Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 02, 2023 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-35668 | |
Entity Registrant Name | INTERCEPT PHARMACEUTICALS, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 22-3868459 | |
Entity Address, Address Line One | 305 Madison Avenue, | |
Entity Address, City or Town | Morristown | |
Entity Address, State or Province | NJ | |
Entity Address, Postal Zip Code | 07960 | |
City Area Code | 646 | |
Local Phone Number | 747-1000 | |
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Trading Symbol | ICPT | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 41,825,966 | |
Entity Central Index Key | 0001270073 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2023 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 102,736 | $ 50,517 |
Restricted cash | 920 | 5,343 |
Investment debt securities, available-for-sale | 219,978 | 435,049 |
Accounts receivable, net of allowance for credit losses of $65 and $54, respectively | 32,479 | 26,862 |
Prepaid expenses and other current assets | 27,332 | 22,356 |
Total current assets | 383,445 | 540,127 |
Fixed assets, net | 822 | 987 |
Inventory | 2,649 | 6,462 |
Security deposits | 1,275 | 1,013 |
Other assets | 4,971 | 5,122 |
Total assets | 393,162 | 553,711 |
Current liabilities: | ||
Accounts payable, accrued expenses and other liabilities | 89,494 | 116,977 |
Short-term interest payable | 1,351 | 3,531 |
Current portion of long-term debt | 109,569 | |
Total current liabilities | 90,845 | 230,077 |
Long-term liabilities: | ||
Long-term debt | 223,856 | 223,104 |
Long-term other liabilities | 6,616 | 7,453 |
Total liabilities | 321,317 | 460,634 |
Commitments and contingencies (Note 15) | ||
Stockholders' equity: | ||
Common stock par value $0.001 per share; 90,000,000 shares authorized; 41,811,686 and 41,523,337 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively | 42 | 42 |
Additional paid-in capital | 2,256,681 | 2,238,179 |
Accumulated other comprehensive loss, net | (7,203) | (8,256) |
Accumulated deficit | (2,177,675) | (2,136,888) |
Total stockholders' equity | 71,845 | 93,077 |
Total liabilities and stockholders' equity | $ 393,162 | $ 553,711 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Condensed Consolidated Balance Sheets | ||
Allowance for credit losses | $ 65 | $ 54 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized | 90,000,000 | 90,000,000 |
Common stock, shares issued | 41,811,686 | 41,523,337 |
Common stock, shares outstanding | 41,811,686 | 41,523,337 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Condensed Consolidated Statements of Operations | ||||
Revenue | $ 88,789 | $ 77,588 | $ 240,465 | $ 208,491 |
Revenue, Product and Service [Extensible Enumeration] | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember |
Operating expenses: | ||||
Cost of sales | $ 197 | $ 424 | $ 604 | $ 956 |
Selling, general and administrative | 45,438 | 43,274 | 156,441 | 121,013 |
Research and development | 41,513 | 44,034 | 120,530 | 136,753 |
Restructuring | 6,260 | 6,260 | ||
Total operating expenses | 93,408 | 87,732 | 283,835 | 258,722 |
Operating loss | (4,619) | (10,144) | (43,370) | (50,231) |
Other income (expense): | ||||
Interest expense | (1,802) | (5,237) | (7,423) | (18,579) |
Loss on extinguishment of debt | (91,759) | (91,739) | ||
Other income, net | 3,661 | 3,053 | 10,326 | 2,691 |
Total other income (expense), net | 1,859 | (93,943) | 2,903 | (107,627) |
Loss from continuing operations | (2,760) | (104,087) | (40,467) | (157,858) |
(Loss) income from discontinued operations, net of income taxes | (30) | 371,540 | (320) | 400,499 |
Net (loss) income | $ (2,790) | $ 267,453 | $ (40,787) | $ 242,641 |
Net income (loss) per common and potential common share (basic and diluted): | ||||
Net loss from continuing operations, Basic (in dollars per share) | $ (0.07) | $ (3.04) | $ (0.97) | $ (5.05) |
Net loss from continuing operations, Diluted (in dollars per share) | (0.07) | (3.04) | (0.97) | (5.05) |
Net (loss) income from discontinued operations, Basic (in dollars per share) | 0 | 10.83 | (0.01) | 12.81 |
Net (loss) income from discontinued operations, Diluted (in dollars per share) | 0 | 10.83 | (0.01) | 12.81 |
Net (loss) income, Basic (in dollars per share) | (0.07) | 7.80 | (0.98) | 7.76 |
Net (loss) income, Diluted (in dollars per share) | $ (0.07) | $ 7.80 | $ (0.98) | $ 7.76 |
Weighted average common and potential common shares outstanding: | ||||
Basic (in shares) | 41,792 | 34,293 | 41,731 | 31,262 |
Diluted (in shares) | 41,792 | 34,293 | 41,731 | 31,262 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive (Loss) Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Condensed Consolidated Statements of Comprehensive (Loss) Income | ||||
Net (loss) income | $ (2,790) | $ 267,453 | $ (40,787) | $ 242,641 |
Other comprehensive income (loss): | ||||
Unrealized gains (losses) on investment debt securities | 258 | (670) | 1,076 | (2,196) |
Release of currency translation adjustments associated with sale of business | (7,319) | (7,319) | ||
Foreign currency translation gains (losses) | 158 | 2,568 | (23) | 4,419 |
Other comprehensive income (loss) | 416 | (5,421) | 1,053 | (5,096) |
Comprehensive (loss) income | $ (2,374) | $ 262,032 | $ (39,734) | $ 237,545 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit) - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital Cumulative effect, period of adoption, adjustment | Additional Paid-In Capital | Accumulated Other Comprehensive Loss, Net | Accumulated Deficit Cumulative effect, period of adoption, adjustment | Accumulated Deficit | Cumulative effect, period of adoption, adjustment | Total |
Balance at Dec. 31, 2021 | $ 30 | $ 2,308,653 | $ (2,873) | $ (2,489,772) | $ (183,962) | |||
Balance (in shares) at Dec. 31, 2021 | 29,573 | |||||||
Stock-based compensation | 21,052 | 21,052 | ||||||
Issuance of common stock under equity plan (in shares) | 520 | |||||||
Employee withholding taxes related to stock-based awards | (480) | (480) | ||||||
Employee withholding taxes related to stock-based awards (in shares) | (35) | |||||||
Net proceeds from exercise of stock options | 433 | 433 | ||||||
Net proceeds from exercise of stock options (in shares) | 29 | |||||||
Other comprehensive income/loss | (5,096) | (5,096) | ||||||
Net (loss) income | 242,641 | 242,641 | ||||||
Issuance of common stock for repurchase of convertible notes | $ 11 | 209,380 | 209,391 | |||||
Issuance of common stock for repurchase of convertible notes (in shares) | 11,330 | |||||||
Balance at Sep. 30, 2022 | $ 41 | $ (307,371) | 2,231,667 | (7,969) | $ 131,068 | (2,116,063) | $ (176,303) | 107,676 |
Balance (in shares) at Sep. 30, 2022 | 41,417 | |||||||
Balance at Jun. 30, 2022 | $ 30 | 2,016,201 | (2,548) | (2,383,516) | (369,833) | |||
Balance (in shares) at Jun. 30, 2022 | 29,798 | |||||||
Stock-based compensation | 5,788 | 5,788 | ||||||
Issuance of common stock under equity plan (in shares) | 269 | |||||||
Employee withholding taxes related to stock-based awards | (135) | (135) | ||||||
Employee withholding taxes related to stock-based awards (in shares) | (9) | |||||||
Net proceeds from exercise of stock options | 433 | 433 | ||||||
Net proceeds from exercise of stock options (in shares) | 29 | |||||||
Other comprehensive income/loss | (5,421) | (5,421) | ||||||
Net (loss) income | 267,453 | 267,453 | ||||||
Issuance of common stock for repurchase of convertible notes | $ 11 | 209,380 | 209,391 | |||||
Issuance of common stock for repurchase of convertible notes (in shares) | 11,330 | |||||||
Balance at Sep. 30, 2022 | $ 41 | $ (307,371) | 2,231,667 | (7,969) | $ 131,068 | (2,116,063) | $ (176,303) | 107,676 |
Balance (in shares) at Sep. 30, 2022 | 41,417 | |||||||
Balance at Dec. 31, 2022 | $ 42 | 2,238,179 | (8,256) | (2,136,888) | 93,077 | |||
Balance (in shares) at Dec. 31, 2022 | 41,523 | |||||||
Stock-based compensation | 18,779 | 18,779 | ||||||
Issuance of common stock under equity plan (in shares) | 306 | |||||||
Employee withholding taxes related to stock-based awards | (351) | (351) | ||||||
Employee withholding taxes related to stock-based awards (in shares) | (23) | |||||||
Net proceeds from exercise of stock options | 74 | $ 74 | ||||||
Net proceeds from exercise of stock options (in shares) | 5 | 7,000 | ||||||
Other comprehensive income/loss | 1,053 | $ 1,053 | ||||||
Net (loss) income | (40,787) | (40,787) | ||||||
Balance at Sep. 30, 2023 | $ 42 | 2,256,681 | (7,203) | (2,177,675) | 71,845 | |||
Balance (in shares) at Sep. 30, 2023 | 41,811 | |||||||
Balance at Jun. 30, 2023 | $ 42 | 2,250,008 | (7,619) | (2,174,885) | 67,546 | |||
Balance (in shares) at Jun. 30, 2023 | 41,783 | |||||||
Stock-based compensation | 6,653 | 6,653 | ||||||
Issuance of common stock under equity plan (in shares) | 28 | |||||||
Employee withholding taxes related to stock-based awards | (33) | (33) | ||||||
Employee withholding taxes related to stock-based awards (in shares) | (3) | |||||||
Net proceeds from exercise of stock options | 53 | 53 | ||||||
Net proceeds from exercise of stock options (in shares) | 3 | |||||||
Other comprehensive income/loss | 416 | 416 | ||||||
Net (loss) income | (2,790) | (2,790) | ||||||
Balance at Sep. 30, 2023 | $ 42 | $ 2,256,681 | $ (7,203) | $ (2,177,675) | $ 71,845 | |||
Balance (in shares) at Sep. 30, 2023 | 41,811 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operating activities: | ||
Net (loss) income | $ (40,787) | $ 242,641 |
Less: (Loss) income from operations of discontinued operations, net of tax | (320) | 400,499 |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock-based compensation | 18,779 | 16,658 |
(Accretion) amortization of (discount) premium on investment debt securities | (6,162) | 716 |
Amortization of deferred financing costs | 991 | 2,242 |
Write-off of fixed assets | 2,400 | |
Depreciation | 276 | 491 |
Non-cash operating & finance lease costs | 935 | 1,435 |
Write-off of inventory | 3,054 | |
Loss on extinguishment of debt | 91,739 | |
Gain on lease termination | (1,101) | |
Provision for allowance on credit losses | 11 | |
Changes in operating assets: | ||
Accounts receivable | (5,628) | 2,169 |
Prepaid expenses and other current assets | (4,491) | 442 |
Inventory | 721 | 232 |
Security deposits | (262) | 3,157 |
Other assets | 32 | |
Changes in operating liabilities: | ||
Accounts payable, accrued expenses and other current liabilities | (22,648) | 13,791 |
Operating lease liabilities | (748) | (1,479) |
Interest payable | (2,180) | (6,357) |
Net cash used in operating activities - continuing operations | (57,819) | (31,291) |
Net cash (used in) provided by operating activities - discontinued operations | (394) | 9,317 |
Net cash used in operating activities | (58,213) | (21,974) |
Cash flows from investing activities: | ||
Purchases of investment debt securities | (181,181) | (401,069) |
Sales and maturities of investment debt securities | 403,490 | 355,485 |
Purchases of equipment, leasehold improvements, and furniture and fixtures | (111) | (865) |
Net cash provided by (used in) investing activities - continuing operations | 222,198 | (46,449) |
Net cash (used in) provided by investing activities - discontinued operations | (6,155) | 363,233 |
Net cash provided by investing activities | 216,043 | 316,784 |
Cash flows from financing activities: | ||
Payments of employee withholding taxes related to stock-based awards | (351) | (480) |
Proceeds from exercise of options, net | 74 | 433 |
Repayment of principal outstanding on 2023 Convertible Notes | (109,808) | |
Payments of principal on finance lease liabilities | (211) | |
Payments for repurchases of convertible senior notes | (261,562) | |
Payments of debt issuance costs | (35) | |
Net cash used in financing activities - continuing operations | (110,296) | (261,644) |
Net cash used in financing activities | (110,296) | (261,644) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 262 | (7,399) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 47,796 | 25,767 |
Cash, cash equivalents and restricted cash at beginning of period | 55,860 | 94,409 |
Cash, cash equivalents and restricted cash at end of period | $ 103,656 | $ 120,176 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Supplemental disclosure of non-cash transactions: | ||
Right-of-use asset obtained in exchange for new operating lease obligations | $ (780) | $ (5,654) |
Non-cash investing and financing activities | ||
Net increase in accrued fixed assets | 21 | |
Reconciliation of cash, cash equivalents and restricted cash included in the condensed consolidated balance sheets: | ||
Cash and cash equivalents | 102,736 | 113,195 |
Restricted cash | 920 | 6,981 |
Total cash, cash equivalents and restricted cash | $ 103,656 | 120,176 |
Supplemental non-cash disclosure: | ||
Issuance of common stock to noteholders in connection with repurchase of convertible notes | 209,391 | |
Supplementary cash flow data: | ||
Income taxes paid | $ 455 |
Overview of Business
Overview of Business | 9 Months Ended |
Sep. 30, 2023 | |
Overview of Business | |
