Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | May 05, 2017 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | DRRX | |
Entity Registrant Name | DURECT CORP | |
Entity Central Index Key | 1,082,038 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 141,966,536 |
Condensed Balance Sheets
Condensed Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 4,272 | $ 5,404 |
Short-term investments | 12,406 | 19,600 |
Accounts receivable (net of allowances of $87 at March 31, 2017 and $73 at December 31, 2016) | 2,076 | 1,154 |
Inventories | 3,462 | 3,782 |
Prepaid expenses and other current assets | 2,905 | 2,486 |
Total current assets | 25,121 | 32,426 |
Property and equipment (net of accumulated depreciation of $21,488 and $21,376 at March 31, 2017 and December 31, 2016, respectively) | 1,191 | 1,297 |
Goodwill | 6,399 | 6,399 |
Long-term restricted investments | 150 | 150 |
Other long-term assets | 236 | 236 |
Total assets | 33,097 | 40,508 |
Current liabilities: | ||
Accounts payable | 1,138 | 2,086 |
Accrued liabilities | 3,289 | 5,060 |
Contract research liabilities | 787 | 783 |
Deferred revenue, current portion | 1,016 | 968 |
Term loan, current portion, net | 1,272 | 19,853 |
Total current liabilities | 7,502 | 28,750 |
Deferred revenue, non-current portion | 1,822 | 1,879 |
Term loan, non-current portion, net | 18,597 | |
Other long-term liabilities | 1,929 | 1,541 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Common stock | 14 | 14 |
Additional paid-in capital | 451,429 | 448,404 |
Accumulated other comprehensive income (loss) | (5) | (3) |
Accumulated deficit | (448,191) | (440,077) |
Stockholders’ equity | 3,247 | 8,338 |
Total liabilities and stockholders’ equity | $ 33,097 | $ 40,508 |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Statement Of Financial Position [Abstract] | ||
Allowances for accounts receivable | $ 87 | $ 73 |
Accumulated depreciation on property and equipment | $ 21,488 | $ 21,376 |
Condensed Statements of Compreh
Condensed Statements of Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Income Statement [Abstract] | ||
Collaborative research and development and other revenue | $ 434 | $ 419 |
Product revenue, net | 4,133 | 3,189 |
Total revenues | 4,567 | 3,608 |
Operating expenses: | ||
Cost of product revenues | 1,543 | 1,242 |
Research and development | 7,548 | 6,625 |
Selling, general and administrative | 3,043 | 3,062 |
Total operating expenses | 12,134 | 10,929 |
Loss from operations | (7,567) | (7,321) |
Other income (expense): | ||
Interest and other income | 36 | 27 |
Interest expense | (583) | (558) |
Net other income (expense) | (547) | (531) |
Net loss | (8,114) | (7,852) |
Net change in unrealized gain (loss) on available-for-sale securities, net of reclassification adjustments and taxes | (2) | 17 |
Total comprehensive loss | $ (8,116) | $ (7,835) |
Net loss per share | ||
Basic | $ (0.06) | $ (0.06) |
Diluted | $ (0.06) | $ (0.06) |
Weighted-average shares used in computing net loss per share | ||
Basic | 141,815 | 122,149 |
Diluted | 141,815 | 122,149 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Cash flows from operating activities | ||
Net loss | $ (8,114) | $ (7,852) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 112 | 101 |
Stock-based compensation | 665 | 710 |
Amortization of debt issuance cost | 16 | 34 |
Net accretion/amortization on investments | (42) | (54) |
Changes in assets and liabilities: | ||
Accounts receivable | (922) | 500 |
Inventories | 320 | (91) |
Prepaid expenses and other assets | (419) | 68 |
Accounts payable | (948) | (292) |
Accrued and other liabilities | 220 | 827 |
Contract research liabilities | 4 | (121) |
Deferred revenue | (9) | (215) |
Total adjustments | (1,003) | 1,467 |
Net cash used in operating activities | (9,117) | (6,385) |
Cash flows from investing activities | ||
Purchases of property and equipment | (6) | (12) |
Purchases of available-for-sale securities | (5,132) | |
Proceeds from maturities of available-for-sale securities | 7,234 | 10,479 |
Net cash provided by investing activities | 7,228 | 5,335 |
Cash flows from financing activities | ||
Payments on equipment financing obligations | (3) | (6) |
Net proceeds from issuances of common stock | 760 | 1,326 |
Net cash provided by financing activities | 757 | 1,320 |
Net (decrease) increase in cash and cash equivalents | (1,132) | 270 |
Cash and cash equivalents, beginning of the period | 5,404 | 3,583 |
Cash and cash equivalents, end of the period | $ 4,272 | $ 3,853 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 1. Summary of Significant Accounting Policies Nature of Operations DURECT Corporation (the Company) was incorporated in the state of Delaware on February 6, 1998. The Company is a biopharmaceutical company with research and development programs broadly falling into two categories: (i) new chemical entities derived from our Epigenetics Regulator Program, in which we attempt to discover and develop molecules which have not previously been approved and marketed as therapeutics, and (ii) Drug Delivery Programs, in which we apply our formulation expertise and technologies largely to active pharmaceutical ingredients whose safety and efficacy have previously been established but which we aim to improve in some manner through a new formulation. The Company has several products under development by itself and with third party collaborators. The Company also manufactures and sells osmotic pumps used in laboratory research, and designs, develops and manufactures a wide range of standard and custom biodegradable polymers and excipients for pharmaceutical and medical device clients for use as raw materials in their products. In addition, the Company conducts research and development of pharmaceutical products in collaboration with third party pharmaceutical and biotechnology companies. Basis of Presentation The accompanying unaudited financial statements include the accounts of the Company. These financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (SEC), and therefore do not include all the information and footnotes necessary for a complete presentation of the Company’s results of operations, financial position and cash flows in conformity with U.S. generally accepted accounting principles (U.S. GAAP). The unaudited financial statements reflect all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of the financial position at March 31, 2017, the operating results and comprehensive loss for the three months ended March 31, 2017 and 2016, and cash flows for the three months ended March 31, 2017 and 2016. The balance sheet as of December 31, 2016 has been derived from audited financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. These financial statements and notes should be read in conjunction with the Company’s audited financial statements and notes thereto, included in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2016 filed with the SEC. The results of operations for the interim periods presented are not necessarily indicative of results that may be expected for any other interim period or for the full fiscal year. Liquidity and Need to Raise Additional Capital As of March 31, 2017, the Company had an accumulated deficit of $448.2 million as well as negative cash flows from operating activities. In May 2017, the Company signed an agreement with Sandoz AG (Sandoz) whereby Sandoz will have the exclusive commercialization rights to POSIMIR ® ® There are no assurances that such additional funding will be obtained and that the Company will succeed in its future operations. If the Company cannot successfully raise additional capital and implement its strategic development plan, its liquidity, financial condition and business prospects will be materially and adversely affected. Inventories Inventories are stated at the lower of cost or market, with cost determined on a first-in, first-out basis. Inventories, in part, include certain excipients that are sold to a customer for a currently marketed animal health product and included in several products in development or awaiting regulatory approval. These inventories are capitalized based on management’s judgment of probable sale prior to their expiration dates. The valuation of inventory requires management to estimate the value of inventory that may become expired prior to use. The Company may be required to expense previously capitalized inventory costs upon a change in management’s judgment due to, among other potential factors, a denial or delay of approval of a customer’s product by the necessary regulatory bodies, or new information that suggests that the inventory will not be saleable. In addition, these circumstances may cause the Company to record a liability related to minimum purchase agreements that the Company has in place for raw materials. As of March 31, 2017, the remaining carrying value of the excipients