Cover Page
Cover Page - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 21, 2020 | Jun. 30, 2019 | |
Cover page. | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Transition Report | false | ||
Entity File Number | 0-30739 | ||
Entity Registrant Name | INSMED INC | ||
Entity Address, Address Line One | 700 US Highway 202/206 | ||
Entity Address, Address Line Two | |||
Entity Address, City or Town | Bridgewater | ||
Entity Incorporation, State or Country Code | VA | ||
Entity Tax Identification Number | 54-1972729 | ||
Entity Address, State or Province | NJ | ||
Entity Address, Postal Zip Code | 08807 | ||
City Area Code | 908 | ||
Local Phone Number | 977-9900 | ||
Title of 12(b) Security | Common Stock, par value $0.01 per share | ||
Trading Symbol | INSM | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 2.3 | ||
Entity Common Stock, Shares Outstanding | 89,775,696 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001104506 | ||
Current Fiscal Year End Date | --12-31 | ||
Documents Incorporated by Reference | Portions of the registrant's definitive Proxy Statement for its 2020 Annual Meeting of Shareholders to be filed with the Securities and Exchange Commission no later than April 29, 2020 an |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 487,429 | $ 495,072 |
Accounts receivable | 19,232 | 5,515 |
Inventory | 28,313 | 7,032 |
Prepaid expenses and other current assets | 20,220 | 11,327 |
Total current assets | 555,194 | 518,946 |
Intangibles, net | 53,682 | 58,675 |
Fixed assets, net | 60,180 | 22,636 |
Finance lease right-of-use assets | 15,256 | |
Operating lease right-of-use assets | 37,673 | |
Other assets | 20,314 | 4,299 |
Total assets | 742,299 | 604,556 |
Current liabilities: | ||
Accounts payable | 13,184 | 17,741 |
Accrued expenses | 40,375 | 38,254 |
Accrued compensation | 19,140 | 22,208 |
Finance lease liabilities | 1,221 | |
Operating lease liabilities | 11,040 | |
Other current liabilities | 280 | 1,529 |
Total current liabilities | 85,240 | 79,732 |
Debt, long-term | 335,940 | 316,558 |
Finance lease liabilities, long-term | 19,529 | |
Long-term lease liabilities | 29,308 | |
Other long-term liabilities | 10,608 | 0 |
Total liabilities | 480,625 | 396,290 |
Shareholders' equity: | ||
Common stock, $0.01 par value; 500,000,000 authorized shares, 89,682,387 and 77,307,521 issued and outstanding shares at December 31, 2019 and December 31, 2018, respectively | 897 | 773 |
Additional paid-in capital | 1,797,286 | 1,489,664 |
Accumulated deficit | (1,536,499) | (1,282,162) |
Accumulated other comprehensive loss | (10) | (9) |
Total shareholders' equity | 261,674 | 208,266 |
Total liabilities and shareholders' equity | $ 742,299 | $ 604,556 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized shares (in shares) | 500,000,000 | 500,000,000 |
Common stock, issued shares (in shares) | 89,682,387 | 77,307,521 |
Common stock, outstanding shares (in shares) | 89,682,387 | 77,307,521 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | |||
Revenues, net | $ 136,467 | $ 9,835 | $ 0 |
Cost of product revenues (excluding amortization of intangible assets) | 24,212 | 2,423 | 0 |
Gross profit | 112,255 | 7,412 | 0 |
Operating expenses: | |||
Research and development | 131,711 | 145,283 | 109,749 |
Selling, general and administrative | 210,796 | 168,218 | 79,171 |
Amortization of intangible assets | 4,993 | 1,249 | 0 |
Total operating expenses | 347,500 | 314,750 | 188,920 |
Operating loss | (235,245) | (307,338) | (188,920) |
Investment income | 9,921 | 10,341 | 1,624 |
Interest expense | (27,705) | (25,472) | (5,925) |
Loss on extinguishment of debt | 0 | (2,209) | 0 |
Other (expense) income, net | (531) | 602 | 300 |
Loss before income taxes | (253,560) | (324,076) | (192,921) |
Provision (benefit) for income taxes | 777 | 201 | (272) |
Net loss | $ (254,337) | $ (324,277) | $ (192,649) |
Basic and diluted net loss (in dollars per share) | $ (3.01) | $ (4.22) | $ (2.89) |
Weighted average basic and diluted common shares outstanding (in shares) | 84,560 | 76,889 | 66,576 |
Net loss | $ (254,337) | $ (324,277) | $ (192,649) |
Other comprehensive income (loss): | |||
Foreign currency translation (losses) gains | (1) | (6) | 62 |
Total comprehensive loss | $ (254,338) | $ (324,283) | $ (192,587) |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss |
Balance at Dec. 31, 2016 | $ 154,483 | $ 620 | $ 919,164 | $ (765,236) | $ (65) |
Balance (in shares) at Dec. 31, 2016 | 62,020,000 | ||||
Comprehensive income (loss) | |||||
Net loss | (192,649) | (192,649) | |||
Other comprehensive income (loss) | 62 | 62 | |||
Exercise of stock options and ESPP shares | $ 3,433 | $ 4 | 3,429 | ||
Exercise of stock options (in shares) | 378,275 | 379,000 | |||
Net proceeds from issuance of common stock | $ 377,656 | $ 141 | 377,515 | ||
Net proceeds from issuance of common stock (in shares) | 14,123,000 | ||||
Issuance of common stock for vesting of RSUs | 1 | $ 1 | |||
Issuance of common stock for vesting of RSUs (in shares) | 89,000 | ||||
Stock compensation expense | 18,073 | 18,073 | |||
Balance at Dec. 31, 2017 | 361,059 | $ 766 | 1,318,181 | (957,885) | (3) |
Balance (in shares) at Dec. 31, 2017 | 76,611,000 | ||||
Comprehensive income (loss) | |||||
Net loss | (324,277) | (324,277) | |||
Other comprehensive income (loss) | (6) | (6) | |||
Exercise of stock options and ESPP shares | $ 8,815 | $ 6 | 8,809 | ||
Exercise of stock options (in shares) | 494,351 | 645,000 | |||
Equity component of convertible debt | $ 136,434 | 136,434 | |||
Issuance of common stock for vesting of RSUs | 1 | $ 1 | |||
Issuance of common stock for vesting of RSUs (in shares) | 52,000 | ||||
Stock compensation expense | 26,240 | 26,240 | |||
Balance at Dec. 31, 2018 | 208,266 | $ 773 | 1,489,664 | (1,282,162) | (9) |
Balance (in shares) at Dec. 31, 2018 | 77,308,000 | ||||
Comprehensive income (loss) | |||||
Net loss | (254,337) | (254,337) | |||
Other comprehensive income (loss) | (1) | (1) | |||
Exercise of stock options and ESPP shares | $ 19,700 | $ 16 | 19,684 | ||
Exercise of stock options (in shares) | 1,413,341 | 1,632,000 | |||
Net proceeds from issuance of common stock | $ 261,074 | $ 107 | 260,967 | ||
Net proceeds from issuance of common stock (in shares) | 10,658,000 | ||||
Issuance of common stock for vesting of RSUs | 1 | $ 1 | |||
Issuance of common stock for vesting of RSUs (in shares) | 84,000 | ||||
Stock compensation expense | 26,971 | 26,971 | |||
Balance at Dec. 31, 2019 | $ 261,674 | $ 897 | $ 1,797,286 | $ (1,536,499) | $ (10) |
Balance (in shares) at Dec. 31, 2019 | 89,682,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Operating activities | |||
Net loss | $ (254,337) | $ (324,277) | $ (192,649) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation | 5,188 | 3,577 | 2,901 |
Amortization of intangible assets | 4,993 | 1,249 | 0 |
Stock-based compensation expense | 26,971 | 26,240 | 18,073 |
Loss on extinguishment of debt | 0 | 2,209 | 0 |
Amortization of debt issuance costs | 1,397 | 1,350 | 118 |
Accretion of debt discount and back-end fee on debt | 17,985 | 15,939 | 658 |
Noncash operating lease expense | 360 | ||
Noncash operating lease expense | 9,763 | ||
Changes in operating assets and liabilities: | |||
Accounts receivable | (13,717) | (5,515) | 0 |
Inventory | (21,281) | (7,032) | 0 |
Prepaid expenses and other current assets | (8,718) | (5,514) | (2,783) |
Other assets | (16,008) | 0 | 0 |
Accounts payable | (4,966) | 3,870 | 3,604 |
Accrued expenses and other | 4,789 | 19,916 | 5,201 |
Accrued compensation | (3,068) | 10,011 | 5,260 |
Net cash used in operating activities | (250,649) | (257,977) | (159,617) |
Investing activities | |||
Purchase of fixed assets | (42,268) | (13,090) | (3,001) |
PARI milestone upon FDA approval | 0 | (1,724) | 0 |
Net cash used in investing activities | (42,268) | (14,814) | (3,001) |
Financing activities | |||
Proceeds from issuance of 1.75% convertible senior notes due 2025 | 0 | 450,000 | 0 |
Payment on extinguishment of debt | 0 | (2,835) | 0 |
Payment of debt | 0 | (55,000) | 0 |
Proceeds from issuance of common stock, net | 261,074 | 0 | 377,656 |
Proceeds from exercise of stock options, ESPP, and RSU vesting | 19,701 | 8,815 | 3,433 |
Payment of debt issuance costs | 0 | (14,237) | 0 |
Proceeds from tenant improvement allowance | 4,503 | ||
Net cash provided by financing activities | 285,278 | 386,743 | 381,089 |
Effect of exchange rates on cash and cash equivalents | (4) | (45) | 103 |
Net (decrease) increase in cash and cash equivalents | (7,643) | 113,907 | 218,574 |
Cash and cash equivalents at beginning of period | 495,072 | 381,165 | 162,591 |
Cash and cash equivalents at end of period | 487,429 | 495,072 | 381,165 |
Supplemental disclosures of cash flow information: | |||
Cash paid for interest | 7,883 | 6,289 | 5,165 |
Cash paid for income taxes | $ 339 | $ 154 | $ 166 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Parenthetical) | Dec. 31, 2019 |
1.75% convertible senior note due 2025 | Convertible Notes Payable | |
Interest rate (as a percent) | 1.75% |
Description of Business and Bas
Description of Business and Basis of Presentation | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Basis of Presentation | Description of Business and Basis of Presentation Description of Business —Insmed is a global biopharmaceutical company on a mission to transform the lives of patients with serious and rare diseases. The Company's first commercial product, ARIKAYCE (amikacin liposome inhalation suspension), received accelerated approval in the U nited States (US) in September 2018 for the treatment of Mycobacterium avium complex (MAC) lung disease as part of a combination antibacterial drug regimen for adult patients with limited or no alternative treatment options. Nontuberculous mycobacterial (NTM) lung disease caused by MAC (which the Company refers to as MAC lung disease) is a rare and often chronic infection that can cause irreversible lung damage and can be fatal. The Company's clinical-stage pipeline includes INS1007 and INS1009. INS1007 is a novel oral, reversible inhibitor of dipeptidyl peptidase 1 (DPP1) with therapeutic potential in non-cystic fibrosis bronchiectasis and other inflammatory diseases. INS1009 is an inhaled formulation of a treprostinil prodrug that may offer a differentiated product profile for rare pulmonary disorders, including pulmonary arterial hypertension (PAH). The Company was incorporated in the Commonwealth of Virginia on November 29, 1999 and its principal executive offices are located in Bridgewater, New Jersey. The Company has legal entities in the US, France, Germany, Ireland, Italy, the Netherlands, the United Kingdom (UK), Switzerland, Japan, and Bermuda. The Company had $487.4 million in cash and cash equivalents as of December 31, 2019 and reported a net loss of $254.3 million for the year ended December 31, 2019. Historically, the Company has funded its operations primarily through public offerings of equity securities and debt financings. The Company commenced commercial shipments of ARIKAYCE in October 2018. The Company expects to continue to incur operating losses both at its US and certain international entities while funding research and development (R&D) activities for ARIKAYCE and its other pipeline programs, continuing commercialization activities for ARIKAYCE in the US, continuing to invest in pre-commercial and regulatory activities for ARIKAYCE in Europe and Japan, and funding other general and administrative activities. The Company expects its future cash requirements to be substantial, and the Company may need to raise additional capital to fund operations, including the commercialization of ARIKAYCE and additional clinical trials related to ARIKAYCE, to develop INS1007 and INS1009 and to develop, acquire, in-license or co-promote other products or product candidates, including those that address orphan or rare diseases. The source, timing and availability of any future financing or other transaction will depend principally upon continued progress in the Company’s commercial, regulatory and development activities. Any equity or debt financing will also be contingent upon equity and debt market conditions and interest rates at the time. If the Company is unable to obtain sufficient additional funds when required, the Company may be forced to delay, restrict or eliminate all or a portion of its development programs, commercialization or business development efforts. The Company believes it currently has sufficient funds to meet its financial needs for at least the next 12 months. Basis of Presentation —The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Celtrix Pharmaceuticals, Inc., Insmed Holdings Limited, Insmed Ireland Limited, Insmed France SAS, Insmed Germany GmbH, Insmed Limited, Insmed Netherlands B.V., Insmed Bermuda Limited, Insmed Godo Kaisha, Insmed Switzerland GmbH, and Insmed Italy S.R.L.. All intercompany transactions and balances have been eliminated in consolidation. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Use of Estimates —The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States (GAAP) requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The Company bases its estimates and judgments on historical experience and on various other assumptions. The amounts of assets and liabilities reported in the Company's balance sheets and the amounts of revenues and expenses reported for each period presented are affected by estimates and assumptions, which are used for, but not limited to, the accounting for revenue allowances, stock-based compensation, income taxes, loss contingencies, and accounting for research and development costs. Actual results could differ from those estimates. Investment Income and Interest Expense —Investment income consists of interest income earned on the Company's cash and cash equivalents. Interest expense consists primarily of interest costs related to the Company's debt. Cash and Cash Equivalents —The Company considers cash equivalents to be highly liquid investments with maturities of three months or less from the date of purchase. Fixed Assets, Net —Fixed assets are recorded at cost and are depreciated on a straight-line basis over the estimated useful lives of the assets. Estimated useful lives of three years to five years are used for computer equipment. Estimated useful lives of seven years are used for laboratory equipment, office equipment, manufacturing equipment and furniture and fixtures. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the asset. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, then an impairment charge is recognized for the amount by which the carrying value of the asset exceeds the fair value of the asset. Intangible Assets, Net —Finite-lived intangible assets are measured at their respective fair values on the date they were recorded and, with respect to the acquired ARIKAYCE R&D intangible asset, at the date of subsequent adjustments of fair value. The fair values assigned to the Company's intangible assets are based on reasonable estimates and assumptions given available facts and circumstances. Impairment Assessment —The Company reviews the recoverability of its finite-lived intangible assets and long-lived assets for indicators of impairments. Events or circumstances that may require an impairment assessment include negative clinical trial results, a significant decrease in the market price of the asset, or a significant adverse change in legal factors or the manner in which the asset is used. If such indicators are present, the Company assess the recoverability of affected assets by determining if the carrying value of such assets is less than the sum of the undiscounted future cash flows of the assets. If such assets are found to not be recoverable, the Company measures the amount of the impairment by comparing to the carrying value of the assets to the fair value of the assets. The Company determined that no indicators of impairment of finite-lived intangible assets or long-lived assets existed at December 31, 2019. Debt Issuance Costs —Debt issuance costs are amortized to interest expense using the effective interest rate method over the term of the debt. Debt issuance costs paid to the lender and third parties are reflected as a discount to the debt in the consolidated balance sheets. Unamortized debt issuance costs associated with extinguished debt are expensed in the period of the extinguishment. Fair Value Measurements —The Company categorizes its financial assets and liabilities measured and reported at fair value in the financial statements on a recurring basis based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels, which are directly related to the amount of subjectivity associated with the inputs used to determine the fair value of financial assets and liabilities, are as follows: • Level 1 — Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. • Level 2 — Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable for the assets or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life. • Level 3 — Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. Each major category of financial assets and liabilities measured at fair value on a recurring basis is categorized based upon the lowest level of significant input to the valuations. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Financial instruments in Level 1 generally include US treasuries and mutual funds listed in active markets. The Company's only financial assets and liabilities which were measured at fair value as of December 31, 2019 and December 31, 2018 were Level 1 assets comprised of cash and cash equivalents. The Company's cash and cash equivalents permit daily redemption and the fair values of these investments are based upon the quoted prices in active markets provided by the holding financial institutions. The following table shows assets and liabilities that are measured at fair value on a recurring basis and their carrying value (in millions): As of December 31, 2019 Fair Value Carrying Value Level 1 Level 2 Level 3 Cash and cash equivalents $ 487.4 $ 487.4 $ — $ — As of December 31, 2018 Fair Value Carrying Value Level 1 Level 2 Level 3 Cash and cash equivalents $ 495.1 $ 495.1 $ — $ — The Company recognizes transfers between levels within the fair value hierarchy, if any, at the end of each quarter. There were no transfers in or out of Level 1, Level 2 or Level 3 during 2019 and 2018. As of December 31, 2019 and 2018, the Company held no securities that were in an unrealized loss or gain position. The Company reviews the status of each security quarterly to determine whether an other-than-temporary impairment has occurred. In making its determination, the Company considers a number of factors, including: (1) the significance of the decline; (2) whether the security was rated below investment grade; (3) how long the security has been in an unrealized loss position; and (4) the Company's ability and intent to retain the investment for a sufficient period of time for it to recover. The estimated fair value of the liability component of the 1.75% convertible senior notes due 2025 (the Convertible Notes) (categorized as a Level 2 liability for fair value measurement purposes) as of December 31, 2019 was $435.4 million, determined using current market factors and the ability of the Company to obtain debt on comparable terms to the Convertible Notes. The $335.9 million carrying value of the Convertible Notes as of December 31, 2019 excludes the $107.0 million of the unamortized portion of the debt discount. Foreign Currency —The Company has operations in the US, France, Germany, Ireland, Italy, the Netherlands, Switzerland, the United Kingdom (UK), and Japan. The results of its non-US dollar based functional currency operations are translated to US dollars at the average exchange rates during the period. Assets and liabilities are translated at the exchange rate prevailing at the balance sheet date. Equity is translated at the prevailing exchange rate at the date of the equity transaction. Translation adjustments are included in shareholders' equity, as a component of accumulated other comprehensive loss. The Company realizes foreign currency transaction gains (losses) in the normal course of business based on movements in the applicable exchange rates. These gains (losses) are included as a component of other income, net. Concentration of Credit Risk —Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents. The Company places its cash equivalents with high credit-quality financial institutions and may invest its short-term investments in US treasury securities, mutual funds and government agency bonds. The Company has established guidelines relative to credit ratings and maturities that seek to maintain safety and liquidity. The Company is exposed to risks associated with extending credit to customers related to the sale of products. The Company does not require collateral to secure amounts due from its customers. The following table presents the percentage of gross product revenue represented by the Company's three largest customers as of the year ended December 31, 2019. Percentage of Total Gross Product Revenue 2019 2018 Customer A 31% 27 % Customer B 26% 37 % Customer C 22% 15 % The Company did not have product revenue prior to US FDA approval of ARIKAYCE in September 2018. The Company relies on third-party manufacturers and suppliers for manufacturing and supply of its products. The inability of the suppliers or manufacturers to fulfill supply requirements of the Company could materially impact future operating results. A change in the relationship with the suppliers or manufacturer, or an adverse change in their business, could materially impact future operating results. Revenue Recognition — In accordance with Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers, the Company recognizes revenue when a customer obtains control of promised goods or services, in an amount that reflects the consideration the Company expects to receive in exchange for the goods or services provided. To determine revenue recognition for arrangements within the scope of ASC 606, the Company performs the following five steps: (1) identify the contracts with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when or as the entity satisfies a performance obligation. At contract inception, the Company assesses the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when or as the performance obligation is satisfied. For all contracts that fall into the scope of ASC 606, the Company has identified one performance obligation: the sale of ARIKAYCE to its