Docoh
Loading...

DRRX Durect

Document and Entity Information

Document and Entity Information - shares9 Months Ended
Sep. 30, 2020Oct. 29, 2020
Cover [Abstract]
Document Type10-Q
Amendment Flagfalse
Document Period End DateSep. 30,
2020
Document Fiscal Year Focus2020
Document Fiscal Period FocusQ3
Title of 12(b) SecurityCommon Stock $0.0001 par value per share
Preferred Share Purchase Rights
Security Exchange NameNASDAQ
Entity Interactive Data CurrentYes
Trading SymbolDRRX
Entity Registrant NameDURECT CORP
Entity Central Index Key0001082038
Current Fiscal Year End Date--12-31
Entity Filer CategoryAccelerated Filer
Entity Small Businesstrue
Entity Emerging Growth Companyfalse
Entity Common Stock, Shares Outstanding203,179,259
Entity Shell Companyfalse
Entity Incorporation, State or Country CodeDE
Entity File Number000-31615
Entity Tax Identification Number94-3297098
Entity Address, Address Line One10260 Bubb Road
Entity Address, City or TownCupertino
Entity Address, State or ProvinceCA
Entity Current Reporting StatusYes
Entity Address, Postal Zip Code95014
City Area Code408
Local Phone Number777-1417
Document Quarterly Reporttrue
Document Transition Reportfalse

Condensed Balance Sheets

Condensed Balance Sheets - USD ($) $ in ThousandsSep. 30, 2020Dec. 31, 2019
Current assets:
Cash and cash equivalents $ 18,670 $ 34,924
Short-term investments29,943 29,750
Accounts receivable (net of allowances of $123 at September 30, 2020 and $34 at December 31, 2019)1,492 2,313
Inventories, net3,628 3,383
Prepaid expenses and other current assets3,134 1,459
Total current assets56,867 71,829
Property and equipment, net430 469
Operating lease right-of-use assets5,048 6,066
Goodwill6,399 6,399
Long-term investments1,000
Long-term restricted investments150 150
Other long-term assets261 1,107
Total assets70,155 86,020
Current liabilities:
Accounts payable1,106 2,109
Accrued liabilities4,665 6,284
Contract research liabilities1,746 3,653
Deferred revenue, current portion22,679
Operating lease liabilities, current portion2,039 2,043
Total current liabilities9,556 36,768
Deferred revenue, non-current portion812 812
Operating lease liabilities, non-current portion3,508 4,517
Term loan, non-current portion, net20,679 20,262
Other long-term liabilities902 801
Commitments and contingencies
Stockholders’ equity:
Common stock20 19
Additional paid-in capital528,804 512,046
Accumulated other comprehensive income (loss)18 (3)
Accumulated deficit(494,144)(489,202)
Stockholders’ equity34,698 22,860
Total liabilities and stockholders’ equity $ 70,155 $ 86,020

Condensed Balance Sheets (Paren

Condensed Balance Sheets (Parenthetical) - USD ($) $ in ThousandsSep. 30, 2020Dec. 31, 2019
Statement Of Financial Position [Abstract]
Allowances for accounts receivable $ 123 $ 34

Condensed Statements of Compreh

Condensed Statements of Comprehensive Income (Loss) - USD ($) shares in Thousands, $ in Thousands3 Months Ended9 Months Ended
Sep. 30, 2020Sep. 30, 2019Sep. 30, 2020Sep. 30, 2019
Total revenues $ 2,683 $ 10,763 $ 31,302 $ 18,879
Operating expenses:
Cost of product revenues $ 1,065 $ 731 $ 3,261 $ 2,746
Type of cost, good or service [extensible list]us-gaap:ProductMemberus-gaap:ProductMemberus-gaap:ProductMemberus-gaap:ProductMember
Research and development $ 7,009 $ 7,906 $ 21,412 $ 20,755
Selling, general and administrative3,479 3,837 10,358 10,569
Total operating expenses11,553 12,474 35,031 34,070
Loss from operations(8,870)(1,711)(3,729)(15,191)
Other income (expense):
Interest and other income84 350 477 736
Interest expense(546)(629)(1,690)(1,892)
Net other expense(462)(279)(1,213)(1,156)
Net loss(9,332)(1,990)(4,942)(16,347)
Net change in unrealized gain on available-for-sale securities, net of reclassification adjustments and taxes(53)9 21 2
Total comprehensive loss $ (9,385) $ (1,981) $ (4,921) $ (16,345)
Net loss per share
Basic $ (0.05) $ (0.01) $ (0.02) $ (0.09)
Diluted $ (0.05) $ (0.01) $ (0.02) $ (0.09)
Weighted-average shares used in computing net loss per share
Basic201,877 192,039 198,176 172,939
Diluted201,877 192,039 198,176 172,939
Collaborative Research and Development and Other Revenue [Member]
Total revenues $ 306 $ 7,741 $ 23,623 $ 10,880
Product Revenue, Net [Member]
Total revenues $ 2,377 $ 3,022 $ 7,679 $ 7,999

Condensed Statements of Stockho

Condensed Statements of Stockholders' Equity - USD ($) $ in ThousandsTotalCommon Stock [Member]Additional paid-in capital [Member]Accumulated other comprehensive income (loss) [Member]Accumulated deficit [Member]
Beginning balance at Dec. 31, 2018 $ 20,000 $ 16 $ 488,608 $ (468,624)
Beginning balance, shares at Dec. 31, 2018162,060,000
Issuance of common stock upon equity financings, net of issuance costs61 61
Issuance of common stock upon equity financings, net of issuance cost, shares243,000
Stock-based compensation expense from stock options and ESPP shares437 437
Fully vested options issued to settle accrued liabilities994 994
Net income (loss)(7,130)(7,130)
Unrealized gain (loss) on available-for-sale securities, net of tax(4) $ (4)
Ending balance at Mar. 31, 201914,358 $ 16 490,100 (4)(475,754)
Ending balance, shares at Mar. 31, 2019162,303,000
Beginning balance at Dec. 31, 201820,000 $ 16 488,608 (468,624)
Beginning balance, shares at Dec. 31, 2018162,060,000
Net income (loss)(16,347)
Ending balance at Sep. 30, 201922,006 $ 19 506,956 2 (484,971)
Ending balance, shares at Sep. 30, 2019192,243,000
Beginning balance at Mar. 31, 201914,358 $ 16 490,100 (4)(475,754)
Beginning balance, shares at Mar. 31, 2019162,303,000
Issuance of common stock upon equity financings, net of issuance costs15,319 $ 3 15,316
Issuance of common stock upon equity financings, net of issuance cost, shares29,571,000
Issuance of common stock upon ESPP purchases27 27
Issuance of common stock upon ESPP purchases, shares57,000
Stock-based compensation expense from stock options and ESPP shares420 420
Net income (loss)(7,227)(7,227)
Unrealized gain (loss) on available-for-sale securities, net of tax(3)(3)
Ending balance at Jun. 30, 201922,894 $ 19 505,863 (7)(482,981)
Ending balance, shares at Jun. 30, 2019191,931,000
Issuance of common stock upon ESPP purchases241 241
Issuance of common stock upon ESPP purchases, shares312,000
Stock-based compensation expense from stock options and ESPP shares852 852
Net income (loss)(1,990)(1,990)
Unrealized gain (loss) on available-for-sale securities, net of tax9 9
Ending balance at Sep. 30, 201922,006 $ 19 506,956 2 (484,971)
Ending balance, shares at Sep. 30, 2019192,243,000
Beginning balance at Dec. 31, 201922,860 $ 19 512,046 (3)(489,202)
Beginning balance, shares at Dec. 31, 2019195,257,000
Issuance of common stock upon exercise of stock options761 761
Issuance of common stock upon exercise of stock options, Shares577,000
Stock-based compensation expense from stock options and ESPP shares416 416
Net income (loss)(9,948)(9,948)
Unrealized gain (loss) on available-for-sale securities, net of tax(15)(15)
Ending balance at Mar. 31, 202014,074 $ 19 513,223 (18)(499,150)
Ending balance, shares at Mar. 31, 2020195,834,000
Beginning balance at Dec. 31, 201922,860 $ 19 512,046 (3)(489,202)
Beginning balance, shares at Dec. 31, 2019195,257,000
Net income (loss)(4,942)
Ending balance at Sep. 30, 202034,698 $ 20 528,804 18 (494,144)
Ending balance, shares at Sep. 30, 2020203,175,000
Beginning balance at Mar. 31, 202014,074 $ 19 513,223 (18)(499,150)
Beginning balance, shares at Mar. 31, 2020195,834,000
Issuance of common stock upon equity financings, net of issuance costs6,202 6,202
Issuance of common stock upon equity financings, net of issuance cost, shares2,610,000
Issuance of common stock upon exercise of stock options, ESPP purchases and other1,145 1,145
Issuance of common stock upon exercise of stock options, ESPP purchases and other, shares1,119,000
Stock-based compensation expense from stock options and ESPP shares494 494
Net income (loss)14,338 14,338
Unrealized gain (loss) on available-for-sale securities, net of tax89 89
Ending balance at Jun. 30, 202036,342 $ 19 521,064 71 (484,812)
Ending balance, shares at Jun. 30, 2020199,563,000
Issuance of common stock upon equity financings, net of issuance costs6,080 6,080
Issuance of common stock upon equity financings, net of issuance cost, shares2,698,000
Issuance of common stock upon exercise of stock options1,025 $ 1 1,024
Issuance of common stock upon exercise of stock options, Shares914,000
Stock-based compensation expense from stock options and ESPP shares636 636
Net income (loss)(9,332)(9,332)
Unrealized gain (loss) on available-for-sale securities, net of tax(53)(53)
Ending balance at Sep. 30, 2020 $ 34,698 $ 20 $ 528,804 $ 18 $ (494,144)
Ending balance, shares at Sep. 30, 2020203,175,000

