Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies From time to time, we may be involved in disputes, including litigation, relating to claims arising out of operations in the normal course of our business. Any of these claims could subject us to costly legal expenses and, while we generally believe that we have adequate insurance to cover many different types of liabilities, our insurance carriers may deny coverage or our policy limits may be inadequate to fully satisfy any damage awards or settlements. If this were to happen, the payment of any such awards could have a material adverse effect on our consolidated results of operations and financial position. Additionally, any such claims, whether or not successful, could damage our reputation and business. We currently are not a party to any legal proceedings, the adverse outcome of which, in management’s opinion, individually or in the aggregate, would have a material adverse effect on our consolidated results of operations or financial position. Our commitments include payments related to our commenced operating leases. Approximate annual future minimum operating lease payments as of March 31, 2021 are as follows (in thousands; excluding the three months ended March 31, 2021): Year: Operating 2021 $ 1,963 2022 2,660 2023 162 2024 — 2025 — Total minimum lease payments $ 4,785 Less imputed interest $ (324) Total $ 4,461 |
Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2021 | May 05, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-32335 | |
Entity Registrant Name | HALOZYME THERAPEUTICS, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 88-0488686 | |
Entity Address, Address Line One | 11388 Sorrento Valley Road | |
Entity Address, City or Town | San Diego | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92121 | |
City Area Code | 858 | |
Local Phone Number | 794-8889 | |
Title of 12(b) Security | Common Stock, $0.001 par value | |
Trading Symbol | HALO | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 142,385,930 | |
Entity Central Index Key | 0001159036 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --03-31 | |
Entity Filer Category | Large Accelerated Filer |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 499,450 | $ 147,703 |
Marketable securities, available-for-sale | 264,856 | 220,310 |
Accounts receivable, net and other contract assets | 88,391 | 97,730 |
Inventories | 58,343 | 60,747 |
Prepaid expenses and other assets | 30,679 | 28,274 |
Total current assets | 941,719 | 554,764 |
Property and equipment, net | 10,366 | 10,593 |
Prepaid expenses and other assets | 13,997 | 14,067 |
Restricted cash | 500 | 500 |
Total assets | 966,582 | 579,924 |
Current liabilities: | ||
Accounts payable | 535 | 1,928 |
Accrued expenses | 16,098 | 20,483 |
Deferred revenue, current portion | 1,746 | 1,746 |
Current portion of long-term debt, net | 89,042 | 397,228 |
Total current liabilities | 107,421 | 421,385 |
Deferred revenue, net of current portion | 4,026 | 4,026 |
Long-term debt, net | 784,731 | 0 |
Other long-term liabilities | 2,809 | 3,466 |
Commitments and contingencies (Note 10) | ||
Stockholders’ equity: | ||
Preferred stock - $0.001 par value; 20,000 shares authorized; no shares issued and outstanding | 0 | 0 |
Common stock - $0.001 par value; 300,000 shares authorized; 143,380 and 135,30 shares issued and outstanding at 44286 and 44196, respectively | 143 | 135 |
Additional paid-in capital | 501,186 | 625,483 |
Accumulated other comprehensive (loss) income | (9) | 22 |
Accumulated deficit | (433,725) | (474,593) |
Total stockholders’ equity | 67,595 | 151,047 |
Total liabilities and stockholders’ equity | $ 966,582 | $ 579,924 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (usd per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (usd per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, shares issued (in shares) | 143,380,373 | 136,712,480 |
Common stock, shares outstanding (in shares) | 143,380,373 | 136,712,480 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Revenues: | ||
Total revenues | $ 89,022,000 | $ 25,354,000 |
Operating expenses: | ||
Cost of product sales | 18,219,000 | 5,787,000 |
Research and development | 9,009,000 | 10,158,000 |
Selling, general and administrative | 11,059,000 | 12,632,000 |
Total operating expenses | 38,287,000 | 28,577,000 |
Operating income (loss) | 50,735,000 | (3,223,000) |
Other income (expense): | ||
Investment and other income, net | 276,000 | 2,479,000 |
Inducement expense related to convertible notes | (20,960,000) | 0 |
Interest expense | (1,965,000) | (5,348,000) |
Net income (loss) before income taxes | 28,086,000 | (6,092,000) |
Income tax expense | 191,000 | 11,000 |
Net income (loss) | $ 27,895,000 | $ (6,103,000) |
Net income (loss) per share: | ||
Basic (USD per share) | $ 0.20 | $ (0.04) |
Diluted (USD per share) | $ 0.19 | $ (0.04) |
Shares used in computing net income (loss) per share: | ||
Basic (shares) | 137,952 | 137,186 |
Diluted (shares) | 148,540 | 137,186 |
Royalties | ||
Revenues: | ||
Total revenues | $ 36,923,000 | $ 16,822,000 |
Product sales, net | ||
Revenues: | ||
Total revenues | 21,766,000 | 8,147,000 |
Revenues under collaborative agreements | ||
Revenues: | ||
Total revenues | $ 30,333,000 | $ 385,000 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ 27,895 | $ (6,103) |
Other comprehensive income (loss): | ||
Unrealized loss on marketable securities | (83) | (229) |
Foreign currency translation adjustment | 35 | (1) |
Unrealized gain on foreign currency | 17 | 1 |
Total comprehensive income (loss) | $ 27,864 | $ (6,332) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Operating activities: | ||
Net income (loss) | $ 27,895,000 | $ (6,103,000) |
Adjustments to reconcile net income (loss) to net cash provided by (used) in operating activities: | ||
Share-based compensation | 4,923,000 | 4,531,000 |
Depreciation and amortization | 738,000 | 857,000 |
Amortization of debt discount | 741,000 | 3,478,000 |
Accretion of discounts on marketable securities, net | 351,000 | 9,000 |
Gain on disposal of equipment | 0 | (597,000) |
Recognition of deferred revenue | 0 | (606,000) |
Lease payments deferred | (203,000) | (221,000) |
Induced conversion expense related to convertible notes | 20,960,000 | 0 |
Other | 0 | (4,000) |
Changes in operating assets and liabilities: | ||
Accounts receivable, net and other contract assets | 9,339,000 | 29,693,000 |
Inventories | 2,513,000 | (12,093,000) |
Prepaid expenses and other assets | (2,335,000) | 3,833,000 |
Accounts payable and accrued expenses | (6,626,000) | (27,621,000) |
Net cash provided by (used in) operating activities | 58,296,000 | (4,844,000) |
Investing activities: | ||
Purchases of marketable securities | (120,980,000) | (63,257,000) |
Proceeds from maturities of marketable securities | 76,000,000 | 100,742,000 |
Purchases of property and equipment | (270,000) | (114,000) |
Proceeds from disposal of property and equipment | 0 | 738,000 |
Net cash (used in) provided by investing activities | (45,250,000) | 38,109,000 |
Financing activities: | ||
Proceeds from issuance of long-term debt, net | 784,875,000 | 0 |
Repayment of long-term debt | (369,064,000) | (16,699,000) |
Payment of debt issuance cost | (329,000) | (68,000) |
Repurchase of common stock | (76,179,000) | (51,574,000) |
Proceeds from issuance of common stock under equity incentive plans, net of taxes paid related to net share settlement | (602,000) | 19,717,000 |
Net cash provided by (used in) financing activities | 338,701,000 | (48,624,000) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 351,747,000 | (15,359,000) |
Cash, cash equivalents and restricted cash at beginning of period | 148,203,000 | 120,679,000 |
Cash, cash equivalents and restricted cash at end of period | 499,950,000 | 105,320,000 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Amounts accrued for purchases of property and equipment | 288,000 | 347,000 |
Right-of-use assets obtained in exchange for lease obligation | 179,000 | 1,589,000 |
Debt issuances cost included in accounts payable | 95,000 | 0 |
Common stock issued for induced conversion related to convertible notes | $ 7,865,000 | $ 0 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) shares in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Common Stock | Additional Paid-In Capital | Additional Paid-In CapitalCumulative Effect, Period of Adoption, Adjustment | Accumulated Other Comprehensive Loss | Accumulated Deficit | Accumulated DeficitCumulative Effect, Period of Adoption, Adjustment |
Equity, beginning balance (in shares) at Dec. 31, 2019 | 136,713 | |||||||
Equity, beginning balance at Dec. 31, 2019 | $ 91,765,000 | $ 137,000 | $ 695,066,000 | $ 240,000 | $ (603,678,000) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Share-based compensation expense | 4,531,000 | 4,531,000 | ||||||
Issuance of common stock pursuant to exercise of stock options and vesting of restricted stock units, net (in shares) | 2,355 | |||||||
Issuance of common stock pursuant to exercise of stock options and vesting of restricted stock units, net | 19,717,000 | $ 2,000 | 19,715,000 | |||||
Issuance of restricted stock awards, net (shares) | (1) | |||||||
Issuance of restricted stock awards, net | 0 | |||||||
Repurchase of common stock (shares) | (3,703) | |||||||
Repurchase of common stock | (51,574,000) | $ (4,000) | (51,570,000) | |||||
Equity component of convertible notes | (65,000) | (65,000) | ||||||
Other comprehensive income (loss) | (229,000) | (229,000) | ||||||
Net income (loss) | (6,103,000) | (6,103,000) | ||||||
Equity, ending balance (in shares) at Mar. 31, 2020 | 135,364 | |||||||
Equity, ending balance at Mar. 31, 2020 | 58,042,000 | $ 135,000 | 667,677,000 | 11,000 | (609,781,000) | |||
Equity, beginning balance (in shares) at Dec. 31, 2020 | 135,030 | |||||||
Equity, beginning balance at Dec. 31, 2020 | 151,047,000 | $ (52,562,000) | $ 135,000 | 625,483,000 | $ (65,535,000) | 22,000 | (474,593,000) | $ 12,973,000 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Share-based compensation expense | 4,923,000 | 4,923,000 | ||||||
Stock Issued During Period, Value, Conversion of Convertible Securities | 13,104,000 | $ 9,000 | 13,095,000 | |||||
Stock Issued During Period, Shares, Conversion of Convertible Securities | 9,083 | |||||||
Issuance of common stock pursuant to exercise of stock options and vesting of restricted stock units, net (in shares) | 563 | |||||||
Issuance of common stock pursuant to exercise of stock options and vesting of restricted stock units, net | (602,000) | $ 0 | (602,000) | |||||
Repurchase of common stock (shares) | (1,296) | |||||||
Repurchase of common stock | (76,179,000) | $ (1,000) | (76,178,000) | |||||
Other comprehensive income (loss) | (31,000) | (31,000) | ||||||
Net income (loss) | 27,895,000 | 27,895,000 | ||||||
Equity, ending balance (in shares) at Mar. 31, 2021 | 143,380 | |||||||
Equity, ending balance at Mar. 31, 2021 | $ 67,595,000 | $ 143,000 | $ 501,186,000 | $ (9,000) | $ (433,725,000) |
Organization and Business
Organization and Business | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business | Organization and Business Halozyme Therapeutics, Inc. is a biopharma technology platform company that provides innovative and disruptive solutions with the goal of improving patient experience and outcomes. Our proprietary enzyme, rHuPH20, is used to facilitate the delivery of injected drugs and fluids. We license our technology to biopharmaceutical companies to collaboratively develop products that combine our ENHANZE ® drug delivery technology with the collaborators’ proprietary compounds. Our approved product and our collaborators’ approved products and product candidates are based on rHuPH20, our patented recombinant human hyaluronidase enzyme. rHuPH20 is the active ingredient in our first commercially approved product, Hylenex ® recombinant, (“Hylenex”), and it works by breaking down hyaluronan (or “HA”), a naturally occurring carbohydrate that is a major component of the extracellular matrix in tissues throughout the body such as skin and cartilage. This temporarily increases dispersion and absorption allowing for improved subcutaneous delivery of injectable biologics, such as monoclonal antibodies and other large therapeutic molecules, as well as small molecules and fluids. We refer to the application of rHuPH20 to facilitate the delivery of other drugs or fluids as our ENHANZE ® drug delivery technology (“ENHANZE”). We license the ENHANZE technology to form collaborations with biopharmaceutical companies that develop or market drugs requiring or benefiting from injection via the subcutaneous route of administration. In the development of proprietary intravenous (IV) drugs combined with our ENHANZE technology, data have been generated supporting the potential for ENHANZE to reduce treatment burden, as a result of shorter duration of subcutaneous (SC) administration. ENHANZE may enable fixed-dose SC dosing compared to weight-based dosing required for IV administration, and potentially allow for lower rates of infusion related reactions. ENHANZE may enable more flexible treatment options such as home administration by a healthcare professional or potentially the patient. Lastly, certain proprietary drugs co-formulated with ENHANZE have been granted additional exclusivity, extending the patent life of the product beyond the one of the proprietary IV drug. We currently have ENHANZE collaborations with F. Hoffmann-La Roche, Ltd. and Hoffmann-La Roche, Inc. (“Roche”), Baxalta US Inc. and Baxalta GmbH (now members of the Takeda group of companies, following the acquisition of Shire plc by Takeda Pharmaceutical Company Limited in January 2019) (“Baxalta”), Pfizer Inc. (“Pfizer”), Janssen Biotech, Inc. (“Janssen”), AbbVie, Inc. (“AbbVie”), Eli Lilly and Company (“Lilly”), Bristol-Myers Squibb Company (“BMS”), Alexion Pharma Holding (“Alexion”), ARGENX BVBA (“argenx”) and Horizon Therapeutics plc. (“Horizon”). We receive royalties from three of these collaborations, including royalties from sales of one product from the Baxalta collaboration, and three products from the Roche collaboration and one product from Janssen collaboration. Future potential revenues from royalties and fees from ENHANZE collaborations and the sales and/or royalties of our approved products will depend on the ability of Halozyme and our collaborators to develop, manufacture, secure and maintain regulatory approvals for approved products and product candidates and commercialize product candidates. Except where specifically noted or the context otherwise requires, references to “Halozyme,” “the Company,” “we,” “our,” and “us” in these notes to the condensed consolidated financial statements refer to Halozyme Therapeutics, Inc. and its wholly owned subsidiary, Halozyme, Inc., and Halozyme, Inc.’s wholly owned subsidiaries, Halozyme Switzerland GmbH and Halozyme Switzerland Holdings GmbH. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) and with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) related to a quarterly report on Form 10-Q. Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for a complete set of financial statements. These interim unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on February 23, 2021. The unaudited financial information for the interim periods presented herein reflects all adjustments which, in the opinion of management, are necessary for a fair presentation of the financial condition and results of operations for the periods presented, with such adjustments consisting only of normal recurring adjustments. Operating results for interim periods are not necessarily indicative of the operating results for an entire fiscal year. The accompanying interim unaudited condensed consolidated financial statements include the accounts of Halozyme Therapeutics, Inc. and our wholly owned subsidiary, Halozyme, Inc., and Halozyme, Inc.’s wholly owned subsidiaries, Halozyme Switzerland GmbH and Halozyme Switzerland Holdings GmbH. All intercompany accounts and transactions have been eliminated. Use of Estimates The preparation of interim unaudited condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect the amounts reported in our interim unaudited condensed consolidated financial statements and accompanying notes. On an ongoing basis, we evaluate our estimates and judgments, which are based on historical and anticipated results and trends and on various other assumptions that management believes to be reasonable under the circumstances. By their nature, estimates are subject to an inherent degree of uncertainty and, as such, actual results may differ from management’s estimates. Cash Equivalents and Marketable Securities Cash equivalents consist of highly liquid investments, readily convertible to cash, that mature within ninety days or less from the date of purchase. As of March 31, 2021, our cash equivalents consisted of money market funds. Marketable securities are investments with original maturities of more than ninety days from the date of purchase that are specifically identified to fund current operations. Marketable securities are considered available-for-sale. These investments are classified as current assets, even though the stated maturity date may be one year or more beyond the current balance sheet date which reflects management’s intention to use the proceeds from the sale of these investments to fund our operations, as necessary. Such available-for-sale investments are carried at fair value with unrealized gains and losses recorded in other comprehensive income (loss) and included as a separate component of stockholders’ equity. The cost of marketable securities is adjusted for amortization of premiums or accretion of discounts to maturity, and such amortization or accretion is included in investment and other income, net in the interim unaudited condensed consolidated statements of operations. We use the specific identification method for calculating realized gains and losses on marketable securities sold. None of the realized gains and losses and declines in value judged to be as a result of credit loss on marketable securities, if any, are included in investment and other income, net in the interim unaudited condensed consolidated statements of operations. Restricted Cash Under the terms of the leases of our facilities, we are required to maintain letters of credit as security deposits during the terms of such leases. At March 31, 2021 and December 31, 2020, restricted cash of $0.5 million was pledged as collateral for the letters of credit. Fair Value of Financial Instruments The authoritative guidance for fair value measurements establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. Our financial instruments include cash equivalents, available-for-sale marketable securities, accounts receivable, prepaid expenses and other assets, accounts payable, accrued expenses and long-term debt. Fair value estimates of these instruments are made at a specific point in time, based on relevant market information. These estimates may be subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. The carrying amount of cash equivalents, accounts receivable, prepaid expenses and other assets, accounts payable and accrued expenses are generally considered to be representative of their respective fair values because of the short-term nature of those instruments. Available-for-sale marketable securities consist of asset-backed securities, corporate debt securities, U.S. Treasury securities and commercial paper, and are measured at fair value using Level 1 and Level 2 inputs. Level 2 financial instruments are valued using market prices on less active markets and proprietary pricing valuation models with observable inputs, including interest rates, yield curves, maturity dates, issue dates, settlement dates, reported trades, broker-dealer quotes, issue spreads, benchmark securities or other market related data. We obtain the fair value of Level 2 investments from our investment manager, who obtains these fair values from a third-party pricing source. We validate the fair values of Level 2 financial instruments provided by our investment manager by comparing these fair values to a third-party pricing source. Inventories Inventories are stated at lower of cost or net realizable value. Cost is determined on a first-in, first-out basis. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Inventories are reviewed periodically for potential excess, dated or obsolete status. We evaluate the carrying value of inventories on a regular basis, taking into account such factors as historical and anticipated future sales compared to quantities on hand, the price we expect to obtain for products in their respective markets compared with historical cost and the remaining shelf life of goods on hand. As of March 31, 2021, and December 31, 2020, inventories consisted of $1.5 million and $1.3 million, respectively, of Hylenex inventory, net and $56.8 million and $59.4 million, respectively, of bulk rHuPH20, consistent with our plan to build inventory to meet future customer demand. Leases The Company has entered into operating leases primarily for real estate and automobiles. These leases have terms which range from 3 years to 6 years. We determine if an arrangement contains a lease at inception. Right of use (“ROU”) assets and liabilities resulting from operating leases are included in property and equipment, accrued expenses and other long-term liabilities on our condensed consolidated balance sheets. Operating lease ROU assets and liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the discount rate to calculate the present value of future payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred. Our leases often include options to extend or terminate the lease. These options are included in the lease term when it is reasonably certain that we will exercise that option. Short-term leases with an initial term of 12 months or less are not recorded on the balance sheet. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. We have lease agreements with lease and non-lease components, which are generally accounted for separately. For certain equipment leases, such as automobiles, we account for the lease and non-lease components as a single lease component. Revenue Recognition We generate revenues from payments received under collaborative agreements and product sales. We recognize revenue when we transfer promised goods or services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. To determine revenue recognition for contracts with customers we perform the following five steps: (i) identify the promised goods or services in the contract; (ii) identify the performance obligations in the contract, including whether they are distinct in the context of the contract; (iii) determine the transaction price, including the constraint on variable consideration; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) we satisfy the performance obligations. Revenues under Collaborative Agreements Under these agreements, we grant the collaboration partner a worldwide license to develop and commercialize products using our ENHANZE technology to combine our patented rHuPH20 enzyme with their proprietary biologics directed at up to a specified number of targets. Targets are usually licensed on an exclusive, global basis. Targets selected subsequent to inception of the arrangement require payment of an additional license fee. The collaboration partner is responsible for all development, manufacturing, clinical, regulatory, sales and marketing costs for any products developed under the agreement. We are responsible for supply of bulk rHuPH20 based on the collaboration partner’s purchase orders and may also be separately engaged to perform research and development services. While these collaboration agreements are similar in that they originate from the same framework, each one is the result of an arms-length negotiation and thus may vary from one to the other. We collect an upfront license payment from collaboration partners and are also entitled to receive event-based payments subject to collaboration partners’ achievement of specified development, regulatory and sales-based milestones. In several agreements, collaboration partners pay us annual fees to maintain their exclusive license rights if they are unable to advance product development to specified stages. We earn separate fees for bulk rHuPH20 supplies and research and development services. In addition, collaboration partners will pay us royalties at an on average mid-single digit percent rate of their sales if products under the collaboration are commercialized. All amounts owed to us are noncancelable after the underlying triggering event occurs, and nonrefundable once paid. Unless terminated earlier in accordance with its terms, collaborations generally continue in effect until the last to expire royalty payment term, as determined on a product by product and on a country by country basis, with each royalty term starting on the first commercial sale of that product and ending the later of: (i) a specified period or term set forth in the agreement or (ii) expiration of the last to expire of the valid claims of our patents covering rHuPH20 or other specified patents developed under the collaboration which valid claim covers a product developed under the collaboration. When there are no valid claims during the applicable royalty term in a given country, the royalty rate is reduced for those sales. Collaboration partners may terminate the agreement prior to expiration for any reason in its entirety or on a target-by-target basis generally upon 90 days prior written notice to us. Upon any such termination, the license granted to collaboration partners (in total or with respect to the terminated target, as applicable) will terminate provided, however, that in the event of expiration of the agreement (as opposed to a termination), the on-going licenses granted will become perpetual, non-exclusive and fully paid. Although these agreements are in form identified as collaborative agreements, we concluded for accounting purposes they represent contracts with customers and are not subject to accounting literature on collaborative arrangements. This is because we grant to collaboration partners licenses to our intellectual property and provide supply of bulk rHuPH20 and research and development services which are all outputs of our ongoing activities, in exchange for consideration. Under these collaborative agreements, we do not develop assets jointly with collaboration partners, and do not share in significant risks of their development or commercialization activities. Accordingly, we concluded our collaborative agreements are appropriately accounted for pursuant to ASC Topic 606, Revenue from Contracts with Customers. Under all of our collaborative agreements, we have identified licenses to use functional intellectual property as the only performance obligation. The intellectual property underlying the license is our proprietary ENHANZE technology which represents application of rHuPH20 to facilitate delivery of drugs or fluids. Each of the licenses grants the collaboration partners rights to use our intellectual property as it exists and is identified on the effective date of the license, because there is no ongoing development of the ENHANZE technology required. Therefore, we recognize revenue from licenses at the point when the license becomes effective and the collaboration partner has received access to our intellectual property, usually at the inception of the agreement. When collaboration partners can select additional targets to add to the licenses granted, we consider these rights to be options. We evaluate whether such options contain material rights, i.e. have exercise prices that are discounted compared to what we would charge for a similar license to a new collaboration partner. The exercise price of these options includes a combination of the target selection fees, event-based milestone payments and royalties. When these amounts in aggregate are not offered at a discount that exceeds discounts available to other customers, we conclude the option does not contain a material right, and we consider grants of additional licensing rights upon option exercises to be separate contracts (target selection contracts). We provide customary indemnification and protection of licensed intellectual property for our customers. These provisions are part of assurance that the licenses meet the agreements’ representations and are not obligations to provide goods or services. We also fulfill purchase orders for supply of bulk rHuPH20 and perform research and development services pursuant to projects authorization forms for our collaboration partners, which represent separate contracts. Additionally, we price our supply of bulk rHuPH20 and research and development services at our regular selling prices, called standalone selling price or “SSP”. Therefore, our collaboration partners do not have material rights to order these items at prices not reflective of SSP. Refer to the discussion below regarding recognition of revenue for these separate contracts. Transaction price for a contract represents the amount to which we are entitled in exchange for providing goods and services to the customer. Transaction price does not include amounts subject to uncertainties unless it is probable that there will be no significant reversal of revenue when the uncertainty is resolved. Apart from the upfront license payment (or target selection fees in the target selection contracts), all other fees we may earn under our collaborative agreements are subject to significant uncertainties of product development. Achievement of many of the event-based development and regulatory milestones may not be probable until such milestones are actually achieved. This generally relates to milestones such as obtaining marketing authorization approvals. With respect to other development milestones, e.g. dosing of a first patient in a clinical trial, achievement could be considered probable prior to its actual occurrence, based on the progress towards commencement of the trial. In order to evaluate progress towards commencement of a trial, we assess the status of activities leading up to our collaboration partner’s initiation of a trial such as feedback received from the applicable regulatory authorities, completion of IND or equivalent filings, readiness and availability of drug, readiness of study sites and our collaboration partner’s commitment of resources to the program. We do not include any amounts subject to uncertainties into the transaction price until it is probable that the amount will not result in a significant reversal of revenue in the future. At the end of each reporting period, we re-evaluate the probability of achievement of such milestones and any related constraint, and if necessary, adjust our estimate of the overall transaction price. When target exchange rights are held by collaboration partners, and the amounts attributed to these rights are not refundable, they are included in the transaction price. However, they are recorded as deferred revenues because we have a potential performance obligation to provide a new target upon an exchange right being exercised. These amounts are recognized in revenue when the right of exchange expires or is exercised. Because our agreements have one type of performance obligation (licenses) which are typically all transferred at the same time at agreement inception, allocation of transaction price often is not required. However, allocation is required when licenses for some of the individual targets are subject to rights of exchange, because revenue associated with these targets cannot be recognized. We perform an allocation of the upfront amount based on relative SSP of licenses for individual targets. We determine license SSP using income-based valuation approach utilizing risk-adjusted discounted cash flow projections of the estimated return a licensor would receive. When amounts subject to uncertainties, such as milestones and royalties, are included in the transaction price, we attribute them to the specific individual target licenses which generate such milestone or royalty amounts. We also estimate SSP of bulk rHuPH20 and research and development services, to determine that our collaboration partners do not have material rights to order them at discounted prices. For supplies of bulk rHuPH20, because we effectively act as a contract manufacturer to our collaboration partners, we estimate and charge SSP based on the typical contract manufacturer margins consistently with all of our collaborative partners. We determine SSP of research and development services based on a fully-burdened labor rate. Our rates are comparable to those we observe in other collaborative agreements. We also have a history of charging similar rates to all of our collaboration partners. Upfront amounts allocated to licenses to individual targets are recognized as revenue when the license is transferred to the collaboration partner, as discussed above, if the license is not subject to exchange rights, or when the exchange right expires or is exercised. Development milestones and other fees are recognized in revenue when they are included in the transaction price, because by that time we have already transferred the related license to the collaboration partner. Sales-based milestones and royalties cannot be recognized until the underlying sales occur. We do not receive final royalty reports from our collaboration partners until after we complete our financial statements for a prior quarter. Therefore, we recognize revenue based on estimates of the royalty earned, which are based on internal estimates and available preliminary reports provided by our collaboration partners. We will record a true-up in the following quarter if necessary, when final royalty reports are received. To date, we have not recorded any material true-ups. In contracts to provide research and development services, such services represent the only performance obligation. The fees are charged based on hours worked by our employees and the fixed contractual rate per hour, plus third-party pass-through costs, on a monthly basis. We recognize revenues as the related services are performed based on the amounts billed, as the collaboration partner consumes the benefit of research and development work simultaneously as we perform these services, and the amounts billed reflect the value of these services to the customer. Refer to Note 4 Revenue , for further discussion on our collaborative arrangements. Product Sales, Net Hylenex ® Recombinant We sell Hylenex recombinant in the U.S. to wholesale pharmaceutical distributors, who sell the product to hospitals and other end-user customers. Sales to wholesalers are made pursuant to purchase orders subject to the terms of a master agreement, and delivery of individual packages of Hylenex recombinant represent performance obligations under each purchase order. We use a contract manufacturer to produce Hylenex recombinant and a third-party logistics (3PL) vendor to process and fulfill orders . We concluded we are the principal in the sales to wholesalers because we control access to services rendered by both vendors and direct their activities. We have no significant obligations to wholesalers to generate pull-through sales. Selling prices initially billed to wholesalers are subject to discounts for prompt payment and subsequent chargebacks when wholesalers sell Hylenex recombinant at negotiated discounted prices to members of certain group purchasing organizations (“GPOs”) and government programs. We also pay quarterly distribution fees to certain wholesalers for inventory reporting and chargeback processing, and to GPOs as administrative fees for services and for access to GPO members. We concluded the benefits received in exchange for these fees are not distinct from our sales of Hylenex recombinant, and accordingly we apply these amounts to reduce revenues. Wholesalers also have rights to return unsold product nearing or past the expiration date. Because of the shelf life of Hylenex recombinant and our lengthy return period, there may be