Overview of Business | 1. Overview of Business Intercept Pharmaceuticals, Inc. (the “Company”) is a biopharmaceutical company founded in 2002 and focused on the development and commercialization of novel therapeutics to treat rare and serious liver diseases, including primary biliary cholangitis (“PBC”) and severe alcohol-associated hepatitis (“sAH”). The Company currently has one marketed product, Ocaliva (obeticholic acid or “OCA”) for the treatment of PBC. Agreement and Plan of Merger On September 26, 2023, the Company announced it had entered into an agreement (the “Merger Agreement”) with Alfasigma and Interstellar Acquisition Inc., a wholly owned subsidiary of Alfasigma (“Purchaser”). Pursuant to the Merger Agreement, Purchaser will commence a tender offer (the “Offer”) to acquire all the outstanding shares of the Company’s common stock (the “Shares”) at an offer price of $19.00 per Share, net to the seller in cash without interest (the “Offer Price”), subject to any applicable withholding taxes. The obligation of Purchaser to purchase Shares tendered in the Offer is subject to the satisfaction of the conditions set forth in Annex I to the Merger Agreement, including that (i) there shall have been validly tendered and not validly withdrawn that number of Shares that, considered together with all other Shares (if any) beneficially owned by Alfasigma and its affiliates, represents one more Share than 50% of the Shares outstanding at the time of the expiration of the Offer; (ii) the Merger Agreement shall not have been validly terminated in accordance with its terms; (iii) the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended; and (iv) those other conditions set forth in Annex I to the Merger Agreement. Following the consummation of the Offer, Purchaser will merge with and into the Company, with the Company surviving as a wholly owned subsidiary of Alfasigma (the “Merger”). In the Merger, each Share issued and outstanding immediately prior to the effective time (the “Effective Time”) of the Merger (other than certain excluded Shares as described in the Merger Agreement) will automatically be converted into the right to receive the Offer Price. It is anticipated the transaction will close by the end of 2023. Upon completion of the transaction, the Company’s common stock will no longer be publicly listed. The Merger Agreement contains certain termination rights for the Company and Alfasigma. If the Merger Agreement is terminated under specified circumstances, the Company will be required to pay Alfasigma a termination fee of $34 million. |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2023 | |
Basis of Presentation | |
Basis of Presentation | 2. Basis of Presentation The Company’s financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All intercompany balances and transactions have been eliminated in consolidation. Certain information that is normally required by U.S. GAAP has been condensed or omitted in accordance with rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Operating results for the three and nine months ended September 30, 2023, are not necessarily indicative of the results that may be expected for any future period or for the year ending December 31, 2023. In the opinion of management, these unaudited condensed consolidated financial statements include all normal and recurring adjustments considered necessary for a fair presentation of these interim unaudited condensed consolidated financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto for the year ended December 31, 2022, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC. Use of Estimates The preparation of these unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect the reported amounts of assets and liabilities, the disclosure of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from these estimates. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2023 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 3. Summary of Significant Accounting Policies included in its Annual Report on Form 10-K for the year ended December 31, 2022. There have been no changes in the Company’s significant accounting policies as compared to the significant accounting policies described in the Annual Report. |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Sep. 30, 2023 | |
Discontinued Operations | |
Discontinued Operations | 4. Discontinued Operations On May 5, 2022, the Company entered into a series of agreements to sell the Company’s ex-U.S. commercial operations and sublicense the right to commercialize Ocaliva for PBC and, if approved, OCA for NASH outside of the United States (the “Disposition Transaction”) to Advanz Pharma and its affiliates (collectively, “Advanz”). Consideration under the agreements totaled $405 million up front, subject to adjustments including for cash, working capital, and assumed liabilities. The Company is entitled to receive an additional cumulative $45 million from Advanz contingent upon receipt of extensions of orphan drug exclusivity for Ocaliva from the European Medicines Agency (“EMA”) and Medicines and Healthcare products Regulatory Agency (“MHRA”). The Company would also receive royalties on any future net sales of OCA in NASH outside of the U.S., should Advanz obtain marketing authorization for this indication in ex-U.S. regions. The Company continues to be responsible for the manufacturing and supply of OCA globally while Advanz is responsible for packaging, distribution and commercialization of the therapy in all markets outside of the U.S. Under the Sublicense Agreement, the Company agreed to continue to conduct certain post-marketing work and other activities with respect to Ocaliva for PBC, including continuing to conduct certain PBC studies (the “PBC Post-Marketing Work”). The Company is being reimbursed by Advanz for a portion of the total R&D costs related to the PBC Post-Marketing Work. total amount recognized as a reduction to Research & development expenses for a portion of the total R&D costs to be reimbursed by Advanz in relation to the PBC Post-Marketing Work was $1.9 million and $3.1 million for the three months ended September 30, 2023 and 2022, respectively, and $5.6 million and $3.1 million for the nine months ended September 30, 2023 and 2022, respectively. Cash inflows were $1.3 million and $1.4 million for the three months ended September 30, 2023 and 2022, respectively, and $4.6 million and $1.4 million for the nine months ended September 30, 2023 and 2022, respectively, under the Transitional Services Agreement (the “TSA”) and Sublicense Agreement. The following table presents the results of operations related to discontinued operations for the three and nine months ended September 30, 2023 and 2022 respectively: Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Product revenue, net $ — $ — $ — $ 58,065 Cost of sales — 169 — 1,194 Selling, general and administrative — 636 — 28,083 Research and development — 4 — 255 Other expense, net — (7) — (390) (Loss) income from discontinued operations $ — $ (816) $ — $ 28,143 (Loss) gain on the sale of the ex-U.S. commercial operations and sublicense (30) 380,356 (320) 380,356 (Loss) income from discontinued operations, pre-tax (30) 379,540 (320) 408,499 Income tax expense — (8,000) — (8,000) Net (loss) income from discontinued operations $ (30) $ 371,540 $ (320) $ 400,499 Stock-based compensation expense, related to discontinued operations, was $0 million and $4.4 million for the three and nine months ended September 30, 2022. The following table presents the net cash (used in) provided by operating activities and investing activities of discontinued operations for the nine months ended September 30, 2023 and 2022 respectively: Nine Months Ended September 30, 2023 2022 Net (loss) income from discontinued operations $ (320) $ 400,499 Adjustment of non-cash activities — 4,937 Decrease in accounts receivable — 18,235 Decrease in prepaid expenses and other current assets — 3,746 Decrease in inventory — 242 Decrease in security deposits — 2,191 Decrease in operating lease liabilities — (386) Decrease in accounts payable, accrued expenses and other current liabilities — (53,647) Reclassification of cash proceeds from sale of business to investing activities (74) (366,500) Net cash (used in) provided by operating activities $ (394) $ 9,317 Proceeds from sale of business, net of cash — 363,233 Net payment of purchase price adjustment for Disposition Transaction (6,155) — Net cash (used in) provided by investing activities $ (6,155) $ 363,233 |
Cash, Cash Equivalents and Inve
Cash, Cash Equivalents and Investment Debt Securities | 9 Months Ended |
Sep. 30, 2023 | |
Cash, Cash Equivalents and Investment Debt Securities | |
Cash, Cash Equivalents and Investment Debt Securities | 5. Cash, Cash Equivalents and Investment Debt Securities The following table summarizes the Company’s cash, cash equivalents and investment debt securities as of September 30, 2023 and December 31, 2022: As of September 30, 2023 Allowance Gross Gross for Credit Unrealized Unrealized Amortized Cost Losses Gains Losses Fair Value (in thousands) Cash and cash equivalents: Cash and money market funds $ 97,764 $ — $ — $ — $ 97,764 Commercial paper 4,974 — — (2) 4,972 Total cash and cash equivalents 102,738 — — (2) 102,736 Investment debt securities: Commercial paper 83,332 — — (116) 83,216 Corporate debt securities 126,020 — 43 (504) 125,559 U.S. government agency bonds 6,225 — — (4) 6,221 U.S. Treasury securities 4,982 — — — 4,982 Total investment debt securities 220,559 — 43 (624) 219,978 Total cash, cash equivalents and investment debt securities $ 323,297 $ — $ 43 $ (626) $ 322,714 As of December 31, 2022 Allowance Gross Gross for Credit Unrealized Unrealized Amortized Cost Losses Gains Losses Fair Value (in thousands) Cash and cash equivalents: Cash and money market funds $ 50,517 $ — $ — $ — $ 50,517 Total cash and cash equivalents 50,517 — — — 50,517 Investment debt securities: Commercial paper 102,379 — 7 (183) 102,203 Corporate debt securities 304,234 — 33 (1,390) 302,877 U.S. government agency bonds 24,100 — 4 (109) 23,995 U.S. Treasury securities 5,993 — — (19) 5,974 Total investment debt securities 436,706 — 44 (1,701) 435,049 Total cash, cash equivalents and investment debt securities $ 487,223 $ — $ 44 $ (1,701) $ 485,566 The aggregate fair value of the Company’s available-for-sale investment debt securities that have been in a continuous unrealized loss position for less than twelve months or twelve months or longer is as follows: As of September 30, 2023 Less than 12 months 12 months or longer Total (in thousands) Gross Gross Gross Unrealized Unrealized Unrealized Fair Value Losses Fair Value Losses Fair Value Losses Commercial paper $ 83,216 $ (116) $ — $ — $ 83,216 $ (116) Corporate debt securities 93,015 (337) 16,894 (167) 109,909 (504) U.S. government agency bonds 3,223 (2) 2,998 (2) 6,221 (4) Total $ 179,454 $ (455) $ 19,892 $ (169) $ 199,346 $ (624) As of December 31, 2022 Less than 12 months 12 months or longer Total (in thousands) Gross Gross Gross Unrealized Unrealized Unrealized Fair Value Losses Fair Value Losses Fair Value Losses Commercial paper $ 93,659 $ (183) $ — $ — $ 93,659 $ (183) Corporate debt securities 256,918 (1,174) 27,494 (216) 284,412 (1,390) U.S. government agency bonds 17,866 (109) — — 17,866 (109) U.S. Treasury securities 5,974 (19) — — 5,974 (19) Total $ 374,417 $ (1,485) $ 27,494 $ (216) $ 401,911 $ (1,701) |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Measurements | |
Fair Value Measurements | 6. Fair Value Measurements The carrying amounts of the Company’s receivables and payables approximate their fair value due to their short maturities. Accounting principles provide guidance for using fair value to measure assets and liabilities. The guidance includes a three-level hierarchy of valuation techniques used to measure fair value, defined as follows: ● Unadjusted Quoted Prices — The fair value of an asset or liability is based on unadjusted quoted prices in active markets for identical assets or liabilities (Level 1). ● Pricing Models with Significant Observable Inputs — The fair value of an asset or liability is based on information derived from either an active market quoted price, which may require further adjustment based on the attributes of the financial asset or liability being measured, or an inactive market transaction (Level 2). ● Pricing Models with Significant Unobservable Inputs — The fair value of an asset or liability is primarily based on internally derived assumptions surrounding the timing and amount of expected cash flows for the financial instrument. Therefore, these assumptions are unobservable in either an active or inactive market (Level 3). The Company considers an active market as one in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Conversely, the Company views an inactive market as one in which there are few transactions for the asset or liability, the prices are not current, or price quotations vary substantially either over time or among market makers. Where appropriate, non-performance risk, or that of a counterparty, is considered in determining the fair values of liabilities and assets, respectively. The Company’s cash deposits, money market funds and U.S. Treasury securities are classified within Level 1 of the fair value hierarchy because they are valued using bank balances or quoted prices from active markets. Commercial paper, corporate debt securities, and U.S. government agency bonds are classified as Level 2 instruments based on market pricing and other observable inputs. Financial assets carried at fair value are classified in the tables below in one of the three categories described above: Fair Value Measurements Using Total Level 1 Level 2 Level 3 (in thousands) September 30, 2023 Assets Cash and cash equivalents: Money market funds $ 77,916 $ 77,916 $ — $ — Available-for-sale investment debt securities: Commercial paper 83,216 — 83,216 — Corporate debt securities 125,559 — 125,559 — U.S. government agency bonds 6,221 — 6,221 — U.S. Treasury securities 4,982 4,982 — — Total financial assets $ 297,894 $ 82,898 $ 214,996 $ — December 31, 2022 Assets Cash and cash equivalents: Money market funds $ 27,035 $ 27,035 $ — $ — Available-for-sale investment debt securities: Commercial paper 102,203 — 102,203 — Corporate debt securities 302,877 — 302,877 — U.S. government agency bonds 23,995 — 23,995 — U.S. Treasury securities 5,974 5,974 — — Total financial assets $ 462,084 $ 33,009 $ 429,075 $ — See Note 10 for the carrying amounts and estimated fair values of the Company’s 3.50% Convertible Senior Secured Notes due 2026 (“2026 Convertible Secured Notes”), . The aggregate fair value of all available-for-sale investment debt securities (commercial paper, corporate debt securities, U.S. government agency bonds and U.S. Treasury securities), by contractual maturity, are as follows: Fair Value as of September 30, 2023 December 31, 2022 (in thousands) Due in one year or less $ 218,487 $ 391,488 Due after one year through two years 1,491 43,561 Total investment debt securities $ 219,978 $ 435,049 Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations without call or prepayment penalties. |
