Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 05, 2020 | |
Document Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2020 | |
Entity File Number | 001-34475 | |
Entity Registrant Name | OMEROS CORPORATION | |
Entity Incorporation, State or Country Code | WA | |
Entity Tax Identification Number | 91-1663741 | |
Entity Address, Address Line One | 201 Elliott Avenue West | |
Entity Address, City or Town | Seattle | |
Entity Address, State or Province | WA | |
Entity Address, Postal Zip Code | 98119 | |
City Area Code | 206 | |
Local Phone Number | 676-5000 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | OMER | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 61,652,326 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001285819 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 21,075 | $ 3,084 |
Short-term investments | 132,448 | 57,704 |
Receivables, net | 37,379 | 35,185 |
Inventory | 1,542 | 1,147 |
Prepaid expense and other assets | 3,541 | 6,625 |
Total current assets | 195,985 | 103,745 |
Property and equipment, net | 2,950 | 3,829 |
Right of use assets | 26,116 | 27,082 |
Restricted investments | 1,154 | 1,154 |
Advanced payments, non-current | 870 | 1,159 |
Total assets | 227,075 | 136,969 |
Current liabilities: | ||
Accounts payable | 7,017 | 5,328 |
Accrued expenses | 36,948 | 46,627 |
Current portion of lease liabilities | 3,754 | 3,504 |
Total current liabilities | 47,719 | 55,459 |
Lease liabilities, non-current | 29,717 | 32,318 |
Unsecured convertible senior notes, net | 232,808 | 158,213 |
Deferred tax liability | 4,157 | |
Commitments and contingencies (Note 8) | ||
Shareholders' deficit: | ||
Preferred stock, par value $0.01 per share, 20,000,000 shares authorized; none issued and outstanding at September 30, 2020 and December 31, 2019. | ||
Common stock, par value $0.01 per share, 150,000,000 shares authorized at September 30, 2020 and December 31, 2019; 61,651,152 and 54,200,810 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively. | 616 | 542 |
Additional paid-in capital | 747,457 | 625,048 |
Accumulated deficit | (835,399) | (734,611) |
Total shareholders' deficit | (87,326) | (109,021) |
Total liabilities and shareholders' deficit | $ 227,075 | $ 136,969 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (USD per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized shares | 20,000,000 | 20,000,000 |
Preferred stock, Issued shares | 0 | 0 |
Preferred stock, outstanding shares | 0 | 0 |
Common stock, par value (USD per share) | $ 0.01 | $ 0.01 |
Common stock, authorized shares | 150,000,000 | 150,000,000 |
Common stock, Issued shares | 61,651,152 | 54,200,810 |
Common stock, outstanding shares | 61,651,152 | 54,200,810 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenue: | ||||
Product sales, net | $ 26,114 | $ 29,856 | $ 63,181 | $ 78,389 |
Costs and expenses: | ||||
Cost of product sales | 401 | 278 | 815 | 464 |
Research and development | 31,316 | 23,746 | 84,359 | 69,108 |
Selling, general and administrative | 19,825 | 16,933 | 54,792 | 48,493 |
Total costs and expenses | 51,542 | 40,957 | 139,966 | 118,065 |
Loss from operations | (25,428) | (11,101) | (76,785) | (39,676) |
Loss on early extinguishment of debt | (13,374) | (13,374) | ||
Interest expense | (6,882) | (5,715) | (18,763) | (16,846) |
Other (expense) income | (633) | 353 | 280 | 1,261 |
Loss before income taxes | (46,317) | (16,463) | (108,642) | (55,261) |
Income tax benefit | 7,854 | 7,854 | ||
Net loss | (38,463) | (16,463) | (100,788) | (55,261) |
Comprehensive loss | $ (38,463) | $ (16,463) | $ (100,788) | $ (55,261) |
Basic and diluted net loss per share (USD per share) | $ (0.66) | $ (0.33) | $ (1.81) | $ (1.12) |
Weighted-average shares used to compute basic and diluted net loss per share ( in shares) | 58,233,988 | 49,373,156 | 55,682,379 | 49,157,055 |
Revenue, Product and Service [Extensible List] | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember |
Cost, Product and Service [Extensible List] | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Operating activities: | ||
Net loss | $ (100,788) | $ (55,261) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock-based compensation expense | 11,122 | 10,468 |
Non-cash interest expense | 8,169 | 6,790 |
Depreciation and amortization | 1,218 | 1,262 |
Loss on early extinguishment of debt | 13,374 | |
Deferred income tax | (7,854) | |
Fair value settlement upon termination of cap call contract | 838 | |
Changes in operating assets and liabilities: | ||
Receivables | (2,194) | (7,113) |
Inventory | (395) | (1,085) |
Prepaid expenses and other assets | 3,533 | 959 |
Accounts payable and accrued expenses | (8,702) | 6,921 |
Net cash used in operating activities | (81,679) | (37,059) |
Investing activities: | ||
Purchases of property and equipment | (283) | (318) |
Purchases of investments | (133,190) | (594) |
Proceeds from the sale and maturities of investments | 58,446 | 36,750 |
Net cash (used in) provided by investing activities | (75,027) | 35,838 |
Financing activities: | ||
Proceeds from issuance of convertible senior notes, net of issuance costs | 218,245 | |
Purchases of capped calls related to convertible senior notes | (23,223) | |
Payments for repurchases of convertible senior notes | (125,638) | |
Proceeds from termination of capped call contracts | 7,549 | |
Proceeds from issuance of common stock, net | 93,675 | |
Proceeds upon exercise of stock options | 4,978 | 5,034 |
Principal payments on finance lease liabilities | (889) | (813) |
Net cash provided by financing activities | 174,697 | 4,221 |
Net increase in cash and cash equivalents | 17,991 | 3,000 |
Cash and cash equivalents at beginning of period | 3,084 | 5,861 |
Cash and cash equivalents at end of period | 21,075 | 8,861 |
Supplemental cash flow information | ||
Cash paid for interest | 8,564 | 6,811 |
Property acquired under finance lease | $ 216 | $ 886 |
Organization and Significant Ac
Organization and Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Organization and Significant Accounting Policies | Note 1—Organization and Significant Accounting Policies Organization We are a commercial-stage biopharmaceutical company committed to discovering, developing and commercializing small-molecule and protein therapeutics for large-market as well as orphan indications targeting inflammation, complement-mediated diseases, disorders of the central nervous system, addiction and immune-related diseases, including cancers. Our first drug product, OMIDRIA, is marketed in the United States (U.S.) for use during cataract surgery or intraocular lens replacement. Basis of Presentation Our condensed consolidated financial statements include the financial position and results of operations of Omeros Corporation (Omeros) and our wholly owned subsidiaries. All intercompany transactions have been eliminated, and we have determined we operate in one segment. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. The information as of September 30, 2020 and December 31, 2019 and for the three and nine months ended September 30, 2020 and 2019 includes all adjustments, which include normal recurring adjustments, necessary to present fairly our interim financial information. The Condensed Consolidated Balance Sheet at December 31, 2019 has been derived from our audited financial statements but does not include all of the information and footnotes required by GAAP for audited annual financial information. The accompanying unaudited condensed consolidated financial statements and related notes thereto should be read in conjunction with the audited consolidated financial statements and related notes thereto that are included in our Annual Report on Form 10-K for the year ended December 31, 2019, which was filed with the U.S. Securities and Exchange Commission (SEC) on March 2, 2020. Risks and Uncertainties In its 2021 outpatient prospective payment system (OPPS) proposed rule, the Centers for Medicare and Medicaid Services (CMS), a part of the Department of Health and Human Services (HHS), confirmed the October 1, 2020 expiration of pass-through reimbursement for OMIDRIA and indicated an intention to package payment for OMIDRIA with payment for the associated surgical procedure in both the hospital outpatient department (HOPD) and ambulatory surgery center (ASC) settings. We are continuing to pursue administrative and legislative avenues to secure separate payment for OMIDRIA; however, we cannot provide assurance that these efforts will be successful. The outbreak of the novel strain of coronavirus (SARS-CoV-2) that causes COVID-19 and the responses to the global pandemic by various governmental authorities, the medical community and others continue to have a significant impact on our business. In March 2020, ASCs and hospitals using OMIDRIA postponed nearly all cataract surgery in response to recommendations from government and medical organizations. As a result, we did not record any sales of OMIDRIA to our wholesalers from March 25 to May 19, 2020. However, by the end of June 2020, the run rate of weekly OMIDRIA sales had recovered to levels approximating those seen prior to the pandemic. Due to the unknown magnitude, duration and outcome of the COVID-19 pandemic, it is not possible to estimate precisely its impact on our business, operations or financial results; however, the impact has been and could continue to be material. As of September 30, 2020, we had cash, cash equivalents and short-term investments of $153.5 million and an accounts receivable-based line of credit that allows us to borrow up to the lesser of $50.0 million or 85% of our accounts receivable borrowing base, less certain reserves. We have incurred losses from operations of $76.8 million for the nine months ended September 30, 2020, and cash used in operating activities was $81.7 million for the nine months ended September 30, 2020. We will continue to incur losses from operating activities until our revenues exceed operating costs and debt service obligations. OMIDRIA pass-through reimbursement from CMS expired on October 1, 2020. If continued separate payment is determined not to be reasonably achievable in the near term, we have developed a commercial strategy that can be quickly implemented to lower the per-vial sales price of OMIDRIA to achieve substantially larger sales volumes. We believe that this approach would result in substantial revenues from OMIDRIA, in part because CMS Medicare Part B beneficiaries only represent approximately 45% of cataract surgery procedures annually. We anticipate narsoplimab for HSCT-TMA will receive FDA approval and will launch