a significant period of time between when the product is shipped and when we issue credits on returned product. We estimate the transaction price when we receive each purchase order taking into account the expected reductions of the selling price initially billed to the wholesaler arising from all of the above factors. We have compiled historical experience and data to estimate future returns and chargebacks of Hylenex recombinant and the impact of the other discounts and fees we pay. When estimating these adjustments to the transaction price, we reduce it sufficiently to be able to assert that it is probable that there will be no significant reversal of revenue when the ultimate adjustment amounts are known. Each purchase order contains only one type of product, and is usually shipped to the wholesaler in a single shipment. Therefore, allocation of the transaction price to individual packages is not required. We recognize revenue from Hylenex recombinant product sales and related cost of sales upon product delivery to the wholesaler location. At that time, the wholesalers take control of the product as they take title, bear the risk of loss of ownership, and have an enforceable obligation to pay us. They also have the ability to direct sales of product to their customers on terms and at prices they negotiate. Although wholesalers have product return rights, we do not believe they have a significant incentive to return the product to us. Upon recognition of revenue from product sales of Hylenex recombinant, the estimated amounts of credit for product returns, chargebacks, distribution fees, prompt payment discounts, and GPO fees are included in sales reserves, accrued liabilities and net of accounts receivable. We monitor actual product returns, chargebacks, discounts and fees subsequent to the sale. If these amounts differ from our estimates, we make adjustments to these allowances, which are applied to increase or reduce product sales revenue and earnings in the period of adjustment. In connection with the orders placed by wholesalers, we incur costs such as commissions to our sales representatives. However, as revenue from product sales is recognized upon delivery to the wholesaler, which occurs shortly after we receive a purchase order, we do not capitalize these commissions and other costs, based on application of the practical expedient allowed within the applicable guidance. Bulk rHuPH20 We sell bulk rHuPH20 to collaboration partners for use in research and development; subsequent to receiving marketing approval, we sell it for use in collaboration commercial products. Sales are made pursuant to purchase orders subject to the terms of the collaborative agreement, and delivery of units of bulk rHuPH20 represent performance obligations under each purchase order. We provide a standard warranty that the product conforms to specifications. We use contract manufacturers to produce bulk rHuPH20 and have concluded we are the principal in the sales to collaboration partners. The transaction price for each purchase order of bulk rHuPH20 is fixed based on the cost of production plus a contractual markup, and is not subject to adjustments. Allocation of the transaction price to individual quantities of the product is usually not required because each order contains only one type of product. We recognize revenue from the sale of bulk rHuPH20 as product sales and related cost of sales upon transfer of title to our partners. At that time, the partners take control of the product, bear the risk of loss of ownership, and have an enforceable obligation to pay us. ENHANZE ® Drug Product We sell ENHANZE drug product to collaboration partners for use in research and development in early phase clinical studies. Sales are made pursuant to purchase orders subject to the terms of the collaborative agreement, and delivery of units of ENHANZE drug product represent performance obligations under each purchase order. We provide a standard warranty that the product conforms to specifications. We use contract manufacturers to produce ENHANZE drug product and we concluded we are the principal in the sales to collaboration partners. The transaction price for each purchase order of ENHANZE drug product is fixed based on the cost of production plus a contractual markup and is not subject to adjustments. Allocation of the transaction price to individual quantities of the product is usually not required because each order contains only one type of product. We recognize revenue from the sale of ENHANZE drug product as product sales and related cost of sales upon transfer of title to our partners. At that time, the partners take control of the product, bear the risk of loss of ownership, and have an enforceable obligation to pay us. Revenue Presentation In our statements of operations, we report as revenues under collaborative agreements the upfront payments, event-based development and regulatory milestones and sales milestones. We also include in this category revenues from separate research and development contracts pursuant to project authorization forms. We report royalties received from collaboration partners as a separate line in our statements of operations. Revenues from sales of Hylenex recombinant, bulk rHuPH20 that has alternative future use and ENHANZE drug product are included in product sales, net. In the footnotes to our condensed consolidated financial statements, we provide disaggregated revenue information by type of arrangement (product sales, net, collaborative agreements and research and development services), and additionally, by type of payment stream received under collaborative agreements (upfront license fees, event-based development and regulatory milestones and other fees, sales milestones and royalties). Cost of Product Sales Cost of product sales consists primarily of raw materials, third-party manufacturing costs, fill and finish costs, freight costs, internal costs and manufacturing overhead associated with the production of Hylenex recombinant and bulk rHuPH20 and ENHANZE drug product. Cost of product sales also consists of the write-down of excess, dated and obsolete inventories and the write-off of inventories that do not meet certain product specifications, if any. Research and Development Expenses Research and development expenses include salaries and benefits, facilities and other overhead expenses, research related manufacturing services, contract services and other outside expenses. Research and development expenses are charged to operating expenses as incurred when these expenditures relate to our research and development efforts and have no alternative future uses. We are obligated to make upfront payments upon execution of certain research and development agreements. Advance payments, including nonrefundable amounts, for goods or services that will be used or rendered for future research and development activities are deferred. Such amounts are recognized as expense as the related goods are delivered or the related services are performed or such time when we do not expect the goods to be delivered or services to be performed. Share-Based Compensation We record compensation expense associated with stock options, restricted stock awards (“RSAs”), restricted stock units (“RSUs”) and performance stock units (“PSUs”) in accordance with the authoritative guidance for stock-based compensation. The cost of employee services received in exchange for an award of an equity instrument is measured at the grant date, based on the estimated fair value of the award, and is recognized as expense on a straight-line basis over the requisite service period of the award. Share-based compensation expense for an award with a performance condition is recognized when the achievement of such performance condition is determined to be probable. If the outcome of such performance condition is not determined to be probable or is not met, no compensation expense is recognized and any previously recognized compensation expense is reversed. Forfeitures are recognized as a reduction of share-based compensation expense as they occur. Income Taxes We provide for income taxes using the liability method. Under this method, deferred income tax assets and liabilities are determined based on the differences between the financial statement carrying amounts of existing assets and liabilities at each year end and their respective tax bases and are measured using enacted tax rates in effect for the year in which the differences are expected to affect taxable income. Significant judgment is required by management to determine our provision for income taxes, our deferred tax assets and liabilities, and the valuation allowance to record against our net deferred tax assets, which are based on complex and evolving tax regulations throughout the world. Deferred tax assets (“DTA”) and other tax benefits are recorded when it is more likely than not that the position will be sustained upon audit. While we have begun to utilize certain of our net operating losses, we have not yet established a track record of profitability. Accordingly, valuation allowances have been recorded to reduce our net deferred tax assets to zero until such time as we can demonstrate an ability to realize them. We intend to continue maintaining a full valuation allowance on our DTAs until there is sufficient evidence to support the reversal of all or some portion of these allowances. Howeve |
Fair Value Measurement
Fair Value Measurement | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | Fair Value Measurement Available-for-sale marketable securities consisted of the following (in thousands): March 31, 2021 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Asset-backed securities 31,764 17 (2) 31,779 Corporate debt securities 68,972 5 (22) 68,955 U.S. Treasury securities 50,381 10 (2) 50,389 Commercial paper 113,733 — — 113,733 264,850 32 (26) 264,856 December 31, 2020 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Asset-backed securities $ 17,013 $ 49 $ — $ 17,062 Corporate debt securities 69,755 42 (8) 69,789 U.S. Treasury securities 45,110 7 — 45,117 Commercial paper 88,342 — — 88,342 $ 220,220 $ 98 $ (8) $ 220,310 As of March 31, 2021, 12 available-for-sale marketable securities with a fair market value of $80.6 million were in a gross unrealized loss position of $26 thousand. Based on our review of these marketable securities, we believe none of the unrealized loss is as a result of a credit loss as of March 31, 2021, because we do not intend to sell these securities and it is not more-likely-than-not that we will be required to sell these securities before the recovery of their amortized cost basis. Contractual maturities of available-for-sale debt securities are as follows (in thousands): March 31, 2021 December 31, 2020 Estimated Fair Value Due within one year $ 223,669 $ 220,310 After one but within five years 41,187 — $ 264,856 $ 220,310 The following table summarizes, by major security type, our cash equivalents and available-for-sale marketable securities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in thousands): March 31, 2021 December 31, 2020 Level 1 Level 2 Total estimated fair value Level 1 Level 2 Total estimated fair value Cash equivalents: Money market funds $ 499,409 $ — $ 499,409 $ 140,571 $ — $ 140,571 Commercial paper — — — — 7,000 7,000 Available-for-sale marketable Asset-backed securities — 31,779 31,779 — 17,062 17,062 Corporate debt securities — 68,955 68,955 — 69,789 69,789 U.S. Treasury securities 50,389 — 50,389 45,117 — 45,117 Commercial paper — 113,733 113,733 — 88,342 88,342 $ 549,798 $ 214,467 $ 764,265 $ 185,688 $ 182,193 $ 367,881 We had no instruments that were classified within Level 3 as of March 31, 2021 and December 31, 2020. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Our disaggregated revenues were as follows (in thousands): Three Months Ended 2021 2020 Royalties $ 36,923 $ 16,822 Product sales, net Sales of bulk rHuPH20 $ 16,770 $ 3,767 Sales of ENHANZE drug product — 46 Sales of Hylenex 4,996 4,334 Total product sales, net 21,766 8,147 Revenues under collaborative agreements: Event-based development and regulatory milestones and other fees 30,000 — Research and development services 333 385 Total revenues under collaborative agreements 30,333 385 Total revenue $ 89,022 $ 25,354 During the three months ended March 31, 2021 we recognized revenue related to licenses granted to collaboration partners in prior periods in the amount of $66.9 million. This amount represents royalties earned in the current period in addition to $30.0 million of variable consideration in the contracts where uncertainties have been resolved and the development milestones were expected to be achieved or were achieved. There was no revenue recognized during the three months ended March 31, 2021 that had been included in deferred revenues at December 31, 2020. Accounts receivable, net, and deferred revenues (contract liabilities) from contracts with customers, including collaboration partners, consisted of the following (in thousands): March 31, 2021 December 31, 2020 Accounts receivable, net $ 58,391 $ 90,730 Other contract assets 30,000 7,000 Deferred revenues 5,772 5,772 As of March 31, 2021, the amounts included in the transaction price of our contracts with customers, including collaboration partners, and allocated to goods and services not yet provided were $75.2 million, of which $69.4 million relates to unfulfilled purchase commitments and $5.8 million has been collected and is reported as deferred revenues. The unfulfilled purchase commitments are estimated to be delivered by the end of the second quarter of 2022. Of the total deferred revenues of $5.8 million, $1.7 million is expected to be used by our customers within the next 12 months. |
Certain Balance Sheet Items
Certain Balance Sheet Items | 3 Months Ended |
Mar. 31, 2021 | |
Balance Sheet Related Disclosures [Abstract] | |
Certain Balance Sheet Items | Certain Balance Sheet Items Accounts receivable, net consisted of the following (in thousands): March 31, December 31, Accounts receivable from product sales to collaborators $ 17,749 $ 25,198 Accounts receivable from revenues under collaborative agreements 365 30,404 Accounts receivable from royalty payments 36,571 32,098 Accounts receivable from other product sales 4,810 4,033 Other contract assets 30,000 7,000 Subtotal 89,495 98,733 Allowance for distribution fees and discounts (1,104) (1,003) Total accounts receivable, net $ 88,391 $ 97,730 Inventories consisted of the following (in thousands): March 31, December 31, Raw materials $ 6,037 $ 5,813 Work-in-process 19,441 33,738 Finished goods 32,865 21,196 Total inventories $ 58,343 $ 60,747 Prepaid expenses and other assets consisted of the following (in thousands): March 31, December 31, Prepaid manufacturing expenses $ 40,610 $ 35,048 Prepaid research and development expenses 473 342 Other prepaid expenses 1,733 2,510 Other assets 1,860 4,441 Total prepaid expenses and other assets 44,676 42,341 Less long-term portion (13,997) (14,067) Total prepaid expenses and other assets, current $ 30,679 $ 28,274 Prepaid manufacturing expenses include raw materials, slot reservation fees and other amounts paid to contract manufacturing organizations. Such amounts are reclassified to work-in-process inventory as materials are used or the contract manufacturing organization services are complete. Property and equipment, net consisted of the following (in thousands): March 31, December 31, Research equipment $ 6,983 $ 7,085 Manufacturing equipment 5,597 5,336 Computer and office equipment 4,712 4,826 Leasehold improvements 1,628 1,628 Subtotal 18,920 18,875 Accumulated depreciation and amortization (11,649) (11,582) Subtotal 7,271 7,293 Right of use assets 3,095 3,300 Property and equipment, net $ 10,366 $ 10,593 Depreciation and amortization expense was approximately $0.7 million and $0.9 million, inclusive of ROU asset amortization of $0.4 million and $0.5 million for the three months ended March 31, 2021 and 2020 respectively. Accrued expenses consisted of the following (in thousands): March 31, December 31, Accrued outsourced research and development expenses $ 467 $ 448 Accrued compensation and payroll taxes 3,958 8,078 Accrued outsourced manufacturing expenses 4,973 4,535 Other accrued expenses 5,048 6,020 Lease liability 4,461 4,868 Total accrued expenses 18,907 23,949 Less long-term portion (2,809) (3,466) Total accrued expenses, current $ 16,098 $ 20,483 Expense associated with the accretion of the lease liabilities was approximately $0.1 million and $0.1 million for the three months ended March 31, 2021 and 2020 respectively. Total lease expense for the three months ended March 31, 2021 and 2020 was $0.5 million and $0.6 million respectively. |
Long-Term Debt, Net