in the Company’s inventory was $626,000. In addition, the Company has remaining unrecorded future purchase commitments totaling $1.0 million through 2018. In the event that management determines that the Company will not utilize all of these materials, there could be a potential write-off related to this inventory and a reserve for future purchase commitments. The Company’s inventories consisted of the following (in thousands): March 31, 2017 December 31, 2016 (unaudited) Raw materials $ 704 $ 745 Work in process 1,364 1,672 Finished goods 1,394 1,365 Total inventories $ 3,462 $ 3,782 Revenue Recognition Revenue from the sale of products is recognized when there is persuasive evidence that an arrangement exists, the product is shipped and title transfers to customers, provided no continuing obligation on the Company’s part exists, the price is fixed or determinable and the collectability of the amounts owed is reasonably assured. The Company enters into license and collaboration agreements under which it may receive upfront license fees, research funding and contingent milestone payments and royalties. The Company’s deliverables under these arrangements typically consist of granting licenses to intellectual property rights and providing research and development services. The accounting standards contain a presumption that separate contracts entered into at or near the same time with the same entity or related parties were negotiated as a package and should be evaluated as a single agreement. Research and development revenue related to services performed under the collaborative arrangements with the Company’s third-party collaborators is recognized as the related research and development services are performed. These research payments received under each respective agreement are not refundable and are generally based on reimbursement of qualified expenses, as defined in the agreements. Research and development expenses under the collaborative research and development agreements generally approximate or exceed the revenue recognized under such agreements over the term of the respective agreements. Deferred revenue may result when the Company does not expend the required level of effort during a specific period in comparison to funds received under the respective agreement. Milestone payments under collaborative arrangements are triggered either by the results of the Company’s research and development efforts or by specified sales results by a third-party collaborator. Milestones related to the Company’s development-based activities may include initiation of various phases of clinical trials, successful completion of a phase of development or results from a clinical trial, acceptance of a New Drug Application by the FDA or an equivalent filing with an equivalent regulatory agency in another territory, or regulatory approval by the FDA or by an equivalent regulatory agency in another territory. Due to the uncertainty involved in meeting these development-based milestones, the development-based milestones are considered to be substantial (i.e., not just achieved through passage of time) at the inception of the collaboration agreement. In addition, the amounts of the payments assigned thereto are considered to be commensurate with the enhancement of the value of the delivered intellectual property as a result of the Company’s performance. The Company’s involvement is generally necessary to the achievement of development-based milestones. The Company would account for development-based milestones as revenue upon achievement of the substantive milestone events. Milestones related to sales-based activities may be triggered upon events such as the first commercial sale of a product or when sales first achieve a defined level. Under the Company’s collaborative agreements, the Company’s third-party collaborators will take the lead in commercialization activities and the Company is typically not involved in the achievement of sales-based milestones. These sales-based milestones would be achieved after the completion of the Company’s development activities. The Company would account for the sales-based milestones in the same manner as royalties, with revenue recognized upon achievement of the milestone. In addition, upon the achievement of either development-based or sales-based milestone events, the Company has no future performance obligations related to any milestone payments. Comprehensive Income (Loss) Components of other comprehensive income (loss) are comprised entirely of unrealized gains and losses on the Company’s available-for-sale securities for all periods presented. Total comprehensive loss has been disclosed in the Company’s Condensed Statements of Comprehensive Loss. Net Loss Per Share Basic net loss per share is calculated by dividing the net loss by the weighted-average number of common shares outstanding. Diluted net loss per share is computed using the weighted-average number of common shares outstanding and common stock equivalents (i.e., options to purchase common stock) outstanding during the period, if dilutive, using the treasury stock method for options. Options to purchase approximately 26.3 million and 20.4 million shares of common stock were excluded from the denominator in the calculation of diluted net loss per share for the three months ended March 31, 2017 and 2016, respectively, as the effect would be anti-dilutive. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers (ASU 2014-09), which amends the guidance in former ASC 605, Revenue Recognition. The core principle of the guidance is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The guidance provides companies with two implementation methods. Companies can choose to apply the standard retrospectively to each prior reporting period presented (full retrospective application) or retrospectively with the cumulative effect of initially applying the standard as an adjustment to the opening balance of retained earnings of the annual reporting period that includes the date of initial application (modified retrospective application). The standard will be effective for the Company in the first quarter of 2018. The Company has not yet completed its final analysis of the impact of this guidance. To date, the Company’s revenues have been derived from product sales and from license and collaboration agreements. Based on the Company’s preliminary analysis, it does not currently anticipate a material quantitative impact on product revenue as the timing of revenue recognition for product sales is not expected to significantly change. For the Company’s license and collaboration agreements, the consideration the Company is eligible to receive under these agreements typically consists of upfront payments, research and development funding, milestone payments, and royalties. Each license and collaboration agreement is unique and will need to be assessed separately under the five-step process under the new standard. The Company continues to review the impact that this new standard will have on collaboration and license arrangements as well as on its financial statement disclosures. The Company has not yet concluded as to the method it will select to adopt the standard. In February 2016, the Financial Accounting Standards Board (FASB) issued ASU No. 2016-02, Leases (Topic 842), which amends the existing accounting standards for leases. The new standard requires lessees to record a right-of-use asset and a corresponding lease liability on the balance sheet (with the exception of short-term leases). For lessees, leases will continue to be classified as either operating or financing in the income statement. This ASU becomes effective for the Company in the first quarter of fiscal year 2019 and early adoption is permitted. This ASU is required to be applied with a modified retrospective approach and requires application of the new standard at the beginning of the earliest comparative period presented. The Company is currently evaluating the impact that ASU 2016-02 will have on its financial statements. |
Strategic Agreements
Strategic Agreements | 3 Months Ended |