Condensed Statements of Stock_2

Condensed Statements of Stockholders' Equity (Parenthetical) - USD ($) $ in Thousands3 Months Ended
Sep. 30, 2020Jun. 30, 2020Jun. 30, 2019Mar. 31, 2019
Statement Of Stockholders Equity [Abstract]
Stock issuance costs $ 188 $ 192 $ 127 $ 129

Condensed Statements of Cash Fl

Condensed Statements of Cash Flows - USD ($) $ in Thousands9 Months Ended
Sep. 30, 2020Sep. 30, 2019
Cash flows from operating activities
Net loss $ (4,942) $ (16,347)
Adjustments to reconcile net loss to net cash used in by operating activities:
Depreciation and amortization219 224
Stock-based compensation1,540 1,709
Amortization of debt issuance cost338 271
Net amortization on investments(212)42
Changes in operating lease liabilities5 105
Changes in assets and liabilities:
Accounts receivable821 (10,436)
Inventories(240)(198)
Prepaid expenses and other assets(828)1,275
Accounts payable(1,003)(88)
Accrued and other liabilities(1,436)1,080
Contract research liabilities(1,907)684
Deferred revenue(22,679)28,803
Total adjustments(25,382)23,471
Net cash (used in) provided by operating activities(30,324)7,124
Cash flows from investing activities
Purchases of property and equipment(179)(81)
Purchases of available-for-sale securities(33,950)(17,306)
Proceeds from maturities of available-for-sale securities32,989 2,702
Net cash used in investing activities(1,140)(14,685)
Cash flows from financing activities
Payments on equipment financing obligations(3)(6)
Net proceeds from issuances of common stock15,213 15,649
Net cash provided by financing activities15,210 15,643
Net (decrease) increase in Cash, cash equivalents, and restricted cash(16,254)8,082
Cash, cash equivalents, and restricted cash, beginning of the period[1]35,074 31,794
Cash, cash equivalents, and restricted cash, end of the period[1] $ 18,820 39,876
Supplementary disclosure of non-cash financing information
Fully vested options issued to settle accrued liabilities994
Operating lease right-of-use assets obtained in exchange for operating lease obligations[2] $ 7,329
[1]Includes restricted cash of $150,000 (in long term restricted investments) included in the condensed balance sheets at September 30, 2020 and December 31, 2019.
[2]Amounts for the nine months ended September 30, 2019 include the transition adjustment for the adoption of Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842).

Condensed Statement of Cash Flo

Condensed Statement of Cash Flows (Parenthetical) - USD ($)Sep. 30, 2020Dec. 31, 2019
Long Term Restricted Investments [Member]
Restricted cash $ 150,000 $ 150,000

Summary of Significant Accounti

Summary of Significant Accounting Policies9 Months Ended
Sep. 30, 2020
Accounting Policies [Abstract]
Summary of Significant Accounting PoliciesNote 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 the Company’s Epigenetics Regulator Program, in which the Company attempts to discover and develop molecules which have not previously been approved and marketed as therapeutics, and (ii) proprietary pharmaceutical programs, in which the Company applies its formulation expertise and technologies largely to active pharmaceutical ingredients whose safety and efficacy have previously been established but which the Company aims to improve 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 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 September 30, 2020, the operating results and comprehensive loss, and stockholders’ equity for the three and nine months ended September 30, 2020, and cash flows for the nine months ended September 30, 2020 and 2019. The balance sheet as of December 31, 2019 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, 2019 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. Risks and Uncertainties The pandemic caused by an outbreak of a new strain of coronavirus, COVID-19, has resulted, and is likely to continue to result, in significant national and global economic disruption and may adversely affect our business. Sales of the Company’s ALZET product line were negatively impacted in the first nine months of 2020 by COVID-19 and the future impact on sales of the Company’s ALZET and LACTEL product lines are uncertain. For DUR-928, the Company may experience delays in the start of the Phase 2b clinical trial in patients with AH and in the recruitment of patients in its COVID-19 trial, and some patients who completed dosing of the Phase 1b clinical trial in NASH were not able to complete their follow up visits. The Company is also incurring additional expenses to initiate and conduct a clinical trial of DUR-928 in COVID-19 patients. These losses, delays and additional expenses will increase the Company’s cash burn. The Company is actively monitoring the impact of COVID-19 and the possible effects on its financial condition, liquidity, operations, clinical trials, suppliers, industry and workforce. However, the full extent, consequences, and duration of the COVID-19 pandemic and the resulting impact on the Company cannot currently be predicted. The Company will continue to evaluate the impact that these events could have on the Company’s operations, financial position, and the results of operations and cash flows. Liquidity and Need to Raise Additional Capital As of September 30, 2020, the Company had an accumulated deficit of $494.1 million as well as negative cash flows from operating activities for the nine months ended September 30, 2020. The Company historically has had negative cash flows from operating activities and expects its negative cash flows to continue. The Company will continue to require substantial funds to continue research and development, including clinical trials of its product candidates. Management’s plans in order to meet its operating cash flow requirements include seeking additional collaborative agreements for certain of its programs and achieving milestone and other payments under its collaboration and licensing agreements as well as financing activities such as public offerings and private placements of its common stock, preferred stock offerings, issuances of debt and convertible debt instruments. 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 net realizable value, with cost determined on a first-in, first-out basis. The Company may be required to expense previously capitalized inventory costs upon a change in management’s judgment due to new information that suggests that the inventory will not be saleable. If the Company is able to subsequently sell products made with raw materials that were previously written down, the Company will report an unusually high gross profit as there will be no associated cost of goods for these materials. The Company’s inventories consist of the following (in thousands):
September 30, 2020
December 31, 2019
(unaudited)
Raw materials
$
306
$
282
Work in process
1,140
1,537
Finished goods
2,182
1,564
Total inventories
$
3,628
$
3,383
Revenue Recognition The Company enters into license and collaboration agreements under which the Company may receive upfront license fees, research funding and contingent milestone payments and royalties. Product Revenue, Net The Company 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. Revenues from product sales are recognized when the customer obtains control of the Company’s product, which occurs at a point in time, typically upon shipment to the customer. The Company expenses incremental costs of obtaining a contract as and when incurred if the expected amortization period of the asset that the Company would have recognized is one year or less. Trade Discounts and Allowances: The Company provides certain customers with discounts that are explicitly stated in the Company’s contracts and are recorded as a reduction of revenue in the period the related product revenue is recognized. Product Returns: Consistent with industry practice, the Company generally offers customers a limited right of return for products that have been purchased from the Company. The Company estimates the amount of its product sales that may be returned by its customers and records this estimate as a reduction of revenue in the period the related product revenue is recognized. The Company currently estimates product return liabilities using its historical sales information. The Company expects product returns to be minimal. Collaborative Research and Development and Other Revenue The Company enters into license agreements, under which it licenses certain rights to its product candidates to third parties. The terms of these arrangements typically include payment to the Company of one or more of the following: non-refundable, up-front license fees; reimbursement of development costs incurred by the Company under approved work plans; development, regulatory and commercial milestone payments; payments for manufacturing supply services the Company provides through its contract manufacturers; and royalties on net sales of licensed products. Each of these payments results in collaborative research and development revenues, except for revenues from royalties on net sales of licensed products, which are classified as royalty revenues. In determining the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. As part of the accounting for these arrangements, the Company must develop assumptions that require judgment to determine the stand-alone selling price for each performance obligation identified in the contract. The Company uses key assumptions to determine the standalone selling price, which may include forecasted revenues, development timelines, reimbursement rates for personnel costs, discount rates and probabilities of technical and regulatory success. The Company expects to recognize revenue for the variable consideration currently being constrained when it is probable that a significant revenue reversal will not occur. Licenses of intellectual property: If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues from non-refundable, up-front fees allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license. For licenses that are bundled with other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable, up-front fees. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. Any such adjustments are recorded on a cumulative catch-up basis, which would affect collaborative research and development revenues and net income (loss) in the period of adjustment. Milestone Payments: At the inception of each arrangement that includes development milestone payments, the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the control of the Company or the licensee, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. The transaction price is then allocated to each performance obligation on a relative stand-alone selling price basis, for which the Company recognizes revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, the Company re-evaluates the probability of achievement of such development milestones and any related constraint, and if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect collaborative research and development revenues and net income (loss) in the period of adjustment. Manufacturing Supply Services: Arrangements that include a promise for future supply of drug product for either clinical development or commercial supply at the customer’s discretion are generally considered as options. The Company assesses if these options provide a material right to the customer and if so, they are accounted for as separate performance obligations. If the Company is entitled to additional payments when the customer exercises these options, any additional payments are recorded in collaborative research and development revenue when the customer obtains control of the goods, which is upon delivery. Royalties and Earn-outs: For arrangements that include sales-based royalties or earn-outs, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). To date, the Company has not recognized any material royalty revenue resulting from the Company’s collaborative arrangements or material earn-out revenue from the Company’s patent purchase agreement with Indivior. The Company receives payments from its customers based on development cost schedules established in each contract. Up-front payments are recorded as deferred revenue upon receipt or when due, and may require deferral of revenue recognition to a future period until the Company performs its obligations under these arrangements. Amounts are recorded as accounts receivable when the Company’s right to consideration is unconditional. The Company does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customer and the transfer of the promised goods or services to the customer will be one year or less. Total revenue by geographic region (based on the location of the customer) for the three and nine months ended September 30, 2020 and 2019 are as follows (in thousands):
Three months ended September 30,
Nine months ended September 30,
2020
2019
2020
2019
United States
$
1,353
$
8,977
$
26,967
$
14,331
Europe
498
721
2,251
2,104
Japan
338
425
863
1,161
Other
494
640
1,221
1,283
Total
$
2,683
$
10,763
$
31,302
$
18,879
Comprehensive Loss Components of other comprehensive 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 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. The numerators and denominators in the calculation of basic and diluted net loss per share were as follows (in thousands except per share amounts):
Three months ended September 30,
Nine months ended September 30,
2020
2019
2020
2019
Numerators:
Net loss
$
(9,332
)
$
(1,990
)
$
(4,942
)
$
(16,347
)
Denominator:
Weighted average shares used to compute basic net loss per share
201,877
192,039
198,176
172,939
Dilutive common shares from stock options and ESPP