customers. The Company has not incurred or capitalized any incremental costs associated with obtaining contracts with customers. Product revenues consist primarily of sales of ARIKAYCE in the US. Product revenues are recognized once the Company performs and satisfies all five steps mentioned above. In October 2018, the Company began shipping ARIKAYCE to its customers in the US, which include specialty pharmacies and specialty distributors. Revenue is recorded at net selling price (transaction price), which includes estimates of variable consideration for which reserves are established for (a) customer credits, such as invoice discounts for prompt pay and specialty pharmacies fees, (b) estimated government rebates, such as Medicaid and Medicare Part D reimbursements, and estimated managed care rebates, (c) estimated chargebacks, and (d) estimated costs of co-payment assistance. These reserves are based on the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable (prompt pay discounts and chargebacks), prepaid expenses (co-payment assistance), or as a current liability (rebates). Where appropriate, these estimates take into consideration a range of possible outcomes which are probability-weighted for relevant factors such as the Company's historical experience, current contractual and statutory requirements, and forecasted customer buying and payment patterns. Overall, these reserves reflect the Company's best estimates of the amount of consideration to which it is entitled based on the terms of the applicable contract. The amount of variable consideration included in the transaction price may be constrained and is included in the net sales price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. Actual amounts of consideration ultimately received may differ from the Company's estimates. If actual results in the future vary from estimates, the Company adjusts these estimates, which would affect net product revenue and earnings in the period such variances become known. Customer credits: The Company's customers are offered various forms of consideration, including fees for enhanced services and prompt payment discounts. The payment terms for sales to specialty pharmacies for prompt payment discounts and fees for services are based on contractual rates agreed with the respective specialty pharmacies. The Company anticipates that its customers will earn these discounts and fees and, therefore, deduct the full amount of these discounts and fees from total gross product revenues at the time such revenues are recognized. Rebates: The Company contracts with government agencies and managed care organizations or collectively, third-party payors, so that ARIKAYCE will be eligible for purchase by, or partial or full reimbursement from, such third-party payors. The Company estimates the rebates it will provide to third-party payors and deducts these estimated amounts from total gross product revenues at the time the revenues are recognized. These reserves are recorded in the same period in which the revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability. The current liability is included in accrued expenses on the consolidated balance sheets. The Company estimates the rebates that it will provide to third-party payors based upon (i) the Company’s contracts with these third-party payors, (ii) the government mandated discounts applicable to government-funded programs, (iii) a range of possible outcomes that are probability-weighted for the estimated payer mix, and (iv) information obtained from the Company’s specialty pharmacies. Chargebacks: Chargebacks are discounts that occur when certain contracted customers, currently public health service institutions and federal government entities purchasing via the Federal Supply Schedule, purchase directly from the Company's specialty distributor. Contracted customers generally purchase the product at a discounted price and the specialty distributor, in turn, charges back to the Company the difference between the price they initially paid and the discounted price paid by the contracted customers. The Company estimates chargebacks provided to the specialty distributor and deducts these estimated amounts from gross product revenues, and from accounts receivable, at the time revenues are recognized. Co-payment assistance: Patients who have commercial insurance and meet certain eligibility requirements may receive co-payment assistance. Based upon the terms of the program and information regarding programs provided for similar specialty pharmaceutical products, the Company estimates the average co-pay mitigation amounts and the percentage of patients that it expects to participate in the program in order to establish accruals for co-payment assistance. These reserves are recorded in the same period in which the related revenue is recognized, resulting in a reduction of product revenue. The Company adjusts its accruals for co-pay assistance based on actual redemption activity and estimates of future redemptions related to sales in the current period. If any, or all, of the Company's actual experience vary from the estimates above, the Company may need to adjust prior period accruals, affecting revenue in the period of adjustment. The following table provides a summary roll-forward of the Company's sales allowances and related accruals for the years ended December 31, 2019 and 2018, which have been deducted in arriving at revenues, net (in thousands). Customer Credits, Fees and Discounts Rebates, Chargebacks and Co-pay Assistance Total Balance as of January 1, 2019 $ 234 $ 688 $ 922 Allowances for current period sales 3,151 12,059 15,210 Allowances for prior period sales 14 26 40 Payments and credits (2,935) (7,602) (10,537) Balance as of December 31, 2019 $ 464 $ 5,171 $ 5,635 Balance as of January 1, 2018 $ — $ — $ — Allowances for current period sales 335 849 1,184 Payments and credits (101) (161) (262) Balance as of December 31, 2018 $ 234 $ 688 $ 922 The Company also recognizes revenue related to early access programs (EAPs) in Europe, consisting of sales to the French National Agency for Medicines and Health Products Safety, which granted ARIKAYCE a Temporary Authorization for Use (Autorisation Temporaire d'Utilisation or ATU) and from the named patient program in Germany, both compassionate use programs. EAPs are intended to make products available on a named patient basis before they are commercially available in accordance with local regulations. Inventory and Cost of Product Revenues (excluding amortization of intangible assets) —Inventory is stated at the lower of cost and net realizable value. The Company began capitalizing inventory costs following FDA approval of ARIKAYCE in September 2018. Inventory is sold on a first-in, first-out (FIFO) basis. The Company periodically reviews inventory for expiry and obsolescence and, if necessary, writes down accordingly. If quality specifications are not met during the manufacturing process, such inventory is written off to cost of product revenues (excluding amortization of intangible assets) in the period identified. Cost of product revenues (excluding amortization of intangible assets) consist primarily of direct and indirect costs related to the manufacturing of ARIKAYCE sold, including third-party manufacturing costs, packaging services, freight, and allocation of overhead costs, in addition to royalty expenses and revenue-based milestones. Cost is determined using a standard cost method, which approximates actual cost, and assumes a first-in, first-out (FIFO) flow of goods. Prior to FDA approval of ARIKAYCE, the Company expensed all inventory related costs in the period incurred. Inventory used for clinical development purposes is expensed to research and development (R&D) expense when consumed. Research and Development —R&D expenses consist primarily of salaries, benefits and other related costs, including stock-based compensation, for personnel serving in the Company's research and development functions, including medical affairs. R&D expense also includes other internal operating expenses, the cost of manufacturing a product candidate, including the medical devices for drug delivery, for clinical study, the cost of conducting clinical studies, and the cost of conducting preclinical and research activities. In addition, R&D expenses include payments to third parties for the license rights to products in development (prior to marketing approval), such as INS1007. The Company's expenses related to manufacturing its product candidates and medical devices for clinical study are primarily related to activities at contract manufacturing organizations that manufacture INS1007 and INS1009. The Company's expenses related to clinical trials are primarily related to activities at contract research organizations that conduct and manage clinical trials on the Company's behalf. These contracts set forth the scope of work to be completed at a fixed fee or amount per patient enrolled. Payments under these contracts primarily depend on performance criteria such as the successful enrollment of patients or the completion of clinical trial milestones as well as time-based fees. Expenses are accrued based on contracted amounts applied to the level of patient enrollment and to activity according to the clinical trial protocol. Nonrefundable advance payments for goods or services that will be used or rendered for future research and development activities are deferred and capitalized. Such amounts are then recognized as an expense as the related goods are delivered or the services are performed, or when the goods or services are no longer expected to be provided. Stock-based Compensation —The Company recognizes stock-based compensation expense for awards of equity instruments to employees and directors based on the grant-date fair value of those awards. The grant-date fair value of the award is recognized as compensation expense ratably over the requisite service period, which generally equals the vesting period of the award, and if applicable, is adjusted for expected forfeitures. The Company may also grant performance-based stock options to employees from time-to-time. The grant-date fair value of performance-based stock options is recognized as compensation expense over the implicit service period using the accelerated attribution method once it is probable that the performance condition will be achieved. Stock-based compensation expense is included in both R&D and SG&A expenses in the consolidated statements of comprehensive loss. Income Taxes —The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded to reduce the deferred tax assets to the amount that is expected to be realized. In evaluating the need for a valuation allowance, the Company takes into account various factors, including the expected level of future taxable income and available tax planning strategies. If actual results differ from the assumptions made in the evaluation of a valuation allowance, the Company records a change in valuation allowance through income tax expense in the period such determination is made. The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based solely on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood to be sustained upon ultimate settlement. As any adjustment to the Company’s uncertain tax positions would not result in a cash tax liability, it has not recorded any accrued interest or penalties related to its uncertain tax positions. The Company's policy for interest and penalties related to income tax exposures is to recognize interest and penalties as a component of the income tax provision (benefit) in the consolidated statements of comprehensive loss. Net Loss Per Share —Basic net loss per share is computed by dividing net loss attributable to common shareholders by the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted average number of common shares and other dilutive securities outstanding during the period. Potentially dilutive securities from stock options and restricted stock units would be anti-dilutive as the Company incurred a net loss in all periods presented. Potentially dilutive common shares resulting from the assumed exercise of outstanding stock options would be determined based on the treasury stock method. The following table sets forth the reconciliation of the weighted average number of shares used to compute basic and diluted net loss per share for the years ended December 31, 2019, 2018 and 2017. Years Ended December 31, 2019 2018 2017 (in thousands, except per share amounts) Numerator: Net loss $ (254,337) $ (324,277) $ (192,649) Denominator: Weighted average common shares used in calculation of basic net loss per share: 84,560 76,889 66,576 Effect of dilutive securities: Common stock options — — — Unvested restricted stock and restricted stock units — — — Convertible debt securities — — — Weighted average common shares outstanding used in calculation of diluted net loss per share 84,560 76,889 66,576 Net loss per share: Basic and diluted $ (3.01) $ (4.22) $ (2.89) The following potentially dilutive securities have been excluded from the computations of diluted weighted average common shares outstanding as of December 31, 2019, 2018 and 2017 as their effect would have been anti-dilutive (in thousands). As of December 31, 2019 2018 2017 Common stock options 10,493 9,382 8,609 Unvested restricted stock and restricted stock units 501 228 47 Convertible debt securities 11,492 11,492 — Leases —In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) in order to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under previous generally accepted accounting principles. ASU 2016-02 requires a lessee to recognize a liability to make lease payments (the lease liability) and a right-of-use (ROU) asset representing its right to use the underlying asset for the lease term on the balance sheet. A lease is a contract, or part of a contract, that conveys the right to control the use of explicitly or implicitly identified property, plant or equipment in exchange for consideration. Control of an asset is conveyed to the Company if the Company obtains the right to obtain substantially all of the economic benefits of the asset or the right to direct the use of the asset. The Company recognizes ROU assets and lease liabilities at the lease commencement date based on the present value of future, fixed lease payments over the term of the arrangement. ROU assets are amortized on a straight-line basis over the term of the lease. Lease liabilities accrete to yield and are reduced at the time when the lease payment is payable to the vendor. Variable lease payments are recognized at the time when the event giving rise to the payment occurs and are recognized in the statement of comprehensive loss in the same line item as expenses arising from fixed lease payments. In accordance with Topic 842, leases are measured at present value using the rate implicit in the lease or, if the implicit rate is not determinable, the lessee's implicit borrowing rate. As the implicit rate is not typically available, the Company uses its implicit borrowing rate based on the information available at the lease commencement date to determine the present value of future lease payments. The implicit borrowing rate approximates the rate the Company would pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments. Financial information presented prior to January 1, 2019 has not been adjusted and is presented in accordance with ASC 840. Refer to the Recently Adopted Accounting Pronouncements section within this note below and Note 7 - Leases for details about the Company's lease portfolio, including Topic 842 required disclosures. Segment Information —The Company currently operates in one business segment, which is the development and commercialization of therapies for patients with rare diseases. A single management team that reports to the Chief Executive Officer comprehensively manages the entire business. The Company does not operate separate lines of business with respect to its products or product candidates. Accordingly, the Company has one reportable segment. Recently Adopted Accounting Pronouncements —Topic 842 was effective for fiscal years beginning after December 15, 2018 (including interim periods within those years) and early adoption was permitted. In August 2018, the FASB issued ASU 2018-11, Targeted Improvements to ASC 842, which provided a transition option in which an entity would initially apply ASU 2016-02 at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company used the new transition option and the package of practical expedients that allowed it to not reassess: (1) whether any expired or existing contracts are or contain leases; (2) lease classification for any expired or existing leases; and (3) initial direct costs for any expired or existing leases. The Company also used the practical expedient that allows it to treat the lease and non-lease components of its leases as a single component. The Company adopted ASU 2016-02 effective January 1, 2019. The impact of the adoption of ASU 2016-02 on the consolidated balance sheet was $47.4 million. In August 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments , which addressed eight specific cash flow issues with the objective of reducing the existing diversity in practice. Among the updates, the standard requires debt extinguishment costs to be classified as cash outflows for financing activities. This standard update became effective as of the first quarter of 2018. As a result of the adoption of the standard, in the first quarter of 2018, the Company reported a $2.2 million loss on extinguishment of debt in the operating activities section of its consolidated statement of cash flows. The Company had no material debt extinguishment costs prior to the first quarter of 2018. The impact of adopting this standard was not material to the Company. Recent Accounting Pronouncements (Not Yet Adopted) —In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses which requires financial assets measured at an amortized cost basis to be presented at the net amount expected to be collected. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019 and the Company will adopt the standard effective January 1, 2020. Different aspects of the guidance require modified retrospective or prospective adoption. The Company has performed an assessment and has determined that adoption will not have a material impact on its consolidated financial statements. |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventory The Company's inventory balance consists of the following (in thousands): As of December 31, 2019 2018 Raw materials $ 16,048 $ 2,145 Work-in-process 6,420 4,567 Finished goods 5,845 320 $ 28,313 $ 7,032 |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2019 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Accrued Expenses Accrued expenses consist of the following (in thousands): As of December 31, 2019 2018 Accrued clinical trial expenses $ 5,598 $ 6,635 Accrued professional fees 12,581 13,398 Accrued technical operation expenses 6,446 9,371 Accrued royalty payable 3,117 409 Accrued interest payable 3,631 3,631 Accrued sales allowances and related costs 5,267 818 Accrued construction costs 2,689 2,946 Other accrued expenses 1,046 1,046 $ 40,375 $ 38,254 |
Intangible Assets, Net
Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets, Net | Intangible Assets, Net As of December 31, 2019, the Company's finite-lived intangible assets consisted of acquired ARIKAYCE R&D, which resulted from the initial amount recorded at the time of the Company's merger with Transave in 2010 and subsequent adjustments in the value, and a milestone paid to PARI of $1.7 million for the license to use PARI's Lamira® Nebulizer System for the delivery of ARIKAYCE to patients as a result of the FDA approval of ARIKAYCE in September 2018 (the PARI milestone). Total intangible assets, net was $53.7 million and $58.7 million as of December 31, 2019 and 2018, respectively. The Company began amortizing its finite-lived intangible assets in October 2018, over ARIKAYCE's initial regulatory exclusivity period of 12 years. Amortization of these assets during each of the next five years is estimated to be approximately $5.0 million per year. A rollforward of the Company's finite-lived intangible assets for the years ended December 31, 2019 and 2018 follows (in thousands): 2019 Intangible Asset January 1, Additions Amortization December 31, Acquired ARIKAYCE R&D $ 56,988 $ — $ (4,849) $ 52,139 PARI milestone 1,687 — (144) 1,543 $ 58,675 $ — $ (4,993) $ 53,682 2018 Intangible Asset January 1, Additions Amortization December 31, Acquired ARIKAYCE R&D $ 58,200 $ — $ (1,212) $ 56,988 PARI milestone — 1,724 (37) 1,687 $ 58,200 $ 1,724 $ (1,249) $ 58,675 |
Fixed Assets, net
