaterial Performance Obligations - the Company disregards promises deemed to be immaterial in the context of the contract. • Shipping and Handling Activities - the Company considers any shipping and handling costs that are incurred after the customer has obtained control of the product as a cost to fulfill a promise. Shipping and handling costs associated with finished goods delivered to customers are recorded as a selling expense. Collaboration revenue The terms of these agreements typically include payments to the Company of one or more of the following: nonrefundable, upfront license fees; milestone payments; research funding and royalties on future product sales. In addition, the Company generates service revenue through agreements that generally provide for fees for research and development services and may include additional payments upon achievement of specified events. At the inception of a collaboration arrangement, the Company needs to first evaluate if the arrangement meets the criteria in ASC Topic 808 “Collaborative Arrangements” to then determine if ASC Topic 606 is applicable by considering whether the collaborator meets the definition of a customer. If the criteria are met, the Company assesses the promises in the arrangement to identify distinct performance obligations. For licenses of intellectual property, the Company assesses, at contract inception, whether the intellectual property is distinct from other performance obligations identified in the arrangement. If the licensing of intellectual property is determined to be distinct, revenue is recognized for nonrefundable, upfront license fees when the license is transferred to the customer and the customer can use and benefit from the license. If the licensing of intellectual property is determined not to be distinct, then the license will be bundled with other promises in the arrangement into one distinct performance obligation. The Company needs to determine if the bundled performance obligation is satisfied over time or at a point in time. If the Company concludes that the nonrefundable, upfront license fees will be recognized over time, the Company will need to assess the appropriate method of measuring proportional performance. For milestone payments, the Company assesses, at contract inception, whether the development or sales-based milestones are considered probable of being achieved. If it is probable that a significant revenue reversal will occur, the Company will not record revenue until the uncertainty has been resolved. Milestone payments that are contingent upon regulatory approval are not considered probable of being achieved until the applicable regulatory approvals or other external conditions are obtained as such conditions are not within the Company's control. If it is probable that a significant revenue reversal will not occur, the Company will estimate the milestone payments using the most likely amount method. The Company will re-assess the development and sales-based milestones each reporting period to determine the probability of achievement. The Company recognizes revenue for reimbursements of research and development costs under collaboration agreements as the services are performed. The Company records these reimbursements as revenue and not as a reduction of research and development expenses as the Company has the risks and rewards as the principal in the research and development activities. Allowance for doubtful accounts The Company maintains an allowance for estimated losses resulting from the inability of its customers to make required payments. The Company estimates uncollectible amounts based upon current customer receivable balances, the age of customer receivable balances, the customer’s financial condition and current economic trends. The allowance for doubtful accounts was $0.5 million as of June 30, 2019 and $0.7 million as of December 31, 2018 . Bad debt expense was immaterial for the three and six month periods ended June 30, 2019 and 2018 . Indefinite-lived intangible assets Indefinite-lived intangible assets consist of in-process research and development ("IPR&D"). IPR&D acquired directly in a transaction other than a business combination is capitalized if the projects will be further developed or have an alternative future use; otherwise they are expensed. The fair values of IPR&D projects acquired in business combinations are capitalized. Several methods may be used to determine the estimated fair value of the IPR&D acquired in a business combination. The Company utilizes the "income method”, and uses estimated future net cash flows that are derived from projected sales revenues and estimated costs. These projections are based on factors such as relevant market size, patent protection, and expected pricing and industry trends. The estimated future net cash flows are then discounted to the present value using an appropriate discount rate. These assets are treated as indefinite-lived intangible assets until completion or abandonment of the projects, at which time the assets are amortized over the remaining useful life or written off, as appropriate. IPR&D intangible assets that are determined to have had a drop in their fair value are adjusted downward and an impairment is recognized in the statement of operations. These assets are tested at least annually or sooner when a triggering event occurs that could indicate a potential impairment. Goodwill Goodwill represents the amount of consideration paid in excess of the fair value of net assets acquired as a result of the Company’s business acquisitions accounted for using the acquisition method of accounting. Goodwill is not amortized and is subject to impairment testing on an annual basis or when a triggering event occurs that may indicate the carrying value of the goodwill is impaired. Income Taxes On December 22, 2017, the U.S. government enacted the 2017 Tax Cuts and Jobs Act ("the 2017 Tax Act"), which significantly revises U.S. tax law by, among other provisions, lowering the U.S. federal statutory income tax rate to 21%, imposing a mandatory one-time transition tax on previously deferred foreign earnings, and eliminating or reducing certain income tax deductions. The Global Intangible Low-tax Income ("GILTI") provisions of the 2017 Tax Act require the Company to include in its U.S. income tax return foreign subsidiary earnings in excess of an allowable return on the foreign subsidiary’s tangible assets. The Company has elected to account for GILTI tax in the period in which it is incurred, and therefore has not provided any deferred tax impacts of GILTI in its consolidated financial statements for the period ended June 30, 2019 . Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and net operating loss and credit carryforwards. Deferred tax assets and liabilities are measured at rates expected to apply to taxable income in the years in which those temporary differences and carryforwards are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statement of operations in the period that includes the enactment date. A valuation allowance is recorded when it is not more likely than not that all or a portion of the net deferred tax assets will be realized. The Company recorded a deferred tax liability in conjunction with the Merger of $ 122.0 million related to the tax basis difference in the IPR&D indefinite-lived intangibles acquired. The Company's policy is to record a deferred tax liability related to acquired IPR&D which may eventually be realized either upon amortization of the asset when the research is completed and a product is successfully launched or the write-off of the asset if it is abandoned or unsuccessful. Leases In February 2016, the FASB issued ASU No. 2016-2, “Leases (Topic 842)” along with other amendments issued in 2017 and 2018. Topic 842 supersedes the lease accounting requirements in Accounting Standards Codification Topic 840, Leases (Topic 840). Topic 842 requires organizations to recognize leased assets and liabilities on the balance sheet. The standard also requires disclosures to help investors and other financial statement users better understand the amount, timing and uncertainty of cash flows arising from leases. The Company determines if an arrangement is a lease at inception. This determination generally depends on whether the arrangement conveys to the Company the right to control the use of an explicitly or implicitly identified fixed asset for a period of time in exchange for consideration. Control of an underlying asset is conveyed to the Company if the Company obtains the rights to direct the use of and to obtain substantially all of the economic benefits from using the underlying asset. The Company has lease agreements which include lease and non-lease components, which the Company accounts for as a single lease component for all leases. Under the standard, operating leases are classified as right of use ("ROU") assets, short term lease liabilities, and long term lease liabilities. Operating lease ROU assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. ROU assets are amortized and lease liabilities accrete to yield straight-line expense over the term of the lease. Lease payments included in the measurement of the lease liability are comprised of fixed payments. Variable lease payments associated with the Company’s leases are recognized when the event, activity, or circumstance in the lease agreement on which those payments are assessed occurs. Variable lease payments are presented in the Company’s consolidated statements of operations in the same line item as expense arising from fixed lease payments for operating leases. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheet and the Company recognizes lease expense for these leases on a straight-line basis over the lease term. The Company applies this policy to all underlying asset categories. Topic 842 requires a lessee to discount its unpaid lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, its incremental borrowing rate. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The Company gives consideration to its recent debt issuances as well as publicly available data for instruments with similar characteristics when calculating its incremental borrowing rates. The lease term for all of the Company’s leases includes the non-cancellable period of the lease plus any additional periods covered by either a Company option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise, or an option to extend (or not to terminate) the lease controlled by the lessor. Leasehold improvements are capitalized and depreciated over the lesser of useful life or lease term. See the "Impact of recently adopted accounting pronouncements" section within this Note below and Note 3 Leases for additional information. The information presented for periods prior to January 1, 2019 has not been adjusted and is reported under Topic 840. Recently issued accounting standards In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”. This standard requires financial assets measured at amortized cost basis to be presented at the net amount expected to be collected. This standard is effective for public companies who are SEC filers for fiscal years beginning after December 15, 2019, including interim periods within those years. The Company expects to adopt this guidance when effective and is assessing what effect the adoption of ASU 2016-13 will have on its consolidated financial statements and accompanying notes. In August 2018, the FASB issued ASU 2018-13, "Fair Value Measurement (Topic 820), Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement". This standard eliminates certain disclosure requirements for fair value measurements for all entities, requires public entities to disclose certain new information and modifies some disclosure requirements. The new guidance is effective for all entities for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. An entity is permitted to early adopt either the entire standard or only the provisions that eliminate or modify requirements. Entities can elect to early adopt in interim periods, including periods for which they have not yet issued financial statements or made their financial statements available for issuance. The Company expects to adopt this guidance when effective and is currently assessing what effect the adoption of ASU No. 2018-13 will have on its consolidated financial statements and accompanying notes. In August 2018, the FASB issued ASU 2018-15,"Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract". ASU 2018-15 requires a customer in a cloud computing arrangement that is a service contract to follow the internal-use software guidance in Accounting Standards Codification 350-40 to determine which implementation costs to defer and recognize as an asset. For public business entities, the guidance is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2019. For all other entities, it is effective for annual periods beginning after December 15, 2020 and interim periods in annual periods beginning after December 15, 2021. Early adoption is permitted, including adoption in any interim period for all entities. The Company expects to adopt this guidance when effective and is currently assessing what effect the adoption of ASU No. 2018-13 will have on its consolidated financial statements and accompanying notes. In November 2018, the FASB issued ASU 2018-18,"Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606”. ASU 2018-18 provides guidance on whether certain transactions between collaborative arrangement participants should be accounted for with revenue under Topic 606. For public business entities, the guidance is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2019. For all other entities, it is effective for annual periods beginning after December 15, 2020 and interim periods in annual periods beginning after December 15, 2021. Early adoption is permitted, including adoption in any interim period for all entities. The Company expects to adopt this guidance when effective and is currently assessing what effect the adoption of ASU No. 2018-18 will have on its consolidated financial statements and accompanying notes. Impact of recently adopted accounting pronouncements In February 2016, the FASB issued ASU No. 2016-2, “Leases (Topic 842)”. This standard requires organizations that lease assets with lease terms of more than 12 months to recognize assets and liabilities for the rights and obligations created by those leases on their balance sheets. The ASU also requires new qualitative and quantitative disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. The standard is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. Additionally, in March 2019, the FASB issued ASU 2019-01,"Leases (Topic 842): Codification Improvements”. ASU 2019-01 clarifies the transition guidance related to interim disclosures provided in the year of adoption. The Company adopted the new guidance on January 1, 2019 using the modified retrospective method. Prior period results were not adjusted and continue to be presented under Topic 840 based on the accounting standards originally in effect for such periods. As part of the adoption, the Company has elected to utilize practical expedients including the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed the Company to: 1) carry forward the historical determination of contracts as leases, lease classification and not reassess initial direct costs for historical lease arrangements, 2) not separate non-lease components from lease components and instead to account for each separate lease component and the non-lease components associated with that lease component as a single lease component (the Company elected to apply this practical expedient to all underlying asset classes), 3) not apply the recognition requirements in ASC 842 to short-term leases, and 4) not record a right of use asset or right of use liability for leases with an asset or liability balance that would be considered immaterial. Upon adoption, the Company recorded an operating lease liability with a corresponding operating lease ROU asset of $11.3 million . The adoption did not have a material impact on the consolidated results of operations, stockholder's equity, and cash flows for the three and six month periods ended June 30, 2019 . As the Company is not a lessor, the aspects of the new guidance pertaining to lessors was not applicable for the Company. In February 2018, the FASB issued ASU 2018-02, "Income Statement — Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income". This standard permits the reclassification of tax effects stranded in other comprehensive income as a result of tax reform to retained earnings related to the change in federal tax rate in addition to other stranded effects that relate to the 2017 Tax Act but do not directly relate to the change in the federal rate. ASU 2018-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years with early adoption permitted for periods for which financial statements have not yet been issued or made available for issuance. The Company adopted this guidance on January 1, 2019 and elected not to reclassify the tax effects in other comprehensive income related to the 2017 Tax Act, as these amounts were immaterial. The adoption of the guidance did not have a material impact on the consolidated financial statements and accompanying notes. In June 2018, the FASB issued ASU 2018-07, "Compensation — Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting". This standard expands the scope of ASC 718 to include share-based payments granted to nonemployees in exchange for goods or services used or consumed in the entity’s own operations and supersedes the guidance in ASC 505-50. The ASU retains the existing cost attribution guidance, which requires entities to recognize compensation cost for nonemployee awards in the same period and in the same manner they would if they paid cash for the goods or services, but it moves the guidance to ASC 718. ASU 2018-07 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years with early adoption permitted for periods for which financial statements have not yet been issued or made available for issuance. The Company adopted this guidance on January 1, 2019. The adoption of the guidance did not have a material impact on the consolidated financial statements and accompanying notes. In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)”. ASU No. 2014-09 eliminated transaction- and industry-specific revenue recognition guidance under FASB Accounting Standards Codification (“ASC”) Subtopic 605-15, Revenue Recognition-Products and replaced it with a principle-based approach for determining revenue recognition. ASC Topic 606 requires entities to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. On January 1, 2018, the Company adopted ASC Topic 606 using the modified retrospective approach and applied this approach only to contracts that were not completed as of January 1, 2018. The Company calculated a one-time transition adjustment of $3.3 million , which was recorded on January 1, 2018 to deferred revenue and accumulated deficit, related to the product sales of Emflaza. In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments — Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities”. This standard enhances the reporting model for financial instruments, which includes amendments to address aspects of recognition, measurement, presentation and disclosure. The new guidance affects all reporting organizations (whether public or private) that hold financial assets or owe financial liabilities. The Company adopted the guidance on January 1, 2018. In March 2018, the FASB issued ASU 2018-04, "Investments - Debt Securities (Topic 320) and Regulated Operations (Topic 980): Amendments to SEC Paragraphs Pursuant to the SEC Staff Accounting Bulletin ("SAB") No. 117 and SEC Release No. 33-9273 (SEC Update)". This standard supersedes SEC paragraphs in ASC 320, Investments- Debt Securities, as a result of the issuance of SAB 117 and also updates the Codification for a 2011 SEC release and is effective when a registrant adopts ASU 2016-01, which in the case of the Company was on January 1, 2018. The adoption of the guidance did not have a material impact on the consolidated financial statements and accompanying notes. In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments”. This standard clarifies the presentation of certain specific cash flow issues in the Statement of Cash Flows. The Company adopted the guidance on January 1, 2018. The adoption of the guidance did not have a material impact on the consolidated financial statements and accompanying notes. In November 2016, the FASB issued ASU 2016-16, “Intra-Entity Transfers of Assets Other Than Inventory”. ASU 2016-16 requires companies to account for the income tax effects of intercompany transfers of assets other than inventory (e.g., intangible assets) when the transfer occurs. The Company adopted the guidance on January 1, 2018. The adoption of the guidance did not have a material impact on the consolidated financial statements and accompanying notes. In November 2016, the FASB issued ASU No. 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash”. This standard requires entities to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows and no longer present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows. The Company adopted the guidance on January 1, 2018. The adoption of the guidance did not have a material impact on the consolidated financial statements and accompanying notes. In May 2017, the FASB issued ASU No. 2017-09, "Stock Compensation (Topic 718): Scope of Modification Accounting". This standard clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as a modification, with entities applying the modification accounting guidance if the value, vesting conditions or classification of the award changes. In addition to all disclosures |