Fixed Assets, Net
Fixed Assets, Net | 9 Months Ended |
Sep. 30, 2023 | |
Fixed Assets, Net | |
Fixed Assets, Net | 7. Fixed Assets, Net Fixed assets are stated at cost and depreciated or amortized using the straight-line method based on useful lives as follows: Useful lives (Years) September 30, 2023 December 31, 2022 (in thousands) Office equipment and software 3 $ 478 $ 3,112 Leasehold improvements Shorter of remaining lease term or useful life 395 395 Furniture and fixtures 7 1,280 1,280 Subtotal 2,153 4,787 Less: accumulated depreciation (1,331) (3,800) Fixed assets, net $ 822 $ 987 |
Inventory
Inventory | 9 Months Ended |
Sep. 30, 2023 | |
Inventory | |
Inventory | 8. Inventory Inventories are stated at the lower of cost or market. Inventories consisted of the following: September 30, 2023 December 31, 2022 (in thousands) Work-in-process $ 2,453 $ 6,230 Finished goods 196 232 Inventory $ 2,649 $ 6,462 During the quarter ended September 30, 2023, the Company recorded a write-off of $3.0 million of active pharmaceutical ingredient (“API”) due to inventory that was determined to be in excess of the Company’s anticipated usage. The write-off was recorded as a component of Research and Development expense given the usage was revised based on the discontinuation of the NASH program. |
Accounts Payable, Accrued Expen
Accounts Payable, Accrued Expenses and Other Liabilities | 9 Months Ended |
Sep. 30, 2023 | |
Accounts Payable, Accrued Expenses and Other Liabilities | |
Accounts Payable, Accrued Expenses and Other Liabilities | 9. Accounts Payable, Accrued Expenses and Other Liabilities Accounts payable, accrued expenses and other liabilities consisted of the following: September 30, 2023 December 31, 2022 (in thousands) Accounts payable $ 10,267 $ 14,234 Accrued employee compensation 20,486 24,737 Accrued contracted services 37,515 58,875 Accrued restructuring 5,611 — Accrued rebates, returns, discounts and other incentives 11,527 14,460 Accrued income taxes payable 2,868 3,144 Other liabilities 1,220 1,527 Accounts payable, accrued expenses and other liabilities $ 89,494 $ 116,977 Research & Development Tax Credit The Company has benefited from the U.K. Small and Medium-sized Enterprise R&D Tax Credit scheme, or the SME scheme, under which it can obtain a tax credit of up to 33.4% of eligible research and development expenses incurred by the Company in the U.K. Eligible expenses generally include employment costs for research staff, consumables, software and certain internal overhead costs incurred as part of research projects. The Company has started to benefit from the U.K. Research and Development Expenditure Scheme, or the RDEC scheme, under which it can obtain a tax credit of 12% of eligible research and development expenses incurred by the Company in the U.K. The RDEC scheme is more restrictive than the SME scheme, and generally applies where qualifying R&D expenditure is not eligible for relief under the SME scheme. The Company has submitted claims seeking to obtain tax credits for qualifying R&D expenses incurred in the 2015 through 2021 calendar years. As described further in Note 11, the 2019 RDEC claim was finalized during the quarter ended June 30, 2023, and therefore the $3.8 million payment received, which was previously deferred, was released into income as a reduction to research & development expense s. |
Current and Long-Term Debt
Current and Long-Term Debt | 9 Months Ended |
Sep. 30, 2023 | |
Current and Long-Term Debt | |
Current and Long-Term Debt | Current and Long-Term Debt Debt, net of debt issuance costs, consisted of the following: September 30, 2023 2026 Convertible Secured Notes 2026 Convertible Notes Total Long-Term Debt (in thousands) Principal $ 111,143 $ 115,349 $ 226,492 Unamortized debt issuance costs (1,333) (1,303) (2,636) Net carrying amount $ 109,810 $ 114,046 $ 223,856 December 31, 2022 2026 Convertible Secured Notes 2026 Convertible Notes 2023 Convertible Notes Total Current Portion of Long-Term Debt Total Long-Term Debt (in thousands) Principal $ 111,143 $ 115,349 $ 109,808 $ 109,808 $ 226,492 Unamortized debt issuance costs (1,728) (1,660) (239) (239) (3,388) Net carrying amount $ 109,415 $ 113,689 $ 109,569 $ 109,569 $ 223,104 As of December 31, 2022, the net carrying amount of the 2023 Convertible Notes was recorded in Current portion of long-term debt. In July 2023, the 2023 Convertible Notes matured and the Company made a cash payment for the total principal amount due of $109.8 million, in addition to payment of the remaining outstanding interest due of $1.8 million. The Company has two series of convertible notes outstanding (together, the “Convertible Notes”). Both series are convertible under certain circumstances into cash, shares of the Company’s common stock, or a combination thereof, at the Company’s election. The 2026 Convertible Notes were issued on May 14, 2019, in the amount of $230.0 million principal, at an interest rate of 2.00%. The Company received net proceeds from their sale of $223.4 million, net of $6.6 million in underwriting discounts, commissions, and estimated offering expenses. On August 10, 2021, the Company entered into privately negotiated exchange and subscription agreements with a limited number of existing “accredited investors” and “qualified institutional buyers” (as defined under Securities Act rules) holding 2023 Convertible Notes and 2026 Convertible Notes to (1) exchange $306.5 million principal of 2023 Convertible Notes for $292.4 million principal of new notes, (2) exchange $114.7 million principal of 2026 Convertible Notes for $90.0 million principal of new notes, and (3) sell $117.6 million principal of new notes for cash. On August 17, 2021, these new notes were issued as 2026 Convertible Secured Notes in the amount of $500.0 million principal, at an interest rate of 3.50%. The Company received cash proceeds from the sale of notes of approximately $116.7 million, net of $0.9 million in issuance costs. The Company also paid its financial advisor $10.0 million in stock for services rendered, in the amount of 769,823 shares, based on the closing price of $12.99 per share on August 20, 2021. In August and September 2022, the Company entered into privately negotiated agreements to repurchase $388.9 million of 2026 Convertible Secured Notes, using a combination of cash and equity. The Company exchanged the existing 2026 Convertible Secured Notes for $258.1 million in cash and 11,329,399 shares of newly issued common stock, par value $0.001 per share. Based on the Company’s closing stock price on the dates of the agreements, the aggregate shares were worth $219.5 million. The approximate fair value of the Convertible Notes was determined as follows using Level 2 inputs based on quoted market values: September 30, 2023 December 31, 2022 (in thousands) 2026 Convertible Secured Notes $ 119,201 $ 108,012 2026 Convertible Notes $ 113,042 $ 87,307 2023 Convertible Notes $ — $ 107,680 The Note Indentures The 2026 Convertible Notes were issued pursuant to a Base Indenture, dated as of July 6, 2016, between the Company and U.S. Bank National Association (“U.S. Bank”), as trustee, and a Second Supplemental Indenture, dated May 14, 2019, between the Company and U.S. Bank as trustee. The 2026 Convertible Secured Notes were issued pursuant to a Base Indenture and a First Supplemental Indenture, each dated as of August 17, 2021, between the Company and U.S. Bank as trustee and collateral agent. In connection with the issuance of the 2026 Convertible Secured Notes, the Company also entered into a Security Agreement, dated as of August 17, 2021, with U.S. Bank as collateral agent. Pursuant to these indentures, the 2026 Convertible Notes are senior unsecured obligations and the 2026 Convertible Secured Notes are senior secured obligations, of the Company. Each indenture provides for customary events of default. Each series of notes bears a fixed rate of interest as identified above, payable semi-annually in arrears: Semi-annual payment dates First payment date First Second Maturity date* 2026 Convertible Secured Notes February 15, 2022 February 15 August 15 February 15, 2026 2026 Convertible Notes November 15, 2019 May 15 November 15 May 15, 2026 * Unless earlier repurchased, redeemed, or converted. Each of the two series of notes is convertible under certain circumstances. Prior to February 15, 2026 (for the 2026 Convertible Notes) and November 15, 2025 (for the 2026 Convertible Secured Notes), holders may convert their notes only under any of the following circumstances: (i) During any calendar quarter commencing after the calendar quarter ended on June 30, 2019 (for the 2026 Convertible Notes) or December 31, 2021 (for the 2026 Convertible Secured Notes), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is at least 130% of the applicable conversion price (as defined in the applicable indenture) on each applicable trading day (the “Stock Price Conversion Condition”). (ii) During the five five of the product of the last reported sale price of the Company’s common stock and the applicable conversion rate (as defined in the applicable indenture) on each such trading day. (iii) If the Company calls any or all of the applicable series of notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date. (iv) Upon the occurrence of specified corporate events. After those dates, holders may convert their notes, regardless of the foregoing circumstances, at any time until immediately preceding the applicable maturity date. Upon conversion of notes, the Company will pay or deliver cash, shares of common stock (or cash in lieu of fractional shares), or a combination of cash and common stock, at the Company’s election. The initial conversion rates of the Convertible Notes per $1,000 principal amount, and the approximate conversion price, are as follows: Initial conversion rate Approximate conversion price 2026 Convertible Secured Notes 47.7612 $20.94 2026 Convertible Notes 9.2123 $108.55 These conversion rates are subject to adjustment upon occurrence of certain events but will not be adjusted for accrued and unpaid interest. Also, if certain specified events occur, the conversion rate will be increased for notes converted in connection with such events. The Convertible Notes are redeemable by the Company in certain circumstances starting May 20, 2023 (for the 2026 Convertible Notes) and February 20, 2024 (for the 2026 Convertible Secured Notes). After such dates, the Company may redeem for cash all or any part of the applicable Convertible Notes, at its option, if the last reported sale price of the common stock has been at least 130% of the applicable conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period ending on and including the trading day immediately preceding the date of the applicable notice of redemption. The redemption price is equal to 100% of the principal amount redeemed, plus accrued and unpaid interest to (but excluding) the redemption date. No sinking fund is provided for any of the Convertible Notes. If the Company undergoes a fundamental change (as defined in the applicable indenture), noteholders may require the Company to repurchase for cash all or any portion of their notes at a fundamental change repurchase price equal to 100% of the principal amount of the notes to be repurchased, plus accrued and unpaid interest to (but excluding) the fundamental change repurchase date. Upon the occurrence of certain corporate events (i.e., a “make-whole fundamental change”, as defined in the applicable indenture), the Company will, under certain circumstances, increase the conversion rate for holders of the Convertible Notes who elect to convert in connection with such corporate events. In addition, with respect to the 2026 Convertible Secured Notes, (1) if the Company elects to redeem all or part of such notes and provides notice of redemption to the holders or (2) if the Stock Price Conversion Condition is satisfied with respect to any calendar quarter commencing after the quarter ended September 30, 2022, the Company will, under certain circumstances, increase the conversion rate for holders who elect to convert (1) during the related redemption period, or (2) in connection with such Stock Price Conversion Condition. Upon a Company redemption of the 2026 Convertible Secured Notes, holders of notes called for redemption may be eligible to receive a make-whole premium. The Company, at its option, will satisfy the conversion obligation through cash, shares of common stock, or a combination of cash and common stock. The right to redeem the 2026 Convertible Secured Notes requires the Company to specify a date of redemption no earlier than 60 days and no later than 90 days after the notice of redemption is sent. If a holder elects to convert its 2026 Convertible Secured Notes prior to the effective date of a make-whole fundamental change or the date of the redemption notice, then it is not entitled to the increased conversion rate in connection