Fixed Assets, net | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Fixed Assets, net | Fixed Assets, Net Fixed assets are stated at cost and depreciated using the straight-line method, based on useful lives as follows (in thousands): Estimated Useful Life (years) As of December 31, Asset Description 2019 2018 Lab equipment 7 $ 9,634 $ 7,935 Furniture and fixtures 7 5,908 2,320 Computer hardware and software 3 - 5 6,806 3,796 Office equipment 7 154 65 Manufacturing equipment 7 1,567 1,166 Leasehold improvements lease term 33,852 7,202 Construction in progress (CIP) — 21,526 14,325 79,447 36,809 Less accumulated depreciation (19,267) (14,173) Fixed assets, net $ 60,180 $ 22,636 Fixed assets, net of depreciation, increased to $60.2 million during the year ended December 31, 2019 from $22.6 million in 2018. The $37.5 million increase was primarily due to the $26.7 million and $7.2 million increases in leasehold improvements and construction in progress, respectively, related to the Company's new corporate headquarters and the long-term capacity increase of the Patheon manufacturing facility. Depreciation expense was $5.2 million, $3.6 million and $2.9 million for the years ended December 31, 2019, 2018 and 2017, respectively. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Leases | Leases In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) in order to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet. ASU 2016-02 requires a lessee to recognize a liability to make lease payments (the lease liability) and a right-of-use (ROU) asset representing its right to use the underlying asset for the lease term on the balance sheet. A lease is a contract, or part of a contract, that conveys the right to control the use of explicitly or implicitly identified property, plant or equipment in exchange for consideration. Control of an asset is conveyed to the Company if the Company obtains the right to obtain substantially all of the economic benefits of the asset or the right to direct the use of the asset. The Company recognizes ROU assets and lease liabilities at the lease commencement date based on the present value of future, fixed lease payments over the term of the arrangement. ROU assets are amortized on a straight-line basis over the term of the lease. Lease liabilities accrete to yield and are reduced at the time when the lease payment is payable to the vendor. Variable lease payments are recognized at the time when the event giving rise to the payment occurs and are recognized in the statement of comprehensive loss in the same line item as expenses arising from fixed lease payments. In accordance with Topic 842, leases are measured at present value using the rate implicit in the lease or, if the implicit rate is not determinable, the lessee's implicit borrowing rate. As the implicit rate is not typically available, the Company uses its implicit borrowing rate based on the information available at the lease commencement date to determine the present value of future lease payments. The implicit borrowing rate approximates the rate the Company would pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments. In order to determine the appropriate discount rate for each lease, the Company determined its public credit rating and constructed debt yield curves. The debt yield curves were adjusted to reflect a collateral borrowing and differences in foreign currencies, where applicable, as well as to match the term of each lease. Financial information presented prior to January 1, 2019 has not been adjusted and is presented in accordance with ASC 840. Refer to the Recently Adopted Accounting Pronouncements section within Note 2 - Summary of Significant Accounting Policies note. The Company's lease portfolio consists primarily of office space, manufacturing facilities and fleet vehicles. All of the Company's leases are classified as operating leases, except for the Company's corporate headquarters lease, which is classified as a finance lease. The terms of the Company's lease agreements that have commenced range from less than one year to ten years, ten months. In its assessment of the term of each such lease, the Company has not included any options to extend or terminate the lease due to the absence of economic incentives in its lease agreements. As permitted by the practical expedient in ASU 2016-02, leases that qualify for treatment as a short-term lease are expensed as incurred. These short-term leases are not material to the Company's financial position. Furthermore, the Company has elected the practical expedient to not separate lease and non-lease components for all classes of underlying assets. The Company's leases do not contain residual value guarantees and it does not sublease any of its leased assets. The Company outsources its manufacturing operations to CMOs. Upon review of the agreements with its CMOs, the Company determined that these contracts contain embedded leases for dedicated manufacturing facilities. The Company obtains substantially all of the economic benefits from the use of the manufacturing facilities, has the right to direct how and for what purpose the facility is used throughout the period of use, and the supplier does not have the right to change the operating instructions of the facility. The operating lease right-of-use assets and corresponding lease liabilities associated with the manufacturing facilities is the sum of the minimum guarantees over the life of the production contracts. In September 2018, the Company entered into the agreement to lease its new corporate headquarters in Bridgewater, NJ, consisting of 117,022 square feet. The lease term commenced in the fourth quarter of 2019 and is accounted for as a finance lease. The initial lease term expires in June 2030. The table below summarizes the Company's total lease costs included in its consolidated financial statements, as well as other required quantitative disclosures (in thousands). As of December 31, 2019 Finance lease cost: Amortization of right-of-use assets $ 360 Interest on lease liabilities 440 Total finance lease cost $ 800 Operating lease cost 12,218 Total lease cost $ 13,018 Other information: Cash paid for amounts included in the measurement of lease liabilities Operating cash flows for finance leases $ — Operating cash flows for operating leases $ 10,060 Financing cash flows for finance leases $ (4,503) Right-of-use assets obtained in exchange for new finance lease liabilities $ 20,310 Right-of-use assets obtained in exchange for new operating lease liabilities $ 47,436 Weighted average remaining lease term - finance leases 10.6 years Weighted average remaining lease term - operating leases 5.0 years Weighted average discount rate - finance leases 8.6 % Weighted average discount rate - operating leases 7.4 % The table below presents the maturity of lease liabilities on an annual basis for the remaining years of the Company's commenced lease agreements (in thousands). Year Ending December 31, Finance Lease Operating Leases 2020 $ 2,938 $ 13,415 2021 2,996 10,306 2022 2,280 6,000 2023 2,080 6,000 2024 3,172 6,000 Thereafter 18,784 6,000 Total 32,250 47,721 Less: present value discount 11,500 7,373 Present value of lease liabilities $ 20,750 $ 40,348 Balance Sheet Classification at December 31, 2019: Current lease liabilities $ 1,221 $ 11,040 Long-term lease liabilities 19,529 29,308 Total lease liabilities $ 20,750 $ 40,348 In addition to the Company's lease agreements that have previously commenced and are reflected in the consolidated financial statements, the Company has entered into additional lease agreements that have not yet commenced. The Company entered into certain agreements with Patheon related to increasing its long-term production capacity for ARIKAYCE commercial inventory. The Company has determined that these agreements with Patheon contain an embedded lease for the manufacturing facility and the specialized equipment contained therein. Costs of $17.9 million incurred by the Company under these additional agreements have been classified within |
Leases | Leases In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) in order to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet. ASU 2016-02 requires a lessee to recognize a liability to make lease payments (the lease liability) and a right-of-use (ROU) asset representing its right to use the underlying asset for the lease term on the balance sheet. A lease is a contract, or part of a contract, that conveys the right to control the use of explicitly or implicitly identified property, plant or equipment in exchange for consideration. Control of an asset is conveyed to the Company if the Company obtains the right to obtain substantially all of the economic benefits of the asset or the right to direct the use of the asset. The Company recognizes ROU assets and lease liabilities at the lease commencement date based on the present value of future, fixed lease payments over the term of the arrangement. ROU assets are amortized on a straight-line basis over the term of the lease. Lease liabilities accrete to yield and are reduced at the time when the lease payment is payable to the vendor. Variable lease payments are recognized at the time when the event giving rise to the payment occurs and are recognized in the statement of comprehensive loss in the same line item as expenses arising from fixed lease payments. In accordance with Topic 842, leases are measured at present value using the rate implicit in the lease or, if the implicit rate is not determinable, the lessee's implicit borrowing rate. As the implicit rate is not typically available, the Company uses its implicit borrowing rate based on the information available at the lease commencement date to determine the present value of future lease payments. The implicit borrowing rate approximates the rate the Company would pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments. In order to determine the appropriate discount rate for each lease, the Company determined its public credit rating and constructed debt yield curves. The debt yield curves were adjusted to reflect a collateral borrowing and differences in foreign currencies, where applicable, as well as to match the term of each lease. Financial information presented prior to January 1, 2019 has not been adjusted and is presented in accordance with ASC 840. Refer to the Recently Adopted Accounting Pronouncements section within Note 2 - Summary of Significant Accounting Policies note. The Company's lease portfolio consists primarily of office space, manufacturing facilities and fleet vehicles. All of the Company's leases are classified as operating leases, except for the Company's corporate headquarters lease, which is classified as a finance lease. The terms of the Company's lease agreements that have commenced range from less than one year to ten years, ten months. In its assessment of the term of each such lease, the Company has not included any options to extend or terminate the lease due to the absence of economic incentives in its lease agreements. As permitted by the practical expedient in ASU 2016-02, leases that qualify for treatment as a short-term lease are expensed as incurred. These short-term leases are not material to the Company's financial position. Furthermore, the Company has elected the practical expedient to not separate lease and non-lease components for all classes of underlying assets. The Company's leases do not contain residual value guarantees and it does not sublease any of its leased assets. The Company outsources its manufacturing operations to CMOs. Upon review of the agreements with its CMOs, the Company determined that these contracts contain embedded leases for dedicated manufacturing facilities. The Company obtains substantially all of the economic benefits from the use of the manufacturing facilities, has the right to direct how and for what purpose the facility is used throughout the period of use, and the supplier does not have the right to change the operating instructions of the facility. The operating lease right-of-use assets and corresponding lease liabilities associated with the manufacturing facilities is the sum of the minimum guarantees over the life of the production contracts. In September 2018, the Company entered into the agreement to lease its new corporate headquarters in Bridgewater, NJ, consisting of 117,022 square feet. The lease term commenced in the fourth quarter of 2019 and is accounted for as a finance lease. The initial lease term expires in June 2030. The table below summarizes the Company's total lease costs included in its consolidated financial statements, as well as other required quantitative disclosures (in thousands). As of December 31, 2019 Finance lease cost: Amortization of right-of-use assets $ 360 Interest on lease liabilities 440 Total finance lease cost $ 800 Operating lease cost 12,218 Total lease cost $ 13,018 Other information: Cash paid for amounts included in the measurement of lease liabilities Operating cash flows for finance leases $ — Operating cash flows for operating leases $ 10,060 Financing cash flows for finance leases $ (4,503) Right-of-use assets obtained in exchange for new finance lease liabilities $ 20,310 Right-of-use assets obtained in exchange for new operating lease liabilities $ 47,436 Weighted average remaining lease term - finance leases 10.6 years Weighted average remaining lease term - operating leases 5.0 years Weighted average discount rate - finance leases 8.6 % Weighted average discount rate - operating leases 7.4 % The table below presents the maturity of lease liabilities on an annual basis for the remaining years of the Company's commenced lease agreements (in thousands). Year Ending December 31, Finance Lease Operating Leases 2020 $ 2,938 $ 13,415 2021 2,996 10,306 2022 2,280 6,000 2023 2,080 6,000 2024 3,172 6,000 Thereafter 18,784 6,000 Total 32,250 47,721 Less: present value discount 11,500 7,373 Present value of lease liabilities $ 20,750 $ 40,348 Balance Sheet Classification at December 31, 2019: Current lease liabilities $ 1,221 $ 11,040 Long-term lease liabilities 19,529 29,308 Total lease liabilities $ 20,750 $ 40,348 In addition to the Company's lease agreements that have previously commenced and are reflected in the consolidated financial statements, the Company has entered into additional lease agreements that have not yet commenced. The Company entered into certain agreements with Patheon related to increasing its long-term production capacity for ARIKAYCE commercial inventory. The Company has determined that these agreements with Patheon contain an embedded lease for the manufacturing facility and the specialized equipment contained therein. Costs of $17.9 million incurred by the Company under these additional agreements have been classified within |
Debt
Debt | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Debt | Debt In January 2018, the Company completed an underwritten public offering of the Convertible Notes, in which the Company sold $450.0 million aggregate principal amount of Convertible Notes, including the exercise in full of the underwriters' option to purchase additional Convertible Notes of $50.0 million. The Company's net proceeds from the offering, after deducting underwriting discounts and commissions and other offering expenses of $14.2 million, were approximately $435.8 million. The Convertible Notes bear interest payable semiannually in arrears on January 15 and July 15 of each year, beginning on July 15, 2018. The Convertible Notes mature on January 15, 2025, unless earlier converted, redeemed, or repurchased. On or after October 15, 2024, until the close of business on the second scheduled trading day immediately preceding January 15, 2025, holders may convert their Convertible Notes at any time. Upon conversion, holders may receive cash, shares of the Company's common stock or a combination of cash and shares of the Company's common stock, at the Company's option. The initial conversion rate is 25.5384 shares of common stock per $1,000 principal amount of Convertible Notes (equivalent to an initial conversion price of approximately $39.16 per share of common stock). The conversion rate will be subject to adjustment in some events but will not be adjusted for any accrued and unpaid interest. Holders may convert their Convertible Notes prior to October 15, 2024, only under the following circumstances, subject to the conditions set forth in an indenture, dated as of January 26, 2018, between the Company and Wells Fargo Bank, National Association (Wells Fargo), as trustee, as supplemented by the first supplemental indenture, dated January 26, 2018, between the Company and Wells Fargo (as supplemented, the Indenture): (i) during the five business day period immediately after any five consecutive trading day period (the measurement period) in which the trading price per $1,000 principal amount of convertible notes, as determined following a request by a holder of the convertible notes, for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the common stock and the conversion rate on such trading day, (ii) the Company elects to distribute to all or substantially all holders of the common stock (a) any rights, options or warrants (other than in connection with a stockholder rights plan for so long as the rights issued under such plan have not detached from the associated shares of common stock) entitling them, for a period of not more than 45 days from the declaration date for such distribution, to subscribe for or purchase shares of common stock at a price per share that is less than the average of the last reported sale prices of the common stock for the 10 consecutive trading day period ending on, and including, the trading day immediately preceding the declaration date for such distribution, or (b) the Company’s assets, debt securities or rights to purchase securities of the Company, which distribution has a per share value, as reasonably determined by the board of directors, exceeding 10% of the last reported sale price of the common stock on the trading day immediately preceding the declaration date for such distribution, (iii) if a transaction or event that constitutes a fundamental change or a make-whole fundamental change occurs, or if the Company is a party to (a) a consolidation, merger, combination, statutory or binding share exchange or similar transaction, pursuant to which the common stock would be converted into, or exchanged for, cash, securities or other property or assets, or (b) any sale, conveyance, lease or other transfer or similar transaction in one transaction or a series of transactions of all or substantially all of the consolidated assets of the Company and its subsidiaries, taken as a whole, all or any portion of the Convertible Notes may be surrendered by a holder for conversion at any time from or after the date that is 30 scheduled trading days prior to the anticipated effective date of the transaction, (iv) if during any calendar quarter commencing after the calendar quarter ending on March 31, 2018 (and only during such calendar quarter), the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day, or, (v) if the Company sends a notice of redemption, a holder may surrender all or any portion of its Convertible Notes, to which the notice of redemption relates, for conversion at any time on or after the date the applicable notice of redemption was sent until the close of business on (a) the second business day immediately preceding the related redemption date or (b) if the Company fails to pay the redemption price on the redemption date as specified in such notice of redemption, such later date on which the redemption price is paid. The Convertible Notes can be settled in cash, common stock, or a combination of cash and common stock at the Company's option, and thus, the Company determined the embedded conversion options in the convertible notes are not required to be separately accounted for as a derivative. However, since the Convertible Notes are within the scope of the accounting guidance for cash convertible instruments, the Company is required to separate the Convertible Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated equity component. The fair value was based on data from readily available pricing sources which utilize market observable inputs and other characteristics for similar types of instruments. The carrying amount of the equity component representing the embedded conversion option was determined by deducting the fair value of the liability component from the gross proceeds of the Convertible Notes. The excess of the principal amount of the liability component over its carrying amount is amortized to interest expense over the expected life of a similar liability that does not have an associated equity component using the effective interest method. The equity component is not remeasured as long as it continues to meet the conditions for equity classification in the accounting guidance for contracts in an entity’s own equity. The fair value of the liability component of the Convertible Notes on the date of issuance was estimated at $309.1 million using an effective interest rate of 7.6%, and accordingly, the residual equity component on the date of issuance was $140.9 million. The discount is being amortized to interest expense over the term of the Convertible Notes and has a remaining period of approximately 5.04 years. For the twelve months ended December 31, 2019, total interest expense related to the Convertible Notes was $27.3 million, which includes the contractual interest coupon payable semi-annually in cash, the amortization of the issuance costs, and accretion of debt discount, as described in the table below. The following table presents the carrying value of the Company’s debt balance as of December 31, 2019 (in thousands): As of December 31, 2019 1.75% convertible senior notes due 2025 $ 450,000 Debt issuance costs, unamortized (7,043) Discount on debt (107,017) Long-term debt, net $ 335,940 As of December 31, 2019, future principal repayments of the debt for each of the fiscal years through maturity were as follows (in thousands): Year Ending December 31: 2020 $ — 2021 — 2022 — 2023 — 2024 and thereafter 450,000 $ 450,000 In February 2018, the Company used part of the net proceeds from the issuance of the Convertible Notes to pay off its outstanding debt to Hercules Capital (Hercules). The payments to Hercules consisted of $55.0 million for the principal amount and an additional $3.2 million in back-end fees, outstanding interest, and prepayment penalty fees, which resulted in a $2.2 million loss on extinguishment of debt in the quarter ended March 31, 2018. The estimated fair value of the debt (categorized as a Level 2 liability for fair value measurement purposes) is determined using current market factors and the ability of the Company to obtain debt at comparable terms to those that are currently in place. As of December 31, 2019 and 2018, the fair value of the Company's debt approximated the carrying amount. Interest Expense Interest expense related to debt and the finance lease for the years ended December 31, 2019, 2018, and 2017, which includes the contractual interest coupon payable semi-annually in cash, the amortization of the issuance costs, and accretion of debt discount is as follows (in thousands): Years ended December 31, 2019 2018 2017 Contractual interest expense $ 7,883 $ 8,183 $ 5,149 Amortization of debt issuance costs 1,397 1,350 118 Accretion of back-end fee on debt — 50 658 Accretion of debt discount 17,985 15,889 — Total convertible debt interest expense $ 27,265 $ 25,472 $ 5,925 Finance lease interest expense 440 — — Total interest expense $ 27,705 $ 25,472 $ 5,925 |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2019 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' Equity | Shareholders' Equity Common Stock —As of December 31, 2019, the Company had 500,000,000 shares of common stock authorized with a par value of $0.01 and 89,682,387 shares of common stock issued and outstanding. In addition, as of December 31, 2019, the Company had reserved 10,492,946 shares of common stock for issuance upon the exercise of outstanding common stock options and 500,822 shares of common stock for issuance upon the vesting of restricted stock units. In the second quarter of 2019, the Company completed an underwritten public offering of 10,657,692 shares of the Company's common stock, which included the underwriters' exercise in full of their over-allotment option of 1,042,307 shares from the Company at a price to the public of $26.00, less underwriting discounts and commissions. The Company's net proceeds from the sale of the shares, after deducting the underwriting discounts and commissions and offering expenses of $16.0 million, were $261.1 million. The offering also included the sale of 400,000 shares from the Company's Chairman and Chief Executive Officer, from which the Company received no proceeds. In January 2018, the Company completed an underwritten public offering of $450.0 million aggregate principal amount of Convertible Notes, including the exercise in full of the underwriter's option to purchase additional Convertible Notes. The fair value of the liability component of the Convertible Notes on the date of issuance was estimated at $309.1 million, and accordingly, the equity component (included in additional paid-in capital) on the date of issuance was calculated as $140.9 million using the residual method, as further described in Note 8 Debt. In September 2017, the Company completed an underwritten public offering of 14,123,150 shares of the Company’s common stock, which included the underwriter’s exercise in full of its over-allotment option of 1,842,150 shares, at a price to the public of $28.50 per share. The Company’s net proceeds from the sale of the shares, after deducting underwriting discounts and offering expenses of $24.8 million, were approximately $377.7 million. Preferred Stock —As of December 31, 2019 and 2018, the Company had 200,000,000 shares of preferred stock authorized with a par value of $0.01 and no shares of preferred stock were issued and outstanding. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation The Company’s current equity compensation plan, the 2019 Incentive Plan, was approved by shareholders at the Company’s Annual Meeting of Shareholders in May 2019. The 2019 Incentive Plan is administered by the Compensation Committee of the Board of Directors of the Company. Under the terms of the 2019 Incentive Plan, the Company is authorized to grant a variety of incentive awards based on its common stock, including stock options (both incentive stock options and non-qualified stock options), RSUs, performance options/shares and other stock awards to eligible employees and non-employee directors. Upon the approval of the 2019 Incentive Plan by shareholders, 3,500,000 shares were authorized for issuance thereunder, plus any shares subject to then-outstanding awards under the 2017 Incentive Plan, 2015 Incentive Plan and the 2013 Incentive Plan that subsequently were canceled, terminated unearned, expired, were forfeited, lapsed for any reason or were settled in cash without the delivery of shares. As of December 31, 2019, 3,868,698 shares remained for future issuance under the 2019 Incentive Plan. The 2019 Incentive Plan will terminate on May 16, 2029 unless it is extended or terminated earlier pursuant to its terms. In addition, from time to time, the Company makes inducement grants of stock options. These awards are made pursuant to the Nasdaq inducement grant exception as a component of new hires’ employment compensation in connection with the Company’s equity grant program. During the twelve months ended December 31, 2019 and 2018, the Company granted inducement stock options covering 305,180 and 295,720 shares, respectively, of the Company's common stock to new employees. Stock Options —The Company calculates the fair value of stock options granted using the Black-Scholes valuation model. The following table summarizes the grant date fair value and assumptions used in determining the fair value of all stock options granted, including grants of inducement options, during the years ended December 31, 2019, 2018 and 2017. 2019 2018 2017 Volatility 67%-70% 66% - 68% 71% - 79% Risk-free interest rate 1.35%-2.56% 2.25% - 2.96% 1.73% - 2.13% Dividend yield 0.0% 0.0% 0.0% Expected option term (in years) 5.09 5.09 6.25 Weighted average fair value of stock options granted $8.76 $16.03 $10.52 For the years ended December 31, 2019, 2018 and 2017, the volatility factor was based on the Company’s historical volatility during the expected option term. Estimated forfeitures were based on the actual percentage of option forfeitures since the closing of the Company’s merger with Transave, Inc. in December 2010 for the years ended 2017 and prior. Beginning with the year ended December 31, 2018, estimated forfeitures were based on the actual percentage of option forfeitures over the expected option term. From time to time, the Company grants performance-condition options to certain employees. Vesting of these options is subject to the Company achieving certain performance criteria established at the date of grant and the individuals fulfilling a service condition (continued employment). As a result of the FDA approval of ARIKAYCE in September 2018, the vesting of performance options totaling $1.1 million was recorded as noncash compensation expense in the third quarter of 2018. The Company had no performance options outstanding as of December 31, 2019 and 2018. The following table summarizes stock option activity for stock options granted for the years ended December 31, 2019, 2018 and 2017 as follows: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life in Years Aggregate Intrinsic Value (in '000) Options outstanding at January 1, 2017 7,116,706 $ 13.30 Granted 2,284,710 $ 15.92 Exercised (378,275) $ 9.08 Forfeited and expired (414,220) $ 15.50 Options outstanding at December 31, 2017 8,608,921 $ 14.08 Vested and expected to vest at December 31, 2017 8,325,255 $ 14.03 Exercisable at December 31, 2017 4,229,478 $ 12.71 Options outstanding at December 31, 2017 8,608,921 $ 14.08 Granted 1,755,600 $ 27.63 Exercised (494,351) $ 14.46 Forfeited and expired (488,440) $ 19.79 Options outstanding at December 31, 2018 9,381,730 $ 16.30 Vested and expected to vest at December 31, 2018 8,693,635 $ 15.90 Exercisable at December 31, 2018 5,649,698 $ 13.45 Granted 3,434,270 $ 15.02 Exercised (1,413,341) $ 11.87 Forfeited and expired (909,713) $ 19.02 Options outstanding at December 31, 2019 10,492,946 $ 16.24 6.82 $ 86,921 Vested and expected to vest at December 31, 2019 9,767,035 $ 16.15 6.67 $ 81,572 Exercisable at December 31, 2019 5,719,818 $ 15.38 5.37 $ 51,000 The total intrinsic value of stock options exercised during the years ended December 31, 2019, 2018 and 2017 was $16.5 million, $5.6 million and $4.3 million, respectively. As of December 31, 2019, there was $31.1 million of unrecognized compensation expense related to unvested stock options, which is expected to be recognized over a weighted average period of 2.6 years. The following table summarizes the range of exercise prices and the number of stock options outstanding and exercisable as of December 31, 2019: Outstanding as of December 31, 2019 Exercisable as of Range of Number of Weighted Weighted Number of Weighted $ 3.03 $ 10.85 1,419,872 4.63 $ 7.55 1,311,142 $ 7.27 $ 11.14 $ 13.67 1,547,063 5.44 $ 12.91 1,237,855 $ 12.76 $ 13.91 $ 13.91 2,661,040 9.01 $ 13.91 — $ — $ 13.94 $ 16.16 1,394,176 5.57 $ 15.59 1,180,091 $ 15.56 $ 16.44 $ 19.47 1,112,775 7.16 $ 17.75 696,563 $ 17.88 $ 19.65 $ 24.22 1,139,884 6.04 $ 22.29 892,465 $ 22.25 $ 24.41 $ 30.46 1,058,332 8.20 $ 29.12 339,295 $ 29.46 $ 30.86 $ 31.73 131,180 8.09 $ 30.94 48,407 $ 30.96 $ 31.78 $ 31.78 21,794 7.48 $ 31.78 11,439 $ 31.78 $ 32.46 $ 32.46 6,830 8.00 $ 32.46 2,561 $ 32.46 Restricted Stock and Restricted Stock Units —The Company may grant Restricted Stock (RS) and Restricted Stock Units (RSUs) to employees and non-employee directors. Each share of RS vests upon and each RSU represents a right to receive one share of the Company's common stock upon the completion of a specific period of continued service. RS and RSU awards granted are valued at the market price of the Company's common stock on the date of grant. The Company recognizes noncash compensation expense for the fair values of these RS and RSUs on a straight-line basis over the requisite service period of these awards. The following table summarizes RSU awards granted during the years ended December 31, 2019, 2018 and 2017: Number of RSUs Weighted Average Grant Price Outstanding at January 1, 2017 89,194 $ 10.85 Granted 46,914 $ 17.16 Released (89,194) $ 10.85 Forfeited — $ — Outstanding at December 31, 2017 46,914 $ 17.16 Granted 253,586 $ 29.16 Released (51,992) $ 18.46 Forfeited (20,682) $ 29.05 Outstanding at December 31, 2018 227,826 $ 29.14 Granted 407,655 $ 27.89 Released (92,145) $ 28.05 Forfeited (42,514) $ 29.11 Outstanding at December 31, 2019 500,822 $ 28.32 As of December 31, 2019, there was $8.3 million of unrecognized compensation expense related to unvested awards, which is expected to be recognized over a weighted average period of 2.7 years. The following table summarizes the stock-based compensation recorded in the consolidated statements of comprehensive loss related to stock options and RSUs during the years ended December 31, 2019, 2018 and 2017 (in millions): 2019 2018 2017 Research and development expenses $ 8.2 $ 9.4 $ 6.5 Selling, general and administrative expenses 18.8 16.8 11.6 Total $ 27.0 $ 26.2 $ 18.1 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The income tax provision (benefit) was $0.8 million, $0.2 million and $(0.3) million and the effective rates were approximately 0%, 0% and 0% for the years ended December 31, 2019, 2018 and 2017, respectively. The income tax (benefit) for the year ended December 31, 2017 reflects the reversal of the valuation allowance related to alternative minimum tax (AMT) that the Company paid in 2009. As a result of the Tax Cuts and Jobs Act (the Tax Act), the Company recorded a noncurrent receivable to reflect the refund due to the Company in future periods relating to the previously paid AMT. In addition, the income tax provision (benefit) for the years ended December 31, 2019, 2018 and 2017 reflected current income tax expense recorded as a result of the taxable income in certain of the Company's non-US subsidiaries. For the years ended December 31, 2019 and 2018, the Company was also subject to foreign income taxes as a result of legal entities established for activities in Europe and Japan. The Company's loss before income taxes in the US and globally was as follows (in thousands): Years Ended December 31, 2019 2018 2017 US $ (201,161) $ (286,211) $ (136,682) Foreign (52,399) (37,865) (56,239) Total $ (253,560) $ (324,076) $ (192,921) The Company's income tax provision (benefit) consisted of the following (in thousands): Years Ended December 31, 2019 2018 2017 Current: Federal $ — $ — $ — State 10 4 3 Foreign 767 197 142 777 201 145 Deferred: Federal — — (417) State — — — Foreign — — — — — (417) Total $ 777 $ 201 $ (272) The reconciliation between the federal statutory tax rates and the Company's effective tax rate is as follows: Years Ended December 31, 2019 2018 2017 Statutory federal tax rate 21 % 21 % 34 % Permanent items (1) % — % (3) % State income taxes, net of federal benefit 6 % 5 % 4 % R&D and other tax credits 2 % 2 % 8 % Foreign income taxes 1 % (1) % (6) % Impact of Tax Act — % — % (49) % Change in valuation allowance (32) % (27) % 12 % Change in Irish trading status 3 % — % — % Effective tax rate — % — % — % The trading income tax rate for an Irish company is 12.5% and the non-trading income tax rate is 25%. During 2019, the Company determined that it qualifies as a non-trading company. As such, the Company’s Irish NOLs were revalued to the higher rate. Further, not all expenses incurred will result in a non-trading company loss carryforward. These changes had no impact to income tax expense as a result of the valuation allowance. Deferred tax assets and liabilities are determined based on the difference between financial statement and tax bases using enacted tax rates in effect for the year in which the differences are expected to reverse. The components of the deferred tax assets and liabilities consist of the following: As of December 31, 2019 2018 Deferred tax assets: Net operating loss carryforwards $ 300,292 $ 231,918 General business credits 114,887 109,502 Product license 6,456 6,902 Inventory 3,129 7,651 Stock based compensation 20,587 17,960 Other 10,012 6,895 Deferred tax assets $ 455,363 $ 380,828 Deferred tax liabilities: Intangibles $ (14,316) $ (15,424) Convertible debt (27,570) (32,799) Deferred tax liabilities $ (41,886) $ (48,223) Net deferred tax assets $ 413,477 $ 332,605 Valuation allowance (413,477) (332,605) Net deferred tax assets $ — $ — The net deferred tax assets (prior to applying the valuation allowance) of $413.5 million and $332.6 million at December 31, 2019 and 2018, respectively, primarily consist of net operating loss carryforwards for income tax purposes. Due to the Company's history of operating losses, the Company recorded a valuation allowance on its net deferred tax assets by increasing the valuation allowance by $80.9 million and $71.3 million in 2019 and 2018, respectively, as it was more likely than not that such tax benefits will not be realized. At December 31, 2019, the Company had federal net operating loss carryforwards for income tax purposes of approximately $1.1 billion. Due to the limitation on NOLs as more fully discussed below, $889.0 million of the NOLs are available to offset future taxable income, if any. The NOL carryovers and general business tax credits expire in various years beginning in 2018. For state tax purposes, the Company has approximately $517.4 million of New Jersey NOLs available to offset against future taxable income. The Company also has California and Virginia NOLs that are entirely limited due to Section 382 (as discussed below). The Company has $152.4 million of non-trading loss carryforwards for Irish tax purposes. From 2014 through 2017, the Company completed an Internal Revenue Code Section 382 (Section 382) analysis in order to determine the amount of losses that are currently available for potential offset against future taxable income, if any. It was determined that the utilization of the Company's NOL and general business tax credit carryforwards generated in tax periods up to and including December 2010 were subject to substantial limitations under Section 382 due to ownership changes that occurred at various points from the Company's original organization through December 2010. In general, an ownership change, as defined by Section 382, results from transactions increasing the ownership of shareholders that own, directly or indirectly, 5% or more of a corporation's stock, in the stock of a corporation by more than 50 percentage points over a testing period (usually 3 years). Since the Company's formation in 1999, it has raised capital through the issuance of common stock on several occasions which, combined with the purchasing shareholders' subsequent disposition of those shares, have resulted in multiple changes in ownership, as defined by Section 382. These ownership changes resulted in substantial limitations on the use of the Company's NOLs and general business tax credit carryforwards up to and including December 2010. The Company continues to track all of its NOLs and tax credit carryforwards but has provided a full valuation allowance to offset those amounts. On December 22, 2017, the US government enacted the Tax Act. The Tax Act significantly revises US tax law by, among other provisions, lowering the US federal statutory income tax rate from 35% to 21%, imposing a mandatory one-time transition tax on previously deferred foreign earnings, and eliminating or reducing certain income tax deductions. The Tax Act ASC 740, Income Taxes requires the effects of changes in tax laws to be recognized in the period in which the legislation is enacted. However, due to the complexity and significance of the Tax Act’s provisions, the SEC staff issued SAB 118, which allowed companies to record the tax effects of the Tax Act on a provisional basis based on a reasonable estimate, and then, if necessary, subsequently adjust such amounts during a limited measurement period as more information becomes available. The Tax Act did not have a material impact on the Company's financial statements because its deferred temporary differences are fully offset by a valuation allowance and the Company does not have any significant offshore earnings from which to record the mandatory transition tax. The Company completed its analysis during the fourth quarter of 2018 and no additional tax effects of the Act were required to be recorded for the year ended December 31, 2018. The financial statement recognition of the benefit for a tax position is dependent upon the benefit being more likely than not to be sustainable upon audit by the applicable taxing authority. If this threshold is met, the tax benefit is then measured and recognized at the largest amount that is greater than 50% likely of being realized upon ultimate settlement. If such unrecognized tax benefits were realized and not subject to valuation allowances, the Company would recognize a tax benefit of $4.8 million. The following table summarizes the gross amounts of unrecognized tax benefits (in thousands): 2019 2018 Balance as of January 1, $ 4,087 $ — Additions related to prior period tax positions — 3,345 Reductions related to prior period tax positions (60) — Additions related to current period tax positions 809 742 Balance as of December 31, $ 4,836 $ 4,087 The Company is subject to US federal and state income taxes and the statute of limitations for tax audit is open for the federal tax returns for the years ended 2016 and later, and is generally open for certain states for the years 2015 and later. The Company has incurred net operating losses since inception, except for the year ended December 31, 2009. Such loss carryforwards would be subject to audit in any tax year in which those losses are utilized, notwithstanding the year of origin. The Company's policy is to recognize interest accrued related to unrecognized tax benefits and penalties in income tax expense. The Company has recorded no such expense. As of December 31, 2019 and 2018, the Company has recorded reserves for unrecognized income tax benefits of $4.8 million and $4.1 million, respectively. As any adjustment to the Company’s uncertain tax positions would not result in a cash tax liability, it has not recorded any accrued interest or penalties related to its uncertain tax positions. The Company does not anticipate any material changes in the amount of unrecognized tax positions over the next 12 months. |
License and Other Agreements
License and Other Agreements | 12 Months Ended |
Dec. 31, 2019 | |
License and Other Agreements | |
License and Other Agreements | License and Other Agreements In-License Agreements PARI Pharma GmbH —In April 2008, the Company entered into a licensing agreement with PARI Pharma GmbH (PARI) for use of the optimized Lamira Nebulizer System for delivery of ARIKAYCE in treating patients with NTM lung infections, CF and bronchiectasis. Under the licensing agreement, the Company has rights under several US and foreign issued patents and patent applications involving improvements to the optimized Lamira Nebulizer System, to exploit the system with ARIKAYCE for the treatment of such indications, but the Company cannot manufacture the nebulizers except as permitted under the a commercialization agreement with PARI, which is described in further detail below. The Lamira Nebulizer System has been approved for use in the US (in combination with ARIKAYCE) and EU. Under the licensing agreement, the Company paid PARI an upfront license fee and certain milestone payments. Upon FDA acceptance of the Company's New Drug Application and the subsequent FDA approval of ARIKAYCE, the Company paid PARI additional milestone payments of €1.0 million and €1.5 million, respectively. In addition, PARI is entitled to receive a future milestone payment of €0.5 million in cash based first receipt of the first marketing approval in a major EU country for ARIKAYCE and the device. In October 2017, the Company exercised an option to buy-down the royalties that will be paid to PARI on ARIKAYCE net sales. As a result, PARI is entitled to receive royalty payments in the mid-single digits on the annual global net sales of ARIKAYCE, pursuant to the licensing agreement, subject to certain specified annual minimum royalties. The buy-down payment to PARI was included as a component of SG&A expenses in the fourth quarter of 2017. See below for information related to the commercialization agreement with PARI. Other Agreements Cystic Fibrosis Foundation Therapeutics, Inc. —In 2004 and 2009, the Company entered into research funding agreements with Cystic Fibrosis Foundation Therapeutics, Inc. (CFFT) whereby it received $1.7 million and $2.2 million in research funding for the development of ARIKAYCE. As a result of the US approval of ARIKAYCE and in accordance with the agreements, as amended, the Company owes payments to CFFT of $13.4 million in the aggregate, which are payable through 2025. Furthermore, if certain global sales milestones are met within five years of the ARIKAYCE's commercialization, the Company would owe up to an additional $3.9 million. The Company has determined the likelihood of meeting such global sales milestones and have accrued for these contingent obligations proportionally based on net sales of ARIKAYCE. Therapure Biopharma Inc. —In February 2014, the Company entered into a contract manufacturing agreement with Therapure Biopharma Inc. (Therapure) for the manufacture of ARIKAYCE, on a non-exclusive basis, at a 200 kg scale. Pursuant to the agreement, the Company and Therapure collaborated to construct a production area for the manufacture of ARIKAYCE in Therapure's existing manufacturing facility in Canada. The agreement has an initial term of five years, which began in October 2018, and will renew automatically for successive periods of two years each, unless terminated by either party by providing the required two years prior written notice to the other party. Notwithstanding the foregoing, the parties have rights and obligations under the agreement prior to the commencement of the initial term. Under the agreement, the Company is obligated to pay a minimum of $6 million for commercial ARIKAYCE batches produced and certain manufacturing activities each calendar year. PARI Pharma GmbH —In July 2014, the Company entered into a commercialization agreement with PARI (the Commercialization Agreement) for the manufacture