in early to mid-2021. Currently we cannot fully predict the timing or the magnitude of narsoplimab revenues, but we believe they will be significant. Execution of our sales and marketing strategies for the launch of narsoplimab for HSCT-TMA is underway. These plans include various milestones at which we commit to incremental activities, providing for flexibility in the timing of costs incurred should the approval of narsoplimab be accelerated or delayed. If warranted, we will adjust the timing and associated costs of our HSCT-TMA launch activities as we advance through the biologics license application (BLA) review and approval process. We plan to continue to fund our operations for at least the next twelve months with our cash and investments on hand, from sales of OMIDRIA and, if FDA approval is granted, from sales of narsoplimab for HSCT-TMA. There is also the possibility that we could generate revenue from sales of narsoplimab for the treatment of COVID-19. In addition, we may utilize funds available under our accounts receivable-based line of credit, which allows us to borrow up to 85% of our available accounts receivable borrowing base, less certain reserves, or $50.0 million, whichever is less. Should it be necessary or determined to be strategically advantageous, we also could pursue debt financings, public and private offerings of our equity securities similar to those we have completed previously, or other strategic transactions, which may include licensing a portion of our existing technology. Should it be necessary to manage our operating expenses, we would reduce our projected cash requirements through reduction of our expenses by delaying clinical trials, reducing selected research and development efforts, or implementing other restructuring activities. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant items subject to such estimates include revenue recognition, stock-based compensation expense and accruals for clinical trials, manufacturing of drug product and clinical drug supply and other contingencies. We base our estimates on historical experience and on various other factors, including the impact of the COVID-19 pandemic, that we believe are reasonable under the circumstances; however, actual results could differ from these estimates. Revenue Recognition When we enter into a customer contract, we perform the following five steps: (i) identify the contract with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) we satisfy a performance obligation. We generally record revenue from product sales when the product is delivered to our wholesalers. Product sales are recorded net of wholesaler distribution fees and estimated chargebacks, rebates, returns and purchase-volume discounts. Accruals or allowances are established for these deductions in the same period when revenue is recognized, and actual amounts incurred are offset against the applicable accruals or allowances. We reflect each of these accruals or allowances as either a reduction in the related accounts receivable or as an accrued liability depending on how the amount is expected to be settled. Right-of-Use Assets and Related Lease Liabilities We record operating leases as right-of-use assets and recognize the related lease liabilities equal to the fair value of the lease payments using our incremental borrowing rate when the implicit rate in the lease agreement is not readily available. We recognize variable lease payments when incurred. Costs associated with operating lease assets are recognized on a straight-line basis within operating expenses over the term of the lease. We record finance leases as a component of property and equipment and amortize these assets within operating expenses on a straight-line basis to their residual values over the shorter of the term of the underlying lease or the estimated useful life of the equipment. The interest component of a finance lease is included in interest expense and recognized using the effective interest method over the lease term. We account for leases with initial terms of 12 months or less as operating expenses on a straight-line basis over the lease term. Advance Payments Advance payments for goods or services that will be used or rendered for future research and development activities are deferred and then recognized as an expense as the related goods are delivered or the services are performed, or when the goods or services are no longer expected to be provided. Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their tax bases. Deferred tax assets and liabilities are measured using enacted tax rates applied to taxable income in the years in which those temporary differences are expected to be recovered or settled. We recognize the effect of income tax positions only if those positions are more likely than not of being sustained upon an examination. A valuation allowance is established when it is more likely than not that the deferred tax assets will not be realized. Stock-Based Compensation Stock-based compensation expense is recognized for all share-based payments based on estimated fair values as of the date of grant. The fair value of our stock options is calculated using the Black-Scholes option-pricing model which requires judgmental assumptions including volatility, forfeiture rates and expected option life. We use the straight-line method to allocate stock-based compensation cost to reporting periods over each optionee’s requisite service period, which is generally the vesting period. Recently Adopted Pronouncements In June 2016, the Financial Accounting Standards Board issued ASU 2016-13, Financial Instruments—Credit Losses , (Topic 326) which changes how entities account for credit losses on most financial assets and certain other instruments and expands disclosures. The standard is effective for annual and interim periods beginning after December 15, 2019 with early adoption permitted. We adopted the standard on January 1, 2020 and the adoption did not have a material impact on our consolidated financial statements and disclosures. Recent Accounting Pronouncements Not Yet Adopted In August 2020, the Financial Accounting Standards Board Debt—Debt with Conversion Options and Derivatives and Hedging—Contracts in Entity’s Own Equity Derivatives and Hedging convertible debt instrument was issued at a substantial premium. Among other potential impacts, this change is expected to reduce reported interest expense, increase reported net income, and result in a reclassification of certain conversion feature balance sheet amounts from stockholders’ equity to liabilities as it relates to the Company’s convertible senior notes. Additionally, ASU 2020-06 requires the application of the if-converted method to calculate the impact of convertible instruments on diluted earnings per share (EPS), which is consistent with the Company’s accounting treatment under the current standard. ASU 2020-06 is effective for fiscal years beginning after December 15, 2021, with early adoption permitted for fiscal years beginning after December 15, 2020, and can be adopted on either a fully retrospective or modified retrospective basis. The Company is evaluating the impact of this pronouncement on its consolidated financial statements. |
Net Loss Per Share
Net Loss Per Share | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Note 2—Net Loss Per Share Basic net loss per share is calculated by dividing the net loss by the weighted-average number of common shares outstanding for the period. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of common shares and dilutive common share equivalents outstanding for the period, determined using the treasury-stock method. Common share equivalents are excluded from the diluted net loss per share computation if their effect is anti-dilutive. The basic and diluted net loss per share amounts for the three and nine months ended September 30, 2020 and 2019 were computed based on the shares of common stock outstanding during the respective periods. Potentially dilutive securities excluded from the diluted loss per share calculation are as follows: Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Outstanding options to purchase common stock 1,456,454 3,026,871 1,777,393 2,829,807 Outstanding warrants to purchase common stock 9,828 18,128 11,712 16,923 Total potentially dilutive shares excluded from loss per share 1,466,282 3,044,999 1,789,105 2,846,730 |
Certain Balance Sheet Accounts
Certain Balance Sheet Accounts | 9 Months Ended |
Sep. 30, 2020 | |
Receivables [Abstract] | |
Certain Balance Sheet Accounts | Note 3—Certain Balance Sheet Accounts Accounts Receivable, net Accounts receivable, net consist of the following: September 30, December 31, 2020 2019 (In thousands) Trade receivables, net $ 37,218 $ 35,074 Sublease and other receivables 161 111 Total accounts receivables, net $ 37,379 $ 35,185 Trade receivables as of September 30, 2020 are shown net of $8.7 million of product return and chargeback allowances. Trade receivables as of December 31, 2019 are shown net of $1.6 million of chargeback allowances. Inventory Inventory consists of the following: September 30, December 31, 2020 2019 (In thousands) Raw materials $ 79 $ 91 Work-in-progress 797 338 Finished goods 666 718 Total inventory $ 1,542 $ 1,147 Property and Equipment, Net Property and equipment, net consists of the following: September 30, December 31, 2020 2019 (In thousands) Finance leases $ 5,690 $ 5,474 Laboratory equipment 2,903 2,844 Computer equipment 985 921 Office equipment and furniture 625 625 Total cost 10,203 9,864 Less accumulated depreciation and amortization (7,253) (6,035) Total property and equipment, net $ 2,950 $ 3,829 Depreciation expense for the three months ended September 30, 2020 and 2019 was $0.4 million for both periods, respectively. Depreciation expense for the nine months ended September 30, 2020 and 2019 was $1.2 million and $1.3 million, respectively. Accrued Expenses Accrued expenses consist of the following: September 30, December 31, 2020 2019 (In thousands) Sales rebates, fees and discounts $ 10,201 $ 10,870 Contract research and development 8,813 24,107 Employee compensation 6,415 3,546 Consulting and professional fees 5,479 3,610 Interest payable 3,736 1,640 Clinical trials 1,482 1,982 Other accrued expenses 822 872 Total accrued expenses $ 36,948 $ 46,627 |
Fair-Value Measurements
Fair-Value Measurements | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair-Value Measurements | Note 4—Fair-Value Measurements As of September 30, 2020, and December 31, 2019, all investments were classified as short-term and available-for-sale on the accompanying Condensed Consolidated Balance Sheets. Investment income, which was included as a component of other income, consists of interest earned. On a recurring basis, we measure certain financial assets at fair value. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability, an exit price, in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The accounting standard establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs, where available. The following summarizes the three levels of inputs required: Level 1—Observable inputs for identical assets or liabilities, such as quoted prices in active markets; Level 2—Inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3—Unobservable inputs in which little or no market data exists, therefore they are developed using estimates and assumptions developed by us, which reflect those that a market participant would use. Our fair value hierarchy for our financial assets and liabilities measured at fair value on a recurring basis are as follows: September 30, 2020 Level 1 Level 2 Level 3 Total (In thousands) Assets: Money-market funds classified as non-current restricted investments $ 1,154 $ — $ — $ 1,154 Money-market funds classified as short-term investments 132,448 — — 132,448 Total $ 133,602 $ — $ — $ 133,602 December 31, 2019 Level 1 Level 2 Level 3 Total (In thousands) Assets: Money-market funds classified as non-current restricted investments $ 1,154 $ — $ — $ 1,154 Money-market funds classified as short-term investments 57,704 — — 57,704 Total $ 58,858 $ — $ — $ 58,858 Cash held in demand deposit accounts of $21.1 million and $3.1 million is excluded from our fair-value hierarchy disclosure as of September 30, 2020 and December 31, 2019, respectively. There were no unrealized gains or losses associated with our investments as of September 30, 2020 or December 31, 2019. The carrying amounts reported in the accompanying Condensed Consolidated Balance Sheets for receivables, accounts payable, other current monetary assets and liabilities approximate fair value. See “Note 6—Unsecured Convertible Senior Notes” for the carrying amount and estimated fair value of our 6.25% Convertible Senior Notes due 2023 . |
Line Of Credit
Line Of Credit | 9 Months Ended |
Sep. 30, 2020 | |
Line of Credit | |
Line of Credit | Note 5—Line of Credit We have a Loan and Security Agreement with Silicon Valley Bank, which provides for a $50.0 million revolving line of credit facility (the Line of Credit Agreement). Under the Line of Credit Agreement, we may draw, on a revolving basis, up to the lesser of $50.0 million or 85.0% of our eligible accounts receivable, less certain reserves. Interest on amounts outstanding is payable monthly at the greater of 5.5% and the prime rate. The line of credit is secured by all our assets excluding intellectual property and development program inventories. As of September 30, 2020 and December 31, 2019, we had no outstanding borrowings under the Line of Credit Agreement. |
Unsecured Convertible Senior No
Unsecured Convertible Senior Notes | 9 Months Ended |
Sep. 30, 2020 | |
Unsecured Convertible Senior Notes | |
Unsecured Convertible Senior Notes | Note 6—Unsecured Convertible Senior Notes Unsecured convertible senior notes outstanding at September 30, 2020 and December 31, 2019 are as follows: Balance as of September 30, 2020 2023 Notes 2026 Notes Total (In thousands) Principal amount $ 95,000 $ 225,030 $ 320,030 Unamortized discount (18,276) (62,591) (80,867) Unamortized issuance costs attributable to liability component (1,583) (4,772) (6,355) Total Convertible Senior Notes, net $ 75,141 $ 157,667 $ 232,808 Fair value of outstanding Convertible Senior Notes (2) $ 89,775 $ 182,043 Amount by which the Convertible Senior Notes if-converted value exceeds their principal amount $ — $ — Equity component $ 25,854 $ 63,544 Unamortized issuance costs (837) (1,916) Net carrying amount of equity component (1) $ 25,017 $ 61,628 Balance as of December 31, 2019 2023 Notes 2026 Notes Total (In thousands) Principal amount $ 210,000 $ — $ 210,000 Unamortized discount (47,660) — (47,660) Unamortized issuance costs attributable to liability component (4,127) — (4,127) Total Convertible Senior Notes, net $ 158,213 $ — $ 158,213 Fair value of outstanding Convertible Senior Notes (2) $ 208,163 $ — Amount by which the Convertible Senior Notes if-converted value exceeds their principal amount $ — $ — Equity component $ 57,152 $ — Unamortized issuance costs (1,851) — Net carrying amount of equity component (1) $ 55,301 $ — (1) Included in the condensed consolidated balance sheet within additional paid-in capital (2) The fair value is classified as Level 3 due to the limited trading activity for the Convertible Senior Notes. 2023 Convertible Senior Notes On November 15, 2018, we issued $210.0 million in aggregate principal amount of our 6.25% Convertible Senior Notes (the 2023 Notes). The 2023 Notes are unsecured and accrue interest at an annual rate of 6.25% per annum, payable semi-annually in arrears on May 15 and November 15 of each year. The 2023 Notes mature on November 15, 2023 unless earlier purchased, redeemed or converted in accordance with their terms. The 2023 Notes will be convertible into cash, shares of our common stock or a combination thereof, as we elect at our sole discretion. The initial conversion rate is 52.0183 shares of our common stock per $1,000 of note principal (equivalent to an initial conversion price of approximately $19.22 per share of common stock), subject to adjustment in certain circumstances. To reduce the dilutive impact or potential cash expenditure associated with conversion of the 2023 Notes, we entered into a capped call transaction (the 2023 Capped Call), which essentially covers the number of shares of our common stock underlying the 2023 Notes when our common stock is trading between the initial conversion price of $19.22 per share and $28.84 per share. On August 14, 2020, we issued $210.0 million aggregate principal amount of 5.25% Convertible Senior Notes (the 2026 Notes) and used $125.6 million of the net proceeds to repurchase $115.0 million principal amount of the 2023 Notes (see “2026 Convertible Senior Notes” below). The settlement consideration was allocated between the repurchase of the liability and the equity component with the fair value of the liability component estimated to be $103.6 million based on the expected future cash flows associated with the $115.0 million principal amount discounted at a 9.9% effective interest rate. The remaining $22.0 million was accounted for as a repurchase of the equity component, reducing additional paid-in capital. As of the repurchase date of August 14, 2020, the carrying value of the repurchased 2023 Notes, net of unamortized debt discount and issuance costs, was $90.2 million. The difference between the $103.6 million fair value of the 2023 Notes repurchased and the carrying value of $90.2 million resulted in a $13.4 million loss on early extinguishment of debt. After giving effect to the repurchase, the total principal amount outstanding on the 2023 Notes as of August 14, 2020 was $95.0 million. In connection with the repurchase of $115.0 million in principal amount of the 2023 Notes, we entered into a capped call termination contract in August 2020 for approximately 6.0 million underlying shares to unwind a proportionate amount of the 2023 Capped Call. Upon settlement, the Company received $7.5 million in cash and recorded a $0.8 million loss due to the change in fair value of the contract between signing and settlement dates. The proceeds were recorded as an increase in additional paid-in capital and the loss was recorded to other expense in the condensed consolidated statements of operations and comprehensive loss. As of September 30, 2020, approximately 4.9 million shares remained outstanding on the 2023 Capped Call. The following table sets forth total interest expense recognized in connection with the 2023 Notes: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (In thousands) Contractual interest expense $ 2,363 $ 3,281 $ 8,925 $ 9,844 Amortization of debt issuance costs 156 188 567 543 Amortization of debt discount 1,804 2,167 6,551 6,271 Total $ 4,323 $ 5,636 $ 16,043 $ 16,658 2026 Convertible Senior Notes In August 2020, we issued $210.0 million aggregate principal amount of 5.25% convertible senior notes. In September 2020, an additional $15.0 million aggregate principal amount was issued on the partial exercise of the underwriters’ option, which resulted in an aggregate principal amount outstanding of $225.0 million. The issuance of the notes and use of proceeds are below: (In thousands) 2026 Notes issued $ 225,030 Termination of the 2023 Capped Call contracts related to debt repurchased 7,549 Repurchase of 2023 Notes (125,638) Purchase of 2026 Capped Call (23,223) Issuance costs (6,785) Net proceeds available for corporate use $ 76,933 The 2026 Notes are unsecured and accrue interest at an annual rate of 5.25% per annum, payable semi-annually in arrears on February 15 and August 15 of each year. The 2026 Notes mature on February 15, 2026, unless earlier purchased, redeemed or converted in accordance with their terms. The initial conversion rate is 54.0906 shares of our common stock per $1,000 of note principal (equivalent to an initial conversion price of approximately $18.4875 per share of common stock), which equals approximately 12.2 million shares upon conversion, subject to adjustment in certain circumstances. The 2026 Notes are convertible at the option of the holders on or after November 15, 2025 at any time prior to the close of business on February 12, 2026, the second scheduled trading day immediately before the stated maturity date of February 15, 2026. Additionally, holders may convert their 2026 Notes at their option at specified times prior to the maturity date only if: (1) during any calendar quarter, beginning after September 30, 2020, that the last reported sale price per share of our common stock exceeds 130% of the conversion price of the 2026 Notes for each of at least 20 trading days in the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter; (2) during the five consecutive business days immediately after any five -consecutive-trading-day period (such five -consecutive-trading-day period, the “measurement period”) in which the trading price per $1,000 principal amount of 2026 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price per share of our common stock on such trading day and the conversion rate on such trading day; (3) there is an occurrence of one or more certain corporate events or distributions of our common stock; or (4) we call the 2026 Notes for redemption. We may elect, at our sole discretion, to convert the 2026 Notes into cash, shares of our common stock or a combination thereof. Subject to the satisfaction of certain conditions, we may redeem in whole or in part the 2026 Notes at our option beginning August 15, 2023 through the 50th scheduled trading day immediately before the maturity date at a cash redemption price equal to the principal amount of the 2026 Notes to be redeemed plus any accrued and unpaid interest to, but excluding, the redemption date. The 2026 Notes are subject to redemption only if certain requirements are satisfied, including that the last reported sale price per share of our common stock exceeds 130% of the conversion price on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date we send the related redemption notice and (ii) the trading day immediately before the date we send such notice. In order to reduce the dilutive impact or potential cash expenditure associated with the conversion of the 2026 Notes, we entered into capped call transactions in connection with the initial issuance of the 2026 Notes and at the time of the issuance of additional 2026 Notes upon the underwriters’ partial exercise of their option (collectively, the 2026 Capped Call). The 2026 Capped Call will cover, subject to anti-dilution adjustments substantially similar to those applicable to the 2026 Notes, the number of shares of common stock underlying the 2026 Notes when our common stock is trading within the range of approximately $18.49 and $26.10 . However, should the market price of our common stock exceed the $26.10 cap, then the conversion of the 2026 Notes would have a dilutive impact or may require a cash expenditure to the extent the market price exceeds the cap price. The 2026 Capped Call will expire on various dates over the 50 -trading-day period ranging from December 2, 2025 to February 12, 2026, if not exercised earlier. The 2026 Capped Call is a separate transaction and not part of the terms of the 2026 Notes and was executed separately from the issuance of the 2026 Notes. The amount paid for the 2026 Capped Call was recorded as a reduction to additional paid-in capital in the condensed consolidated balance sheet. We evaluated the accounting for the issuance of the 2026 Notes and concluded that the embedded conversion features meet the requirements for a derivative scope exception for instruments that are both indexed to an entity’s own stock and classified in stockholders’ equity in its balance sheet, and that the cash conversion guidance applies. Therefore, proceeds of $225.0 million are allocated first to the liability component based on the fair value of non-convertible debt with the residual proceeds allocated to the equity component for the conversion features. The Company allocated $6.8 million in issuance costs associated with the 2026 Notes to the liability and equity component in the same proportion as the $225.0 million in proceeds. Further, we concluded the 2026 Capped Call qualifies for a derivative scope exception for instruments that are both indexed to an entity’s own stock and classified in stockholders’ equity in its balance sheet. Consequently, the fair value of the 2026 Capped Call of $23.2 million is classified as equity and will not be subsequently remeasured. In accounting for the issuance of the 2026 Notes, we separated the 2026 Notes into liability and equity components, using an effective interest rate of 12.5% to determine the fair value of the liability component. The following table sets forth interest expense recognized related to the 2026 Notes: Three and Nine Months Ended September 30, 2020 (In thousands) Contractual interest expense $ 1,444 Amortization of debt issuance costs 74 Amortization of debt discount 976 Total $ 2,494 Future minimum payments for the 2023 and 2026 Notes as of September 30, 2020 are as follows: (In thousands) 2020 $ — 2021 — 2022 — 2023 95,000 2024 — 2025 and thereafter 225,030 Total future minimum payments under the convertible senior notes $ 320,030 |
Lease Liabilities
Lease Liabilities | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Lease liabilities | Note 7—Leases We have operating leases related to our office and laboratory space and finance leases for certain laboratory and office equipment as follows: September 30, December 31, 2020 2019 (In thousands) Assets Operating lease assets $ 26,116 $ 27,082 Finance lease assets, net 2,150 2,973 Total lease assets $ 28,266 $ 30,055 Liabilities Current: Operating leases $ 2,619 $ 2,282 Finance leases 1,135 1,222 Non-current: Operating leases 28,767 30,772 Finance leases 950 1,546 Total lease liabilities $ 33,471 $ 35,822 The components of total lease cost are as follows: Nine Months Ended September 30, 2020 2019 (In thousands) Lease cost Operating lease cost $ 4,540 $ 3,121 Finance lease cost: Amortization 1,039 984 Interest 224 248 Variable lease cost 1,715 1,699 Sublease income (929) (673) Total lease cost $ 6,589 $ 5,379 The supplemental cash flow information related to leases is as follows: Nine Months Ended September 30, 2020 2019 (In thousands) Cash paid for amounts included in the measurement of lease liabilities Operating cash flows used for operating leases $ 6,490 $ 4,962 Operating cash flows used for finance leases $ 224 $ 248 Financing cash flows used for finance leases $ 889 $ 813 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 8—Commitments and Contingencies Lease Agreements We lease our office and laboratory space in The Omeros Building under a lease agreement with BMR - 201 Elliott Avenue LLC. The initial term of the lease ends in November 2027, and we have two options to extend the lease term, each by five years. As of September 30, 2020, the remaining aggregate non-cancelable rent payable under the initial term of the lease, excluding common area maintenance and related operating expenses, is $48.2 million. Contracts We have various agreements with third parties that would collectively require payment of termination fees totaling $35.9 million if we had cancelled the work as of September 30, 2020. Development Milestones and Product Royalties We have licensed a variety of intellectual property from third parties that we are currently developing or may develop in the future. These licenses may require milestone payments in connection with clinical development or commercial milestones and/or low single to low double-digit royalties on the net income or net sales of the product. For the three and nine months ended September 30, 2020 and 2019, development milestones were insignificant. We do not owe any royalties on OMIDRIA. |
Shareholders' Deficit
Shareholders' Deficit | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Shareholders' Deficit | Note 9—Shareholders’ Deficit Common Stock and Warrants For the nine months ended September 30, 2020, we received proceeds of $5.0 million upon the exercise of stock options which resulted in the issuance of 550,342 shares of common stock. For the nine months ended September 30, 2019, we received proceeds of $5.0 million upon the exercise of stock options which resulted in the issuance of 513,790 shares of common stock. As of September 30, 2020 and December 31, 2019, we had 243,115 warrants outstanding with a weighted average exercise price of $20.68 per share. Underwritten Public Offering of Common Stock On August 14, 2020, we sold 6.9 million shares of our common stock at a public offering price of $14.50 per share. After deducting underwriter discounts and offering expenses, we received net proceeds from the transaction of $93.7 million. Interim Condensed Consolidated Statements of Shareholders’ Deficit The changes in interim balances of the components of our shareholders’ deficit are as follows: Additional Common Paid-In Accumulated Stock Capital Deficit Total (In thousands) Balance January 1, 2020 $ 542 $ 625,048 $ (734,611) $ (109,021) Exercise of stock options 3 2,709 — 2,712 Stock-based compensation expense — 3,476 — 3,476 Net loss — — (29,031) (29,031) Balance March 31, 2020 545 631,233 (763,642) (131,864) Exercise of stock options — 66 — 66 Stock-based compensation expense — 3,822 — 3,822 Net loss — — (33,294) (33,294) Balance June 30, 2020 545 635,121 (796,936) (161,270) Issuance of common stock in direct offering, net of offering costs 69 93,606 — 93,675 Exercise of stock options 2 2,198 — 2,200 Stock-based compensation expense — 3,824 — 3,824 Equity component of 2026 Notes, net of issuance costs — 61,628 — 61,628 Purchases of 2026 Capped Calls — (23,223) — (23,223) Equity component of early extinguishment of 2023 Notes — (22,073) — (22,073) Termination of the 2023 Capped Call contracts related to debt repurchased — 8,387 — 8,387 Tax benefit related to issuance of 2026 Notes, net of extinguishment — (12,011) — (12,011) Net loss — — (38,463) (38,463) Balance September 30, 2020 $ 616 $ 747,457 $ (835,399) $ (87,326) Additional Common Paid-In Accumulated Stock Capital Deficit Total (In thousands) Balance January 1, 2019 $ 490 $ 549,479 $ (650,125) $ (100,156) Exercise of stock options — 108 — 108 Stock-based compensation expense — 3,374 — 3,374 Net loss — — (24,345) (24,345) Balance March 31, 2019 490 552,961 (674,470) (121,019) Exercise of stock options 2 1,598 — 1,600 Stock-based compensation expense — 3,598 — 3,598 Net loss — — (14,453) (14,453) Balance June 30, 2019 492 558,157 (688,923) (130,274) Exercise of stock options 3 3,323 — 3,326 Stock-based compensation expense — 3,496 — 3,496 Net loss — — (16,463) (16,463) Balance September 30, 2019 $ 495 $ 564,976 $ (705,386) $ (139,915) |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2020 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Note 10—Stock-Based Compensation Stock-based compensation expense is as follows: Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019 (In thousands) Research and development $ 1,636 $ 1,558 $ 4,714 $ 4,698 Selling, general and administrative 2,188 1,938 6,408 5,770 Total $ 3,824 $ 3,496 $ 11,122 $ 10,468 The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model. The following assumptions were applied to all stock option grants: Three Months Ended Nine Months Ended September 30, 2020 September 30, 2020 Estimated weighted-average fair value $ 8.21 $ 8.22 Weighted-average assumptions: Expected volatility 82 % 77 % Expected term, in years 6.1 6.0 Risk-free interest rate 0.58 % 1.10 % Expected dividend yield — % — % Stock option activity for all stock plans and related information is as follows: Weighted- Average Aggregate Exercise Remaining Intrinsic Options Price per Contractual Life Value Outstanding Share (In years) (In thousands) Balance at December 31, 2019 11,207,931 $ 11.72 Granted 2,074,460 12.36 Exercised (550,342) 9.05 Forfeited (635,433) 11.29 Balance at September 30, 2020 12,096,616 $ 11.98 6.2 $ 3,433 Vested and expected to vest at September 30, 2020 11,689,261 $ 11.93 6.1 $ 3,432 Exercisable at September 30, 2020 8,407,551 $ 11.38 5.1 $ 3,426 As of September 30, 2020, there were 3.7 million unvested options outstanding that will vest over a weighted-average period of 2.6 years and 4.0 million shares were available to grant. The total estimated compensation expense yet to be recognized on outstanding options is $28.0 million. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 11—Income Taxes We have a history of losses and therefore have historically not made a provision for income taxes. However, in the quarter ended September 30, 2020, we recorded an income tax benefit of $7.9 million related to the issuance of our 2026 Notes (see —Unsecured |
Organization and Significant _2
Organization and Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Organization | Organization We are a commercial-stage biopharmaceutical company committed to discovering, developing and commercializing small-molecule and protein therapeutics for large-market as well as orphan indications targeting inflammation, complement-mediated diseases, disorders of the central nervous system, addiction and immune-related diseases, including cancers. Our first drug product, OMIDRIA, is marketed in the United States (U.S.) for use during cataract surgery or intraocular lens replacement. |
Basis of Presentation | Basis of Presentation Our condensed consolidated financial statements include the financial position and results of operations of Omeros Corporation (Omeros) and our wholly owned subsidiaries. All intercompany transactions have been eliminated, and we have determined we operate in one segment. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. The information as of September 30, 2020 and December 31, 2019 and for the three and nine months ended September 30, 2020 and 2019 includes all adjustments, which include normal recurring adjustments, necessary to present fairly our interim financial information. The Condensed Consolidated Balance Sheet at December 31, 2019 has been derived from our audited financial statements but does not include all of the information and footnotes required by GAAP for audited annual financial information. The accompanying unaudited condensed consolidated financial statements and related notes thereto should be read in conjunction with the audited consolidated financial statements and related notes thereto that are included in our Annual Report on Form 10-K for the year ended December 31, 2019, which was filed with the U.S. Securities and Exchange Commission (SEC) on March 2, 2020. |
Risks and Uncertainties | Risks and Uncertainties In its 2021 outpatient prospective payment system (OPPS) proposed rule, the Centers for Medicare and Medicaid Services (CMS), a part of the Department of Health and Human Services (HHS), confirmed the October 1, 2020 expiration of pass-through reimbursement for OMIDRIA and indicated an intention to package payment for OMIDRIA with payment for the associated surgical procedure in both the hospital outpatient department (HOPD) and ambulatory surgery center (ASC) settings. We are continuing to pursue administrative and legislative avenues to secure separate payment for OMIDRIA; however, we cannot provide assurance that these efforts will be successful. The outbreak of the novel strain of coronavirus (SARS-CoV-2) that causes COVID-19 and the responses to the global pandemic by various governmental authorities, the medical community and others continue to have a significant impact on our business. In March 2020, ASCs and hospitals using OMIDRIA postponed nearly all cataract surgery in response to recommendations from government and medical organizations. As a result, we did not record any sales of OMIDRIA to our wholesalers from March 25 to May 19, 2020. However, by the end of June 2020, the run rate of weekly OMIDRIA sales had recovered to levels approximating those seen prior to the pandemic. Due to the unknown magnitude, duration and outcome of the COVID-19 pandemic, it is not possible to estimate precisely its impact on our business, operations or financial results; however, the impact has been and could continue to be material. As of September 30, 2020, we had cash, cash equivalents and short-term investments of $153.5 million and an accounts receivable-based line of credit that allows us to borrow up to the lesser of $50.0 million or 85% of our accounts receivable borrowing base, less certain reserves. We have incurred losses from operations of $76.8 million for the nine months ended September 30, 2020, and cash used in operating activities was $81.7 million for the nine months ended September 30, 2020. We will continue to incur losses from operating activities until our revenues exceed operating costs and debt service obligations. OMIDRIA pass-through reimbursement from CMS expired on October 1, 2020. If continued separate payment is determined not to be reasonably achievable in the near term, we have developed a commercial strategy that can be quickly implemented to lower the per-vial sales price of OMIDRIA to achieve substantially larger sales volumes. We believe that this approach would result in substantial revenues from OMIDRIA, in part because CMS Medicare Part B beneficiaries only represent approximately 45% of cataract surgery procedures annually. We anticipate narsoplimab for HSCT-TMA will receive FDA approval and will launch in early to mid-2021. Currently we cannot fully predict the timing or the magnitude of narsoplimab revenues, but we believe they will be significant. Execution of our sales and marketing strategies for the launch of narsoplimab for HSCT-TMA is underway. These plans include various milestones at which we commit to incremental activities, providing for flexibility in the timing of costs incurred should the approval of narsoplimab be accelerated or delayed. If warranted, we will adjust the timing and associated costs of our HSCT-TMA launch activities as we advance through the biologics license application (BLA) review and approval process. We plan to continue to fund our operations for at least the next twelve months with our cash and investments on hand, from sales of OMIDRIA and, if FDA approval is granted, from sales of narsoplimab for HSCT-TMA. There is also the possibility that we could generate revenue from sales of narsoplimab for the treatment of COVID-19. In addition, we may utilize funds available under our accounts receivable-based line of credit, which allows us to borrow up to 85% of our available accounts receivable borrowing base, less certain reserves, or $50.0 million, whichever is less. Should it be necessary or determined to be strategically advantageous, we also could pursue debt financings, public and private offerings of our equity securities similar to those we have completed previously, or other strategic transactions, which may include licensing a portion of our existing technology. Should it be necessary to manage our operating expenses, we would reduce our projected cash requirements through reduction of our expenses by delaying clinical trials, reducing selected research and development efforts, or implementing other restructuring activities. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant items subject to such estimates include revenue recognition, stock-based compensation expense and accruals for clinical trials, manufacturing of drug product and clinical drug supply and other contingencies. We base our estimates on historical experience and on various other factors, including the impact of the COVID-19 pandemic, that we believe are reasonable under the circumstances; however, actual results could differ from these estimates. |
Revenue Recognition | Revenue Recognition When we enter into a customer contract, we perform the following five steps: (i) identify the contract with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) we satisfy a performance obligation. We generally record revenue from product sales when the product is delivered to our wholesalers. Product sales are recorded net of wholesaler distribution fees and estimated chargebacks, rebates, returns and purchase-volume discounts. Accruals or allowances are established for these deductions in the same period when revenue is recognized, and actual amounts incurred are offset against the applicable accruals or allowances. We reflect each of these accruals or allowances as either a reduction in the related accounts receivable or as an accrued liability depending on how the amount is expected to be settled. |
Right-of-Use Assets and Related Lease Liabilities | Right-of-Use Assets and Related Lease Liabilities We record operating leases as right-of-use assets and recognize the related lease liabilities equal to the fair value of the lease payments using our incremental borrowing rate when the implicit rate in the lease agreement is not readily available. We recognize variable lease payments when incurred. Costs associated with operating lease assets are recognized on a straight-line basis within operating expenses over the term of the lease. We record finance leases as a component of property and equipment and amortize these assets within operating expenses on a straight-line basis to their residual values over the shorter of the term of the underlying lease or the estimated useful life of the equipment. The interest component of a finance lease is included in interest expense and recognized using the effective interest method over the lease term. We account for leases with initial terms of 12 months or less as operating expenses on a straight-line basis over the lease term. |
Advance Payments | Advance Payments Advance payments for goods or services that will be used or rendered for future research and development activities are deferred and then recognized as an expense as the related goods are delivered or the services are performed, or when the goods or services are no longer expected to be provided. |
Income Taxes | Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their tax bases. Deferred tax assets and liabilities are measured using enacted tax rates applied to taxable income in the years in which those temporary differences are expected to be recovered or settled. We recognize the effect of income tax positions only if those positions are more likely than not of being sustained upon an examination. A valuation allowance is established when it is more likely than not that the deferred tax assets will not be realized. |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation expense is recognized for all share-based payments based on estimated fair values as of the date of grant. The fair value of our stock options is calculated using the Black-Scholes option-pricing model which requires judgmental assumptions including volatility, forfeiture rates and expected option life. We use the straight-line method to allocate stock-based compensation cost to reporting periods over each optionee’s requisite service period, which is generally the vesting period. |
Recently Adopted Pronouncements | Recently Adopted Pronouncements In June 2016, the Financial Accounting Standards Board issued ASU 2016-13, Financial Instruments—Credit Losses , (Topic 326) which changes how entities account for credit losses on most financial assets and certain other instruments and expands disclosures. The standard is effective for annual and interim periods beginning after December 15, 2019 with early adoption permitted. We adopted the standard on January 1, 2020 and the adoption did not have a material impact on our consolidated financial statements and disclosures. Recent Accounting Pronouncements Not Yet Adopted In August 2020, the Financial Accounting Standards Board Debt—Debt with Conversion Options and Derivatives and Hedging—Contracts in Entity’s Own Equity Derivatives and Hedging convertible debt instrument was issued at a substantial premium. Among other potential impacts, this change is expected to reduce reported interest expense, increase reported net income, and result in a reclassification of certain conversion feature balance sheet amounts from stockholders’ equity to liabilities as it relates to the Company’s convertible senior notes. Additionally, ASU 2020-06 requires the application of the if-converted method to calculate the impact of convertible instruments on diluted earnings per share (EPS), which is consistent with the Company’s accounting treatment under the current standard. ASU 2020-06 is effective for fiscal years beginning after December 15, 2021, with early adoption permitted for fiscal years beginning after December 15, 2020, and can be adopted on either a fully retrospective or modified retrospective basis. The Company is evaluating the impact of this pronouncement on its consolidated financial statements. In December 2019, the Financial Accounting Standards Board Income Taxes |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Calculation of Historical Outstanding Dilutive Securities Not Included in Diluted Loss per Share | Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Outstanding options to purchase common stock 1,456,454 3,026,871 1,777,393 2,829,807 Outstanding warrants to purchase common stock 9,828 18,128 11,712 16,923 Total potentially dilutive shares excluded from loss per share 1,466,282 3,044,999 1,789,105 2,846,730 |
Certain Balance Sheet Accounts
Certain Balance Sheet Accounts (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Receivables [Abstract] | |
Schedule of accounts receivable | September 30, December 31, 2020 2019 (In thousands) Trade receivables, net $ 37,218 $ 35,074 Sublease and other receivables 161 111 Total accounts receivables, net $ 37,379 $ 35,185 |
Schedule of Inventory, Current | September 30, December 31, 2020 2019 (In thousands) Raw materials $ 79 $ 91 Work-in-progress 797 338 Finished goods 666 718 Total inventory $ 1,542 $ 1,147 |
Property, Plant and Equipment | September 30, December 31, 2020 2019 (In thousands) Finance leases $ 5,690 $ 5,474 Laboratory equipment 2,903 2,844 Computer equipment 985 921 Office equipment and furniture 625 625 Total cost 10,203 9,864 Less accumulated depreciation and amortization (7,253) (6,035) Total property and equipment, net $ 2,950 $ 3,829 |
Accrued Expenses | September 30, December 31, 2020 2019 (In thousands) Sales rebates, fees and discounts $ 10,201 $ 10,870 Contract research and development 8,813 24,107 Employee compensation 6,415 3,546 Consulting and professional fees 5,479 3,610 Interest payable 3,736 1,640 Clinical trials 1,482 1,982 Other accrued expenses 822 872 Total accrued expenses $ 36,948 $ 46,627 |
Fair-Value Measurements (Tables
Fair-Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | September 30, 2020 Level 1 Level 2 Level 3 Total (In thousands) Assets: Money-market funds classified as non-current restricted investments $ 1,154 $ — $ — $ 1,154 Money-market funds classified as short-term investments 132,448 — — 132,448 Total $ 133,602 $ — $ — $ 133,602 December 31, 2019 Level 1 Level 2 Level 3 Total (In thousands) Assets: Money-market funds classified as non-current restricted investments $ 1,154 $ — $ — $ 1,154 Money-market funds classified as short-term investments 57,704 — — 57,704 Total $ 58,858 $ — $ — $ 58,858 |
Unsecured Convertible Senior _2
Unsecured Convertible Senior Notes (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Instrument [Line Items] | |
Summary of unsecured convertible senior notes outstanding | Balance as of September 30, 2020 2023 Notes 2026 Notes Total (In thousands) Principal amount $ 95,000 $ 225,030 $ 320,030 Unamortized discount (18,276) (62,591) (80,867) Unamortized issuance costs attributable to liability component (1,583) (4,772) (6,355) Total Convertible Senior Notes, net $ 75,141 $ 157,667 $ 232,808 Fair value of outstanding Convertible Senior Notes (2) $ 89,775 $ 182,043 Amount by which the Convertible Senior Notes if-converted value exceeds their principal amount $ — $ — Equity component $ 25,854 $ 63,544 Unamortized issuance costs (837) (1,916) Net carrying amount of equity component (1) $ 25,017 $ 61,628 Balance as of December 31, 2019 2023 Notes 2026 Notes Total (In thousands) Principal amount $ 210,000 $ — $ 210,000 Unamortized discount (47,660) — (47,660) Unamortized issuance costs attributable to liability component (4,127) — (4,127) Total Convertible Senior Notes, net $ 158,213 $ — $ 158,213 Fair value of outstanding Convertible Senior Notes (2) $ 208,163 $ — Amount by which the Convertible Senior Notes if-converted value exceeds their principal amount $ — $ — Equity component $ 57,152 $ — Unamortized issuance costs (1,851) — Net carrying amount of equity component (1) $ 55,301 $ — (1) Included in the condensed consolidated balance sheet within additional paid-in capital (2) The fair value is classified as Level 3 due to the limited trading activity for the Convertible Senior Notes. |
Schedule of future minimum payments of debt | (In thousands) 2020 $ — 2021 — 2022 — 2023 95,000 2024 — 2025 and thereafter 225,030 Total future minimum payments under the convertible senior notes $ 320,030 |
2023 Convertible Senior Notes | |
Debt Instrument [Line Items] | |
Schedule of total interest expense recognized | Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (In thousands) Contractual interest expense $ 2,363 $ 3,281 $ 8,925 $ 9,844 Amortization of debt issuance costs 156 188 567 543 Amortization of debt discount 1,804 2,167 6,551 6,271 Total $ 4,323 $ 5,636 $ 16,043 $ 16,658 |
2026 Convertible Senior Notes | |
Debt Instrument [Line Items] | |
Schedule of total interest expense recognized | Three and Nine Months Ended September 30, 2020 (In thousands) Contractual interest expense $ 1,444 Amortization of debt issuance costs 74 Amortization of debt discount 976 Total $ 2,494 |
Summary of issuance of the notes and use of proceeds | (In thousands) 2026 Notes issued $ 225,030 Termination of the 2023 Capped Call contracts related to debt repurchased 7,549 Repurchase of 2023 Notes (125,638) Purchase of 2026 Capped Call (23,223) Issuance costs (6,785) Net proceeds available for corporate use $ 76,933 |
Lease Liabilities (Tables)
Lease Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Schedule of lease-related assets and liabilities recorded on the balance sheet | September 30, December 31, 2020 2019 (In thousands) Assets Operating lease assets $ 26,116 $ 27,082 Finance lease assets, net 2,150 2,973 Total lease assets $ 28,266 $ 30,055 Liabilities Current: Operating leases $ 2,619 $ 2,282 Finance leases 1,135 1,222 Non-current: Operating leases 28,767 30,772 Finance leases 950 1,546 Total lease liabilities $ 33,471 $ 35,822 |
Schedule of lease costs | Nine Months Ended September 30, 2020 2019 (In thousands) Lease cost Operating lease cost $ 4,540 $ 3,121 Finance lease cost: Amortization 1,039 984 Interest 224 248 Variable lease cost 1,715 1,699 Sublease income (929) (673) Total lease cost $ 6,589 $ 5,379 |
Schedule of supplemental cash flow information | Nine Months Ended September 30, 2020 2019 (In thousands) Cash paid for amounts included in the measurement of lease liabilities Operating cash flows used for operating leases $ 6,490 $ 4,962 Operating cash flows used for finance leases $ 224 $ 248 Financing cash flows used for finance leases $ 889 $ 813 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Schedule of Stockholders Equity | Additional Common Paid-In Accumulated Stock Capital Deficit Total (In thousands) Balance January 1, 2020 $ 542 $ 625,048 $ (734,611) $ (109,021) Exercise of stock options 3 2,709 — 2,712 Stock-based compensation expense — 3,476 — 3,476 Net loss — — (29,031) (29,031) Balance March 31, 2020 545 631,233 (763,642) (131,864) Exercise of stock options — 66 — 66 Stock-based compensation expense — 3,822 — 3,822 Net loss — — (33,294) (33,294) Balance June 30, 2020 545 635,121 (796,936) (161,270) Issuance of common stock in direct offering, net of offering costs 69 93,606 — 93,675 Exercise of stock options 2 2,198 — 2,200 Stock-based compensation expense — 3,824 — 3,824 Equity component of 2026 Notes, net of issuance costs — 61,628 — 61,628 Purchases of 2026 Capped Calls — (23,223) — (23,223) Equity component of early extinguishment of 2023 Notes — (22,073) — (22,073) Termination of the 2023 Capped Call contracts related to debt repurchased — 8,387 — 8,387 Tax benefit related to issuance of 2026 Notes, net of extinguishment — (12,011) — (12,011) Net loss — — (38,463) (38,463) Balance September 30, 2020 $ 616 $ 747,457 $ (835,399) $ (87,326) Additional Common Paid-In Accumulated Stock Capital Deficit Total (In thousands) Balance January 1, 2019 $ 490 $ 549,479 $ (650,125) $ (100,156) Exercise of stock options — 108 — 108 Stock-based compensation expense — 3,374 — 3,374 Net loss — — (24,345) (24,345) Balance March 31, 2019 490 552,961 (674,470) (121,019) Exercise of stock options 2 1,598 — 1,600 Stock-based compensation expense — 3,598 — 3,598 Net loss — — (14,453) (14,453) Balance June 30, 2019 492 558,157 (688,923) (130,274) Exercise of stock options 3 3,323 — 3,326 Stock-based compensation expense — 3,496 — 3,496 Net loss — — (16,463) (16,463) Balance September 30, 2019 $ 495 $ 564,976 $ (705,386) $ (139,915) |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation Expense | Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019 (In thousands) Research and development $ 1,636 $ 1,558 $ 4,714 $ 4,698 Selling, general and administrative 2,188 1,938 6,408 5,770 Total $ 3,824 $ 3,496 $ 11,122 $ 10,468 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | Three Months Ended Nine Months Ended September 30, 2020 September 30, 2020 Estimated weighted-average fair value $ 8.21 $ 8.22 Weighted-average assumptions: Expected volatility 82 % 77 % Expected term, in years 6.1 6.0 Risk-free interest rate 0.58 % 1.10 % Expected dividend yield — % — % |
Schedule of Stock Option Activity | Weighted- Average Aggregate Exercise Remaining Intrinsic Options Price per Contractual Life Value Outstanding Share (In years) (In thousands) Balance at December 31, 2019 11,207,931 $ 11.72 Granted 2,074,460 12.36 Exercised (550,342) 9.05 Forfeited (635,433) 11.29 Balance at September 30, 2020 12,096,616 $ 11.98 6.2 $ 3,433 Vested and expected to vest at September 30, 2020 11,689,261 $ 11.93 6.1 $ 3,432 Exercisable at September 30, 2020 8,407,551 $ 11.38 5.1 $ 3,426 |
Organization and Significant _3
Organization and Significant Accounting Policies - Additional Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)segment | Sep. 30, 2019USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Number of operating segments | segment | 1 | |||
Cash, cash equivalents and short-term investments | $ 153,500 | $ 153,500 | ||
Operating loss | 25,428 | $ 11,101 | 76,785 | $ 39,676 |
Net cash used in operating activities | $ 81,679 | $ 37,059 | ||
Annual cataract surgery procedures to CMS Medicare Part B beneficiaries (as a percent) | 45.00% | |||
Line of Credit Agreement | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Maximum borrowing capacity | $ 50,000 | $ 50,000 | ||
Borrowing option - percentage of eligible accounts receivable | 85.00% | 85.00% |
Net Loss Per Share (Details)
Net Loss Per Share (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Outstanding dilutive securities not included in diluted loss per share calculation | 1,466,282 | 3,044,999 | 1,789,105 | 2,846,730 |
Outstanding options to purchase common stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Outstanding dilutive securities not included in diluted loss per share calculation | 1,456,454 | 3,026,871 | 1,777,393 | 2,829,807 |
Outstanding warrants to purchase common stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Outstanding dilutive securities not included in diluted loss per share calculation | 9,828 | 18,128 | 11,712 | 16,923 |
Certain Balance Sheet Account_2
Certain Balance Sheet Accounts - Accounts Receivable, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Balance Sheet Related Disclosures [Abstract] | ||
Trade receivables, net | $ 37,218 | $ 35,074 |
Sublease and other receivables | 161 | 111 |
Total accounts receivables, net | 37,379 | 35,185 |
Chargeback and product return allowances | $ 8,700 | |
Chargeback allowances | $ 1,600 |
Certain Balance Sheet Account_3
Certain Balance Sheet Accounts - Inventory (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 79 | $ 91 |
Work-in-progress | 797 | 338 |
Finished goods | 666 | 718 |
Total inventory | $ 1,542 | $ 1,147 |
Certain Balance Sheet Account_4
Certain Balance Sheet Accounts - Property and Equipment, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Property, Plant and Equipment [Line Items] | |||||
Total cost | $ 10,203 | $ 10,203 | $ 9,864 | ||
Less accumulated depreciation and amortization | (7,253) | (7,253) | (6,035) | ||
Total property and equipment, net | 2,950 | 2,950 | 3,829 | ||
Depreciation and amortization | 400 | $ 400 | 1,218 | $ 1,262 | |
Finance leases | |||||
Property, Plant and Equipment [Line Items] | |||||
Total cost | 5,690 | 5,690 | 5,474 | ||
Laboratory equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Total cost | 2,903 | 2,903 | 2,844 | ||
Computer equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Total cost | 985 | 985 | 921 | ||
Office equipment and furniture | |||||
Property, Plant and Equipment [Line Items] | |||||
Total cost | $ 625 | $ 625 | $ 625 |
Certain Balance Sheet Account_5
Certain Balance Sheet Accounts - Accrued Expenses (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Payables and Accruals [Abstract] | ||
Contract research and development | $ 8,813 | $ 24,107 |
Sales rebates, fees and discounts | 10,201 | 10,870 |
Employee compensation | 6,415 | 3,546 |
Consulting and professional fees | 5,479 | 3,610 |
Interest payable | 3,736 | 1,640 |
Clinical trials | 1,482 | 1,982 |
Other accrued expenses | 822 | 872 |
Total accrued expenses | $ 36,948 | $ 46,627 |
Fair-Value Measurements - Recur
Fair-Value Measurements - Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Money-market funds classified as non-current restricted investments | $ 1,154 | $ 1,154 |
Money-market funds classified as short-term investments | 132,448 | 57,704 |
Fair Value, Measurements, Recurring | Money Market Funds | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Money-market funds classified as non-current restricted investments | 1,154 | 1,154 |
Money-market funds classified as short-term investments | 132,448 | 57,704 |
Total | 133,602 | 58,858 |
Fair Value, Measurements, Recurring | Level 1 | Money Market Funds | ||
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items] | ||
Money-market funds classified as non-current restricted investments | 1,154 | 1,154 |
Money-market funds classified as short-term investments | 132,448 | 57,704 |
Total | $ 133,602 | $ 58,858 |
Fair-Value Measurements - Narra
Fair-Value Measurements - Narrative (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | Nov. 15, 2018 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | $ 21,075 | $ 3,084 | |
Unrealized gain (loss) on investments | $ 0 | $ 0 | |
2023 Convertible Senior Notes | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Interest rate (as a percent) | 6.25% |
Line of Credit (Details)
Line of Credit (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | |
Debt Instrument | |||
Loss on early extinguishment of debt | $ 13,374 | $ 13,374 | |
Outstanding borrowings | 232,808 | 232,808 | $ 158,213 |
Line of Credit Agreement | |||
Debt Instrument | |||
Maximum borrowing capacity | $ 50,000 | $ 50,000 | |
Borrowing option - percentage of eligible accounts receivable | 85.00% | 85.00% | |
Outstanding borrowings | $ 0 | $ 0 | $ 0 |
Prime Rate | Line of Credit Agreement | |||
Debt Instrument | |||
Interest rate (as a percent) | 5.50% | 5.50% |
Unsecured Convertible Senior _3
Unsecured Convertible Senior Notes - Unsecured convertible senior notes outstanding (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Aug. 14, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | |||
Principal amount | $ 320,030 | $ 210,000 | |
Unamortized discount | (80,867) | (47,660) | |
Unamortized issuance costs attributable to principal amount | (6,355) | (4,127) | |
Total Convertible Senior Notes, net | 232,808 | 158,213 | |
2023 Convertible Senior Notes | |||
Debt Instrument [Line Items] | |||
Principal amount | 95,000 | $ 95,000 | 210,000 |
Unamortized discount | (18,276) | (47,660) | |
Unamortized issuance costs attributable to principal amount | (1,583) | (4,127) | |
Total Convertible Senior Notes, net | 75,141 | 158,213 | |
Fair value of outstanding Convertible Senior Notes (2) | 89,775 | 208,163 | |
Equity component | 25,854 | 57,152 | |
Unamortized issuance costs | (837) | (1,851) | |
Net carrying amount of equity component (1) | 25,017 | $ 55,301 | |
2026 Convertible Senior Notes | |||
Debt Instrument [Line Items] | |||
Principal amount | 225,030 | ||
Unamortized discount | (62,591) | ||
Unamortized issuance costs attributable to principal amount | (4,772) | ||
Total Convertible Senior Notes, net | 157,667 | ||
Fair value of outstanding Convertible Senior Notes (2) | 182,043 | ||
Equity component | 63,544 | ||
Unamortized issuance costs | (1,916) | ||
Net carrying amount of equity component (1) | $ 61,628 |
Unsecured Convertible Senior _4
Unsecured Convertible Senior Notes - 2023 Convertible Senior Notes (Details) $ / shares in Units, shares in Millions | Aug. 14, 2020USD ($)shares | Nov. 15, 2018USD ($)$ / shares | Sep. 30, 2020USD ($)shares | Sep. 30, 2020USD ($)shares | Dec. 31, 2019USD ($) |
Debt Instrument [Line Items] | |||||
Adjustments to additional paid-in capital due to repurchase of the equity component | $ 22,073,000 | ||||
Loss on early extinguishment of debt | 13,374,000 | $ 13,374,000 | |||
Principal amount | 320,030,000 | 320,030,000 | $ 210,000,000 | ||
Proceeds from termination of capped call contracts | 7,549,000 | ||||
2023 Convertible Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Principal amount | $ 210,000,000 | ||||
Interest rate (as a percent) | 6.25% | ||||
Conversion rate | 0.0520183 | ||||
Value used in calculation of conversion rate | $ 1,000 | ||||
Conversion price | $ / shares | $ 19.22 | ||||
Proceeds from debt issuance | $ 125,600,000 | ||||
Principal amount of debt repurchased | 115,000,000 | ||||
Fair value of the liability component | $ 103,600,000 | ||||
Effective interest rate (as a percent) | 9.90% | ||||
Adjustments to additional paid-in capital due to repurchase of the equity component | $ 22,000,000 | ||||
Amount outstanding | 90,200,000 | ||||
Loss on early extinguishment of debt | 13,400,000 | ||||
Principal amount | $ 95,000,000 | $ 95,000,000 | $ 95,000,000 | $ 210,000,000 | |
Number of underlying shares | shares | 6 | ||||
Proceeds from termination of capped call contracts | $ 7,500,000 | ||||
Settlement loss upon termination of cap call contract | $ 800,000 | ||||
Number of shares outstanding on the 2023 Capped Call | shares | 4.9 | 4.9 | |||
2023 Convertible Senior Notes | Minimum | |||||
Debt Instrument [Line Items] | |||||
Conversion price | $ / shares | 19.22 | ||||
2023 Convertible Senior Notes | Maximum | |||||
Debt Instrument [Line Items] | |||||
Conversion price | $ / shares | $ 28.84 |
Unsecured Convertible Senior _5
Unsecured Convertible Senior Notes - 2026 Convertible Senior Notes (Details) $ / shares in Units, shares in Millions | Aug. 14, 2020USD ($)D$ / sharesshares | Sep. 30, 2020USD ($) | Dec. 31, 2019USD ($) |
Debt Instrument [Line Items] | |||
Aggregate principal amount outstanding | $ 320,030,000 | $ 210,000,000 | |
Termination of the 2023 Capped Call contracts related to debt repurchased | 7,549,000 | ||
Repurchase of 2023 Notes | (125,638,000) | ||
2026 Convertible Senior Notes | |||
Debt Instrument [Line Items] | |||
Principal amount | $ 210,000,000 | $ 15,000,000 | |
Interest rate (as a percent) | 5.25% | 5.25% | |
Aggregate principal amount outstanding | $ 225,030,000 | ||
2026 Notes issued | $ 225,030,000 | ||
Termination of the 2023 Capped Call contracts related to debt repurchased | 7,549,000 | ||
Repurchase of 2023 Notes | (125,638,000) | ||
Purchase of 2026 Capped Call | (23,223,000) | ||
Issuance costs | (6,785,000) | ||
Net proceeds available for corporate use | $ 76,933,000 | ||
Conversion rate | 0.0540906 | ||
Value used in calculation of conversion rate | $ 1,000 | ||
Shares upon conversion | shares | 12.2 | ||
Conversion price | $ / shares | $ 18.4875 | ||
Capped Call Transactions, Threshold Trading Day Period | 50 days | ||
Fair value of equity component | $ 23,200,000 | ||
Effective interest rate (as a percent) | 12.50% | ||
2026 Convertible Senior Notes | Debt Conversion, After September 30, 2020 | |||
Debt Instrument [Line Items] | |||
Stock price trigger (as a percent) | 130.00% | ||
Trading days, number | D | 20 | ||
Consecutive trading days, period | D | 30 | ||
Consecutive business days, period | 5 days | ||
Consecutive trading-day period | 5 days | ||
Maximum product of the closing sale price of shares of the Company's common stock and the applicable conversion rate for such trading day (as a percent) | 98.00% | ||
2026 Convertible Senior Notes | Debt Conversion, On Or After August 15, 2023 | |||
Debt Instrument [Line Items] | |||
Stock price trigger (as a percent) | 130.00% | ||
Trading days, number | D | 20 | ||
Consecutive trading days, period | D | 30 | ||
2026 Convertible Senior Notes | Minimum | |||
Debt Instrument [Line Items] | |||
Conversion price | $ / shares | $ 18.49 | ||
2026 Convertible Senior Notes | Maximum | |||
Debt Instrument [Line Items] | |||
Conversion price | $ / shares | $ 26.10 |
Unsecured Convertible Senior _6
Unsecured Convertible Senior Notes - Interest expense recognized (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
2023 Convertible Senior Notes | ||||
Interest Expense, Debt [Abstract] | ||||
Contractual interest expense | $ 2,363 | $ 3,281 | $ 8,925 | $ 9,844 |
Amortization of debt issuance costs | 156 | 188 | 567 | 543 |
Amortization of debt discount | 1,804 | 2,167 | 6,551 | 6,271 |
Total | 4,323 | $ 5,636 | $ 16,043 | $ 16,658 |
2026 Convertible Senior Notes | ||||
Interest Expense, Debt [Abstract] | ||||
Contractual interest expense | 1,444 | |||
Amortization of debt issuance costs | 74 | |||
Amortization of debt discount | 976 | |||
Total | $ 2,494 |
Unsecured Convertible Senior _7
Unsecured Convertible Senior Notes - Future minimum payments (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Long-term Debt, Fiscal Year Maturity [Abstract] | ||
Total future minimum payments under the convertible senior notes | $ 320,030 | $ 210,000 |
2023 and 2026 Convertible Senior Notes | ||
Long-term Debt, Fiscal Year Maturity [Abstract] | ||
2023 | 95,000 | |
2025 and thereafter | 225,030 | |
Total future minimum payments under the convertible senior notes | $ 320,030 |
Lease Liabilities (Details)
Lease Liabilities (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Classification on the Balance Sheet | |||
Operating lease assets | $ 26,116 | $ 27,082 | |
Finance lease assets, net | 2,150 | 2,973 | |
Total lease assets | 28,266 | 30,055 | |
Operating leases, current | 2,619 | 2,282 | |
Finance leases, current | 1,135 | 1,222 | |
Operating leases, non-current | 28,767 | 30,772 | |
Finance leases, non-current | 950 | 1,546 | |
Total lease liabilities | 33,471 | $ 35,822 | |
Lease cost | |||
Operating lease cost | 4,540 | $ 3,121 | |
Amortization | 1,039 | 984 | |
Interest | 224 | 248 | |
Variable lease cost | 1,715 | 1,699 | |
Sublease income | (929) | (673) | |
Total lease cost | 6,589 | 5,379 | |
Operating cash flows used for operating leases | 6,490 | 4,962 | |
Operating cash flows used for finance leases | 224 | 248 | |
Financing cash flows used for finance leases | $ 889 | $ 813 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2020USD ($)Options | |
Commitments and Contingencies Disclosure [Abstract] | |
Lessee, Operating Lease, Existence of Option to Extend | true |
Number of options to extend lease | Options | 2 |
Option to extend, lease period | 5 years |
Operating expenses | $ 48.2 |
Contract termination fees | $ 35.9 |
Shareholders' Deficit - Narrati
Shareholders' Deficit - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Aug. 14, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 |
Class of Warrant or Right [Line Items] | ||||
Proceeds upon exercise of stock options | $ 4,978 | $ 5,034 | ||
Issuance of common stock upon exercise of stock options (in shares) | 550,342 | 513,790 | ||
Sale of common stock (in shares) | 6,900,000 | |||
Sale price per share (in dollars per share) | $ 14.50 | |||
Proceeds from issuance of common stock, net | $ 93,700 | $ 93,675 | ||
Outstanding warrants to purchase common stock | ||||
Class of Warrant or Right [Line Items] | ||||
Warrants outstanding | 243,115 | 243,115 | ||
Warrant exercise price (in USD per share) | $ 20.68 | $ 20.68 |
Shareholders' Deficit- Equity T
Shareholders' Deficit- Equity Table (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Class of Stock [Line Items] | ||||||||
Balance | $ (161,270) | $ (131,864) | $ (109,021) | $ (130,274) | $ (121,019) | $ (100,156) | $ (109,021) | $ (100,156) |
Issuance of common stock in direct offering, net of offering costs | 93,675 | |||||||
Exercise of stock options | 2,200 | 66 | 2,712 | 3,326 | 1,600 | 108 | ||
Stock-based compensation expense | 3,824 | 3,822 | 3,476 | 3,496 | 3,598 | 3,374 | ||
Equity component of 2026 Notes, net of issuance costs | 61,628 | |||||||
Purchases of 2026 Capped Calls | (23,223) | |||||||
Equity component of early extinguishment of 2023 Notes | (22,073) | |||||||
Termination of the 2023 Capped Call contracts related to debt repurchased | 8,387 | |||||||
Tax benefit related to issuance of 2026 Notes, net of extinguishment | (12,011) | |||||||
Net loss | (38,463) | (33,294) | (29,031) | (16,463) | (14,453) | (24,345) | (100,788) | (55,261) |
Balance | (87,326) | (161,270) | (131,864) | (139,915) | (130,274) | (121,019) | (87,326) | (139,915) |
Common Stock [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Balance | 545 | 545 | 542 | 492 | 490 | 490 | 542 | 490 |
Issuance of common stock in direct offering, net of offering costs | 69 | |||||||
Exercise of stock options | 2 | 3 | 3 | 2 | ||||
Balance | 616 | 545 | 545 | 495 | 492 | 490 | 616 | 495 |
Additional Paid-in Capital [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Balance | 635,121 | 631,233 | 625,048 | 558,157 | 552,961 | 549,479 | 625,048 | 549,479 |
Issuance of common stock in direct offering, net of offering costs | 93,606 | |||||||
Exercise of stock options | 2,198 | 66 | 2,709 | 3,323 | 1,598 | 108 | ||
Stock-based compensation expense | 3,824 | 3,822 | 3,476 | 3,496 | 3,598 | 3,374 | ||
Equity component of 2026 Notes, net of issuance costs | 61,628 | |||||||
Purchases of 2026 Capped Calls | (23,223) | |||||||
Equity component of early extinguishment of 2023 Notes | (22,073) | |||||||
Termination of the 2023 Capped Call contracts related to debt repurchased | 8,387 | |||||||
Tax benefit related to issuance of 2026 Notes, net of extinguishment | (12,011) | |||||||
Balance | 747,457 | 635,121 | 631,233 | 564,976 | 558,157 | 552,961 | 747,457 | 564,976 |
Retained Earnings [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Balance | (796,936) | (763,642) | (734,611) | (688,923) | (674,470) | (650,125) | (734,611) | (650,125) |
Net loss | (38,463) | (33,294) | (29,031) | (16,463) | (14,453) | (24,345) | ||
Balance | $ (835,399) | $ (796,936) | $ (763,642) | $ (705,386) | $ (688,923) | $ (674,470) | $ (835,399) | $ (705,386) |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | $ 3,824 | $ 3,496 | $ 11,122 | $ 10,468 |
Research and development | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | 1,636 | 1,558 | 4,714 | 4,698 |
Selling, general and administrative | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | $ 2,188 | $ 1,938 | $ 6,408 | $ 5,770 |
Stock-Based Compensation - Fair
Stock-Based Compensation - Fair Value of Employee Option Grant Estimated on Date of Grant (Details) - Outstanding options to purchase common stock - $ / shares | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020 | Sep. 30, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||
Estimated weighted-average fair value (USD per share) | $ 8.21 | $ 8.22 |
Weighted Average | ||
Weighted-average assumptions | ||
Expected volatility | 82.00% | 77.00% |
Expected term, in years | 6 years 1 month 6 days | 6 years |
Risk-free interest rate | 0.58% | 1.10% |
Expected dividend yield | 0.00% | 0.00% |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock Option Activity and Related Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Options Outstanding | ||
Beginning balance (shares) | 11,207,931 | |
Granted (shares) | 2,074,460 | |
Exercised (shares) | (550,342) | (513,790) |
Forfeited (shares) | (635,433) | |
Ending balance (shares) | 12,096,616 | |
Vested and expected to vest (shares) | 11,689,261 | |
Exercisable (shares) | 8,407,551 | |
Weighted-Average Exercise Price per Share | ||
Beginning balance (USD per share) | $ 11.72 | |
Granted (USD per share) | 12.36 | |
Exercised (USD per share) | 9.05 | |
Forfeited (USD per share) | 11.29 | |
Ending balance (USD per share) | 11.98 | |
Vested and expected to vest (USD per share) | 11.93 | |
Exercisable (USD per share) | $ 11.38 | |
Weighted- Average Remaining Contractual Life | ||
Balance (in years) | 6 years 2 months 12 days | |
Vested and expected to vest (in years) | 6 years 1 month 6 days | |
Exercisable (in years) | 5 years 1 month 6 days | |
Aggregate Intrinsic Value | ||
Balance | $ 3,433 | |
Vested and expected to vest | 3,432 | |
Exercisable | $ 3,426 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - Outstanding options to purchase common stock shares in Millions, $ in Millions | 9 Months Ended |
Sep. 30, 2020USD ($)shares | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Unvested options outstanding (shares) | 3.7 |
Period for recognition | 2 years 7 months 6 days |
Shares available for future grants (shares) | 4 |
Unrecognized compensation expense | $ | $ 28 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020 | Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | ||
Income tax benefit | $ 7,854 | $ 7,854 |