Long-Term Debt, Net | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Long-Term Debt, Net | Debt, Net 0.25% Convertible Notes due 2027 In March 2021, we completed the sale of $805.0 million in aggregate principal amount of 0.25% Convertible Senior Notes due 2027 (the “2027 Convertible Notes” and collectively with the 2024 Convertible Notes the “Convertible Notes”). The net proceeds in connection with the issuance of the 2027 Convertible Notes, after deducting the initial purchasers’ fee of $20.1 million, was approximately $784.9 million. We also incurred additional debt issuance costs totaling $0.4 million. Debt issuance costs and the initial purchasers’ fee are presented as a debt discount. The 2027 Convertible Notes pay interest semi-annually in arrears on March 1st and September 1st of each year at an annual rate of 0.25%. The 2027 Convertible Notes are general unsecured obligations and will rank senior in right of payment to all indebtedness that is expressly subordinated in right of payment to the 2027 Convertible Notes, will rank equally in right of payment with all existing and future liabilities that are not so subordinated, will be effectively junior to any secured indebtedness to the extent of the value of the assets securing such indebtedness and will be structurally subordinated to all indebtedness and other liabilities (including trade payables) of our current or future subsidiaries. The 2027 Convertible Notes have a maturity date of March 1, 2027. Holders may convert their 2027 Convertible Notes at their option only in the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on June 30, 2021, if the last reported sale price per share of common stock exceeds 130% of the conversion price for each of at least 20 trading days during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter; (2) during the five consecutive business days immediately after any five consecutive trading day period (such five consecutive trading day period, the “measurement period”) in which the trading price per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price per share of our common stock on such trading day and the conversion rate on such trading day; (3) upon the occurrence of certain corporate events or distributions on our common stock, as described in the offering memorandum; (4) if we call such notes for redemption; and (5) at any time from, and including, September 1, 2026 until the close of business on the scheduled trading day immediately before the maturity date. The Notes will be convertible, regardless of the foregoing circumstances, at any time from, and including, September 1, 2026 until the close of business on the scheduled trading day immediately preceding the maturity date. As of March 31, 2021, the 2027 Convertible Notes are not convertible. Upon conversion, we will pay cash for the settlement of principal and for the premium, if applicable, we will pay cash, deliver shares of common stock or a combination of cash and shares of common stock, at our election. The initial conversion rate for the 2027 Convertible Notes will be 12.9576 shares of common stock per $1,000 in principal amount of 2027 Convertible Notes, equivalent to a conversion price of approximately $77.17 per share of our common stock. The conversion rate is subject to adjustment. As of March 31, 2021, we were in compliance with all covenants and there was no material adverse change in our business, operations or financial condition. 1.25% Convertible Notes due 2024 In November 2019, we completed the sale of $460.0 million in aggregate principal amount of 1.25% Convertible Senior Notes due 2024 (“2024 Convertible Notes”). The net proceeds in connection with the 2024 Convertible Notes, after deducting the initial purchasers’ fee of $12.7 million, was approximately $447.3 million. We also incurred debt issuance cost totaling $0.3 million. Debt issuance costs and the initial purchasers’ fee are presented as a debt discount. The 2024 Convertible Notes pay interest semi-annually in arrears on June 1st and December 1st of each year, beginning on June 1, 2020, at an annual rate of 1.25%. The 2024 Convertible Notes are general unsecured obligations and will rank senior in right of payment to all indebtedness that is expressly subordinated in right of payment to the 2024 Convertible Notes, will rank equally in right of payment with all existing and future liabilities that are not so subordinated, will be effectively junior to any secured indebtedness to the extent of the value of the assets securing such indebtedness and will be structurally subordinated to all indebtedness and other liabilities (including trade payables) of the our current or future subsidiaries. The 2024 Convertible Notes have a maturity date of December 1, 2024. Holders may convert their 2024 Convertible Notes at their option only in the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on March 31, 2020, if the last reported sale price per share of common stock exceeds 130% of the conversion price for each of at least 20 trading days during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter; (2) during the five consecutive business days immediately after any five consecutive trading day period (such five consecutive trading day period, the “measurement period”) in which the trading price per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price per share of our common stock on such trading day and the conversion rate on such trading day; (3) upon the occurrence of certain corporate events or distributions on our common stock, as described in the offering memorandum; (4) if we call such notes for redemption; and (5) at any time from, and including, June 1, 2024 until the close of business on the scheduled trading day immediately before the maturity date. As of March 31, 2021, the 2024 Convertible Notes are convertible and are classified as a current liability. In January 2021 we notified the note holders our irrevocable election to settle the principal of the 2024 Convertible Notes in cash and for the premium, if applicable, deliver shares of common stock. The conversion rate for the 2024 Convertible Notes will be 41.9208 shares of common stock per $1,000 in principal amount of 2024 Convertible Notes, equivalent to a conversion price of approximately $23.85 per share of our common stock. The conversion rate is subject to adjustment. In March 2021, we completed a privately negotiated induced conversion of $369.1 million principal amount of the 2024 Convertible Notes (“Note Repurchases” or the “Induced Conversion”). In connection with the Induced Conversion, we paid approximately $370.2 million in cash, which includes principal and accrued interest, and issued approximately 9.08 million shares of our common stock representing the intrinsic value based on the contractual conversion rate and incremental shares as an inducement for conversion. As a result of the Induced Conversion, we recorded $21.0 million in induced conversion expense which is included in Other income (expense) of the Condensed Consolidated Statements of Operations for the three months ended March 31, 2021. The induced conversion expense represents the fair value of the common stock issued upon conversion in excess of the common stock issuable under the original terms of the 2024 Convertible Notes. As of March 31, 2021, we were in compliance with all covenants and there was no material adverse change in our business, operations or financial condition. Net Carrying Amounts of the Convertible Notes The carrying amount and fair value of our Convertible Notes were as follows as of the dates indicated. As disclosed in Note 2, we early adopted ASU 2020-06 as of January 1, 2021 on a modified retrospective basis which adoption is reflected in the following table (in thousands). March 31, January 1, Principal amount: 2024 Convertible Notes $ 90,936 $ 460,000 2027 Convertible Notes 805,000 — Total Principal Amount $ 895,936 $ 460,000 Unamortized debt discount: 2024 Convertible Notes $ (1,894) $ (10,211) 2027 Convertible Notes (20,269) — Total unamortized debt discount $ (22,163) $ (10,211) Carrying amount: 2024 Convertible Notes $ 89,042 $ 449,789 2027 Convertible Notes 784,731 — Total carrying amount $ 873,773 $ 449,789 Fair value based on trading levels (Level 2): 2024 Convertible Notes $ 167,222 $ 861,738 2027 Convertible Notes 734,707 — Total fair value of outstanding notes $ 901,929 $ 861,738 Remaining amortization per period of debt discount (in years): 2024 Convertible Notes 3.7 3.9 2027 Convertible Notes 5.9 n/a The following table summarizes the components of interest expense and the effective interest rates for each of our Convertible Notes for the periods shown (in thousands). Three Months Ended 2021 2020 Coupon Interest: 2024 Convertible Notes $ 1,053.1 $ 1,437.5 2027 Convertible Notes 167.7 — Total Coupon Interest $ 1,220.8 $ 1,437.5 Amortization of debt discount: 2024 Convertible Notes $ 461.3 $ 3,462.9 2027 Convertible Notes 279.7 — Total amortization of debt discount $ 741.0 $ 3,462.9 Interest expense: 2024 Convertible Notes $ 1,514.4 $ 4,900.4 2027 Convertible Notes 447.4 — Total interest expense $ 1,961.8 $ 4,900.4 Effective interest rates: 2024 Convertible Notes 1.8 % 5.1 % 2027 Convertible Notes 0.7 % n/a Royalty-backed Loan In January 2016, through our wholly-owned subsidiary Halozyme Royalty LLC (“Halozyme Royalty”), we received a $150 million loan (the “Royalty-backed Loan”) pursuant to a credit agreement (the “Credit Agreement”) with BioPharma Credit Investments IV Sub, LP and Athyrium Opportunities II Acquisition LP (the “Royalty-backed Lenders”). Under the terms of the Credit Agreement, Halozyme Therapeutics, Inc. transferred to Halozyme Royalty the right to receive royalty payments from the commercial sales of ENHANZE products owed under the Roche Collaboration and Baxalta Collaboration (“Collaboration Agreements”). The royalty payments from the Collaboration Agreements were used to repay the principal and interest on the loan (the “Royalty Payments”). The Royalty-backed Loan bore interest at a per annum rate of 8.75% plus the three-month LIBOR rate. The three-month LIBOR rate was subject to a floor of 0.7% and a cap of 1.5%. In June 2020, we paid the full remaining balance and final payment of $2.93 million thereby satisfying and discharging all obligations under, and terminating, the Royalty-backed Loan. |
Share-based Compensation
Share-based Compensation | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | |
Share-based Compensation | Share-based Compensation Total share-based compensation expense related to share-based awards was comprised of the following (in thousands): Three Months Ended 2021 2020 Research and development $ 1,648 $ 1,550 Selling, general and administrative 3,275 2,981 Share-based compensation expense $ 4,923 $ 4,531 Share-based compensation expense by type of share-based award (in thousands): Three Months Ended 2021 2020 Stock options $ 2,482 $ 2,383 RSAs, RSUs and PSUs 2,441 2,148 $ 4,923 $ 4,531 We granted stock options to purchase approximately 0.7 million and 1.3 million shares of common stock during the three months ended March 31, 2021 and 2020, respectively. The exercise price of stock options granted is equal to the closing price of the common stock on the date of grant. The fair value of each option award is estimated on the date of grant using the Black-Scholes-Merton option pricing model (“Black-Scholes model”). Expected volatility is based on historical volatility of our common stock. The expected term of options granted is based on analyses of historical employee termination rates and option exercises. The risk-free interest rate is based on the U.S. Treasury yield for a period consistent with the expected term of the option in effect at the time of the grant. The dividend yield assumption is based on the expectation of no future dividend payments. The assumptions used in the Black-Scholes model were as follows: Three Months Ended 2021 2020 Expected volatility 45.75-46.45% 50.92-51.30% Average expected term (in years) 4.7 5.5 Risk-free interest rate 0.36-0.71% 0.88-1.67% Expected dividend yield — — Total unrecognized estimated compensation cost by type of award and the weighted-average remaining requisite service period over which such expense is expected to be recognized (in thousands, unless otherwise noted): March 31, 2021 Unrecognized Remaining Stock options $ 28,628 2.73 RSAs $ 115 0.08 RSUs $ 24,657 2.80 PSUs $ 2,737 2.50 |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity During the three months ended March 31, 2021 and 2020, we issued an aggregate of 280,946 and 1,792,043 shares of common stock, respectively, in connection with the exercises of stock options at a weighted average exercise price of $13.24 and $12.56 per share, respectively, for net proceeds of approximately $3.7 million and $22.5 million, respectively. For the three months ended March 31, 2021 and 2020, we issued 282,774 and 563,603 shares of common stock, respectively, upon vesting of certain RSUs for which 87,324 and 140,525 RSUs were withheld from the RSU holders, respectively, to pay for minimum withholding taxes totaling approximately $7.8 million and $5.4 million, respectively. Stock options and unvested restricted units totaling approximately 7.0 million shares and 6.7 million shares of our common stock were outstanding as of March 31, 2021 and December 31, 2020, respectively. Share Repurchases In November 2019, we announced that the Board of Directors has authorized the initiation of a capital return program to repurchase up to $550.0 million of outstanding common stock over a three-year period. We may utilize a variety of methods including open market purchases, privately negotiated transactions, accelerated share repurchase programs or any combination of such methods. The Board will regularly review this capital return program in connection with a balanced capital allocation strategy. During 2019, we repurchased approximately 11.1 million shares of common stock for $200.0 million at an average price of $18.03. During 2020, we repurchased 6.5 million shares of common stock for $150.0 million at an average price of $23.05. The shares were purchased through open market transactions and through an Accelerated Share Repurchase (ASR) agreement with Bank of America in December 2020, for which we repurchased $21.7 million of common stock and received 0.5 million shares. In February 2021, we entered into an ASR agreement with Bank of America to repurchase $75.0 million of common stock. At inception, pursuant to the agreement, we paid $75.0 million to Bank of America and took an initial delivery of 1.3 million shares. In April 2021, we finalized the transaction and received an additional 0.5 million shares. We retired the repurchased shares and they resumed the status of authorized and unissued shares. We had the following activity under the approved share repurchase programs (dollars in thousands, except share and per share data): 2021 Total Number of Shares Purchased Weighted-Average Price paid Per Share Total Cost (1) First quarter (2) 1,775,945 $ 42.89 $ 76,179 1,775,945 $ 42.89 $ 76,179 (1) Included in the total cost of shares purchased is a commission fee of $0.02 per share. (2) This includes 0.5 million shares delivered in April upon completion of the ASR. |
Net Income (loss) per share
Net Income (loss) per share | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Net Income (loss) per share | Net Income (loss) per share Basic net income (loss) per common share is computed by dividing net income (loss) for the period by the weighted average number of common shares outstanding during the period, without consideration for common stock equivalents. Outstanding stock options, unvested RSAs, unvested RSUs, unvested PSUs and the Convertible Notes are considered common stock equivalents and are only included in the calculation of diluted earnings per common share when net income is reported and their effect is dilutive. Potentially dilutive common shares issuable upon vesting of stock options, RSAs, RSUs and PSUs are determined using the average share price for each period under the treasury stock method. Potentially dilutive common shares issuable upon conversion of our Convertible Notes are determined using the if-converted method. Since we have committed to settle the principal amount of the Convertible Notes in cash upon conversion the number of shares for the conversion spread will be included as a dilutive common stock equivalent. A reconciliation of the numerators and the denominators of the basic and diluted net income (loss) per common share computations is as follows (in thousands, except per share amounts): Three Months Ended 2021 2020 Numerator: Net income (loss) $ 27,895 $ (6,103) Denominator: Weighted average common shares outstanding for basic net income (loss) per share 137,952 137,186 Dilutive potential common stock outstanding: Stock Options 3,223 — RSAs, RSUs and PSUs 702 — Convertible Notes 6,663 — Weighted average common shares outstanding for diluted net income (loss) per share 148,540 137,186 Net income (loss) per share: Basic $ 0.20 $ (0.04) Diluted $ 0.19 $ (0.04) Shares which have been excluded from the calculation of diluted net income (loss) per common share because their effect was anti-dilutive, include the following (shares in millions): Three Months Ended 2021 2020 Antidilutive securities (1) 13.4 29.2 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying interim unaudited condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) and with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) related to a quarterly report on Form 10-Q. Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for a complete set of financial statements. These interim unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on February 23, 2021. The unaudited financial information for the interim periods presented herein reflects all adjustments which, in the opinion of management, are necessary for a fair presentation of the financial condition and results of operations for the periods presented, with such adjustments consisting only of normal recurring adjustments. Operating results for interim periods are not necessarily indicative of the operating results for an entire fiscal year. |
Consolidation | The accompanying interim unaudited condensed consolidated financial statements include the accounts of Halozyme Therapeutics, Inc. and our wholly owned subsidiary, Halozyme, Inc., and Halozyme, Inc.’s wholly owned subsidiaries, Halozyme Switzerland GmbH and Halozyme Switzerland Holdings GmbH. All intercompany accounts and transactions have been eliminated. |
Use of Estimates | Use of EstimatesThe preparation of interim unaudited condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect the amounts reported in our interim unaudited condensed consolidated financial statements and accompanying notes. On an ongoing basis, we evaluate our estimates and judgments, which are based on historical and anticipated results and trends and on various other assumptions that management believes to be reasonable under the circumstances. By their nature, estimates are subject to an inherent degree of uncertainty and, as such, actual results may differ from management’s estimates |