Weighted average shares used to compute diluted net loss per share
201,877
192,039
198,176
172,939
Net loss per share:
Basic
$
(0.05
)
$
(0.01
)
$
(0.02
)
$
(0.09
)
Diluted
$
(0.05
)
$
(0.01
)
$
(0.02
)
$
(0.09
) Options to purchase approximately 7.6 million and 7.3 million shares of common stock were excluded from the denominator in the calculation of diluted net loss per share for the three and nine months ended September 30, 2020, respectively, as the effect would be anti-dilutive. Options to purchase approximately 12.2 million and 26.2 million shares of common stock were excluded from the denominator in the calculation of diluted net loss per share for the three and nine months ended September 30, 2019, respectively, as the effect would be anti-dilutive. Recent Accounting Pronouncements In November 2018, the Financial Accounting Standards Board (the FASB) issued Accounting Standards Update (“ASU”) No. 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606 (ASU 2018-18) The adoption of this standard did not have a material effect on the Company’s financial statements. 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 which eliminates certain disclosure requirements for fair value measurements for all entities, requires public entities to disclose certain new information and modifies some disclosure requirements. fiscal years The adoption of this standard did not have a material effect on the Company’s financial statements. In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, (ASU 2017-04) The adoption of this standard did not have a material effect on the Company’s financial statements. In June 2016, the FASB issued Accounting Standards Update No. 2016-13 (ASU 2016-13) “Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 requires measurement and recognition of expected credit losses for financial assets. This standard is effective for fiscal years beginning after December 15, 2022, including interim reporting periods within those years and must be adopted using a modified retrospective approach, with certain exceptions. Early adoption is permitted. The Company is in the process of assessing the impact of adopting of this standard on its financial statements.

Strategic Agreements

Strategic Agreements9 Months Ended
Sep. 30, 2020
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Strategic AgreementsNote 2. Strategic Agreements The collaborative research and development and other revenues associated with the Company’s collaborators or counterparties are as follows (in thousands):
Three months ended September 30,
Nine months ended September 30,
2020
2019
2020
2019
Collaborator/Counterparty
Gilead (1)
$

$
7,416
$
22,876
$
10,120
Others (2)
306
325
747
760
Total collaborative research and development and other revenue
$
306
$
7,741
$
23,623
$
10,880
(1)
Amounts related to recognition of upfront fee and milestone payment were zero and $22.7 million for the three and nine months ended September 30, 2020, respectively, compared to $6.2 million for each of the corresponding periods in 2019. The Company signed a license agreement with Gilead on July 19, 2019 and received a nonrefundable upfront license fee and a milestone payment totaling $35.0 million in 2019 which was being recognized as revenue as the Company’s obligation was being satisfied (see Agreement with Gilead Sciences, Inc.) In June 2020, the Company received notice that Gilead was terminating the License Agreement and a related R&D agreement between Gilead and the Company. As a result, the Company recognized as revenue all of the remaining upfront fee and milestone payment during the nine months ended September 30, 2020 that had previously been deferred as there were no remaining substantive performance obligations to be provided to Gilead by the Company as of the date when the termination notice was received. Amounts recognized as revenue during each of the three and nine months ended September 30, 2019 also included the Company’s reimbursable collaborative research and development services performed under the Company’s agreement with Gilead.
(2)
Includes: (a) amounts related to earn-out revenue from Indivior UK Limited (Indivior) with respect to PERSERIS net sales; (b) feasibility program(s); and (c) research and development activities funded by Santen pharmaceutical Co. Ltd. (Santen). Note that in January 2018, the Company was notified by Santen that due to a shift in priorities, Santen had elected to reallocate research and development resources and put the Company’s program on pause until further notice. While the main program is on pause, the parties are working together on a limited set of research and development activities funded by Santen. Agreement with Gilead Sciences, Inc. On July 19, 2019, the Company entered into a license agreement (the “Gilead Agreement”) with Gilead Sciences, Inc. (“Gilead”). Pursuant to the Gilead Agreement, the Company granted Gilead the exclusive worldwide rights to develop and commercialize a long-acting injectable HIV product utilizing DURECT’s SABER ® Under the terms of the Gilead Agreement, Gilead made an upfront payment to DURECT of $25 million, and in October 2019, the Company also received a $10 million milestone payment from Gilead for further development of the product candidate. The upfront and milestone consideration of $35 million received in 2019 was being recognized as revenue as the Company’s performance obligations were being satisfied using the cost-to-cost input method, which the Company believed best depicted the transfer of control to the customer. In June 2020, the Company was notified that Gilead was terminating the Gilead Agreement and a related R&D agreement between Gilead and the Company. As a result, we recognized $22.7 million as revenue during the nine months ended September 30, 2020, which represents all of the remaining upfront fee and milestone payment that had previously been deferred as there were no remaining substantive performance obligations to be provided to Gilead by the Company as of the date when the termination notice as received. The following table provides a summary of collaborative research and development revenue recognized under the Gilead Agreement (in thousands).
Three months ended September 30,
Nine months ended September 30,
2020
2019
2020
2019
Recognition of upfront and milestone consideration
$

$
6,198
$
22,679
$
6,198
Research and development expenses reimbursable by Gilead

1,218
197
3,922
Total collaborative research and development revenue
$

$
7,416
$
22,876
$
10,120
Patent Purchase Agreement with Indivior On September 26, 2017, the Company entered into a Patent Purchase Agreement (the “Indivior Agreement”) with Indivior. Pursuant to the Indivior Agreement, the Company assigned to Indivior certain patent rights including granted patents extending through at least 2026. The Indivior Agreement contains customary representations, warranties and indemnities of the parties. Amounts recognized in the three and nine months ended September 30, 2020 and 2019 related to earn-out revenues from PERSERIS have been immaterial and are included in collaborative research and development and other revenue. 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 September 30, 2020). 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. In January 2018, the Company was notified by Santen that due to a shift in near term priorities, Santen elected to reallocate research and development resources and put the Company’s program on pause until further notice. While the main program is on pause, the parties are working together on a limited set of research and development activities funded by Santen. As of September 30, 2020, the cumulative aggregate payments received by the Company under this agreement were $3.3 million.