with such make-whole fundamental change or redemption. Upon certain events of default occurring and continuing, either the indenture trustee or holders of at least 25% in aggregate principal amount of a series of notes then outstanding may declare the entire principal amount of that series of notes, and accrued interest, if any, to be immediately due and payable. Upon events of default involving specified bankruptcy events involving the Company, the Convertible Notes are due and payable immediately. The 2026 Convertible Secured Notes indenture and security agreement include (1) customary covenants, (2) guarantor provisions, and (3) collateral provisions. The 2026 Convertible Secured Notes may become guaranteed in the future by subsidiaries of the Company that meet certain threshold requirements, with the 2026 Convertible Secured Notes becoming senior obligations of such guarantor. The 2026 Convertible Secured Notes are secured by a first priority security interest in substantially all assets of the Company, and of any guarantors, subject to certain exceptions. Interest Expense on Convertible Notes The table summarizes the total interest expense recognized in the periods presented: Three Months Ended September 30, 2023 Nine Months Ended September 30, 2023 2026 Convertible Secured Notes 2026 Convertible Notes Total 2026 Convertible Secured Notes 2026 Convertible Notes 2023 Convertible Notes Total (in thousands) Contractual interest expense $ 972 $ 577 1,549 $ 2,918 $ 1,730 $ 1,784 $ 6,432 Amortization of debt issuance costs 133 120 253 395 357 239 991 Total interest expense $ 1,105 $ 697 $ 1,802 $ 3,313 $ 2,087 $ 2,023 $ 7,423 Three Months Ended September 30, 2022 Nine Months Ended September 30, 2022 2026 Convertible Secured Notes 2026 Convertible Notes 2023 Convertible Notes Total 2026 Convertible Secured Notes 2026 Convertible Notes 2023 Convertible Notes Total (in thousands) Contractual interest expense $ 3,127 $ 577 $ 892 $ 4,596 $ 11,877 $ 1,731 $ 2,729 $ 16,337 Amortization of debt issuance costs 407 117 117 641 1,540 349 353 2,242 Total interest expense $ 3,534 $ 694 $ 1,009 $ 5,237 $ 13,417 $ 2,080 $ 3,082 $ 18,579 The effective interest rates during the three and nine months ended September 30, 2023 and September 30, 2022 for the 2026 Convertible Secured Notes and 2026 Convertible Notes are 4.03% and 2.44%, respectively. Accrued interest on the Convertible Notes was approximately $1.4 million and $3.5 million as of September 30, 2023 and December 31, 2022, respectively. The Company’s total recorded debt issuance costs are $8.7 million, which are being amortized using the effective interest method through the date of maturity. As of September 30, 2023 and December 31, 2022, respectively, $2.6 million and $3.4 million of debt issuance costs for the 2026 Convertible Secured Notes and 2026 Convertible Notes are unamortized and included within the condensed consolidated balance sheets in Long-term debt. As of December 31, 2022, $0.2 million of debt issuance costs for the 2023 Convertible Notes were unamortized and included within the condensed consolidated balance sheets in Current portion of long-term debt. Cash payments for interest were $8.6 million and $22.7 million for the nine months ended September 30, 2023 and 2022, respectively. |
Research and Development Tax Cr
Research and Development Tax Credit | 9 Months Ended |
Sep. 30, 2023 | |
Research and Development Tax Credit | |
Research and Development Tax Credit | 11. Research and Development Tax Credit The Company has benefited from the U.K. Small and Medium-sized Enterprise R&D Tax Credit scheme, or the SME scheme, under which it can obtain a tax credit of up to 33.4% of eligible research and development expenses incurred by the Company in the U.K. Eligible expenses generally include employment costs for research staff, consumables, software and certain internal overhead costs incurred as part of research projects. The Company submitted a claim seeking to obtain tax credits for qualifying R&D expenses incurred in the years ended December 31, 2019, 2020 and 2021. In February 2022, the Company received a payment for the 2019 claim of $3.8 million from His Majesty’s Revenue and Customs (“HMRC”). The claim for 2019 was finalized and approved in the quarter ended June 30, 2023, at which time the Company recorded the net U.K. research and development tax credit payments received of $3.8 million (less $0.2 million due to foreign currency translation) as a reduction of research and development expense in the condensed consolidated statements of operations for the nine months ended September 30, 2023. In the three and nine months ended September 30, 2022, the Company recorded U.K. research and development tax credits of $3.5 million as a reduction of research and development expense. |
Restructuring
Restructuring | 9 Months Ended |
Sep. 30, 2023 | |
Restructuring | |
Restructuring | 12. Restructuring Restructuring On June 23, 2023, the Company announced the adoption of a workforce reduction and expense reduction plan (the “Restructuring Plan”), including a workforce reduction of approximately one third , and discontinuance of NASH-related investment. The intent of the Restructuring Plan is to strengthen the Company’s focus on the treatment of rare and serious liver diseases, and significantly reduce operating expenses. The Restructuring Plan was implemented during the third quarter of 2023 and is expected to be substantially completed by the end of 2023. For the three and nine months ended September 30, 2023, restructuring activities resulted in expenses o f $6.3 million, which were comprised entirely of severance and other employee benefit costs. The following table displays a rollforward of the changes to the accrued balances as of September 30, 2023: Severance and Related Costs (in thousands) Accrued balance at December 31, 2022 $ — Charges incurred 6,260 Cash payments made (649) Other reserve adjustments — Accrued balance at September 30, 2023 $ 5,611 |
Stock Compensation
Stock Compensation | 9 Months Ended |
Sep. 30, 2023 | |
Stock Compensation | |
Stock Compensation | 13. Stock Compensation In April 2023, the Company’s Compensation Committee and Board of Directors approved the 2023 Equity Incentive Plan (“2023 Plan”), which was approved by stockholders at the annual meeting of stockholders on May 24, 2023, and which is replacing the Company’s Amended and Restated Equity Incentive Plan (“2022 Plan”). Under the 2022 Plan and the 2023 Plan, the Company may grant stock options, which include incentive stock options (“ISOs”) and non-qualified stock options (“NSOs”), stock grants, which include unrestricted shares, restricted shares (“RSAs”) and performance restricted shares (“PSAs”), and stock-based awards, which include restricted stock unit awards (“RSUs”) and performance restricted stock unit awards (“PRSUs”). The number of shares available to grant using the 2023 Plan consists of those shares which remained unallocated under the 2022 Plan, an additional allocation of 1.5 million shares, and shares subject to previously issued awards that are forfeited. The 2023 Plan will remain effective for a ten-year term, expiring in 2033. Other than the plan size and termination date, the provisions of the 2023 Plan are materially the same as the provisions of the 2022 Plan. The estimated fair value of the stock options granted in the nine months ended September 30, 2023, was determined utilizing a Black-Scholes option-pricing model at the date of grant. The fair value of the RSUs granted in the nine months ended September 30, 2023, was determined utilizing the closing price of the Company’s common stock on the date of grant. The fair value of the PRSUs granted in the nine months ended September 30, 2023, was determined utilizing the Monte Carlo simulation method. The Company accounts for all forfeitures when they occur. Ultimately, the actual expense recognized over the vesting period will be for only those shares that vest and are not forfeited. The following table summarizes stock option activity during the nine months ended September 30, 2023: Weighted Average Number Weighted Remaining Aggregate of Options Average Contractual Intrinsic Value (in thousands) Exercise Price Term (years) (in thousands) Outstanding at December 31, 2022 2,087 $ 43.51 7.1 $ 4 Granted 641 $ 16.60 — $ — Exercised (7) $ 15.04 — $ 28 Cancelled/forfeited (136) $ 19.70 — $ — Expired (150) $ 65.34 — $ — Outstanding at September 30, 2023 2,435 $ 36.82 7.3 $ 3,681 Expected to vest 1,012 $ 18.32 8.8 $ 2,168 Exercisable 1,423 $ 49.96 6.2 $ 1,513 The aggregate intrinsic value of options is calculated as the difference between the exercise price of the underlying options and the fair value of the Company’s common stock for those options that had exercise prices lower than the fair value of the Company’s common stock. As of September 30, 2023, the total compensation cost related to non-vested option awards not yet recognized is approximately $10.4 million with a weighted average remaining vesting period of 1.16 years. The Company estimated the fair value of stock options granted in the periods presented utilizing a Black-Scholes option-pricing model utilizing the following assumptions: Nine Months Ended September 30, 2023 2022 Volatility 69.5 - 72.6 % 66.4 - 67.7 % Expected term (in years) 6.0 5.5 - 6.0 Risk-free rate 3.6 - 4.3 % 1.3 - 2.8 % Expected dividend yield — % — % The following table summarizes the aggregate RSU and PRSU activity during the nine months ended September 30, 2023: Weighted Number of Average Grant Date Awards Fair Value (in thousands) Non-vested awards at December 31, 2022 1,051 $ 23.90 Granted 1,857 $ 16.00 Vested (160) $ 21.56 Forfeited (226) $ 18.83 Non-vested awards at September 30, 2023 2,522 $ 18.24 As of September 30, 2023, there is approximately $31.1 million of total unrecognized compensation expense related to unvested RSUs and PRSUs which is expected to be recognized over a weighted average vesting period of 1.29 years. During the nine months ended September 30, 2023, the Company granted a total of 224,700 PRSUs to certain of the Company’s executive officers. The performance criterion for such PRSUs is based on the Total Shareholder Return (“TSR”) of the Company’s common stock relative to the TSR of the companies comprising the S&P Biotechnology Select Industry Index (the “TSR Peer Group”) over a 3-year Compensation – Stock Compensation The Company recorded approximately $0.5 million and $1.4 million of stock-based compensation related to such PRSUs granted during the three and nine months ended September 30, 2023. Stock-based compensation expense has been reported in the Company’s condensed consolidated statements of operations as follows: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (in thousands) Selling, general and administrative $ 4,710 $ 4,411 $ 13,774 $ 12,485 Research and development 1,943 1,377 5,005 4,173 Total stock-based compensation $ 6,653 $ 5,788 $ 18,779 $ 16,658 |
Net Loss Per Share
Net Loss Per Share | 9 Months Ended |
Sep. 30, 2023 | |
Net Loss Per Share | |
Net Loss Per Share | 14. Net Loss Per Share Basic loss per share is computed by dividing net loss attributable to common stockholders (numerator) by the weighted average number of common shares outstanding (denominator) during the period. For the three and nine-month periods ended September 30, 2023 and 2022, the diluted loss per share computations for such periods did not assume the conversion of the Convertible Notes, exercise of stock options or vesting of RSUs or PRSUs as they would have had an anti-dilutive effect on loss per share. The Company utilized the control number concept in the computation of diluted earnings per share. The control number used is net loss from continuing operations. The control number requires that the same number of potentially dilutive securities applied in computing diluted earnings per share from continuing operations be applied to all other categories of income or loss. Since the Company had a net loss from continuing operations for all periods presented, no dilutive effect has been recognized in the calculation of income from discontinued operations per share. The following potentially dilutive securities have been excluded from the computations of diluted weighted average shares outstanding for the three and nine-month periods ended September 30, 2023 and 2022, as the inclusion thereof would have been anti-dilutive: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (in thousands) (in thousands) Shares issuable upon conversion of Convertible Notes 6,370 18,462 6,737 23,169 Options 2,526 2,483 2,510 2,474 Unvested restricted stock units 2,660 1,233 2,168 1,351 Total 11,556 22,178 11,415 26,994 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies. | |