Cash Equivalents and Marketable Securities and Restricted Cash | Cash Equivalents and Marketable Securities Cash equivalents consist of highly liquid investments, readily convertible to cash, that mature within ninety days or less from the date of purchase. As of March 31, 2021, our cash equivalents consisted of money market funds. Marketable securities are investments with original maturities of more than ninety days from the date of purchase that are specifically identified to fund current operations. Marketable securities are considered available-for-sale. These investments are classified as current assets, even though the stated maturity date may be one year or more beyond the current balance sheet date which reflects management’s intention to use the proceeds from the sale of these investments to fund our operations, as necessary. Such available-for-sale investments are carried at fair value with unrealized gains and losses recorded in other comprehensive income (loss) and included as a separate component of stockholders’ equity. The cost of marketable securities is adjusted for amortization of premiums or accretion of discounts to maturity, and such amortization or accretion is included in investment and other income, net in the interim unaudited condensed consolidated statements of operations. We use the specific identification method for calculating realized gains and losses on marketable securities sold. None of the realized gains and losses and declines in value judged to be as a result of credit loss on marketable securities, if any, are included in investment and other income, net in the interim unaudited condensed consolidated statements of operations. Restricted Cash Under the terms of the leases of our facilities, we are required to maintain letters of credit as security deposits during the terms of such leases. At March 31, 2021 and December 31, 2020, restricted cash of $0.5 million was pledged as collateral for the letters of credit. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The authoritative guidance for fair value measurements establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. Our financial instruments include cash equivalents, available-for-sale marketable securities, accounts receivable, prepaid expenses and other assets, accounts payable, accrued expenses and long-term debt. Fair value estimates of these instruments are made at a specific point in time, based on relevant market information. These estimates may be subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. The carrying amount of cash equivalents, accounts receivable, prepaid expenses and other assets, accounts payable and accrued expenses are generally considered to be representative of their respective fair values because of the short-term nature of those instruments. Available-for-sale marketable securities consist of asset-backed securities, corporate debt securities, U.S. Treasury securities and commercial paper, and are measured at fair value using Level 1 and Level 2 inputs. Level 2 financial instruments are valued using market prices on less active markets and proprietary pricing valuation models with observable inputs, including interest rates, yield curves, maturity dates, issue dates, settlement dates, reported trades, broker-dealer quotes, issue spreads, benchmark securities or other market related data. We obtain the fair value of Level 2 investments from our investment manager, who obtains these fair values from a third-party pricing source. We validate the fair values of Level 2 financial instruments provided by our investment manager by comparing these fair values to a third-party pricing source. |
Inventories | Inventories Inventories are stated at lower of cost or net realizable value. Cost is determined on a first-in, first-out basis. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Inventories are reviewed periodically for potential excess, dated or obsolete status. We evaluate the carrying value of inventories on a regular basis, taking into account such factors as historical and anticipated future sales compared to quantities on hand, the price we expect to obtain for products in their respective markets compared with historical cost and the remaining shelf life of goods on hand. |
Leases | Leases The Company has entered into operating leases primarily for real estate and automobiles. These leases have terms which range from 3 years to 6 years. We determine if an arrangement contains a lease at inception. Right of use (“ROU”) assets and liabilities resulting from operating leases are included in property and equipment, accrued expenses and other long-term liabilities on our condensed consolidated balance sheets. Operating lease ROU assets and liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the discount rate to calculate the present value of future payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred. Our leases often include options to extend or terminate the lease. These options are included in the lease term when it is reasonably certain that we will exercise that option. Short-term leases with an initial term of 12 months or less are not recorded on the balance sheet. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. |
Revenue and Cost of Product Sales | Revenue Recognition We generate revenues from payments received under collaborative agreements and product sales. We recognize revenue when we transfer promised goods or services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. To determine revenue recognition for contracts with customers we perform the following five steps: (i) identify the promised goods or services in the contract; (ii) identify the performance obligations in the contract, including whether they are distinct in the context of the contract; (iii) determine the transaction price, including the constraint on variable consideration; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) we satisfy the performance obligations. Revenues under Collaborative Agreements Under these agreements, we grant the collaboration partner a worldwide license to develop and commercialize products using our ENHANZE technology to combine our patented rHuPH20 enzyme with their proprietary biologics directed at up to a specified number of targets. Targets are usually licensed on an exclusive, global basis. Targets selected subsequent to inception of the arrangement require payment of an additional license fee. The collaboration partner is responsible for all development, manufacturing, clinical, regulatory, sales and marketing costs for any products developed under the agreement. We are responsible for supply of bulk rHuPH20 based on the collaboration partner’s purchase orders and may also be separately engaged to perform research and development services. While these collaboration agreements are similar in that they originate from the same framework, each one is the result of an arms-length negotiation and thus may vary from one to the other. We collect an upfront license payment from collaboration partners and are also entitled to receive event-based payments subject to collaboration partners’ achievement of specified development, regulatory and sales-based milestones. In several agreements, collaboration partners pay us annual fees to maintain their exclusive license rights if they are unable to advance product development to specified stages. We earn separate fees for bulk rHuPH20 supplies and research and development services. In addition, collaboration partners will pay us royalties at an on average mid-single digit percent rate of their sales if products under the collaboration are commercialized. All amounts owed to us are noncancelable after the underlying triggering event occurs, and nonrefundable once paid. Unless terminated earlier in accordance with its terms, collaborations generally continue in effect until the last to expire royalty payment term, as determined on a product by product and on a country by country basis, with each royalty term starting on the first commercial sale of that product and ending the later of: (i) a specified period or term set forth in the agreement or (ii) expiration of the last to expire of the valid claims of our patents covering rHuPH20 or other specified patents developed under the collaboration which valid claim covers a product developed under the collaboration. When there are no valid claims during the applicable royalty term in a given country, the royalty rate is reduced for those sales. Collaboration partners may terminate the agreement prior to expiration for any reason in its entirety or on a target-by-target basis generally upon 90 days prior written notice to us. Upon any such termination, the license granted to collaboration partners (in total or with respect to the terminated target, as applicable) will terminate provided, however, that in the event of expiration of the agreement (as opposed to a termination), the on-going licenses granted will become perpetual, non-exclusive and fully paid. Although these agreements are in form identified as collaborative agreements, we concluded for accounting purposes they represent contracts with customers and are not subject to accounting literature on collaborative arrangements. This is because we grant to collaboration partners licenses to our intellectual property and provide supply of bulk rHuPH20 and research and development services which are all outputs of our ongoing activities, in exchange for consideration. Under these collaborative agreements, we do not develop assets jointly with collaboration partners, and do not share in significant risks of their development or commercialization activities. Accordingly, we concluded our collaborative agreements are appropriately accounted for pursuant to ASC Topic 606, Revenue from Contracts with Customers. Under all of our collaborative agreements, we have identified licenses to use functional intellectual property as the only performance obligation. The intellectual property underlying the license is our proprietary ENHANZE technology which represents application of rHuPH20 to facilitate delivery of drugs or fluids. Each of the licenses grants the collaboration partners rights to use our intellectual property as it exists and is identified on the effective date of the license, because there is no ongoing development of the ENHANZE technology required. Therefore, we recognize revenue from licenses at the point when the license becomes effective and the collaboration partner has received access to our intellectual property, usually at the inception of the agreement. When collaboration partners can select additional targets to add to the licenses granted, we consider these rights to be options. We evaluate whether such options contain material rights, i.e. have exercise prices that are discounted compared to what we would charge for a similar license to a new collaboration partner. The exercise price of these options includes a combination of the target selection fees, event-based milestone payments and royalties. When these amounts in aggregate are not offered at a discount that exceeds discounts available to other customers, we conclude the option does not contain a material right, and we consider grants of additional licensing rights upon option exercises to be separate contracts (target selection contracts). We provide customary indemnification and protection of licensed intellectual property for our customers. These provisions are part of assurance that the licenses meet the agreements’ representations and are not obligations to provide goods or services. We also fulfill purchase orders for supply of bulk rHuPH20 and perform research and development services pursuant to projects authorization forms for our collaboration partners, which represent separate contracts. Additionally, we price our supply of bulk rHuPH20 and research and development services at our regular selling prices, called standalone selling price or “SSP”. Therefore, our collaboration partners do not have material rights to order these items at prices not reflective of SSP. Refer to the discussion below regarding recognition of revenue for these separate contracts. Transaction price for a contract represents the amount to which we are entitled in exchange for providing goods and services to the customer. Transaction price does not include amounts subject to uncertainties unless it is probable that there will be no significant reversal of revenue when the uncertainty is resolved. Apart from the upfront license payment (or target selection fees in the target selection contracts), all other fees we may earn under our collaborative agreements are subject to significant uncertainties of product development. Achievement of many of the event-based development and regulatory milestones may not be probable until such milestones are actually achieved. This generally relates to milestones such as obtaining marketing authorization approvals. With respect to other development milestones, e.g. dosing of a first patient in a clinical trial, achievement could be considered probable prior to its actual occurrence, based on the progress towards commencement of the trial. In order to evaluate progress towards commencement of a trial, we assess the status of activities leading up to our collaboration partner’s initiation of a trial such as feedback received from the applicable regulatory authorities, completion of IND or equivalent filings, readiness and availability of drug, readiness of study sites and our collaboration partner’s commitment of resources to the program. We do not include any amounts subject to uncertainties into the transaction price until it is probable that the amount will not result in a significant reversal of revenue in the future. At the end of each reporting period, we re-evaluate the probability of achievement of such milestones and any related constraint, and if necessary, adjust our estimate of the overall transaction price. When target exchange rights are held by collaboration partners, and the amounts attributed to these rights are not refundable, they are included in the transaction price. However, they are recorded as deferred revenues because we have a potential performance obligation to provide a new target upon an exchange right being exercised. These amounts are recognized in revenue when the right of exchange expires or is exercised. Because our agreements have one type of performance obligation (licenses) which are typically all transferred at the same time at agreement inception, allocation of transaction price often is not required. However, allocation is required when licenses for some of the individual targets are subject to rights of exchange, because revenue associated with these targets cannot be recognized. We perform an allocation of the upfront amount based on relative SSP of licenses for individual targets. We determine license SSP using income-based valuation approach utilizing risk-adjusted discounted cash flow projections of the estimated return a licensor would receive. When amounts subject to uncertainties, such as milestones and royalties, are included in the transaction price, we attribute them to the specific individual target licenses which generate such milestone or royalty amounts. We also estimate SSP of bulk rHuPH20 and research and development services, to determine that our collaboration partners do not have material rights to order them at discounted prices. For supplies of bulk rHuPH20, because we effectively act as a contract manufacturer to our collaboration partners, we estimate and charge SSP based on the typical contract manufacturer margins consistently with all of our collaborative partners. We determine SSP of research and development services based on a fully-burdened labor rate. Our rates are comparable to those we observe in other collaborative agreements. We also have a history of charging similar rates to all of our collaboration partners. Upfront amounts allocated to licenses to individual targets are recognized as revenue when the license is transferred to the collaboration partner, as discussed above, if the license is not subject to exchange rights, or when the exchange right expires or is exercised. Development milestones and other fees are recognized in revenue when they are included in the transaction price, because by that time we have already transferred the related license to the collaboration partner. Sales-based milestones and royalties cannot be recognized until the underlying sales occur. We do not receive final royalty reports from our collaboration partners until after we complete our financial statements for a prior quarter. Therefore, we recognize revenue based on estimates of the royalty earned, which are based on internal estimates and available preliminary reports provided by our collaboration partners. We will record a true-up in the following quarter if necessary, when final royalty reports are received. To date, we have not recorded any material true-ups. In contracts to provide research and development services, such services represent the only performance obligation. The fees are charged based on hours worked by our employees and the fixed contractual rate per hour, plus third-party pass-through costs, on a monthly basis. We recognize revenues as the related services are performed based on the amounts billed, as the collaboration partner consumes the benefit of research and development work simultaneously as we perform these services, and the amounts billed reflect the value of these services to the customer. Refer to Note 4 Revenue , for further discussion on our collaborative arrangements. Product Sales, Net Hylenex ® Recombinant We sell Hylenex recombinant in the U.S. to wholesale pharmaceutical distributors, who sell the product to hospitals and other end-user customers. Sales to wholesalers are made pursuant to purchase orders subject to the terms of a master agreement, and delivery of individual packages of Hylenex recombinant represent performance obligations under each purchase order. We use a contract manufacturer to produce Hylenex recombinant and a third-party logistics (3PL) vendor to process and fulfill orders . We concluded we are the principal in the sales to wholesalers because we control access to services rendered by both vendors and direct their activities. We have no significant obligations to wholesalers to generate pull-through sales. Selling prices initially billed to wholesalers are subject to discounts for prompt payment and subsequent chargebacks when wholesalers sell Hylenex recombinant at negotiated discounted prices to members of certain group purchasing organizations (“GPOs”) and government programs. We also pay quarterly distribution fees to certain wholesalers for inventory reporting and chargeback processing, and to GPOs as administrative fees for services and for access to GPO members. We concluded the benefits received in exchange for these fees are not distinct from our sales of Hylenex recombinant, and accordingly we apply these amounts to reduce revenues. Wholesalers also have rights to return unsold product nearing or past the expiration date. Because of the shelf life of Hylenex recombinant and our lengthy return period, there may be a significant period of time between when the product is shipped and when we issue credits on returned product. We estimate the transaction price when we receive each purchase order taking into account the expected reductions of the selling price initially billed to the wholesaler arising from all of the above factors. We have compiled historical experience and data to estimate future returns and chargebacks of Hylenex recombinant and the impact of the other discounts and fees we pay. When estimating these adjustments to the transaction price, we reduce it sufficiently to be able to assert that it is probable that there will be no significant reversal of revenue when the ultimate adjustment amounts are known. Each purchase order contains only one type of product, and is usually shipped to the wholesaler in a single shipment. Therefore, allocation of the transaction price to individual packages is not required. We recognize revenue from Hylenex recombinant product sales and related cost of sales upon product delivery to the wholesaler location. At that time, the wholesalers take control of the product as they take title, bear the risk of loss of ownership, and have an enforceable obligation to pay us. They also have the ability to direct sales of product to their customers on terms and at prices they negotiate. Although wholesalers have product return rights, we do not believe they have a significant incentive to return the product to us. Upon recognition of revenue from product sales of Hylenex recombinant, the estimated amounts of credit for product returns, chargebacks, distribution fees, prompt payment discounts, and GPO fees are included in sales reserves, accrued liabilities and net of accounts receivable. We monitor actual product returns, chargebacks, discounts and fees subsequent to the sale. If these amounts differ from our estimates, we make adjustments to these allowances, which are applied to increase or reduce product sales revenue and earnings in the period of adjustment. In connection with the orders placed by wholesalers, we incur costs such as commissions to our sales representatives. However, as revenue from product sales is recognized upon delivery to the wholesaler, which occurs shortly after we receive a purchase order, we do not capitalize these commissions and other costs, based on application of the practical expedient allowed within the applicable guidance. Bulk rHuPH20 We sell bulk rHuPH20 to collaboration partners for use in research and development; subsequent to receiving marketing approval, we sell it for use in collaboration commercial products. Sales are made pursuant to purchase orders subject to the terms of the collaborative agreement, and delivery of units of bulk rHuPH20 represent performance obligations under each purchase order. We provide a standard warranty that the product conforms to specifications. We use contract manufacturers to produce bulk rHuPH20 and have concluded we are the principal in the sales to collaboration partners. The transaction price for each purchase order of bulk rHuPH20 is fixed based on the cost of production plus a contractual markup, and is not subject to adjustments. Allocation of the transaction price to individual quantities of the product is usually not required because each order contains only one type of product. We recognize revenue from the sale of bulk rHuPH20 as product sales and related cost of sales upon transfer of title to our partners. At that time, the partners take control of the product, bear the risk of loss of ownership, and have an enforceable obligation to pay us. ENHANZE ® Drug Product We sell ENHANZE drug product to collaboration partners for use in research and development in early phase clinical studies. Sales are made pursuant to purchase orders subject to the terms of the collaborative agreement, and delivery of units of ENHANZE drug product represent performance obligations under each purchase order. We provide a standard warranty that the product conforms to specifications. We use contract manufacturers to produce ENHANZE drug product and we concluded we are the principal in the sales to collaboration partners. The transaction price for each purchase order of ENHANZE drug product is fixed based on the cost of production plus a contractual markup and is not subject to adjustments. Allocation of the transaction price to individual quantities of the product is usually not required because each order contains only one type of product. We recognize revenue from the sale of ENHANZE drug product as product sales and related cost of sales upon transfer of title to our partners. At that time, the partners take control of the product, bear the risk of loss of ownership, and have an enforceable obligation to pay us. Revenue Presentation In our statements of operations, we report as revenues under collaborative agreements the upfront payments, event-based development and regulatory milestones and sales milestones. We also include in this category revenues from separate research and development contracts pursuant to project authorization forms. We report royalties received from collaboration partners as a separate line in our statements of operations. Revenues from sales of Hylenex recombinant, bulk rHuPH20 that has alternative future use and ENHANZE drug product are included in product sales, net. In the footnotes to our condensed consolidated financial statements, we provide disaggregated revenue information by type of arrangement (product sales, net, collaborative agreements and research and development services), and additionally, by type of payment stream received under collaborative agreements (upfront license fees, event-based development and regulatory milestones and other fees, sales milestones and royalties). Cost of Product Sales Cost of product sales consists primarily of raw materials, third-party manufacturing costs, fill and finish costs, freight costs, internal costs and manufacturing overhead associated with the production of Hylenex recombinant and bulk rHuPH20 and ENHANZE drug product. Cost of product sales also consists of the write-down of excess, dated and obsolete inventories and the write-off of inventories that do not meet certain product specifications, if any. |
Research and Development Expenses | Research and Development Expenses Research and development expenses include salaries and benefits, facilities and other overhead expenses, research related manufacturing services, contract services and other outside expenses. Research and development expenses are charged to operating expenses as incurred when these expenditures relate to our research and development efforts and have no alternative future uses. We are obligated to make upfront payments upon execution of certain research and development agreements. Advance payments, including nonrefundable amounts, for goods or services that will be used or rendered for future research and development activities are deferred. Such amounts are recognized as expense as the related goods are delivered or the related services are performed or such time when we do not expect the goods to be delivered or services to be performed. |
Share-Based Compensation | Share-Based Compensation We record compensation expense associated with stock options, restricted stock awards (“RSAs”), restricted stock units (“RSUs”) and performance stock units (“PSUs”) in accordance with the authoritative guidance for stock-based compensation. The cost of employee services received in exchange for an award of an equity instrument is measured at the grant date, based on the estimated fair value of the award, and is recognized as expense on a straight-line basis over the requisite service period of the award. Share-based compensation expense for an award with a performance condition is recognized when the achievement of such performance condition is determined to be probable. If the outcome of such performance condition is not determined to |
Income Taxes | Income Taxes We provide for income taxes using the liability method. Under this method, deferred income tax assets and liabilities are determined based on the differences between the financial statement carrying amounts of existing assets and liabilities at each year end and their respective tax bases and are measured using enacted tax rates in effect for the year in which the differences are expected to affect taxable income. Significant judgment is required by management to determine our provision for income taxes, our deferred tax assets and liabilities, and the valuation allowance to record against our net deferred tax assets, which are based on complex and evolving tax regulations throughout the world. Deferred tax assets (“DTA”) and other tax benefits are recorded when it is more likely than not that the position will be sustained upon audit. While we have begun to utilize certain of our net operating losses, we have not yet established a track record of profitability. Accordingly, valuation allowances have been recorded to reduce our net deferred tax assets to zero until such time as we can demonstrate an ability to realize them. We intend to continue maintaining a full valuation allowance on our DTAs until there is sufficient evidence to support the reversal of all or some portion of these allowances. However, given our current earnings and anticipated future earnings, we believe that there is a reasonable possibility that within the next 12 months, sufficient positive evidence may become available to reach a conclusion that a significant portion of the valuation allowance will no longer be needed. Release of the valuation allowance would result in the recognition of certain DTAs and a decrease to income tax expense for the period the release is recorded. However, the exact timing and amount of the valuation allowance release are subject to change on the basis of the level of profitability that we are able to actually achieve. |
Segment Information | Segment Information We operate our business in one segment, which includes all activities related to the research, development and commercialization of our proprietary enzymes. This segment also includes revenues and expenses related to (i) research and development and bulk rHuPH20 manufacturing activities conducted under our collaborative agreements with third parties and (ii) product sales of Hylenex recombinant. The chief operating decision-maker reviews the operating results on an aggregate basis and manages the operations as a single operating segment. |
Adoption and Pending Adoption of Recent Accounting Pronouncements | Adoption and Pending Adoption of Recent Accounting Pronouncements The following table provides a brief description of recently issued accounting standards, those adopted in the current period and those not yet adopted: Standard Description Effective Date Effect on the Financial In August 2020, the FASB issued ASU 2020-06, Debt with Conversion and other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40) The new guidance eliminates the beneficial conversion and cash conversion accounting models for convertible instruments. It also amends the accounting for certain contracts in an entity’s own equity that are currently accounted for as derivatives because of specific settlement provisions. In addition, the new guidance modifies how particular convertible instruments and certain contracts that may be settled in cash or shares impact the diluted EPS computation. January 1, 2022 We early adopted ASU 2020-06 as of January 1, 2021 on a modified retrospective basis, which resulted in an approximately $65.6 million decrease in additional paid in capital from the derecognition of the bifurcated equity component, $52.6 million increase in debt from the derecognition of the discount associated with the bifurcated equity component and $13.0 million decrease to the opening balance of accumulated deficit, representing the cumulative non-cash interest expense recognized related to the amortization of the bifurcated conversion option related to the 2024 Convertible Notes. We derecognized the related deferred tax liabilities of $11.8 million with a corresponding adjustment to the valuation allowance, resulting in no net impact to the cumulative adjustment to retained earnings. As we committed to settle the principal amount of the convertible notes in cash upon conversion, shares used for diluted EPS will continue to be limited to the excess conversion value over the principal amount of the convertible note. Diluted earnings per share is also impacted due to the elimination of non-cash interest expense associated with the amortization of the equity component. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedule of reconciliation of numerators and denominators of basic and diluted computations | A reconciliation of the numerators and the denominators of the basic and diluted net income (loss) per common share computations is as follows (in thousands, except per share amounts): Three Months Ended 2021 2020 Numerator: Net income (loss) $ 27,895 $ (6,103) Denominator: Weighted average common shares outstanding for basic net income (loss) per share 137,952 137,186 Dilutive potential common stock outstanding: Stock Options 3,223 — RSAs, RSUs and PSUs 702 — Convertible Notes 6,663 — Weighted average common shares outstanding for diluted net income (loss) per share 148,540 137,186 Net income (loss) per share: Basic $ 0.20 $ (0.04) Diluted $ 0.19 $ (0.04) |
Schedule of adoption and pending adoption of recent accounting pronouncements | The following table provides a brief description of recently issued accounting standards, those adopted in the current period and those not yet adopted: Standard Description Effective Date Effect on the Financial In August 2020, the FASB issued ASU 2020-06, Debt with Conversion and other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40) The new guidance eliminates the beneficial conversion and cash conversion accounting models for convertible instruments. It also amends the accounting for certain contracts in an entity’s own equity that are currently accounted for as derivatives because of specific settlement provisions. In addition, the new guidance modifies how particular convertible instruments and certain contracts that may be settled in cash or shares impact the diluted EPS computation. January 1, 2022 We early adopted ASU 2020-06 as of January 1, 2021 on a modified retrospective basis, which resulted in an approximately $65.6 million decrease in additional paid in capital from the derecognition of the bifurcated equity component, $52.6 million increase in debt from the derecognition of the discount associated with the bifurcated equity component and $13.0 million decrease to the opening balance of accumulated deficit, representing the cumulative non-cash interest expense recognized related to the amortization of the bifurcated conversion option related to the 2024 Convertible Notes. We derecognized the related deferred tax liabilities of $11.8 million with a corresponding adjustment to the valuation allowance, resulting in no net impact to the cumulative adjustment to retained earnings. As we committed to settle the principal amount of the convertible notes in cash upon conversion, shares used for diluted EPS will continue to be limited to the excess conversion value over the principal amount of the convertible note. Diluted earnings per share is also impacted due to the elimination of non-cash interest expense associated with the amortization of the equity component. |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of available-for-sale marketable securities | Available-for-sale marketable securities consisted of the following (in thousands): March 31, 2021 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Asset-backed securities 31,764 17 (2) 31,779 Corporate debt securities 68,972 5 (22) 68,955 U.S. Treasury securities 50,381 10 (2) 50,389 Commercial paper 113,733 — — 113,733 264,850 32 (26) 264,856 December 31, 2020 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Asset-backed securities $ 17,013 $ 49 $ — $ 17,062 Corporate debt securities 69,755 42 (8) 69,789 U.S. Treasury securities 45,110 7 — 45,117 Commercial paper 88,342 — — 88,342 $ 220,220 $ 98 $ (8) $ 220,310 |
Schedule of contractual maturities of available-for-sale debt securities | Contractual maturities of available-for-sale debt securities are as follows (in thousands): March 31, 2021 December 31, 2020 Estimated Fair Value Due within one year $ 223,669 $ 220,310 After one but within five years 41,187 — $ 264,856 $ 220,310 |
Schedule of assets measured at fair value on a recurring basis | The following table summarizes, by major security type, our cash equivalents and available-for-sale marketable securities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in thousands): March 31, 2021 December 31, 2020 Level 1 Level 2 Total estimated fair value Level 1 Level 2 Total estimated fair value Cash equivalents: Money market funds $ 499,409 $ — $ 499,409 $ 140,571 $ — $ 140,571 Commercial paper — — — — 7,000 7,000 Available-for-sale marketable Asset-backed securities — 31,779 31,779 — 17,062 17,062 Corporate debt securities — 68,955 68,955 — 69,789 69,789 U.S. Treasury securities 50,389 — 50,389 45,117 — 45,117 Commercial paper — 113,733 113,733 — 88,342 88,342 $ 549,798 $ 214,467 $ 764,265 $ 185,688 $ 182,193 $ 367,881 |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of disaggregation of revenues | Our disaggregated revenues were as follows (in thousands): Three Months Ended 2021 2020 Royalties $ 36,923 $ 16,822 Product sales, net Sales of bulk rHuPH20 $ 16,770 $ 3,767 Sales of ENHANZE drug product — 46 Sales of Hylenex 4,996 4,334 Total product sales, net 21,766 8,147 Revenues under collaborative agreements: Event-based development and regulatory milestones and other fees 30,000 — Research and development services 333 385 Total revenues under collaborative agreements 30,333 385 Total revenue $ 89,022 $ 25,354 |
Schedule of accounts receivable, deferred revenues from contracts with customers, and amounts under collaborative agreements included in transaction price | Accounts receivable, net, and deferred revenues (contract liabilities) from contracts with customers, including collaboration partners, consisted of the following (in thousands): March 31, 2021 December 31, 2020 Accounts receivable, net $ 58,391 $ 90,730 Other contract assets 30,000 7,000 Deferred revenues 5,772 5,772 |
Certain Balance Sheet Items (Ta
Certain Balance Sheet Items (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of accounts receivable | Accounts receivable, net consisted of the following (in thousands): March 31, December 31, Accounts receivable from product sales to collaborators $ 17,749 $ 25,198 Accounts receivable from revenues under collaborative agreements 365 30,404 Accounts receivable from royalty payments 36,571 32,098 Accounts receivable from other product sales 4,810 4,033 Other contract assets 30,000 7,000 Subtotal 89,495 98,733 Allowance for distribution fees and discounts (1,104) (1,003) Total accounts receivable, net $ 88,391 $ 97,730 |
Schedule of inventories | Inventories consisted of the following (in thousands): March 31, December 31, Raw materials $ 6,037 $ 5,813 Work-in-process 19,441 33,738 Finished goods 32,865 21,196 Total inventories $ 58,343 $ 60,747 |
Schedule of prepaid expenses and other assets | Prepaid expenses and other assets consisted of the following (in thousands): March 31, December 31, Prepaid manufacturing expenses $ 40,610 $ 35,048 Prepaid research and development expenses 473 342 Other prepaid expenses 1,733 2,510 Other assets 1,860 4,441 Total prepaid expenses and other assets 44,676 42,341 Less long-term portion (13,997) (14,067) Total prepaid expenses and other assets, current $ 30,679 $ 28,274 |
Schedule of property and equipment, net | Property and equipment, net consisted of the following (in thousands): March 31, December 31, Research equipment $ 6,983 $ 7,085 Manufacturing equipment 5,597 5,336 Computer and office equipment 4,712 4,826 Leasehold improvements 1,628 1,628 Subtotal 18,920 18,875 Accumulated depreciation and amortization (11,649) (11,582) Subtotal 7,271 7,293 Right of use assets 3,095 3,300 Property and equipment, net $ 10,366 $ 10,593 |
Schedule of accrued expenses | Accrued expenses consisted of the following (in thousands): March 31, December 31, Accrued outsourced research and development expenses $ 467 $ 448 Accrued compensation and payroll taxes 3,958 8,078 Accrued outsourced manufacturing expenses 4,973 4,535 Other accrued expenses 5,048 6,020 Lease liability 4,461 4,868 Total accrued expenses 18,907 23,949 Less long-term portion (2,809) (3,466) Total accrued expenses, current $ 16,098 $ 20,483 |
Long-Term Debt, Net (Tables)
Long-Term Debt, Net (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments | Net Carrying Amounts of the Convertible Notes The carrying amount and fair value of our Convertible Notes were as follows as of the dates indicated. As disclosed in Note 2, we early adopted ASU 2020-06 as of January 1, 2021 on a modified retrospective basis which adoption is reflected in the following table (in thousands). March 31, January 1, Principal amount: 2024 Convertible Notes $ 90,936 $ 460,000 2027 Convertible Notes 805,000 — Total Principal Amount $ 895,936 $ 460,000 Unamortized debt discount: 2024 Convertible Notes $ (1,894) $ (10,211) 2027 Convertible Notes (20,269) — Total unamortized debt discount $ (22,163) $ (10,211) Carrying amount: 2024 Convertible Notes $ 89,042 $ 449,789 2027 Convertible Notes 784,731 — Total carrying amount $ 873,773 $ 449,789 Fair value based on trading levels (Level 2): 2024 Convertible Notes $ 167,222 $ 861,738 2027 Convertible Notes 734,707 — Total fair value of outstanding notes $ 901,929 $ 861,738 Remaining amortization per period of debt discount (in years): 2024 Convertible Notes 3.7 3.9 2027 Convertible Notes 5.9 n/a |
Interest Income and Interest Expense Disclosure | The following table summarizes the components of interest expense and the effective interest rates for each of our Convertible Notes for the periods shown (in thousands). Three Months Ended 2021 2020 Coupon Interest: 2024 Convertible Notes $ 1,053.1 $ 1,437.5 2027 Convertible Notes 167.7 — Total Coupon Interest $ 1,220.8 $ 1,437.5 Amortization of debt discount: 2024 Convertible Notes $ 461.3 $ 3,462.9 2027 Convertible Notes 279.7 — Total amortization of debt discount $ 741.0 $ 3,462.9 Interest expense: 2024 Convertible Notes $ 1,514.4 $ 4,900.4 2027 Convertible Notes 447.4 — Total interest expense $ 1,961.8 $ 4,900.4 Effective interest rates: 2024 Convertible Notes 1.8 % 5.1 % 2027 Convertible Notes 0.7 % n/a |
Share-based Compensation (Table
Share-based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | |
Schedule of share-based compensation expense | Total share-based compensation expense related to share-based awards was comprised of the following (in thousands): Three Months Ended 2021 2020 Research and development $ 1,648 $ 1,550 Selling, general and administrative 3,275 2,981 Share-based compensation expense $ 4,923 $ 4,531 |
Schedule of share-based compensation expense by type | Share-based compensation expense by type of share-based award (in thousands): Three Months Ended 2021 2020 Stock options $ 2,482 $ 2,383 RSAs, RSUs and PSUs 2,441 2,148 $ 4,923 $ 4,531 |
Schedule of assumptions used in Black-Scholes model | The assumptions used in the Black-Scholes model were as follows: Three Months Ended 2021 2020 Expected volatility 45.75-46.45% 50.92-51.30% Average expected term (in years) 4.7 5.5 Risk-free interest rate 0.36-0.71% 0.88-1.67% Expected dividend yield — — |
Schedule of unrecognized estimated compensation cost by type | Total unrecognized estimated compensation cost by type of award and the weighted-average remaining requisite service period over which such expense is expected to be recognized (in thousands, unless otherwise noted): March 31, 2021 Unrecognized Remaining Stock options $ 28,628 2.73 RSAs $ 115 0.08 RSUs $ 24,657 2.80 PSUs $ 2,737 2.50 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Schedule of share repurchases | We had the following activity under the approved share repurchase programs (dollars in thousands, except share and per share data): 2021 Total Number of Shares Purchased Weighted-Average Price paid Per Share Total Cost (1) First quarter (2) 1,775,945 $ 42.89 $ 76,179 1,775,945 $ 42.89 $ 76,179 (1) Included in the total cost of shares purchased is a commission fee of $0.02 per share. (2) This includes 0.5 million shares delivered in April upon completion of the ASR. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of approximate annual future minimum operating lease payments | Approximate annual future minimum operating lease payments as of March 31, 2021 are as follows (in thousands; excluding the three months ended March 31, 2021): Year: Operating 2021 $ 1,963 2022 2,660 2023 162 2024 — 2025 — Total minimum lease payments $ 4,785 Less imputed interest $ (324) Total $ 4,461 |
Net Income (loss) per share (Ta
Net Income (loss) per share (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of reconciliation of numerators and denominators of basic and diluted computations | A reconciliation of the numerators and the denominators of the basic and diluted net income (loss) per common share computations is as follows (in thousands, except per share amounts): Three Months Ended 2021 2020 Numerator: Net income (loss) $ 27,895 $ (6,103) Denominator: Weighted average common shares outstanding for basic net income (loss) per share 137,952 137,186 Dilutive potential common stock outstanding: Stock Options 3,223 — RSAs, RSUs and PSUs 702 — Convertible Notes 6,663 — Weighted average common shares outstanding for diluted net income (loss) per share 148,540 137,186 Net income (loss) per share: Basic $ 0.20 $ (0.04) Diluted $ 0.19 $ (0.04) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | Shares which have been excluded from the calculation of diluted net income (loss) per common share because their effect was anti-dilutive, include the following (shares in millions): Three Months Ended 2021 2020 Antidilutive securities (1) 13.4 29.2 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Restricted Cash (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Accounting Policies [Abstract] | ||
Restricted cash | $ 500 | $ 500 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Inventories (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Inventory [Line Items] | ||
Inventories | $ 58,343 | $ 60,747 |
Hylenex | ||
Inventory [Line Items] | ||
Inventories | 1,500 | 1,300 |
bulk rHuPH20 | ||
Inventory [Line Items] | ||
Inventories | $ 56,800 | $ 59,400 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Leases (Details) | Mar. 31, 2021 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Term of leases | 3 years |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Term of leases | 6 years |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Revenue and Cost of Product Sales (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Accounting Policies [Abstract] | ||
Period of contract termination by written notice | 90 days | |
Cost of sales previously expensed as R&D | $ 18,219 | $ 5,787 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Income Taxes (Details) | Mar. 31, 2021USD ($) |
Accounting Policies [Abstract] | |
Value of deferred tax assets | $ 0 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Segment Information (Details) | 3 Months Ended |
Mar. 31, 2021segment | |
Accounting Policies [Abstract] | |
Number of operating segments | 1 |
Fair Value Measurement - Compon
Fair Value Measurement - Components of Available-for-sale Marketable Securities (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Schedule of Available-for-sale Securities | ||
Amortized Cost | $ 264,850 | $ 220,220 |
Gross Unrealized Gains | 32 | 98 |
Gross Unrealized Losses | (26) | (8) |
Estimated Fair Value | 264,856 | 220,310 |
Asset-backed securities | ||
Schedule of Available-for-sale Securities | ||
Amortized Cost | 31,764 | 17,013 |
Gross Unrealized Gains | 17 | 49 |
Gross Unrealized Losses | (2) | 0 |
Estimated Fair Value | 31,779 | 17,062 |
Corporate debt securities | ||
Schedule of Available-for-sale Securities | ||
Amortized Cost | 68,972 | 69,755 |
Gross Unrealized Gains | 5 | 42 |
Gross Unrealized Losses | (22) | (8) |
Estimated Fair Value | 68,955 | 69,789 |
U.S. Treasury securities | ||
Schedule of Available-for-sale Securities | ||
Amortized Cost | 50,381 | 45,110 |
Gross Unrealized Gains | 10 | 7 |
Gross Unrealized Losses | (2) | 0 |
Estimated Fair Value | 50,389 | 45,117 |
Commercial paper | ||
Schedule of Available-for-sale Securities | ||
Amortized Cost | 113,733 | 88,342 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | $ 113,733 | $ 88,342 |
Fair Value Measurement - Narrat
Fair Value Measurement - Narrative (Details) | Mar. 31, 2021USD ($)security | Dec. 31, 2020USD ($) |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions | security | 12 | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | $ 80,600,000 | |
Unrealized loss position of debt securities | (26,000) | $ (8,000) |
Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Investments, Fair Value Disclosure | $ 0 | $ 0 |
Fair Value Measurement - Contra
Fair Value Measurement - Contractual Maturities of Available for Sale Debt Securities (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Fair Value Disclosures [Abstract] | ||
Due within one year | $ 223,669 | $ 220,310 |
After one but within five years | 41,187 | 0 |
Estimated Fair Value | $ 264,856 | $ 220,310 |
Fair Value Measurement - Assets
Fair Value Measurement - Assets Measured at Fair Value on a Recurring Basis (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Estimated Fair Value | $ 264,856,000 | $ 220,310,000 |
Fair value of assets measured on a recurring basis | 764,265,000 | 367,881,000 |
Money market funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Money market funds | 499,409,000 | 140,571,000 |
Commercial paper | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Money market funds | 0 | 7,000,000 |
Asset-backed securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Estimated Fair Value | 31,779,000 | 17,062,000 |
Corporate debt securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Estimated Fair Value | 68,955,000 | 69,789,000 |
U.S. Treasury securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Estimated Fair Value | 50,389,000 | 45,117,000 |
Commercial paper | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Estimated Fair Value | 113,733,000 | 88,342,000 |
Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Investments, Fair Value Disclosure | 0 | 0 |
Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets measured on a recurring basis | 549,798,000 | 185,688,000 |
Level 1 | Money market funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Money market funds | 499,409,000 | 140,571,000 |
Level 1 | Asset-backed securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Estimated Fair Value | 0 | 0 |
Level 1 | Corporate debt securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Estimated Fair Value | 0 | 0 |
Level 1 | U.S. Treasury securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Estimated Fair Value | 50,389,000 | 45,117,000 |
Level 1 | Commercial paper | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Estimated Fair Value | 0 | 0 |
Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of assets measured on a recurring basis | 214,467,000 | 182,193,000 |
Level 2 | Money market funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Money market funds | 0 | 0 |
Level 2 | Asset-backed securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Estimated Fair Value | 31,779,000 | 17,062,000 |
Level 2 | Corporate debt securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Estimated Fair Value | 68,955,000 | 69,789,000 |
Level 2 | U.S. Treasury securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Estimated Fair Value | 0 | 0 |
Level 2 | Commercial paper | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Estimated Fair Value | $ 113,733,000 | $ 88,342,000 |
Revenue - Disaggregated Revenue
Revenue - Disaggregated Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 89,022 | $ 25,354 |
Royalties | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 36,923 | 16,822 |
Product sales, net | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 21,766 | 8,147 |
bulk rHuPH20 | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 16,770 | 3,767 |
ENHANZE | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 0 | 46 |
Hylenex | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 4,996 | 4,334 |
Collaborative Agreements | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 30,333 | 385 |
Event-Based Development Fees | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 30,000 | 0 |
Research and Development Services | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 333 | $ 385 |
Revenue - Narrative (Details)
Revenue - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | |||
Total revenues | $ 89,022 | $ 25,354 | |
Revenue recognized | 0 | (606) | |
Deferred revenues | 5,772 | $ 5,772 | |
Deferred revenues | 5,800 | ||
Contract assets | 30,000 | $ 7,000 | |
Other collaborators | |||
Disaggregation of Revenue [Line Items] | |||
Deferred revenues | 75,200 | ||
Product sales, net | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 21,766 | $ 8,147 | |
Deferred revenue, current portion | 69,400 | ||
License Fees And Event-Based [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 66,900 | ||
Variable consideration | $ 30,000 |
Revenue - Accounts Receivable,
Revenue - Accounts Receivable, net and Deferred Revenues from Contracts (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Revenue from Contract with Customer [Abstract] | ||
Accounts receivable, net | $ 58,391 | $ 90,730 |
Other contract assets | 30,000 | 7,000 |
Deferred revenues | $ 5,772 | $ 5,772 |
Revenue - Additional Revenue In
Revenue - Additional Revenue Information (Details) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-10-01 $ in Millions | Mar. 31, 2021USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Deferred revenue, remaining performance obligation, expected timing | 12 months |
Deferred revenue, remaining performance obligation | $ 1.7 |
Certain Balance Sheet Items - A
Certain Balance Sheet Items - Accounts Receivable, net (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Balance Sheet Related Disclosures [Abstract] | ||
Accounts receivable from product sales to collaborators | $ 17,749 | $ 25,198 |
Accounts receivable from revenues under collaborative agreements | 365 | 30,404 |
Accounts receivable from royalty payments | 36,571 | 32,098 |
Accounts receivable from other product sales | 4,810 | 4,033 |
Other contract assets | 30,000 | 7,000 |
Subtotal | 89,495 | 98,733 |
Allowance for distribution fees and discounts | (1,104) | (1,003) |
Total accounts receivable, net | $ 88,391 | $ 97,730 |
Certain Balance Sheet Items - I
Certain Balance Sheet Items - Inventories (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Balance Sheet Related Disclosures [Abstract] | ||
Raw materials | $ 6,037 | $ 5,813 |
Work-in-process | 19,441 | 33,738 |
Finished goods | 32,865 | 21,196 |
Total inventories | $ 58,343 | $ 60,747 |
Certain Balance Sheet Items - P