Financial Instruments

Financial Instruments9 Months Ended
Sep. 30, 2020
Fair Value Disclosures [Abstract]
Financial InstrumentsNote 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 September 30, 2020 is less than twelve months and these investments are rated by S&P and Moody’s at AAA or AA- for securities and A1, A2, P1 or P2 for commercial paper. The following is a summary of available-for-sale securities as of September 30, 2020 and December 31, 2019 (in thousands):
September 30, 2020
Amortized Cost
Unrealized Gain
Unrealized Loss
Estimated Fair Value
Money market funds
$
4,126
$

$

$
4,126
Certificates of deposit
150


150
Commercial paper
25,941
2
(1
)
25,942
Municipal bonds
12,779
11

12,790
Corporate debt
4,505
6

4,511
U.S. Government agencies
1,000


1,000
$
48,501
$
19
$
(1
)
$
48,519
Reported as:
Cash and cash equivalents
$
17,425
$
1
$

$
17,426
Short-term investments
29,926
18
(1
)
29,943
Long-term investments
1,000


1,000
Long-term restricted investments
150


150
$
48,501
$
19
$
(1
)
$
48,519
December 31, 2019
Amortized Cost
Unrealized Gain
Unrealized Loss
Estimated Fair Value
Money market funds
$
524
$

$

$
524
Certificates of deposit
150


150
Commercial paper
47,221
1
(4
)
47,218
U.S. Government agencies
4,500
1

4,501
Corporate debt
9,869
1
(2
)
9,868
$
62,264
$
3
$
(6
)
$
62,261
Reported as:
Cash and cash equivalents
$
32,364
$

$
(3
)
$
32,361
Short-term investments
29,750
3
(3
)
29,750
Long-term restricted investments
150


150
$
62,264
$
3
$
(6
)
$
62,261
The following is a summary of the cost and estimated fair value of available-for-sale securities at September 30, 2020, by contractual maturity (in thousands):
September 30, 2020
Amortized Cost
Estimated Fair Value
Mature in one year or less
$
43,225
$
43,243
$
43,225
$
43,243
There were no securities that have had an unrealized loss for more than 12 months as of September 30, 2020. As of September 30, 2020, 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 Compensation9 Months Ended
Sep. 30, 2020
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Stock-Based CompensationNote 4. Stock-Based Compensation As of September 30, 2020, 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 September 30,
Nine months ended September 30,
2020
2019
2020
2019
Cost of product revenues
$
28
$
21
$
80
$
64
Research and development
259
197
719
543
Selling, general and administrative
347
632
741
1,102
Total stock-based compensation
$
634
$
850
$
1,540
$
1,709
As of September 30, 2020 and 2019, $15,000 and $11,000 of stock-based compensation cost was capitalized in inventory on the Company’s balance sheets, respectively. 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 and shares purchased under its employee stock purchase plan for the three and nine months ended September 30, 2020 and 2019:
Three months ended September 30,
Nine months ended September 30,
2020
2019
2020
2019
Stock Options
Risk-free rate
0.5%
1.5-2.0%
0.5-1.4%
1.5-2.7%
Expected dividend yield




Expected life of option (in years)
7.0-7.3
7.5-10.0
7.0-7.3
7.5-10.0
Volatility
85-86%
80-83%
84-87%
79-83%
Three months ended September 30,
Nine months ended September 30,
2020
2019
2020
2019
Employee Stock Purchase Plan
Risk-free rate
0.1%
2.4%
0.1-1.6%
2.4-2.5%
Expected dividend yield




Expected life of option (in years)
0.5
0.5
0.5
0.5
Volatility
124%
78%
105-124%
60-78%

Term Loan

Term Loan9 Months Ended
Sep. 30, 2020
Debt Disclosure [Abstract]
Term LoanNote 5. Term Loan In July 2016, the Company entered into a $20.0 million secured single-draw term loan with Oxford Finance LLC (Oxford Finance). The Company and Oxford Finance entered into three subsequent amendments to the Loan Agreement in February 2018, November of 2018 and December 2019, for which the Company paid Oxford Finance loan modification fees of $100,000, $900,000 and $825,000 respectively. As amended, the 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 December 1, 2021 and continuing through the maturity date of the term loan of May 1, 2024. The Loan Agreement provides for a floating interest rate (7.95% initially and 7.46% as of September 30, 2020) based on an index rate plus a spread. In addition, a payment equal to 10% of the principal amount of the term loan 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 of between 0.75% and 2.5% of the principal amount of the term loan depending on the timing of prepayment. The $150,000 facility fee that was paid at the original closing, the loan modification fees and other debt offering/issuance costs have been recorded as debt discount on the Company’s balance sheet and together with the final $2.0 million payment are being amortized to interest expense using the effective interest method over the revised term of the loan. 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 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 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 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 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 . The fair value of the term loan approximates the carrying value. Future maturities and interest payments due under the term loan as of September 30, 2020, are as follows (in thousands):
Three months ended December 31, 2020
$
465
2021
3,172
2022
9,381
2023
8,644
2024
4,717
Total minimum payments
26,379
Less amount representing interest
(4,628
)
Gross balance of term loan
21,751
Less unamortized debt discount
(1,072
)
Carrying value of term loan, net
20,679
Less term loan, current portion, net

Term loan, non-current portion, net
$
20,679
As of September 30, 2020, the Company was in compliance with all material covenants under the Loan Agreement and there had been no material adverse change.

Commitments

Commitments9 Months Ended
Sep. 30, 2020
Commitments And Contingencies Disclosure [Abstract]
CommitmentsNote 6. Commitments Operating Leases The Company has lease arrangements for its facilities in California and Alabama as follows.
Location
Approximate Square Feet
Operation
Expiration
Cupertino, CA
30,149 sq. ft.
Office, Laboratory and Manufacturing
Lease expires 2024 (with an option to renew for an additional five years)
Cupertino, CA
20,100 sq. ft.
Office and Laboratory
Lease expires 2024 (with an option to renew for an additional five years)
Vacaville, CA
24,634 sq. ft.
Manufacturing
Lease expires 2023
Birmingham, AL
21,540 sq. ft.
Office, Laboratory and Manufacturing
Lease expires 2021 (with two options to renew the lease term for an additional five years each after the current lease expires) Under these leases, the Company is required to pay certain maintenance expenses in addition to monthly rent. Rent expense is recognized on a straight-line basis over the lease term for leases that have scheduled rental payment increases. Rent expense under all operating leases was $523,000 and $1.7 million for the three and nine months ended September 30, 2020, respectively, compared to $564,000 and $1.7 million for the corresponding periods in 2019. Future minimum payments under these noncancelable leases are as follows (in thousands):
Operating Leases
Three months ended December 31, 2020
$
554
2021
2,126
2022
1,991
2023
1,970
Thereafter
275
$
6,916