Commitments and Contingencies | 15. Commitments and Contingencies Legal Proceedings The Company is involved in various disputes, legal proceedings and litigation in the course of its business, including the matters described below and, from time to time, governmental inquiries and investigations and employment and other litigation. These matters, which could result in damages, fines or other administrative, civil or criminal remedies, liabilities or penalties, are often complex and the outcome of such matters is often uncertain. The Company may from time to time enter into settlements to resolve such matters. Litigation Relating to the Tender Offer and the Merger Agreement As of November 6, 2023, four complaints have been filed in federal court, each relating to the tender offer and the transactions contemplated by our Merger Agreement with Alfasigma. ● On October 13, 2023, a purported stockholder of Intercept filed a lawsuit in the United States District Court for the District of Delaware against Intercept and its directors, captioned Walsh v. Intercept Pharmaceuticals, Inc., et al., Case No. 23-cv-01153 (which we refer to as the “Walsh Complaint”). ● Also on October 13, 2023, a purported stockholder of Intercept filed a lawsuit in the United States District Court for the Southern District of New York against Intercept and its directors, captioned O’Dell v. Intercept Pharmaceuticals, Inc., et al., Case No. 23-cv-09052 (which we refer to as the “O’Dell Complaint”). ● On October 17, 2023, a purported stockholder of Intercept filed a lawsuit in the United States District Court for the Southern District of New York against Intercept and its directors, captioned Dickerson v. Intercept Pharmaceuticals, Inc., et al., Case No. 23-cv-09121 (which we refer to as the “Dickerson Complaint”). ● On October 19, 2023, a purported stockholder of Intercept filed a lawsuit in the United States District Court for the District of Delaware against Intercept and its directors, captioned Clark v. Intercept Pharmaceuticals, Inc., et al., Case No. 23-cv-01180 (which we refer to as the “Clark Complaint”). The Walsh Complaint, O’Dell Complaint, Dickerson Complaint, and Clark Complaint allege that the Solicitation/Recommendation Statement issued in connection with the tender offer and the transactions contemplated by our Merger Agreement with Alfasigma omits material information or contains misleading disclosures and that, as a result, the defendants violated Sections 14(d), 14(e), and 20(a) of the Exchange Act. The complaints seek, among other things, (i) injunctive relief preventing the consummation of the transactions contemplated by the Merger Agreement, (ii) rescission or rescissory damages in the event the transactions contemplated by the Merger Agreement have been implemented, (iii) dissemination of a Solicitation/Recommendation Statement that does not omit material information or contain any misleading disclosures, (iv) an award of damages that plaintiff suffered as a result of the defendant’s purported wrongdoings, and (v) an award of plaintiff’s expenses, including attorneys’ and experts’ fees. Intercept believes the claims asserted in each of the complaints are without merit. As of November 6, 2023, one complaint has been filed in a New Jersey state court relating to the tender offer and the transactions contemplated by our Merger Agreement with Alfasigma. On October 23, 2023, a purported stockholder of Intercept filed a lawsuit in the Morris County Superior Court of New Jersey against Intercept, its directors and Alfasigma, captioned Haltman v. Akkaraju, et al., Case No. MRS-C-000085-23 The Haltman Complaint alleges that the Solicitation/Recommendation Statement issued in connection with the tender offer and the transactions contemplated by our Merger Agreement with Alfasigma omits material information or contains misleading disclosures and that, as a result, the defendants violated Section 49:3-71 of the New Jersey Statutes and New Jersey common law. The complaint seeks, among other things, (i) injunctive relief preventing the consummation of the transactions contemplated by the Merger Agreement, (ii) a declaration that Alfasigma violated Section 49:3-71 of the New Jersey Statutes, and (iii) dissemination of a Solicitation/Recommendation Statement that makes corrective and complete disclosures. Intercept believes the claims asserted in this complaint are without merit. Intercept and the plaintiff in the Haltman Complaint reached an agreement for settlement and the Haltman Complaint was voluntarily dismissed with prejudice by the plaintiff on October 30, 2023. Patent Litigation In August 2022, the Company received a paragraph IV certification notice letter from Zenara Pharma Private Limited (“Zenara”), a generic drug manufacturer, indicating that it had submitted to the FDA an Abbreviated New Drug Application (“ANDA”) seeking approval to manufacture and sell a generic version of the Company’s 5 mg and 10 mg dosage strengths of Ocaliva® (obeticholic acid) for PBC prior to the expiration of certain patents listed for Ocaliva in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations (the “Orange Book”). The paragraph IV certification notice alleged that the challenged Orange Book patents were invalid, unenforceable, and/or would not be infringed by the commercial manufacture, use, or sale of the generic products described in Zenara’s ANDA. Within 45 days of receipt of the paragraph IV certification notice, the Company initiated a patent infringement suit against Zenara in the United States District Court for the District of Delaware. In June 2023, the Company received an additional paragraph IV certification notice letter from Zenara challenging an additional Orange Book patent. Within 45 days, in June 2023, the Company initiated a patent infringement suit against Zenara in the United States District Court for the District of Delaware. The two patent infringement suits have been consolidated, and trial is scheduled for March 17, 2025. Separately, the Company previously settled ANDA litigation, with six other generic manufacturers. Patent litigation is costly and time-consuming, and successful challenges to the Company’s patents or other intellectual property rights could result in the Company losing those rights in the relevant jurisdiction, and could allow third parties to use the Company’s proprietary technologies without a license from the Company or its collaborators. While the Company intends to vigorously defend and enforce its intellectual property rights protecting Ocaliva, the Company can offer no assurances regarding when patent lawsuits such as the Zenara lawsuit will be decided, which side will prevail, or whether a generic equivalent of Ocaliva could be approved and enter the market before the expiration of the Company’s patents without license from the Company. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Summary of Significant Accounting Policies | |
Agreement And Plan Of Merger | Agreement and Plan of Merger On September 26, 2023, the Company announced it had entered into an agreement (the “Merger Agreement”) with Alfasigma and Interstellar Acquisition Inc., a wholly owned subsidiary of Alfasigma (“Purchaser”). Pursuant to the Merger Agreement, Purchaser will commence a tender offer (the “Offer”) to acquire all the outstanding shares of the Company’s common stock (the “Shares”) at an offer price of $19.00 per Share, net to the seller in cash without interest (the “Offer Price”), subject to any applicable withholding taxes. The obligation of Purchaser to purchase Shares tendered in the Offer is subject to the satisfaction of the conditions set forth in Annex I to the Merger Agreement, including that (i) there shall have been validly tendered and not validly withdrawn that number of Shares that, considered together with all other Shares (if any) beneficially owned by Alfasigma and its affiliates, represents one more Share than 50% of the Shares outstanding at the time of the expiration of the Offer; (ii) the Merger Agreement shall not have been validly terminated in accordance with its terms; (iii) the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended; and (iv) those other conditions set forth in Annex I to the Merger Agreement. Following the consummation of the Offer, Purchaser will merge with and into the Company, with the Company surviving as a wholly owned subsidiary of Alfasigma (the “Merger”). In the Merger, each Share issued and outstanding immediately prior to the effective time (the “Effective Time”) of the Merger (other than certain excluded Shares as described in the Merger Agreement) will automatically be converted into the right to receive the Offer Price. It is anticipated the transaction will close by the end of 2023. Upon completion of the transaction, the Company’s common stock will no longer be publicly listed. The Merger Agreement contains certain termination rights for the Company and Alfasigma. If the Merger Agreement is terminated under specified circumstances, the Company will be required to pay Alfasigma a termination fee of $34 million. |
Use of Estimates | Use of Estimates The preparation of these unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect the reported amounts of assets and liabilities, the disclosure of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from these estimates. |
Fair Value of Financial Instruments | The carrying amounts of the Company’s receivables and payables approximate their fair value due to their short maturities. Accounting principles provide guidance for using fair value to measure assets and liabilities. The guidance includes a three-level hierarchy of valuation techniques used to measure fair value, defined as follows: ● Unadjusted Quoted Prices — The fair value of an asset or liability is based on unadjusted quoted prices in active markets for identical assets or liabilities (Level 1). ● Pricing Models with Significant Observable Inputs — The fair value of an asset or liability is based on information derived from either an active market quoted price, which may require further adjustment based on the attributes of the financial asset or liability being measured, or an inactive market transaction (Level 2). ● Pricing Models with Significant Unobservable Inputs — The fair value of an asset or liability is primarily based on internally derived assumptions surrounding the timing and amount of expected cash flows for the financial instrument. Therefore, these assumptions are unobservable in either an active or inactive market (Level 3). The Company considers an active market as one in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Conversely, the Company views an inactive market as one in which there are few transactions for the asset or liability, the prices are not current, or price quotations vary substantially either over time or among market makers. Where appropriate, non-performance risk, or that of a counterparty, is considered in determining the fair values of liabilities and assets, respectively. The Company’s cash deposits, money market funds and U.S. Treasury securities are classified within Level 1 of the fair value hierarchy because they are valued using bank balances or quoted prices from active markets. Commercial paper, corporate debt securities, and U.S. government agency bonds are classified as Level 2 instruments based on market pricing and other observable inputs. |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Discontinued Operations | |
Schedule of discontinued operations | Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Product revenue, net $ — $ — $ — $ 58,065 Cost of sales — 169 — 1,194 Selling, general and administrative — 636 — 28,083 Research and development — 4 — 255 Other expense, net — (7) — (390) (Loss) income from discontinued operations $ — $ (816) $ — $ 28,143 (Loss) gain on the sale of the ex-U.S. commercial operations and sublicense (30) 380,356 (320) 380,356 (Loss) income from discontinued operations, pre-tax (30) 379,540 (320) 408,499 Income tax expense — (8,000) — (8,000) Net (loss) income from discontinued operations $ (30) $ 371,540 $ (320) $ 400,499 Nine Months Ended September 30, 2023 2022 Net (loss) income from discontinued operations $ (320) $ 400,499 Adjustment of non-cash activities — 4,937 Decrease in accounts receivable — 18,235 Decrease in prepaid expenses and other current assets — 3,746 Decrease in inventory — 242 Decrease in security deposits — 2,191 Decrease in operating lease liabilities — (386) Decrease in accounts payable, accrued expenses and other current liabilities — (53,647) Reclassification of cash proceeds from sale of business to investing activities (74) (366,500) Net cash (used in) provided by operating activities $ (394) $ 9,317 Proceeds from sale of business, net of cash — 363,233 Net payment of purchase price adjustment for Disposition Transaction (6,155) — Net cash (used in) provided by investing activities $ (6,155) $ 363,233 |
Cash, Cash Equivalents and In_2
Cash, Cash Equivalents and Investment Debt Securities (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Cash, Cash Equivalents and Investment Debt Securities | |
Cash, Cash Equivalents and Investment Debt Securities | As of September 30, 2023 Allowance Gross Gross for Credit Unrealized Unrealized Amortized Cost Losses Gains Losses Fair Value (in thousands) Cash and cash equivalents: Cash and money market funds $ 97,764 $ — $ — $ — $ 97,764 Commercial paper 4,974 — — (2) 4,972 Total cash and cash equivalents 102,738 — — (2) 102,736 Investment debt securities: Commercial paper 83,332 — — (116) 83,216 Corporate debt securities 126,020 — 43 (504) 125,559 U.S. government agency bonds 6,225 — — (4) 6,221 U.S. Treasury securities 4,982 — — — 4,982 Total investment debt securities 220,559 — 43 (624) 219,978 Total cash, cash equivalents and investment debt securities $ 323,297 $ — $ 43 $ (626) $ 322,714 As of December 31, 2022 Allowance Gross Gross for Credit Unrealized Unrealized Amortized Cost Losses Gains Losses Fair Value (in thousands) Cash and cash equivalents: Cash and money market funds $ 50,517 $ — $ — $ — $ 50,517 Total cash and cash equivalents 50,517 — — — 50,517 Investment debt securities: Commercial paper 102,379 — 7 (183) 102,203 Corporate debt securities 304,234 — 33 (1,390) 302,877 U.S. government agency bonds 24,100 — 4 (109) 23,995 U.S. Treasury securities 5,993 — — (19) 5,974 Total investment debt securities 436,706 — 44 (1,701) 435,049 Total cash, cash equivalents and investment debt securities $ 487,223 $ — $ 44 $ (1,701) $ 485,566 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | As of September 30, 2023 Less than 12 months 12 months or longer Total (in thousands) Gross Gross Gross Unrealized Unrealized Unrealized Fair Value Losses Fair Value Losses Fair Value Losses Commercial paper $ 83,216 $ (116) $ — $ — $ 83,216 $ (116) Corporate debt securities 93,015 (337) 16,894 (167) 109,909 (504) U.S. government agency bonds 3,223 (2) 2,998 (2) 6,221 (4) Total $ 179,454 $ (455) $ 19,892 $ (169) $ 199,346 $ (624) As of December 31, 2022 Less than 12 months 12 months or longer Total (in thousands) Gross Gross Gross Unrealized Unrealized Unrealized Fair Value Losses Fair Value Losses Fair Value Losses Commercial paper $ 93,659 $ (183) $ — $ — $ 93,659 $ (183) Corporate debt securities 256,918 (1,174) 27,494 (216) 284,412 (1,390) U.S. government agency bonds 17,866 (109) — — 17,866 (109) U.S. Treasury securities 5,974 (19) — — 5,974 (19) Total $ 374,417 $ (1,485) $ 27,494 $ (216) $ 401,911 $ (1,701) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Measurements | |