and supply of Lamira Nebulizer Systems and related accessories (the Device) as optimized for use with ARIKAYCE. Under the Commercialization Agreement, PARI manufactures the Device except in the case of certain defined supply failures, when the Company will have the right to make the Device and have it made by third parties (but not certain third parties deemed under the Commercialization Agreement to compete with PARI). The Commercialization Agreement has an initial term of fifteen years from the first commercial sale of ARIKAYCE in October 2018 (the Initial Term). The term of the agreement may be extended by the Company for an additional five years by providing written notice to PARI at least one year prior to the expiration of the Initial Term. Notwithstanding the foregoing, the parties have certain rights and obligations under the agreement prior to the commencement of the Initial Term. Ajinomoto Althea, Inc. —In September 2015, the Company entered into a Commercial Fill/Finish Services Agreement (the Fill/Finish Agreement) with Ajinomoto Althea, Inc., a Delaware corporation (Althea), for Althea to produce, on a non-exclusive basis, ARIKAYCE in finished dosage form at a 50 kg scale. Under the Fill/Finish Agreement, the Company is obligated to pay a minimum of $2.7 million for the batches of ARIKAYCE produced by Althea each calendar year during the term of the Fill/Finish Agreement. The Fill/Finish Agreement became effective as of January 1, 2015, and following an extension in 2018, is expected to remain in effect through December 31, 2021. The Fill/Finish Agreement may be extended for additional two-year periods upon mutual written agreement of the Company and Althea at least one year prior to the expiration of its then-current term. The Company has expensed at least the required minimum in each year of the contract. AstraZeneca AB —In October 2016, the Company entered into a license agreement (AZ License Agreement) with AstraZeneca AB, a Swedish corporation (AstraZeneca). Pursuant to the terms of the AZ License Agreement, AstraZeneca granted the Company exclusive global rights for the purpose of developing and commercializing AZD7986 (renamed INS 1007). In consideration of the licenses and other rights granted by AstraZeneca, the Company made an upfront payment of $30.0 million, which was included as research and development expense in the fourth quarter of 2016. The Company is also obligated to make a series of contingent milestone payments totaling up to an additional $85.0 million upon the achievement of clinical development and regulatory filing milestones. If the Company elects to develop INS1007 for a second indication, the Company will be obligated to make an additional series of contingent milestone payments to AstraZeneca totaling up to $42.5 million. The Company is not obligated to make any additional milestone payments for additional indications. In addition, the Company will pay AstraZeneca tiered royalties ranging from a high single-digit to mid-teens on net sales of any approved product based on INS1007 and one additional payment of $35.0 million upon the first achievement of $1.0 billion in annual net sales. The AZ License Agreement provides AstraZeneca with the option to negotiate a future agreement with the Company for commercialization of INS1007 in chronic obstructive pulmonary disease or asthma. Patheon UK Limited —In October 2017, the Company entered into certain agreements with Patheon UK Limited (Patheon) related to the increase of its long-term production capacity for ARIKAYCE commercial inventory. The agreements provide for Patheon to manufacture and supply ARIKAYCE for its anticipated commercial needs. Under these agreements, the Company is required to deliver to Patheon the required raw materials, including active pharmaceutical ingredients, and certain fixed assets needed to manufacture ARIKAYCE. Patheon's supply obligations will commence once certain technology transfer and construction services are completed. The Company's manufacturing and supply agreement with Patheon will remain in effect for a fixed initial term, after which it will continue for successive renewal terms unless either party has given written notice of termination. The technology transfer agreement will expire when the parties agree that the technology transfer services have been completed. The agreements may also be terminated under certain other circumstances, including by either party due to a material uncured breach of the other party or the other party’s insolvency. These early termination clauses may reduce the amounts due to the relevant parties. The investment to increase our long-term production capacity, including under the Patheon agreements and related agreements or purchase orders with third parties for raw materials and fixed assets, is estimated to be approximately $60 million. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Commitments In September 2018, the Company entered into a lease for its new corporate headquarters in Bridgewater, New Jersey. The initial lease term commenced in October 2019 and expires in September 2030. In July 2016, the Company signed an operating lease for laboratory space, also located in Bridgewater, for which the initial lease term expires in September 2021. In October 2018, the Company expanded its lease for laboratory space located in Bridgewater, which commenced in January 2019. Future minimum rental payments under the Bridgewater leases are $34.5 million. Rent expense charged to operations was $3.2 million, $2.1 million, and $1.5 million for the years ended December 31, 2019, 2018 and 2017, respectively. Rent expense is recorded on a straight-line basis over the term of the applicable leases. In addition to rent, the Company has several firm purchase commitments, primarily related to the manufacturing of ARIKAYCE and annual minimum royalties on global net sales of ARIKAYCE. Future firm purchase commitments under these agreements, the last of which ends in 2034, total $82.0 million. These amounts do not represent the Company's entire anticipated purchases in the future, but instead represent only purchases that are the subject of contractually obligated minimum purchases. The minimum commitments disclosed are determined based on non-cancelable minimum spend amounts or termination amounts. Additionally, the Company purchases products and services as needed with no firm commitment. Legal Proceedings From time to time, the Company is a party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of business. While the outcomes of these matters are uncertain, management does not expect that the ultimate costs to resolve these matters will have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data (Unaudited) | Quarterly Financial Data (Unaudited) The following table summarizes unaudited quarterly financial data for the years ended December 31, 2019 and 2018 (in thousands, except per share data). 2019 First Quarter Second Quarter Third Quarter Fourth Quarter Total Revenues $ 21,902 $ 29,972 $ 38,885 $ 45,708 $ 136,467 Gross profit* $ 17,752 $ 25,053 $ 32,448 $ 37,002 $ 112,255 Operating loss $ (69,509) $ (62,166) $ (56,488) $ (47,082) $ (235,245) Net loss $ (74,153) $ (66,514) $ (60,682) $ (52,988) $ (254,337) Basic and diluted net loss per share $ (0.96) $ (0.81) $ (0.68) $ (0.59) $ (3.01) 2018 First Quarter Second Quarter Third Quarter Fourth Quarter** Total Revenues $ — $ — $ — $ 9,835 $ 9,835 Gross profit* $ — $ — $ — $ 7,412 $ 7,412 Operating loss $ (62,751) $ (72,882) $ (83,983) $ (87,722) $ (307,338) Net loss $ (68,524) $ (76,437) $ (87,743) $ (91,573) $ (324,277) Basic and diluted net loss per share $ (0.89) $ (1.00) $ (1.14) $ (1.19) $ (4.22) ________________ * Excludes amortization of intangible assets. Basic and diluted net loss per share amounts included in the above table were computed independently for each of the quarters presented. Accordingly, the sum of the quarterly basic and diluted net loss per share amounts may not agree to the total for the year. |
Retirement Plan
Retirement Plan | 12 Months Ended |
Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |
Retirement Plan | Retirement PlanThe Company has a 401(k) defined contribution plan for the benefit for all US employees and permits voluntary contributions by employees subject to IRS-imposed limitations. Effective January 1, 2018, the Company matched 100% of eligible employee contributions on the first 4% of employee salary (up to the IRS maximum). Employer contributions for the year ended December 31, 2019, 2018 and 2017 were $2.8 million, $2.2 million and $0.8 million, respectively. In 2017, the Company matched 100% of eligible employee contributions on the first 3% of employee salary (up to the IRS maximum). |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation —The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Celtrix Pharmaceuticals, Inc., Insmed Holdings Limited, Insmed Ireland Limited, Insmed France SAS, Insmed Germany GmbH, Insmed Limited, Insmed Netherlands B.V., Insmed Bermuda Limited, Insmed Godo Kaisha, Insmed Switzerland GmbH, and Insmed Italy S.R.L.. All intercompany transactions and balances have been eliminated in consolidation. |
Use of Estimates | Use of Estimates —The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States (GAAP) requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The Company bases its estimates and judgments on historical experience and on various other assumptions. The amounts of assets and liabilities reported in the Company's balance sheets and the amounts of revenues and expenses reported for each period presented are affected by estimates and assumptions, which are used for, but not limited to, the accounting for revenue allowances, stock-based compensation, income taxes, loss contingencies, and accounting for research and development costs. Actual results could differ from those estimates. |
Investment Income and Interest Expense | Investment Income and Interest Expense —Investment income consists of interest income earned on the Company's cash and cash equivalents. Interest expense consists primarily of interest costs related to the Company's debt. |
Cash and Cash Equivalents | Cash and Cash Equivalents —The Company considers cash equivalents to be highly liquid investments with maturities of three months or less from the date of purchase. |
Fixed Assets, Net | Fixed Assets, Net —Fixed assets are recorded at cost and are depreciated on a straight-line basis over the estimated useful lives of the assets. Estimated useful lives of three years to five years are used for computer equipment. Estimated useful lives of seven years are used for laboratory equipment, office equipment, manufacturing equipment and furniture and fixtures. Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the asset. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, then an impairment charge is recognized for the amount by which the carrying value of the asset exceeds the fair value of the asset. |
Intangible Assets, Net and Impairment Assessment | Intangible Assets, Net —Finite-lived intangible assets are measured at their respective fair values on the date they were recorded and, with respect to the acquired ARIKAYCE R&D intangible asset, at the date of subsequent adjustments of fair value. The fair values assigned to the Company's intangible assets are based on reasonable estimates and assumptions given available facts and circumstances. |
Debt Issuance Costs | Debt Issuance Costs —Debt issuance costs are amortized to interest expense using the effective interest rate method over the term of the debt. Debt issuance costs paid to the lender and third parties are reflected as a discount to the debt in the consolidated balance sheets. Unamortized debt issuance costs associated with extinguished debt are expensed in the period of the extinguishment. |
Fair Value Measurements | Fair Value Measurements —The Company categorizes its financial assets and liabilities measured and reported at fair value in the financial statements on a recurring basis based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels, which are directly related to the amount of subjectivity associated with the inputs used to determine the fair value of financial assets and liabilities, are as follows: • Level 1 — Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. • Level 2 — Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable for the assets or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life. • Level 3 — Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. Each major category of financial assets and liabilities measured at fair value on a recurring basis is categorized based upon the lowest level of significant input to the valuations. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Financial instruments in Level 1 generally include US treasuries and mutual funds listed in active markets. The Company's only financial assets and liabilities which were measured at fair value as of December 31, 2019 and December 31, 2018 were Level 1 assets comprised of cash and cash equivalents. The Company's cash and cash equivalents permit daily redemption and the fair values of these investments are based upon the quoted prices in active markets provided by the holding financial institutions. The following table shows assets and liabilities that are measured at fair value on a recurring basis and their carrying value (in millions): As of December 31, 2019 Fair Value Carrying Value Level 1 Level 2 Level 3 Cash and cash equivalents $ 487.4 $ 487.4 $ — $ — As of December 31, 2018 Fair Value Carrying Value Level 1 Level 2 Level 3 Cash and cash equivalents $ 495.1 $ 495.1 $ — $ — The Company recognizes transfers between levels within the fair value hierarchy, if any, at the end of each quarter. There were no transfers in or out of Level 1, Level 2 or Level 3 during 2019 and 2018. As of December 31, 2019 and 2018, the Company held no securities that were in an unrealized loss or gain position. The Company reviews the status of each security quarterly to determine whether an other-than-temporary impairment has occurred. In making its determination, the Company considers a number of factors, including: (1) the significance of the decline; (2) whether the security was rated below investment grade; (3) how long the security has been in an unrealized loss position; and (4) the Company's ability and intent to retain the investment for a sufficient period of time for it to recover. |
Foreign Currency | Foreign Currency —The Company has operations in the US, France, Germany, Ireland, Italy, the Netherlands, Switzerland, the United Kingdom (UK), and Japan. The results of its non-US dollar based functional currency operations are translated to US dollars at the average exchange rates during the period. Assets and liabilities are translated at the exchange rate prevailing at the balance sheet date. Equity is translated at the prevailing exchange rate at the date of the equity transaction. Translation adjustments are included in shareholders' equity, as a component of accumulated other comprehensive loss. The Company realizes foreign currency transaction gains (losses) in the normal course of business based on movements in the applicable exchange rates. These gains (losses) are included as a component of other income, net. |
Concentration of Credit Risk | Concentration of Credit Risk —Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents. The Company places its cash equivalents with high credit-quality financial institutions and may invest its short-term investments in US treasury securities, mutual funds and government agency bonds. The Company has established guidelines relative to credit ratings and maturities that seek to maintain safety and liquidity. The Company is exposed to risks associated with extending credit to customers related to the sale of products. The Company does not require collateral to secure amounts due from its customers. The following table presents the percentage of gross product revenue represented by the Company's three largest customers as of the year ended December 31, 2019. Percentage of Total Gross Product Revenue 2019 2018 Customer A 31% 27 % Customer B 26% 37 % Customer C 22% 15 % |
Revenue Recognition | Revenue Recognition — In accordance with Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers, the Company recognizes revenue when a customer obtains control of promised goods or services, in an amount that reflects the consideration the Company expects to receive in exchange for the goods or services provided. To determine revenue recognition for arrangements within the scope of ASC 606, the Company performs the following five steps: (1) identify the contracts with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when or as the entity satisfies a performance obligation. At contract inception, the Company assesses the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when or as the performance obligation is satisfied. For all contracts that fall into the scope of ASC 606, the Company has identified one performance obligation: the sale of ARIKAYCE to its customers. The Company has not incurred or capitalized any incremental costs associated with obtaining contracts with customers. Product revenues consist primarily of sales of ARIKAYCE in the US. Product revenues are recognized once the Company performs and satisfies all five steps mentioned above. In October 2018, the Company began shipping ARIKAYCE to its customers in the US, which include specialty pharmacies and specialty distributors. Revenue is recorded at net selling price (transaction price), which includes estimates of variable consideration for which reserves are established for (a) customer credits, such as invoice discounts for prompt pay and specialty pharmacies fees, (b) estimated government rebates, such as Medicaid and Medicare Part D reimbursements, and estimated managed care rebates, (c) estimated chargebacks, and (d) estimated costs of co-payment assistance. These reserves are based on the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable (prompt pay discounts and chargebacks), prepaid expenses (co-payment assistance), or as a current liability (rebates). Where appropriate, these estimates take into consideration a range of possible outcomes which are probability-weighted for relevant factors such as the Company's historical experience, current contractual and statutory requirements, and forecasted customer buying and payment patterns. Overall, these reserves reflect the Company's best estimates of the amount of consideration to which it is entitled based on the terms of the applicable contract. The amount of variable consideration included in the transaction price may be constrained and is included in the net sales price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. Actual amounts of consideration ultimately received may differ from the Company's estimates. If actual results in the future vary from estimates, the Company adjusts these estimates, which would affect net product revenue and earnings in the period such variances become known. Customer credits: The Company's customers are offered various forms of consideration, including fees for enhanced services and prompt payment discounts. The payment terms for sales to specialty pharmacies for prompt payment discounts and fees for services are based on contractual rates agreed with the respective specialty pharmacies. The Company anticipates that its customers will earn these discounts and fees and, therefore, deduct the full amount of these discounts and fees from total gross product revenues at the time such revenues are recognized. Rebates: The Company contracts with government agencies and managed care organizations or collectively, third-party payors, so that ARIKAYCE will be eligible for purchase by, or partial or full reimbursement from, such third-party payors. The Company estimates the rebates it will provide to third-party payors and deducts these estimated amounts from total gross product revenues at the time the revenues are recognized. These reserves are recorded in the same period in which the revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability. The current liability is included in accrued expenses on the consolidated balance sheets. The Company estimates the rebates that it will provide to third-party payors based upon (i) the Company’s contracts with these third-party payors, (ii) the government mandated discounts applicable to government-funded programs, (iii) a range of possible outcomes that are probability-weighted for the estimated payer mix, and (iv) information obtained from the Company’s specialty pharmacies. Chargebacks: Chargebacks are discounts that occur when certain contracted customers, currently public health service institutions and federal government entities purchasing via the Federal Supply Schedule, purchase directly from the Company's specialty distributor. Contracted customers generally purchase the product at a discounted price and the specialty distributor, in turn, charges back to the Company the difference between the price they initially paid and the discounted price paid by the contracted customers. The Company estimates chargebacks provided to the specialty distributor and deducts these estimated amounts from gross product revenues, and from accounts receivable, at the time revenues are recognized. Co-payment assistance: Patients who have commercial insurance and meet certain eligibility requirements may receive co-payment assistance. Based upon the terms of the program and information regarding programs provided for similar specialty pharmaceutical products, the Company estimates the average co-pay mitigation amounts and the percentage of patients that it expects to participate in the program in order to establish accruals for co-payment assistance. These reserves are recorded in the same period in which the related revenue is recognized, resulting in a reduction of product revenue. The Company adjusts its accruals for co-pay assistance based on actual redemption activity and estimates of future redemptions related to sales in the current period. If any, or all, of the Company's actual experience vary from the estimates above, the Company may need to adjust prior period accruals, affecting revenue in the period of adjustment. The following table provides a summary roll-forward of the Company's sales allowances and related accruals for the years ended December 31, 2019 and 2018, which have been deducted in arriving at revenues, net (in thousands). Customer Credits, Fees and Discounts Rebates, Chargebacks and Co-pay Assistance Total Balance as of January 1, 2019 $ 234 $ 688 $ 922 Allowances for current period sales 3,151 12,059 15,210 Allowances for prior period sales 14 26 40 Payments and credits (2,935) (7,602) (10,537) Balance as of December 31, 2019 $ 464 $ 5,171 $ 5,635 Balance as of January 1, 2018 $ — $ — $ — Allowances for current period sales 335 849 1,184 Payments and credits (101) (161) (262) Balance as of December 31, 2018 $ 234 $ 688 $ 922 The Company also recognizes revenue related to early access programs (EAPs) in Europe, consisting of sales to the French National Agency for Medicines and Health Products Safety, which granted ARIKAYCE a Temporary Authorization for Use (Autorisation Temporaire d'Utilisation or ATU) and from the named patient program in Germany, both compassionate use programs. EAPs are intended to make products available on a named patient basis before they are commercially available in accordance with local regulations. |