Stockholders' Equity

Stockholders' Equity9 Months Ended
Sep. 30, 2020
Equity [Abstract]
Stockholders' EquityNote 7. Stockholders’ Equity In August 2018, the Company filed a shelf registration statement on Form S-3 with the SEC (the “2018 Registration Statement”) (File No. 333-226518), which upon being declared effective in October 2018, terminated the Company’s registration statement filed in November 2015 (File No. 333-207776) and allowed the Company to offer up to $175.0 million of securities from time to time in one or more public offerings, inclusive of up to $75.0 million of shares of the Company’s common stock which the Company may sell, subject to certain limitations, pursuant to a sales agreement dated November 3, 2015 with Cantor Fitzgerald & Co. (the “2015 Sales Agreement”). During the three months ended September 30, 2020, the Company raised net proceeds (net of commissions) of approximately $6.1 million from the sale of 2,697,627 shares of the Company’s common stock in the open market at a weighted average price of $2.32 per share, pursuant to the 2015 Sales Agreement. During the nine months ended September 30, 2020, the Company raised net proceeds (net of commissions) of approximately $12.3 million from the sale of 5,308,002 shares of the Company’s common stock in the open market at a weighted average price of $2.39 per share, pursuant to the 2015 Sales Agreement. During the three months ended September 30, 2019, the Company did not raise any net proceeds through its Controlled Equity Offering sales agreement with Cantor Fitzgerald. During the nine months ended September 30, 2019, the Company raised net proceeds (net of commissions) of approximately $538,900 from the sale of 814,450 shares of the Company’s common stock in the open market at a weighted average price of $0.68 per share, pursuant to the 2015 Sales Agreement. As of October 29, 2020, the Company had up to approximately $143.6 million of the Company’s securities available for sale under the 2018 Registration Statement, of which approximately $58.7 million of the Company’s common stock are available pursuant to the 2015 Sales Agreement.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)9 Months Ended
Sep. 30, 2020
Accounting Policies [Abstract]
Nature of OperationsNature 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 the Company’s Epigenetics Regulator Program, in which the Company attempts to discover and develop molecules which have not previously been approved and marketed as therapeutics, and (ii) proprietary pharmaceutical programs, in which the Company applies its formulation expertise and technologies largely to active pharmaceutical ingredients whose safety and efficacy have previously been established but which the Company aims to improve 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 PresentationBasis of Presentation 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 September 30, 2020, the operating results and comprehensive loss, and stockholders’ equity for the three and nine months ended September 30, 2020, and cash flows for the nine months ended September 30, 2020 and 2019. The balance sheet as of December 31, 2019 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, 2019 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.
Risks And UncertaintiesRisks and Uncertainties The pandemic caused by an outbreak of a new strain of coronavirus, COVID-19, has resulted, and is likely to continue to result, in significant national and global economic disruption and may adversely affect our business. Sales of the Company’s ALZET product line were negatively impacted in the first nine months of 2020 by COVID-19 and the future impact on sales of the Company’s ALZET and LACTEL product lines are uncertain. For DUR-928, the Company may experience delays in the start of the Phase 2b clinical trial in patients with AH and in the recruitment of patients in its COVID-19 trial, and some patients who completed dosing of the Phase 1b clinical trial in NASH were not able to complete their follow up visits. The Company is also incurring additional expenses to initiate and conduct a clinical trial of DUR-928 in COVID-19 patients. These losses, delays and additional expenses will increase the Company’s cash burn. The Company is actively monitoring the impact of COVID-19 and the possible effects on its financial condition, liquidity, operations, clinical trials, suppliers, industry and workforce. However, the full extent, consequences, and duration of the COVID-19 pandemic and the resulting impact on the Company cannot currently be predicted. The Company will continue to evaluate the impact that these events could have on the Company’s operations, financial position, and the results of operations and cash flows.
Liquidity and Need to Raise Additional CapitalLiquidity and Need to Raise Additional Capital As of September 30, 2020, the Company had an accumulated deficit of $494.1 million as well as negative cash flows from operating activities for the nine months ended September 30, 2020. The Company historically has had negative cash flows from operating activities and expects its negative cash flows to continue. The Company will continue to require substantial funds to continue research and development, including clinical trials of its product candidates. Management’s plans in order to meet its operating cash flow requirements include seeking additional collaborative agreements for certain of its programs and achieving milestone and other payments under its collaboration and licensing agreements as well as financing activities such as public offerings and private placements of its common stock, preferred stock offerings, issuances of debt and convertible debt instruments. 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.
InventoriesInventories Inventories are stated at the lower of cost or net realizable value, with cost determined on a first-in, first-out basis. The Company may be required to expense previously capitalized inventory costs upon a change in management’s judgment due to new information that suggests that the inventory will not be saleable. If the Company is able to subsequently sell products made with raw materials that were previously written down, the Company will report an unusually high gross profit as there will be no associated cost of goods for these materials. The Company’s inventories consist of the following (in thousands):
September 30, 2020
December 31, 2019
(unaudited)
Raw materials
$
306
$
282
Work in process
1,140
1,537
Finished goods
2,182
1,564
Total inventories
$
3,628
$
3,383
Revenue RecognitionRevenue Recognition The Company enters into license and collaboration agreements under which the Company may receive upfront license fees, research funding and contingent milestone payments and royalties. Product Revenue, Net The Company 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. Revenues from product sales are recognized when the customer obtains control of the Company’s product, which occurs at a point in time, typically upon shipment to the customer. The Company expenses incremental costs of obtaining a contract as and when incurred if the expected amortization period of the asset that the Company would have recognized is one year or less. Trade Discounts and Allowances: The Company provides certain customers with discounts that are explicitly stated in the Company’s contracts and are recorded as a reduction of revenue in the period the related product revenue is recognized. Product Returns: Consistent with industry practice, the Company generally offers customers a limited right of return for products that have been purchased from the Company. The Company estimates the amount of its product sales that may be returned by its customers and records this estimate as a reduction of revenue in the period the related product revenue is recognized. The Company currently estimates product return liabilities using its historical sales information. The Company expects product returns to be minimal. Collaborative Research and Development and Other Revenue The Company enters into license agreements, under which it licenses certain rights to its product candidates to third parties. The terms of these arrangements typically include payment to the Company of one or more of the following: non-refundable, up-front license fees; reimbursement of development costs incurred by the Company under approved work plans; development, regulatory and commercial milestone payments; payments for manufacturing supply services the Company provides through its contract manufacturers; and royalties on net sales of licensed products. Each of these payments results in collaborative research and development revenues, except for revenues from royalties on net sales of licensed products, which are classified as royalty revenues. In determining the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. As part of the accounting for these arrangements, the Company must develop assumptions that require judgment to determine the stand-alone selling price for each performance obligation identified in the contract. The Company uses key assumptions to determine the standalone selling price, which may include forecasted revenues, development timelines, reimbursement rates for personnel costs, discount rates and probabilities of technical and regulatory success. The Company expects to recognize revenue for the variable consideration currently being constrained when it is probable that a significant revenue reversal will not occur. Licenses of intellectual property: If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues from non-refundable, up-front fees allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license. For licenses that are bundled with other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable, up-front fees. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. Any such adjustments are recorded on a cumulative catch-up basis, which would affect collaborative research and development revenues and net income (loss) in the period of adjustment. Milestone Payments: At the inception of each arrangement that includes development milestone payments, the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the control of the Company or the licensee, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. The transaction price is then allocated to each performance obligation on a relative stand-alone selling price basis, for which the Company recognizes revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, the Company re-evaluates the probability of achievement of such development milestones and any related constraint, and if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect collaborative research and development revenues and net income (loss) in the period of adjustment. Manufacturing Supply Services: Arrangements that include a promise for future supply of drug product for either clinical development or commercial supply at the customer’s discretion are generally considered as options. The Company assesses if these options provide a material right to the customer and if so, they are accounted for as separate performance obligations. If the Company is entitled to additional payments when the customer exercises these options, any additional payments are recorded in collaborative research and development revenue when the customer obtains control of the goods, which is upon delivery. Royalties and Earn-outs: For arrangements that include sales-based royalties or earn-outs, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). To date, the Company has not recognized any material royalty revenue resulting from the Company’s collaborative arrangements or material earn-out revenue from the Company’s patent purchase agreement with Indivior. The Company receives payments from its customers based on development cost schedules established in each contract. Up-front payments are recorded as deferred revenue upon receipt or when due, and may require deferral of revenue recognition to a future period until the Company performs its obligations under these arrangements. Amounts are recorded as accounts receivable when the Company’s right to consideration is unconditional. The Company does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customer and the transfer of the promised goods or services to the customer will be one year or less. Total revenue by geographic region (based on the location of the customer) for the three and nine months ended September 30, 2020 and 2019 are as follows (in thousands):
Three months ended September 30,
Nine months ended September 30,
2020
2019
2020
2019
United States
$
1,353
$
8,977
$
26,967
$
14,331
Europe
498
721
2,251
2,104
Japan
338
425
863
1,161
Other
494
640
1,221
1,283
Total
$
2,683
$
10,763
$
31,302
$
18,879
Comprehensive LossComprehensive Loss Components of other comprehensive 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 Statements of Comprehensive Loss.
Net Loss Per ShareNet 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. The numerators and denominators in the calculation of basic and diluted net loss per share were as follows (in thousands except per share amounts):
Three months ended September 30,
Nine months ended September 30,
2020
2019
2020
2019
Numerators:
Net loss
$
(9,332
)
$
(1,990
)
$
(4,942
)
$
(16,347
)
Denominator:
Weighted average shares used to compute basic net loss per share
201,877
192,039
198,176
172,939
Dilutive common shares from stock options and ESPP




Weighted average shares used to compute diluted net loss per share
201,877
192,039
198,176
172,939
Net loss per share:
Basic
$
(0.05
)
$
(0.01
)
$
(0.02
)
$
(0.09
)
Diluted
$
(0.05
)
$
(0.01
)
$
(0.02
)
$
(0.09
) Options to purchase approximately 7.6 million and 7.3 million shares of common stock were excluded from the denominator in the calculation of diluted net loss per share for the three and nine months ended September 30, 2020, respectively, as the effect would be anti-dilutive. Options to purchase approximately 12.2 million and 26.2 million shares of common stock were excluded from the denominator in the calculation of diluted net loss per share for the three and nine months ended September 30, 2019, respectively, as the effect would be anti-dilutive.
Recent Accounting PronouncementsRecent Accounting Pronouncements In November 2018, the Financial Accounting Standards Board (the FASB) issued Accounting Standards Update (“ASU”) No. 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606 (ASU 2018-18) The adoption of this standard did not have a material effect on the Company’s financial statements. 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 which eliminates certain disclosure requirements for fair value measurements for all entities, requires public entities to disclose certain new information and modifies some disclosure requirements. fiscal years The adoption of this standard did not have a material effect on the Company’s financial statements. In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, (ASU 2017-04) The adoption of this standard did not have a material effect on the Company’s financial statements. In June 2016, the FASB issued Accounting Standards Update No. 2016-13 (ASU 2016-13) “Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 requires measurement and recognition of expected credit losses for financial assets. This standard is effective for fiscal years beginning after December 15, 2022, including interim reporting periods within those years and must be adopted using a modified retrospective approach, with certain exceptions. Early adoption is permitted. The Company is in the process of assessing the impact of adopting of this standard on its financial statements.