Mar. 31, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Strategic Agreements | Note 2. Strategic Agreements The collaborative research and development and other revenues associated with the Company’s major third-party collaborators are as follows (in thousands): Three months ended March 31, 2017 2016 Collaborator Santen Pharmaceutical Co. Ltd. (Santen) (1) $ 94 $ 162 Zogenix, Inc. (Zogenix) (2) 44 246 Pain Therapeutics, Inc. (Pain Therapeutics) 24 4 Other collaborators 272 7 Total collaborative research and development and other revenue $ 434 $ 419 (1) Amounts related to ratable recognition of upfront fees were $57,000 for each of the three months ended March 31, 2017 and 2016. (2) Amounts related to ratable recognition of upfront fees were $42,000 and $52,000 for the three months ended March 31, 2017 and 2016, respectively. Agreement with Pain Therapeutics, Inc. In December 2002, the Company entered into an exclusive agreement with Pain Therapeutics, Inc. (Pain Therapeutics) to develop and commercialize on a worldwide basis REMOXY ER and other oral sustained release, abuse deterrent opioid products incorporating four specified opioid drugs, using the ORADUR technology. Total collaborative research and development revenue recognized under the agreements with Pain Therapeutics was $24,000 and $4,000 for the three months ended March 31, 2017 and 2016, respectively. The cumulative aggregate payments received by the Company from Pain Therapeutics as of March 31, 2017 were $40.3 million under this agreement. Under the terms of this agreement, Pain Therapeutics paid the Company an upfront license fee of $1.0 million, with the potential for an additional $3.0 million in performance milestone payments based on the successful development and approval of REMOXY ER. Of these potential milestones, all $3.0 million are development-based milestones. There are no sales-based milestones under the agreement. As of March 31, 2017, the Company had received $1.5 million in cumulative milestone payments. In March 2016, Pain Therapeutics resubmitted a New Drug Application (NDA) to the U.S. Food and Drug Administration (FDA), and in September 2016, Pain Therapeutics received a Complete Response Letter from the FDA for REMOXY ER. Based on its review, the FDA has determined that the NDA cannot be approved in its present form and specifies additional actions and data that are needed for drug approval. Total collaborative research and development revenue recognized for REMOXY-related work performed by the Company for Pain Therapeutics was $24,000 and $4,000 for the three months ended March 31, 2017 and 2016, respectively. For the three months ended March 31, 2017 and 2016, the Company recognized zero and $279,000 of product revenue, respectively, related to key excipients for REMOXY ER and the associated cost of goods sold was zero and $124,000, respectively. Pursuant to the Company’s 2002 agreement with Pain Therapeutics, the Company is to be the exclusive supplier of certain defined excipients for products in the collaboration. Agreement with Zogenix, Inc. On July 11, 2011, the Company and Zogenix, Inc. (Zogenix) entered into a Development and License Agreement (the Zogenix Agreement). The Company and Zogenix had previously been working together under a feasibility agreement pursuant to which the Company’s research and development costs were reimbursed by Zogenix. Under the Zogenix Agreement, Zogenix will be responsible for the clinical development and commercialization of a proprietary, long-acting injectable formulation of risperidone using the Company’s SABER controlled-release formulation technology potentially in combination with Zogenix’s DosePro® needle-free, subcutaneous drug delivery system. DURECT will be responsible for non-clinical, formulation and CMC development activities. The Company will be reimbursed by Zogenix for its research and development efforts on the product. Zogenix paid a non-refundable upfront fee to the Company of $2.25 million in July 2011. The Company’s research and development services are considered integral to utilizing the licensed intellectual property and, accordingly, the deliverables are accounted for as a single unit of accounting. The $2.25 million upfront fee is being recognized as collaborative research and development revenue ratably over the term of the Company’s continuing research and development involvement with Zogenix with respect to this product candidate. Zogenix is obligated to pay the Company up to $103 million in total future milestone payments with respect to the product subject to and upon the achievement of various developments, regulatory and sales milestones. Of these potential milestones, $28 million are development-based milestones (none of which has been achieved as of March 31, 2017), and $75 million are sales-based milestones (none of which has been achieved as of March 31, 2017). Zogenix is also required to pay a mid single-digit to low double-digit percentage patent royalty on annual net sales of the product determined on a jurisdiction-by-jurisdiction basis. The patent royalty term is equal to the later of the expiration of all DURECT technology patents or joint patent rights in a particular jurisdiction, the expiration of marketing exclusivity rights in such jurisdiction, or 15 years from first commercial sale in such jurisdiction. After the patent royalty term, Zogenix will continue to pay royalties on annual net sales of the product at a reduced rate for so long as Zogenix continues to sell the product in the jurisdiction. Zogenix is also required to pay to the Company a tiered percentage of fees received in connection with any sublicense of the licensed rights. The Company granted to Zogenix an exclusive worldwide license, with sub-license rights, to the Company’s intellectual property rights related to the Company’s proprietary polymeric and non-polymeric controlled-release formulation technology to make and have made, use, offer for sale, sell and import risperidone products, where risperidone is the sole active agent, for administration by injection in the treatment of schizophrenia, bipolar disorder or other psychiatric related disorders in humans. The Company retains the right to supply Zogenix’s Phase III clinical trial and commercial product requirements on the terms set forth in the Zogenix Agreement. Zogenix may terminate the Zogenix Agreement without cause at any time upon prior written notice, and either party may terminate the Zogenix Agreement upon certain circumstances including written notice of a material uncured breach. The following table provides a summary of collaborative research and development revenue recognized under the agreements with Zogenix (in thousands). The cumulative aggregate payments received by the Company as of March 31, 2017 were $20.1 million under these agreements. Three months ended March 31, 2017 2016 Ratable recognition of upfront payment $ 42 $ 52 Research and development expenses reimbursable by Zogenix 2 194 Total collaborative research and development revenue $ 44 $ 246 Agreement with Santen Pharmaceutical Co., Ltd. On December 11, 2014, the Company and Santen Pharmaceutical Co., Ltd. (Santen) entered into a definitive agreement (the Santen Agreement). Pursuant to the Santen Agreement, the Company granted Santen an exclusive worldwide license to the Company’s proprietary SABER formulation platform and other intellectual property to develop and commercialize a sustained release product utilizing the Company’s SABER technology to deliver an ophthalmology drug. Santen controls and funds the development and commercialization program, and the parties established a joint management committee to oversee, review and coordinate the development activities of the parties under the Santen Agreement. In connection with the Santen agreement, Santen agreed to pay the Company an upfront fee of $2.0 million in cash and to make contingent cash payments to the Company of up to $76.0 million upon the achievement of certain milestones, of which $13.0 million are development-based milestones and $63.0 million are commercialization-based milestones including milestones requiring the achievement of certain product sales targets (none of which has been achieved as of March 31, 2017). Santen will also pay for certain Company costs incurred in the development of the licensed product. If the product is commercialized, the Company would also receive a tiered royalty on annual net product sales ranging from single-digit to the low double digits, determined on a country-by-country basis. As of March 31, 2017, the cumulative aggregate payments received by the Company under this agreement were $3.3 million. The following table provides a summary of collaborative research and development revenue recognized under the Santen Agreement (in thousands). Three months ended March 31, 2017 2016 Ratable recognition of upfront payment $ 57 $ 57 Research and development expenses reimbursable by Santen 37 105 Total collaborative research and development revenue $ 94 $ 162 |
Financial Instruments