Inventory and cost of product revenues (excluding amortization of intangible assets) | Inventory and Cost of Product Revenues (excluding amortization of intangible assets) —Inventory is stated at the lower of cost and net realizable value. The Company began capitalizing inventory costs following FDA approval of ARIKAYCE in September 2018. Inventory is sold on a first-in, first-out (FIFO) basis. The Company periodically reviews inventory for expiry and obsolescence and, if necessary, writes down accordingly. If quality specifications are not met during the manufacturing process, such inventory is written off to cost of product revenues (excluding amortization of intangible assets) in the period identified. Cost of product revenues (excluding amortization of intangible assets) consist primarily of direct and indirect costs related to the manufacturing of ARIKAYCE sold, including third-party manufacturing costs, packaging services, freight, and allocation of overhead costs, in addition to royalty expenses and revenue-based milestones. Cost is determined using a standard cost method, which approximates actual cost, and assumes a first-in, first-out (FIFO) flow of goods. Prior to FDA approval of ARIKAYCE, the Company expensed all inventory related costs in the period incurred. Inventory used for clinical development purposes is expensed to research and development (R&D) expense when consumed. |
Research and Development | Research and Development —R&D expenses consist primarily of salaries, benefits and other related costs, including stock-based compensation, for personnel serving in the Company's research and development functions, including medical affairs. R&D expense also includes other internal operating expenses, the cost of manufacturing a product candidate, including the medical devices for drug delivery, for clinical study, the cost of conducting clinical studies, and the cost of conducting preclinical and research activities. In addition, R&D expenses include payments to third parties for the license rights to products in development (prior to marketing approval), such as INS1007. The Company's expenses related to manufacturing its product candidates and medical devices for clinical study are primarily related to activities at contract manufacturing organizations that manufacture INS1007 and INS1009. The Company's expenses related to clinical trials are primarily related to activities at contract research organizations that conduct and manage clinical trials on the Company's behalf. These contracts set forth the scope of work to be completed at a fixed fee or amount per patient enrolled. Payments under these contracts primarily depend on performance criteria such as the successful enrollment of patients or the completion of clinical trial milestones as well as time-based fees. Expenses are accrued based on contracted amounts applied to the level of patient enrollment and to activity according to the clinical trial protocol. Nonrefundable advance payments for goods or services that will be used or rendered for future research and development activities are deferred and capitalized. Such amounts are then recognized as an expense as the related goods are delivered or the services are performed, or when the goods or services are no longer expected to be provided. |
Stock-Based Compensation | Stock-based Compensation —The Company recognizes stock-based compensation expense for awards of equity instruments to employees and directors based on the grant-date fair value of those awards. The grant-date fair value of the award is recognized as compensation expense ratably over the requisite service period, which generally equals the vesting period of the award, and if applicable, is adjusted for expected forfeitures. The Company may also grant performance-based stock options to employees from time-to-time. The grant-date fair value of performance-based stock options is recognized as compensation expense over the implicit service period using the accelerated attribution method once it is probable that the performance condition will be achieved. Stock-based compensation expense is included in both R&D and SG&A expenses in the consolidated statements of comprehensive loss. |
Income Taxes | Income Taxes —The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded to reduce the deferred tax assets to the amount that is expected to be realized. In evaluating the need for a valuation allowance, the Company takes into account various factors, including the expected level of future taxable income and available tax planning strategies. If actual results differ from the assumptions made in the evaluation of a valuation allowance, the Company records a change in valuation allowance through income tax expense in the period such determination is made. The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based solely on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood to be sustained upon ultimate settlement. As any adjustment to the Company’s uncertain tax positions would not result in a cash tax liability, it has not recorded any accrued interest or penalties related to its uncertain tax positions. The Company's policy for interest and penalties related to income tax exposures is to recognize interest and penalties as a component of the income tax provision (benefit) in the consolidated statements of comprehensive loss. |
Net Loss Per Share | Net Loss Per Share —Basic net loss per share is computed by dividing net loss attributable to common shareholders by the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted average number of common shares and other dilutive securities outstanding during the period. Potentially dilutive securities from stock options and restricted stock units would be anti-dilutive as the Company incurred a net loss in all periods presented. Potentially dilutive common shares resulting from the assumed exercise of outstanding stock options would be determined based on the treasury stock method. The following table sets forth the reconciliation of the weighted average number of shares used to compute basic and diluted net loss per share for the years ended December 31, 2019, 2018 and 2017. Years Ended December 31, 2019 2018 2017 (in thousands, except per share amounts) Numerator: Net loss $ (254,337) $ (324,277) $ (192,649) Denominator: Weighted average common shares used in calculation of basic net loss per share: 84,560 76,889 66,576 Effect of dilutive securities: Common stock options — — — Unvested restricted stock and restricted stock units — — — Convertible debt securities — — — Weighted average common shares outstanding used in calculation of diluted net loss per share 84,560 76,889 66,576 Net loss per share: Basic and diluted $ (3.01) $ (4.22) $ (2.89) The following potentially dilutive securities have been excluded from the computations of diluted weighted average common shares outstanding as of December 31, 2019, 2018 and 2017 as their effect would have been anti-dilutive (in thousands). As of December 31, 2019 2018 2017 Common stock options 10,493 9,382 8,609 Unvested restricted stock and restricted stock units 501 228 47 Convertible debt securities 11,492 11,492 — |
Leases | Leases —In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) in order to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under previous generally accepted accounting principles. ASU 2016-02 requires a lessee to recognize a liability to make lease payments (the lease liability) and a right-of-use (ROU) asset representing its right to use the underlying asset for the lease term on the balance sheet. A lease is a contract, or part of a contract, that conveys the right to control the use of explicitly or implicitly identified property, plant or equipment in exchange for consideration. Control of an asset is conveyed to the Company if the Company obtains the right to obtain substantially all of the economic benefits of the asset or the right to direct the use of the asset. The Company recognizes ROU assets and lease liabilities at the lease commencement date based on the present value of future, fixed lease payments over the term of the arrangement. ROU assets are amortized on a straight-line basis over the term of the lease. Lease liabilities accrete to yield and are reduced at the time when the lease payment is payable to the vendor. Variable lease payments are recognized at the time when the event giving rise to the payment occurs and are recognized in the statement of comprehensive loss in the same line item as expenses arising from fixed lease payments. In accordance with Topic 842, leases are measured at present value using the rate implicit in the lease or, if the implicit rate is not determinable, the lessee's implicit borrowing rate. As the implicit rate is not typically available, the Company uses its implicit borrowing rate based on the information available at the lease commencement date to determine the present value of future lease payments. The implicit borrowing rate approximates the rate the Company would pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments. Financial information presented prior to January 1, 2019 has not been adjusted and is presented in accordance with ASC 840. Refer to the Recently Adopted Accounting Pronouncements section within this note below and Note 7 - Leases for details about the Company's lease portfolio, including Topic 842 required disclosures. |
Segment Information | Segment Information —The Company currently operates in one business segment, which is the development and commercialization of therapies for patients with rare diseases. A single management team that reports to the Chief Executive Officer comprehensively manages the entire business. The Company does not operate separate lines of business with respect to its products or product candidates. Accordingly, the Company has one reportable segment. |
Recently Adopted Accounting Pronouncements and (Not Yet Adopted) | Recently Adopted Accounting Pronouncements —Topic 842 was effective for fiscal years beginning after December 15, 2018 (including interim periods within those years) and early adoption was permitted. In August 2018, the FASB issued ASU 2018-11, Targeted Improvements to ASC 842, which provided a transition option in which an entity would initially apply ASU 2016-02 at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company used the new transition option and the package of practical expedients that allowed it to not reassess: (1) whether any expired or existing contracts are or contain leases; (2) lease classification for any expired or existing leases; and (3) initial direct costs for any expired or existing leases. The Company also used the practical expedient that allows it to treat the lease and non-lease components of its leases as a single component. The Company adopted ASU 2016-02 effective January 1, 2019. The impact of the adoption of ASU 2016-02 on the consolidated balance sheet was $47.4 million. In August 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments , which addressed eight specific cash flow issues with the objective of reducing the existing diversity in practice. Among the updates, the standard requires debt extinguishment costs to be classified as cash outflows for financing activities. This standard update became effective as of the first quarter of 2018. As a result of the adoption of the standard, in the first quarter of 2018, the Company reported a $2.2 million loss on extinguishment of debt in the operating activities section of its consolidated statement of cash flows. The Company had no material debt extinguishment costs prior to the first quarter of 2018. The impact of adopting this standard was not material to the Company. Recent Accounting Pronouncements (Not Yet Adopted) —In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses which requires financial assets measured at an amortized cost basis to be presented at the net amount expected to be collected. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019 and the Company will adopt the standard effective January 1, 2020. Different aspects of the guidance require modified retrospective or prospective adoption. The Company has performed an assessment and has determined that adoption will not have a material impact on its consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Carrying Value and Fair Value of Assets and Liabilities | The following table shows assets and liabilities that are measured at fair value on a recurring basis and their carrying value (in millions): As of December 31, 2019 Fair Value Carrying Value Level 1 Level 2 Level 3 Cash and cash equivalents $ 487.4 $ 487.4 $ — $ — As of December 31, 2018 Fair Value Carrying Value Level 1 Level 2 Level 3 Cash and cash equivalents $ 495.1 $ 495.1 $ — $ — |
Schedules of Concentration of Risk, by Risk Factor | The following table presents the percentage of gross product revenue represented by the Company's three largest customers as of the year ended December 31, 2019. Percentage of Total Gross Product Revenue 2019 2018 Customer A 31% 27 % Customer B 26% 37 % Customer C 22% 15 % |
Contract with Customer, Asset, Allowance for Credit Loss | The following table provides a summary roll-forward of the Company's sales allowances and related accruals for the years ended December 31, 2019 and 2018, which have been deducted in arriving at revenues, net (in thousands). Customer Credits, Fees and Discounts Rebates, Chargebacks and Co-pay Assistance Total Balance as of January 1, 2019 $ 234 $ 688 $ 922 Allowances for current period sales 3,151 12,059 15,210 Allowances for prior period sales 14 26 40 Payments and credits (2,935) (7,602) (10,537) Balance as of December 31, 2019 $ 464 $ 5,171 $ 5,635 Balance as of January 1, 2018 $ — $ — $ — Allowances for current period sales 335 849 1,184 Payments and credits (101) (161) (262) Balance as of December 31, 2018 $ 234 $ 688 $ 922 |
Reconciliation of the Weighted Average Number of Shares Used to Compute Basic and Diluted Net Loss per Share | The following table sets forth the reconciliation of the weighted average number of shares used to compute basic and diluted net loss per share for the years ended December 31, 2019, 2018 and 2017. Years Ended December 31, 2019 2018 2017 (in thousands, except per share amounts) Numerator: Net loss $ (254,337) $ (324,277) $ (192,649) Denominator: Weighted average common shares used in calculation of basic net loss per share: 84,560 76,889 66,576 Effect of dilutive securities: Common stock options — — — Unvested restricted stock and restricted stock units — — — Convertible debt securities — — — Weighted average common shares outstanding used in calculation of diluted net loss per share 84,560 76,889 66,576 Net loss per share: Basic and diluted $ (3.01) $ (4.22) $ (2.89) |
Potentially Dilutive Securities Excluded from Computations of Diluted Weighted Average Common Shares Outstanding | The following potentially dilutive securities have been excluded from the computations of diluted weighted average common shares outstanding as of December 31, 2019, 2018 and 2017 as their effect would have been anti-dilutive (in thousands). As of December 31, 2019 2018 2017 Common stock options 10,493 9,382 8,609 Unvested restricted stock and restricted stock units 501 228 47 Convertible debt securities 11,492 11,492 — |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current | The Company's inventory balance consists of the following (in thousands): As of December 31, 2019 2018 Raw materials $ 16,048 $ 2,145 Work-in-process 6,420 4,567 Finished goods 5,845 320 $ 28,313 $ 7,032 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Accrued expenses consist of the following (in thousands): As of December 31, 2019 2018 Accrued clinical trial expenses $ 5,598 $ 6,635 Accrued professional fees 12,581 13,398 Accrued technical operation expenses 6,446 9,371 Accrued royalty payable 3,117 409 Accrued interest payable 3,631 3,631 Accrued sales allowances and related costs 5,267 818 Accrued construction costs 2,689 2,946 Other accrued expenses 1,046 1,046 $ 40,375 $ 38,254 |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule Intangible Assets | A rollforward of the Company's finite-lived intangible assets for the years ended December 31, 2019 and 2018 follows (in thousands): 2019 Intangible Asset January 1, Additions Amortization December 31, Acquired ARIKAYCE R&D $ 56,988 $ — $ (4,849) $ 52,139 PARI milestone 1,687 — (144) 1,543 $ 58,675 $ — $ (4,993) $ 53,682 2018 Intangible Asset January 1, Additions Amortization December 31, Acquired ARIKAYCE R&D $ 58,200 $ — $ (1,212) $ 56,988 PARI milestone — 1,724 (37) 1,687 $ 58,200 $ 1,724 $ (1,249) $ 58,675 |
Fixed Assets, net (Tables)
Fixed Assets, net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Fixed Assets | Fixed assets are stated at cost and depreciated using the straight-line method, based on useful lives as follows (in thousands): Estimated Useful Life (years) As of December 31, Asset Description 2019 2018 Lab equipment 7 $ 9,634 $ 7,935 Furniture and fixtures 7 5,908 2,320 Computer hardware and software 3 - 5 6,806 3,796 Office equipment 7 154 65 Manufacturing equipment 7 1,567 1,166 Leasehold improvements lease term 33,852 7,202 Construction in progress (CIP) — 21,526 14,325 79,447 36,809 Less accumulated depreciation (19,267) (14,173) Fixed assets, net $ 60,180 $ 22,636 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Lease, Cost | The table below summarizes the Company's total lease costs included in its consolidated financial statements, as well as other required quantitative disclosures (in thousands). As of December 31, 2019 Finance lease cost: Amortization of right-of-use assets $ 360 Interest on lease liabilities 440 Total finance lease cost $ 800 Operating lease cost 12,218 Total lease cost $ 13,018 Other information: Cash paid for amounts included in the measurement of lease liabilities Operating cash flows for finance leases $ — Operating cash flows for operating leases $ 10,060 Financing cash flows for finance leases $ (4,503) Right-of-use assets obtained in exchange for new finance lease liabilities $ 20,310 Right-of-use assets obtained in exchange for new operating lease liabilities $ 47,436 Weighted average remaining lease term - finance leases 10.6 years Weighted average remaining lease term - operating leases 5.0 years Weighted average discount rate - finance leases 8.6 % Weighted average discount rate - operating leases 7.4 % |
Maturity of Operating Lease Liabilities | The table below presents the maturity of lease liabilities on an annual basis for the remaining years of the Company's commenced lease agreements (in thousands). Year Ending December 31, Finance Lease Operating Leases 2020 $ 2,938 $ 13,415 2021 2,996 10,306 2022 2,280 6,000 2023 2,080 6,000 2024 3,172 6,000 Thereafter 18,784 6,000 Total 32,250 47,721 Less: present value discount 11,500 7,373 Present value of lease liabilities $ 20,750 $ 40,348 Balance Sheet Classification at December 31, 2019: Current lease liabilities $ 1,221 $ 11,040 Long-term lease liabilities 19,529 29,308 Total lease liabilities $ 20,750 $ 40,348 |
Maturity of Finance Lease Liabilities | The table below presents the maturity of lease liabilities on an annual basis for the remaining years of the Company's commenced lease agreements (in thousands). Year Ending December 31, Finance Lease Operating Leases 2020 $ 2,938 $ 13,415 2021 2,996 10,306 2022 2,280 6,000 2023 2,080 6,000 2024 3,172 6,000 Thereafter 18,784 6,000 Total 32,250 47,721 Less: present value discount 11,500 7,373 Present value of lease liabilities $ 20,750 $ 40,348 Balance Sheet Classification at December 31, 2019: Current lease liabilities $ 1,221 $ 11,040 Long-term lease liabilities 19,529 29,308 Total lease liabilities $ 20,750 $ 40,348 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Components of Debt Balance | The following table presents the carrying value of the Company’s debt balance as of December 31, 2019 (in thousands): As of December 31, 2019 1.75% convertible senior notes due 2025 $ 450,000 Debt issuance costs, unamortized (7,043) Discount on debt (107,017) Long-term debt, net $ 335,940 |
Schedule of Future Principal Repayments of Debt | As of December 31, 2019, future principal repayments of the debt for each of the fiscal years through maturity were as follows (in thousands): Year Ending December 31: 2020 $ — 2021 — 2022 — 2023 — 2024 and thereafter 450,000 $ 450,000 |
Summary of Interest Expense | Interest expense related to debt and the finance lease for the years ended December 31, 2019, 2018, and 2017, which includes the contractual interest coupon payable semi-annually in cash, the amortization of the issuance costs, and accretion of debt discount is as follows (in thousands): Years ended December 31, 2019 2018 2017 Contractual interest expense $ 7,883 $ 8,183 $ 5,149 Amortization of debt issuance costs 1,397 1,350 118 Accretion of back-end fee on debt — 50 658 Accretion of debt discount 17,985 15,889 — Total convertible debt interest expense $ 27,265 $ 25,472 $ 5,925 Finance lease interest expense 440 — — Total interest expense $ 27,705 $ 25,472 $ 5,925 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | |
Summary of Fair Value Assumptions for Stock Options | The following table summarizes the grant date fair value and assumptions used in determining the fair value of all stock options granted, including grants of inducement options, during the years ended December 31, 2019, 2018 and 2017. 2019 2018 2017 Volatility 67%-70% 66% - 68% 71% - 79% Risk-free interest rate 1.35%-2.56% 2.25% - 2.96% 1.73% - 2.13% Dividend yield 0.0% 0.0% 0.0% Expected option term (in years) 5.09 5.09 6.25 Weighted average fair value of stock options granted $8.76 $16.03 $10.52 |
Summary of Stock Option Activity | The following table summarizes stock option activity for stock options granted for the years ended December 31, 2019, 2018 and 2017 as follows: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life in Years Aggregate Intrinsic Value (in '000) Options outstanding at January 1, 2017 7,116,706 $ 13.30 Granted 2,284,710 $ 15.92 Exercised (378,275) $ 9.08 Forfeited and expired (414,220) $ 15.50 Options outstanding at December 31, 2017 8,608,921 $ 14.08 Vested and expected to vest at December 31, 2017 8,325,255 $ 14.03 Exercisable at December 31, 2017 4,229,478 $ 12.71 Options outstanding at December 31, 2017 8,608,921 $ 14.08 Granted 1,755,600 $ 27.63 Exercised (494,351) $ 14.46 Forfeited and expired (488,440) $ 19.79 Options outstanding at December 31, 2018 9,381,730 $ 16.30 Vested and expected to vest at December 31, 2018 8,693,635 $ 15.90 Exercisable at December 31, 2018 5,649,698 $ 13.45 Granted 3,434,270 $ 15.02 Exercised (1,413,341) $ 11.87 Forfeited and expired (909,713) $ 19.02 Options outstanding at December 31, 2019 10,492,946 $ 16.24 6.82 $ 86,921 Vested and expected to vest at December 31, 2019 9,767,035 $ 16.15 6.67 $ 81,572 Exercisable at December 31, 2019 5,719,818 $ 15.38 5.37 $ 51,000 |
Summary of Exercise Price and Number of Stock Options Exercisable | The following table summarizes the range of exercise prices and the number of stock options outstanding and exercisable as of December 31, 2019: Outstanding as of December 31, 2019 Exercisable as of Range of Number of Weighted Weighted Number of Weighted $ 3.03 $ 10.85 1,419,872 4.63 $ 7.55 1,311,142 $ 7.27 $ 11.14 $ 13.67 1,547,063 5.44 $ 12.91 1,237,855 $ 12.76 $ 13.91 $ 13.91 2,661,040 9.01 $ 13.91 — $ — $ 13.94 $ 16.16 1,394,176 5.57 $ 15.59 1,180,091 $ 15.56 $ 16.44 $ 19.47 1,112,775 7.16 $ 17.75 696,563 $ 17.88 $ 19.65 $ 24.22 1,139,884 6.04 $ 22.29 892,465 $ 22.25 $ 24.41 $ 30.46 1,058,332 8.20 $ 29.12 339,295 $ 29.46 $ 30.86 $ 31.73 131,180 8.09 $ 30.94 48,407 $ 30.96 $ 31.78 $ 31.78 21,794 7.48 $ 31.78 11,439 $ 31.78 $ 32.46 $ 32.46 6,830 8.00 $ 32.46 2,561 $ 32.46 |
Summary of RSU Activity | The following table summarizes RSU awards granted during the years ended December 31, 2019, 2018 and 2017: Number of RSUs Weighted Average Grant Price Outstanding at January 1, 2017 89,194 $ 10.85 Granted 46,914 $ 17.16 Released (89,194) $ 10.85 Forfeited — $ — Outstanding at December 31, 2017 46,914 $ 17.16 Granted 253,586 $ 29.16 Released (51,992) $ 18.46 Forfeited (20,682) $ 29.05 Outstanding at December 31, 2018 227,826 $ 29.14 Granted 407,655 $ 27.89 Released (92,145) $ 28.05 Forfeited (42,514) $ 29.11 Outstanding at December 31, 2019 500,822 $ 28.32 |
Summary of Allocation of Employee Stock-Based Compensation | The following table summarizes the stock-based compensation recorded in the consolidated statements of comprehensive loss related to stock options and RSUs during the years ended December 31, 2019, 2018 and 2017 (in millions): 2019 2018 2017 Research and development expenses $ 8.2 $ 9.4 $ 6.5 Selling, general and administrative expenses 18.8 16.8 11.6 Total $ 27.0 $ 26.2 $ 18.1 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Loss Before Income Taxes in the US and Globally | The Company's loss before income taxes in the US and globally was as follows (in thousands): Years Ended December 31, 2019 2018 2017 US $ (201,161) $ (286,211) $ (136,682) Foreign (52,399) (37,865) (56,239) Total $ (253,560) $ (324,076) $ (192,921) |
Schedule of Components Income Tax (Benefit) Provision | The Company's income tax provision (benefit) consisted of the following (in thousands): Years Ended December 31, 2019 2018 2017 Current: Federal $ — $ — $ — State 10 4 3 Foreign 767 197 142 777 201 145 Deferred: Federal — — (417) State — — — Foreign — — — — — (417) Total $ 777 $ 201 $ (272) |
Reconciliation Between Federal Statutory Tax Rate and Effective Tax Rate | The reconciliation between the federal statutory tax rates and the Company's effective tax rate is as follows: Years Ended December 31, 2019 2018 2017 Statutory federal tax rate 21 % 21 % 34 % Permanent items (1) % — % (3) % State income taxes, net of federal benefit 6 % 5 % 4 % R&D and other tax credits 2 % 2 % 8 % Foreign income taxes 1 % (1) % (6) % Impact of Tax Act — % — % (49) % Change in valuation allowance (32) % (27) % 12 % Change in Irish trading status 3 % — % — % Effective tax rate — % — % — % |
Schedule of Components of Deferred Tax Assets and Liabilities | The components of the deferred tax assets and liabilities consist of the following: As of December 31, 2019 2018 Deferred tax assets: Net operating loss carryforwards $ 300,292 $ 231,918 General business credits 114,887 109,502 Product license 6,456 6,902 Inventory 3,129 7,651 Stock based compensation 20,587 17,960 Other 10,012 6,895 Deferred tax assets $ 455,363 $ 380,828 Deferred tax liabilities: Intangibles $ (14,316) $ (15,424) Convertible debt (27,570) (32,799) Deferred tax liabilities $ (41,886) $ (48,223) Net deferred tax assets $ 413,477 $ 332,605 Valuation allowance (413,477) (332,605) Net deferred tax assets $ — $ — |
Schedule of Unrecognized Tax Benefits | The following table summarizes the gross amounts of unrecognized tax benefits (in thousands): 2019 2018 Balance as of January 1, $ 4,087 $ — Additions related to prior period tax positions — 3,345 Reductions related to prior period tax positions (60) — Additions related to current period tax positions 809 742 Balance as of December 31, $ 4,836 $ 4,087 |
Quarterly Financial Data (Una_2
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summary of Quarterly Financial Data (Unaudited) | The following table summarizes unaudited quarterly financial data for the years ended December 31, 2019 and 2018 (in thousands, except per share data). 2019 First Quarter Second Quarter Third Quarter Fourth Quarter Total Revenues $ 21,902 $ 29,972 $ 38,885 $ 45,708 $ 136,467 Gross profit* $ 17,752 $ 25,053 $ 32,448 $ 37,002 $ 112,255 Operating loss $ (69,509) $ (62,166) $ (56,488) $ (47,082) $ (235,245) Net loss $ (74,153) $ (66,514) $ (60,682) $ (52,988) $ (254,337) Basic and diluted net loss per share $ (0.96) $ (0.81) $ (0.68) $ (0.59) $ (3.01) 2018 First Quarter Second Quarter Third Quarter Fourth Quarter** Total Revenues $ — $ — $ — $ 9,835 $ 9,835 Gross profit* $ — $ — $ — $ 7,412 $ 7,412 Operating loss $ (62,751) $ (72,882) $ (83,983) $ (87,722) $ (307,338) Net loss $ (68,524) $ (76,437) $ (87,743) $ (91,573) $ (324,277) Basic and diluted net loss per share $ (0.89) $ (1.00) $ (1.14) $ (1.19) $ (4.22) ________________ * Excludes amortization of intangible assets. |
Description of Business and B_2
Description of Business and Basis of Presentation Description of Business and Basis of Presentation - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||
Cash and cash equivalents | $ 487,429 | $ 495,072 | $ 487,429 | $ 495,072 | |||||||
Net loss | $ (52,988) | $ (60,682) | $ (66,514) | $ (74,153) | $ (91,573) | $ (87,743) | $ (76,437) | $ (68,524) | $ (254,337) | $ (324,277) | $ (192,649) |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Fixed Assets, Net (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Computer equipment | Minimum | |
Fixed Assets, Net | |
Estimated useful live of fixed assets | 3 years |
Computer equipment | Maximum | |
Fixed Assets, Net | |
Estimated useful live of fixed assets | 5 years |
Laboratory equipment, office equipment, manufacturing equipment and furniture and fixtures | |
Fixed Assets, Net | |
Estimated useful live of fixed assets | 7 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Fair Value Measurements (Details) | 12 Months Ended | ||
Dec. 31, 2019USD ($)security | Dec. 31, 2018USD ($)security | Jan. 31, 2018USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value transfers in or out of Level 1, Level 2 or Level 3 | $ 0 | $ 0 | |
Securities in an unrealized gain or loss position | security | 0 | 0 | |
Unamortized portion of debt discount | $ 107,017,000 | ||
Convertible Notes Payable | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Unamortized portion of debt discount | $ 107,000,000 | ||
Convertible Notes Payable | 1.75% convertible senior note due 2025 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Interest rate (as a percent) | 1.75% | ||
Convertible notes ($450.0 face value) | $ 309,100,000 | ||
Reported Value Measurement | Fair Value, Measurements, Recurring | Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | $ 487,400,000 | $ 495,100,000 | |
Reported Value Measurement | Fair Value, Measurements, Recurring | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Convertible notes ($450.0 face value) | 335,900,000 | ||
Estimate of Fair Value Measurement | Fair Value, Measurements, Recurring | Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | 487,400,000 | 495,100,000 | |
Estimate of Fair Value Measurement | Fair Value, Measurements, Recurring | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | 0 | 0 | |
Convertible notes ($450.0 face value) | 435,400,000 | ||
Estimate of Fair Value Measurement | Fair Value, Measurements, Recurring | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | $ 0 | $ 0 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Concentration Risk (Details) - Sales Revenue, Product Line - Customer Concentration Risk | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Customer A | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 31.00% | 27.00% |
Customer B | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 26.00% | 37.00% |
Customer C | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 22.00% | 15.00% |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Allowance for Credit Loss (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Contract with Customer, Asset, Allowance for Credit Loss [Roll Forward] | ||
Balance at beginning | $ 922 | $ 0 |
Allowances for current period sales | 15,210 | 1,184 |
Allowances for prior period sales | 40 | |
Payments and credits | (10,537) | (262) |
Ending balance | 5,635 | 922 |
Customer Credits, Fees and Discounts | ||
Contract with Customer, Asset, Allowance for Credit Loss [Roll Forward] | ||
Balance at beginning | 234 | 0 |
Allowances for current period sales | 3,151 | 335 |
Allowances for prior period sales | 14 | |
Payments and credits | (2,935) | (101) |
Ending balance | 464 | 234 |
Rebates, Chargebacks and Co-pay Assistance | ||
Contract with Customer, Asset, Allowance for Credit Loss [Roll Forward] | ||
Balance at beginning | 688 | 0 |
Allowances for current period sales | 12,059 | 849 |
Allowances for prior period sales | 26 | |
Payments and credits | (7,602) | (161) |
Ending balance | $ 5,171 | $ 688 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Net Loss Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Numerator: | |||||||||||
Net loss | $ (52,988) | $ (60,682) | $ (66,514) | $ (74,153) | $ (91,573) | $ (87,743) | $ (76,437) | $ (68,524) | $ (254,337) | $ (324,277) | $ (192,649) |
Denominator: | |||||||||||
Weighted average common shares used in calculation of basic net loss per share (in shares) | 84,560 | 76,889 | 66,576 | ||||||||
Effect of dilutive securities: | |||||||||||
Weighted average common shares outstanding used in calculation of diluted net loss per share (in shares) | 84,560 | 76,889 | 66,576 | ||||||||
Net loss per share: | |||||||||||
Basic and diluted (in dollars per share) | $ (0.59) | $ (0.68) | $ (0.81) | $ (0.96) | $ (1.19) | $ (1.14) | $ (1) | $ (0.89) | $ (3.01) | $ (4.22) | $ (2.89) |
Common stock options | |||||||||||
Effect of dilutive securities: | |||||||||||
Dilutive securities (in shares) | 0 | 0 | 0 | ||||||||
Unvested restricted stock and restricted stock units | |||||||||||
Effect of dilutive securities: | |||||||||||
Dilutive securities (in shares) | 0 | 0 | 0 | ||||||||
Convertible debt securities | |||||||||||
Effect of dilutive securities: | |||||||||||
Dilutive securities (in shares) | 0 | 0 | 0 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Anti-dilutive Securities (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Common stock options | |||
Anti-dilutive securities excluded from computations of diluted weighted-average common shares outstanding | |||
Potentially dilutive securities excluded from computations of diluted weighted-average shares outstanding (in shares) | 10,493 | 9,382 | 8,609 |
Unvested restricted stock and restricted stock units | |||
Anti-dilutive securities excluded from computations of diluted weighted-average common shares outstanding | |||
Potentially dilutive securities excluded from computations of diluted weighted-average shares outstanding (in shares) | 501 | 228 | 47 |
Convertible debt securities | |||
Anti-dilutive securities excluded from computations of diluted weighted-average common shares outstanding | |||
Potentially dilutive securities excluded from computations of diluted weighted-average shares outstanding (in shares) | 11,492 | 11,492 | 0 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Segment Information (Details) | 12 Months Ended |
Dec. 31, 2019segment | |
Accounting Policies [Abstract] | |
Number of operating segments | 1 |
Number of reportable segments | 1 |
Summary of Significant Accou_11
Summary of Significant Accounting Policies - New Accounting Pronouncements (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 01, 2019 | |
Summary Of Significant Policies [Line Items] | |||||
Loss on extinguishment of debt | $ 2,200 | $ 0 | $ 2,209 | $ 0 | |
Present value of lease liabilities | 40,348 | ||||
Operating lease right-of-use assets | $ 37,673 | ||||
Accounting Standards Update 2016-02 | |||||
Summary Of Significant Policies [Line Items] | |||||
Present value of lease liabilities | $ 47,400 | ||||
Operating lease right-of-use assets | $ 47,400 |
Inventory - Schedule of Invento
Inventory - Schedule of Inventory, Current (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 16,048 | $ 2,145 |
Work-in-process | 6,420 | 4,567 |
Finished goods | 5,845 | 320 |
Inventory, Net | $ 28,313 | $ 7,032 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | ||
Accrued clinical trial expenses | $ 5,598 | $ 6,635 |
Accrued professional fees | 12,581 | 13,398 |
Accrued technical operation expenses | 6,446 | 9,371 |
Accrued royalty payable | 3,117 | 409 |
Accrued interest payable | 3,631 | 3,631 |
Accrued sales allowances and related costs | 5,267 | 818 |
Accrued construction costs | 2,689 | 2,946 |
Other accrued expenses | 1,046 | 1,046 |
Total accrued expenses | $ 40,375 | $ 38,254 |
Intangible Assets, Net (Details
Intangible Assets, Net (Details) - USD ($) $ in Thousands | Sep. 28, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 01, 2019 | Jan. 01, 2018 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||
New drug milestone payment | $ 1,700 | $ 0 | $ 1,724 | $ 0 | ||
Intangibles, net | $ 53,682 | 58,675 | ||||
Intangible assets estimated useful life | 12 years | |||||
Amortization of intangible assets, 2020 | $ 5,000 | |||||
Amortization of intangible assets, 2021 | 5,000 | |||||
Amortization of intangible assets, 2022 | 5,000 | |||||
Amortization of intangible assets, 2023 | 5,000 | |||||
Amortization of intangible assets, 2024 | 5,000 | |||||
Finite-lived Intangible Assets [Roll Forward] | ||||||
Intangibles, gross | $ 58,675 | $ 58,200 | ||||
Additions | 0 | 1,724 | ||||
Amortization | (4,993) | (1,249) | ||||
Intangibles, net | 53,682 | 58,675 | ||||
In Process Research and Development | ||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||
Intangibles, net | 52,139 | 56,988 | ||||
Finite-lived Intangible Assets [Roll Forward] | ||||||
Intangibles, gross | 56,988 | 58,200 | ||||
Additions | 0 | 0 | ||||
Amortization | (4,849) | (1,212) | ||||
Intangibles, net | 52,139 | 56,988 | ||||
Licensing Agreements | ||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||
Intangibles, net | 1,543 | 1,687 | ||||
Finite-lived Intangible Assets [Roll Forward] | ||||||
Intangibles, gross | $ 1,687 | $ 0 | ||||
Additions | 0 | 1,724 | ||||
Amortization | (144) | (37) | ||||
Intangibles, net | $ 1,543 | $ 1,687 |
Fixed Assets, net (Details)
Fixed Assets, net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment | |||
Fixed assets, gross | $ 79,447 | $ 36,809 | |
Less accumulated depreciation | (19,267) | (14,173) | |
Fixed assets, net | 60,180 | 22,636 | |
Depreciation increase (decrease) | 37,500 | ||
Depreciation expense | 5,200 | 3,600 | $ 2,900 |
Lab equipment | |||
Property, Plant and Equipment | |||
Fixed assets, gross | $ 9,634 | 7,935 | |
Estimated Useful Life (years) | 7 years | ||
Furniture and fixtures | |||
Property, Plant and Equipment | |||
Fixed assets, gross | $ 5,908 | 2,320 | |
Estimated Useful Life (years) | 7 years | ||
Computer hardware and software | |||
Property, Plant and Equipment | |||
Fixed assets, gross | $ 6,806 | 3,796 | |
Computer hardware and software | Minimum | |||
Property, Plant and Equipment | |||
Estimated Useful Life (years) | 3 years | ||
Computer hardware and software | Maximum | |||
Property, Plant and Equipment | |||
Estimated Useful Life (years) | 5 years | ||
Office equipment | |||
Property, Plant and Equipment | |||
Fixed assets, gross | $ 154 | 65 | |
Estimated Useful Life (years) | 7 years | ||
Manufacturing equipment | |||
Property, Plant and Equipment | |||
Fixed assets, gross | $ 1,567 | 1,166 | |
Estimated Useful Life (years) | 7 years | ||
Leasehold improvements | |||
Property, Plant and Equipment | |||
Fixed assets, gross | $ 33,852 | 7,202 | |
Depreciation increase (decrease) | 26,700 | ||
Construction in progress (CIP) | |||
Property, Plant and Equipment | |||
Fixed assets, gross | 21,526 | $ 14,325 | |
Depreciation increase (decrease) | $ 7,200 |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($)ft² | |
Lessee, Lease, Description [Line Items] | |
Lease, square feet of corporate headquarters | ft² | 117,022 |
Lease cost, future right-of-use asset | $ | $ 17.9 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 10 years 10 months |
Leases - Lease, Cost (Details)
Leases - Lease, Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Lease, Cost [Abstract] | |||
Amortization of right-of-use assets | $ 360 | ||
Finance lease interest expense | 440 | $ 0 | $ 0 |
Total finance lease cost | 800 | ||
Operating lease cost | 12,218 | ||
Total lease cost | 13,018 | ||
Cash Flow, Lessee [Abstract] | |||
Operating cash flows for finance leases | 0 | ||
Operating cash flows for operating leases | 10,060 | ||
Financing cash flows for finance leases | (4,503) | ||
Right-of-use assets obtained in exchange for new finance lease liabilities | 20,310 | ||
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 47,436 | ||
Weighted average remaining lease term - finance leases | 10 years 7 months 6 days | ||
Weighted average remaining lease term - operating leases | 5 years | ||
Weighted average discount rate - finance leases | 8.60% | ||
Weighted average discount rate - operating leases | 7.40% |
Leases - Maturity of Lease Liab
Leases - Maturity of Lease Liabilities (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Finance Lease | |
2020 | $ 2,938 |
2021 | 2,996 |
2022 | 2,280 |
2023 | 2,080 |
2024 | 3,172 |
Thereafter | 18,784 |
Total | 32,250 |
Less: present value discount | 11,500 |
Present value of lease liabilities | 20,750 |
Finance lease liabilities | 1,221 |
Finance lease liabilities, long-term | 19,529 |
Total lease liabilities | 20,750 |
Operating Leases | |
2020 | 13,415 |
2021 | 10,306 |
2022 | 6,000 |
2023 | 6,000 |
2024 | 6,000 |
Thereafter | 6,000 |
Total | 47,721 |
Less: present value discount | 7,373 |
Present value of lease liabilities | 40,348 |
Operating lease liabilities | 11,040 |
Long-term lease liabilities | 29,308 |
Total lease liabilities | $ 40,348 |
Debt (Details)
Debt (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Feb. 28, 2018USD ($) | Jan. 31, 2018USD ($)day$ / shares | Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Debt | ||||||
Underwriting discounts and commissions and other offering expenses | $ 7,043,000 | |||||
Net proceeds | 0 | $ 450,000,000 | $ 0 | |||
Interest expense | 27,705,000 | 25,472,000 | 5,925,000 | |||
Repayments of debt | 0 | 55,000,000 | 0 | |||
Loss on extinguishment of debt | $ 2,200,000 | 0 | $ 2,209,000 | $ 0 | ||
1.75% convertible senior note due 2025 | ||||||
Debt | ||||||
Initial conversion rate | 0.0255384 | |||||
A&R Loan Agreement with Hercules | ||||||
Debt | ||||||
Repayments of debt | $ 55,000,000 | |||||
Repayments of debt, back end fees, outstanding interest, and prepayment penalty fees | $ 3,200,000 | |||||
Convertible Notes Payable | 1.75% convertible senior note due 2025 | ||||||
Debt | ||||||
Aggregate principal amount | $ 450,000,000 | |||||
Option to purchase additional debt | 50,000,000 | |||||
Underwriting discounts and commissions and other offering expenses | 14,200,000 | |||||
Net proceeds | $ 435,800,000 | |||||
Initial conversion price (in dollars per share) | $ / shares | $ 39.16 | |||||
Convertible notes ($450.0 face value) | $ 309,100,000 | |||||
Effective interest rate | 7.60% | |||||
Equity component of convertible debt | $ 140,900,000 | |||||
Remaining discount amortization period | 5 years 14 days | |||||
Interest expense | $ 27,300,000 | |||||
Conversion Term (i) | Convertible Notes Payable | 1.75% convertible senior note due 2025 | ||||||
Debt | ||||||
Threshold trading days | day | 5 | |||||
Threshold consecutive trading days | day | 5 | |||||
Threshold percentage of stock price trigger | 98.00% | |||||
Conversion Term (ii) | Convertible Notes Payable | 1.75% convertible senior note due 2025 | ||||||
Debt | ||||||
Threshold trading days | day | 45 | |||||
Threshold consecutive trading days | day | 10 | |||||
Threshold percentage of stock price trigger | 10.00% | |||||
Conversion Term (iii) | Convertible Notes Payable | 1.75% convertible senior note due 2025 | ||||||
Debt | ||||||
Threshold trading days following fundamental change | day | 30 | |||||
Conversion Term (iv) | Convertible Notes Payable | 1.75% convertible senior note due 2025 | ||||||
Debt | ||||||
Threshold trading days | day | 20 | |||||
Threshold consecutive trading days | day | 30 | |||||
Threshold percentage of stock price trigger | 130.00% |
Debt - Components of Debt (Deta
Debt - Components of Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Jan. 31, 2018 |
Debt Instrument [Line Items] | |||
1.75% convertible senior notes due 2025 | $ 450,000 | ||
Debt issuance costs, unamortized | (7,043) | ||
Discount on debt | (107,017) | ||
Long-term debt, net | 335,940 | $ 316,558 | |
Convertible Notes Payable | |||
Debt Instrument [Line Items] | |||
Discount on debt | $ (107,000) | ||