Summary of Significant Accoun_3

Summary of Significant Accounting Policies (Tables)9 Months Ended
Sep. 30, 2020
Accounting Policies [Abstract]
Summary of Components of InventoriesThe Company’s inventories consist of the following (in thousands):
September 30, 2020
December 31, 2019
(unaudited)
Raw materials
$
306
$
282
Work in process
1,140
1,537
Finished goods
2,182
1,564
Total inventories
$
3,628
$
3,383
Summary of Total Revenue by Geographic RegionTotal revenue by geographic region (based on the location of the customer) for the three and nine months ended September 30, 2020 and 2019 are as follows (in thousands):
Three months ended September 30,
Nine months ended September 30,
2020
2019
2020
2019
United States
$
1,353
$
8,977
$
26,967
$
14,331
Europe
498
721
2,251
2,104
Japan
338
425
863
1,161
Other
494
640
1,221
1,283
Total
$
2,683
$
10,763
$
31,302
$
18,879
Summary of Numerators and Denominators in Calculation of Basic and Diluted Net Income (Loss) per ShareThe numerators and denominators in the calculation of basic and diluted net loss per share were as follows (in thousands except per share amounts):
Three months ended September 30,
Nine months ended September 30,
2020
2019
2020
2019
Numerators:
Net loss
$
(9,332
)
$
(1,990
)
$
(4,942
)
$
(16,347
)
Denominator:
Weighted average shares used to compute basic net loss per share
201,877
192,039
198,176
172,939
Dilutive common shares from stock options and ESPP




Weighted average shares used to compute diluted net loss per share
201,877
192,039
198,176
172,939
Net loss per share:
Basic
$
(0.05
)
$
(0.01
)
$
(0.02
)
$
(0.09
)
Diluted
$
(0.05
)
$
(0.01
)
$
(0.02
)
$
(0.09
)

Strategic Agreements (Tables)

Strategic Agreements (Tables)9 Months Ended
Sep. 30, 2020
Summary of Collaborative Research and Development and Other Revenues Associated with Company's Collaborators or CounterpartiesThe collaborative research and development and other revenues associated with the Company’s collaborators or counterparties are as follows (in thousands):
Three months ended September 30,
Nine months ended September 30,
2020
2019
2020
2019
Collaborator/Counterparty
Gilead (1)
$

$
7,416
$
22,876
$
10,120
Others (2)
306
325
747
760
Total collaborative research and development and other revenue
$
306
$
7,741
$
23,623
$
10,880
(1)
Amounts related to recognition of upfront fee and milestone payment were zero and $22.7 million for the three and nine months ended September 30, 2020, respectively, compared to $6.2 million for each of the corresponding periods in 2019. The Company signed a license agreement with Gilead on July 19, 2019 and received a nonrefundable upfront license fee and a milestone payment totaling $35.0 million in 2019 which was being recognized as revenue as the Company’s obligation was being satisfied (see Agreement with Gilead Sciences, Inc.) In June 2020, the Company received notice that Gilead was terminating the License Agreement and a related R&D agreement between Gilead and the Company. As a result, the Company recognized as revenue all of the remaining upfront fee and milestone payment during the nine months ended September 30, 2020 that had previously been deferred as there were no remaining substantive performance obligations to be provided to Gilead by the Company as of the date when the termination notice was received. Amounts recognized as revenue during each of the three and nine months ended September 30, 2019 also included the Company’s reimbursable collaborative research and development services performed under the Company’s agreement with Gilead.
(2)
Includes: (a) amounts related to earn-out revenue from Indivior UK Limited (Indivior) with respect to PERSERIS net sales; (b) feasibility program(s); and (c) research and development activities funded by Santen pharmaceutical Co. Ltd. (Santen). Note that in January 2018, the Company was notified by Santen that due to a shift in priorities, Santen had elected to reallocate research and development resources and put the Company’s program on pause until further notice. While the main program is on pause, the parties are working together on a limited set of research and development activities funded by Santen.
Agreement With Gilead Sciences, Inc [Member]
Summary of Collaborative Research and Development Revenue RecognizedThe following table provides a summary of collaborative research and development revenue recognized under the Gilead Agreement (in thousands).
Three months ended September 30,
Nine months ended September 30,
2020
2019
2020
2019
Recognition of upfront and milestone consideration
$

$
6,198
$
22,679
$
6,198
Research and development expenses reimbursable by Gilead

1,218
197
3,922
Total collaborative research and development revenue
$

$
7,416
$
22,876
$
10,120

Financial Instruments (Tables)

Financial Instruments (Tables)9 Months Ended
Sep. 30, 2020
Fair Value Disclosures [Abstract]
Summary of Money Market Funds and Available-for-Sale SecuritiesThe following is a summary of available-for-sale securities as of September 30, 2020 and December 31, 2019 (in thousands):
September 30, 2020
Amortized Cost
Unrealized Gain
Unrealized Loss
Estimated Fair Value
Money market funds
$
4,126
$

$

$
4,126
Certificates of deposit
150


150
Commercial paper
25,941
2
(1
)
25,942
Municipal bonds
12,779
11

12,790
Corporate debt
4,505
6

4,511
U.S. Government agencies
1,000


1,000
$
48,501
$
19
$
(1
)
$
48,519
Reported as:
Cash and cash equivalents
$
17,425
$
1
$

$
17,426
Short-term investments
29,926
18
(1
)
29,943
Long-term investments
1,000


1,000
Long-term restricted investments
150


150
$
48,501
$
19
$
(1
)
$
48,519
December 31, 2019
Amortized Cost
Unrealized Gain
Unrealized Loss
Estimated Fair Value
Money market funds
$
524
$

$

$
524
Certificates of deposit
150


150
Commercial paper
47,221
1
(4
)
47,218
U.S. Government agencies
4,500
1

4,501
Corporate debt
9,869
1
(2
)
9,868
$
62,264
$
3
$
(6
)
$
62,261
Reported as:
Cash and cash equivalents
$
32,364
$

$
(3
)
$
32,361
Short-term investments
29,750
3
(3
)
29,750
Long-term restricted investments
150


150
$
62,264
$
3
$
(6
)
$
62,261
Summary of Cost and Estimated Fair Value of Available-for-Sale Securities by Contractual MaturityThe following is a summary of the cost and estimated fair value of available-for-sale securities at September 30, 2020, by contractual maturity (in thousands):
September 30, 2020
Amortized Cost
Estimated Fair Value
Mature in one year or less
$
43,225
$
43,243
$
43,225
$
43,243

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)9 Months Ended
Sep. 30, 2020
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Summary of Stock-Based Compensation Cost that has been Included in Statements of Comprehensive LossThe stock-based compensation cost that has been included in the statements of comprehensive loss is shown as below (in thousands):
Three months ended September 30,
Nine months ended September 30,
2020
2019
2020
2019
Cost of product revenues
$
28
$
21
$
80
$
64
Research and development
259
197
719
543
Selling, general and administrative
347
632
741
1,102
Total stock-based compensation
$
634
$
850
$
1,540
$
1,709
Summary of Assumptions Used to Estimate Fair Value of Options Granted and Shares PurchasedThe Company used the following assumptions to estimate the fair value of stock options granted and shares purchased under its employee stock purchase plan for the three and nine months ended September 30, 2020 and 2019:
Three months ended September 30,
Nine months ended September 30,
2020
2019
2020
2019
Stock Options
Risk-free rate
0.5%
1.5-2.0%
0.5-1.4%
1.5-2.7%
Expected dividend yield




Expected life of option (in years)
7.0-7.3
7.5-10.0
7.0-7.3
7.5-10.0
Volatility
85-86%
80-83%
84-87%
79-83%
Three months ended September 30,
Nine months ended September 30,
2020
2019
2020
2019
Employee Stock Purchase Plan
Risk-free rate
0.1%
2.4%
0.1-1.6%
2.4-2.5%
Expected dividend yield




Expected life of option (in years)
0.5
0.5
0.5
0.5
Volatility
124%
78%
105-124%
60-78%

Term Loan (Tables)

Term Loan (Tables)9 Months Ended
Sep. 30, 2020
Debt Disclosure [Abstract]
Schedule of Future Maturities and Interest Payments due under Term LoanThe fair value of the term loan approximates the carrying value. Future maturities and interest payments due under the term loan as of September 30, 2020, are as follows (in thousands):
Three months ended December 31, 2020
$
465
2021
3,172
2022
9,381
2023
8,644
2024
4,717
Total minimum payments
26,379
Less amount representing interest
(4,628
)
Gross balance of term loan
21,751
Less unamortized debt discount
(1,072
)
Carrying value of term loan, net
20,679
Less term loan, current portion, net

Term loan, non-current portion, net
$
20,679

Commitments (Tables)