Fair Value, Marketable Securities Measured on Recurring and Nonrecurring Basis | Financial assets carried at fair value are classified in the tables below in one of the three categories described above: Fair Value Measurements Using Total Level 1 Level 2 Level 3 (in thousands) September 30, 2023 Assets Cash and cash equivalents: Money market funds $ 77,916 $ 77,916 $ — $ — Available-for-sale investment debt securities: Commercial paper 83,216 — 83,216 — Corporate debt securities 125,559 — 125,559 — U.S. government agency bonds 6,221 — 6,221 — U.S. Treasury securities 4,982 4,982 — — Total financial assets $ 297,894 $ 82,898 $ 214,996 $ — December 31, 2022 Assets Cash and cash equivalents: Money market funds $ 27,035 $ 27,035 $ — $ — Available-for-sale investment debt securities: Commercial paper 102,203 — 102,203 — Corporate debt securities 302,877 — 302,877 — U.S. government agency bonds 23,995 — 23,995 — U.S. Treasury securities 5,974 5,974 — — Total financial assets $ 462,084 $ 33,009 $ 429,075 $ — |
Schedule of Available for Sale Securities Debt Maturities | The aggregate fair value of all available-for-sale investment debt securities (commercial paper, corporate debt securities, U.S. government agency bonds and U.S. Treasury securities), by contractual maturity, are as follows: Fair Value as of September 30, 2023 December 31, 2022 (in thousands) Due in one year or less $ 218,487 $ 391,488 Due after one year through two years 1,491 43,561 Total investment debt securities $ 219,978 $ 435,049 |
Fixed Assets, Net (Tables)
Fixed Assets, Net (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Fixed Assets, Net | |
Schedule of Fixed assets | Fixed assets are stated at cost and depreciated or amortized using the straight-line method based on useful lives as follows: Useful lives (Years) September 30, 2023 December 31, 2022 (in thousands) Office equipment and software 3 $ 478 $ 3,112 Leasehold improvements Shorter of remaining lease term or useful life 395 395 Furniture and fixtures 7 1,280 1,280 Subtotal 2,153 4,787 Less: accumulated depreciation (1,331) (3,800) Fixed assets, net $ 822 $ 987 |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Inventory | |
Schedule of Inventories | Inventories are stated at the lower of cost or market. Inventories consisted of the following: September 30, 2023 December 31, 2022 (in thousands) Work-in-process $ 2,453 $ 6,230 Finished goods 196 232 Inventory $ 2,649 $ 6,462 |
Accounts Payable, Accrued Exp_2
Accounts Payable, Accrued Expenses and Other Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Accounts Payable, Accrued Expenses and Other Liabilities | |
Schedule of Accounts payable, accrued expenses and other liabilities | Accounts payable, accrued expenses and other liabilities consisted of the following: September 30, 2023 December 31, 2022 (in thousands) Accounts payable $ 10,267 $ 14,234 Accrued employee compensation 20,486 24,737 Accrued contracted services 37,515 58,875 Accrued restructuring 5,611 — Accrued rebates, returns, discounts and other incentives 11,527 14,460 Accrued income taxes payable 2,868 3,144 Other liabilities 1,220 1,527 Accounts payable, accrued expenses and other liabilities $ 89,494 $ 116,977 |
Current and Long-Term Debt (Tab
Current and Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Current and Long-Term Debt | |
Schedule of Long-term Debt Instruments | September 30, 2023 2026 Convertible Secured Notes 2026 Convertible Notes Total Long-Term Debt (in thousands) Principal $ 111,143 $ 115,349 $ 226,492 Unamortized debt issuance costs (1,333) (1,303) (2,636) Net carrying amount $ 109,810 $ 114,046 $ 223,856 December 31, 2022 2026 Convertible Secured Notes 2026 Convertible Notes 2023 Convertible Notes Total Current Portion of Long-Term Debt Total Long-Term Debt (in thousands) Principal $ 111,143 $ 115,349 $ 109,808 $ 109,808 $ 226,492 Unamortized debt issuance costs (1,728) (1,660) (239) (239) (3,388) Net carrying amount $ 109,415 $ 113,689 $ 109,569 $ 109,569 $ 223,104 |
Schedule of fair value of the convertible notes | September 30, 2023 December 31, 2022 (in thousands) 2026 Convertible Secured Notes $ 119,201 $ 108,012 2026 Convertible Notes $ 113,042 $ 87,307 2023 Convertible Notes $ — $ 107,680 |
Schedule of initial conversion of convertible debt | Initial conversion rate Approximate conversion price 2026 Convertible Secured Notes 47.7612 $20.94 2026 Convertible Notes 9.2123 $108.55 |
Schedule of interest expenses on convertible debt | Three Months Ended September 30, 2023 Nine Months Ended September 30, 2023 2026 Convertible Secured Notes 2026 Convertible Notes Total 2026 Convertible Secured Notes 2026 Convertible Notes 2023 Convertible Notes Total (in thousands) Contractual interest expense $ 972 $ 577 1,549 $ 2,918 $ 1,730 $ 1,784 $ 6,432 Amortization of debt issuance costs 133 120 253 395 357 239 991 Total interest expense $ 1,105 $ 697 $ 1,802 $ 3,313 $ 2,087 $ 2,023 $ 7,423 Three Months Ended September 30, 2022 Nine Months Ended September 30, 2022 2026 Convertible Secured Notes 2026 Convertible Notes 2023 Convertible Notes Total 2026 Convertible Secured Notes 2026 Convertible Notes 2023 Convertible Notes Total (in thousands) Contractual interest expense $ 3,127 $ 577 $ 892 $ 4,596 $ 11,877 $ 1,731 $ 2,729 $ 16,337 Amortization of debt issuance costs 407 117 117 641 1,540 349 353 2,242 Total interest expense $ 3,534 $ 694 $ 1,009 $ 5,237 $ 13,417 $ 2,080 $ 3,082 $ 18,579 |
Restructuring (Tables)
Restructuring (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Restructuring | |
Summary of rollforward of the changes to the accrued balances of restructuring | Severance and Related Costs (in thousands) Accrued balance at December 31, 2022 $ — Charges incurred 6,260 Cash payments made (649) Other reserve adjustments — Accrued balance at September 30, 2023 $ 5,611 |
Stock Compensation (Tables)
Stock Compensation (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Stock Compensation | |
Schedule of outstanding option activity | The following table summarizes stock option activity during the nine months ended September 30, 2023: Weighted Average Number Weighted Remaining Aggregate of Options Average Contractual Intrinsic Value (in thousands) Exercise Price Term (years) (in thousands) Outstanding at December 31, 2022 2,087 $ 43.51 7.1 $ 4 Granted 641 $ 16.60 — $ — Exercised (7) $ 15.04 — $ 28 Cancelled/forfeited (136) $ 19.70 — $ — Expired (150) $ 65.34 — $ — Outstanding at September 30, 2023 2,435 $ 36.82 7.3 $ 3,681 Expected to vest 1,012 $ 18.32 8.8 $ 2,168 Exercisable 1,423 $ 49.96 6.2 $ 1,513 |
Schedule of estimated the fair value of stock options granted in the periods presented utilizing a Black-Scholes option-pricing model | The Company estimated the fair value of stock options granted in the periods presented utilizing a Black-Scholes option-pricing model utilizing the following assumptions: Nine Months Ended September 30, 2023 2022 Volatility 69.5 - 72.6 % 66.4 - 67.7 % Expected term (in years) 6.0 5.5 - 6.0 Risk-free rate 3.6 - 4.3 % 1.3 - 2.8 % Expected dividend yield — % — % |
Schedule of aggregate RSU, RSA and PRSU activity | The following table summarizes the aggregate RSU and PRSU activity during the nine months ended September 30, 2023: Weighted Number of Average Grant Date Awards Fair Value (in thousands) Non-vested awards at December 31, 2022 1,051 $ 23.90 Granted 1,857 $ 16.00 Vested (160) $ 21.56 Forfeited (226) $ 18.83 Non-vested awards at September 30, 2023 2,522 $ 18.24 |
Schedule of stock based compensation expense | Stock-based compensation expense has been reported in the Company’s condensed consolidated statements of operations as follows: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (in thousands) Selling, general and administrative $ 4,710 $ 4,411 $ 13,774 $ 12,485 Research and development 1,943 1,377 5,005 4,173 Total stock-based compensation $ 6,653 $ 5,788 $ 18,779 $ 16,658 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Net Loss Per Share | |
Schedule of antidilutive securities excluded from computation of earnings per share | The following potentially dilutive securities have been excluded from the computations of diluted weighted average shares outstanding for the three and nine-month periods ended September 30, 2023 and 2022, as the inclusion thereof would have been anti-dilutive: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (in thousands) (in thousands) Shares issuable upon conversion of Convertible Notes 6,370 18,462 6,737 23,169 Options 2,526 2,483 2,510 2,474 Unvested restricted stock units 2,660 1,233 2,168 1,351 Total 11,556 22,178 11,415 26,994 |
Overview of Business (Agreement
Overview of Business (Agreement and Plan of Merger) (Details) - Intercept Pharmaceuticals, Inc - Alfasigma and Interstellar Acquisition Inc $ / shares in Units, $ in Millions | Sep. 26, 2023 USD ($) $ / shares shares |
Agreement And Plan Of Merger | |
Share price | $ / shares | $ 19 |
Number of shares beneficially Owned more than the specified percentage | shares | 1 |
Percentage of shares outstanding | 50% |
Termination fee | $ | $ 34 |
Discontinued Operations (Narrat
Discontinued Operations (Narratives) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
May 15, 2023 | Jul. 01, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | May 05, 2022 | |
Discontinued Operations | ||||||||
Research and development | $ 41,513 | $ 44,034 | $ 120,530 | $ 136,753 | ||||
Share Purchase Agreement Additional Consideration Payable | 6,200 | 6,200 | ||||||
Discontinued operation, share purchase agreement, proceeds from difference between estimated and actual liability | $ 100 | |||||||
Disposal Group, Including Discontinued Operation, Share Based Compensation Expense | 0 | 4,400 | ||||||
TSA | ||||||||
Discontinued Operations | ||||||||
Research and development | 1,900 | 3,100 | 5,600 | 3,100 | ||||
Cash inflow under TSA and Sub-license Agreement | 1,300 | 1,400 | 4,600 | 1,400 | ||||
Held-for-sale | Ex-U.S. commercial operations | ||||||||
Discontinued Operations | ||||||||
Consideration | $ 405,000 | |||||||
Additional contingent consideration | $ 45,000 | |||||||
Current assets of discontinued operations | 0 | 0 | $ 0 | |||||
Current liabilities of discontinued operations | $ 0 | $ 0 | $ 0 | |||||
Provision for income taxes recorded with discontinued operations | $ 8,000 | $ 8,000 | ||||||
Disposed of by sale | International Business | ||||||||
Discontinued Operations | ||||||||
Cash consideration received | $ 366,500 | |||||||
Additional consideration receivable under SPA | $ 38,500 |
Discontinued Operations (Result
Discontinued Operations (Results of operations) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Discontinued Operations | ||||
Net (loss) income from discontinued operations | $ (30) | $ 371,540 | $ (320) | $ 400,499 |
Ex-U.S. commercial operations | Held-for-sale | ||||
Discontinued Operations | ||||
Product revenue, net | 58,065 | |||
Cost of sales | 169 | 1,194 | ||
Selling, general and administrative | 636 | 28,083 | ||
Research and development | 4 | 255 | ||
Other expense, net | (7) | (390) | ||
(Loss) income from discontinued operations | (816) | 28,143 | ||
(Loss) gain on the sale of the ex-U.S. commercial operations and sublicense | (30) | 380,356 | (320) | 380,356 |
(Loss) income from discontinued operations, pre-tax | (30) | 379,540 | (320) | 408,499 |
Income tax expense | (8,000) | (8,000) | ||
Net (loss) income from discontinued operations | $ (30) | $ 371,540 | $ (320) | $ 400,499 |
Discontinued Operations (Net ca
Discontinued Operations (Net cash (used in) provided by operating activities and investing activities) (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Discontinued Operations | ||
Net cash (used in) provided by operating activities | $ (394) | $ 9,317 |
Net cash (used in) provided by investing activities | (6,155) | 363,233 |
Ex-U.S. commercial operations | Held-for-sale | ||
Discontinued Operations | ||
Net (loss) income from discontinued operations | (320) | 400,499 |
Adjustment of non-cash activities | 4,937 | |
Decrease in accounts receivable | 18,235 | |
Decrease in prepaid expenses and other current assets | 3,746 | |
Decrease in inventory | 242 | |
Decrease in security deposits | 2,191 | |
Decrease in operating lease liabilities | (386) | |
Decrease in accounts payable, accrued expenses and other current liabilities | (53,647) | |
Reclassification of cash proceeds from sale of business to investing activities | (74) | (366,500) |
Net cash (used in) provided by operating activities | (394) | 9,317 |
Proceeds from sale of business, net of cash | 363,233 | |
Net payment of purchase price adjustment for Disposition Transaction | (6,155) | |
Net cash (used in) provided by investing activities | $ (6,155) | $ 363,233 |
Cash, Cash Equivalents and In_3
Cash, Cash Equivalents and Investment Debt Securities (Cash, Cash Equivalents and Investments) (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Cash and cash equivalents: | ||