Convertible Notes Payable | 1.75% convertible senior note due 2025 | |||
Debt Instrument [Line Items] | |||
Interest rate (as a percent) | 1.75% | ||
Debt issuance costs, unamortized | $ (14,200) |
Debt - Future Principal Repayme
Debt - Future Principal Repayments of Debt (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Debt Disclosure [Abstract] | |
2020 | $ 0 |
2021 | 0 |
2022 | 0 |
2023 | 0 |
2024 and thereafter | 450,000 |
Long-term Debt | $ 450,000 |
Debt - Interest Expense (Detail
Debt - Interest Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |||
Contractual interest expense | $ 7,883 | $ 8,183 | $ 5,149 |
Amortization of debt issuance costs | 1,397 | 1,350 | 118 |
Accretion of back-end fee on debt | 0 | 50 | 658 |
Accretion of debt discount | 17,985 | 15,889 | 0 |
Total convertible debt interest expense | 27,265 | 25,472 | 5,925 |
Finance lease interest expense | 440 | 0 | 0 |
Total interest expense | $ 27,705 | $ 25,472 | $ 5,925 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) | May 24, 2019 | Sep. 30, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 31, 2018 |
Class of Stock [Line Items] | ||||||
Common stock, authorized shares (in shares) | 500,000,000 | 500,000,000 | ||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | ||||
Common stock, issued shares (in shares) | 89,682,387 | 77,307,521 | ||||
Common stock, outstanding shares (in shares) | 89,682,387 | 77,307,521 | ||||
Exercise of stock options (in shares) | 1,413,341 | 494,351 | 378,275 | |||
Shares issued under underwritten public offering (in shares) | 14,123,150 | |||||
Shares exercised in full of over-allotment option by underwriter (in shares) | 1,842,150 | |||||
Shares price (in dollars per share) | $ 28.50 | |||||
Underwriter's discount and offering expenses | $ 24,800,000 | |||||
Net proceeds from the sale of shares | $ 377,700,000 | $ 261,074,000 | $ 0 | $ 377,656,000 | ||
Preferred stock, authorized (in shares) | 200,000,000 | 200,000,000 | ||||
Preferred stock, par value (in shares) | $ 0.01 | $ 0.01 | ||||
Preferred stock, shares issued (in shares) | 0 | 0 | ||||
Preferred stock, shares outstanding (in shares) | 0 | 0 | ||||
Chief Executive Officer | ||||||
Class of Stock [Line Items] | ||||||
Exercise of stock options (in shares) | 400,000 | |||||
IPO | ||||||
Class of Stock [Line Items] | ||||||
Shares issued in period (in shares) | 10,657,692 | |||||
Stock options exercised (in dollars per share) | $ 26 | |||||
Underwriters' discount and offering costs | $ 16,000,000 | |||||
Proceeds from issuance IPO | $ 261,100,000 | |||||
Over-Allotment Option | ||||||
Class of Stock [Line Items] | ||||||
Exercise of stock options (in shares) | 1,042,307 | |||||
Common stock options | ||||||
Class of Stock [Line Items] | ||||||
Common stock shares reserved for issuance (in shares) | 10,492,946 | |||||
Unvested restricted stock and restricted stock units | ||||||
Class of Stock [Line Items] | ||||||
Common stock shares reserved for issuance (in shares) | 500,822 | |||||
Convertible debt securities | 1.75% convertible senior note due 2025 | ||||||
Class of Stock [Line Items] | ||||||
Aggregate principal amount | $ 450,000,000 | |||||
Convertible notes ($450.0 face value) | 309,100,000 | |||||
Equity component of convertible debt | $ 140,900,000 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | May 16, 2019 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | |||
Shares of common stock, maximum authorized for issuance (in shares) | 3,500,000 | ||
Shares available for grant (in shares) | 3,868,698 | ||
Inducement stock option granted to new employees (in shares) | 305,180 | 295,720 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Number of Shares | ||||
Options outstanding beginning of the year (in shares) | 9,381,730 | 8,608,921 | 7,116,706 | |
Granted (in shares) | 3,434,270 | 1,755,600 | 2,284,710 | |
Exercised (in shares) | (1,413,341) | (494,351) | (378,275) | |
Forfeited and expired (in shares) | (909,713) | (488,440) | (414,220) | |
Options outstanding end of the year (in shares) | 10,492,946 | 9,381,730 | 8,608,921 | |
Vested and expected to vest (in shares) | 9,767,035 | 8,693,635 | 8,325,255 | |
Exercisable (in shares) | 5,719,818 | 5,649,698 | 4,229,478 | |
Weighted Average Exercise Price | ||||
Options outstanding beginning of the year (in dollars per share) | $ 16.30 | $ 14.08 | $ 13.30 | |
Granted (in dollars per share) | 15.02 | 27.63 | 15.92 | |
Exercised (in dollars per share) | 11.87 | 14.46 | 9.08 | |
Forfeited and expired (in dollars per share) | 19.02 | 19.79 | 15.50 | |
Options outstanding end of the year (in dollars per share) | 16.24 | 16.30 | 14.08 | |
Vested and expected to vest (in dollars per share) | 16.15 | 15.90 | 14.03 | |
Exercisable (in dollars per share) | $ 15.38 | $ 13.45 | $ 12.71 | |
Weighted Average Remaining Contractual Life in Years | ||||
Options outstanding | 6 years 9 months 25 days | |||
Vested and expected to vest | 6 years 8 months 1 day | |||
Exercisable | 5 years 4 months 13 days | |||
Aggregate Intrinsic Value | ||||
Options outstanding | $ 86,921 | |||
Vested and expected to vest | 81,572 | |||
Exercisable | $ 51,000 | |||
Common stock options | ||||
Fair value and assumptions used in determining fair value of stock options | ||||
Dividend yield | 0.00% | 0.00% | 0.00% | |
Expected option term (in years) | 5 years 1 month 2 days | 5 years 1 month 2 days | 6 years 3 months | |
Weighted average fair value of stock options granted (in dollars per share) | $ 8.76 | $ 16.03 | $ 10.52 | |
Common stock options | Minimum | ||||
Fair value and assumptions used in determining fair value of stock options | ||||
Volatility | 67.00% | 66.00% | 71.00% | |
Risk-free interest rate | 1.35% | 2.25% | 1.73% | |
Common stock options | Maximum | ||||
Fair value and assumptions used in determining fair value of stock options | ||||
Volatility | 70.00% | 68.00% | 79.00% | |
Risk-free interest rate | 2.56% | 2.96% | 2.13% | |
Performance-condition options | ||||
Stock Option disclosures | ||||
Non-cash compensation expense | $ 1,100 | |||
Number of Shares | ||||
Options outstanding beginning of the year (in shares) | 0 | |||
Options outstanding end of the year (in shares) | 0 | 0 |
Stock-Based Compensation - Rang
Stock-Based Compensation - Range of Exercise Prices (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Common stock options | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range | |||
Total intrinsic value of stock options exercised during the period | $ 16.5 | $ 5.6 | $ 4.3 |
Unrecognized compensation expense related to unvested stock options | $ 31.1 | ||
Expected weighted average period for recognizing unrecognized compensation expense | 2 years 7 months 6 days | ||
$3.03 to $10.85 | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range | |||
Range of Exercise Prices lower range limit (in dollars per share) | $ 3.03 | ||
Range of Exercise Prices upper range limit (in dollars per share) | $ 10.85 | ||
Number of Options outstanding (in shares) | 1,419,872 | ||
Weighted Average Remaining Contractual Term (in Years) | 4 years 7 months 17 days | ||
Outstanding Options, Weighted Average Exercise Price (in dollars per share) | $ 7.55 | ||
Number of Options exercisable (in shares) | 1,311,142 | ||
Exercisable Options, Weighted Average Exercise Price (in dollars per share) | $ 7.27 | ||
$11.14 to $13.67 | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range | |||
Range of Exercise Prices lower range limit (in dollars per share) | 11.14 | ||
Range of Exercise Prices upper range limit (in dollars per share) | $ 13.67 | ||
Number of Options outstanding (in shares) | 1,547,063 | ||
Weighted Average Remaining Contractual Term (in Years) | 5 years 5 months 8 days | ||
Outstanding Options, Weighted Average Exercise Price (in dollars per share) | $ 12.91 | ||
Number of Options exercisable (in shares) | 1,237,855 | ||
Exercisable Options, Weighted Average Exercise Price (in dollars per share) | $ 12.76 | ||
$13.91 to $13.91 | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range | |||
Range of Exercise Prices lower range limit (in dollars per share) | 13.91 | ||
Range of Exercise Prices upper range limit (in dollars per share) | $ 13.91 | ||
Number of Options outstanding (in shares) | 2,661,040 | ||
Weighted Average Remaining Contractual Term (in Years) | 9 years 3 days | ||
Outstanding Options, Weighted Average Exercise Price (in dollars per share) | $ 13.91 | ||
Number of Options exercisable (in shares) | 0 | ||
Exercisable Options, Weighted Average Exercise Price (in dollars per share) | $ 0 | ||
$13.94 to $16.16 | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range | |||
Range of Exercise Prices lower range limit (in dollars per share) | 13.94 | ||
Range of Exercise Prices upper range limit (in dollars per share) | $ 16.16 | ||
Number of Options outstanding (in shares) | 1,394,176 | ||
Weighted Average Remaining Contractual Term (in Years) | 5 years 6 months 25 days | ||
Outstanding Options, Weighted Average Exercise Price (in dollars per share) | $ 15.59 | ||
Number of Options exercisable (in shares) | 1,180,091 | ||
Exercisable Options, Weighted Average Exercise Price (in dollars per share) | $ 15.56 | ||
$16.44 to $19.47 | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range | |||
Range of Exercise Prices lower range limit (in dollars per share) | 16.44 | ||
Range of Exercise Prices upper range limit (in dollars per share) | $ 19.47 | ||
Number of Options outstanding (in shares) | 1,112,775 | ||
Weighted Average Remaining Contractual Term (in Years) | 7 years 1 month 28 days | ||
Outstanding Options, Weighted Average Exercise Price (in dollars per share) | $ 17.75 | ||
Number of Options exercisable (in shares) | 696,563 | ||
Exercisable Options, Weighted Average Exercise Price (in dollars per share) | $ 17.88 | ||
$19.65 to $24.22 | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range | |||
Range of Exercise Prices lower range limit (in dollars per share) | 19.65 | ||
Range of Exercise Prices upper range limit (in dollars per share) | $ 24.22 | ||
Number of Options outstanding (in shares) | 1,139,884 | ||
Weighted Average Remaining Contractual Term (in Years) | 6 years 14 days | ||
Outstanding Options, Weighted Average Exercise Price (in dollars per share) | $ 22.29 | ||
Number of Options exercisable (in shares) | 892,465 | ||
Exercisable Options, Weighted Average Exercise Price (in dollars per share) | $ 22.25 | ||
$24.21 to $30.46 | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range | |||
Range of Exercise Prices lower range limit (in dollars per share) | 24.41 | ||
Range of Exercise Prices upper range limit (in dollars per share) | $ 30.46 | ||
Number of Options outstanding (in shares) | 1,058,332 | ||
Weighted Average Remaining Contractual Term (in Years) | 8 years 2 months 12 days | ||
Outstanding Options, Weighted Average Exercise Price (in dollars per share) | $ 29.12 | ||
Number of Options exercisable (in shares) | 339,295 | ||
Exercisable Options, Weighted Average Exercise Price (in dollars per share) | $ 29.46 | ||
$30.86 to $31.73 | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range | |||
Range of Exercise Prices lower range limit (in dollars per share) | 30.86 | ||
Range of Exercise Prices upper range limit (in dollars per share) | $ 31.73 | ||
Number of Options outstanding (in shares) | 131,180 | ||
Weighted Average Remaining Contractual Term (in Years) | 8 years 1 month 2 days | ||
Outstanding Options, Weighted Average Exercise Price (in dollars per share) | $ 30.94 | ||
Number of Options exercisable (in shares) | 48,407 | ||
Exercisable Options, Weighted Average Exercise Price (in dollars per share) | $ 30.96 | ||
$31.78 to $31.78 | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range | |||
Range of Exercise Prices lower range limit (in dollars per share) | 31.78 | ||
Range of Exercise Prices upper range limit (in dollars per share) | $ 31.78 | ||
Number of Options outstanding (in shares) | 21,794 | ||
Weighted Average Remaining Contractual Term (in Years) | 7 years 5 months 23 days | ||
Outstanding Options, Weighted Average Exercise Price (in dollars per share) | $ 31.78 | ||
Number of Options exercisable (in shares) | 11,439 | ||
Exercisable Options, Weighted Average Exercise Price (in dollars per share) | $ 31.78 | ||
$32.46 to $32.46 | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range | |||
Range of Exercise Prices lower range limit (in dollars per share) | 32.46 | ||
Range of Exercise Prices upper range limit (in dollars per share) | $ 32.46 | ||
Number of Options outstanding (in shares) | 6,830 | ||
Weighted Average Remaining Contractual Term (in Years) | 8 years | ||
Outstanding Options, Weighted Average Exercise Price (in dollars per share) | $ 32.46 | ||
Number of Options exercisable (in shares) | 2,561 | ||
Exercisable Options, Weighted Average Exercise Price (in dollars per share) | $ 32.46 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock and Restricted Stock Units (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
RSUs | |||
Stock Based Compensation disclosures | |||
Number of common shares each award holder is entitled to receive | 1 | ||
Unrecognized compensation expense related to unvested awards | $ 8.3 | ||
Expected weighted average period for recognized and unrecognized compensation expense | 2 years 8 months 12 days | ||
Unvested restricted stock and restricted stock units | |||
Number of RSUs | |||
Outstanding, beginning balance (in shares) | 227,826 | 46,914 | 89,194 |
Granted (in shares) | 407,655 | 253,586 | 46,914 |
Released (in shares) | (92,145) | (51,992) | (89,194) |
Forfeited (in shares) | (42,514) | (20,682) | 0 |
Outstanding, ending balance (in shares) | 500,822 | 227,826 | 46,914 |
Weighted Average Grant Price | |||
Outstanding Weighted Average Grant Price (in dollars per share) | $ 29.14 | $ 17.16 | $ 10.85 |
Granted (in dollars per share) | 27.89 | 29.16 | 17.16 |
Released (in dollars per share) | 28.05 | 18.46 | 10.85 |
Forfeited (in dollars per share) | 29.11 | 29.05 | 0 |
Outstanding Weighted Average Grant Price (in dollars per share) | $ 28.32 | $ 29.14 | $ 17.16 |
Stock options and RSUs | |||
Weighted Average Grant Price | |||
ESPP compensation expense | $ 27 | $ 26.2 | $ 18.1 |
Stock options and RSUs | Research and development expenses | |||
Weighted Average Grant Price | |||
ESPP compensation expense | 8.2 | 9.4 | 6.5 |
Stock options and RSUs | Selling, general and administrative expenses | |||
Weighted Average Grant Price | |||
ESPP compensation expense | 18.8 | 16.8 | $ 11.6 |
Employee Stock | |||
Weighted Average Grant Price | |||
ESPP compensation expense | $ 1.6 | $ 0.9 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
NOL carryforwards | |||
Income tax provision (benefit) | $ 777,000 | $ 201,000 | $ (272,000) |
Effective tax rate | 0.00% | 0.00% | 0.00% |
Net deferred tax assets (prior to applying the valuation allowance) | $ 413,477,000 | $ 332,605,000 | |
Increase (decrease) in valuation allowance | 80,900,000 | 71,300,000 | |
Tax benefit | 4,836,000 | 4,087,000 | $ 0 |
Unrecognized tax benefits, interest and penalties accrued | 0 | $ 0 | |
Federal | |||
NOL carryforwards | |||
Net operating loss carryforwards for income tax purposes | 1,100,000,000 | ||
Net operating loss carryforwards available to offset future taxable income | 889,000,000 | ||
New Jersey Division of Taxation | |||
NOL carryforwards | |||
Net operating loss carryforwards available to offset future taxable income | $ 517,400,000 | ||
Ireland Tax | |||
NOL carryforwards | |||
Effective tax rate, trading income of Irish company | 12.50% | ||
Effective tax rate, non-trading income of Irish company | 25.00% | ||
Operating loss carryforwards, non-trading loss | $ 152,400,000 |
Income Taxes - Loss Before Inco
Income Taxes - Loss Before Income Taxes in the US and Globally (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
US | $ (201,161) | $ (286,211) | $ (136,682) |
Foreign | (52,399) | (37,865) | (56,239) |
Loss before income taxes | $ (253,560) | $ (324,076) | $ (192,921) |
Income Taxes - Income Tax (Bene
Income Taxes - Income Tax (Benefit) Provision (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Current: | |||
Federal | $ 0 | $ 0 | $ 0 |
State | 10 | 4 | 3 |
Foreign | 767 | 197 | 142 |
Current income tax provision (benefit) | 777 | 201 | 145 |
Deferred: | |||
Federal | 0 | 0 | (417) |
State | 0 | 0 | 0 |
Foreign | 0 | 0 | 0 |
Deferred income tax provision (benefit) | 0 | 0 | (417) |
Total | $ 777 | $ 201 | $ (272) |
Income Taxes - Reconciliation B
Income Taxes - Reconciliation Between Federal Statutory Tax Rate and Effective Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Statutory federal tax rate | 21.00% | 21.00% | 34.00% |
Permanent items | (1.00%) | 0.00% | (3.00%) |
State income taxes, net of federal benefit | 6.00% | 5.00% | 4.00% |
R&D and other tax credits | 2.00% | 2.00% | 8.00% |
Foreign income taxes | 1.00% | (1.00%) | (6.00%) |
Impact of Tax Act | 0 | 0 | (0.49) |
Change in valuation allowance | (32.00%) | (27.00%) | 12.00% |
Change in Irish trading status | 3.00% | 0.00% | 0.00% |
Effective tax rate | 0.00% | 0.00% | 0.00% |
Income Taxes - Components of De
Income Taxes - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 300,292 | $ 231,918 |
General business credits | 114,887 | 109,502 |
Product license | 6,456 | 6,902 |
Inventory | 3,129 | 7,651 |
Stock based compensation | 20,587 | 17,960 |
Other | 10,012 | 6,895 |
Deferred tax assets | 455,363 | 380,828 |
Deferred tax liabilities: | ||
Intangibles | (14,316) | (15,424) |
Convertible debt | (27,570) | (32,799) |
Deferred tax liabilities | (41,886) | (48,223) |
Net deferred tax assets | 413,477 | 332,605 |
Valuation allowance | (413,477) | (332,605) |
Net deferred tax assets | $ 0 | $ 0 |
Income Taxes - Schedule of Unre
Income Taxes - Schedule of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Tax benefit | $ 4,087 | $ 4,087 |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Net deferred tax assets as of January 1 | 4,087 | 0 |
Additions related to prior period tax positions | 0 | 3,345 |
Reductions related to prior period tax positions | (60) | 0 |
Additions related to current period tax positions | 809 | 742 |
Net deferred tax assets as of December 31 | $ 4,836 | $ 4,087 |
License and Other Agreements (D
License and Other Agreements (Details) € in Millions, $ in Millions | 1 Months Ended | 12 Months Ended | ||||||||
Oct. 31, 2016USD ($) | Jul. 31, 2014 | Feb. 28, 2014USD ($) | Apr. 30, 2008EUR (€) | Dec. 31, 2019USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2009USD ($) | Dec. 31, 2004USD ($) | Oct. 31, 2017USD ($) | Sep. 30, 2015USD ($) | |
PARI Agreement | ||||||||||
Collaboration Agreements | ||||||||||
Initial term of contract manufacturing agreement | 15 years | |||||||||
Additional term of contract manufacturing agreement | 5 years | |||||||||
PARI Agreement | Maximum | ||||||||||
Collaboration Agreements | ||||||||||
Future milestone payments | € | € 0.5 | |||||||||
PARI Agreement | Minimum | ||||||||||
Collaboration Agreements | ||||||||||
Written notice period required for termination of contract manufacturing agreement | 1 year | |||||||||
CFFT | ||||||||||
Collaboration Agreements | ||||||||||
Compensation earned under research funding agreements with CFFT | $ 2.2 | $ 1.7 | ||||||||
Royalty payable on approval of ARIKAYCE as commercialized drug | $ 13.4 | |||||||||
Period for meeting sales milestones for additional royalty payments | 5 years | |||||||||
Royalty payable on meeting certain sales milestones | $ 3.9 | |||||||||
Therapure | ||||||||||
Collaboration Agreements | ||||||||||
Initial term of contract manufacturing agreement | 5 years | |||||||||
Period of each automatic renewal of contract manufacturing agreement | 2 years | |||||||||
Written notice period required for termination of contract manufacturing agreement | 2 years | |||||||||
Minimum obligation | $ 6 | |||||||||
Fill/Finish Agreement | ||||||||||
Collaboration Agreements | ||||||||||
Minimum obligation | $ 2.7 | |||||||||
Period prior to expiration for extension | 1 year | |||||||||
License Agreement with AstraZeneca | ||||||||||
Collaboration Agreements | ||||||||||
Royalty payment | $ 35 | |||||||||
License Agreement with AstraZeneca | Research and development expenses | ||||||||||
Collaboration Agreements | ||||||||||
Upfront payment | $ 30 | |||||||||
License Agreement with AstraZeneca | Maximum | ||||||||||
Collaboration Agreements | ||||||||||
Aggregate payment upon the achievement of certain clinical milestones | 85 | |||||||||
Additional contingent payments upon second indication to develop INS1007 | 42.5 | |||||||||
Supply Agreement with Patheon UK Limited | ||||||||||
Collaboration Agreements | ||||||||||
Agreement to purchase raw materials and fixed assets | $ 60 | |||||||||
License and Service | License Agreement with AstraZeneca | ||||||||||
Collaboration Agreements | ||||||||||
Annual net sales | $ 1,000 | |||||||||
Milestone, New Drug Application | PARI Agreement | ||||||||||
Collaboration Agreements | ||||||||||
PARI milestone upon FDA approval | € | 1 | |||||||||
Milestone, FDA Approval | PARI Agreement | ||||||||||
Collaboration Agreements | ||||||||||
PARI milestone upon FDA approval | € | € 1.5 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Commitments | |||
Future minimum rental payments under Bridgewater | $ 47,721 | ||
Rent expense charged to operations | 3,200 | ||
Rent expense charged to operations | $ 2,100 | $ 1,500 | |
Future minimum commitments due for firm purchase | 82,000 | ||
Bridgewater, NJ Facility | |||
Commitments | |||
Future minimum rental payments under Bridgewater | $ 34,500 |
Quarterly Financial Data (Una_3
Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenues, net | $ 45,708 | $ 38,885 | $ 29,972 | $ 21,902 | $ 9,835 | $ 0 | $ 0 | $ 0 | $ 136,467 | $ 9,835 | $ 0 |
Gross Profit | 37,002 | 32,448 | 25,053 | 17,752 | 7,412 | 0 | 0 | 0 | 112,255 | 7,412 | 0 |
Operating loss | (47,082) | (56,488) | (62,166) | (69,509) | (87,722) | (83,983) | (72,882) | (62,751) | (235,245) | (307,338) | (188,920) |
Net loss | $ (52,988) | $ (60,682) | $ (66,514) | $ (74,153) | $ (91,573) | $ (87,743) | $ (76,437) | $ (68,524) | $ (254,337) | $ (324,277) | $ (192,649) |
Basic and diluted net loss (in dollars per share) | $ (0.59) | $ (0.68) | $ (0.81) | $ (0.96) | $ (1.19) | $ (1.14) | $ (1) | $ (0.89) | $ (3.01) | $ (4.22) | $ (2.89) |
Retirement Plan (Details)
Retirement Plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |||
Employer matching contribution, percent of match | 100.00% | 100.00% | |
Employer matching contribution, percent of employees' gross pay | 4.00% | 3.00% | |
Employer contributions | $ 2.8 | $ 2.2 | $ 0.8 |