Financial Instruments | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments | Note 3. Financial Instruments Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company’s valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The Company follows a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value. These levels of inputs are the following: • Level 1—Quoted prices in active markets for identical assets or liabilities. • Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company’s financial instruments are valued using quoted prices in active markets or based upon other observable inputs. Money market funds are classified as Level 1 financial assets. Certificates of deposit, commercial paper, corporate debt securities, and U.S. Government agency securities are classified as Level 2 financial assets. The fair value of the Level 2 assets is estimated using pricing models using current observable market information for similar securities. The Company’s Level 2 investments include U.S. government-backed securities and corporate securities that are valued based upon observable inputs that may include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data including market research publications. The fair value of commercial paper is based upon the time to maturity and discounted using the three-month treasury bill rate. The average remaining maturity of the Company’s Level 2 investments as of March 31, 2017 is less than twelve months and these investments are rated by S&P and Moody’s at AAA or AA- for securities and A1 or P1 for commercial paper. The following is a summary of available-for-sale securities as of March 31, 2017 and December 31, 2016 (in thousands): March 31, 2017 Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value Money market funds $ 40 $ — $ — $ 40 Certificates of deposit 150 — — 150 Commercial paper 3,078 — — 3,078 Corporate debt 2,631 — (1 ) 2,630 U.S. Government agencies 9,780 — (4 ) 9,776 $ 15,679 $ — $ (5 ) $ 15,674 Reported as: Cash and cash equivalents $ 3,118 $ — $ — $ 3,118 Short-term investments 12,411 — (5 ) 12,406 Long-term restricted investments 150 — — 150 $ 15,679 $ — $ (5 ) $ 15,674 December 31, 2016 Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value Money market funds $ 693 $ — $ — $ 693 Certificates of deposit 150 — — 150 Commercial paper 4,947 — — 4,947 Corporate debt 2,644 — (1 ) 2,643 U.S. Government agencies 14,461 1 (3 ) 14,459 $ 22,895 $ 1 $ (4 ) $ 22,892 Reported as: Cash and cash equivalents $ 3,142 $ — $ — $ 3,142 Short-term investments 19,603 1 (4 ) 19,600 Long-term restricted investments 150 — — 150 $ 22,895 $ 1 $ (4 ) $ 22,892 The following is a summary of the cost and estimated fair value of available-for-sale securities at March 31, 2017, by contractual maturity (in thousands): March 31, 2017 Amortized Cost Estimated Fair Value Mature in one year or less $ 15,639 $ 15,634 Mature after one year through two years — — $ 15,639 $ 15,634 There were no securities that have had an unrealized loss for more than 12 months as of March 31, 2017. As of March 31, 2017, unrealized losses on available-for-sale investments are not attributed to credit risk and are considered to be temporary. The Company believes that it is more-likely-than-not that investments in an unrealized loss position will be held until maturity or the recovery of the cost basis of the investment. To date, the Company has not recorded any impairment charges on marketable securities related to other-than-temporary declines in market value. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation | Note 4. Stock-Based Compensation In the first quarter of 2017, the Company elected to adopt ASU 2016-09, Improvement to Employee Share-based Payment, which simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as equity or liabilities, an option to recognize gross share compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows. The Company elected to account for forfeitures as they occur and therefore, share-based compensation expense for the three months ended March 31, 2017 has been calculated based on actual forfeitures, rather than our previous approach which was net of estimated forfeitures. The Company’s adoption of ASU 2016-09 in the first quarter of 2017 did not have a material impact on its financial statements. As of March 31, 2017, the Company has three stock-based compensation plans. The stock-based compensation cost that has been included in the statements of comprehensive loss is shown as below (in thousands): Three months ended March 31, 2017 2016 Cost of product revenues $ 28 $ 27 Research and development 369 353 Selling, general and administrative 268 330 Total stock-based compensation $ 665 $ 710 As of March 31, 2017 and December 31, 2016, $14,000 of stock-based compensation cost was capitalized in inventory on the Company’s balance sheets. The Company uses the Black-Scholes option pricing model to value its stock options. The expected life computation is based on historical exercise patterns and post-vesting termination behavior. The Company considered its historical volatility in developing its estimate of expected volatility. The Company used the following assumptions to estimate the fair value of stock options granted (including fully vested options issued in January 2017 and January 2016) and shares purchased under its employee stock purchase plan for the three and nine months ended March 31, 2017 and 2016: Stock Options Employee Stock Purchase Plan Three months ended March 31, Three months ended March 31, 2017 2016 2017 2016 Risk-free rate 2.2-2.5% 1.6-1.9% 0.6% 0.3% Expected dividend yield — — — — Expected life of option (in years) 6.8-10.0 6.5-9.3 0.5 0.5 Volatility 75-82% 77-83% 81% 68% |
Term Loan
Term Loan | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Term Loan | Note 5. Term Loan In July 2016, the Company renegotiated the terms of its $20.0 million secured single-draw term loan with Oxford Finance LLC (Oxford Finance) with such renegotiated terms being formalized in a new Loan and Security Agreement (the “2016 Loan Agreement”). The 2016 Loan Agreement supersedes the 2014 Loan Agreement with Oxford Finance and the 2015 amendment to such agreement. The 2016 Loan Agreement provides for interest only payments for the first 18 months, followed by consecutive monthly payments of principal and interest in arrears starting on March 1, 2018 and continuing through the maturity date of the term loan of August 1, 2020. The 2016 Loan Agreement also provides for a floating interest rate (7.95% initially) based on an index rate plus a spread, a $150,000 facility fee that was paid at closing and an additional payment equal to 9.25% of the principal amount of the term loan, which is due when the term loan becomes due or upon the prepayment of the facility. If the Company elects to prepay the loan, there is also a prepayment fee between 1% and 3% of the principal amount of the term loan depending on the timing of prepayment. The facility fee and other debt offering/issuance costs have been recorded as debt discount on the Company’s balance sheet and together with the final $1.9 million payment and interest rate payments are being amortized to interest expense during the life of the term loan using the effective interest rate method. The term loan is secured by substantially all of the assets of the Company, except that the collateral does not include any intellectual property (including licensing, collaboration and similar agreements relating thereto), and certain other excluded assets. The 2016 Loan Agreement contains customary representations, warranties and covenants by the Company, which covenants limit the Company’s ability to convey, sell, lease, transfer, assign or otherwise dispose of certain assets of the Company; engage in any business other than the businesses currently engaged in by the Company or reasonably related thereto; liquidate or dissolve; make certain management changes; undergo certain change of control events; create, incur, assume, or be liable with respect to certain indebtedness; grant certain liens; pay dividends and make certain other restricted payments; make certain investments; and make payments on any subordinated debt. The 2016 Loan Agreement also contains customary indemnification obligations and customary events of default, including, among other things, the Company’s failure to fulfill certain obligations of the Company under the 2016 Loan Agreement and the occurrence of a material adverse change which is defined as a material adverse change in the Company’s business, operations, or condition (financial or otherwise), a material impairment of the prospect of repayment of any portion of the loan, or a material impairment in the perfection or priority of lender’s lien in the collateral or in the value of such collateral. In the event of default by the Company under the 2016 Loan Agreement, the lender would be entitled to exercise its remedies thereunder, including the right to accelerate the debt, upon which the Company may be required to repay all amounts then outstanding under the 2016 Loan Agreement, which could harm the Company’s financial condition. The conditionally exercisable call option related to the event of default is considered to be an embedded derivative which is required to be bifurcated and accounted for as a separate financial instrument. In the periods presented, the value of the embedded derivative is not material, but could become material in future periods if an event of default became more probable than is currently estimated. As of March 31, 2017, the Company was in compliance with all material covenants under the Loan Agreement and the Company believes that there have been no material adverse changes. In accordance with ASC 470-10-45-2, the term loan had been reclassified to a current liability from a non-current liability on the Company’s balance sheet as of December 31, 2016 due to recurring losses, liquidity concerns and a subjective acceleration clause in the Company’s 2016 Loan Agreement. In May 2017, the Company signed an agreement with Sandoz whereby Sandoz will have the exclusive commercialization rights to POSIMIR (SABER-bupivacaine) in the United States. Assuming expiration or termination of the application waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act) and the closing of the Company’s license agreement with Sandoz, the Company has sufficient resources to meet its plans for the next twelve months following the issuance of these financial statements. As a result, that portion of the term loan that is due more than 12 months after March 31, 2017 has been reclassified to a non-current liability from a current liability as of March 31, 2017. The fair value of the term loan approximates the carrying value. Future maturities and interest payments under the term loan as of March 31, 2017, are as follows (in thousands): Nine months ended December 31, 2017 $ 1,215 2018 8,698 2019 8,724 2020 6,641 Total minimum payments 25,278 Less amount representing interest (5,278 ) Gross balance of term loan 20,000 Less unamortized debt discount (131 ) Carrying value of term loan 19,869 Less term loan, current portion, net (1,272 ) Term loan, non-current portion, net 18,597 |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2017 | |
Equity [Abstract] | |
Stockholders' Equity | Note 6. Stockholders’ Equity During the three months ended March 31, 2017, the Company raised net proceeds (net of commissions) of approximately $731,000 from the sale of 573,612 shares of the Company’s common stock in the open market at a weighted average price of $1.31 per share, through its Controlled Equity Offering sales agreement with Cantor Fitzgerald, entered into in November 2015 (Controlled Equity Offering). As of May 5, 2017, the Company had up to approximately $29.5 million of common stock available for sale under the Controlled Equity Offering program and approximately $67.8 million of common stock available for sale under its shelf registration statement. |
Subsequent Event
Subsequent Event | 3 Months Ended |
Mar. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Event | Note 7. Subsequent Event In May 2017, the Company and Sandoz entered into a license agreement to develop and market POSIMIR in the United States. POSIMIR is the Company’s investigational post-operative pain relief depot currently in Phase III clinical development in the United States that utilizes the Company’s patented SABER ® |
Summary of Significant Accoun13
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Nature of Operations | Nature of Operations DURECT Corporation (the Company) was incorporated in the state of Delaware on February 6, 1998. The Company is a biopharmaceutical company with research and development programs broadly falling into two categories: (i) new chemical entities derived from our Epigenetics Regulator Program, in which we attempt to discover and develop molecules which have not previously been approved and marketed as therapeutics, and (ii) Drug Delivery Programs, in which we apply our formulation expertise and technologies largely to active pharmaceutical ingredients whose safety and efficacy have previously been established but which we aim to improve in some manner through a new formulation. The Company has several products under development by itself and with third party collaborators. The Company also manufactures and sells osmotic pumps used in laboratory research, and designs, develops and manufactures a wide range of standard and custom biodegradable polymers and excipients for pharmaceutical and medical device clients for use as raw materials in their products. In addition, the Company conducts research and development of pharmaceutical products in collaboration with third party pharmaceutical and biotechnology companies. |
Basis of Presentation | Basis of Presentation The accompanying unaudited financial statements include the accounts of the Company. These financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (SEC), and therefore do not include all the information and footnotes necessary for a complete presentation of the Company’s results of operations, financial position and cash flows in conformity with U.S. generally accepted accounting principles (U.S. GAAP). The unaudited financial statements reflect all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of the financial position at March 31, 2017, the operating results and comprehensive loss for the three months ended March 31, 2017 and 2016, and cash flows for the three months ended March 31, 2017 and 2016. The balance sheet as of December 31, 2016 has been derived from audited financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. These financial statements and notes should be read in conjunction with the Company’s audited financial statements and notes thereto, included in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2016 filed with the SEC. The results of operations for the interim periods presented are not necessarily indicative of results that may be expected for any other interim period or for the full fiscal year. |
Liquidity and Need to Raise Additional Capital | Liquidity and Need to Raise Additional Capital As of March 31, 2017, the Company had an accumulated deficit of $448.2 million as well as negative cash flows from operating activities. In May 2017, the Company signed an agreement with Sandoz AG (Sandoz) whereby Sandoz will have the exclusive commercialization rights to POSIMIR ® ® There are no assurances that such additional funding will be obtained and that the Company will succeed in its future operations. If the Company cannot successfully raise additional capital and implement its strategic development plan, its liquidity, financial condition and business prospects will be materially and adversely affected. |
Inventories | Inventories Inventories are stated at the lower of cost or market, with cost determined on a first-in, first-out basis. Inventories, in part, include certain excipients that are sold to a customer for a currently marketed animal health product and included in several products in development or awaiting regulatory approval. These inventories are capitalized based on management’s judgment of probable sale prior to their expiration dates. The valuation of inventory requires management to estimate the value of inventory that may become expired prior to use. The Company may be required to expense previously capitalized inventory costs upon a change in management’s judgment due to, among other potential factors, a denial or delay of approval of a customer’s product by the necessary regulatory bodies, or new information that suggests that the inventory will not be saleable. In addition, these circumstances may cause the Company to record a liability related to minimum purchase agreements that the Company has in place for raw materials. As of March 31, 2017, the remaining carrying value of the excipients in the Company’s inventory was $626,000. In addition, the Company has remaining unrecorded future purchase commitments totaling $1.0 million through 2018. In the event that management determines that the Company will not utilize all of these materials, there could be a potential write-off related to this inventory and a reserve for future purchase commitments. The Company’s inventories consisted of the following (in thousands): March 31, 2017 December 31, 2016 (unaudited) Raw materials $ 704 $ 745 Work in process 1,364 1,672 Finished goods 1,394 1,365 Total inventories $ 3,462 $ 3,782 |
Revenue Recognition | Revenue Recognition Revenue from the sale of products is recognized when there is persuasive evidence that an arrangement exists, the product is shipped and title transfers to customers, provided no continuing obligation on the Company’s part exists, the price is fixed or determinable and the collectability of the amounts owed is reasonably assured. The Company enters into license and collaboration agreements under which it may receive upfront license fees, research funding and contingent milestone payments and royalties. The Company’s deliverables under these arrangements typically consist of granting licenses to intellectual property rights and providing research and development services. The accounting standards contain a presumption that separate contracts entered into at or near the same time with the same entity or related parties were negotiated as a package and should be evaluated as a single agreement. Research and development revenue related to services performed under the collaborative arrangements with the Company’s third-party collaborators is recognized as the related research and development services are performed. These research payments received under each respective agreement are not refundable and are generally based on reimbursement of qualified expenses, as defined in the agreements. Research and development expenses under the collaborative research and development agreements generally approximate or exceed the revenue recognized under such agreements over the term of the respective agreements. Deferred revenue may result when the Company does not expend the required level of effort during a specific period in comparison to funds received under the respective agreement. Milestone payments under collaborative arrangements are triggered either by the results of the Company’s research and development efforts or by specified sales results by a third-party collaborator. Milestones related to the Company’s development-based activities may include initiation of various phases of clinical trials, successful completion of a phase of development or results from a clinical trial, acceptance of a New Drug Application by the FDA or an equivalent filing with an equivalent regulatory agency in another territory, or regulatory approval by the FDA or by an equivalent regulatory agency in another territory. Due to the uncertainty involved in meeting these development-based milestones, the development-based milestones are considered to be substantial (i.e., not just achieved through passage of time) at the inception of the collaboration agreement. In addition, the amounts of the payments assigned thereto are considered to be commensurate with the enhancement of the value of the delivered intellectual property as a result of the Company’s performance. The Company’s involvement is generally necessary to the achievement of development-based milestones. The Company would account for development-based milestones as revenue upon achievement of the substantive milestone events. Milestones related to sales-based activities may be triggered upon events such as the first commercial sale of a product or when sales first achieve a defined level. Under the Company’s collaborative agreements, the Company’s third-party collaborators will take the lead in commercialization activities and the Company is typically not involved in the achievement of sales-based milestones. These sales-based milestones would be achieved after the completion of the Company’s development activities. The Company would account for the sales-based milestones in the same manner as royalties, with revenue recognized upon achievement of the milestone. In addition, upon the achievement of either development-based or sales-based milestone events, the Company has no future performance obligations related to any milestone payments. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Components of other comprehensive income (loss) are comprised entirely of unrealized gains and losses on the Company’s available-for-sale securities for all periods presented. Total comprehensive loss has been disclosed in the Company’s Condensed Statements of Comprehensive Loss. |
Net Loss Per Share | Net Loss Per Share Basic net loss per share is calculated by dividing the net loss by the weighted-average number of common shares outstanding. Diluted net loss per share is computed using the weighted-average number of common shares outstanding and common stock equivalents (i.e., options to purchase common stock) outstanding during the period, if dilutive, using the treasury stock method for options. Options to purchase approximately 26.3 million and 20.4 million shares of common stock were excluded from the denominator in the calculation of diluted net loss per share for the three months ended March 31, 2017 and 2016, respectively, as the effect would be anti-dilutive. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers (ASU 2014-09), which amends the guidance in former ASC 605, Revenue Recognition. The core principle of the guidance is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The guidance provides companies with two implementation methods. Companies can choose to apply the standard retrospectively to each prior reporting period presented (full retrospective application) or retrospectively with the cumulative effect of initially applying the standard as an adjustment to the opening balance of retained earnings of the annual reporting period that includes the date of initial application (modified retrospective application). The standard will be effective for the Company in the first quarter of 2018. The Company has not yet completed its final analysis of the impact of this guidance. To date, the Company’s revenues have been derived from product sales and from license and collaboration agreements. Based on the Company’s preliminary analysis, it does not currently anticipate a material quantitative impact on product revenue as the timing of revenue recognition for product sales is not expected to significantly change. For the Company’s license and collaboration agreements, the consideration the Company is eligible to receive under these agreements typically consists of upfront payments, research and development funding, milestone payments, and royalties. Each license and collaboration agreement is unique and will need to be assessed separately under the five-step process under the new standard. The Company continues to review the impact that this new standard will have on collaboration and license arrangements as well as on its financial statement disclosures. The Company has not yet concluded as to the method it will select to adopt the standard. In February 2016, the Financial Accounting Standards Board (FASB) issued ASU No. 2016-02, Leases (Topic 842), which amends the existing accounting standards for leases. The new standard requires lessees to record a right-of-use asset and a corresponding lease liability on the balance sheet (with the exception of short-term leases). For lessees, leases will continue to be classified as either operating or financing in the income statement. This ASU becomes effective for the Company in the first quarter of fiscal year 2019 and early adoption is permitted. This ASU is required to be applied with a modified retrospective approach and requires application of the new standard at the beginning of the earliest comparative period presented. The Company is currently evaluating the impact that ASU 2016-02 will have on its financial statements. |
Summary of Significant Accoun14
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Components of Inventories | The Company’s inventories consisted of the following (in thousands): March 31, 2017 December 31, 2016 (unaudited) Raw materials $ 704 $ 745 Work in process 1,364 1,672 Finished goods 1,394 1,365 Total inventories $ 3,462 $ 3,782 |
Strategic Agreements (Tables)
Strategic Agreements (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Summary of Collaborative Research and Development and Other Revenues Associated with Company's Major Third-Party Collaborators | The collaborative research and development and other revenues associated with the Company’s major third-party collaborators are as follows (in thousands): Three months ended March 31, 2017 2016 Collaborator Santen Pharmaceutical Co. Ltd. (Santen) (1) $ 94 $ 162 Zogenix, Inc. (Zogenix) (2) 44 246 Pain Therapeutics, Inc. (Pain Therapeutics) 24 4 Other collaborators 272 7 Total collaborative research and development and other revenue $ 434 $ 419 (1) Amounts related to ratable recognition of upfront fees were $57,000 for each of the three months ended March 31, 2017 and 2016. (2) Amounts related to ratable recognition of upfront fees were $42,000 and $52,000 for the three months ended March 31, 2017 and 2016, respectively. |
Agreement with Zogenix, Inc. [Member] | |
Summary of Collaborative Research and Development Revenue Recognized | The following table provides a summary of collaborative research and development revenue recognized under the agreements with Zogenix (in thousands). The cumulative aggregate payments received by the Company as of March 31, 2017 were $20.1 million under these agreements. Three months ended March 31, 2017 2016 Ratable recognition of upfront payment $ 42 $ 52 Research and development expenses reimbursable by Zogenix 2 194 Total collaborative research and development revenue $ 44 $ 246 |
Agreement with Santen Pharmaceutical Co., Ltd. [Member] | |