Commitments (Tables)9 Months Ended
Sep. 30, 2020
Commitments And Contingencies Disclosure [Abstract]
Summary of Lease Arrangements of Company FacilitiesThe Company has lease arrangements for its facilities in California and Alabama as follows.
Location
Approximate Square Feet
Operation
Expiration
Cupertino, CA
30,149 sq. ft.
Office, Laboratory and Manufacturing
Lease expires 2024 (with an option to renew for an additional five years)
Cupertino, CA
20,100 sq. ft.
Office and Laboratory
Lease expires 2024 (with an option to renew for an additional five years)
Vacaville, CA
24,634 sq. ft.
Manufacturing
Lease expires 2023
Birmingham, AL
21,540 sq. ft.
Office, Laboratory and Manufacturing
Lease expires 2021 (with two options to renew the lease term for an additional five years each after the current lease expires)
Schedule of Future Operating Lease Minimum PaymentsFuture minimum payments under these noncancelable leases are as follows (in thousands):
Operating Leases
Three months ended December 31, 2020
$
554
2021
2,126
2022
1,991
2023
1,970
Thereafter
275
$
6,916

Summary of Significant Accoun_4

Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) $ in Thousands, shares in Millions3 Months Ended9 Months Ended
Sep. 30, 2020Sep. 30, 2019Sep. 30, 2020Sep. 30, 2019Dec. 31, 2019
Accounting Policies [Abstract]
Date of incorporationFeb. 6,
1998
Accumulated deficit $ 494,144 $ 494,144 $ 489,202
Options to purchase common stock excluded from computation of diluted net loss per share7.6 12.2 7.3 26.2

Summary of Significant Accoun_5

Summary of Significant Accounting Policies - Summary of Components of Inventories (Detail) - USD ($) $ in ThousandsSep. 30, 2020Dec. 31, 2019
Inventory Net [Abstract]
Raw materials $ 306 $ 282
Work in process1,140 1,537
Finished goods2,182 1,564
Total inventories $ 3,628 $ 3,383

Summary of Significant Accoun_6

Summary of Significant Accounting Policies - Summary of Total Revenue by Geographic Region (Detail) - USD ($) $ in Thousands3 Months Ended9 Months Ended
Sep. 30, 2020Sep. 30, 2019Sep. 30, 2020Sep. 30, 2019
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue $ 2,683 $ 10,763 $ 31,302 $ 18,879
United States [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue1,353 8,977 26,967 14,331
Europe [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue498 721 2,251 2,104
Japan [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue338 425 863 1,161
Other [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue $ 494 $ 640 $ 1,221 $ 1,283

Summary of Significant Accoun_7

Summary of Significant Accounting Policies - Summary of Numerators and Denominators in Calculation of Basic and Diluted Net Loss per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands3 Months Ended9 Months Ended
Sep. 30, 2020Jun. 30, 2020Mar. 31, 2020Sep. 30, 2019Jun. 30, 2019Mar. 31, 2019Sep. 30, 2020Sep. 30, 2019
Numerators:
Net income (loss) $ (9,332) $ 14,338 $ (9,948) $ (1,990) $ (7,227) $ (7,130) $ (4,942) $ (16,347)
Denominator:
Basic201,877 192,039 198,176 172,939
Dilutive common shares from stock options and ESPP0 0 0 0
Weighted average shares used to compute diluted net loss per share201,877 192,039 198,176 172,939
Net loss per share
Basic $ (0.05) $ (0.01) $ (0.02) $ (0.09)
Diluted $ (0.05) $ (0.01) $ (0.02) $ (0.09)

Strategic Agreements - Summary

Strategic Agreements - Summary of Collaborative Research and Development and Other Revenues Associated with Company's Collaborators or Counterparties (Detail) - USD ($) $ in ThousandsJul. 19, 2019Sep. 30, 2020Sep. 30, 2019Sep. 30, 2020Sep. 30, 2019Dec. 31, 2019
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Revenue $ 2,683 $ 10,763 $ 31,302 $ 18,879
Collaborative Research and Development and Other Revenue [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Revenue306 7,741 23,623 10,880
Agreement with Gilead [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Revenue $ 25,000 22,700 $ 35,000
Agreement with Gilead [Member] | Collaborative Research and Development and Other Revenue [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Revenue[1]7,416 22,876 10,120
Agreements With Other Collaborators or Counterparties [Member] | Collaborative Research and Development and Other Revenue [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Revenue[2] $ 306 $ 325 $ 747 $ 760
[1]Amounts related to recognition of upfront fee and milestone payment were zero and $22.7 million for the three and nine months ended September 30, 2020, respectively, compared to $6.2 million for each of the corresponding periods in 2019. The Company signed a license agreement with Gilead on July 19, 2019 and received a nonrefundable upfront license fee and a milestone payment totaling $35.0 million in 2019 which was being recognized as revenue as the Company’s obligation was being satisfied (see Agreement with Gilead Sciences, Inc.) In June 2020, the Company received notice that Gilead was terminating the License Agreement and a related R&D agreement between Gilead and the Company. As a result, the Company recognized as revenue all of the remaining upfront fee and milestone payment during the nine months ended September 30, 2020 that had previously been deferred as there were no remaining substantive performance obligations to be provided to Gilead by the Company as of the date when the termination notice was received. Amounts recognized as revenue during each of the three and nine months ended September 30, 2019 also included the Company’s reimbursable collaborative research and development services performed under the Company’s agreement with Gilead.
[2]Includes: (a) amounts related to earn-out revenue from Indivior UK Limited (Indivior) with respect to PERSERIS net sales; (b) feasibility program(s); and (c) research and development activities funded by Santen pharmaceutical Co. Ltd. (Santen). Note that in January 2018, the Company was notified by Santen that due to a shift in priorities, Santen had elected to reallocate research and development resources and put the Company’s program on pause until further notice. While the main program is on pause, the parties are working together on a limited set of research and development activities funded by Santen.

Strategic Agreements - Summar_2

Strategic Agreements - Summary of Collaborative Research and Development and Other Revenues Associated with Company's Collaborators or Counterparties (Parenthetical) (Detail) - USD ($) $ in ThousandsJul. 19, 2019Sep. 30, 2020Sep. 30, 2019Sep. 30, 2020Sep. 30, 2019Dec. 31, 2019
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Total revenues $ 2,683 $ 10,763 $ 31,302 $ 18,879
Agreement with Gilead [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Amount related to the milestone payment earned $ 0 $ 6,198 22,679 $ 6,198
Total revenues $ 25,000 $ 22,700 $ 35,000

Strategic Agreements - Agreemen

Strategic Agreements - Agreement with Gilead Sciences, Inc - Additional Information (Detail) - USD ($) $ in ThousandsJul. 19, 2019Oct. 31, 2019Sep. 30, 2020Sep. 30, 2019Sep. 30, 2020Sep. 30, 2019Dec. 31, 2019
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Total revenues $ 2,683 $ 10,763 $ 31,302 $ 18,879
Revenue $ 2,683 $ 10,763 31,302 $ 18,879
Agreement with Gilead [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Total revenues $ 25,000 22,700 $ 35,000
Amount related to the milestone payment earned $ 10,000
Performance milestone payments based on successful development35,000
Revenue $ 25,000 $ 22,700 $ 35,000

Strategic Agreements - Summar_3

Strategic Agreements - Summary of Collaborative Research and Development Revenue Recognized (Detail) - USD ($) $ in ThousandsJul. 19, 2019Sep. 30, 2020Sep. 30, 2019Sep. 30, 2020Sep. 30, 2019Dec. 31, 2019
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Total collaborative research and development revenue $ 2,683 $ 10,763 $ 31,302 $ 18,879
Agreement with Gilead [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Amount related to the milestone payment earned $ 0 6,198 22,679 6,198
Research and development expenses reimbursable by Gilead1,218 197 3,922
Total collaborative research and development revenue $ 25,000 22,700 $ 35,000
Agreement with Gilead [Member] | Collaborative Research and Devlopment Revenue [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Total collaborative research and development revenue $ 7,416 $ 22,876 $ 10,120

Strategic Agreements - Patent P

Strategic Agreements - Patent Purchase Agreement with Indivior - Additional Information (Detail)Sep. 26, 2017
Patent Purchase Agreement with Indivior [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Granted patents extending year, minimum2026

Strategic Agreements - Agreem_2

Strategic Agreements - Agreement with Santen Pharmaceutical Co., Ltd. - Additional Information (Detail) - USD ($)Dec. 11, 2014Sep. 30, 2020Sep. 30, 2019Sep. 30, 2020Sep. 30, 2019
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Total revenues $ 2,683,000 $ 10,763,000 $ 31,302,000 $ 18,879,000
Agreement with Santen Pharmaceutical Co., Ltd. [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Cumulative aggregate payments received by the Company3,300,000
Agreement with Santen Pharmaceutical Co., Ltd. [Member] | License Fees [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Total revenues $ 2,000,000
Agreement with Santen Pharmaceutical Co., Ltd. [Member] | Maximum [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Future milestone payments76,000,000
Agreement with Santen Pharmaceutical Co., Ltd. [Member] | Development-Based Milestones [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Future milestone payments13,000,000
Agreement with Santen Pharmaceutical Co., Ltd. [Member] | 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 ThousandsSep. 30, 2020Dec. 31, 2019
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost $ 48,501 $ 62,264
Unrealized Gain19 3
Unrealized Loss(1)(6)
Estimated Fair Value48,519 62,261
Money market funds [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost4,126 524
Estimated Fair Value4,126 524
Certificates of deposit [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost150 150
Estimated Fair Value150 150
Commercial paper [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost25,941 47,221
Unrealized Gain2 1
Unrealized Loss(1)(4)
Estimated Fair Value25,942 47,218
Municipal bonds [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost12,779
Unrealized Gain11
Estimated Fair Value12,790
U.S. Government agencies [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost1,000 4,500
Unrealized Gain1
Estimated Fair Value1,000 4,501
Corporate debt [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost4,505 9,869
Unrealized Gain6 1
Unrealized Loss(2)
Estimated Fair Value4,511 9,868
Cash and cash equivalents [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost17,425 32,364
Unrealized Gain1
Unrealized Loss(3)
Estimated Fair Value17,426 32,361
Short-term investments [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost29,926 29,750
Unrealized Gain18 3
Unrealized Loss(1)(3)
Estimated Fair Value29,943 29,750
Long-term restricted investments [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost150 150
Estimated Fair Value150 $ 150
Long Term Investments [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost1,000
Estimated Fair Value $ 1,000

Financial Instruments - Summa_2

Financial Instruments - Summary of Cost and Estimated Fair Value of Available-for-Sale Securities by Contractual Maturity (Detail) $ in ThousandsSep. 30, 2020USD ($)
Investments Debt And Equity Securities [Abstract]
Mature in one year or less, Amortized Cost $ 43,225
Amortized Cost43,225
Mature in one year or less, Estimated Fair Value43,243
Estimated Fair Value $ 43,243

Financial Instruments - Additio

Financial Instruments - Additional Information (Detail)Sep. 30, 2020USD ($)
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 Thousands3 Months Ended9 Months Ended
Sep. 30, 2020Sep. 30, 2019Sep. 30, 2020Sep. 30, 2019
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock-based compensation $ 634 $ 850 $ 1,540 $ 1,709
Cost of product revenues [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock-based compensation28 21 80 64
Research and development [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock-based compensation259 197 719 543
Selling, general and administrative [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock-based compensation $ 347 $ 632 $ 741 $ 1,102

Stock-Based Compensation - Addi

Stock-Based Compensation - Additional Information (Detail) - USD ($)9 Months Ended
Sep. 30, 2020Sep. 30, 2019
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Stock-based compensation cost capitalized in inventory $ 15,000 $ 11,000

Stock-Based Compensation - Su_2

Stock-Based Compensation - Summary of Assumptions Used to Estimate Fair Value of Options Granted and Shares Purchased (Detail)3 Months Ended9 Months Ended
Sep. 30, 2020Sep. 30, 2019Sep. 30, 2020Sep. 30, 2019
Employees Stock Purchase Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free rate, minimum0.10%2.40%0.10%2.40%
Risk-free rate, maximum1.60%2.50%
Expected dividend yield0.00%0.00%0.00%0.00%
Expected life of option (in years)6 months6 months6 months6 months
Minimum [Member] | Employees Stock Purchase Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Volatility124.00%78.00%105.00%60.00%
Maximum [Member] | Employees Stock Purchase Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Volatility124.00%78.00%
Stock Option Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free rate, minimum0.50%1.50%0.50%1.50%
Risk-free rate, maximum2.00%1.40%2.70%
Expected dividend yield0.00%0.00%0.00%0.00%
Volatility, minimum85.00%80.00%84.00%79.00%
Volatility, maximum86.00%83.00%87.00%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)7 years7 years 6 months7 years7 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)7 years 3 months 18 days10 years7 years 3 months 18 days10 years

Term Loan - Additional Informat

Term Loan - Additional Information (Detail) - USD ($)1 Months Ended
Dec. 31, 2019Nov. 30, 2018Feb. 28, 2018Jul. 31, 2016Sep. 30, 2020
Debt Instrument [Line Items]
Loan modification fee $ 825,000,000
Oxford Finance LLC Term Loan [Member]
Debt Instrument [Line Items]
Secured term loan $ 20,000,000
Term loan repayment descriptionAs amended, the 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 December 1, 2021 and continuing through the maturity date of the term loan of May 1, 2024
First principal payment dateDec. 1,
2021
Term loan, maturity dateMay 1,
2024
Interest rate on term loan7.95%7.46%
Term loan, floating interest rate basisan index rate plus a spread
Facility fee paid at final payment $ 150,000
Percentage of an additional payment equal to principal amount10.00%
Debt offering/issuance costs $ 2,000,000
Loan modification fee $ 900,000 $ 100,000
Oxford Finance LLC Term Loan [Member] | Minimum [Member]
Debt Instrument [Line Items]
Percentage of prepayment fee0.75%
Oxford Finance LLC Term Loan [Member] | Maximum [Member]
Debt Instrument [Line Items]
Percentage of prepayment fee2.50%

Term Loan - Schedule of Future

Term Loan - Schedule of Future Maturities and Interest Payments due under Term Loan (Detail) - USD ($) $ in ThousandsSep. 30, 2020Dec. 31, 2019
Future maturities and interest payments under the term loan:
Three months ended December 31, 2020 $ 465
20213,172
20229,381
20238,644
20244,717
Total minimum payments26,379
Less amount representing interest(4,628)
Gross balance of term loan21,751
Less unamortized debt discount(1,072)
Carrying value of term loan, net20,679
Term loan, non-current portion, net $ 20,679 $ 20,262

Commitments - Summary of Lease

Commitments - Summary of Lease Arrangements of Company Facilities (Detail)9 Months Ended
Sep. 30, 2020ft²Option
Vacaville, CA [Member] | Manufacturing [Member]
Property Subject To Or Available For Operating Lease [Line Items]
Approximate Square Feet24,634
ExpirationLease expires 2023
Lease expiration year2023
Birmingham, AL [Member] | Office, Laboratory and Manufacturing [Member]
Property Subject To Or Available For Operating Lease [Line Items]
Approximate Square Feet21,540
ExpirationLease expires 2021 (with two options to renew the lease term for an additional five years each after the current lease expires)
Lease expiration year2021
Lease renewal term5 years
Number of renewal option for lease | Option2
Cupertino, CA [Member] | Office, Laboratory and Manufacturing [Member]
Property Subject To Or Available For Operating Lease [Line Items]
Lease expiration year2024
Lease renewal term5 years
Cupertino, CA [Member] | Office, Laboratory and Manufacturing [Member] | Lease Amendment [Member]
Property Subject To Or Available For Operating Lease [Line Items]
Approximate Square Feet30,149
ExpirationLease expires 2024 (with an option to renew for an additional five years)
Cupertino, CA [Member] | Office and Laboratory [Member]
Property Subject To Or Available For Operating Lease [Line Items]
Lease expiration year2024
Lease renewal term5 years
Cupertino, CA [Member] | Office and Laboratory [Member] | Lease Amendment [Member]
Property Subject To Or Available For Operating Lease [Line Items]
Approximate Square Feet20,100
ExpirationLease expires 2024 (with an option to renew for an additional five years)
 

Commitments - Additional Inform

Commitments - Additional Information (Detail) - USD ($) $ in Thousands3 Months Ended9 Months Ended
Sep. 30, 2020Sep. 30, 2019Sep. 30, 2020Sep. 30, 2019
Commitments And Contingencies Disclosure [Abstract]
Rent expenses of operating leases $ 523,000 $ 564,000 $ 1,700 $ 1,700

Commitments - Schedule of Futur

Commitments - Schedule of Future Operating Lease Minimum Payments (Detail) $ in ThousandsSep. 30, 2020USD ($)
Leases [Abstract]
Three months ended December 31, 2020 $ 554
20212,126
20221,991
20231,970
Thereafter275
Total operating leases future minimum payments $ 6,916

Stockholders' Equity - Addition

Stockholders' Equity - Additional Information (Detail) - USD ($) $ / shares in Units, shares in Thousands3 Months Ended9 Months Ended
Sep. 30, 2020Sep. 30, 2019Sep. 30, 2020Sep. 30, 2019Oct. 29, 2020Oct. 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Proceeds from sale of common stock, net of commission $ 15,213,000 $ 15,649,000
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Securities offered $ 175,000,000
2015 Sales Agreement [Member] | IPO [Member] | Subsequent Event [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock available for sale $ 58,700,000
2015 Sales Agreement [Member] | Cantor Fitzgerald Co [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Proceeds from sale of common stock, net of commission $ 6,100,000 $ 12,300,000 $ 538,900,000
Sale of common stock during period2,697,627 0 5,308,002 814,450
Common stock weighted average price $ 2.32 $ 2.39 $ 0.68
2015 Sales Agreement [Member] | Cantor Fitzgerald Co [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Securities offered $ 75,000,000
2018 Registration Statement [Member] | Maximum [Member] | Subsequent Event [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock available for sale $ 143,600,000