Certain Balance Sheet Items - Prepaid Expenses and Other Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment, Gross, Excluding Capital Leased Assets | $ 18,920 | $ 18,875 |
Prepaid manufacturing expenses | 40,610 | 35,048 |
Prepaid research and development expenses | 473 | 342 |
Other prepaid expenses | 1,733 | 2,510 |
Other assets | 1,860 | 4,441 |
Total prepaid expenses and other assets | 44,676 | 42,341 |
Less long-term portion | (13,997) | (14,067) |
Total prepaid expenses and other assets, current | 30,679 | 28,274 |
Computer and Office Equipment [Member] | ||
Property, Plant and Equipment, Gross, Excluding Capital Leased Assets | $ 4,712 | $ 4,826 |
Certain Balance Sheet Items -_2
Certain Balance Sheet Items - Property and Equipment, net (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment subtotal | $ 18,920,000 | $ 18,875,000 | |
Accumulated depreciation and amortization | (11,649,000) | (11,582,000) | |
Property and equipment, net of accumulated depreciation and amortization | 7,271,000 | 7,293,000 | |
Right of use assets | 3,095,000 | 3,300,000 | |
Property and equipment, net | 10,366,000 | 10,593,000 | |
Depreciation and amortization | 738,000 | $ 857,000 | |
Right-of-use asset amortization | 400,000 | $ 500,000 | |
Research equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment subtotal | 6,983,000 | 7,085,000 | |
Manufacturing equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment subtotal | 5,597,000 | 5,336,000 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment subtotal | $ 1,628,000 | $ 1,628,000 |
Certain Balance Sheet Items -_3
Certain Balance Sheet Items - Accrued Expenses (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Balance Sheet Related Disclosures [Abstract] | |||
Accrued outsourced research and development expenses | $ 467,000 | $ 448,000 | |
Accrued compensation and payroll taxes | 3,958,000 | 8,078,000 | |
Accrued outsourced manufacturing expenses | 4,973,000 | 4,535,000 | |
Other accrued expenses | 5,048,000 | 6,020,000 | |
Lease liability | 4,461,000 | 4,868,000 | |
Total accrued expenses | 18,907,000 | 23,949,000 | |
Less long-term portion | (2,809,000) | (3,466,000) | |
Total accrued expenses, current | 16,098,000 | $ 20,483,000 | |
Expense associated with accretion of lease liabilities | 100,000 | $ 100,000 | |
Total operating lease cost | 500,000 | 600,000 | |
Cash paid for amounts related to leases | $ 700,000 | $ 800,000 |
Long-Term Debt, Net - Narrative
Long-Term Debt, Net - Narrative (Details) $ / shares in Units, shares in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||
Mar. 31, 2021USD ($)trading_day$ / sharesshares | Feb. 28, 2021USD ($) | Dec. 31, 2020USD ($) | Jun. 30, 2020USD ($) | Nov. 30, 2019USD ($)trading_day$ / shares | Jan. 31, 2016USD ($) | Mar. 31, 2021USD ($)$ / shares | Mar. 31, 2020USD ($) | Dec. 31, 2020USD ($)shares | Dec. 31, 2019USD ($)shares | Jan. 01, 2021USD ($) | |
Debt Instrument [Line Items] | |||||||||||
Total loan balance | $ 895,936,000 | $ 895,936,000 | $ 460,000,000 | ||||||||
Proceeds from Convertible Debt | $ 447,300,000 | ||||||||||
Payments for repurchase of common stock | 76,179,000 | $ 51,574,000 | |||||||||
Treasury Stock, Value, Acquired, Cost Method | $ 75,000,000 | $ 21,700,000 | 76,179,000 | $ 150,000,000 | $ 200,000,000 | ||||||
Stock repurchased (shares) | shares | 6,500 | 11,100 | |||||||||
Repayments of Debt | $ 2,930,000 | ||||||||||
Long-term Debt | 784,731,000 | 0 | 784,731,000 | $ 0 | |||||||
Convertible Notes Payable | 873,773,000 | 873,773,000 | 449,789,000 | ||||||||
Debt Instrument, Fair Value Disclosure | 901,929,000 | 901,929,000 | 861,738,000 | ||||||||
Payments of Debt Issuance Costs | 329,000 | 68,000 | |||||||||
Amortization of Debt Discount (Premium) | 741,000 | 3,478,000 | |||||||||
Unamortized discount | (22,163,000) | (22,163,000) | (10,211,000) | ||||||||
Current portion of long-term debt, net | 89,042,000 | $ 397,228,000 | 89,042,000 | $ 397,228,000 | |||||||
Induced conversion expense related to convertible notes | 20,960,000 | 0 | |||||||||
Repayments of Convertible Debt | 369,100,000 | ||||||||||
Amount paid for conversion of debt instrument | $ 370,200,000 | 7,865,000 | 0 | ||||||||
Stock issued for conversion of debt instrument (shares) | shares | 9,080 | ||||||||||
1.25% Convertible Senior Notes due 2024 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Total loan balance | $ 90,936,000 | 90,936,000 | 460,000,000 | ||||||||
Debt Instrument, Fair Value Disclosure | 167,222,000 | $ 167,222,000 | 861,738,000 | ||||||||
Debt Instrument, Convertible, Remaining Discount Amortization Period | 3 years 8 months 12 days | 3 years 10 months 24 days | |||||||||
Unamortized discount | (1,894,000) | $ (1,894,000) | (10,211,000) | ||||||||
Current portion of long-term debt, net | 89,042,000 | 89,042,000 | 449,789,000 | ||||||||
0.25% Convertible Senior Notes due 2027 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Total loan balance | 805,000,000 | 805,000,000 | 0 | ||||||||
Proceeds from Convertible Debt | 784,900,000 | ||||||||||
Long-term Debt | 784,731,000 | 784,731,000 | 0 | ||||||||
Debt Instrument, Fair Value Disclosure | 734,707,000 | $ 734,707,000 | 0 | ||||||||
Debt Instrument, Convertible, Remaining Discount Amortization Period | 5 years 10 months 24 days | ||||||||||
Unamortized discount | $ (20,269,000) | $ (20,269,000) | $ 0 | ||||||||
Convertible Debt | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Interest expense recognized | 1,961,800 | 4,900,400 | |||||||||
Debt Instrument, Periodic Payment, Interest | 1,220,800 | 1,437,500 | |||||||||
Amortization of Debt Discount (Premium) | $ 741,000 | $ 3,462,900 | |||||||||
Convertible Debt | 1.25% Convertible Senior Notes due 2024 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Total loan balance | $ 460,000,000 | ||||||||||
Interest rate, stated percentage | 1.25% | ||||||||||
Debt Instrument, Convertible, Conversion Ratio | 41.9208 | ||||||||||
Debt Instrument, Convertible, Conversion Price | $ / shares | $ 23.85 | ||||||||||
Effective rate at end of period | 1.80% | 1.80% | 5.10% | ||||||||
Lenders fee | $ 12,700,000 | ||||||||||
Payments of Debt Issuance Costs | $ 300,000 | ||||||||||
Interest expense recognized | $ 1,514,400 | $ 4,900,400 | |||||||||
Debt Instrument, Periodic Payment, Interest | 1,053,100 | 1,437,500 | |||||||||
Amortization of Debt Discount (Premium) | 461,300 | 3,462,900 | |||||||||
Convertible Debt | 0.25% Convertible Senior Notes due 2027 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Total loan balance | $ 805,000,000 | $ 805,000,000 | |||||||||
Interest rate, stated percentage | 0.25% | 0.25% | |||||||||
Debt Instrument, Convertible, Conversion Ratio | 12.9576 | ||||||||||
Debt Instrument, Convertible, Conversion Price | $ / shares | $ 77.17 | $ 77.17 | |||||||||
Effective rate at end of period | 0.70% | 0.70% | |||||||||
Lenders fee | $ 20,100,000 | $ 20,100,000 | |||||||||
Payments of Debt Issuance Costs | $ 400,000 | ||||||||||
Interest expense recognized | 447,400 | 0 | |||||||||
Debt Instrument, Periodic Payment, Interest | 167,700 | 0 | |||||||||
Amortization of Debt Discount (Premium) | $ 279,700 | $ 0 | |||||||||
Royalty-backed Loan | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Total loan balance | $ 150,000,000 | ||||||||||
Interest rate, stated percentage | 8.75% | ||||||||||
Royalty-backed Loan | Minimum | LIBOR | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 0.70% | ||||||||||
Royalty-backed Loan | Maximum | LIBOR | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate | 1.50% | ||||||||||
0.25% Convertible Senior Notes due 2027 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt Instrument, Covenant Compliance | in compliance | ||||||||||
Period Two | Convertible Debt | 1.25% Convertible Senior Notes due 2024 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger | 98.00% | ||||||||||
Debt Instrument, Convertible, Threshold Consecutive Trading Days | trading_day | 5 | ||||||||||
Period Two | Convertible Debt | 0.25% Convertible Senior Notes due 2027 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger | 98.00% | ||||||||||
Debt Instrument, Convertible, Threshold Consecutive Trading Days | trading_day | 5 | ||||||||||
Period One | Convertible Debt | 1.25% Convertible Senior Notes due 2024 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger | 130.00% | ||||||||||
Debt Instrument, Convertible, Threshold Trading Days | trading_day | 20 | ||||||||||
Debt Instrument, Convertible, Threshold Consecutive Trading Days | trading_day | 30 | ||||||||||
Period One | Convertible Debt | 0.25% Convertible Senior Notes due 2027 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger | 130.00% | ||||||||||
Debt Instrument, Convertible, Threshold Trading Days | trading_day | 20 | ||||||||||
Debt Instrument, Convertible, Threshold Consecutive Trading Days | trading_day | 30 |
Long-Term Debt, Net - Carrying
Long-Term Debt, Net - Carrying Amount of Convertible Notes (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | Jan. 01, 2021 | |
Debt Instrument [Line Items] | |||
Total loan balance | $ 895,936 | $ 460,000 | |
Unamortized discount | 22,163 | 10,211 | |
Current portion of long-term debt, net | 89,042 | $ 397,228 | |
Long-term debt, net | 784,731 | $ 0 | |
Convertible Notes Payable | 873,773 | 449,789 | |
Debt Instrument, Fair Value Disclosure | 901,929 | 861,738 | |
1.25% Convertible Senior Notes due 2024 | |||
Debt Instrument [Line Items] | |||
Total loan balance | 90,936 | 460,000 | |
Unamortized discount | 1,894 | 10,211 | |
Current portion of long-term debt, net | 89,042 | 449,789 | |
Debt Instrument, Fair Value Disclosure | $ 167,222 | 861,738 | |
Debt Instrument, Convertible, Remaining Discount Amortization Period | 3 years 8 months 12 days | 3 years 10 months 24 days | |
0.25% Convertible Senior Notes due 2027 | |||
Debt Instrument [Line Items] | |||
Total loan balance | $ 805,000 | 0 | |
Unamortized discount | 20,269 | 0 | |
Long-term debt, net | 784,731 | 0 | |
Debt Instrument, Fair Value Disclosure | $ 734,707 | $ 0 | |
Debt Instrument, Convertible, Remaining Discount Amortization Period | 5 years 10 months 24 days |
Long-Term Debt, Net - Component
Long-Term Debt, Net - Components of Interest Expense (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Debt Instrument [Line Items] | ||
Amortization of Debt Discount (Premium) | $ 741,000 | $ 3,478,000 |
Convertible Debt | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Periodic Payment, Interest | 1,220,800 | 1,437,500 |
Amortization of Debt Discount (Premium) | 741,000 | 3,462,900 |
Interest expense recognized | 1,961,800 | 4,900,400 |
1.25% Convertible Senior Notes due 2024 | Convertible Debt | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Periodic Payment, Interest | 1,053,100 | 1,437,500 |
Amortization of Debt Discount (Premium) | 461,300 | 3,462,900 |
Interest expense recognized | $ 1,514,400 | $ 4,900,400 |
Effective rate at end of period | 1.80% | 5.10% |
0.25% Convertible Senior Notes due 2027 | Convertible Debt | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Periodic Payment, Interest | $ 167,700 | $ 0 |
Amortization of Debt Discount (Premium) | 279,700 | 0 |
Interest expense recognized | $ 447,400 | $ 0 |
Effective rate at end of period | 0.70% |
Share-based Compensation - Shar
Share-based Compensation - Share-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock options granted (in shares) | 700,000 | 1,300,000 |
Share-based compensation expense | $ 4,923 | $ 4,531 |
Stock options | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation expense | 2,482 | 2,383 |
RSAs, RSUs and PSUs | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation expense | 2,441 | 2,148 |
Research and development | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation expense | 1,648 | 1,550 |
Selling, general and administrative | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation expense | $ 3,275 | $ 2,981 |
Share-based Compensation - Narr
Share-based Compensation - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | $ 4,923 | $ 4,531 |
Stock options granted (in shares) | 700,000 | 1,300,000 |
Stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | $ 2,482 | $ 2,383 |
RSAs, RSUs and PSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | $ 2,441 | $ 2,148 |
Share-based Compensation - Assu
Share-based Compensation - Assumptions Used in the Black-Scholes Model (Details) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Schedule of Share-based Compensation Arrangements Valuation Inputs [Line Items] | ||
Average expected term (in years) | 4 years 8 months 12 days | 5 years 6 months |
Risk-free interest rate, minimum | 0.36% | 0.88% |
Risk-free interest rate, maximum | 0.71% | 1.67% |
Expected dividend yield | 0.00% | 0.00% |
Minimum | ||
Schedule of Share-based Compensation Arrangements Valuation Inputs [Line Items] | ||
Expected volatility | 45.75% | 50.92% |
Maximum | ||
Schedule of Share-based Compensation Arrangements Valuation Inputs [Line Items] | ||
Expected volatility | 46.45% | 51.30% |
Share-based Compensation - Unre
Share-based Compensation - Unrecognized Estimated Compensation Cost (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Stock options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Expense | $ 28,628 |
Remaining Weighted-Average Recognition Period (years) | 2 years 8 months 23 days |
RSAs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Expense | $ 115 |
Remaining Weighted-Average Recognition Period (years) | 29 days |
RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Expense | $ 24,657 |
Remaining Weighted-Average Recognition Period (years) | 2 years 9 months 18 days |
Performance Shares [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Expense | $ 2,737 |
Remaining Weighted-Average Recognition Period (years) | 2 years 6 months |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) - USD ($) | Apr. 15, 2021 | Feb. 28, 2021 | Dec. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Nov. 30, 2019 |
Stockholders' equity (deficit) (textual) | ||||||||
Stock Repurchase Program, Authorized Amount (shares) | $ 550,000,000 | |||||||
Stock repurchased (shares) | 6,500,000 | 11,100,000 | ||||||
Treasury Stock, Value, Acquired, Cost Method | $ 75,000,000 | $ 21,700,000 | $ 76,179,000 | $ 150,000,000 | $ 200,000,000 | |||
Weighted-Average Price paid Per Share (USD per share) | $ 42.89 | $ 23.05 | $ 18.03 | |||||
Subsequent Event | ||||||||
Stockholders' equity (deficit) (textual) | ||||||||
Stock repurchased (shares) | 500,000 | |||||||
2020 Share Repurchase Program - Bank of America | ||||||||
Stockholders' equity (deficit) (textual) | ||||||||
Stock repurchased (shares) | 500,000 | |||||||
2021 Share Repurchase Program - Bank of America | ||||||||
Stockholders' equity (deficit) (textual) | ||||||||
Stock repurchased (shares) | 1,300,000 | |||||||
Stock options | ||||||||
Stockholders' equity (deficit) (textual) | ||||||||
Number of shares of common stock issued as a result of stock option exercises (in shares) | 280,946 | 1,792,043 | ||||||
Stock options weighted average exercise price (usd per share) | $ 13.24 | $ 12.56 | ||||||
Net proceeds from stock options exercised | $ 3,700,000 | $ 22,500,000 | ||||||
Restricted stock units | ||||||||
Stockholders' equity (deficit) (textual) | ||||||||
Stock issued during period, shares, restricted stock award, net of forfeitures (in shares) | 282,774 | 563,603 | ||||||
Number of RSUs withheld to pay for minimum withholding taxes (in shares) | 87,324 | 140,525 | ||||||
Payments for tax withholding for restricted stock units vested, net | $ 7,800,000 | $ 5,400,000 | ||||||
Stock options and restricted units | ||||||||
Stockholders' equity (deficit) (textual) | ||||||||
Outstanding stock options and restricted stock units (in shares) | 6,700,000 | 7,000,000 | 6,700,000 |
Stockholders' Equity - Share Re
Stockholders' Equity - Share Repurchase Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | Apr. 15, 2021 | Feb. 28, 2021 | Dec. 31, 2020 | Mar. 31, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Equity, Class of Treasury Stock [Line Items] | |||||||
Total Number of Shares Purchased (shares) | 1,775,945 | ||||||
Weighted-Average Price paid Per Share (USD per share) | $ 42.89 | $ 23.05 | $ 18.03 | ||||
Total Cost | $ 75,000 | $ 21,700 | $ 76,179 | $ 150,000 | $ 200,000 | ||
Fee per share (USD per share) | $ 0.02 | ||||||
Stock repurchased (shares) | 6,500,000 | 11,100,000 | |||||
Subsequent Event | |||||||
Equity, Class of Treasury Stock [Line Items] | |||||||
Stock repurchased (shares) | 500,000 |
Commitments and Contingencies -
Commitments and Contingencies - Summary (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Commitments and Contingencies Disclosure [Abstract] | ||
2020 | $ 1,963 | |
2021 | 2,660 | |
2022 | 162 | |
2023 | 0 | |
2024 | 0 | |
Total minimum lease payments | 4,785 | |
Less imputed interest | (324) | |
Total | $ 4,461 | $ 4,868 |
Weighted-average remaining lease term | 1 year 10 months 24 days |
Net Income (loss) per share - S
Net Income (loss) per share - Summary (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||
Net income (loss) | $ 27,895 | $ (6,103) |
Weighted average common shares outstanding for basic net income (loss) per share (shares) | 137,952 | 137,186 |
Weighted average common shares outstanding for diluted net income (loss) per share (shares) | 148,540 | 137,186 |
Net income (loss) per share: | ||
Basic (USD per share) | $ 0.20 | $ (0.04) |
Diluted (USD per share) | $ 0.19 | $ (0.04) |
Convertible Debt Securities | ||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||
Dilutive potential common stock outstanding (shares) | 6,663 | 0 |
Stock options | ||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||
Dilutive potential common stock outstanding (shares) | 3,223 | 0 |
Restricted stock | ||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||
Dilutive potential common stock outstanding (shares) | 702 | 0 |
Net Income (loss) per share - A
Net Income (loss) per share - Antidilutive Securities (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Earnings Per Share [Abstract] | ||
Anti-dilutive shares excluded from per share calculation (in shares) | 13,400 | 29,200 |