Cash and cash equivalents: Amortized Cost | $ 102,738 | $ 50,517 |
Cash and cash equivalents: Gross Unrealized Losses | (2) | |
Cash and cash equivalents: Fair Value | 102,736 | 50,517 |
Investment Debt Securities Abstract | ||
Investment debt securities: Amortized Cost | 220,559 | 436,706 |
Investment debt securities: Allowance for Credit Losses | 0 | |
Investment debt securities: Gross Unrealized Gains | 43 | 44 |
Investment debt securities: Gross Unrealized Losses | (624) | (1,701) |
Investment debt securities: Fair Value | 219,978 | 435,049 |
Cash, cash equivalents and investment debt securities: Amortized Cost | 323,297 | 487,223 |
Cash, cash equivalents and investment debt securities: Gross Unrealized Gains | 43 | 44 |
Cash, cash equivalents and investment debt securities: Gross Unrealized Losses | (626) | (1,701) |
Cash, cash equivalents and investment debt securities: Fair Value | 322,714 | 485,566 |
Commercial paper | ||
Investment Debt Securities Abstract | ||
Investment debt securities: Amortized Cost | 83,332 | 102,379 |
Investment debt securities: Allowance for Credit Losses | 0 | |
Investment debt securities: Gross Unrealized Gains | 0 | 7 |
Investment debt securities: Gross Unrealized Losses | (116) | (183) |
Investment debt securities: Fair Value | 83,216 | 102,203 |
Corporate debt securities | ||
Investment Debt Securities Abstract | ||
Investment debt securities: Amortized Cost | 126,020 | 304,234 |
Investment debt securities: Allowance for Credit Losses | 0 | |
Investment debt securities: Gross Unrealized Gains | 43 | 33 |
Investment debt securities: Gross Unrealized Losses | (504) | (1,390) |
Investment debt securities: Fair Value | 125,559 | 302,877 |
U.S. government agency bonds | ||
Investment Debt Securities Abstract | ||
Investment debt securities: Amortized Cost | 6,225 | 24,100 |
Investment debt securities: Gross Unrealized Gains | 4 | |
Investment debt securities: Gross Unrealized Losses | (4) | (109) |
Investment debt securities: Fair Value | 6,221 | 23,995 |
U.S Treasury securities | ||
Investment Debt Securities Abstract | ||
Investment debt securities: Amortized Cost | 4,982 | 5,993 |
Investment debt securities: Gross Unrealized Losses | 0 | (19) |
Investment debt securities: Fair Value | 4,982 | 5,974 |
Cash and money market funds | ||
Cash and cash equivalents: | ||
Cash and cash equivalents: Amortized Cost | 97,764 | 50,517 |
Cash and cash equivalents: Gross Unrealized Losses | 0 | |
Cash and cash equivalents: Fair Value | 97,764 | $ 50,517 |
Commercial paper | ||
Cash and cash equivalents: | ||
Cash and cash equivalents: Amortized Cost | 4,974 | |
Cash and cash equivalents: Gross Unrealized Losses | (2) | |
Cash and cash equivalents: Fair Value | $ 4,972 |
Cash, Cash Equivalents and In_4
Cash, Cash Equivalents and Investment Debt Securities (Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value) (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Total available for sale securities, Less than 12 months, Fair Value | $ 179,454 | $ 374,417 |
Total available for sale securities Less than 12 months, Gross Unrealized Holding Losses | (455) | (1,485) |
Total available for sale securities, More than 12 months, Fair Value | 19,892 | 27,494 |
Total available for sale securities more than 12 months, Gross Unrealized Holding Losses | (169) | (216) |
Available-for-sale securities, Total Fair Value | 199,346 | 401,911 |
Available-for-sale securities, Total Gross Unrealized Losses | (624) | (1,701) |
Commercial paper | ||
Total available for sale securities, Less than 12 months, Fair Value | 83,216 | 93,659 |
Total available for sale securities Less than 12 months, Gross Unrealized Holding Losses | (116) | (183) |
Available-for-sale securities, Total Fair Value | 83,216 | 93,659 |
Available-for-sale securities, Total Gross Unrealized Losses | (116) | (183) |
Corporate debt securities | ||
Total available for sale securities, Less than 12 months, Fair Value | 93,015 | 256,918 |
Total available for sale securities Less than 12 months, Gross Unrealized Holding Losses | (337) | (1,174) |
Total available for sale securities, More than 12 months, Fair Value | 16,894 | 27,494 |
Total available for sale securities more than 12 months, Gross Unrealized Holding Losses | (167) | (216) |
Available-for-sale securities, Total Fair Value | 109,909 | 284,412 |
Available-for-sale securities, Total Gross Unrealized Losses | (504) | (1,390) |
U.S. government agency bonds | ||
Total available for sale securities, Less than 12 months, Fair Value | 3,223 | 17,866 |
Total available for sale securities Less than 12 months, Gross Unrealized Holding Losses | (2) | (109) |
Total available for sale securities, More than 12 months, Fair Value | 2,998 | |
Total available for sale securities more than 12 months, Gross Unrealized Holding Losses | (2) | |
Available-for-sale securities, Total Fair Value | 6,221 | 17,866 |
Available-for-sale securities, Total Gross Unrealized Losses | $ (4) | (109) |
U.S Treasury securities | ||
Total available for sale securities, Less than 12 months, Fair Value | 5,974 | |
Total available for sale securities Less than 12 months, Gross Unrealized Holding Losses | (19) | |
Available-for-sale securities, Total Fair Value | 5,974 | |
Available-for-sale securities, Total Gross Unrealized Losses | $ (19) |
Cash, Cash Equivalents and In_5
Cash, Cash Equivalents and Investment Debt Securities (Narrative) (Details) $ in Millions | Sep. 30, 2023 USD ($) security | Dec. 31, 2022 USD ($) security |
Cash, Cash Equivalents and Investment Debt Securities | ||
Number of positions that were in a continuous unrealized loss position for more than twelve months | security | 57 | 122 |
Accrued investment income receivable | $ | $ 1.1 | $ 2.4 |
Fair Value Measurements (Fair V
Fair Value Measurements (Fair Value, Marketable Securities Measured on Recurring and Nonrecurring Basis) (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and cash equivalents, fair value disclosure | $ 102,736 | $ 50,517 |
Available-for-sale securities, fair value disclosure | 219,978 | 435,049 |
Total financial assets | 297,894 | 462,084 |
Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total financial assets | 82,898 | 33,009 |
Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total financial assets | 214,996 | 429,075 |
Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total financial assets | 0 | 0 |
Commercial paper | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Available-for-sale securities, fair value disclosure | 83,216 | 102,203 |
Commercial paper | Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Available-for-sale securities, fair value disclosure | 0 | 0 |
Commercial paper | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Available-for-sale securities, fair value disclosure | 83,216 | 102,203 |
Commercial paper | Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Available-for-sale securities, fair value disclosure | 0 | 0 |
Corporate debt securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Available-for-sale securities, fair value disclosure | 125,559 | 302,877 |
Corporate debt securities | Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Available-for-sale securities, fair value disclosure | 0 | 0 |
Corporate debt securities | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Available-for-sale securities, fair value disclosure | 125,559 | 302,877 |
Corporate debt securities | Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Available-for-sale securities, fair value disclosure | 0 | 0 |
U.S. government agency bonds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Available-for-sale securities, fair value disclosure | 6,221 | 23,995 |
U.S. government agency bonds | Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Available-for-sale securities, fair value disclosure | 0 | 0 |
U.S. government agency bonds | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Available-for-sale securities, fair value disclosure | 6,221 | 23,995 |
U.S. government agency bonds | Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Available-for-sale securities, fair value disclosure | 0 | 0 |
U.S Treasury securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Available-for-sale securities, fair value disclosure | 4,982 | 5,974 |
U.S Treasury securities | Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Available-for-sale securities, fair value disclosure | 4,982 | 5,974 |
U.S Treasury securities | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Available-for-sale securities, fair value disclosure | 0 | 0 |
U.S Treasury securities | Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Available-for-sale securities, fair value disclosure | 0 | 0 |
Money market funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and cash equivalents, fair value disclosure | 77,916 | 27,035 |
Money market funds | Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and cash equivalents, fair value disclosure | 77,916 | 27,035 |
Money market funds | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and cash equivalents, fair value disclosure | 0 | 0 |
Money market funds | Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and cash equivalents, fair value disclosure | $ 0 | $ 0 |
Fair Value Measurements (Schedu
Fair Value Measurements (Schedule of Available for Sale Securities Debt Maturities) (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Fair Value Measurements | ||
Due in one year or less | $ 218,487 | $ 391,488 |
Due after one year through two years | 1,491 | 43,561 |
Total investment debt securities | $ 219,978 | $ 435,049 |
Fair Value Measurements (Narrat
Fair Value Measurements (Narratives) (Details) | Sep. 30, 2023 | Aug. 17, 2021 | May 14, 2019 |
2026 convertible secured notes | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Interest rate on debt | 3.50% | 3.50% | |
2026 Convertible Notes | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Interest rate on debt | 2% | 2% | |
2023 Convertible Notes | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Interest rate on debt | 3.25% |
Fixed Assets, Net (Fixed Assets
Fixed Assets, Net (Fixed Assets Stated at Cost) (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Fixed assets | $ 2,153 | $ 4,787 |
Less: accumulated depreciation | (1,331) | (3,800) |
Fixed assets, net | 822 | 987 |
Office equipment and software | ||
Property, Plant and Equipment [Line Items] | ||
Fixed assets | $ 478 | 3,112 |
Property, Plant and Equipment, Useful Life | 3 years | |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Fixed assets | $ 395 | 395 |
Property, Plant and Equipment, Estimated Useful Lives | us-gaap:UsefulLifeShorterOfTermOfLeaseOrAssetUtilityMember, us-gaap:UsefulLifeTermOfLeaseMember | |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Fixed assets | $ 1,280 | $ 1,280 |
Property, Plant and Equipment, Useful Life | 7 years |
Inventory (Schedule of Inventor
Inventory (Schedule of Inventory) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2023 | Dec. 31, 2022 | |
Inventory | |||
Work-in-process | $ 2,453 | $ 2,453 | $ 6,230 |
Finished goods | 196 | 196 | 232 |
Inventory | 2,649 | 2,649 | $ 6,462 |
Write-off of inventory | $ 3,000 | $ 3,054 |
Accounts Payable, Accrued Exp_3
Accounts Payable, Accrued Expenses and Other Liabilities (Schedule of Accounts Payable and Accrued Liabilities) (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Feb. 28, 2022 | Jun. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Accounts payable | $ 10,267 | $ 14,234 | ||||
Accrued employee compensation | 20,486 | 24,737 | ||||
Accrued contracted services | 37,515 | 58,875 | ||||
Accrued restructuring | 5,611 | 0 | ||||
Accrued rebates, returns, discounts and other incentives | 11,527 | 14,460 | ||||
Accrued income taxes payable | 2,868 | 3,144 | ||||
Other liabilities | 1,220 | 1,527 | ||||
Accounts payable, accrued expenses and other liabilities | $ 89,494 | $ 116,977 | ||||
SME scheme | UK tax authority | Foreign tax authority | ||||||
Percentage of credit eligible from tax authority | 33.40% | |||||
RDEC scheme | UK tax authority | ||||||
Research and development expense, decrease | $ 3,800 | $ 3,800 | $ 3,500 | $ 3,500 | ||
RDEC scheme | UK tax authority | Foreign tax authority | ||||||
Percentage of credit eligible from tax authority | 12% |
Current and Long-Term Debt- Nar
Current and Long-Term Debt- Narratives (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 9 Months Ended | |||||||
Aug. 20, 2021 | Aug. 17, 2021 | Aug. 10, 2021 | May 14, 2019 | Jul. 31, 2023 | Sep. 30, 2022 | Aug. 31, 2022 | Sep. 30, 2023 | Dec. 31, 2022 | |
Debt Instrument [Line Items] | |||||||||
Cash repayment for the total principal | $ 109,808 | ||||||||
Stock issued for services | $ 10,000 | ||||||||
Stock issued for services, (in shares) | 769,823 | ||||||||
Issue price | $ 12.99 | ||||||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |||||||
2023 Convertible Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Cash repayment for the total principal | $ 109,800 | ||||||||
Payment of the remaining outstanding interest due | $ 1,800 | ||||||||
Interest rate | 3.25% | ||||||||
Cost of debt issued | $ 900 | ||||||||
Convertible debt, original debt | $ 306,500 | ||||||||
Convertible debt | 292,400 | ||||||||
2026 Convertible Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt, face amount | $ 230,000 | ||||||||
Interest rate | 2% | 2% | |||||||
Proceeds from convertible debt | $ 223,400 | ||||||||
Cost of debt issued | $ 6,600 | ||||||||
Convertible debt, original debt | 114,700 | ||||||||
Convertible debt | 90,000 | ||||||||
Interest rate, effective | 2.44% | 2.44% | |||||||
2026 convertible secured notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt, face amount | $ 500,000 | $ 117,600 | |||||||