Leases
Leases | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Leases | Leases The Company leases office space in South Plainfield, New Jersey for its principal office under three noncancelable operating leases through May 2022 and August 2024, in addition to office space in various countries for international employees primarily through workspace providers. The Company also leases certain vehicles, lab equipment, and office equipment under operating leases. The Company’s operating leases have remaining lease terms ranging from 0.4 years to 7.0 years and certain of the leases include renewal options to extend the lease for up to 10 years. The components of lease expense were as follows: Three Months Ended June 30, 2019 Six Months Ended June 30, 2019 Operating Lease Cost Fixed lease cost $ 835 $ 1,647 Variable lease cost 161 304 Short-term lease cost 88 141 Total operating lease cost $ 1,084 $ 2,092 Total operating lease cost is a component of operating expenses on the consolidated statements of operations. Supplemental balance sheet information related to leases was as follows: June 30, 2019 Operating lease ROU asset $ 10,387 Operating lease liabilities- current $ 2,143 Operating lease liabilities- noncurrent 8,416 Total operating lease liability $ 10,559 Operating lease ROU asset is a component of deposits and other assets on the consolidated balance sheet. The current portion of operating lease liability is a component of other current liabilities on the consolidated balance sheet. The long term portion of operating lease liabilities is a component of other long term liabilities on the consolidated balance sheet. Supplemental lease term and discount rate information related to leases was as follows: June 30, 2019 Weighted-average remaining lease terms - operating leases (years) 4.51 Weighted-average discount rate - operating leases 7.18 % Supplemental cash flow information related to leases was as follows: Six Months Ended June 30, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 1,508 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 11,643 Future minimum lease payments under non-cancelable leases as of June 30, 2019 were as follows: Operating Leases 2019 (Excludes the six months ended June 30, 2019) $ 1,371 2020 3,023 2021 2,494 2022 2,147 2023 and thereafter 2,160 Total lease payments 11,195 Less: Imputed Interest 636 Total $ 10,559 As of June 30, 2019 , the Company had no operating leases that had not yet commenced. |
Fair value of financial instrum
Fair value of financial instruments and marketable securities | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair value of financial instruments and marketable securities | Fair value of financial instruments and marketable securities The Company follows the fair value measurement rules, which provide guidance on the use of fair value in accounting and disclosure for assets and liabilities when such accounting and disclosure is called for by other accounting literature. These rules establish a fair value hierarchy for inputs to be used to measure fair value of financial assets and liabilities. This hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three levels: Level 1 (highest priority), Level 2, and Level 3 (lowest priority). · Level 1—Unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the balance sheet date. · Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs). · Level 3—Inputs are unobservable and reflect the Company’s assumptions as to what market participants would use in pricing the asset or liability. The Company develops these inputs based on the best information available. Cash equivalents and investments are reflected in the accompanying financial statements at fair value. The carrying amount of receivables and accounts payable and accrued expenses approximates fair value due to the short-term nature of those instruments. In May 2019, the Company purchased $4.0 million of shares of MRI Interventions, Inc.'s ("MRI") common stock, at a purchase price of $3.10 per share, in connection with a securities purchase agreement that the Company entered into with MRI, a publicly traded medical device company. The Company determined that the equity investment represents a financial instrument and therefore, recorded it at fair value, which is readily determinable. The equity investment is a component of deposits and other assets on the consolidated balance sheet. During the three and six month periods ended June 30, 2019 , the Company recorded an unrealized gain of $0.1 million , which is a component of other (expense) income, net within the consolidated statement of operations. The fair value of the equity investment was $4.1 million as of June 30, 2019 . The Company classifies its equity investment in MRI as a Level 1 asset within the fair value hierarchy, as the value is based on a quoted market price in an active market, which is not adjusted. Fair value of certain marketable securities is based upon market prices using quoted prices in active markets for identical assets quoted on the last day of the period. In establishing the estimated fair value of the remaining investments, the Company used the fair value as determined by its investment advisors using observable inputs other than quoted prices. The Company reviews its investments on a periodic basis for other-than-temporary impairments. This review is subjective, as it requires management to evaluate whether an event or change in circumstances has occurred in that period that may have a significant adverse effect on the fair value of the investment. The following represents the fair value using the hierarchy described above for the Company’s financial assets and liabilities that are required to be measured at fair value on a recurring basis as of June 30, 2019 and December 31, 2018 : June 30, 2019 Total Quoted prices Significant Significant Marketable securities $ 227,447 $ — $ 227,447 $ — Equity investment in MRI $ 4,129 $ 4,129 $ — $ — Stock appreciation rights liability $ 1,960 $ — $ — $ 1,960 Deferred consideration payable $ 38,200 $ — $ 38,200 $ — Contingent consideration payable- development and regulatory milestones $ 277,400 $ — $ — $ 277,400 Contingent consideration payable- net sales milestones and royalties $ 58,800 $ — $ — $ 58,800 December 31, 2018 Total Quoted prices in active markets for identical assets (level 1) Significant other observable inputs (level 2) Significant unobservable inputs (level 3) Marketable securities $ 58,088 $ — $ 58,088 $ — Stock appreciation rights liability $ 3,814 $ — $ — $ 3,814 Deferred consideration payable $ 37,700 $ — $ 37,700 $ — Contingent consideration payable- development and regulatory milestones $ 257,040 $ — $ — $ 257,040 Contingent consideration payable- net sales milestones and royalties $ 53,200 $ — $ — $ 53,200 No transfers of assets between Level 1, Level 2, or Level 3 of the fair value measurement hierarchy occurred during the periods ended June 30, 2019 and December 31, 2018 . The following is a summary of marketable securities accounted for as available-for-sale securities at June 30, 2019 and December 31, 2018 : June 30, 2019 Amortized Gross Unrealized Fair Gains Losses Commercial paper $ 70,185 $ 116 $ — $ 70,301 Corporate debt securities 129,252 464 (10 ) 129,706 Asset-backed securities 27,364 76 — 27,440 Total $ 226,801 $ 656 $ (10 ) $ 227,447 December 31, 2018 Amortized Cost Gross Unrealized Fair Value Gains Losses Commercial paper $ 31,657 $ 43 $ (1 ) $ 31,699 Corporate debt securities 26,399 — (10 ) 26,389 Total $ 58,056 $ 43 $ (11 ) $ 58,088 At June 30, 2019 and December 31, 2018 , the Company held securities with an unrealized loss position that were not considered to be other-than-temporarily impaired as the Company has the ability to hold such investments until recovery of their fair value. Unrealized gains and losses are reported as a component of accumulated other comprehensive (loss) income in stockholders’ equity. As of June 30, 2019 and December 31, 2018 , the Company did not have any realized gains/losses from the sale of marketable securities. The unrealized losses and fair values of available-for-sale securities that have been in an unrealized loss position for a period of less than and greater than 12 months as of June 30, 2019 are as follows: June 30, 2019 Securities in an unrealized loss position less than 12 months Securities in an unrealized loss position greater than 12 months Total Unrealized losses Fair Value Unrealized losses Fair Value Unrealized losses Fair Value Commercial paper $ — $ — $ — $ — $ — $ — Corporate debt securities (10 ) 17,684 — — (10 ) 17,684 Asset-backed securities — — — — — — Total $ (10 ) $ 17,684 $ — $ — $ (10 ) $ 17,684 The unrealized losses and fair values of available-for-sale securities that have been in an unrealized loss position for a period of less than and greater than 12 months as of December 31, 2018 are as follows: December 31, 2018 Securities in an unrealized loss position less than 12 months Securities in an unrealized loss position greater than 12 months Total Unrealized losses Fair Value Unrealized losses Fair Value Unrealized losses Fair Value Commercial paper $ (1 ) $ 1,993 $ — $ — $ (1 ) $ 1,993 Corporate debt securities (7 ) 14,230 (3 ) 10,087 (10 ) 24,317 Total $ (8 ) $ 16,223 $ (3 ) $ 10,087 $ (11 ) $ 26,310 Marketable securities on the balance sheet at June 30, 2019 and December 31, 2018 mature as follows: June 30, 2019 Less Than 12 Months More Than 12 Months Commercial paper $ 70,301 $ — Corporate debt securities 70,192 59,514 Asset-backed securities 20,639 6,801 Total Marketable securities $ 161,132 $ 66,315 December 31, 2018 Less Than 12 Months More Than 12 Months Commercial paper $ 31,699 $ — Corporate debt securities 26,389 — Total Marketable securities $ 58,088 $ — The Company classifies all of its securities as current as they are all available for sale and are available for current operations. Convertible 3.0% senior notes In August 2015, the Company issued $150.0 million of 3.0% convertible senior notes due August 15, 2022 (the “Convertible Notes”). Interest is payable semi-annually on February 15 and August 15 of each year, beginning on February 15, 2016. The Company separately accounted for the liability and equity components of the Convertible Notes by allocating the proceeds between the liability component and equity component, as further discussed in Note 10. The fair value of the Convertible Notes, which differs from their carrying values, is influenced by interest rates, the Company’s stock price and stock price volatility and is determined by prices for the Convertible Notes observed in market trading which are Level 2 inputs. The estimated fair value of the Convertible Notes at June 30, 2019 and December 31, 2018 was $166.2 million and $146.6 million , respectively. The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, accounts receivable, accounts payable and borrowings under the credit and security agreement with MidCap Financial Trust and other financial institutions (as further discussed in Note 10) approximate fair value because of the immediate or short-term maturity of these financial instruments. The carrying amounts for the credit and security agreement approximate fair value based on market activity for other debt instruments with similar characteristics and comparable risk. Deferred consideration payable Pursuant to the Merger Agreement, Agilis equityholders may become entitled to receive contingent consideration payments from the Company based on the achievement of certain development milestones up to an aggregate maximum amount of $60.0 million and the achievement of certain regulatory approval milestones together with a milestone payment following the receipt of a priority review voucher up to an aggregate maximum amount of $535.0 million . The Company is required to pay $40.0 million of development milestone payments no later than the second anniversary of the closing of the Merger, regardless of whether the applicable milestones have been achieved. The fair value of the deferred consideration payable at June 30, 2019 was estimated to be $38.2 million by applying a discounted cash flow approach. The discount rates are estimated utilizing Corporate B rated bonds maturing in the years of expected payments based on the Company’s estimated development timelines for the acquired product candidates. As of June 30, 2019 , $19.4 million of the deferred consideration payable was classified as current on the balance sheet. Level 3 valuation The stock appreciation rights ("SARs") liability is classified in other liabilities on the Company’s consolidated balance sheets. The SARs liability is marked-to-market each reporting period with the change in fair value recorded as compensation expense on the Company’s consolidated statements of operations until the SARs vest. The fair value of the SARs liability is determined at each reporting period by utilizing the Black-Scholes option pricing model. The contingent consideration payable is fair valued each reporting period with the change in fair value recorded as a gain or loss in the consolidated statements of operations. The fair value of the development and regulatory milestones is estimated utilizing a probability adjusted, discounted cash flow approach. The discount rates are estimated utilizing Corporate B rated bonds maturing in the years of expected payments based on the Company’s estimated development timelines for the acquired product candidate. The fair value of the net sales milestones and royalties is determined utilizing an option pricing model with Monte Carlo simulation to simulate a range of possible payment scenarios, and the average of the payments in these scenarios is then discounted to calculate present fair value. The table presented below is a summary of changes in the fair value of the Company’s Level 3 valuations for the SARs liability, and the contingent consideration payable for the period ended June 30, 2019 . The changes in the fair value of the Company's Level 3 valuations for the period ended June 30, 2018 were immaterial. Level 3 liabilities SARs Contingent consideration payable- development and regulatory milestones Contingent consideration payable- net sales milestones and royalties Beginning balance as of December 31, 2018 $ 3,814 $ 257,040 $ 53,200 Additions — — — Change in fair value 1,961 20,360 5,600 Payments (3,815 ) — Ending balance as of June 30, 2019 $ 1,960 $ 277,400 $ 58,800 The following significant unobservable inputs were used in the valuation of the SARs liability, and the contingent consideration payable for the periods ended June 30, 2019 and December 31, 2018 : June 30, 2019 Fair Value Valuation Technique Unobservable Input Range SARs $1,960 Option-pricing model Volatility 49.70% Risk free interest rate 2.09% Strike price $6.76 - $30.86 Fair value of common stock $45.00 Expected life 0.52 years Contingent consideration payable- development and regulatory milestones $277,400 Probability-adjusted discounted cash flow Potential development and regulatory milestones $0 - $555 million Probabilities of success 25% - 94% Discount rates 3.8% - 5.7% Projected years of payments 2020 - 2026 Contingent considerable payable- net sales milestones and royalties $58,800 Option-pricing model with Monte Carlo simulation Potential net sales milestones $0 - $150 million Probabilities of success 25% - 89% Potential percentage of net sales for royalties 2% - 6% Discount rate 14.5% Projected years of payments 2021 - 2038 December 31, 2018 Fair Value Valuation Technique Unobservable Input Range SARs $3,814 Option-pricing model Volatility 46.53% - 59.59% Risk free interest rate 2.44% - 2.63% Strike price $6.76 - $30.86 Fair value of common stock $34.32 Expected life 0.01 - 1.01 years Contingent consideration payable- development and regulatory milestones $257,040 Probability-adjusted discounted cash flow Potential development and regulatory milestones $0 - $555 million Probabilities of success 25% - 94% Discount rates 5.8% - 8.0% Projected years of payments 2020 - 2026 Contingent considerable payable- net sales milestones and royalties $53,200 Option-pricing model with Monte Carlo simulation Potential net sales milestones $0 - $150 million Probabilities of success 25% - 89% Potential percentage of net sales for royalties 2% - 6% Discount rate 14.0% Projected years of payments 2021 - 2038 The contingent consideration is classified as a Level 3 liability as its valuation requires substantial judgment and estimation of factors that are not currently observable in the market. If different assumptions were used for the various inputs to the valuation approach, including but not limited to, assumptions involving probability adjusted sales estimates for the Agilis platform and estimated discount rates, the estimated fair value could be significantly higher or lower than the fair value determined. |
Other comprehensive income (los
Other comprehensive income (loss) and accumulated other comprehensive items | 6 Months Ended |
Jun. 30, 2019 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
Other comprehensive income (loss) and accumulated other comprehensive items | Other comprehensive income (loss) and accumulated other comprehensive items Other comprehensive income (loss) includes changes in equity that are excluded from net income (loss), such as unrealized gains and losses on marketable securities. The following tables summarize other comprehensive income (loss) and the changes in accumulated other comprehensive items for the three and six months ended June 30, 2019 : Unrealized Gains/(Losses) On Marketable Securities, net of tax Foreign Currency Translation Total Accumulated Other Comprehensive Items Balance at March 31, 2019 $ 90 $ 715 $ 805 Other comprehensive income before reclassifications 839 278 1,117 Amounts reclassified from other comprehensive items — — — Other comprehensive income 839 278 1,117 Balance at June 30, 2019 $ 929 $ 993 $ 1,922 Unrealized Gains/(Losses) On Marketable Securities, net of tax Foreign Currency Translation Total Accumulated Other Comprehensive Items Balance at December 31, 2018 $ 31 $ 1,431 $ 1,462 Other comprehensive income (loss) before reclassifications 898 (438 ) 460 Amounts reclassified from other comprehensive items — — — Other comprehensive income (loss) 898 (438 ) 460 Balance at June 30, 2019 $ 929 $ 993 $ 1,922 |
Accounts payable and accrued ex
Accounts payable and accrued expenses | 6 Months Ended |
Jun. 30, 2019 | |
Payables and Accruals [Abstract] | |
Accounts payable and accrued expenses | Accounts payable and accrued expenses Accounts payable and accrued expenses at June 30, 2019 and December 31, 2018 consist of the following: June 30, December 31, Employee compensation, benefits, and related accruals $ 19,039 $ 27,629 Consulting and contracted research 12,373 11,267 Professional fees 4,116 5,574 Sales allowance and other costs 36,794 29,417 Sales rebates and royalties 29,449 31,874 Accounts payable 10,219 6,001 Other 10,385 16,437 $ 122,375 $ 128,199 |
Capitalization
Capitalization | 6 Months Ended |
Jun. 30, 2019 | |
Stockholders' Equity Note [Abstract] | |
Capitalization | Capitalization In January 2019, the Company closed an underwritten public offering of its common stock pursuant to a registration statement on Form S-3. The Company issued and sold an aggregate of 7,563,725 shares of common stock under the registration statement at a public offering price of $30.20 per share, including 843,725 shares issued upon exercise by the underwriter of its option to purchase additional shares in February 2019. The Company received net proceeds of $224.5 million after deducting underwriting discounts and commissions and other offering expenses payable by the Company. Warrants All of the Company’s outstanding warrants were classified as liabilities as of June 30, 2019 and December 31, 2018 because they contained non-standard antidilution provisions. The fair value of the warrants as of June 30, 2019 and December 31, 2018 was immaterial. The following is a summary of the Company’s outstanding warrants as of June 30, 2019 and December 31, 2018 : Warrant shares Exercise price Expiration Common stock 7,030 $ 128.00 September 2019 Common stock 130 $ 2,520.00 August 2019 |
Net loss per share
Net loss per share | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Net loss per share | Net loss per share Basic earnings per share is computed by dividing net loss by the weighted-average number of common shares outstanding. Diluted earnings per share is computed by dividing net loss by the weighted-average number of common shares plus the effect of any dilutive potential common shares outstanding during the period. The following tables set forth the computation of basic and diluted net loss per share: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Numerator Net loss $ (41,789 ) $ (9,520 ) $ (113,902 ) $ (28,782 ) Denominator Denominator for basic and diluted net loss per share 55,912,748 46,137,833 57,113,141 46,257,397 Net loss per share: Basic and diluted $ (0.75 ) * $ (0.21 ) * $ (1.99 ) * $ (0.62 ) * *In the three and six months ended June 30, 2019 and 2018 , the Company experienced a net loss and therefore did not report any dilutive share impact. The following table shows historical dilutive common share equivalents outstanding, which are not included in the above historical calculation, as the effect of their inclusion is anti-dilutive during each period. As of June 30, 2019 2018 Stock Options 10,853,301 8,166,403 Unvested restricted stock awards and units 665,002 584,181 Total 11,518,303 8,750,584 |
Stock award plan
Stock award plan | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock award plan | Stock award plan On March 5, 2013, the Company’s Board of Directors approved the 2013 Stock Incentive Plan, which provides for the granting of stock option awards, stock appreciation rights, restricted stock, restricted stock units and other stock-based awards in the aggregate of 739,937 shares of common stock. On March 5, 2013, the Board approved a grant of 735,324 shares of restricted stock and 4,613 stock options. There are no additional shares available for issuance under this plan. In 2009, the Company’s shareholders approved the 2009 Equity and Long-Term Incentive Plan, which provides for the granting of stock option awards, restricted stock awards, and other stock-based and cash-based awards, subject to certain adjustments and annual increases. In May 2013, the Company’s Board of Directors and stockholders increased by 2,500,000 the number of shares authorized under the 2009 Equity and Long Term Incentive Plan, which provides for the granting of stock option awards, restricted stock awards, and other stock-based and cash-based awards. There are no additional shares available for issuance under this plan. In May 2013, the Company’s Board of Directors and stockholders approved the 2013 Long Term Incentive Plan, which became effective upon the closing of the Company’s initial public offering. The 2013 Long Term Incentive Plan provides for the grant of incentive stock options, nonstatutory stock options, restricted stock awards and other stock-based awards. The number of shares of common stock reserved for issuance under the 2013 Long Term Incentive Plan is the sum of (1) 122,296 shares of common stock available for issuance under the Company’s 2009 Equity and Long Term Incentive Plan and 2013 Stock Incentive Plan, (2) the number of shares (up to 3,040,444 shares) equal to the sum of the number of shares of common stock subject to outstanding awards under the Company’s 1998 Employee, Director and Consultant Stock Option Plan, 2009 Equity and Long Term Incentive Plan and 2013 Stock Incentive Plan that expire, terminate or are otherwise surrendered, canceled, forfeited or repurchased by the Company at their original issuance price pursuant to a contractual repurchase right plus (3) an annual increase, to be added on the first day of each fiscal year until the expiration of the 2013 Long Term Incentive Plan, equal to the lowest of 2,500,000 shares of common stock, 4% of the number of shares of common stock outstanding on the first day of the fiscal year and an amount determined by the Company’s Board of Directors. As of June 30, 2019 , awards for 302,538 shares of common stock are available for issuance. From January 1, 2019 through June 30, 2019 , the Company issued a total of 2,845,620 stock options to various employees. Of those, 579,700 were inducement grants for non-statutory stock options. The inducement grant awards were made pursuant to the Nasdaq Listing Rule 5635(c)(4) inducement grant exception as a material component of the Company's new hires’ employment compensation and not under the 2013 Long Term Incentive Plan. A summary of stock option activity is as follows: Number of Weighted- Weighted- Aggregate Outstanding at December 31, 2018 8,534,358 $ 28.58 Granted 2,845,620 $ 33.54 Exercised (311,002 ) $ 16.50 Forfeited/Cancelled (215,675 ) $ 36.10 Outstanding at June 30, 2019 10,853,301 $ 30.07 7.59 years $ 178,906 Vested or Expected to vest at June 30, 2019 5,334,168 $ 29.22 9.01 years $ 84,446 Exercisable at June 30, 2019 5,138,717 $ 30.90 5.98 years $ 88,423 The fair value of grants made in the six months ended June 30, 2019 was contemporaneously estimated on the date of grant using the following assumptions: Six months ended Risk-free interest rate 1.98 - 2.63% Expected volatility 61.90 - 63.09% Expected term 6.11 years The Company assumed no expected dividends for all grants. The weighted average grant date fair value of options granted during the six -month period ended June 30, 2019 was $20.01 per share. The Company uses the “simplified method” to determine the expected term of options. Under this method, the expected term represents the average of the vesting period and the contractual term. The expected volatility of share options was estimated based on a historical volatility analysis of peers that were similar to the Company with respect to industry, stage of life cycle, size, and financial leverage. The risk-free rate of the option is based on U.S. Government Securities Treasury Constant Maturities yields at the date of grant for a term similar to the expected term of the option. Restricted Stock Awards —Restricted stock awards are granted subject to certain restrictions, including in some cases service or time conditions (restricted stock). The grant-date fair value of restricted stock awards, which has been determined based upon the market value of the Company’s shares on the grant date, is expensed over the vesting period. Restricted Stock Units —Restricted stock units are granted subject to certain restrictions, including in some cases service or time conditions (restricted stock). The grant-date fair value of restricted stock units, which has been determined based upon the market value of the Company’s shares on the grant date, is expensed over the vesting period. The following table summarizes information on the Company’s restricted stock awards and units: Restricted Stock Awards and Units Number of Weighted January 1, 2019 571,479 $ 17.61 Granted 304,549 $ 32.94 Vested (179,577 ) $ 17.54 Forfeited (31,449 ) $ 21.47 Unvested at June 30, 2019 665,002 $ 24.45 Stock Appreciation Rights —SARs entitle the holder to receive, upon exercise, an amount of the Company's common stock or cash (or a combination thereof) determined by reference to appreciation, from and after the date of grant, in the fair market value of a share of the Company's common stock over the measurement price based on the exercise date. In May 2016, a total of 897,290 SARs were granted to non-executive employees (the "2016 SARs"). The 2016 SARs will vest annually in equal installments over four years and will be settled in cash on each vest date, requiring the Company to remeasure the SARs at each reporting period until vesting occurs. For the six month period ended June 30, 2019 , a total of 157,930 SARs vested. For the three and six month periods ended June 30, 2019 , the Company recorded $0.9 million and $1.9 million , respectively, in compensation expense related to the 2016 SARs. Employee Stock Purchase Plan —In June 2016, the Company established an Employee Stock Purchase Plan (“ESPP” or the "Plan”) for certain eligible employees. The Plan is administered by the Company’s Board of Directors or a committee appointed by the Company's Board of Directors. The total number of shares available for purchase under the Plan is one million shares of the Company’s common stock. Employees may participate over a six -month period through payroll withholdings and may purchase, at the end of the six -month period, the Company’s common stock at a purchase price of at least 85% of the closing price of a share of the Company’s common stock on the first business day of the offering period or the closing price of a share of the Company’s common stock on the last business day of the offering period, whichever is lower. No participant will be granted a right to purchase the Company’s common stock under the Plan if such participant would own more than 5% of the total combined voting power of the Company or any subsidiary of the Company after such purchase. For the three and six month periods ended June 30, 2019 , the Company recorded $0.3 million and $0.6 million , respectively, in compensation expense related to the ESPP. The Company recorded share-based compensation expense in the statement of operations related to incentive stock options, nonstatutory stock options, restricted stock awards, restricted stock units and the ESPP as follows: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Research and development $ 5,516 $ 3,932 $ 10,203 $ 7,678 Selling, general and administrative 5,404 4,152 9,981 8,153 Total $ 10,920 $ 8,084 $ 20,184 $ 15,831 As of June 30, 2019 , there was approximately $105.8 million of total unrecognized compensation cost related to unvested share-based compensation arrangements granted under the 2009 Equity and Long Term Incentive Plan, the 2013 Long Term Incentive Plan and equity awards made pursuant to the Nasdaq Listing Rule 5635(c)(4) inducement grant exception for new hires. This cost is expected to be recognized as share-based compensation expense over the weighted average remaining service period of approximately 3.10 years. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Debt | Debt 2017 Credit Facility In May 2017, the Company entered into a credit and security agreement (the "Credit Facility") with MidCap Financial Trust, a Delaware statutory trust (“MidCap”), as administrative agent and MidCap and certain other financial institutions as lenders thereunder (the “Credit Agreement”) that provides for a senior secured term loan facility of $60.0 million , of which $40.0 million was drawn by the Company on May 5, 2017. The Company's ability to draw on the remaining $20.0 million under the senior secured term loan facility expired on December 31, 2018. The Company capitalized approximately $0.4 million of debt issuance costs, which were netted against the carrying value of the Credit Facility and will be amortized over the term of the Credit Facility. As of June 30, 2019 , the Company had made loan repayments of $ 1.7 million on the Credit Facility. Borrowings under the Credit Agreement bear interest at a rate per annum equal to LIBOR (with a LIBOR floor rate of 1.00% ) plus 6.15% . The Company was obligated to make interest only payments (payable monthly in arrears) through April 30, 2019. Commencing on May 1, 2019 and continuing for the remaining twenty-four months of the facility, the Company is required to make monthly interest payments and monthly principal payments. The principal payments are to be made based on straight-line amortization of the principal over the twenty-four month period. The maturity date of the Credit Agreement is May 1, 2021, unless terminated earlier. The Credit Facility is subject to certain financial covenants. As of June 30, 2019 , the Company was in compliance with all required covenants. Convertible Notes In August 2015, the Company issued, at par value, $150.0 million aggregate principal amount of 3.0% convertible senior notes due 2022 (the "Convertible Notes"). The Convertible Notes bear cash interest at a rate of 3.0% per year, payable semi-annually on February 15 and August 15 of each year, beginning on February 15, 2016. The Convertible Notes will mature on August 15, 2022, unless earlier repurchased or converted. The net proceeds to the Company from the offering were $145.4 million after deducting the initial purchasers’ discounts and commissions and the offering expenses payable by the Company. The Convertible Notes are governed by an indenture (the "Convertible Notes Indenture") with U.S Bank National Association as trustee (the "Convertible Notes Trustee"). Holders may convert their Convertible Notes at their option at any time prior to the close of business on the business day immediately preceding February 15, 2022 only under the following circumstances: · during any calendar quarter commencing on or after September 30, 2015 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; · during the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price (as defined in the Convertible Notes Indenture) per $1,000 principal amount of Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; · during any period after the Company has issued notice of redemption until the close of business on the scheduled trading day immediately preceding the relevant redemption date; or · upon the occurrence of specified corporate events. On or after February 15, 2022, until the close of business on the business day immediately preceding the maturity date, holders may convert their Convertible Notes at any time, regardless of the foregoing circumstances. Upon conversion, the Company will pay cash up to the aggregate principal amount of the Convertible Notes to be converted and deliver shares of its common stock in respect of the remainder, if any, of its conversion obligation in excess of the aggregate principal amount of Convertible Notes being converted. The conversion rate for the Convertible Notes was initially, and remains, 17.7487 shares of the Company’s common stock per $1,000 principal amount of the Convertible Notes, which is equivalent to an initial conversion price of approximately $56.34 per share of the Company’s common stock. The Company was not permitted to redeem the Convertible Notes prior to August 20, 2018. As of August 20, 2018, the Company may redeem for cash all or any portion of the Convertible Notes, at its option, if the last reported sale price of its common stock has been at least 130% of the conversion price then in effect on the last trading day of, and for at least 19 other trading days (whether or not consecutive) during, any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption, at a redemption price equal to 100% of the principal amount of the Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the Convertible Notes, which means that the Company is not required to redeem or retire the Convertible Notes periodically. There have been no redemptions to date. If the Company undergoes a “fundamental change” (as defined in the Indenture governing the Convertible Notes Indenture), subject to certain conditions, holders of the Convertible Notes may require the Company to repurchase for cash all or part of their Convertible Notes at a repurchase price equal to 100% of the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. The Convertible Notes Indenture contains customary events of default with respect to the Convertible Notes, including that upon certain events of default (including the Company’s failure to make any payment of principal or interest on the Convertible Notes when due and payable) occurring and continuing, the Convertible Notes Trustee by notice to the Company, or the holders of at least 25% in principal amount of the outstanding Convertible Notes by notice to the Company and the Convertible Notes Trustee, may, and the Convertible Notes Trustee at the request of such holders (subject to the provisions of the Convertible Notes Indenture) shall, declare 100% of the principal of and accrued and unpaid interest, if any, on all the Convertible Notes to be due and payable. In case of certain events of bankruptcy, insolvency or reorganization, involving the Company or a significant subsidiary, 100% of the principal of and accrued and unpaid interest on the Convertible Notes will automatically become due and payable. Upon such a declaration of acceleration, such principal and accrued and unpaid interest, if any, will be due and payable immediately. The Company accounts for the Convertible Notes as a liability and equity component where the carrying value of the liability component will be valued based on a similar instrument. In accounting for the issuance of the Convertible Notes, the Company separated the Convertible Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature. The carrying amount of the equity component representing the conversion option was determined by deducting the fair value of the liability component from the par value of the Convertible Notes as a whole. The excess of the principal amount of the liability component over its carrying amount, referred to as the debt discount, is amortized to interest expense over the seven -year term of the Convertible Notes. The equity component is not re-measured as long as it continues to meet the conditions for equity classification. The equity component recorded at issuance related to the Convertible Notes is $57.5 million and was recorded in additional paid-in capital. In accounting for the transaction costs related to the issuance of the Convertible Notes, the Company allocated the total costs incurred to the liability and equity components of the Convertible Notes based on their relative values. Transaction costs attributable to the liability component are amortized to interest expense over the seven -year term of the Convertible Notes, and transaction costs attributable to the equity component are netted with the equity components in stockholders’ equity. Additionally, the Company initially recorded a net deferred tax liability of $22.3 million in connection with the Notes. The Convertible Notes consist of the following: Liability component June 30, 2019 December 31, 2018 Principal $ 150,000 $ 150,000 Less: Debt issuance costs (1,544 ) (1,746 ) Less: Debt discount, net(1) (30,999 ) (35,054 ) Net carrying amount $ 117,457 $ 113,200 (1) Included in the consolidated balance sheets within convertible senior notes (due 2022) and amortized to interest expense over the remaining life of the Convertible Notes using the effective interest rate method. As of June 30, 2019 , the remaining contractual life of the Convertible Notes is approximately 3.1 years. The following table sets forth total interest expense recognized related to the Convertible Notes: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Contractual interest expense $ 1,131 $ 1,131 $ 2,241 $ 2,241 Amortization of debt issuance costs 103 93 202 182 Amortization of debt discount 2,074 1,863 4,055 3,644 Total $ 3,308 $ 3,087 $ 6,498 $ 6,067 Effective interest rate of the liability component 11 % 11 % 11 % 11 % |
- (Notes)
- (Notes) | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Commitments and contingencies Under various agreements, the Company will be required to pay royalties and milestone payments upon the successful development and commercialization of products. The Company has entered into funding agreements with The Wellcome Trust Limited ("Wellcome Trust") for the research and development of small molecule compounds in connection with the Company's oncology and antibacterial programs. As the Company has discontinued development under its antibacterial program, it no longer expects that milestone and royalty payments from the Company to Wellcome Trust will apply under that agreement, resulting in a change to the total amount of development and regulatory milestone payments the Company may become obligated to pay for this program. Under the oncology program funding agreement, to the extent that the Company develops and commercializes program intellectual property on a for-profit basis itself or in collaboration with a partner (provided the Company retains overall control of worldwide commercialization), the Company may become obligated to pay to Wellcome Trust development and regulatory milestone payments and single-digit royalties on sales of any research program product. The Company’s obligation to pay such royalties would continue on a country-by-country basis until the longer of the expiration of the last patent in the program intellectual property in such country covering the research program product and the expiration of market exclusivity of such product in such country. The Company’s first such milestone payment of $0.8 million payable to Wellcome Trust occurred in the second quarter of 2016. Additional milestone payments of up to an aggregate of $22.4 million may become payable by the Company to Wellcome Trust under this agreement. The Company has also entered into a collaboration agreement with the SMA Foundation. The Company may become obligated to pay the SMA Foundation single-digit royalties on worldwide net product sales of any collaboration product that is successfully developed and subsequently commercialized or, if the Company outlicenses rights to a collaboration product, a specified percentage of certain payments the Company receives from its licensee. The Company is not obligated to make such payments unless and until annual sales of a collaboration product exceed a designated threshold. The Company’s obligation to make such payments would end upon the Company's payment to the SMA Foundation of a specified amount. Pursuant to the Merger Agreement with Agilis, Agilis equityholders may become entitled to receive contingent consideration payments from the Company based on (i) the achievement of certain development milestones up to an aggregate maximum amount of $60.0 million , (ii) the achievement of certain regulatory approval milestones together with a milestone payment following the receipt of a priority review voucher up to an aggregate maximum amount of $535.0 million , (iii) the achievement of certain net sales milestones up to an aggregate maximum amount of $150.0 million , and (iv) a percentage of annual net sales for Friedreich Ataxia and Angelman Syndrome during specified terms, ranging from 2% - 6% . The Company is required to pay $40.0 million of the development milestone payments no later than the second anniversary of the closing of the Merger, regardless of whether the applicable milestones have been achieved. The Company also has a Collaboration and License Agreement with Akcea Therapeutics, Inc. ("Akcea") for the commercialization of Tegsedi and Waylivra, and products containing those compounds in countries in Latin America and the Caribbean (the "Akcea Collaboration and License Agreement"). Pursuant to the agreement, the Company paid Akcea an upfront licensing fee, which included an initial payment of $12.0 million . An additional $6.0 million was paid to Akcea in the three month period ended June 30, 2019 upon regulatory approval of Waylivra from the EMA. In addition, Akcea is eligible to receive milestone payments, on a Product-by-Product basis, of $4.0 million upon receipt of regulatory approval for a product from ANVISA, subject to a maximum aggregate amount of $8.0 million for all such products. Akcea is also entitled to receive royalty payments subject to certain terms set forth in the Akcea Collaboration and License Agreement. The Company filed a request for marketing authorizations for Tegsedi with ANVISA. The Company has employment agreements with certain employees which require the funding of a specific level of payments, if certain events, such as a change in control or termination without cause, occur. Additionally, the Company has royalty payments associated with Translarna and Emflaza product net sales, payable quarterly or annually in accordance with the terms of the related agreements. From time to time in the ordinary course of its business, the Company is subject to claims, legal proceedings and disputes, including as a result of patients seeking to participate in the Company's clinical trials or otherwise gain access to its product candidates. The Company is not currently aware of any material legal proceedings against it. |
Revenue recognition
Revenue recognition | 6 Months Ended |
Jun. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue recognition | Revenue recognition Net product sales The Company views its operations and manages its business in one operating segment. During the three months ended June 30, 2019 and 2018 , net product sales in the United States were $27.6 million and $20.3 million respectively, consisting solely of Emflaza, and net product sales not in the United States were $57.8 million and $47.8 million , respectively, consisting of Translarna and Tegsedi. During the six months ended June 30, 2019 and 2018 , net product sales in the United States were $45.4 million and $39.5 million respectively, consisting solely of Emflaza, and net product sales not in the United States were $93.0 million and $84.6 million, respectively, consisting of Translarna and Tegsedi. The following table presents changes in the Company’s contract liabilities from December 31, 2018 to June 30, 2019 and December 31, 2017 to June 30, 2018 : Balance as of Additions Deductions ASC 606 Adjustment Balance as of Deferred Revenue $ 12,938 $ 2,864 $ — $ — $ 15,802 Balance as of Additions Deductions ASC 606 Adjustment Balance as of Deferred Revenue $ 11,891 $ 2,586 $ — $ (3,937 ) $ 10,540 The Company did not have any contract assets for the three and six month periods ended June 30, 2019 and 2018 . During the three and six month periods ended June 30, 2019 and 2018 , the Company recognized revenue in the period from: Three Months Ended June 30, 2019 Three Months Ended June 30, 2018 Six Months Ended June 30, 2019 Six Months Ended June 30, 2018 Amounts included in contract liabilities at the beginning of the period $ — $ — $ — $ — Performance obligations satisfied in previous period — — — — Performance obligations satisfied in current period 85,476 68,170 138,530 124,151 Total product revenue $ 85,476 $ 68,170 $ 138,530 $ 124,151 The Company has not made significant changes to the judgments made in applying ASC Topic 606 for the three and six month periods ended June 30, 2019 and 2018 . Remaining performance obligations Remaining performance obligations represent the transaction price for goods the Company has yet to provide. As of June 30, 2019 and 2018 , the aggregate amount of transaction price allocated to remaining performance obligations relating to Translarna net product revenue was $15.8 million and $10.5 million , respectively. The Company expects to recognize revenue over the next one to three years as the specific timing for satisfying the performance obligations is contingent upon a number of factors, including customers’ needs and schedules. Collaboration revenue The Company has ongoing collaborations with the Spinal Muscular Atrophy Foundation ("SMA Foundation") and F. Hoffman-La Roche Ltd and Hoffman- La Roche Inc. (collectively, "Roche") and early stage discovery arrangements with other institutions. The following are the key terms to the Company’s (i) ongoing collaborations and (ii) early stage discovery and development arrangements. Roche and SMA Foundation In November 2011, the Company and the SMA Foundation entered into a licensing and collaboration agreement with Roche for a spinal muscular atrophy program. Under the terms of the agreement, Roche acquired an exclusive worldwide license to the Company’s spinal muscular atrophy program, which includes three compounds currently in preclinical development, as well as potential back-up compounds. The Company received a nonrefundable upfront cash payment of $30.0 million during the research term, which was terminated effective December 31, 2014, after which Roche provided the Company with funding, based on an agreed- upon full-time equivalent rate, for an agreed-upon number of full-time equivalent employees that the Company contributed to the research program. The Company identified two material promises in the collaboration agreement, the license and the research activities. The Company evaluated whether these material promises are distinct and determined that the license does not have standalone functionality and there is a significant integration of the license and research activities. As such, both promises were bundled into one distinct performance obligation. As a result, the Company deferred the $30.0 million upfront payment which was recognized over the estimated performance period of two years, which was the contracted research period. As of adoption of ASC Topic 606 on January 1, 2018, all performance obligations had been satisfied and the balance of the remaining deferred upfront payment was fully recognized. Under the agreement, the Company is eligible to receive additional payments from Roche if specified events are achieved with respect to each licensed product, including up to $135.0 million in research and development event milestones, up to $325.0 million in sales milestones upon achievement of specified sales events, and up to double digit royalties on worldwide annual net sales of a commercial product. In August 2013, a lead development compound, RG7800, was selected to move into IND-enabling studies, which triggered a milestone payment to the Company from Roche of $10.0 million . Under ASC Topic 605, the Company considered this milestone event substantive because the applicable criteria of its revenue recognition policy would be satisfied and recorded it as collaboration revenue for the year ended December 31, 2013. In January 2014, the Company announced the initiation of a Phase 1 clinical program in its spinal muscular atrophy collaboration with Roche and the SMA Foundation which triggered a $7.5 million milestone payment from Roche. Under ASC Topic 605, the Company considered this milestone event substantive because the applicable criteria of its revenue recognition policy would be satisfied and recorded it as collaboration revenue for the year ended December 31, 2014. In November 2014, the Company announced the initiation of a Phase 2 study in adult and pediatric patients in its spinal muscular atrophy collaboration with Roche and the SMA Foundation which triggered a $10 million payment from Roche. Under ASC Topic 605, the Company considered this milestone event substantive because the applicable criteria of its revenue recognition policy would be satisfied and recorded it as collaboration revenue for the year ended December 31, 2014. In October 2017, the Company announced that the Sunfish, a two-part clinical trial in pediatric and adult type 2 and type 3 spinal muscular atrophy initiated in the fourth quarter of 2016 with Roche and SMA Foundation, had transitioned into the pivotal second part of its study. The achievement of this milestone triggered a $20.0 million payment to the Company from Roche. Under ASC Topic 605, the Company considered this milestone event substantive because the applicable criteria of its revenue recognition policy would be satisfied and recorded it as collaboration revenue for the year ended December 31, 2017. The remaining potential research and development event milestones that can be received as of June 30, 2019 is $87.5 million . The remaining potential sales milestones as of June 30, 2019 is $325.0 million upon achievement of certain sales events. In addition, the Company is eligible to receive up to double digit royalties on worldwide annual net sales of a commercial product. For the three months ended June 30, 2019 and 2018 , the Company recognized revenue related to the licensing and collaboration agreement with Roche of $0.1 million and $0.1 million , respectively. For the six months ended June 30, 2019 and 2018 , the Company recognized revenue related to the licensing and collaboration agreement with Roche of $0.1 million and $0.1 million , respectively. Early stage collaboration and discovery agreements From time to time, the Company has arrangements with several organizations pursuant to which the Company uses its discovery technologies to help identify potential drug candidates. The Company does not take ownership of the potential compounds, but rather provides research services to the collaborator using its specialized technology platform. Generally, these arrangements are structured such that the collaborator and the Company work together to jointly select targets from which to apply its discovery technologies. The research period for the Company to apply its technology is generally three to four years. The Company will typically receive a nonrefundable, upfront cash payment and the collaborator agrees to provide funding for research activities performed on its behalf. Generally, the two material promises in these arrangements are the license and the research activities. The Company evaluated whether these material promises are distinct and determined that the license does not have standalone functionality and there is a significant integration of the license and research activities. As such, both promises are bundled into one distinct performance obligation. As of adoption of ASC Topic 606 on January 1, 2018, all deferred revenue related to these arrangements had been recognized. For the three and six months ended June 30, 2019 and 2018 , the Company did not recognize any revenue related to discovery agreements. The Company is eligible to receive additional payments from its early stage discovery research arrangements if the discovery compounds are ultimately developed and commercialized. The aggregate potential payments the Company is eligible for if all products are developed is $143.0 million and up to $252.0 million in sales milestones upon achievement of specified sales events and up to double digit royalties on worldwide annual net sales of the licensed product. The Company will recognize revenue when it is probable the milestones will be achieved (see Note 2). For the three and six months ended June 30, 2019 and 2018 , the Company did not |
Intangible assets and goodwill
Intangible assets and goodwill | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible assets and goodwill | Intangible assets and goodwill Definite-lived intangibles On April 20, 2017, the Company completed its previously announced acquisition of all rights to Emflaza pursuant to the Asset Purchase Agreement, dated March 15, 2017, and amended on April 20, 2017, by and between the Company and Marathon. The assets acquired by the Company in the Transaction include intellectual property rights related to Emflaza, inventories of Emflaza, and certain contractual rights related to Emflaza. In accordance with ASU No. 2017-01, the Company determined that substantially all of the fair value is concentrated in the Emflaza rights intangible asset and as such accounted for the transaction as an asset acquisition under ASC 805-50 and recorded an intangible asset of $148.4 million . The Emflaza rights intangible asset is being amortized to cost of product sales over its expected useful life of approximately seven years on a straight line basis. Marathon is entitled to receive contingent payments from the Company based on annual net sales of Emflaza up to a specified aggregate maximum amount over the expected commercial life of the asset. In accordance with the guidance for an asset acquisition, the Company will record the milestone payment when it becomes payable to Marathon and increase the cost basis for the Emflaza rights intangible asset. For the three month periods ended June 30, 2019 and 2018 , milestone payments of $8.3 million and $3.9 million were recorded, respectively. Pursuant to the Akcea Collaboration and License Agreement, in May 2019 the Company made a $6.0 million milestone payment to Akcea upon regulatory approval of Waylivra from the EMA. The payment was recorded as an intangible asset and is being amortized to cost of product sales over its expected useful life of approximately ten years on a straight line basis. Akcea is also entitled to receive royalty payments subject to certain terms set forth in the Akcea Collaboration and License Agreement related to sales of Waylivra. In accordance with the guidance for an asset acquisition, the Company will record royalty payments when they become payable to Akcea and increase the cost basis for the Waylivra intangible asset. For the three month periods ended June 30, 2019 and 2018 , the Company recognized amortization expense of $6.6 million and $5.6 million , respectively, related to the Emflaza rights and Waylivra intangible assets. For the six month periods ended June 30, 2019 and 2018 , the Company recognized amortization expense of $12.7 million and $11.0 million , respectively, related to the Emflaza rights and Waylivra intangible assets. The estimated future amortization of the Emflaza rights and Waylivra intangible asset is expected to be as follows: As of June 30, 2019 2019 $ 13,273 2020 26,566 2021 26,566 2022 26,566 2023 and thereafter 33,258 Total $ 126,229 Indefinite-lived intangibles In connection with the acquisition of Agilis, the Company acquired rights to PTC-AADC, for the treatment of AADC deficiency. AADC deficiency is a rare CNS disorder arising from reductions in the enzyme AADC that result from mutations in the dopa decarboxylase gene. The Agilis platform also includes a gene therapy asset targeting Friedreich ataxia, a rare and life-shortening neurodegenerative disease caused by a single defect in the FXN gene which causes reduced production of the frataxin protein. An investigational new drug ("IND") submission with the FDA for this program is expected in late 2019. Additionally, the Agilis platform includes two other gene therapy programs targeting CNS disorders, including Angelman syndrome, a rare, genetic, neurological disorder characterized by severe developmental delays. In accordance with the acquisition method of accounting, the Company allocated the acquisition cost for the Merger to the underlying assets acquired and liabilities assumed, based upon the estimated fair values of those assets and liabilities at the date of acquisition. The Company classified the fair value of the acquired IPR&D as indefinite lived intangible assets until the successful completion or abandonment of the associated research and development efforts. The value allocated to the indefinite lived intangible assets was $576.5 million . Goodwill As a result of the Merger on August 23, 2018, the Company recorded $82.3 million of goodwill. There were no changes to the recorded value of goodwill for the three and six month periods ended June 30, 2019 . |
Subsequent events
Subsequent events | 6 Months Ended |
Jun. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent events | Subsequent events On August 4, 2019, the Company and Bristol-Myers Squibb Company, (the “Landlord”) entered into a Lease Agreement (the “Lease”), relating to the lease of approximately 185,000 square feet of office, production and laboratory space at a facility located in Hopewell Township, New Jersey (the “Campus”). The rental term of the Lease is currently estimated to commence on July 1, 2020 (the “Commencement Date”). Upon the Commencement Date, the Lease has an initial term of fifteen years (the “Initial Term”), with two consecutive 10 -year renewal periods at the Company’s option. The aggregate rent for the Initial Term will be approximately $88.0 million . The rental rate for the renewal periods will be 95% of the Prevailing Market Rate (as defined in the Lease) and determined at the time of the exercise of the renewal. The Company is also responsible for maintaining certain insurance and the payment of proportional taxes, utilities and common area operating expenses. Subject to the terms of the Lease, the Company has a right of first refusal to rent certain other space of the Campus, which would be triggered upon the Landlord’s issuance of a second round proposal or letter of intent to another tenant for such space. The Company also may seek to build a new separate building on the Campus, which may not contain less than 75,000 square feet (the “New Building”). Upon receipt of notice of the Company’s intention to build the New Building, the Landlord may, in its sole discretion, construct and lease the New Building to the Company or enter into a ground lease with the Company permitting the Company to construct the New Building. The term for the New Building will be fifteen years with two consecutive five-year renewal rights. Rent terms for the New Building will be determined based on the land value, construction and project costs subject to whether the Landlord or Company constructs the New Building. The Company is also obligated to provide the Landlord with either an unconditional, irrevocable and transferable letter of credit (the “Letter of Credit”) in the amount of $7.5 million , for a term of not less than five years , as a security deposit, or the same amount as a cash security deposit within thirty days upon entering into the Lease. The Letter of Credit shall remain in effect continuously and shall either expire (i) sixty days after the Expiration Date (as defined in the Lease) or (ii) be automatically self-renewing until the Expiration Date. If the Lease is extended, the Company must continue to provide and maintain the Letter of Credit until sixty days after the extended Expiration Date. If after the fifth anniversary of the Commencement Date, the Company has not received notice of being in default of the Lease, then the Letter of Credit shall be reduced to $3.8 million . The Lease contains customary events of default, representations, warranties and covenants. The foregoing summary of the Lease and Letter of Credit are not complete and are qualified in their entirety by reference to the Lease and Letter of Credit, which will be filed as exhibits to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ending September 30, 2019. |
Summary of significant accoun_2
Summary of significant accounting policies - (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The accompanying financial information as of June 30, 2019 and for the three and six months ended June 30, 2019 and 2018 has been prepared by the Company, without audit, pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States ("GAAP") have been condensed or omitted pursuant to such rules and regulations. These interim financial statements should be read in conjunction with the Company’s audited financial statements as of December 31, 2018 and notes thereto included in the 2018 Form 10-K. In the opinion of management, the unaudited financial information as of June 30, 2019 and for the three and six months ended June 30, 2019 and 2018 reflects all adjustments, which are normal recurring adjustments, necessary to present a fair statement of financial position, results of operations, stockholders' equity, and cash flows. The results of operations for the three and six month period ended June 30, 2019 are not necessarily indicative of the results to be expected for the year ended December 31, 2019 or for any other interim period or for any other future year. |
Use of estimates | Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant estimates in these consolidated financial statements have been made in connection with the calculation of net product sales, certain accruals related to the Company’s research and development expenses, stock-based compensation, valuation procedures for the convertible notes, allowance for doubtful accounts, inventory, acquired intangible assets, fair value of the contingent consideration, and the provision for or benefit from income taxes. Actual results could differ from those estimates. Changes in estimates are reflected in reported results in the period in which they become known. |
Inventory and cost of product sales | Inventory and cost of product sales Inventory Inventories are stated at the lower of cost and net realizable value with cost determined on a first-in, first-out basis by product. The Company capitalizes inventory costs associated with products following regulatory approval when future commercialization is considered probable and the future economic benefit is expected to be realized. Translarna and Emflaza product which may be used in clinical development programs are included in inventory and charged to research and development expense when the product enters the research and development process and no longer can be used for commercial purposes. Inventory used for marketing efforts are charged to selling, general and administrative expense. The following table summarizes the components of the Company’s inventory for the periods indicated: June 30, 2019 December 31, 2018 Raw materials $ 2,089 $ 1,431 Work in progress 8,341 9,324 Finished goods 6,467 5,362 Total inventory $ 16,897 $ 16,117 The Company periodically reviews its inventories for excess amounts or obsolescence and writes down obsolete or otherwise unmarketable inventory to its estimated net realizable value. No write downs were recorded for the three and six month periods ended June 30, 2019 and 2018 . Additionally, though the Company’s product is subject to strict quality control and monitoring which it performs throughout the manufacturing processes, certain batches or units of product may not meet quality specifications resulting in a charge to cost of product sales. For the three and six month periods ended June 30, 2019 and 2018 , these amounts were immaterial. Cost of product sales Costs of product sales consists of the cost of inventory sold, manufacturing and supply chain costs, including personnel costs, storage costs, amortization of the acquired intangible asset and royalty payments associated with net product sales. |
Revenue recognition | Revenue recognition In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-9, “Revenue from Contracts with Customers (Topic 606)”. ASU No. 2014-9 eliminated transaction- and industry-specific revenue recognition guidance under FASB Accounting Standards Codification (“ASC”) Subtopic 605-15, Revenue Recognition-Products (Topic 605) and replaced it with a principle-based approach for determining revenue recognition. ASC Topic 606 requires entities to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Net product revenue The Company's net product revenue primarily consists of sales of Translarna in territories outside of the U.S. for the treatment of nmDMD and sales of Emflaza in the U.S. for the treatment of DMD. The Company recognizes revenue when its performance obligations with its customers have been satisfied. The Company’s performance obligations are to provide Translarna or Emflaza based on customer orders from distributors, hospitals, specialty pharmacies or retail pharmacies. The performance obligations are satisfied at a point in time when the Company’s customer obtains control of either Translarna or Emflaza, which is typically upon delivery. The Company invoices its customers after the products have been delivered and invoice payments are generally due within 30 to 90 days of the invoice date. The Company determines the transaction price based on fixed consideration in its contractual agreements. Contract liabilities arise in certain circumstances when consideration is due for goods the Company has yet to provide. As the Company has identified only one distinct performance obligation, the transaction price is allocated entirely to either product sales of Translarna or Emflaza. In determining the transaction price, a significant financing component does not exist since the timing from when the Company delivers product to when the customers pay for the product is typically less than one year. Customers in certain countries pay in advance of product delivery. In those instances, payment and delivery typically occur in the same month. The Company records product sales net of any variable consideration, which includes discounts, allowances, rebates and distribution fees. The Company uses the expected value or most likely amount method when estimating its variable consideration, unless discount or rebate terms are specified within contracts. Historically, returns of Translarna and Emflaza are immaterial to the financial statements, except as related to labeling changes and changes in specialty pharmacies. The identified variable consideration is recorded as a reduction of revenue at the time revenues from product sales are recognized. These estimates for variable consideration are adjusted to reflect known changes in factors and may impact such estimates in the quarter those changes are known. Revenue recognized does not include amounts of variable consideration that are constrained. In relation to customer contracts, the Company incurs costs to fulfill a contract but does not incur costs to obtain a contract. These costs to fulfill a contract do not meet the criteria for capitalization and are expensed as incurred. Upon adoption of ASC Topic 606 on January 1, 2018, the Company elected the following practical expedients: • Portfolio Approach - the Company applied the Portfolio Approach to contract reviews within its identified revenue streams that have similar characteristics and the Company believes this approach would not differ materially than if applying ASC Topic 606 to each individual contract. • Significant Financing Component - the Company expects the period between when it transfers a promised good to a customer and when the customer pays for the good or service to be one year or less. • Immaterial Performance Obligations - the Company disregards promises deemed to be immaterial in the context of the contract. • Shipping and Handling Activities - the Company considers any shipping and handling costs that are incurred after the customer has obtained control of the product as a cost to fulfill a promise. Shipping and handling costs associated with finished goods delivered to customers are recorded as a selling expense. Collaboration revenue The terms of these agreements typically include payments to the Company of one or more of the following: nonrefundable, upfront license fees; milestone payments; research funding and royalties on future product sales. In addition, the Company generates service revenue through agreements that generally provide for fees for research and development services and may include additional payments upon achievement of specified events. At the inception of a collaboration arrangement, the Company needs to first evaluate if the arrangement meets the criteria in ASC Topic 808 “Collaborative Arrangements” to then determine if ASC Topic 606 is applicable by considering whether the collaborator meets the definition of a customer. If the criteria are met, the Company assesses the promises in the arrangement to identify distinct performance obligations. For licenses of intellectual property, the Company assesses, at contract inception, whether the intellectual property is distinct from other performance obligations identified in the arrangement. If the licensing of intellectual property is determined to be distinct, revenue is recognized for nonrefundable, upfront license fees when the license is transferred to the customer and the customer can use and benefit from the license. If the licensing of intellectual property is determined not to be distinct, then the license will be bundled with other promises in the arrangement into one distinct performance obligation. The Company needs to determine if the bundled performance obligation is satisfied over time or at a point in time. If the Company concludes that the nonrefundable, upfront license fees will be recognized over time, the Company will need to assess the appropriate method of measuring proportional performance. For milestone payments, the Company assesses, at contract inception, whether the development or sales-based milestones are considered probable of being achieved. If it is probable that a significant revenue reversal will occur, the Company will not record revenue until the uncertainty has been resolved. Milestone payments that are contingent upon regulatory approval are not considered probable of being achieved until the applicable regulatory approvals or other external conditions are obtained as such conditions are not within the Company's control. If it is probable that a significant revenue reversal will not occur, the Company will estimate the milestone payments using the most likely amount method. The Company will re-assess the development and sales-based milestones each reporting period to determine the probability of achievement. The Company recognizes revenue for reimbursements of research and development costs under collaboration agreements as the services are performed. The Company records these reimbursements as revenue and not as a reduction of research and development expenses as the Company has the risks and rewards as the principal in the research and development activities. |
Allowance for doubtful accounts | Allowance for doubtful accounts |
Indefinite-lived intangible assets | Indefinite-lived intangible assets Indefinite-lived intangible assets consist of in-process research and development ("IPR&D"). IPR&D acquired directly in a transaction other than a business combination is capitalized if the projects will be further developed or have an alternative future use; otherwise they are expensed. The fair values of IPR&D projects acquired in business combinations are capitalized. Several methods may be used to determine the estimated fair value of the IPR&D acquired in a business combination. The Company utilizes the "income method”, and uses estimated future net cash flows that are derived from projected sales revenues and estimated costs. These projections are based on factors such as relevant market size, patent protection, and expected pricing and industry trends. The estimated future net cash flows are then discounted to the present value using an appropriate discount rate. These assets are treated as indefinite-lived intangible assets until completion or abandonment of the projects, at which time the assets are amortized over the remaining useful life or written off, as appropriate. IPR&D intangible assets that are determined to have had a drop in their fair value are adjusted downward and an impairment is recognized in the statement of operations. These assets are tested at least annually or sooner when a triggering event occurs that could indicate a potential impairment. |
Goodwill | Goodwill Goodwill represents the amount of consideration paid in excess of the fair value of net assets acquired as a result of the Company’s business acquisitions accounted for using the acquisition method of accounting. Goodwill is not amortized and is subject to impairment testing on an annual basis or when a triggering event occurs that may indicate the carrying value of the goodwill is impaired. |
Income Taxes | Income Taxes On December 22, 2017, the U.S. government enacted the 2017 Tax Cuts and Jobs Act ("the 2017 Tax Act"), which significantly revises U.S. tax law by, among other provisions, lowering the U.S. federal statutory income tax rate to 21%, imposing a mandatory one-time transition tax on previously deferred foreign earnings, and eliminating or reducing certain income tax deductions. The Global Intangible Low-tax Income ("GILTI") provisions of the 2017 Tax Act require the Company to include in its U.S. income tax return foreign subsidiary earnings in excess of an allowable return on the foreign subsidiary’s tangible assets. The Company has elected to account for GILTI tax in the period in which it is incurred, and therefore has not provided any deferred tax impacts of GILTI in its consolidated financial statements for the period ended June 30, 2019 . Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and net operating loss and credit carryforwards. Deferred tax assets and liabilities are measured at rates expected to apply to taxable income in the years in which those temporary differences and carryforwards are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statement of operations in the period that includes the enactment date. A valuation allowance is recorded when it is not more likely than not that all or a portion of the net deferred tax assets will be realized. The Company recorded a deferred tax liability in conjunction with the Merger of $ 122.0 million related to the tax basis difference in the IPR&D indefinite-lived intangibles acquired. The Company's policy is to record a deferred tax liability related to acquired IPR&D which may eventually be realized either upon amortization of the asset when the research is completed and a product is successfully launched or the write-off of the asset if it is abandoned or unsuccessful. |
Recently issued accounting standards | Recently issued accounting standards In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”. This standard requires financial assets measured at amortized cost basis to be presented at the net amount expected to be collected. This standard is effective for public companies who are SEC filers for fiscal years beginning after December 15, 2019, including interim periods within those years. The Company expects to adopt this guidance when effective and is assessing what effect the adoption of ASU 2016-13 will have on its consolidated financial statements and accompanying notes. In August 2018, the FASB issued ASU 2018-13, "Fair Value Measurement (Topic 820), Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement". This standard eliminates certain disclosure requirements for fair value measurements for all entities, requires public entities to disclose certain new information and modifies some disclosure requirements. The new guidance is effective for all entities for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. An entity is permitted to early adopt either the entire standard or only the provisions that eliminate or modify requirements. Entities can elect to early adopt in interim periods, including periods for which they have not yet issued financial statements or made their financial statements available for issuance. The Company expects to adopt this guidance when effective and is currently assessing what effect the adoption of ASU No. 2018-13 will have on its consolidated financial statements and accompanying notes. In August 2018, the FASB issued ASU 2018-15,"Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract". ASU 2018-15 requires a customer in a cloud computing arrangement that is a service contract to follow the internal-use software guidance in Accounting Standards Codification 350-40 to determine which implementation costs to defer and recognize as an asset. For public business entities, the guidance is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2019. For all other entities, it is effective for annual periods beginning after December 15, 2020 and interim periods in annual periods beginning after December 15, 2021. Early adoption is permitted, including adoption in any interim period for all entities. The Company expects to adopt this guidance when effective and is currently assessing what effect the adoption of ASU No. 2018-13 will have on its consolidated financial statements and accompanying notes. In November 2018, the FASB issued ASU 2018-18,"Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606”. ASU 2018-18 provides guidance on whether certain transactions between collaborative arrangement participants should be accounted for with revenue under Topic 606. For public business entities, the guidance is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2019. For all other entities, it is effective for annual periods beginning after December 15, 2020 and interim periods in annual periods beginning after December 15, 2021. Early adoption is permitted, including adoption in any interim period for all entities. The Company expects to adopt this guidance when effective and is currently assessing what effect the adoption of ASU No. 2018-18 will have on its consolidated financial statements and accompanying notes. Impact of recently adopted accounting pronouncements In February 2016, the FASB issued ASU No. 2016-2, “Leases (Topic 842)”. This standard requires organizations that lease assets with lease terms of more than 12 months to recognize assets and liabilities for the rights and obligations created by those leases on their balance sheets. The ASU also requires new qualitative and quantitative disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. The standard is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. Additionally, in March 2019, the FASB issued ASU 2019-01,"Leases (Topic 842): Codification Improvements”. ASU 2019-01 clarifies the transition guidance related to interim disclosures provided in the year of adoption. The Company adopted the new guidance on January 1, 2019 using the modified retrospective method. Prior period results were not adjusted and continue to be presented under Topic 840 based on the accounting standards originally in effect for such periods. As part of the adoption, the Company has elected to utilize practical expedients including the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed the Company to: 1) carry forward the historical determination of contracts as leases, lease classification and not reassess initial direct costs for historical lease arrangements, 2) not separate non-lease components from lease components and instead to account for each separate lease component and the non-lease components associated with that lease component as a single lease component (the Company elected to apply this practical expedient to all underlying asset classes), 3) not apply the recognition requirements in ASC 842 to short-term leases, and 4) not record a right of use asset or right of use liability for leases with an asset or liability balance that would be considered immaterial. Upon adoption, the Company recorded an operating lease liability with a corresponding operating lease ROU asset of $11.3 million . The adoption did not have a material impact on the consolidated results of operations, stockholder's equity, and cash flows for the three and six month periods ended June 30, 2019 . As the Company is not a lessor, the aspects of the new guidance pertaining to lessors was not applicable for the Company. In February 2018, the FASB issued ASU 2018-02, "Income Statement — Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income". This standard permits the reclassification of tax effects stranded in other comprehensive income as a result of tax reform to retained earnings related to the change in federal tax rate in addition to other stranded effects that relate to the 2017 Tax Act but do not directly relate to the change in the federal rate. ASU 2018-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years with early adoption permitted for periods for which financial statements have not yet been issued or made available for issuance. The Company adopted this guidance on January 1, 2019 and elected not to reclassify the tax effects in other comprehensive income related to the 2017 Tax Act, as these amounts were immaterial. The adoption of the guidance did not have a material impact on the consolidated financial statements and accompanying notes. In June 2018, the FASB issued ASU 2018-07, "Compensation — Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting". This standard expands the scope of ASC 718 to include share-based payments granted to nonemployees in exchange for goods or services used or consumed in the entity’s own operations and supersedes the guidance in ASC 505-50. The ASU retains the existing cost attribution guidance, which requires entities to recognize compensation cost for nonemployee awards in the same period and in the same manner they would if they paid cash for the goods or services, but it moves the guidance to ASC 718. ASU 2018-07 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years with early adoption permitted for periods for which financial statements have not yet been issued or made available for issuance. The Company adopted this guidance on January 1, 2019. The adoption of the guidance did not have a material impact on the consolidated financial statements and accompanying notes. In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)”. ASU No. 2014-09 eliminated transaction- and industry-specific revenue recognition guidance under FASB Accounting Standards Codification (“ASC”) Subtopic 605-15, Revenue Recognition-Products and replaced it with a principle-based approach for determining revenue recognition. ASC Topic 606 requires entities to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. On January 1, 2018, the Company adopted ASC Topic 606 using the modified retrospective approach and applied this approach only to contracts that were not completed as of January 1, 2018. The Company calculated a one-time transition adjustment of $3.3 million , which was recorded on January 1, 2018 to deferred revenue and accumulated deficit, related to the product sales of Emflaza. In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments — Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities”. This standard enhances the reporting model for financial instruments, which includes amendments to address aspects of recognition, measurement, presentation and disclosure. The new guidance affects all reporting organizations (whether public or private) that hold financial assets or owe financial liabilities. The Company adopted the guidance on January 1, 2018. In March 2018, the FASB issued ASU 2018-04, "Investments - Debt Securities (Topic 320) and Regulated Operations (Topic 980): Amendments to SEC Paragraphs Pursuant to the SEC Staff Accounting Bulletin ("SAB") No. 117 and SEC Release No. 33-9273 (SEC Update)". This standard supersedes SEC paragraphs in ASC 320, Investments- Debt Securities, as a result of the issuance of SAB 117 and also updates the Codification for a 2011 SEC release and is effective when a registrant adopts ASU 2016-01, which in the case of the Company was on January 1, 2018. The adoption of the guidance did not have a material impact on the consolidated financial statements and accompanying notes. In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments”. This standard clarifies the presentation of certain specific cash flow issues in the Statement of Cash Flows. The Company adopted the guidance on January 1, 2018. The adoption of the guidance did not have a material impact on the consolidated financial statements and accompanying notes. In November 2016, the FASB issued ASU 2016-16, “Intra-Entity Transfers of Assets Other Than Inventory”. ASU 2016-16 requires companies to account for the income tax effects of intercompany transfers of assets other than inventory (e.g., intangible assets) when the transfer occurs. The Company adopted the guidance on January 1, 2018. The adoption of the guidance did not have a material impact on the consolidated financial statements and accompanying notes. In November 2016, the FASB issued ASU No. 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash”. This standard requires entities to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows and no longer present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows. The Company adopted the guidance on January 1, 2018. The adoption of the guidance did not have a material impact on the consolidated financial statements and accompanying notes. In May 2017, the FASB issued ASU No. 2017-09, "Stock Compensation (Topic 718): Scope of Modification Accounting". This standard clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as a modification, with entities applying the modification accounting guidance if the value, vesting conditions or classification of the award changes. In addition to all disclosures about modifications that are required under the current guidance, entities will be also required to disclose that compensation expense has not changed if applicable. The Company adopted the guidance on January 1, 2018. The adoption of the guidance did not have a material impact on the consolidated financial statements and accompanying notes. |
Summary of significant accoun_3
Summary of significant accounting policies - (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Inventory | The following table summarizes the components of the Company’s inventory for the periods indicated: June 30, 2019 December 31, 2018 Raw materials $ 2,089 $ 1,431 Work in progress 8,341 9,324 Finished goods 6,467 5,362 Total inventory $ 16,897 $ 16,117 |
Leases - (Tables)
Leases - (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Lease costs | The components of lease expense were as follows: Three Months Ended June 30, 2019 Six Months Ended June 30, 2019 Operating Lease Cost Fixed lease cost $ 835 $ 1,647 Variable lease cost 161 304 Short-term lease cost 88 141 Total operating lease cost $ 1,084 $ 2,092 Total operating lease cost is a component of operating expenses on the consolidated statements of operations. Supplemental balance sheet information related to leases was as follows: June 30, 2019 Operating lease ROU asset $ 10,387 Operating lease liabilities- current $ 2,143 Operating lease liabilities- noncurrent 8,416 Total operating lease liability $ 10,559 Supplemental lease term and discount rate information related to leases was as follows: June 30, 2019 Weighted-average remaining lease terms - operating leases (years) 4.51 Weighted-average discount rate - operating leases 7.18 % Supplemental cash flow information related to leases was as follows: Six Months Ended June 30, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 1,508 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 11,643 |
Lease payments | Future minimum lease payments under non-cancelable leases as of June 30, 2019 were as follows: Operating Leases 2019 (Excludes the six months ended June 30, 2019) $ 1,371 2020 3,023 2021 2,494 2022 2,147 2023 and thereafter 2,160 Total lease payments 11,195 Less: Imputed Interest 636 Total $ 10,559 |
Fair value of financial instr_2
Fair value of financial instruments and marketable securities - (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of financial assets and liabilities that are required to be measured at fair value on a recurring basis | The following represents the fair value using the hierarchy described above for the Company’s financial assets and liabilities that are required to be measured at fair value on a recurring basis as of June 30, 2019 and December 31, 2018 : June 30, 2019 Total Quoted prices Significant Significant Marketable securities $ 227,447 $ — $ 227,447 $ — Equity investment in MRI $ 4,129 $ 4,129 $ — $ — Stock appreciation rights liability $ 1,960 $ — $ — $ 1,960 Deferred consideration payable $ 38,200 $ — $ 38,200 $ — Contingent consideration payable- development and regulatory milestones $ 277,400 $ — $ — $ 277,400 Contingent consideration payable- net sales milestones and royalties $ 58,800 $ — $ — $ 58,800 December 31, 2018 Total Quoted prices in active markets for identical assets (level 1) Significant other observable inputs (level 2) Significant unobservable inputs (level 3) Marketable securities $ 58,088 $ — $ 58,088 $ — Stock appreciation rights liability $ 3,814 $ — $ — $ 3,814 Deferred consideration payable $ 37,700 $ — $ 37,700 $ — Contingent consideration payable- development and regulatory milestones $ 257,040 $ — $ — $ 257,040 Contingent consideration payable- net sales milestones and royalties $ 53,200 $ — $ — $ 53,200 |
Summary of marketable securities accounted for as available-for-sale securities | The following is a summary of marketable securities accounted for as available-for-sale securities at June 30, 2019 and December 31, 2018 : June 30, 2019 Amortized Gross Unrealized Fair Gains Losses Commercial paper $ 70,185 $ 116 $ — $ 70,301 Corporate debt securities 129,252 464 (10 ) 129,706 Asset-backed securities 27,364 76 — 27,440 Total $ 226,801 $ 656 $ (10 ) $ 227,447 December 31, 2018 Amortized Cost Gross Unrealized Fair Value Gains Losses Commercial paper $ 31,657 $ 43 $ (1 ) $ 31,699 Corporate debt securities 26,399 — (10 ) 26,389 Total $ 58,056 $ 43 $ (11 ) $ 58,088 |
Summary of unrealized losses and fair values of available-for-sale securities in a continuous unrealized loss position | The unrealized losses and fair values of available-for-sale securities that have been in an unrealized loss position for a period of less than and greater than 12 months as of June 30, 2019 are as follows: June 30, 2019 Securities in an unrealized loss position less than 12 months Securities in an unrealized loss position greater than 12 months Total Unrealized losses Fair Value Unrealized losses Fair Value Unrealized losses Fair Value Commercial paper $ — $ — $ — $ — $ — $ — Corporate debt securities (10 ) 17,684 — — (10 ) 17,684 Asset-backed securities — — — — — — Total $ (10 ) $ 17,684 $ — $ — $ (10 ) $ 17,684 The unrealized losses and fair values of available-for-sale securities that have been in an unrealized loss position for a period of less than and greater than 12 months as of December 31, 2018 are as follows: December 31, 2018 Securities in an unrealized loss position less than 12 months Securities in an unrealized loss position greater than 12 months Total Unrealized losses Fair Value Unrealized losses Fair Value Unrealized losses Fair Value Commercial paper $ (1 ) $ 1,993 $ — $ — $ (1 ) $ 1,993 Corporate debt securities (7 ) 14,230 (3 ) 10,087 (10 ) 24,317 Total $ (8 ) $ 16,223 $ (3 ) $ 10,087 $ (11 ) $ 26,310 |
Schedule of marketable securities on the balance sheet | Marketable securities on the balance sheet at June 30, 2019 and December 31, 2018 mature as follows: June 30, 2019 Less Than 12 Months More Than 12 Months Commercial paper $ 70,301 $ — Corporate debt securities 70,192 59,514 Asset-backed securities 20,639 6,801 Total Marketable securities $ 161,132 $ 66,315 December 31, 2018 Less Than 12 Months More Than 12 Months Commercial paper $ 31,699 $ — Corporate debt securities 26,389 — Total Marketable securities $ 58,088 $ — |
Summary of changes in the fair value of the Company's Level 3 valuation for warrant liability and SARs liability | The following significant unobservable inputs were used in the valuation of the SARs liability, and the contingent consideration payable for the periods ended June 30, 2019 and December 31, 2018 : June 30, 2019 Fair Value Valuation Technique Unobservable Input Range SARs $1,960 Option-pricing model Volatility 49.70% Risk free interest rate 2.09% Strike price $6.76 - $30.86 Fair value of common stock $45.00 Expected life 0.52 years Contingent consideration payable- development and regulatory milestones $277,400 Probability-adjusted discounted cash flow Potential development and regulatory milestones $0 - $555 million Probabilities of success 25% - 94% Discount rates 3.8% - 5.7% Projected years of payments 2020 - 2026 Contingent considerable payable- net sales milestones and royalties $58,800 Option-pricing model with Monte Carlo simulation Potential net sales milestones $0 - $150 million Probabilities of success 25% - 89% Potential percentage of net sales for royalties 2% - 6% Discount rate 14.5% Projected years of payments 2021 - 2038 December 31, 2018 Fair Value Valuation Technique Unobservable Input Range SARs $3,814 Option-pricing model Volatility 46.53% - 59.59% Risk free interest rate 2.44% - 2.63% Strike price $6.76 - $30.86 Fair value of common stock $34.32 Expected life 0.01 - 1.01 years Contingent consideration payable- development and regulatory milestones $257,040 Probability-adjusted discounted cash flow Potential development and regulatory milestones $0 - $555 million Probabilities of success 25% - 94% Discount rates 5.8% - 8.0% Projected years of payments 2020 - 2026 Contingent considerable payable- net sales milestones and royalties $53,200 Option-pricing model with Monte Carlo simulation Potential net sales milestones $0 - $150 million Probabilities of success 25% - 89% Potential percentage of net sales for royalties 2% - 6% Discount rate 14.0% Projected years of payments 2021 - 2038 |
Fair Value Measurement Inputs and Valuation Techniques | The table presented below is a summary of changes in the fair value of the Company’s Level 3 valuations for the SARs liability, and the contingent consideration payable for the period ended June 30, 2019 . The changes in the fair value of the Company's Level 3 valuations for the period ended June 30, 2018 were immaterial. Level 3 liabilities SARs Contingent consideration payable- development and regulatory milestones Contingent consideration payable- net sales milestones and royalties Beginning balance as of December 31, 2018 $ 3,814 $ 257,040 $ 53,200 Additions — — — Change in fair value 1,961 20,360 5,600 Payments (3,815 ) — Ending balance as of June 30, 2019 $ 1,960 $ 277,400 $ 58,800 |
Other comprehensive income (l_2
Other comprehensive income (loss) and accumulated other comprehensive items - (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
Summary of other comprehensive income (loss) and the changes in accumulated other comprehensive items | The following tables summarize other comprehensive income (loss) and the changes in accumulated other comprehensive items for the three and six months ended June 30, 2019 : Unrealized Gains/(Losses) On Marketable Securities, net of tax Foreign Currency Translation Total Accumulated Other Comprehensive Items Balance at March 31, 2019 $ 90 $ 715 $ 805 Other comprehensive income before reclassifications 839 278 1,117 Amounts reclassified from other comprehensive items — — — Other comprehensive income 839 278 1,117 Balance at June 30, 2019 $ 929 $ 993 $ 1,922 Unrealized Gains/(Losses) On Marketable Securities, net of tax Foreign Currency Translation Total Accumulated Other Comprehensive Items Balance at December 31, 2018 $ 31 $ 1,431 $ 1,462 Other comprehensive income (loss) before reclassifications 898 (438 ) 460 Amounts reclassified from other comprehensive items — — — Other comprehensive income (loss) 898 (438 ) 460 Balance at June 30, 2019 $ 929 $ 993 $ 1,922 |
Accounts payable and accrued _2
Accounts payable and accrued expenses - (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Payables and Accruals [Abstract] | |
Schedule of components of accounts payable and accrued expenses | Accounts payable and accrued expenses at June 30, 2019 and December 31, 2018 consist of the following: June 30, December 31, Employee compensation, benefits, and related accruals $ 19,039 $ 27,629 Consulting and contracted research 12,373 11,267 Professional fees 4,116 5,574 Sales allowance and other costs 36,794 29,417 Sales rebates and royalties 29,449 31,874 Accounts payable 10,219 6,001 Other 10,385 16,437 $ 122,375 $ 128,199 |
Capitalization - (Tables)
Capitalization - (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Stockholders' Equity Note [Abstract] | |
Summary of the Company's outstanding warrants | The following is a summary of the Company’s outstanding warrants as of June 30, 2019 and December 31, 2018 : Warrant shares Exercise price Expiration Common stock 7,030 $ 128.00 September 2019 Common stock 130 $ 2,520.00 August 2019 |
Net loss per share - (Tables)
Net loss per share - (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of computation of basic and diluted net loss available to common stockholders | The following tables set forth the computation of basic and diluted net loss per share: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Numerator Net loss $ (41,789 ) $ (9,520 ) $ (113,902 ) $ (28,782 ) Denominator Denominator for basic and diluted net loss per share 55,912,748 46,137,833 57,113,141 46,257,397 Net loss per share: Basic and diluted $ (0.75 ) * $ (0.21 ) * $ (1.99 ) * $ (0.62 ) * *In the three and six months ended June 30, 2019 and 2018 , the Company experienced a net loss and therefore did not report any dilutive share impact. |
Schedule of historical dilutive common share equivalents outstanding | The following table shows historical dilutive common share equivalents outstanding, which are not included in the above historical calculation, as the effect of their inclusion is anti-dilutive during each period. As of June 30, 2019 2018 Stock Options 10,853,301 8,166,403 Unvested restricted stock awards and units 665,002 584,181 Total 11,518,303 8,750,584 |
Stock award plan - (Tables)
Stock award plan - (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Summary of stock option activity | A summary of stock option activity is as follows: Number of Weighted- Weighted- Aggregate Outstanding at December 31, 2018 8,534,358 $ 28.58 Granted 2,845,620 $ 33.54 Exercised (311,002 ) $ 16.50 Forfeited/Cancelled (215,675 ) $ 36.10 Outstanding at June 30, 2019 10,853,301 $ 30.07 7.59 years $ 178,906 Vested or Expected to vest at June 30, 2019 5,334,168 $ 29.22 9.01 years $ 84,446 Exercisable at June 30, 2019 5,138,717 $ 30.90 5.98 years $ 88,423 |
Schedule of assumptions used to estimate fair values of grants made on the date of grant | The fair value of grants made in the six months ended June 30, 2019 was contemporaneously estimated on the date of grant using the following assumptions: Six months ended Risk-free interest rate 1.98 - 2.63% Expected volatility 61.90 - 63.09% Expected term 6.11 years |
Summary of information on the Company's restricted stock | The following table summarizes information on the Company’s restricted stock awards and units: Restricted Stock Awards and Units Number of Weighted January 1, 2019 571,479 $ 17.61 Granted 304,549 $ 32.94 Vested (179,577 ) $ 17.54 Forfeited (31,449 ) $ 21.47 Unvested at June 30, 2019 665,002 $ 24.45 |
Schedule of share-based compensation expense recorded in the statement of operations | The Company recorded share-based compensation expense in the statement of operations related to incentive stock options, nonstatutory stock options, restricted stock awards, restricted stock units and the ESPP as follows: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Research and development $ 5,516 $ 3,932 $ 10,203 $ 7,678 Selling, general and administrative 5,404 4,152 9,981 8,153 Total $ 10,920 $ 8,084 $ 20,184 $ 15,831 |
Debt - (Tables)
Debt - (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Summary of convertible notes | The Convertible Notes consist of the following: Liability component June 30, 2019 December 31, 2018 Principal $ 150,000 $ 150,000 Less: Debt issuance costs (1,544 ) (1,746 ) Less: Debt discount, net(1) (30,999 ) (35,054 ) Net carrying amount $ 117,457 $ 113,200 (1) Included in the consolidated balance sheets within convertible senior notes (due 2022) and amortized to interest expense over the remaining life of the Convertible Notes using the effective interest rate method. |
Summary of interest expense recognized related to the Convertible Notes | The following table sets forth total interest expense recognized related to the Convertible Notes: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Contractual interest expense $ 1,131 $ 1,131 $ 2,241 $ 2,241 Amortization of debt issuance costs 103 93 202 182 Amortization of debt discount 2,074 1,863 4,055 3,644 Total $ 3,308 $ 3,087 $ 6,498 $ 6,067 Effective interest rate of the liability component 11 % 11 % 11 % 11 % |
Revenue recognition - (Tables)
Revenue recognition - (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Contract liabilities, rollforward and revenue recognition | During the three and six month periods ended June 30, 2019 and 2018 , the Company recognized revenue in the period from: Three Months Ended June 30, 2019 Three Months Ended June 30, 2018 Six Months Ended June 30, 2019 Six Months Ended June 30, 2018 Amounts included in contract liabilities at the beginning of the period $ — $ — $ — $ — Performance obligations satisfied in previous period — — — — Performance obligations satisfied in current period 85,476 68,170 138,530 124,151 Total product revenue $ 85,476 $ 68,170 $ 138,530 $ 124,151 The following table presents changes in the Company’s contract liabilities from December 31, 2018 to June 30, 2019 and December 31, 2017 to June 30, 2018 : Balance as of Additions Deductions ASC 606 Adjustment Balance as of Deferred Revenue $ 12,938 $ 2,864 $ — $ — $ 15,802 Balance as of Additions Deductions ASC 606 Adjustment Balance as of Deferred Revenue $ 11,891 $ 2,586 $ — $ (3,937 ) $ 10,540 |
Intangible assets and goodwill
Intangible assets and goodwill - (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Future amortization expense | The estimated future amortization of the Emflaza rights and Waylivra intangible asset is expected to be as follows: As of June 30, 2019 2019 $ 13,273 2020 26,566 2021 26,566 2022 26,566 2023 and thereafter 33,258 Total $ 126,229 |
The Company - Narrative (Detail
The Company - Narrative (Details) $ in Thousands | Aug. 23, 2018USD ($)shares | Apr. 20, 2017USD ($)shares | Aug. 31, 2014member_state | Jun. 30, 2019USD ($)productcountry | Dec. 31, 2018USD ($) | Aug. 31, 2015 |
Long-term debt | ||||||
Number of products | product | 2 | |||||
Number of member states of the European Economic Area | member_state | 31 | |||||
Retained earnings (accumulated deficit) | $ (1,052,825) | $ (938,923) | ||||
Convertible debt | 3.00% Convertible senior notes due 2022 | ||||||
Long-term debt | ||||||
Interest rate ( as a percent ) | 3.00% | |||||
Non-collaborative Arrangement Transactions | Marathon Pharmaceuticals, LLC | ||||||
Long-term debt | ||||||
Cash consideration | $ 75,000 | |||||
Equity Interest Issued, number of shares (in shares) | shares | 6,683,598 | |||||
Numerator for calculation of number of shares of equity interests issued to acquire entity | $ 65,000 | |||||
Trading day period | 15 days | |||||
Development milestone payments which the entity is obligated to pay | $ 50,000 | |||||
Translarna | ||||||
Long-term debt | ||||||
Number of countries ( over ) | country | 40 | |||||
Agilis | ||||||
Long-term debt | ||||||
Cash consideration | $ 49,200 | |||||
Equity Interest Issued, number of shares (in shares) | shares | 3,500,907 | |||||
Numerator for calculation of number of shares of equity interests issued to acquire entity | $ 150,000 | |||||
Trading day period | 10 days | |||||
Development milestone payments which the entity is obligated to pay | $ 40,000 | |||||
Agilis | Non-collaborative Arrangement Transactions | ||||||
Long-term debt | ||||||
Development milestone payments which the entity is obligated to pay | $ 40,000 |
Summary of significant accoun_4
Summary of significant accounting policies - Inventory (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Accounting Policies [Abstract] | ||
Raw materials | $ 2,089 | $ 1,431 |
Work in progress | 8,341 | 9,324 |
Finished goods | 6,467 | 5,362 |
Total inventory | $ 16,897 | $ 16,117 |
Summary of significant accoun_5
Summary of significant accounting policies - Narrative (Details) - USD ($) $ in Thousands | 6 Months Ended | ||||
Jun. 30, 2019 | Jun. 30, 2018 | Jan. 01, 2019 | Dec. 31, 2018 | Jan. 01, 2018 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Operating lease ROU asset | $ 10,387 | $ 11,300 | |||
Allowance for doubtful accounts receivable | 500 | $ 700 | |||
Deferred tax liability | 122,032 | 122,032 | |||
Retained earnings (accumulated deficit) | (1,052,825) | $ (938,923) | |||
ASC 606 Adjustment | $ 0 | $ (3,937) | |||
Adjustments | |||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Retained earnings (accumulated deficit) | $ 3,300 |
Leases - Narrative (Details)
Leases - Narrative (Details) | Jun. 30, 2019operating_lease |
Lessee, Lease, Description [Line Items] | |
Number Of Operating Leases | 3 |
Renewal Term ( in years ) | 10 years |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Term of Contract ( in years ) | 4 months 24 days |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Term of Contract ( in years ) | 7 years |
Leases - Lease costs (Details)
Leases - Lease costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Jan. 01, 2019 | |
Leases [Abstract] | ||||
Fixed lease cost | $ 835 | $ 1,647 | ||
Variable lease cost | 161 | 304 | ||
Short-term lease cost | 88 | 141 | ||
Total operating lease cost | 1,084 | 2,092 | ||
Assets and Liabilities, Lessee [Abstract] | ||||
Operating lease ROU asset | 10,387 | 10,387 | $ 11,300 | |
Operating lease liabilities- current | 2,143 | 2,143 | ||
Operating lease liabilities- noncurrent | 8,416 | 8,416 | ||
Total operating lease liability | $ 10,559 | $ 10,559 | ||
Weighted-average remaining lease terms - operating leases (years) | 4 years 6 months 3 days | 4 years 6 months 3 days | ||
Weighted-average discount rate - operating leases ( as a percent) | 7.18% | 7.18% | ||
Operating cash flows from operating leases | $ 1,508 | |||
Right-of-use assets obtained in exchange for lease obligations | $ 11,643 | $ 0 |
Leases - Lease payments (Detail
Leases - Lease payments (Details) $ in Thousands | Jun. 30, 2019USD ($) |
Leases [Abstract] | |
2019 (Excludes the six months ended June 30, 2019) | $ 1,371 |
2020 | 3,023 |
2021 | 2,494 |
2022 | 2,147 |
2023 and thereafter | 2,160 |
Total lease payments | 11,195 |
Less: Imputed Interest | 636 |
Total | $ 10,559 |
Business Combination - Narrativ
Business Combination - Narrative (Details) - USD ($) $ in Thousands | Aug. 23, 2018 | Jun. 30, 2019 | Dec. 31, 2018 |
Business Acquisition [Line Items] | |||
Contingent consideration payable | $ 336,200 | $ 310,240 | |
Estimated fair value of deferred consideration payable | 18,800 | $ 18,300 | |
Agilis | |||
Business Acquisition [Line Items] | |||
Cash consideration | $ 49,200 | ||
Equity Interest Issued, number of shares (in shares) | 3,500,907 | ||
Numerator for calculation of number of shares of equity interests issued to acquire entity | $ 150,000 | ||
Trading day period | 10 days | ||
Development milestone payments which the entity is obligated to pay | $ 40,000 | ||
Maximum | Agilis | |||
Business Acquisition [Line Items] | |||
Development milestone payments which the entity is obligated to pay | 60,000 | ||
Milestone, potential achievements, priority review voucher amount | 535,000 | ||
Milestone, potential achievements, net sales amount | $ 150,000 | ||
Milestone, potential achievements, product sales | 6.00% | ||
Minimum | Agilis | |||
Business Acquisition [Line Items] | |||
Milestone, potential achievements, product sales | 2.00% |
Business Combination - Consider
Business Combination - Consideration Transfered (Details) - USD ($) $ in Thousands | Aug. 23, 2018 | Jun. 30, 2019 | Dec. 31, 2018 |
Business Acquisition [Line Items] | |||
Estimated fair value of deferred consideration payable | $ 18,800 | $ 18,300 | |
Contingent consideration payable | $ 336,200 | $ 310,240 | |
Agilis | |||
Business Acquisition [Line Items] | |||
Cash consideration | $ 49,200 |
Business Combination - Assets a
Business Combination - Assets and Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Business Acquisition [Line Items] | ||
Goodwill | $ 82,341 | $ 82,341 |
Fair value of financial instr_3
Fair value of financial instruments and marketable securities - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | May 31, 2019 | Jan. 31, 2019 | Dec. 31, 2018 | Aug. 23, 2018 | Aug. 31, 2015 | |
Financial assets and liabilities measured at fair value on recurring basis | ||||||||
Realized gain (loss) | $ 0 | |||||||
Fair value of shares (in dollars per share) | $ 30.20 | |||||||
Estimated fair value of deferred consideration payable | $ 18,800,000 | 18,800,000 | $ 18,300,000 | |||||
Deferred consideration payable | 19,400,000 | 19,400,000 | 19,400,000 | |||||
Unrealized Gain (Loss) on Investments | 129,000 | $ 0 | ||||||
Investment In MRI | 4,100,000 | 4,100,000 | ||||||
3.00% Convertible senior notes due 2022 | Convertible debt | ||||||||
Financial assets and liabilities measured at fair value on recurring basis | ||||||||
Principal | 150,000,000 | 150,000,000 | 150,000,000 | $ 150,000,000 | ||||
Interest rate ( as a percent ) | 3.00% | |||||||
Fair value of convertible notes | $ 166,200,000 | $ 166,200,000 | 146,600,000 | |||||
Agilis | ||||||||
Financial assets and liabilities measured at fair value on recurring basis | ||||||||
Development milestone payments which the entity is obligated to pay | $ 40,000,000 | |||||||
Agilis | Minimum | ||||||||
Financial assets and liabilities measured at fair value on recurring basis | ||||||||
Milestone, potential achievements, product sales | 2.00% | 2.00% | ||||||
Agilis | Maximum | ||||||||
Financial assets and liabilities measured at fair value on recurring basis | ||||||||
Milestone, potential achievements, product sales | 6.00% | 6.00% | ||||||
Development milestone payments which the entity is obligated to pay | $ 60,000,000 | $ 60,000,000 | ||||||
Milestone, potential achievements, priority review voucher amount | 535,000,000 | |||||||
Milestone, potential achievements, net sales amount | 150,000,000 | 150,000,000 | ||||||
Non-collaborative Arrangement Transactions | Agilis | ||||||||
Financial assets and liabilities measured at fair value on recurring basis | ||||||||
Development milestone payments which the entity is obligated to pay | 40,000,000 | 40,000,000 | ||||||
Recurring basis | Total | ||||||||
Financial assets and liabilities measured at fair value on recurring basis | ||||||||
Estimated fair value of deferred consideration payable | 38,200,000 | 38,200,000 | $ 37,700,000 | |||||
Common stock | ||||||||
Financial assets and liabilities measured at fair value on recurring basis | ||||||||
Investment Owned, Balance, Shares | $ 4,000,000 | |||||||
Fair value of shares (in dollars per share) | $ 3.10 | |||||||
Unrealized Gain (Loss) on Investments | $ 100,000 | $ 100,000 |
Fair value of financial instr_4
Fair value of financial instruments and marketable securities - Hierarchy (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Financial assets and liabilities measured at fair value on recurring basis | ||
Marketable securities | $ 227,447 | $ 58,088 |
Deferred consideration payable | 18,800 | 18,300 |
Contingent consideration payable | 336,200 | 310,240 |
Recurring basis | Total | ||
Financial assets and liabilities measured at fair value on recurring basis | ||
Marketable securities | 227,447 | 58,088 |
Equity Securities, FV-NI | 4,129 | |
Stock appreciation rights liability | 1,960 | 3,814 |
Deferred consideration payable | 38,200 | 37,700 |
Contingent consideration payable | 277,400 | 257,040 |
Contingent consideration payable- net sales milestones and royalties | 58,800 | 53,200 |
Recurring basis | Quoted prices in active markets for identical assets (level 1) | ||
Financial assets and liabilities measured at fair value on recurring basis | ||
Marketable securities | 0 | 0 |
Equity Securities, FV-NI | 4,129 | |
Stock appreciation rights liability | 0 | 0 |
Deferred consideration payable | 0 | 0 |
Contingent consideration payable | 0 | 0 |
Contingent consideration payable- net sales milestones and royalties | 0 | 0 |
Recurring basis | Significant other observable inputs (level 2) | ||
Financial assets and liabilities measured at fair value on recurring basis | ||
Marketable securities | 227,447 | 58,088 |
Stock appreciation rights liability | 0 | 0 |
Deferred consideration payable | 38,200 | 37,700 |
Contingent consideration payable | 0 | 0 |
Contingent consideration payable- net sales milestones and royalties | 0 | 0 |
Recurring basis | Significant unobservable inputs (level 3) | ||
Financial assets and liabilities measured at fair value on recurring basis | ||
Marketable securities | 0 | 0 |
Stock appreciation rights liability | 1,960 | 3,814 |
Deferred consideration payable | 0 | 0 |
Contingent consideration payable | 277,400 | 257,040 |
Agilis | Significant unobservable inputs (level 3) | ||
Financial assets and liabilities measured at fair value on recurring basis | ||
Contingent consideration payable- net sales milestones and royalties | $ 58,800 | $ 53,200 |
Fair value of financial instr_5
Fair value of financial instruments and marketable securities - Available for sale (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 226,801 | $ 58,056 |
Gross Unrealized, Gain | 656 | 43 |
Gross Unrealized, Loss | (10) | (11) |
Fair Value | 227,447 | 58,088 |
Commercial paper | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 70,185 | 31,657 |
Gross Unrealized, Gain | 116 | 43 |
Gross Unrealized, Loss | 0 | (1) |
Fair Value | 70,301 | 31,699 |
Corporate debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 129,252 | 26,399 |
Gross Unrealized, Gain | 464 | 0 |
Gross Unrealized, Loss | (10) | (10) |
Fair Value | 129,706 | $ 26,389 |
Asset-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 27,364 | |
Gross Unrealized, Gain | 76 | |
Gross Unrealized, Loss | 0 | |
Fair Value | $ 27,440 |
Fair value of financial instr_6
Fair value of financial instruments and marketable securities - Fair Value Measurement Inputs and Valuation Techniques (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | |
Financial assets and liabilities measured at fair value on recurring basis | ||
Additions | $ 0 | |
SARs | ||
Financial assets and liabilities measured at fair value on recurring basis | ||
Contingent consideration payable- net sales milestones and royalties | 1,960 | $ 3,814 |
Change in fair value | 1,961 | |
Payments | (3,815) | |
Commitments | ||
Financial assets and liabilities measured at fair value on recurring basis | ||
Contingent consideration payable- net sales milestones and royalties | 277,400 | 257,040 |
Additions | 0 | |
Change in fair value | 20,360 | |
Payments | ||
Agilis | Significant unobservable inputs (level 3) | ||
Financial assets and liabilities measured at fair value on recurring basis | ||
Contingent consideration payable- net sales milestones and royalties | 58,800 | 53,200 |
Milestones and Royalties | Agilis | ||
Financial assets and liabilities measured at fair value on recurring basis | ||
Contingent consideration payable- net sales milestones and royalties | 58,800 | 53,200 |
Milestones and Royalties | Agilis | Significant unobservable inputs (level 3) | ||
Financial assets and liabilities measured at fair value on recurring basis | ||
Contingent consideration payable- net sales milestones and royalties | 58,800 | $ 53,200 |
Additions | 0 | |
Change in fair value | 5,600 | |
Payments | $ 0 |
Fair value of financial instr_7
Fair value of financial instruments and marketable securities - Unrealized Loss Positions (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Unrealized losses | ||
Securities in an unrealized loss position less than 12 months | $ (10) | $ (8) |
Securities in an unrealized loss position greater than 12 months | 0 | (3) |
Total | (10) | (11) |
Fair Value | ||
Securities in an unrealized loss position less than 12 months | 17,684 | 16,223 |
Securities in an unrealized loss position greater than 12 months | 0 | 10,087 |
Total | 17,684 | 26,310 |
Commercial paper | ||
Unrealized losses | ||
Securities in an unrealized loss position less than 12 months | 0 | (1) |
Securities in an unrealized loss position greater than 12 months | 0 | 0 |
Total | 0 | (1) |
Fair Value | ||
Securities in an unrealized loss position less than 12 months | 0 | 1,993 |
Securities in an unrealized loss position greater than 12 months | 0 | 0 |
Total | 0 | 1,993 |
Corporate debt securities | ||
Unrealized losses | ||
Securities in an unrealized loss position less than 12 months | (10) | (7) |
Securities in an unrealized loss position greater than 12 months | 0 | (3) |
Total | (10) | (10) |
Fair Value | ||
Securities in an unrealized loss position less than 12 months | 17,684 | 14,230 |
Securities in an unrealized loss position greater than 12 months | 0 | 10,087 |
Total | 17,684 | $ 24,317 |
Asset-backed securities | ||
Unrealized losses | ||
Securities in an unrealized loss position less than 12 months | 0 | |
Securities in an unrealized loss position greater than 12 months | 0 | |
Total | 0 | |
Fair Value | ||
Securities in an unrealized loss position less than 12 months | 0 | |
Securities in an unrealized loss position greater than 12 months | 0 | |
Total | $ 0 |
Fair value of financial instr_8
Fair value of financial instruments and marketable securities - Marketable securities (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Marketable securities on the balance sheet | ||
Total Marketable securities, Less Than 12 Months | $ 161,132 | $ 58,088 |
Total Marketable securities, More Than 12 Months | 66,315 | 0 |
Commercial paper | ||
Marketable securities on the balance sheet | ||
Total Marketable securities, Less Than 12 Months | 70,301 | 31,699 |
Total Marketable securities, More Than 12 Months | 0 | 0 |
Corporate debt securities | ||
Marketable securities on the balance sheet | ||
Total Marketable securities, Less Than 12 Months | 70,192 | 26,389 |
Total Marketable securities, More Than 12 Months | 59,514 | $ 0 |
Asset-backed securities | ||
Marketable securities on the balance sheet | ||
Total Marketable securities, Less Than 12 Months | 20,639 | |
Total Marketable securities, More Than 12 Months | $ 6,801 |
Fair value of financial instr_9
Fair value of financial instruments and marketable securities - Warrants and SARs (Details) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019USD ($)$ / shares | Dec. 31, 2018USD ($)$ / shares | |
Changes in the fair value of warrant liability and SARs liability | ||
Additions | $ 0 | |
SARs | ||
Changes in the fair value of warrant liability and SARs liability | ||
December 31, 2018 | 3,814 | |
Change in fair value | 1,961 | |
Payments | (3,815) | |
June 30, 2019 | 1,960 | $ 3,814 |
Commitments | ||
Changes in the fair value of warrant liability and SARs liability | ||
December 31, 2018 | 257,040 | |
Additions | 0 | |
Change in fair value | 20,360 | |
Payments | ||
June 30, 2019 | 277,400 | 257,040 |
SARs | ||
Changes in the fair value of warrant liability and SARs liability | ||
December 31, 2018 | 3,814 | |
June 30, 2019 | $ 1,960 | $ 3,814 |
Measurement Input, Option Volatility | SARs | ||
Fair value of warrant liability | ||
Alternative Investment, Measurement Input | 0.4970 | |
Measurement Input, Risk Free Interest Rate | SARs | ||
Fair value of warrant liability | ||
Alternative Investment, Measurement Input | 0.0209 | |
Measurement Input, Expected Term | SARs | ||
Fair value of warrant liability | ||
Expected term (in years) | 6 months 7 days | |
Minimum | Warrants | ||
Fair value of warrant liability | ||
Alternative Investment, Measurement Input | $ / shares | 128 | 128 |
Minimum | SARs | ||
Fair value of warrant liability | ||
Alternative Investment, Measurement Input | $ / shares | 6.76 | 6.76 |
Minimum | Measurement Input, Option Volatility | Warrants | ||
Fair value of warrant liability | ||
Alternative Investment, Measurement Input | 0.4759 | 0.5939 |
Minimum | Measurement Input, Option Volatility | SARs | ||
Fair value of warrant liability | ||
Alternative Investment, Measurement Input | 0.4653 | |
Minimum | Measurement Input, Risk Free Interest Rate | SARs | ||
Fair value of warrant liability | ||
Alternative Investment, Measurement Input | 0.0244 | |
Minimum | Measurement Input, Expected Term | Warrants | ||
Fair value of warrant liability | ||
Alternative Investment, Measurement Input | 0.10 | |
Expected term (in years) | 7 months 2 days | |
Minimum | Measurement Input, Expected Term | SARs | ||
Fair value of warrant liability | ||
Expected term (in years) | 3 days | |
Maximum | Warrants | ||
Fair value of warrant liability | ||
Alternative Investment, Measurement Input | $ / shares | 2,520 | 2,520 |
Maximum | SARs | ||
Fair value of warrant liability | ||
Alternative Investment, Measurement Input | $ / shares | 30.86 | 30.86 |
Maximum | Measurement Input, Option Volatility | Warrants | ||
Fair value of warrant liability | ||
Alternative Investment, Measurement Input | 0.4841 | 0.6048 |
Maximum | Measurement Input, Option Volatility | SARs | ||
Fair value of warrant liability | ||
Alternative Investment, Measurement Input | 0.5959 | |
Maximum | Measurement Input, Risk Free Interest Rate | SARs | ||
Fair value of warrant liability | ||
Alternative Investment, Measurement Input | 0.0263 | |
Maximum | Measurement Input, Expected Term | Warrants | ||
Fair value of warrant liability | ||
Alternative Investment, Measurement Input | 0.23 | |
Expected term (in years) | 8 months 19 days | |
Maximum | Measurement Input, Expected Term | SARs | ||
Fair value of warrant liability | ||
Expected term (in years) | 1 year 3 days | |
Common stock | Measurement Input, Share Price | SARs | ||
Fair value of warrant liability | ||
Alternative Investment, Measurement Input | $ / shares | 45 | 34.32 |
Milestones and Royalties | Minimum | Probability of Success [Member] | Commitments | ||
Fair value of warrant liability | ||
Alternative Investment, Measurement Input | 0.25 | 0.25 |
Milestones and Royalties | Maximum | Probability of Success [Member] | Commitments | ||
Fair value of warrant liability | ||
Alternative Investment, Measurement Input | 0.89 | 0.89 |
Development and Regulatory Milestone | Minimum | Probability of Success [Member] | Commitments | ||
Fair value of warrant liability | ||
Alternative Investment, Measurement Input | 0.25 | 0.25 |
Development and Regulatory Milestone | Maximum | Probability of Success [Member] | Commitments | ||
Fair value of warrant liability | ||
Alternative Investment, Measurement Input | 0.94 | 0.94 |
Agilis | Milestones and Royalties | ||
Changes in the fair value of warrant liability and SARs liability | ||
December 31, 2018 | $ 53,200 | |
June 30, 2019 | $ 58,800 | $ 53,200 |
Agilis | Milestones and Royalties | Measurement Input, Discount Rate | Commitments | ||
Fair value of warrant liability | ||
Alternative Investment, Measurement Input | 0.145 | 0.140 |
Agilis | Milestones and Royalties | Minimum | Sales Milestones | Commitments | ||
Fair value of warrant liability | ||
Alternative Investment, Milestone | $ 0 | $ 0 |
Agilis | Milestones and Royalties | Minimum | Percentage of Sales for Royalties | Commitments | ||
Fair value of warrant liability | ||
Alternative Investment, Measurement Input | 0.02 | 0.02 |
Agilis | Milestones and Royalties | Maximum | Sales Milestones | Commitments | ||
Fair value of warrant liability | ||
Alternative Investment, Milestone | $ 150,000 | $ 150,000 |
Agilis | Milestones and Royalties | Maximum | Percentage of Sales for Royalties | Commitments | ||
Fair value of warrant liability | ||
Alternative Investment, Measurement Input | 0.06 | 0.06 |
Agilis | Development and Regulatory Milestone | ||
Changes in the fair value of warrant liability and SARs liability | ||
December 31, 2018 | $ 257,040 | |
June 30, 2019 | 277,400 | $ 257,040 |
Agilis | Development and Regulatory Milestone | Minimum | Development and Regulatory Milestone | Commitments | ||
Fair value of warrant liability | ||
Alternative Investment, Milestone | $ 0 | $ 0 |
Agilis | Development and Regulatory Milestone | Minimum | Measurement Input, Discount Rate | Commitments | ||
Fair value of warrant liability | ||
Alternative Investment, Measurement Input | 0.038 | 0.058 |
Agilis | Development and Regulatory Milestone | Maximum | Development and Regulatory Milestone | Commitments | ||
Fair value of warrant liability | ||
Alternative Investment, Milestone | $ 555,000 | $ 555,000 |
Agilis | Development and Regulatory Milestone | Maximum | Measurement Input, Discount Rate | Commitments | ||
Fair value of warrant liability | ||
Alternative Investment, Measurement Input | 0.057 | 0.08 |
Significant unobservable inputs (level 3) | Agilis | ||
Changes in the fair value of warrant liability and SARs liability | ||
December 31, 2018 | $ 53,200 | |
June 30, 2019 | 58,800 | $ 53,200 |
Significant unobservable inputs (level 3) | Agilis | Milestones and Royalties | ||
Changes in the fair value of warrant liability and SARs liability | ||
December 31, 2018 | 53,200 | |
Additions | 0 | |
Change in fair value | 5,600 | |
Payments | 0 | |
June 30, 2019 | $ 58,800 | $ 53,200 |
Other comprehensive income (l_3
Other comprehensive income (loss) and accumulated other comprehensive items - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Other comprehensive income (loss) and accumulated other comprehensive items | ||
Balance at the beginning of the period | $ 512,942 | $ 350,727 |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Other comprehensive income before reclassifications | 1,117 | 460 |
Amounts reclassified from other comprehensive items | 0 | 0 |
Other comprehensive income (loss) | 1,117 | 460 |
Balance at the end of the period | 488,685 | 488,685 |
Unrealized Gains/(Losses) On Marketable Securities, net of tax | ||
Other comprehensive income (loss) and accumulated other comprehensive items | ||
Balance at the beginning of the period | 90 | 31 |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Other comprehensive income before reclassifications | 839 | 898 |
Amounts reclassified from other comprehensive items | 0 | 0 |
Other comprehensive income (loss) | 839 | 898 |
Balance at the end of the period | 929 | 929 |
Foreign Currency Translation | ||
Other comprehensive income (loss) and accumulated other comprehensive items | ||
Balance at the beginning of the period | 715 | 1,431 |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Other comprehensive income before reclassifications | 278 | (438) |
Amounts reclassified from other comprehensive items | 0 | 0 |
Other comprehensive income (loss) | 278 | (438) |
Balance at the end of the period | 993 | 993 |
AOCI Attributable to Parent | ||
Other comprehensive income (loss) and accumulated other comprehensive items | ||
Balance at the beginning of the period | 805 | 1,462 |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Balance at the end of the period | $ 1,922 | $ 1,922 |
Accounts payable and accrued _3
Accounts payable and accrued expenses - Narrative (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | ||
Employee compensation, benefits, and related accruals | $ 19,039 | $ 27,629 |
Consulting and contracted research | 12,373 | 11,267 |
Professional fees | 4,116 | 5,574 |
Sales allowance and other costs | 36,794 | 29,417 |
Sales rebates and royalties | 29,449 | 31,874 |
Accounts payable | 10,219 | 6,001 |
Other | 10,385 | 16,437 |
Accounts payable and accrued expenses | $ 122,375 | $ 128,199 |
Capitalization - Narrative (Det
Capitalization - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 6 Months Ended | |
Jan. 31, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | |
Warrants | |||
Stock issued (in shares) | 7,563,725 | ||
Share price (in dollars per share) | $ 30.20 | ||
Net proceeds from public offerings | $ 224,500 | $ 224,545 | $ 117,874 |
Over-Allotment Option | |||
Warrants | |||
Stock issued (in shares) | 843,725 |
Capitalization - Warrants (Deta
Capitalization - Warrants (Details) - Common stock - $ / shares | Jun. 30, 2019 | Dec. 31, 2018 |
Period One | ||
Warrants | ||
Warrant shares (in shares) | 7,030 | 7,030 |
Exercise price (in dollars per share) | $ 128 | $ 128 |
Period Five | ||
Warrants | ||
Warrant shares (in shares) | 130 | 130 |
Exercise price (in dollars per share) | $ 2,520 | $ 2,520 |
Net loss per share - Numerator
Net loss per share - Numerator and Denominator (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Numerator | ||||
Net loss | $ (41,789) | $ (9,520) | $ (113,902) | $ (28,782) |
Denominator | ||||
Denominator for basic and diluted net loss per share (in shares) | 55,912,748 | 46,137,833 | 57,113,141 | 46,257,397 |
Net loss per share: | ||||
Basic and diluted (in dollars per share) | $ (0.75) | $ (0.21) | $ (1.99) | $ (0.62) |
Net loss per share - Antidiluti
Net loss per share - Antidilutive (Details) - shares | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Net loss per share | ||
Total shares excluded from calculation (in shares) | 11,518,303 | 8,750,584 |
Stock Options | ||
Net loss per share | ||
Total shares excluded from calculation (in shares) | 10,853,301 | 8,166,403 |
Unvested restricted stock awards and units | ||
Net loss per share | ||
Total shares excluded from calculation (in shares) | 665,002 | 584,181 |
Stock award plan - Narrative (D
Stock award plan - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Mar. 05, 2013 | Jun. 30, 2016 | May 31, 2016 | May 31, 2013 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 |
Stock option plan | ||||||||
Share-based compensation expense | $ 10,920 | $ 8,084 | $ 20,184 | $ 15,831 | ||||
Unrecognized compensation cost | $ 105,800 | $ 105,800 | ||||||
Weighted average remaining service period for recognition of unrecognized compensation cost | 3 years 1 month 6 days | |||||||
Common stock | ||||||||
Stock option plan | ||||||||
Number of shares available for issuance (in shares) | 302,538 | 302,538 | ||||||
Unvested restricted stock | ||||||||
Stock option plan | ||||||||
Grants in period (in shares) | 304,549 | |||||||
Stock option | ||||||||
Stock option plan | ||||||||
Granted (in shares) | 2,845,620 | |||||||
Inducement grants for non-statutory stock options (in shares) | 579,700 | |||||||
Expected dividend yield (as a percent) | 0.00% | |||||||
Weighted average grant date fair value (in dollars per share) | $ 20.01 | |||||||
SARs | ||||||||
Stock option plan | ||||||||
Granted (in shares) | 897,290 | |||||||
Vesting period | 4 years | |||||||
Vested (in shares) | 157,930 | |||||||
Share-based compensation expense | $ 900 | $ 1,900 | ||||||
2013 Stock Incentive Plan | ||||||||
Stock option plan | ||||||||
Number of shares available for issuance (in shares) | 0 | |||||||
2013 Stock Incentive Plan | Common stock | ||||||||
Stock option plan | ||||||||
Number of shares authorized (in shares) | 739,937 | |||||||
2013 Stock Incentive Plan | Unvested restricted stock | ||||||||
Stock option plan | ||||||||
Grants in period (in shares) | 735,324 | |||||||
2013 Stock Incentive Plan | Stock option | ||||||||
Stock option plan | ||||||||
Granted (in shares) | 4,613 | |||||||
2009 Equity and Long Term Incentive Plan | ||||||||
Stock option plan | ||||||||
Number of shares available for issuance (in shares) | 0 | 0 | ||||||
Number of additional shares authorized (in shares) | 2,500,000 | |||||||
2009 Equity and Long Term Incentive Plan and 2013 Stock Incentive Plan | Common stock | ||||||||
Stock option plan | ||||||||
Number of shares available for issuance (in shares) | 122,296 | |||||||
2009 Equity and Long Term Incentive Plan and 2013 Stock Incentive Plan | 1998 Employee, Director and Consultant Stock Option Plan | Common stock | Maximum | ||||||||
Stock option plan | ||||||||
Number of shares subject to outstanding awards (in shares) | 3,040,444 | |||||||
2013 Long Term Incentive Plan | Minimum | ||||||||
Stock option plan | ||||||||
Annual increase in the number of shares (in shares) on the first day of the fiscal year | 2,500,000 | |||||||
Annual increase in the number of shares outstanding on the first day of the fiscal year | 4.00% | |||||||
Employee Stock Purchase Plan | ||||||||
Stock option plan | ||||||||
Number of shares authorized (in shares) | 1,000,000,000,000 | |||||||
Share-based compensation expense | $ 300 | $ 600 | ||||||
Award requisite service period | 6 months | |||||||
Purchase price of common stock, percent | 85.00% | |||||||
Employee stock purchase plan, voting percentage limit | 5.00% |
Stock award plan - Share Base C
Stock award plan - Share Base Compensation (Details) - Stock option - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended |
Jun. 30, 2019 | |
Number of options | |
Outstanding at the beginning of the period (in shares) | 8,534,358 |
Granted (in shares) | 2,845,620 |
Exercised (in shares) | (311,002) |
Forfeited/Cancelled (in shares) | (215,675) |
Outstanding at the end of the period (in shares) | 10,853,301 |
Vested or Expected to vest at the end of the period (in shares) | 5,334,168 |
Exercisable at the end of the period (in shares) | 5,138,717 |
Weighted- average exercise price | |
Outstanding at the beginning of the period (in dollars per share) | $ 28.58 |
Granted (in dollars per share) | 33.54 |
Exercised (in dollars per share) | 16.50 |
Forfeited/Cancelled (in dollars per share) | 36.10 |
Outstanding at the end of the period (in dollars per share) | 30.07 |
Vested or Expected to vest at the end of the period (in dollars per share) | 29.22 |
Exercisable at the end of the period (in dollars per share) | $ 30.90 |
Weighted- average remaining contractual term | |
Outstanding at the end of the period | 7 years 7 months 2 days |
Vested or Expected to vest at the end of the period | 9 years 3 days |
Exercisable at the end of the period | 5 years 11 months 23 days |
Aggregate intrinsic value | |
Outstanding at the end of the period (in dollars) | $ 178,906 |
Vested or Expected to vest at the end of the period (in dollars) | 84,446 |
Exercisable at the end of the period (in dollars) | $ 88,423 |
Minimum | |
Valuation assumptions | |
Risk-free interest rate (as a percent) | 1.98% |
Expected volatility (as a percent) | 61.90% |
Expected term (in years) | 6 years 1 month 9 days |
Maximum | |
Valuation assumptions | |
Risk-free interest rate (as a percent) | 2.63% |
Expected volatility (as a percent) | 63.09% |
Expected term (in years) | 6 years 1 month 9 days |
Stock award plan - Restricted S
Stock award plan - Restricted Stock (Details) - Unvested restricted stock | 6 Months Ended |
Jun. 30, 2019$ / sharesshares | |
Number of Shares | |
Balance at the beginning of the period (in shares) | shares | 571,479 |
Granted (in shares) | shares | 304,549 |
Vested (in shares) | shares | (179,577) |
Forfeited (in shares) | shares | (31,449) |
Balance at the end of the period (in shares) | shares | 665,002 |
Weighted Average Grant Date Fair Value | |
Balance at the beginning of the period (in dollars per share) | $ / shares | $ 17.61 |
Granted (in dollars per share) | $ / shares | 32.94 |
Vested (in dollars per share) | $ / shares | 17.54 |
Forfeited (in dollars per share) | $ / shares | 21.47 |
Balance at the end of the period (in dollars per share) | $ / shares | $ 24.45 |
Stock award plan - Share-based
Stock award plan - Share-based compensation expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Stock option plan | ||||
Share-based compensation expense | $ 10,920 | $ 8,084 | $ 20,184 | $ 15,831 |
Research and development | ||||
Stock option plan | ||||
Share-based compensation expense | 5,516 | 3,932 | 10,203 | 7,678 |
Selling, general and administrative | ||||
Stock option plan | ||||
Share-based compensation expense | $ 5,404 | $ 4,152 | $ 9,981 | $ 8,153 |
Debt - Narrative (Details)
Debt - Narrative (Details) | May 05, 2017USD ($) | May 31, 2017USD ($) | Aug. 31, 2015USD ($)day$ / shares | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Dec. 31, 2018USD ($) |
Long-term debt | ||||||
Repayments of Debt | $ 1,667,000 | $ 0 | ||||
Convertible debt | 3.00% Convertible senior notes due 2022 | ||||||
Long-term debt | ||||||
Debt principal amount | $ 150,000,000 | 150,000,000 | $ 150,000,000 | |||
Interest rate ( as a percent ) | 3.00% | |||||
Net proceeds from issuance of convertible notes | $ 145,400,000 | |||||
Trading days, number | day | 20 | |||||
Consecutive trading days, period | day | 30 | |||||
Stock price trigger | 130.00% | |||||
Business days, period | 5 days | |||||
Consecutive trading-day period | 5 days | |||||
Common stock per principal amount | $ 1,000 | |||||
Maximum product of the closing sale price of shares of the Company's common stock and the applicable conversion rate for such trading day | 98.00% | |||||
Conversion ratio | 17.7487 | |||||
Conversion price per share (in dollars per share) | $ / shares | $ 56.34 | |||||
Convertible instruments principal and unpaid interest payable upon events of default | 100.00% | |||||
Minimum percentage of principal held by convertible debt instrument holders required to issue notice for declaration of principal and unpaid interest payable upon events of default | 25.00% | |||||
Term of the convertible notes | 7 years | |||||
Adjustments to additional paid in capital, equity component of convertible debt | $ 57,500,000 | |||||
Net deferred tax liability in connection with convertible notes | $ 22,300,000 | |||||
Fair value of convertible notes | $ 166,200,000 | $ 146,600,000 | ||||
Remaining contractual life of the convertible notes | 3 years 1 month 6 days | |||||
Convertible debt | 3.00% Convertible senior notes due 2022 | Redemption on or after August 20, 2018 | ||||||
Long-term debt | ||||||
Trading days, number | day | 19 | |||||
Consecutive trading days, period | day | 30 | |||||
Stock price trigger | 130.00% | |||||
Redemption price | 100.00% | |||||
Sinking fund | $ 0 | |||||
MidCap Financial Trust | ||||||
Long-term debt | ||||||
Line of credit facility, maximum borrowing capacity | $ 60,000,000 | |||||
Proceeds from lines of credit | $ 40,000,000 | |||||
Line of credit facility, additional capacity available, net product revenue threshold | 20,000,000 | |||||
Debt issuance costs | $ 400,000 | |||||
Repayments of Debt | $ 1,700,000 | |||||
Debt instrument, floor interest rate | 1.00% | |||||
Debt instrument, basis spread on variable rate | 6.15% | |||||
Debt instrument, interest payment period | 24 months |
Debt - Convertible Notes (Detai
Debt - Convertible Notes (Details) - 3.00% Convertible senior notes due 2022 - Convertible debt - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 | Aug. 31, 2015 |
Long-term debt | |||
Principal | $ 150,000,000 | $ 150,000,000 | $ 150,000,000 |
Less: Debt issuance costs | (1,544,000) | (1,746,000) | |
Less: Debt discount, net | (30,999,000) | (35,054,000) | |
Net carrying amount | $ 117,457,000 | $ 113,200,000 |
Debt - Interest Expense (Detail
Debt - Interest Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Sep. 30, 2017 | |
Long-term debt | |||||
Amortization of debt issuance costs | $ 280 | $ 256 | |||
Convertible debt | 3.00% Convertible senior notes due 2022 | |||||
Long-term debt | |||||
Contractual interest expense | $ 1,131 | $ 1,131 | 2,241 | 2,241 | |
Amortization of debt issuance costs | 103 | 93 | 202 | 182 | |
Amortization of debt discount | 2,074 | 1,863 | 4,055 | 3,644 | |
Total | $ 3,308 | $ 3,087 | $ 6,498 | $ 6,067 | |
Effective interest rate of the liability component | 11.00% | 11.00% | 11.00% | 11.00% | 11.00% |
Commitments and contingencies -
Commitments and contingencies - Narrative (Details) - USD ($) $ in Millions | 6 Months Ended | ||
Jun. 30, 2019 | Aug. 23, 2018 | Jun. 30, 2016 | |
Akcea | |||
Other Commitments [Abstract] | |||
Upfront licensing fee | $ 12 | ||
Milestone, Potential Achievements, Regulatory Approval | 4 | ||
Akcea | Maximum | |||
Other Commitments [Abstract] | |||
Milestone, Potential Achievements, Regulatory Approval | 8 | ||
Non-collaborative Arrangement Transactions | Akcea | |||
Other Commitments [Abstract] | |||
Milestone, Potential Achievements, Regulatory Approval | 6 | ||
Agilis | |||
Other Commitments [Abstract] | |||
Development milestone payments which the entity is obligated to pay | $ 40 | ||
Agilis | Maximum | |||
Other Commitments [Abstract] | |||
Development milestone payments which the entity is obligated to pay | 60 | ||
Milestone, potential achievements, priority review voucher amount | 535 | ||
Milestone, potential achievements, net sales amount | $ 150 | ||
Milestone, potential achievements, product sales | 6.00% | ||
Agilis | Non-collaborative Arrangement Transactions | |||
Other Commitments [Abstract] | |||
Development milestone payments which the entity is obligated to pay | $ 40 | ||
Product | Wellcome trust | |||
Other Commitments [Abstract] | |||
Development milestone payments which the entity is obligated to pay | $ 0.8 | ||
Product | Wellcome trust | Maximum | |||
Other Commitments [Abstract] | |||
Development milestone payments which the entity is obligated to pay | $ 22.4 |
Revenue recognition - Narrative
Revenue recognition - Narrative (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||
Oct. 31, 2017USD ($) | Nov. 30, 2014USD ($) | Jan. 31, 2014USD ($) | Aug. 31, 2013USD ($) | Nov. 30, 2011USD ($)compound | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)segmentdeliverable | Jun. 30, 2018USD ($) | Dec. 31, 2017USD ($)deliverable | Dec. 31, 2018USD ($) | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Contract with Customer, Liability | $ 15,802,000 | $ 10,540,000 | $ 15,802,000 | $ 10,540,000 | $ 11,891,000 | $ 12,938,000 | |||||
Number of operating segments | segment | 1 | ||||||||||
Net product revenue | 85,476,000 | 68,170,000 | $ 138,530,000 | 124,151,000 | |||||||
Upfront cash payment | 2,864,000 | 2,586,000 | |||||||||
Revenue | 85,522,000 | 68,743,000 | 139,105,000 | 124,805,000 | |||||||
Performance obligations satisfied in current period | 85,476,000 | 68,170,000 | 138,530,000 | 124,151,000 | |||||||
Licensing And Collaboration Agreement | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Upfront cash payment | $ 30,000,000 | ||||||||||
Performance obligations satisfied in current period | $ 20,000,000 | $ 10,000,000 | $ 7,500,000 | $ 10,000,000 | |||||||
Licensing And Collaboration Agreement | Research And Development Event Milestones | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Revenue recognition, milestone, potential achievements | 135,000,000 | 87,500,000 | |||||||||
Licensing And Collaboration Agreement | Sales Milestones | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Revenue recognition, milestone, potential achievements | $ 325,000,000 | 325,000,000 | |||||||||
Discovery Agreements | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Revenues | 0 | 0 | |||||||||
Early Stage Collaborations | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Revenues | 0 | 0 | |||||||||
Early Stage Collaborations | Research And Development Event Milestones | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Revenue recognition, milestone, potential achievements | 143,000,000 | ||||||||||
Early Stage Collaborations | Sales Milestones | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Revenue recognition, milestone, potential achievements | 252,000,000 | ||||||||||
United States | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Net product revenue | 27,600,000 | 20,300,000 | 45,400,000 | 39,500,000 | |||||||
Non-US | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Net product revenue | 57,800,000 | 47,800,000 | $ 93,000,000 | 84,600,000 | |||||||
Collaborative Arrangement | Roche And Sma Foundation | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Number of compounds in preclinical development | compound | 3 | ||||||||||
Number of significant deliverables | deliverable | 2 | ||||||||||
Collaboration And Discovery Agreements | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Number of significant deliverables | deliverable | 2 | ||||||||||
Minimum | Collaboration And Discovery Agreements | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Collaborative arrangements research period for applying discovery technology | 3 years | ||||||||||
Maximum | Collaboration And Discovery Agreements | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Collaborative arrangements research period for applying discovery technology | 4 years | ||||||||||
Roche | Licensing And Collaboration Agreement | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Revenues | $ 100,000 | $ 100,000 | $ 100,000 | $ 100,000 |
Revenue recognition - Contract
Revenue recognition - Contract Liabilities, Rollforward (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Movement in Deferred Revenue [Roll Forward] | ||
Beginning balance | $ 12,938 | $ 11,891 |
Additions | 2,864 | 2,586 |
Deductions | 0 | 0 |
ASC 606 Adjustment | 0 | (3,937) |
Ending balance | $ 15,802 | $ 10,540 |
Revenue recognition - Recognize
Revenue recognition - Recognized revenue in the period (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | ||||
Amounts included in contract liabilities at the beginning of the period | $ 0 | $ 0 | $ 0 | $ 0 |
Performance obligations satisfied in previous period | 0 | 0 | 0 | 0 |
Performance obligations satisfied in current period | 85,476 | 68,170 | 138,530 | 124,151 |
Total product revenue | $ 85,476 | $ 68,170 | $ 138,530 | $ 124,151 |
Revenue recognition - Performan
Revenue recognition - Performance Obligations (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | Nov. 30, 2011 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Contract with Customer, Liability | $ 15,802 | $ 12,938 | $ 10,540 | $ 11,891 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-10-01 | Minimum | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Revenue, performance obligation, period | 1 year | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-10-01 | Maximum | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Revenue, performance obligation, period | 3 years | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-10-01 | Licensing And Collaboration Agreement | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Deferred consideration payable | $ 30,000 | ||||
Revenue, performance obligation, period | 2 years |
Intangible assets and goodwil_2
Intangible assets and goodwill - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Apr. 20, 2017 | |
Finite-Lived Intangible Assets [Line Items] | ||||||
Useful life | 7 years | |||||
Amortization of acquired intangible assets | $ 6,575 | $ 5,593 | $ 12,652 | $ 11,022 | ||
Total allocation of IPR&D assets | 576,500 | |||||
Goodwill | 82,341 | 82,341 | $ 82,341 | |||
Research and development | 59,979 | 32,607 | 112,544 | 63,970 | ||
Akcea | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Milestone, Potential Achievements, Regulatory Approval | 4,000 | 4,000 | ||||
Upfront licensing fee | 12,000 | |||||
Non-collaborative Arrangement Transactions | Akcea | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Milestone, Potential Achievements, Regulatory Approval | 6,000 | $ 6,000 | ||||
Useful life | 10 years | |||||
Emflaza asset acquisition | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | $ 148,400 | |||||
Milestone, Potential Achievements, Regulatory Approval | $ 8,300 | $ 3,900 | $ 8,300 | $ 3,900 |
Intangible assets and goodwil_3
Intangible assets and goodwill - Future Amortization (Details) $ in Thousands | Jun. 30, 2019USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2019 | $ 13,273 |
2020 | 26,566 |
2021 | 26,566 |
2022 | 26,566 |
2023 and thereafter | 33,258 |
Total | $ 126,229 |
Subsequent events - Narrative (
Subsequent events - Narrative (Details) $ in Thousands | Aug. 04, 2019USD ($)FeetTerm | Aug. 02, 2019 | Jun. 30, 2019USD ($) |
Subsequent Event [Line Items] | |||
Aggregate rent, Initial term | $ 11,195 | ||
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Square feet of office | Feet | 185,000 | ||
Term of Contract ( in years ) | 15 years | ||
Number of terms | Term | 2 | ||
Aggregate rent, Initial term | $ 88,000 | ||
Percent Of Market Rate | 95.00% | ||
Renewal Term (in years) | 10 years | ||
Letters of Credit | $ 7,500 | ||
Term for letter of credit (in years) | 5 years | ||
Fifth Anniversary [Member] | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Letters of Credit | $ 3,800 | ||
New Building | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Square feet of office | Feet | 75,000 | ||
Term of Contract ( in years ) | 15 years | ||
Number of terms | Term | 2 | ||
Renewal Term (in years) | 5 years |