Summary of Collaborative Research and Development Revenue Recognized | The following table provides a summary of collaborative research and development revenue recognized under the Santen Agreement (in thousands). Three months ended March 31, 2017 2016 Ratable recognition of upfront payment $ 57 $ 57 Research and development expenses reimbursable by Santen 37 105 Total collaborative research and development revenue $ 94 $ 162 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Summary of Money Market Funds and Available-for-Sale Securities | The following is a summary of available-for-sale securities as of March 31, 2017 and December 31, 2016 (in thousands): March 31, 2017 Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value Money market funds $ 40 $ — $ — $ 40 Certificates of deposit 150 — — 150 Commercial paper 3,078 — — 3,078 Corporate debt 2,631 — (1 ) 2,630 U.S. Government agencies 9,780 — (4 ) 9,776 $ 15,679 $ — $ (5 ) $ 15,674 Reported as: Cash and cash equivalents $ 3,118 $ — $ — $ 3,118 Short-term investments 12,411 — (5 ) 12,406 Long-term restricted investments 150 — — 150 $ 15,679 $ — $ (5 ) $ 15,674 December 31, 2016 Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value Money market funds $ 693 $ — $ — $ 693 Certificates of deposit 150 — — 150 Commercial paper 4,947 — — 4,947 Corporate debt 2,644 — (1 ) 2,643 U.S. Government agencies 14,461 1 (3 ) 14,459 $ 22,895 $ 1 $ (4 ) $ 22,892 Reported as: Cash and cash equivalents $ 3,142 $ — $ — $ 3,142 Short-term investments 19,603 1 (4 ) 19,600 Long-term restricted investments 150 — — 150 $ 22,895 $ 1 $ (4 ) $ 22,892 |
Summary of Cost and Estimated Fair Value of Available-for-Sale Securities by Contractual Maturity | The following is a summary of the cost and estimated fair value of available-for-sale securities at March 31, 2017, by contractual maturity (in thousands): March 31, 2017 Amortized Cost Estimated Fair Value Mature in one year or less $ 15,639 $ 15,634 Mature after one year through two years — — $ 15,639 $ 15,634 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Stock-Based Compensation Cost that has been Included in Statements of Comprehensive Loss | The stock-based compensation cost that has been included in the statements of comprehensive loss is shown as below (in thousands): Three months ended March 31, 2017 2016 Cost of product revenues $ 28 $ 27 Research and development 369 353 Selling, general and administrative 268 330 Total stock-based compensation $ 665 $ 710 |
Summary of Assumptions Used to Estimate Fair Value of Options Granted and Shares Purchased | The Company used the following assumptions to estimate the fair value of stock options granted (including fully vested options issued in January 2017 and January 2016) and shares purchased under its employee stock purchase plan for the three and nine months ended March 31, 2017 and 2016: Stock Options Employee Stock Purchase Plan Three months ended March 31, Three months ended March 31, 2017 2016 2017 2016 Risk-free rate 2.2-2.5% 1.6-1.9% 0.6% 0.3% Expected dividend yield — — — — Expected life of option (in years) 6.8-10.0 6.5-9.3 0.5 0.5 Volatility 75-82% 77-83% 81% 68% |
Term Loan (Tables)
Term Loan (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Future Maturities and Interest Payments under Term Loan | Future maturities and interest payments under the term loan as of March 31, 2017, are as follows (in thousands): Nine months ended December 31, 2017 $ 1,215 2018 8,698 2019 8,724 2020 6,641 Total minimum payments 25,278 Less amount representing interest (5,278 ) Gross balance of term loan 20,000 Less unamortized debt discount (131 ) Carrying value of term loan 19,869 Less term loan, current portion, net (1,272 ) Term loan, non-current portion, net 18,597 |
Summary of Significant Accoun19
Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) shares in Millions | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Summary Of Significant Accounting Policies [Line Items] | |||
State of incorporation | Delaware | ||
Date of incorporation | Feb. 6, 1998 | ||
Accumulated deficit | $ 448,191,000 | $ 440,077,000 | |
Inventories | $ 3,462,000 | $ 3,782,000 | |
Options to purchase common stock excluded from computation of diluted net loss per share | 26.3 | 20.4 | |
Agreement with Pain Therapeutics, Inc. [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Inventories | $ 626,000 | ||
Remaining unrecorded future purchase commitments | $ 1,000,000 |
Summary of Significant Accoun20
Summary of Significant Accounting Policies - Summary of Components of Inventories (Detail) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Inventory Net [Abstract] | ||
Raw materials | $ 704 | $ 745 |
Work in process | 1,364 | 1,672 |
Finished goods | 1,394 | 1,365 |
Total inventories | $ 3,462 | $ 3,782 |
Strategic Agreements - Summary
Strategic Agreements - Summary of Collaborative Research and Development and Other Revenues Associated with Company's Major Third-Party Collaborators (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||
Total collaborative research and development and other revenue | $ 434 | $ 419 |
Agreement with Zogenix, Inc. [Member] | ||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||
Total collaborative research and development and other revenue | 44 | 246 |
Agreement with Santen Pharmaceutical Co., Ltd. [Member] | ||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||
Total collaborative research and development and other revenue | 94 | 162 |
Agreement with Pain Therapeutics, Inc. [Member] | ||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||
Total collaborative research and development and other revenue | 24 | 4 |
Agreements With Other Third Party Collaborators [Member] | ||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||
Total collaborative research and development and other revenue | $ 272 | $ 7 |
Strategic Agreements - Summar22
Strategic Agreements - Summary of Collaborative Research and Development and Other Revenues Associated with Company's Major Third-Party Collaborators (Parenthetical) (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Agreement with Santen Pharmaceutical Co., Ltd. [Member] | ||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||
Amounts related to the ratable recognition of upfront fees | $ 57 | $ 57 |
Agreement with Zogenix, Inc. [Member] | ||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||
Amounts related to the ratable recognition of upfront fees | $ 42 | $ 52 |
Strategic Agreements - Agreemen
Strategic Agreements - Agreement with Pain Therapeutics, Inc. - Additional Information (Detail) | 1 Months Ended | 3 Months Ended | |
Dec. 31, 2002Drug | Mar. 31, 2017USD ($) | Mar. 31, 2016USD ($) | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Total collaborative research and development and other revenue | $ 434,000 | $ 419,000 | |
Product revenue, net | 4,133,000 | 3,189,000 | |
Cost of goods sold | 1,543,000 | 1,242,000 | |
Agreement with Pain Therapeutics, Inc. [Member] | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Number of specified opioid drugs | Drug | 4 | ||
Total collaborative research and development and other revenue | 24,000 | 4,000 | |
Cumulative aggregate payments received by the Company | 40,300,000 | ||
Upfront license fee | 1,000,000 | ||
Performance milestone payments based on successful development | 3,000,000 | ||
Product revenue, net | 0 | 279,000 | |
Cost of goods sold | 0 | $ 124,000 | |
Agreement with Pain Therapeutics, Inc. [Member] | Development-Based Milestones [Member] | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Performance milestone payments based on successful development | 3,000,000 | ||
Revenue recognition milestone achieved | 1,500,000 | ||
Agreement with Pain Therapeutics, Inc. [Member] | Sales-Based Milestones [Member] | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Performance milestone payments based on successful development | $ 0 |
Strategic Agreements - Agreem24
Strategic Agreements - Agreement with Zogenix, Inc. - Additional Information (Detail) - Agreement with Zogenix, Inc. [Member] - USD ($) | 1 Months Ended | 3 Months Ended |
Jul. 31, 2011 | Mar. 31, 2017 | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||
Patent royalty term | 15 years | |
Cumulative aggregate payments received by the Company | $ 20,100,000 | |
Maximum [Member] | ||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||
Future milestone payments | 103,000,000 | |
Development-Based Milestones [Member] | ||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||
Future milestone payments | 28,000,000 | |
Revenue recognition milestone achieved | 0 | |
Sales-Based Milestones [Member] | ||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||
Future milestone payments | 75,000,000 | |
Revenue recognition milestone achieved | 0 | |
Up-front Payment Arrangement [Member] | ||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||
Non-refundable upfront fee | $ 2,250,000 | $ 2,250,000 |
Strategic Agreements - Summar25
Strategic Agreements - Summary of Collaborative Research and Development Revenue Recognized (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||
Total collaborative research and development revenue | $ 434 | $ 419 |
Agreement with Zogenix, Inc. [Member] | ||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||
Ratable recognition of upfront payment | 42 | 52 |
Research and development expenses reimbursable by the Company | 2 | 194 |
Total collaborative research and development revenue | 44 | 246 |
Agreement with Santen Pharmaceutical Co., Ltd. [Member] | ||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||
Ratable recognition of upfront payment | 57 | 57 |
Research and development expenses reimbursable by the Company | 37 | 105 |
Total collaborative research and development revenue | $ 94 | $ 162 |
Strategic Agreements - Agreem26
Strategic Agreements - Agreement with Santen Pharmaceutical Co., Ltd. - Additional Information (Detail) - Agreement with Santen Pharmaceutical Co., Ltd. [Member] - USD ($) | Dec. 11, 2014 | Mar. 31, 2017 |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||
Upfront license fee | $ 2,000,000 | |
Cumulative aggregate payments received by the Company | $ 3,300,000 | |
Maximum [Member] | ||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||
Future milestone payments | 76,000,000 | |
Development-Based Milestones [Member] | ||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||
Future milestone payments | 13,000,000 | |
Commercialization-Based Milestones [Member] | ||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||
Future milestone payments | $ 63,000,000 | |
Revenue recognition milestone achieved | $ 0 |
Financial Instruments - Summary
Financial Instruments - Summary of Money Market Funds and Available-for-Sale Securities (Detail) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $ 15,679 | $ 22,895 |
Unrealized Gain | 1 | |
Unrealized Loss | (5) | (4) |
Estimated Fair Value | 15,674 | 22,892 |
Money market funds [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 40 | 693 |
Estimated Fair Value | 40 | 693 |
Certificates of deposit [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 150 | 150 |
Estimated Fair Value | 150 | 150 |
Commercial paper [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 3,078 | 4,947 |
Estimated Fair Value | 3,078 | 4,947 |
Corporate debt [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 2,631 | 2,644 |
Unrealized Loss | (1) | (1) |
Estimated Fair Value | 2,630 | 2,643 |
U.S. Government agencies [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 9,780 | 14,461 |
Unrealized Gain | 1 | |
Unrealized Loss | (4) | (3) |
Estimated Fair Value | 9,776 | 14,459 |
Cash and cash equivalents [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 3,118 | 3,142 |
Estimated Fair Value | 3,118 | 3,142 |
Short-term investments [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 12,411 | 19,603 |
Unrealized Gain | 1 | |
Unrealized Loss | (5) | (4) |
Estimated Fair Value | 12,406 | 19,600 |
Long-term restricted investments [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 150 | 150 |
Estimated Fair Value | $ 150 | $ 150 |
Financial Instruments - Summa28
Financial Instruments - Summary of Cost and Estimated Fair Value of Available-for-Sale Securities by Contractual Maturity (Detail) $ in Thousands | Mar. 31, 2017USD ($) |
Investments Debt And Equity Securities [Abstract] | |
Mature in one year or less, Amortized Cost | $ 15,639 |
Amortized Cost | 15,639 |
Mature in one year or less, Estimated Fair Value | 15,634 |
Estimated Fair Value | $ 15,634 |
Financial Instruments - Additio
Financial Instruments - Additional Information (Detail) | Mar. 31, 2017USD ($) |
Investments Debt And Equity Securities [Abstract] | |
Unrealized loss of securities | $ 0 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock-Based Compensation Cost that has been Included in Statements of Comprehensive Loss (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total employee stock-based compensation cost | $ 665 | $ 710 |
Cost of product revenues [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total employee stock-based compensation cost | 28 | 27 |
Research and development [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total employee stock-based compensation cost | 369 | 353 |
Selling, general and administrative [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total employee stock-based compensation cost | $ 268 | $ 330 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||
Stock-based compensation cost capitalized in inventory | $ 14,000 | $ 14,000 |
Stock-Based Compensation - Su32
Stock-Based Compensation - Summary of Assumptions Used to Estimate Fair Value of Options Granted and Shares Purchased (Detail) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Employees Stock Purchase Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free rate | 0.60% | 0.30% |
Expected dividend yield | 0.00% | 0.00% |
Expected life of option (in years) | 6 months | 6 months |
Volatility | 81.00% | 68.00% |
Stock Option Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free rate, minimum | 2.20% | 1.60% |
Risk-free rate, maximum | 2.50% | 1.90% |
Expected dividend yield | 0.00% | 0.00% |
Volatility, minimum | 75.00% | 77.00% |
Volatility, maximum | 82.00% | 83.00% |
Stock Option Plan [Member] | Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected life of option (in years) | 6 years 9 months 18 days | 6 years 6 months |
Stock Option Plan [Member] | Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected life of option (in years) | 10 years | 9 years 3 months 18 days |
Term Loan - Additional Informat
Term Loan - Additional Information (Detail) - USD ($) | 1 Months Ended | 3 Months Ended |
Jul. 31, 2016 | Mar. 31, 2017 | |
Debt Instrument [Line Items] | ||
Debt instrument, covenants in compliance | The Company was in compliance with all material covenants under the Loan Agreement and the Company believes that there have been no material adverse changes. | |
Oxford Finance 2016 Term Loan [Member] | ||
Debt Instrument [Line Items] | ||
Secured term loan | $ 20,000,000 | |
Term loan repayment description | The 2016 Loan Agreement provides for interest only payments for the first 18 months, followed by consecutive monthly payments of principal and interest in arrears starting on March 1, 2018 | |
First principal payment date | Mar. 1, 2018 | |
Term loan, maturity date | Aug. 1, 2020 | |
Interest rate on term loan | 7.95% | |
Term loan, floating interest rate basis | index rate plus a spread | |
Facility fee paid at final payment | $ 150,000 | |
Percentage of an additional payment equal to principal amount | 9.25% | |
Debt offering/issuance costs | $ 1,900,000 | |
Oxford Finance 2016 Term Loan [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Percentage of prepayment fee | 1.00% | |
Oxford Finance 2016 Term Loan [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Percentage of prepayment fee | 3.00% |
Term Loan - Schedule of Future
Term Loan - Schedule of Future Maturities and Interest Payments under Term Loan (Detail) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Future maturities and interest payments under the term loan: | ||
Nine months ended December 31, 2017 | $ 1,215 | |
2,018 | 8,698 | |
2,019 | 8,724 | |
2,020 | 6,641 | |
Total minimum payments | 25,278 | |
Less amount representing interest | (5,278) | |
Gross balance of term loan | 20,000 | |
Less unamortized debt discount | (131) | |
Carrying value of term loan | 19,869 | |
Less term loan, current portion, net | (1,272) | $ (19,853) |
Term loan, non-current portion, net | $ 18,597 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - USD ($) | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | May 05, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Proceeds from sale of common stock, net of commission | $ 760,000 | $ 1,326,000 | |
Scenario Forecast [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common stock available for sale | $ 67,800,000 | ||
Controlled Equity Offering Program [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Proceeds from sale of common stock, net of commission | $ 731,000 | ||
Sale of common stock during period | 573,612 | ||
Common stock weighted average price | $ 1.31 | ||
Cantor Fitzgerald Co [Member] | Maximum [Member] | Scenario Forecast [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common stock available for sale | $ 29,500,000 |
Subsequent Event - Additional I
Subsequent Event - Additional Information (Detail) - Agreement with Sandoz AG [Member] - Scenario Forecast [Member] | 1 Months Ended |
May 31, 2017USD ($) | |
Subsequent Event [Line Items] | |
Upfront license fee | $ 20,000,000 |
Maximum [Member] | |
Subsequent Event [Line Items] | |
Performance milestone payments based on successful development | 43,000,000 |
Sales-Based Milestones [Member] | Maximum [Member] | |
Subsequent Event [Line Items] | |
Performance milestone payments based on successful development | $ 230,000,000 |