Interest rate | 3.50% | 3.50% | |||||||
Proceeds from convertible debt | $ 116,700 | ||||||||
Convertible debt | $ 219,500 | $ 219,500 | |||||||
Convertible debt repurchased, face amount | 388,900 | 388,900 | |||||||
Convertible debt repurchased | $ 258,100 | $ 258,100 | |||||||
Common stock issued | 11,329,399 | 11,329,399 | |||||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |||||||
Interest rate, effective | 4.03% | 4.03% |
Current and Long-Term Debt (Sch
Current and Long-Term Debt (Schedule of Long-term Debt Instruments and Interest Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Long-term debt, Current | ||||||
Principal | $ 109,808 | |||||
Unamortized debt issuance costs | (239) | |||||
Net carrying amount | 109,569 | |||||
Long-term debt, noncurrent | ||||||
Principal | $ 226,492 | $ 226,492 | 226,492 | |||
Unamortized debt issuance costs | (2,636) | (2,636) | (3,388) | |||
Net carrying amount | 223,856 | 223,856 | 223,104 | |||
Interest Expense, Long-term Debt [Abstract] | ||||||
Contractual interest expense | 1,549 | $ 4,596 | 6,432 | $ 16,337 | ||
Amortization of debt issuance costs | 253 | 641 | 991 | 2,242 | ||
Total interest expense | 1,802 | $ 5,237 | $ 5,237 | 7,423 | 18,579 | |
2026 Convertible Secured Notes | ||||||
Long-term debt | ||||||
Principal | 111,143 | 111,143 | 111,143 | |||
Unamortized debt issuance costs | (1,333) | (1,333) | (1,728) | |||
Net carrying amount | 109,810 | 109,810 | 109,415 | |||
Interest Expense, Long-term Debt [Abstract] | ||||||
Contractual interest expense | 972 | 3,127 | 2,918 | 11,877 | ||
Amortization of debt issuance costs | 133 | 407 | 395 | 1,540 | ||
Total interest expense | 1,105 | 3,534 | 3,313 | 13,417 | ||
2026 Convertible Notes | ||||||
Long-term debt | ||||||
Principal | 115,349 | 115,349 | 115,349 | |||
Unamortized debt issuance costs | (1,303) | (1,303) | (1,660) | |||
Net carrying amount | 114,046 | 114,046 | 113,689 | |||
Interest Expense, Long-term Debt [Abstract] | ||||||
Contractual interest expense | 577 | 577 | 1,730 | 1,731 | ||
Amortization of debt issuance costs | 120 | 117 | 357 | 349 | ||
Total interest expense | 697 | 694 | 2,087 | 2,080 | ||
2023 Convertible Notes | ||||||
Long-term debt | ||||||
Principal | 109,808 | |||||
Unamortized debt issuance costs | (239) | |||||
Net carrying amount | 109,569 | |||||
Interest Expense, Long-term Debt [Abstract] | ||||||
Contractual interest expense | 892 | 1,784 | 2,729 | |||
Amortization of debt issuance costs | 117 | 239 | 353 | |||
Total interest expense | $ 1,009 | 2,023 | $ 3,082 | |||
2023 Convertible Notes | Current portion of long-term debt | ||||||
Long-term debt | ||||||
Unamortized debt issuance costs | $ (2,600) | $ (2,600) | $ (200) |
Current and Long-Term Debt - Fa
Current and Long-Term Debt - Fair value of convertible debt (Details) - Level 2 - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
2026 convertible secured notes | ||
Debt Instrument [Line Items] | ||
Fair value of convertible debt | $ 119,201 | $ 108,012 |
2026 Convertible Notes | ||
Debt Instrument [Line Items] | ||
Fair value of convertible debt | $ 113,042 | 87,307 |
2023 Convertible Notes | ||
Debt Instrument [Line Items] | ||
Fair value of convertible debt | $ 107,680 |
Current and Long-Term Debt- Ini
Current and Long-Term Debt- Initial conversion of convertible debt (Details) | 9 Months Ended |
Sep. 30, 2023 $ / shares | |
2026 convertible secured notes | |
Debt Instrument [Line Items] | |
Initial conversion rate | 47.7612 |
Approximate conversion price | $ 20.94 |
2026 Convertible Notes | |
Debt Instrument [Line Items] | |
Initial conversion rate | 9.2123 |
Approximate conversion price | $ 108.55 |
Current and Long-Term Debt - No
Current and Long-Term Debt - Note Indentures (Details) | 9 Months Ended |
Sep. 30, 2023 item D | |
Debt Instrument [Line Items] | |
Debt Instrument, Convertible, Threshold Trading Days | 20 |
Debt Instrument, Convertible, Threshold Consecutive Trading Days | 30 |
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger | 130% |
Debt Instrument Convertible Threshold Sale Price Of Common Stock Conversion Rate Product Percentage Maximum | 98% |
Average percentage of closing sale price of common stock | 100% |
Percentage of repurchase price is equal to principal amount of convertible notes | 100% |
Minimum | |
Debt Instrument [Line Items] | |
Debt Instrument, Default, Threshold Percentage Of Aggregate Principal Amount Of Debt Holders Who Can Declare Due And Payable | 25% |
Convertible Debt | |
Debt Instrument [Line Items] | |
Debt Instrument, Number Of Series Of Convertible Notes | item | 2 |
Debt Instrument, Convertible Threshold Consecutive Business Days | 5 days |
Debt Instrument, Convertible Threshold Consecutive Trading Day Period | 5 days |
Current and Long-Term Debt - Ex
Current and Long-Term Debt - Exchange of convertible debt - Narratives (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 |
2026 convertible secured notes | |||
Debt Instrument [Line Items] | |||
Debt instrument liability component effective interest rate | 4.03% | 4.03% | |
2026 convertible secured notes | Current portion of long-term debt | |||
Debt Instrument [Line Items] | |||
Debt issuance costs | $ 3,400 | ||
2026 Convertible Notes | |||
Debt Instrument [Line Items] | |||
Debt instrument liability component effective interest rate | 2.44% | 2.44% | |
Debt issuance costs | $ 1,303 | 1,660 | |
2023 Convertible Notes | |||
Debt Instrument [Line Items] | |||
Debt issuance costs | 239 | ||
2023 Convertible Notes | Current portion of long-term debt | |||
Debt Instrument [Line Items] | |||
Debt issuance costs | $ 2,600 | $ 200 |
Current and Long-Term Debt - In
Current and Long-Term Debt - Interest Expense (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Convertible Debt | |||
Interest payable, current | $ 1,400 | $ 3,500 | |
Debt Related Commitment Fees and Debt Issuance Costs | 8,700 | ||
Cash payments for interest | 8,600 | $ 22,700 | |
2026 Convertible Notes | |||
Debt issuance costs | 1,303 | 1,660 | |
2023 Convertible Notes | |||
Debt issuance costs | 239 | ||
2023 Convertible Notes | Current portion of long-term debt | |||
Debt issuance costs | $ 2,600 | $ 200 |
Research and Development Tax _2
Research and Development Tax Credit (Narrative) (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2022 | Jun. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Additional research and development expense due to foreign currency translation | $ 0.2 | ||||
SME scheme | UK tax authority | Foreign tax authority | |||||
Percentage of credit eligible from tax authority | 33.40% | ||||
RDEC scheme | UK tax authority | |||||
Research and development expense, decrease | $ 3.8 | $ 3.8 | $ 3.5 | $ 3.5 | |
RDEC scheme | UK tax authority | Foreign tax authority | |||||
Percentage of credit eligible from tax authority | 12% |
Restructuring - Narratives (Det
Restructuring - Narratives (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Jun. 23, 2023 | Sep. 30, 2023 | Sep. 30, 2023 | |
Restructuring | |||
Percentage of workforce reduction | 33.33% | ||
Restructuring costs | $ 6,300 | $ 6,260 |
Restructuring - Rollforward of
Restructuring - Rollforward of changes to accrued balances (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2023 | Sep. 30, 2023 | |
Restructuring Reserve [Roll Forward] | ||
Restructuring charges | $ 6,300 | $ 6,260 |
Cash payments made | (649) | |
Accrued balance , Ending Balance | $ 5,611 | $ 5,611 |
Stock Compensation (Narrative)
Stock Compensation (Narrative) (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended |
Apr. 30, 2023 | Sep. 30, 2023 | Sep. 30, 2023 | |
Employee Stock Option [Member] | |||
Share-based compensation not yet recognized | $ 10.4 | $ 10.4 | |
Share-based compensation not yet recognized, period | 1 year 1 month 28 days | ||
RSUs, RSAs, and PRSUs | |||
Share-based compensation not yet recognized, other than options | 31.1 | $ 31.1 | |
Share-based compensation not yet recognized, period | 1 year 3 months 14 days | ||
PRSUs | |||
Performance period | 3 years | ||
Share based compensation expenses | $ 0.5 | $ 1.4 | |
Shares granted during period for stock based compensation | 224,700 | ||
PRSUs | Minimum | |||
Payout percentage, as percent of target award | 0% | 0% | |
PRSUs | Maximum | |||
Payout percentage, as percent of target award | 150% | 150% | |
Equity Incentive Plan ("2023 Plan") | |||
Additional shares available | 1,500,000 | ||
Share based payment award, expiration period | 10 years |
Stock Compensation (Schedule of
Stock Compensation (Schedule of Share Based Compensation Stock Options Activities) (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | |
Stock Compensation | ||
Beginning Outstanding, Number of Shares | shares | 2,087 | |
Granted - Number of Shares | shares | 641 | |
Exercised - Number of Shares | shares | (7) | |
Cancelled/forfeited - Number of Shares | shares | (136) | |
Expired - Number of Shares | shares | (150) | |
Ending Outstanding, Number of Shares | shares | 2,435 | 2,087 |
Expected to vest - Number of shares | shares | 1,012 | |
Exercisable - Number of Shares | shares | 1,423 | |
Beginning Outstanding, Weighted Average Exercise Price | $ / shares | $ 43.51 | |
Granted - Weighted Average Exercise Price | $ / shares | 16.60 | |
Exercised - Weighted Average Exercise Price | $ / shares | 15.04 | |
Cancelled/forfeited - Weighted Average Exercise Price | $ / shares | 19.70 | |
Expired - Weighted Average Exercise Price | $ / shares | 65.34 | |
Ending Outstanding, Weighted Average Exercise Price | $ / shares | 36.82 | $ 43.51 |
Expected to vest - Weighted Average Exercise Price | $ / shares | 18.32 | |
Exercisable - Weighted Average Exercise Price | $ / shares | $ 49.96 | |
Options Outstanding - Weighted Average Remaining Life | 7 years 3 months 18 days | 7 years 1 month 6 days |
Expected to vest - Weighted Average Remaining Term | 8 years 9 months 18 days | |
Exercisable - Weighted Average Remaining Term | 6 years 2 months 12 days | |
Options Outstanding - Aggregate Intrinsic Value | $ | $ 3,681 | $ 4 |
Exercised aggregate intrinsic value | $ | 28 | |
Expected to vest - Aggregate Intrinsic Value | $ | 2,168 | |
Exercisable - Aggregate Intrinsic Value | $ | $ 1,513 |
Stock Compensation (Schedule _2
Stock Compensation (Schedule of Share Based Compensation Arrangement By Share Based Payment Award Grants in Period Fair Value Assumptions) (Details) - Employee Stock Option [Member] | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||
Volatility, minimum | 69.50% | 66.40% |
Volatility, maximum | 72.60% | 67.70% |
Expected term (in years) | 6 years | |
Risk-free interest rate, minimum | 3.60% | 1.30% |
Risk-free interest rate, maximum | 4.30% | 2.80% |
Expected dividend yield | 0% | 0% |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Expected term (in years) | 5 years 6 months | |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Expected term (in years) | 6 years |
Stock Compensation (Schedule _3
Stock Compensation (Schedule of Share-based Compensation, Restricted Stock Units and Award Activity) (Details) - RSUs, RSAs, and PRSUs shares in Thousands | 9 Months Ended |
Sep. 30, 2023 $ / shares shares | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Outstanding, at beginning period | shares | 1,051 |
Granted - Shares | shares | 1,857 |
Vested - Shares | shares | (160) |
Forfeited | shares | 226 |
Outstanding, at ending period | shares | 2,522 |
Outstanding - Weighted Average Fair Value, at beginning period | $ / shares | $ 23.90 |
Granted - Weighted Average Fair Value | $ / shares | 16 |
Vested - Weighted Average Fair Value | $ / shares | 21.56 |
Forfeited - Weighted Average Fair Value | $ / shares | 18.83 |
Outstanding - Weighted Average Fair Value, at ending period | $ / shares | $ 18.24 |
Stock Compensation (Schedule _4
Stock Compensation (Schedule of Stock Based Compensation Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs | ||||
Allocated stock-based compensation | $ 6,653 | $ 5,788 | $ 18,779 | $ 16,658 |
Selling, general and administrative | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs | ||||
Allocated stock-based compensation | 4,710 | 4,411 | 13,774 | 12,485 |
Research and development | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs | ||||
Allocated stock-based compensation | $ 1,943 | $ 1,377 | $ 5,005 | $ 4,173 |
Net Loss Per Share (Schedule of
Net Loss Per Share (Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share) (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||||
Antidilutive securities excluded from computation of earnings per share, amount | 11,556 | 22,178 | 11,415 | 26,994 |
Convertible notes | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||||
Antidilutive securities excluded from computation of earnings per share, amount | 6,370 | 18,462 | 6,737 | 23,169 |
Employee Stock Option [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||||
Antidilutive securities excluded from computation of earnings per share, amount | 2,526 | 2,483 | 2,510 | 2,474 |
Restricted stock units (RSUs) | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||||
Antidilutive securities excluded from computation of earnings per share, amount | 2,660 | 1,233 | 2,168 | 1,351 |
Commitments and Contingencies (
Commitments and Contingencies (Narrative) (Details) | 9 Months Ended | ||
Nov. 03, 2023 complaint | Oct. 26, 2023 complaint | Sep. 30, 2023 item | |
Commitments and Contingencies. | |||
Number of complaints filed | complaint | 4 | 1 | |
Number of patent infringement suits scheduled for trail | item | 2 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Pay vs Performance Disclosure | ||||
Net Income (Loss) | $ (2,790) | $ 267,453 | $ (40,787) | $ 242,641 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Sep. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |