Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 14, 2018 | Jun. 30, 2017 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | AERI | ||
Entity Registrant Name | AERIE PHARMACEUTICALS INC | ||
Entity Central Index Key | 1,337,553 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding (in shares) | 39,492,900 | ||
Entity Public Float | $ 1,868,270,790 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets | ||
Cash and cash equivalents | $ 197,569 | $ 197,945 |
Short-term investments | 52,086 | 35,717 |
Prepaid expenses and other current assets | 4,487 | 4,028 |
Total current assets | 254,142 | 237,690 |
Property, plant and equipment, net | 31,932 | 7,857 |
Other assets | 4,202 | 2,707 |
Total assets | 290,276 | 248,254 |
Current liabilities | ||
Accounts payable | 6,245 | 5,610 |
Accrued expenses and other current liabilities | 18,939 | 13,761 |
Total current liabilities | 25,184 | 19,371 |
Convertible notes, net | 123,845 | 123,539 |
Other non-current liabilities | 5,648 | 0 |
Total liabilities | 154,677 | 142,910 |
Commitments and contingencies (Note 11) | ||
Stockholders’ equity | ||
Preferred stock, $0.001 par value; 15,000,000 shares authorized as of December 31, 2017 and December 31, 2016; None issued and outstanding | 0 | 0 |
Common stock, $0.001 par value; 150,000,000 shares authorized as of December 31, 2017 and December 31, 2016; 36,947,637 and 33,458,607 shares issued and outstanding as of December 31, 2017 and December 31, 2016, respectively | 37 | 33 |
Additional paid-in capital | 597,318 | 422,002 |
Accumulated other comprehensive loss | (28) | (68) |
Accumulated deficit | (461,728) | (316,623) |
Total stockholders’ equity | 135,599 | 105,344 |
Total liabilities and stockholders’ equity | $ 290,276 | $ 248,254 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 15,000,000 | 15,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, shares issued (in shares) | 36,947,637 | 33,458,607 |
Common stock, shares outstanding (in shares) | 36,947,637 | 33,458,607 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating expenses | |||
Selling, general and administrative | $ 73,615 | $ 44,478 | $ 30,635 |
Research and development | 72,078 | 52,394 | 44,451 |
Total operating expenses | 145,693 | 96,872 | 75,086 |
Loss from operations | (145,693) | (96,872) | (75,086) |
Other income (expense), net | (1,170) | (1,994) | 862 |
Net loss before income taxes | (146,863) | (98,866) | (74,224) |
Income tax (benefit) expense | (1,758) | 193 | 139 |
Net loss | $ (145,105) | $ (99,059) | $ (74,363) |
Net loss per common share - basic and diluted (in dollars per share) | $ (4.11) | $ (3.40) | $ (2.88) |
Weighted average number of common shares outstanding—basic and diluted (in shares) | 35,324,472 | 29,135,583 | 25,781,230 |
Net loss | $ (145,105) | $ (99,059) | $ (74,363) |
Unrealized gain (loss) on available-for-sale investments | 40 | 111 | (72) |
Comprehensive loss | $ (145,065) | $ (98,948) | $ (74,435) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit |
Beginning balance (in shares) at Dec. 31, 2014 | 24,018,577 | ||||
Beginning balance, value at Dec. 31, 2014 | $ 28,042 | $ 24 | $ 171,326 | $ (107) | $ (143,201) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Proceeds from issuance of common stock, net of commissions and expenses (in shares) | 1,754,556 | ||||
Proceeds from issuance of common stock | 50,373 | $ 2 | 50,371 | ||
Issuance of common stock upon exercise of stock purchase rights (in shares) | 5,029 | ||||
Issuance of common stock upon exercise of stock purchase rights | 96 | 96 | |||
Exercise of stock options (in shares) | 296,716 | ||||
Exercise of stock options | 1,282 | 1,282 | |||
Issuance of common stock upon net exercise of warrants (in shares) | 314,368 | ||||
Issuance of common stock upon net exercise of warrants | 9 | 9 | |||
Issuance of common stock for restricted stock awards, net (in shares) | 69,249 | ||||
Issuance of common stock for restricted stock awards, net | 0 | ||||
Stock-based compensation | 12,945 | 12,945 | |||
Excess tax benefit | 463 | 463 | |||
Other comprehensive income (loss) | (72) | (72) | |||
Net loss | (74,363) | (74,363) | |||
Ending balance (in shares) at Dec. 31, 2015 | 26,458,495 | ||||
Ending balance, value at Dec. 31, 2015 | 18,775 | $ 26 | 236,492 | (179) | (217,564) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Proceeds from issuance of common stock, net of commissions and expenses (in shares) | 6,721,529 | ||||
Proceeds from issuance of common stock | 167,165 | $ 7 | 167,158 | ||
Issuance of common stock upon exercise of stock purchase rights (in shares) | 75,205 | ||||
Issuance of common stock upon exercise of stock purchase rights | 1,120 | 1,120 | |||
Exercise of stock options (in shares) | 149,186 | ||||
Exercise of stock options | 591 | 591 | |||
Issuance of common stock for restricted stock awards, net (in shares) | 54,192 | ||||
Issuance of common stock for restricted stock awards, net | (153) | (153) | |||
Stock-based compensation | 16,794 | 16,794 | |||
Other comprehensive income (loss) | 111 | 111 | |||
Net loss | (99,059) | (99,059) | |||
Ending balance (in shares) at Dec. 31, 2016 | 33,458,607 | ||||
Ending balance, value at Dec. 31, 2016 | 105,344 | $ 33 | 422,002 | (68) | (316,623) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Proceeds from issuance of common stock, net of commissions and expenses (in shares) | 2,506,387 | ||||
Proceeds from issuance of common stock | 133,812 | $ 2 | 133,810 | ||
Issuance of common stock upon exercise of stock purchase rights (in shares) | 27,953 | ||||
Issuance of common stock upon exercise of stock purchase rights | $ 1,050 | 1,050 | |||
Exercise of stock options (in shares) | 241,050 | 201,592 | |||
Exercise of stock options | $ 828 | $ 1 | 827 | ||
Issuance of common stock for restricted stock awards, net (in shares) | 489,952 | ||||
Issuance of common stock for restricted stock awards, net | $ (750) | $ 1 | (751) | ||
Shares issued for asset acquisition (in shares) | 263,146 | ||||
Shares issued for asset acquisition | $ 14,302 | 14,302 | |||
Stock-based compensation | 26,078 | 26,078 | |||
Other comprehensive income (loss) | 40 | 40 | |||
Net loss | (145,105) | (145,105) | |||
Ending balance (in shares) at Dec. 31, 2017 | 36,947,637 | ||||
Ending balance, value at Dec. 31, 2017 | $ 135,599 | $ 37 | $ 597,318 | $ (28) | $ (461,728) |
Consolidated Statements of Sto6
Consolidated Statements of Stockholders' Equity (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Common Stock | |||
Underwriting discounts and commissions and expenses | $ 3,458 | $ 5,963 | $ 1,496 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities | |||
Net loss | $ (145,105) | $ (99,059) | $ (74,363) |
Adjustments to reconcile net loss to net cash used in operating activities | |||
Depreciation | 1,410 | 970 | 252 |
Amortization of debt discounts | 306 | 303 | 305 |
Amortization and accretion of premium or discount on investments, net | 9 | 525 | 570 |
Acquisition of assets expensed to research and development | 24,802 | 0 | 0 |
Stock-based compensation | 26,078 | 16,794 | 12,945 |
Unrealized foreign exchange loss | 601 | 0 | 0 |
Changes in operating assets and liabilities | |||
Prepaid, current and other assets | (2,239) | (1,852) | (840) |
Accounts payable, accrued expenses and other current liabilities | 925 | 2,479 | 5,385 |
Net cash used in operating activities | (93,213) | (79,840) | (55,746) |
Cash flows from investing activities | |||
Acquisition of assets from Envisia | (10,500) | 0 | 0 |
Purchase of available-for-sale investments | (104,490) | (35,169) | (46,872) |
Proceeds from sales and maturities of investments | 88,153 | 58,346 | 59,534 |
Purchase of property, plant and equipment | (15,970) | (5,077) | (3,280) |
Net cash (used in) provided by investing activities | (42,807) | 18,100 | 9,382 |
Cash flows from financing activities | |||
Proceeds from sale of common stock, net | 134,215 | 167,383 | 50,451 |
Proceeds related to issuance of stock for stock-based compensation arrangements, net | 1,429 | 1,242 | 1,387 |
Net cash provided by financing activities | 135,644 | 168,625 | 51,838 |
Net change in cash and cash equivalents | (376) | 106,885 | 5,474 |
Cash and cash equivalents, at beginning of period | 197,945 | 91,060 | 85,586 |
Cash and cash equivalents, at end of period | 197,569 | 197,945 | 91,060 |
Supplemental disclosures | |||
Cash paid for interest | 2,188 | 2,192 | 2,186 |
Cash paid for income taxes | 0 | 1,790 | 600 |
Non-cash investing and financing activities: | |||
Capital lease obligation | 689 | 0 | 0 |
Deferred costs from the sale of common stock | 403 | 70 | 0 |
Build-to-suit lease transaction | |||
Envisia Therapeutics Inc. | |||
Non-cash investing and financing activities: | |||
Equity issued for Envisia Asset Acquisition | $ 14,302 | $ 0 | $ 0 |
The Company
The Company | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
The Company | The Company Aerie Pharmaceuticals, Inc. (“Aerie”), with its wholly-owned subsidiaries, Aerie Distribution, Inc., Aerie Pharmaceuticals Limited and Aerie Pharmaceuticals Ireland Limited (“Aerie Distribution,” “Aerie Limited” and “Aerie Ireland Limited,” respectively, together with Aerie, the “Company”), is an ophthalmic pharmaceutical company focused on the discovery, development and commercialization of first-in-class therapies for the treatment of patients with open-angle glaucoma and other diseases of the eye. The Company has its principal executive offices in Durham, North Carolina, and operates as one business segment. The Company has an FDA-approved product, Rhopressa ® (netarsudil ophthalmic solution) 0.02% (“Rhopressa ® ”), and an advanced-stage product candidate, Roclatan TM (netarsudil/latanoprost ophthalmic solution) 0.02% / 0.005% (“Roclatan TM ”), both designed to reduce elevated intraocular pressure (“IOP”) in patients with open-angle glaucoma or ocular hypertension. The Company intends to commercialize Rhopressa ® and Roclatan TM , if approved, on its own in North American markets. The Company’s strategy also includes pursuing regulatory approval for Rhopressa ® and Roclatan TM in Europe and Japan on its own. Rhopressa ® , is a once-daily eye drop designed to reduce elevated IOP in patients with open-angle glaucoma or ocular hypertension that received U.S. Food and Drug Administration (“FDA”) approval on December 18, 2017. The Company expects to launch Rhopressa ® in the United States in mid-second quarter of 2018. The Company also intends to file a marketing authorization application with the European Medicines Agency for Rhopressa ® in the second half of 2018. Additionally, the Company has commenced Phase 1 and Phase 2 clinical trial activities for Rhopressa ® on Japanese patients in the United States and anticipates conducting future Phase 3 registration trials in Japan with the objective of receiving regulatory approval of Rhopressa ® in Japan. The Company’s advanced-stage product candidate, Roclatan TM , is a once-daily fixed-dose combination of Rhopressa ® and latanoprost for which the Company plans to submit a New Drug Application (“NDA”) to the FDA in the second quarter of 2018. The Company is currently conducting a Phase 3 trial, named Mercury 3, in Europe comparing Roclatan TM to Ganfort ® , which if successful, is expected to improve its commercialization prospects in that region. Mercury 3 is not necessary for approval in the United States. In 2015, the Company revised its corporate structure to align with its business strategy outside of North America by establishing Aerie Limited and Aerie Ireland Limited. Aerie assigned the beneficial rights to its non-U.S. and non-Canadian intellectual property for Rhopressa ® and Roclatan TM to Aerie Limited (the “IP Assignment”). As part of the IP Assignment, Aerie and Aerie Limited entered into a research and development cost-sharing agreement pursuant to which Aerie and Aerie Limited will share the costs of the development of intellectual property and Aerie Limited and Aerie Ireland Limited entered into a license arrangement pursuant to which Aerie Ireland Limited will develop and commercialize the beneficial rights of the intellectual property assigned as part of the IP Assignment. In 2016, Aerie assigned the beneficial rights to certain of Aerie’s intellectual property in the United States and Canada to Aerie Distribution, and amended and restated the research and development cost sharing agreement to transfer Aerie’s rights and obligations under the agreement to Aerie Distribution. On July 31, 2017, the Company entered into a collaborative research, development and licensing agreement with DSM, a global science-based company headquartered in the Netherlands. The research collaboration agreement includes an option to license DSM’s bio-erodible polymer implant technology for evaluating its application to the delivery of certain Aerie compounds to treat ophthalmic diseases. This technology uses polyesteramide polymers to produce an injectable, thin fiber that is minute in size. Preclinical experiments have demonstrated early success in conjunction with Aerie’s preclinical molecule, AR-13503, including demonstration of linear, sustained elution rates over several months and achievement of target retinal drug concentrations. On October 4, 2017, the Company entered into an Asset Purchase Agreement (the “Agreement”) with Envisia Therapeutics Inc. (“Envisia”) to acquire the rights to use PRINT ® technology in ophthalmology, as well as rights relating to Envisia’s preclinical dexamethasone steroid implant for the potential treatment of diabetic macular edema that utilizes the PRINT ® technology, referred to as AR-1105. Under the terms of the Agreement, the Company (a) made an upfront cash payment of $10.5 million and issued 263,146 shares of Aerie’s common stock valued at approximately $14.3 million and (b) agreed to make potential milestone payments of up to an aggregate of $45.0 million , contingent upon the achievement of certain product regulatory approvals. Under the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 805: Business Combinations (“ASC Topic 805”), including the provisions of Accounting Standards Update (“ASU”) 2017-01 (see Note 2), the Company accounted for the transaction as an asset acquisition rather than a business combination, and expensed $24.8 million of acquired in-process research and development (“IPR&D”) to research and development in the consolidated statement of operations and comprehensive loss during the three months ended December 31, 2017 . In addition, any milestone payments will be recognized only once the contingency is resolved and such amounts are payable. The Company has not yet commenced commercial operations and therefore has not generated product revenue. The Company received FDA approval for Rhopressa ® on December 18, 2017, and expects to launch Rhopressa ® in mid-second quarter of 2018. As a result, Aerie expects to commence generating product revenues related to sales of Rhopressa ® in mid-2018. The Company’s activities since inception have primarily consisted of developing product candidates, raising capital and performing research and development activities. The Company has incurred losses and experienced negative operating cash flows since inception. The Company has funded its operations primarily through the sale of equity securities (Note 9) and issuance of convertible notes (Note 7). If the Company does not successfully commercialize Rhopressa ® , Roclatan TM or any future product candidates, it may be unable to generate product revenue or achieve profitability. Accordingly, the Company may be required to obtain further funding through public or private offerings, debt financings, collaboration and licensing arrangements or other sources. Adequate additional funding may not be available to the Company on acceptable terms, or at all. If the Company is unable to raise capital when needed or on attractive terms, it may be forced to delay, reduce or eliminate its research and development programs or commercialization and manufacturing efforts. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Basis of Presentation and Consolidation The Company’s consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The consolidated financial statements include the accounts of Aerie and its wholly-owned subsidiaries. All intercompany accounts, transactions and profits have been eliminated in consolidation. Certain reclassifications have been made to prior year amounts to conform to the current year presentation. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of income and expenses during the reporting periods. Significant items subject to such estimates and assumptions include the valuation of stock options and operating expense accruals. Actual results could differ from the Company’s estimates. Segment Information Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business as one operating segment. Cash Equivalents The Company’s cash and cash equivalents are held principally at several financial institutions and at times may exceed insured limits. The Company has placed these funds in high quality institutions in order to minimize risk relating to exceeding insured limits. Inventories Prior to the date the Company obtains regulatory approval for any of its product candidates, manufacturing costs related to commercial production are expensed as selling, general and administrative expense. Once regulatory approval is obtained, the Company capitalizes such costs as inventory. Rhopressa ® obtained regulatory approval on December 18, 2017, but no inventory was produced from the approval date through year end; therefore, no inventory has been capitalized on the consolidated balance sheet as of December 31, 2017. Inventories will be stated at the lower of cost or estimated realizable value. The Company will determine the cost of inventory using the first-in, first-out (“FIFO”) method. Property, Plant and Equipment, Net Property, plant and equipment is recorded at historical cost. Depreciation is calculated using the straight-line method over the estimated useful lives of the related assets. Construction-in-progress reflects amounts incurred for property, plant or equipment construction or improvements that have not been yet placed in service, which primarily relates to the build-out of the Company’s manufacturing plant in Ireland. Repairs and maintenance are expensed when incurred. Upon retirement or sale, the cost of the assets disposed of and the related accumulated depreciation are removed from the accounts, and any resulting gain or loss is included in the determination of net loss. The Company capitalizes certain costs incurred in connection with obtaining or developing internal-use software including external direct costs of materials and services involved with the software development. Capitalized software costs are included in property, plant and equipment and are amortized over its useful life beginning when the software project is substantially complete and the asset is ready for its intended use. Costs incurred during the preliminary project stage and post-implementation stage, along with maintenance and training costs, are expensed as incurred. Estimated useful lives by major asset category are as follows: Manufacturing equipment 10 years Laboratory equipment 7 years Furniture and fixtures 5 years Software and computer equipment 3 years Leasehold improvements Lower of estimated useful life or term of lease Impairment of Long-Lived Assets The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by a comparison of the carrying amount of an asset or asset group to estimated undiscounted future cash flows expected to be generated by the asset or asset group. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fair value of the asset. For the years ended December 31, 2017 , 2016 and 2015 , no such impairment losses have been recorded by the Company. Acquisitions The Company evaluates acquisitions to determine whether the acquisition is a business combination or an acquisition of assets under ASC Topic 805. Business combinations are accounted for using the acquisition method of accounting, whereby assets acquired and liabilities assumed are recorded as of the acquisition date at their respective fair values and excess of the fair value of the consideration transferred over the fair value of the net assets acquired is recorded as goodwill. In an asset acquisition that does not constitute a business, no goodwill is recognized, and the net assets acquired are generally recorded at cost. See below for an explanation of a new ASU adopted as of July 1, 2017, which clarifies the definition of a business and provides a screen to determine when an integrated set of assets and activities is not a business. Significant judgment is required in estimating the fair value of intangible assets and in a determination of whether an acquisition is a business combination or an acquisition of assets. The fair value estimates are based on available historical information and on future expectations and assumptions deemed reasonable by management, but are inherently uncertain. Our consolidated financial statements as of and for the year ended December 31, 2017 include the impact of the acquisition of assets from Envisia (see Note 1 for additional information). Research and Development Costs Research and development costs are charged to expense as incurred and include, but are not limited to: • employee-related expenses including salaries, benefits, travel and stock-based compensation expense for research and development personnel; • expenses incurred under agreements with contract research organizations (“CROs”), contract manufacturing organizations and service providers that assist in conducting clinical and preclinical studies; • costs associated with any collaboration arrangements, licenses or acquisitions of preclinical molecules, product candidates or technologies; • costs associated with preclinical activities and development activities; • costs associated with regulatory operations; and • depreciation expense for assets used in research and development activities. Costs for certain development activities, such as clinical studies, are recognized based on an evaluation of the progress to completion of specific tasks using data such as patient enrollment, clinical site activations, or information provided to the Company by its vendors on their actual costs incurred. Payments for these activities are based on the terms of the individual arrangements, which may differ from the patterns of costs incurred, and are reflected in the consolidated financial statements as prepaid expenses or accrued expenses as deemed appropriate. No material adjustments to these estimates have been recorded in these consolidated financial statements. Research and development costs also include the cost of IPR&D projects acquired as part of an asset acquisition that have no alternative future use. Milestone payments due to third parties in connection with research and development activities prior to regulatory approval are expensed as incurred, while milestone payments due to third parties upon, or subsequent to, regulatory approval are capitalized and amortized over the estimate useful life. Stock-Based Compensation Stock-based compensation for awards granted to employees and non-employees is measured at grant date, based on the estimated fair value of the award. The Company estimates the fair value of options to purchase common stock using a Black-Scholes option pricing model. The Black-Scholes option pricing model utilizes assumptions including expected term, volatility, a risk-free interest rate, and an expected dividend yield. The Company utilized the guidance set forth in the Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin 107, Share-Based Payment (“SAB 107”), to determine the expected term of options, as it does not have sufficient historical exercise and post-vesting termination data to provide a reasonable basis upon which to estimate the expected term of stock options granted to employees. The simplified method utilizes the midpoint between the vesting date and the maximum contractual expiration date as the expected term. Volatility is based on the historical volatility of the Company as well as several public entities that are similar to the Company. The risk-free interest rate is based on the yields of U.S. Treasury securities with maturities similar to the expected term. The fair value of restricted stock awards (“RSAs”), including restricted stock awards with non-market performance and service conditions (“PSAs”) is determined based on the fair value of Aerie’s common stock on the date of grant. Compensation expense related to RSAs is recognized ratably over the vesting period. As the PSAs have multiple performance conditions, compensation expense is recognized for each vesting tranche over the respective requisite service period of each tranche if and when the Company’s management deems it probable that the performance conditions will be satisfied. Stock-based compensation related to stock options, RSAs and PSAs is expensed on a straight-line basis over the relevant vesting period. The fair value of unvested awards granted to non-employees is remeasured each period until the related service is complete. Compensation expense for employee stock purchase plan rights (“stock purchase rights”) is measured and recognized on the date that Aerie becomes obligated to issue shares of common stock and is based on the difference between the fair value of Aerie’s common stock and the purchase price on such date. As of the adoption of ASU 2016-09 on January 1, 2017 (see “Adoption of New Accounting Standards” below), the Company accounts for forfeitures as they occur. All stock-based compensation expense is recorded between selling, general and administrative and research and development costs in the consolidated statements of operations and comprehensive loss based upon the underlying employees’ roles within the Company. Investments The Company determines the appropriate classification of its investments in debt and equity securities at the time of purchase. The Company’s investments are comprised of certificates of deposit, commercial paper, corporate bonds and government agency securities that are classified as available-for-sale in accordance with ASC Topic 320, Investments—Debt and Equity Securities . The Company classifies investments available to fund current operations as current assets on its consolidated balance sheets. Investments are classified as long-term assets on the consolidated balance sheets if (i) the Company has the intent and ability to hold the investments for a period of at least one year and (ii) the contractual maturity date of the investments is greater than one year. Available-for-sale investments are recorded at fair value, with unrealized gains or losses included in comprehensive loss on the consolidated statements of operations and comprehensive loss and in accumulated other comprehensive loss on the consolidated balance sheets. Realized gains and losses are determined using the specific identification method and are included as a component of other income (expense), net. Realized gains or losses were immaterial for the years ended December 31, 2017 , 2016 and 2015 . The Company reviews investments for other-than-temporary impairment whenever the fair value of an investment is less than the amortized cost and evidence indicates that an investment’s carrying amount is not recoverable within a reasonable period of time. To determine whether an impairment is other-than-temporary, the Company considers its intent to sell, or whether it is more likely than not that the Company will be required to sell the investment before recovery of the investment’s amortized cost basis. Evidence considered in this assessment includes reasons for the impairment, the severity and the duration of the impairment and changes in value subsequent to period end. The carrying value of these investments was not impaired as of December 31, 2017 . Fair Value Measurements The Company records certain financial assets and liabilities at fair value in accordance with the provisions of ASC Topic 820, Fair Value Measurements and Disclosures . As defined in the guidance, fair value, defined as an exit price, represents the amount that would be received to sell an asset or pay to transfer a liability in an orderly transaction between market participants. As a result, fair value is a market-based approach that should be determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering these assumptions, the guidance defines a three-tier value hierarchy that prioritizes the inputs used in the valuation methodologies in measuring fair value. • Level 1—Unadjusted quoted prices in active, accessible markets for identical assets or liabilities. • Level 2—Other inputs that are directly or indirectly observable in the marketplace. • Level 3—Unobservable inputs that are supported by little or no market activity. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There were no transfers between the different levels of the fair value hierarchy in 2017 or in 2016. Comprehensive Loss Comprehensive loss is comprised of net loss and other comprehensive loss. Other comprehensive loss includes changes in stockholders’ equity that are excluded from net income (loss), specifically changes in unrealized gains and losses on the Company’s available-for-sale securities. Income Taxes Deferred tax assets or liabilities are recorded for temporary differences between financial statement and tax basis of assets and liabilities, using enacted rates in effect for the year in which the differences are expected to reverse. A valuation allowance is recorded if it is more likely than not that a deferred tax asset will not be realized. The Company has provided a full valuation allowance on its deferred tax assets that consist of federal and state net operating losses, stock-based compensation and tax credits as of December 31, 2017 and 2016 (Note 8). The Company reduced its valuation allowance during the year ended December 31, 2017 for federal alternative minimum tax (“AMT”) carryforwards that became refundable under the Tax Act (defined herein). See Note 8 for additional information. The Company recognizes the impact of an uncertain tax position in the consolidated financial statements only if it is more likely than not that the tax position will be sustained upon examination by the taxing authorities. The Company’s policy is to record interest and penalties on uncertain tax positions as income tax expense. The Company did not recognize interest or penalties on uncertain tax positions for the years ended December 31, 2017 , 2016 or 2015 . As of December 31, 2017 and 2016 , the Company had no uncertain tax positions. Adoption of New Accounting Standards In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business . The new standard clarifies the definition of a business and provides a screen to determine when an integrated set of assets and activities is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired, or disposed of, is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. The new standard was effective for the Company beginning on January 1, 2018; however, Aerie elected to early adopt this standard as of July 1, 2017. Under this guidance, the October 4, 2017 transaction to acquire assets from Envisia was determined to meet the criteria of an asset acquisition rather than a business combination resulting in a $24.8 million charge to research and development expense on the consolidated statement of operations and comprehensive loss in the three months ended December 31, 2017. See Note 1 for additional information. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Shared-Based Payment Accounting, which provides guidance related to how companies account for certain aspects of share-based payment awards to employees, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. This ASU was effective for the Company beginning on January 1, 2017, with different transition methods for the various provisions. The adoption of ASU 2016-09 had the following impact on the consolidated financial statements and accounting policies: • The Company elected to adopt a new policy to recognize forfeitures in the period in which they occur. Prior to the adoption of this guidance, forfeitures were estimated such that expense was recognized for the shares expected to vest, and adjustments were made if actual forfeitures differed from those estimates. The financial statement impact of this policy change was immaterial under the modified retrospective adoption. • Classification of excess tax benefits on the statement of cash flows has been prospectively adopted and classified within operating activities in the statement of cash flows for the year ended December 31, 2017. In prior periods, excess tax benefits are shown within financing activities. • Classification of taxes paid on employees’ behalf through withholding of shares on restricted stock awards on the statement of cash flows will continue to be classified within financing activities. Recently Issued Accounting Standards In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting , which clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. Under ASU 2017-09, an entity will not apply modification accounting to a share-based payment award if the award’s fair value, vesting conditions and classification as an equity or liability instrument are the same immediately before and after the change. ASU 2017-09 will be applied prospectively to awards modified on or after the adoption date. The guidance became effective for the Company beginning on January 1, 2018. The impact of the adoption of this guidance on its consolidated financial statements would be dependent on future modifications to share-based payment awards, if any. In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory , which eliminates the exception to the principle in ASC Topic 740, Income Taxes , that generally requires comprehensive recognition of current and deferred income taxes for all intra-entity sales of assets other than inventory. As a result, a reporting entity would recognize the tax expense from the sale of the asset in the seller’s tax jurisdiction when the transfer occurs, even though the pre-tax effects of that transaction are eliminated in consolidation. This ASU became effective for the Company on January 1, 2018, and must be applied on a modified retrospective basis through a cumulative-effect adjustment directly to accumulated deficit as of the beginning of the period of adoption. At December 31, 2017, the Company had $2.1 million of income tax effects deferred from past intercompany transactions that are recorded as prepaid assets within other assets, net, at December 31, 2017 that will be adjusted through the opening accumulated deficit as of January 1, 2018. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which requires that financial assets measured at amortized cost be presented at the net amount expected to be collected. Currently, U.S. GAAP delays recognition of the full amount of credit losses until the loss is probable of occurring. Under this ASU, the income statement will reflect an entity’s current estimate of all expected credit losses. The measurement of expected credit losses will be based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. Credit losses relating to available-for-sale debt securities will be recorded through an allowance for credit losses rather than as a direct write-down of the security. This ASU is effective for the Company beginning on January 1, 2020, with early adoption permitted beginning on January 1, 2019. The new guidance prescribes different transition methods for the various provisions. The Company is currently evaluating the impact of ASU 2016-13 on its consolidated financial statements and disclosures. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) , which requires lessees to recognize a right of use asset and related lease liability for those leases classified as operating leases at the commencement date and for those leases that have lease terms of more than 12 months. The guidance is effective for the Company beginning on January 1, 2019, and all annual and interim periods thereafter, with early adoption permitted, and must be adopted using a modified retrospective transition approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements, and provides for certain practical expedients. The Company is currently evaluating the impact of ASU 2016-02 on its consolidated financial statements and disclosures. In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities , which provides guidance related to the accounting for equity investments, financial liabilities under the fair value option and the presentation and disclosure requirements for financial instruments. The guidance became effective for the Company beginning on January 1, 2018 and prescribes different transition methods for the various provisions. The Company does not expect ASU 2016-01 to have a material impact on its consolidated financial statements and disclosures. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) . The standard states that an entity should recognize revenue based on the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The FASB has subsequently issued amendments to ASU 2014-09 that have the same effective date of January 1, 2018. The future impact of ASU 2014-09 will be dependent on the nature of the Company’s forthcoming revenue contracts and arrangements, if any. Net Loss per Common Share Basic net loss per common share (“Basic EPS”) is calculated by dividing the net loss by the weighted average number of shares of common stock outstanding for the period, without consideration for potentially dilutive securities with the exception of warrants for common stock with a $0.05 exercise price, which are exercisable for nominal consideration and are therefore included in the calculation of the weighted-average number of shares of common stock as common stock equivalents. Diluted net loss per share (“Diluted EPS”) gives effect to all dilutive potential shares of common stock outstanding during this period. For Diluted EPS, net loss used in calculating Basic EPS is adjusted for certain items related to the dilutive securities. For all periods presented, Aerie’s potential common stock equivalents have been excluded from the computation of Diluted EPS as their inclusion would have had an anti-dilutive effect. The potential common stock equivalents that have been excluded from the computation of Diluted EPS consist of the following: DECEMBER 31, 2017 2016 2015 2014 Convertible Notes 5,040,323 5,040,323 5,040,323 Outstanding stock options 6,457,343 5,255,930 4,583,586 Stock purchase warrants 157,500 157,500 157,500 Nonvested restricted stock awards 447,049 164,194 119,993 |
Investments
Investments | 12 Months Ended |
Dec. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments Cash, cash equivalents and investments as of December 31, 2017 included the following: GROSS GROSS AMORTIZED UNREALIZED UNREALIZED FAIR (in thousands) COST GAINS LOSSES VALUE Cash and cash equivalents: Cash and money market funds $ 197,569 $ — $ — $ 197,569 Total cash and cash equivalents $ 197,569 $ — $ — $ 197,569 Investments: Commercial paper (due within 1 year) $ 30,883 $ — $ — $ 30,883 Corporate bonds (due within 1 year) 21,231 — (28 ) 21,203 Total investments $ 52,114 $ — $ (28 ) $ 52,086 Total cash, cash equivalents and investments $ 249,683 $ — $ (28 ) $ 249,655 Cash, cash equivalents and investments as of December 31, 2016 included the following: GROSS GROSS AMORTIZED UNREALIZED UNREALIZED FAIR (in thousands) COST GAINS LOSSES VALUE Cash and cash equivalents: Cash and money market funds $ 196,445 $ — $ — $ 196,445 Commercial paper 1,500 — — 1,500 Total cash and cash equivalents $ 197,945 $ — $ — $ 197,945 Investments: Certificates of deposit (due within 1 year) $ 6,920 $ 4 $ (1 ) $ 6,923 Corporate bonds (due within 1 year) 27,615 4 (75 ) 27,544 Government agencies (due within 1 year) 1,250 — — 1,250 Total investments $ 35,785 $ 8 $ (76 ) $ 35,717 Total cash, cash equivalents and investments $ 233,730 $ 8 $ (76 ) $ 233,662 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The following tables summarize the fair value of financial assets and liabilities that are measured at fair value and the classification by level of input within the fair value hierarchy: FAIR VALUE MEASUREMENTS AS OF DECEMBER 31, 2017 (in thousands) LEVEL 1 LEVEL 2 LEVEL 3 TOTAL Cash and cash equivalents: Cash and money market funds $ 197,569 $ — $ — $ 197,569 Total cash and cash equivalents: $ 197,569 $ — $ — $ 197,569 Investments: Commercial paper $ — $ 30,883 $ — $ 30,883 Corporate bonds — 21,203 — 21,203 Total investments $ — $ 52,086 $ — $ 52,086 Total cash, cash equivalents and investments: $ 197,569 $ 52,086 $ — $ 249,655 FAIR VALUE MEASUREMENTS AS OF DECEMBER 31, 2016 (in thousands) LEVEL 1 LEVEL 2 LEVEL 3 TOTAL Cash and cash equivalents: Cash and money market funds $ 196,445 $ — $ — $ 196,445 Commercial paper — 1,500 — 1,500 Total cash and cash equivalents: $ 196,445 $ 1,500 $ — $ 197,945 Investments: Certificates of deposit $ — $ 6,923 $ — $ 6,923 Corporate bonds — 27,544 — 27,544 Government agencies — 1,250 — 1,250 Total investments $ — $ 35,717 $ — $ 35,717 Total cash, cash equivalents and investments: $ 196,445 $ 37,217 $ — $ 233,662 Convertible Notes As of December 31, 2017 and 2016 , the estimated fair value of the $125.0 million aggregate principal amount of senior secured convertible notes (the “2014 Convertible Notes”) was $327.6 million and $209.6 million , respectively. The estimated fair value of the 2014 Convertible Notes was determined using a scenario analysis and Monte Carlo simulation model to capture the various features of the 2014 Convertible Notes. The scenario analysis and Monte Carlo simulation require the use of Level 3 unobservable inputs and subjective assumptions, including but not limited to the probability of conversion, stock price volatility, the risk-free interest rate and credit spread. The increase in the estimated fair value of the 2014 Convertible Notes was primarily attributable to the increase in the closing price of Aerie’s common stock on December 31, 2017 compared to December 31, 2016 . The estimates presented are not necessarily indicative of amounts that could be realized in a current market exchange. The use of alternative market assumptions and estimation methodologies could have a material effect on these estimates of fair value. |
Property, Plant and Equipment,
Property, Plant and Equipment, Net | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment, Net | Property, Plant and Equipment, Net Property, plant and equipment, net consists of the following: (in thousands) DECEMBER 31, 2017 2016 Manufacturing equipment $ 2,082 $ 1,689 Laboratory equipment 3,602 2,537 Furniture and fixtures 1,209 808 Software and computer equipment 1,932 1,732 Leasehold improvements 1,887 641 Construction-in-progress 24,228 2,695 34,940 10,102 Less: Accumulated depreciation (3,008 ) (2,245 ) $ 31,932 $ 7,857 Depreciation expense was $1.4 million , $1.0 million and $0.3 million for the years ended December 31, 2017 , 2016 and 2015 , respectively. Manufacturing Plant Build-Out In January 2017, the Company entered into a Euro-denominated lease agreement, expiring in September 2037, for a new manufacturing plant in Athlone, Ireland, under which the Company is leasing approximately 30,000 square feet of interior floor space for build-out. The Company is permitted to terminate the lease beginning in September 2027. Minimum expected lease payments were as follows at December 31, 2017 (a) : (in thousands) 2018 $ 262 2019 262 2020 262 2021 262 2022 271 2023 and thereafter 1,579 Total minimum lease payments (b) $ 2,898 (a) Uses foreign exchange rates in effect at December 31, 2017 . (b) This represents the obligation through the minimum lease term of September 2027. If the Company utilizes the leased space through the full term of the lease, expiring in September 2037, the total rental payments would be $6.5 million . The Company is not the legal owner of the leased space. However, in accordance with ASC Topic 840, Leases , the Company is deemed to be the owner of the leased space, including the building shell, during the construction period because of the Company’s expected level of direct financial and operational involvement in the substantial tenant improvements required. As a result, the Company capitalized approximately $4.2 million as a build-to-suit asset within property, plant and equipment, net and recognized a corresponding build-to-suit facility lease obligation as a liability on its consolidated balance sheets equal to the estimated replacement cost of the building at the inception of the lease. Additionally, construction costs incurred as part of the build-out and tenant improvements will also be capitalized within property, plant and equipment, net. Costs of approximately $17.4 million have been capitalized during the year ended December 31, 2017 , related to both equipment purchases and the build-out of the facility. In 2016 , the Company capitalized $2.7 million of manufacturing equipment. Lease payments made under the lease will be allocated to interest expense and the build-to-suit facility lease obligation based on the implicit rate of the build-to-suit facility lease obligation. The build-to-suit facility obligation was approximately $5.7 million as of December 31, 2017 , of which $0.3 million was classified within accrued expenses and other current liabilities as of December 31, 2017 . The lease obligation is denominated in Euros and is remeasured to U.S. dollars at the balance sheet date with any foreign exchange gain or loss recognized within other income (expense), net on the consolidated statements of operations and comprehensive loss. Unrealized foreign currency loss related to the remeasurement of the build-to-suit facility lease obligation for the year ended December 31, 2017 was $0.6 million . |
Accrued Expenses & Other Curren
Accrued Expenses & Other Current Liabilities | 12 Months Ended |
Dec. 31, 2017 | |
Payables and Accruals [Abstract] | |
Accrued Expenses & Other Current Liabilities | Accrued Expenses & Other Current Liabilities Accrued expenses and other current liabilities consist of the following: DECEMBER 31, (in thousands) 2017 2016 Accrued expenses and other current liabilities: Accrued compensation and benefits $ 7,886 $ 4,111 Accrued consulting and professional fees 3,841 1,142 Accrued research and development (1) 1,855 5,998 Accrued other (2) 5,357 2,510 $ 18,939 $ 13,761 (1) Comprised of accruals such as fees for investigative sites, contract research organizations, contract manufacturing organizations and other service providers that assist in conducting preclinical research studies and clinical trials. (2) Comprised of accruals related to commercial manufacturing activities, interest payable and other business-related expenses. |
Convertible Notes
Convertible Notes | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Convertible Notes | Convertible Notes In September 2014, Aerie issued $125.0 million aggregate principal amount of the 2014 Convertible Notes to Deerfield Partners, L.P., Deerfield International Master Fund, L.P., Deerfield Private Design Fund III, L.P., Deerfield Special Situations Fund, L.P. and Deerfield Special Situations International Master Fund, L.P., collectively with their transferees, “Deerfield.” The 2014 Convertible Notes were issued pursuant to a note purchase agreement (as amended and supplemented from time to time, the “Note Purchase Agreement”), dated as of September 8, 2014, among Aerie and the Deerfield entities party thereto. The 2014 Convertible Notes bear interest at a rate of 1.75% per annum payable quarterly in arrears on the first business day of each January, April, July and October. The 2014 Convertible Notes mature on the seventh anniversary from the date of issuance, unless earlier converted. The 2014 Convertible Notes are guaranteed on a senior secured basis by Aerie Distribution. The 2014 Convertible Notes constitute the senior secured obligations of Aerie and Aerie Distribution, collateralized by a first priority security interest in substantially all of the assets of Aerie and Aerie Distribution. The Note Purchase Agreement provides that, upon the request of Aerie, Deerfield will release all of the liens on the collateral and the security agreement will terminate if both of the following occur: (i) beginning one month after FDA approval of either Rhopressa ® or Roclatan TM , shares of Aerie’s common stock have traded at a price above $30 per share (subject to adjustment for any subdivision or combination of outstanding common stock) for 30 consecutive trading days, and (ii) Aerie is prepared to close a financing that will be secured by a lien on Aerie’s assets, subject only to the release of the lien on Aerie’s assets held by Deerfield. Also, in connection with the IP Assignment, Aerie granted Deerfield a security interest in certain intercompany promissory notes and pledged 65% of the voting stock of Aerie Limited. Upon the request of Aerie, Deerfield will release the lien on the intercompany promissory notes under certain circumstances. The 2014 Convertible Notes are convertible at any time at the option of Deerfield, in whole or in part, into shares of common stock, including upon the repayment of the 2014 Convertible Notes at maturity (the “Conversion Option”). However, upon conversion, Deerfield (together with their affiliates) is limited to a 9.985% ownership cap in shares of common stock (the “ 9.985% Cap”). The 9.985% Cap would remain in place upon any assignment of the 2014 Convertible Notes by Deerfield. The initial conversion price is $24.80 per share of common stock (equivalent to an initial conversion rate of 40.32 shares of common stock per $1,000 principal amount of 2014 Convertible Notes), representing a 30% premium over the closing price of the common stock on September 8, 2014. The conversion rate and the corresponding conversion price are subject to adjustment for stock dividends (other than a dividend for which Deerfield would be entitled to participate on an as-converted basis), stock splits, reverse stock splits and reclassifications. In addition, in connection with certain significant corporate transactions, Deerfield, at its option, may (i) require Aerie to prepay all or a portion of the principal amount of the 2014 Convertible Notes, plus accrued and unpaid interest, or (ii) convert all or a portion of the principal amount of the 2014 Convertible Notes into shares of common stock or receive the consideration Deerfield would have received had Deerfield converted the 2014 Convertible Notes immediately prior to the consummation of the transaction. The 2014 Convertible Notes provide for an increase in the conversion rate if Deerfield elects to convert their 2014 Convertible Notes in connection with a significant corporate transaction with the current maximum increase to the initial conversion rate being 12.07 shares of common stock per $1,000 principal amount of 2014 Conversion Notes, which decreases over time and is determined by reference to the price of the common stock prior to the consummation of the significant corporate transaction or the value of the significant corporate transaction. The Note Purchase Agreement contains various representations and warranties, and affirmative and negative covenants, customary for financings of this type, including restrictions on the incurrence of additional debt and liens on Aerie’s and its subsidiaries’ assets. As of December 31, 2017 , Aerie was in compliance with the covenants. The Note Purchase Agreement also provides for certain events of default, including the failure to pay principal and interest when due; inaccuracies in Aerie’s or Aerie Distribution’s representations and warranties to Deerfield; failure to comply with any of the covenants; Aerie’s or Aerie Distribution’s insolvency or the occurrence of certain bankruptcy-related events; certain judgments against Aerie and its subsidiaries; the suspension, cancellation or revocation of governmental authorizations that are reasonably expected to have a material adverse effect on Aerie’s business; the acceleration of a specified amount of indebtedness; and the failure to deliver shares of common stock upon conversion of the 2014 Convertible Notes. If any event of default were to occur, and continue beyond any applicable cure period, the holders of more than 50% of the aggregate principal amount of the then outstanding 2014 Convertible Notes would be permitted to declare the principal and accrued and unpaid interest to be immediately due and payable. The Company recorded the 2014 Convertible Notes as long-term debt at face value less $2.1 million in debt discount and issuance costs incurred at the time of the transaction, which are being amortized to interest expense using the effective interest method through the maturity of the 2014 Convertible Notes. The Company recognized $0.3 million of amortization of debt discount and issuance costs for each of the years ended December 31, 2017 , 2016 and 2015 . The table below summarizes the carrying value of the 2014 Convertible Notes as of December 31, 2017 and 2016: DECEMBER 31, (in thousands) 2017 2016 Gross proceeds $ 125,000 $ 125,000 Unamortized debt discount and issuance costs (1,155 ) (1,461 ) Carrying value $ 123,845 $123,539 Interest expense related to the 2014 Convertible Notes, exclusive of amortization of debt discount and issuance costs, was $2.1 million , $2.2 million and $2.2 million for the years ended December 31, 2017 , 2016 and 2015 , respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The provision for income taxes is based on net loss before income taxes as follows: DECEMBER 31, (in thousands) 2017 2016 2015 Net loss before income taxes: United States $ (133,113 ) $ (88,123 ) $ (59,211 ) Other (13,750 ) (10,743 ) (15,013 ) Net loss before income taxes $ (146,863 ) $ (98,866 ) $ (74,224 ) The components of the provision for income taxes are as follows: DECEMBER 31, (in thousands, except percentages) 2017 2016 2015 Provision for income taxes: Current: United States $ (24 ) $ 193 $ 139 Other — — — Total $ (24 ) $ 193 $ 139 Deferred: United States $ (1,734 ) $ — $ — Other — — — Total (1,734 ) — — Provision for income taxes $ (1,758 ) $ 193 $ 139 Effective tax rate 1.20 % (0.19 )% (0.19 )% Significant components of the Company’s net deferred income tax assets as of December 31, 2017 and 2016 consist of the following: DECEMBER 31, (in thousands) 2017 2016 Net deferred tax assets: Net operating loss carryforwards $ 58,172 $ 39,188 Stock-based compensation 13,681 11,845 U.S. tax credit carryforwards 4,182 4,566 Envisia asset acquisition 7,107 — Other assets, net 242 1,138 Valuation allowance (83,384 ) (56,737 ) Total net deferred income taxes $ — $ — A reconciliation of the statutory tax rates and the effective tax rates for the years ended December 31, 2017 , 2016 and 2015 is as follows: DECEMBER 31, 2017 2016 2015 U.S. federal tax rate 35.00 % 35.00 % 35.00 % Impact of federal tax legislation 25.82 % — % — % State income taxes, net of federal benefit 7.71 % 5.34 % (0.90 )% Taxable gain resulting from IP Assignment — % — % (75.31 )% Non-taxable foreign loss (0.51 )% (2.69 )% (6.98 )% Tax deferral from IP Assignment (0.10 )% (0.19 )% 3.56 % Other (2.11 )% (1.45 )% 0.02 % Change in valuation allowance (64.61 )% (36.20 )% 44.42 % Effective tax rate 1.20 % (0.19 )% (0.19 )% On December 22, 2017, H.R. 1 (commonly referred to as the “Tax Act”) was signed into law and enacted significant changes to the Internal Revenue Code of 1986, as amended. This new tax legislation, among other changes, reduces the federal corporate income tax rate from 35% to 21% effective January 1, 2018. Under U.S. GAAP, deferred tax assets and liabilities are required to be revalued during the period in which the new tax legislation is enacted. Therefore, the deferred tax assets and liabilities were remeasured during the period ended December 31, 2017, resulting in a reduction of the deferred tax asset balance and corresponding valuation allowance of $34.2 million due to the enacted changes in tax rate. The Tax Act also repealed the corporate AMT for tax years beginning after December 31, 2017, and provides that existing AMT credit carryovers are refundable in tax years beginning after December 31, 2017. The Company has approximately $1.7 million of AMT credit carryovers that are expected to be fully refunded between 2019 and 2022. This amount is recorded as a non-current receivable within other assets on the consolidated balance sheet as of December 31, 2017. On December 22, 2017, the SEC issued Staff Accounting Bulletin No. 118 to address the application of U.S. GAAP in situations when a registrant may not have the necessary information available in reasonable detail to complete the accounting for certain income tax effects. The Company has recognized provisional tax impacts related to the revaluation of its net deferred tax assets and the income tax benefit recognized for refundable AMT. The final impact assessment will be completed as additional information becomes available, but no later than one year from the enactment of the Tax Act, and may differ from provisional amounts, due to, among other things, additional analysis, changes in interpretations and assumptions the Company has made, additional regulatory guidance that may be issued, the filing of the Company’s tax return and actions the Company may take as a result of the Tax Act. At December 31, 2017 , the Company had federal and state net operating loss (“NOL”) carryforwards of approximately $196.2 million and $271.3 million , respectively, which expire from 2024 through 2037 . Included in the NOL carryforwards are approximately $8.9 million and $2.3 million of federal and state NOL carryforwards, respectively, related to stock-based awards that were recognized as deferred tax assets upon the adoption of ASU 2016-09 on January 1, 2017. The $3.7 million tax-effected adjustment under ASU 2016-09 related to these NOLs had no net impact on accumulated deficit since this amount was fully offset by a valuation allowance. NOL and tax credit carryforwards are subject to review and possible adjustment by the Internal Revenue Service and state tax authorities and may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant stockholders over a three -year period in excess of 50% , as defined under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, as well as similar state provisions. This could limit the amount of tax attributes that can be utilized annually to offset future taxable income or tax liabilities. Realization of future tax benefits is dependent on the Company’s ability to generate sufficient taxable income within the carryforward period. The Company provides a valuation allowance when it is more likely than not that deferred tax assets will not be realized. Due to the Company’s history of operating losses and lack of available evidence supporting future taxable income, the Company maintains a valuation allowance on all of its deferred tax assets as of December 31, 2017 . The Company reduced the valuation allowance on its deferred tax assets as of December 31, 2017 by $1.7 million related to federal AMT credit carryforwards which became fully refundable under the Tax Act. The increase in valuation allowance as of December 31, 2017 as compared to December 31, 2016 was primarily the result of the increase in NOL carryforwards. The IP Assignment in 2015 resulted in the recognition of a taxable gain for U.S. federal and state income tax purposes. The income tax expense of $2.8 million was recorded as a prepaid asset and is being amortized into income tax expense over the estimated remaining patent life of the intellectual property subject to the IP Assignment. For the year ended December 31, 2017 , the Company’s income tax benefit relates primarily to a deferred income tax benefit recognized for the refundable AMT, as discussed above, partially offset by amortization of the prepaid asset. For the years ended December 31, 2016 and 2015, the Company’s income tax expense relates to the amortization of the prepaid asset. The IP Assignment is subject to complex tax and transfer pricing regulations administered by taxing authorities in various jurisdictions. The relevant taxing authorities may disagree with the Company’s determinations as to the income and expenses attributable to specific jurisdictions. If such a disagreement were to occur, and the Company’s position were not sustained, the Company could be required to pay additional taxes, interest and penalties, which could result in one-time tax charges, higher effective tax rates and reduced cash flows than otherwise would be expected. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity During the year ended December 31, 2017 , Aerie issued and sold approximately 1.1 million shares of common stock under “at-the-market” sales agreements (“ATMs”) entered into in May 2017 and December 2017, and received net proceeds of approximately $61.1 million , after deducting fees and expenses. The Company also entered into an underwriting agreement, dated May 25, 2017, relating to the registered public offering of approximately 1.4 million shares of Aerie’s common stock at a price to the public of $53.75 per share, and received net proceeds of approximately $72.7 million , after deducting fees and expenses. Subsequent to December 31, 2017 , the Company received net proceeds of approximately $136.2 million through the issue and sale of Aerie’s common stock pursuant to the ATM that commenced in December 2017 and pursuant to an underwriting agreement, dated January 23, 2018, relating to the registered public offering of approximately 1.3 million shares of Aerie’s common stock. See Note 14 for additional information regarding these subsequent events. During the year ended December 31, 2016, Aerie issued and sold approximately 4.2 million shares of common stock under ATMs entered into in November 2015 and September 2016, and received net proceeds of approximately $96.2 million , after deducting fees and expenses. The Company also entered into an underwriting agreement, dated September 15, 2016, relating to the registered public offering of approximately 2.5 million shares of Aerie’s common stock at a price to the public of $29.50 , and received net proceeds of approximately $71.0 million , after deducting fees and expenses. During the year ended December 31, 2015, Aerie issued and sold approximately 1.8 million shares of common stock under ATMs entered into in November 2014 and November 2015, and received net proceeds of approximately $50.4 million , after deducting fees and expenses. Holders of common stock are entitled to dividends when and if declared by Aerie’s Board of Directors subject to prior rights of the holders of any preferred stock. The holder of each share of common stock is entitled to one vote. Warrants As of December 31, 2017 , the following equity classified warrants were outstanding: NUMBER OF UNDERLYING SHARES EXERCISE PRICE PER SHARE WARRANT EXPIRATION DATE 75,000 $5.00 February 2019 75,000 $5.00 November 2019 7,500 $5.00 August 2020 223,482 $0.05 December 2019 The warrants outstanding as of December 31, 2017 are all currently exercisable. As of December 31, 2017 and 2016 , all outstanding warrants are classified as equity and are recorded within additional paid-in capital on the consolidated balance sheets. |
Stock-based Compensation
Stock-based Compensation | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-based Compensation | Stock-based Compensation Stock-based compensation expense for options granted, RSAs, PSAs and stock purchase rights are reflected in the consolidated statements of operations and comprehensive loss as follows: YEAR ENDED DECEMBER 31, (in thousands) 2017 2016 2015 Selling, general and administrative $ 19,972 $ 13,013 $ 10,445 Research and development 6,106 3,781 2,500 Total $ 26,078 $ 16,794 $ 12,945 As of December 31, 2017 , the Company had $57.1 million of unrecognized compensation expense related to options outstanding under its equity plans. This expense is expected to be recognized over a weighted average period of 3.0 years as of December 31, 2017 . As of December 31, 2017 , the Company had $11.6 million of unrecognized compensation expense, related to unvested RSAs, including PSAs. This cost is expected to be recognized over a weighted average period of 2.8 years as of December 31, 2017 . Equity Plans The Company maintains three equity compensation plans, the 2005 Aerie Pharmaceutical Stock Plan (the “2005 Plan”), the 2013 Omnibus Incentive Plan (the “2013 Equity Plan”), which was amended and restated as the Aerie Pharmaceuticals, Inc. Amended and Restated Omnibus Incentive Plan (the “Amended and Restated Equity Plan”), as described below, and the Aerie Pharmaceuticals, Inc. Inducement Award Plan (the “Inducement Award Plan”), as described below. The 2005 Plan, the Amended and Restated Equity Plan and the Inducement Award Plan are referred to collectively as the “Plans.” On October 30, 2013, the effective date of the 2013 Equity Plan, the 2005 Plan was frozen and no additional awards have been or will be made under the 2005 Plan. Any remaining shares available for future grant under the 2005 Plan were allocated to the 2013 Equity Plan. On April 10, 2015, Aerie’s stockholders approved the adoption of the Amended and Restated Equity Plan and no additional awards have been or will be made under the 2013 Equity Plan. Any remaining shares available under the 2013 Equity Plan were allocated to the Amended and Restated Equity Plan. The Amended and Restated Equity Plan provides for the granting of up to 5,729,068 equity awards in respect of common stock of Aerie, including equity awards that were available for issuance under the 2013 Equity Plan. On December 7, 2016, Aerie’s Board of Directors approved the Inducement Award Plan which provides for the granting of up to 418,000 equity awards in respect of common stock of Aerie and was subsequently amended during the year ended December 31, 2017 to increase the equity awards that may be issued by an additional 874,500 shares. Awards granted under the Inducement Award Plan are intended to qualify as employment inducement awards under NASDAQ Listing Rule 5635(c)(4). Options to Purchase Common Stock Weighted average assumptions utilized in the fair value calculation for options to purchase common stock as of December 31, 2017 , 2016 and 2015 are as follows: YEAR ENDED DECEMBER 31, 2017 2016 2015 Expected term (years) 6.0 6.0 6.1 Expected stock price volatility 84 % 84 % 74 % Risk-free interest rate 2.0 % 1.4 % 1.6 % Dividend yield — % — % — % The following table summarizes the stock option activity under the Plans: NUMBER OF SHARES WEIGHTED AVERAGE EXERCISE PRICE WEIGHTED AGGREGATE (000’s) Options outstanding at December 31, 2016 5,255,930 $ 14.34 Granted 1,477,759 48.64 Exercised (241,050 ) 12.21 Canceled (35,296 ) 36.98 Options outstanding at December 31, 2017 6,457,343 $ 22.15 7.1 $ 243,240 Options exercisable at December 31, 2017 4,187,293 $ 13.55 6.2 $ 193,465 The weighted-average fair values of all stock options granted for the years ended December 31, 2017 , 2016 and 2015 was $35.01 , $14.48 and $16.19 , respectively. The aggregate intrinsic value of options exercised for the years ended December 31, 2017 , 2016 and 2015 was $8.6 million , $3.9 million and $4.3 million , respectively. The intrinsic value is calculated as the difference between the fair market value at December 31, 2017 and the exercise price per share of the stock options. The fair market value per share of common stock as of December 31, 2017 was $59.75 . The following table provides additional information about stock options that are outstanding and exercisable at December 31, 2017 : EXERCISE OPTIONS OUTSTANDING WEIGHTED AVERAGE REMAINING CONTRACTUAL LIFE (YEARS) OPTIONS EXERCISABLE $0.20 - $10.00 2,002,112 5.2 2,002,112 $10.01 - $16.00 401,578 7.9 199,514 $16.01 - $22.00 1,526,818 7.0 1,197,197 $22.01 - $27.00 294,030 7.3 184,671 $27.01 - $41.00 899,046 7.8 473,259 $41.01 - $64.90 1,333,759 9.4 130,540 6,457,343 4,187,293 Restricted Stock Awards The following table summarizes the RSA, including PSAs, activity under the Plans: NUMBER OF SH ARES WEIGHTED AVERAGE FAIR VALUE PER SHARE Nonvested RSAs at December 31, 2016 164,194 $ 19.87 Granted 344,512 48.03 Vested (59,091 ) 22.57 Canceled (2,566 ) 43.90 Nonvested RSAs at December 31, 2017 447,049 $ 41.08 The vesting of the RSAs is time and service based with terms of one to four years. The total fair value of restricted stock vested during the years ended December 31, 2017 , 2016 and 2015 was $1.3 million , $0.9 million and $0.2 million , respectively. During the year ended December 31, 2017 , the Company granted 98,817 RSAs with non-market performance conditions that vest upon the satisfaction of certain performance conditions and service conditions. Employee Stock Purchase Plan The Company maintains the 2013 Employee Stock Purchase Plan (the “Purchase Plan”) under which substantially all employees may purchase Aerie’s common stock through payroll deductions and lump sum contributions at a price equal to 85% of the lower of the fair market values of the stock as of the beginning or the end of the offering periods. Employees may not purchase more than the fair value equivalent of $25,000 of stock during any calendar year. The Purchase Plan provides for the issuance of up to 645,814 shares of Aerie’s common stock. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Lease Commitment Summary The following table presents future minimum commitments of the Company due under non-cancelable operating leases with original or remaining terms in excess of one year as of December 31, 2017 . The Company’s operating lease obligations are related to its principal executive office and research facility in Durham, North Carolina, and its offices in Irvine, California, Bedminster, New Jersey, and Dublin, Ireland. Minimum lease payments under operating leases were as follows at December 31, 2017 : (in thousands) 2018 $ 2,739 2019 3,046 2020 2,788 2021 2,360 2022 538 2023 and thereafter 577 Total minimum lease payments $ 12,048 Rent expense amounted to $2.0 million , $1.4 million and $1.5 million for the years ended December 31, 2017 , 2016 and 2015 , respectively, and is reflected in selling, general and administrative expenses and research and development expenses as determined by the underlying activities occurring at each of the Company’s locations. The Company acquired certain leased equipment in connection with the Envisia asset acquisition (see Note 1), which qualified for treatment as a capital lease. The minimum lease payments related to this lease are $0.5 million in 2018 and $0.2 million in 2019. Minimum expected lease payments related to the Company’s manufacturing plant in Athlone, Ireland, are not reflected in the table above (see Note 5). Litigation The Company may periodically become subject to legal proceedings and claims arising in connection with its business. Except as previously disclosed for matters which have now concluded, the Company is not a party to any known litigation, is not aware of any unasserted claims and does not have contingency reserves established for any litigation liabilities. Milestone Payments In association with the Envisia asset acquisition (see Note 1), contingent milestone payments of up to $45.0 million may be due, subject to achievement of certain product regulatory approvals using the IPR&D assets acquired, if achieved within the 15 -year milestone period. These contingent milestone payments are recognized only when the contingency is resolved (the milestone is achieved) and the consideration is paid or becomes payable. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Aerie has one operating segment: the discovery, development and commercialization of pharmaceutical products that address unmet medical needs, focusing on glaucoma and other diseases of the eye. The Company's business is managed by a single management team, which reports to the Chief Executive Officer. The following table presents total long-lived assets by location: DECEMBER 31, (in thousands) 2017 2016 United States $ 6,609 $ 5,161 Ireland 25,323 2,696 Total long-lived assets $ 31,932 $ 7,857 Included in the above table is $4.2 million related to the value of the building leased for the Company’s build-out of its manufacturing plant in Ireland, which was recognized with a corresponding financing obligation, as the Company was deemed to be the owner of the building during the construction period under U.S. GAAP. |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financial Data (Unaudited) | Selected Quarterly Financial Data (Unaudited) The following table presents selected unaudited quarterly financial information for the years ended December 31, 2017 and 2016 . The results for any quarter are not necessarily indicative of future quarterly results and, accordingly, period to period comparisons should not be relied upon as an indication of future performance. FOR THE QUARTER ENDED (in thousands, except per share amounts) DECEMBER 31, SEPTEMBER 30, JUNE 30, MARCH 31, 2017 Operating expenses $ 60,314 $ 32,182 $ 27,768 $ 25,429 Net loss $ (58,513 ) $ (32,372 ) $ (28,433 ) $ (25,787 ) Net loss per common share—basic and diluted $ (1.60 ) $ (0.89 ) $ (0.82 ) $ (0.76 ) DECEMBER 31, SEPTEMBER 30, JUNE 30, MARCH 31, 2016 Operating expenses $ 28,757 $ 23,315 $ 22,690 $ 22,110 Net loss $ (29,322 ) $ (23,814 ) $ (23,219 ) $ (22,704 ) Net loss per common share—basic and diluted $ (0.87 ) $ (0.81 ) $ (0.87 ) $ (0.85 ) |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Subsequent to December 31, 2017 , Aerie issued and sold approximately 1.0 million additional shares of common stock in January 2018 and received additional net proceeds of approximately $62.3 million , after deducting fees and expenses, under the ATM that commenced in December 2017. In addition, the Company entered into an underwriting agreement, dated January 23, 2018, related to the registered public offering of approximately 1.3 million shares of Aerie’s common stock and received net proceeds of approximately $74.0 million , after deducting fees and expenses. The transactions were made pursuant to an automatic shelf registration on Form S-3, filed with the SEC on September 15, 2016, that permits the offering, issuance and sale of an unlimited number of shares of common stock from time to time by Aerie. There are no remaining shares available for issuance under the ATM that commenced in December 2017. |
Significant Accounting Polici22
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The Company’s consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The consolidated financial statements include the accounts of Aerie and its wholly-owned subsidiaries. All intercompany accounts, transactions and profits have been eliminated in consolidation. |
Principles of Consolidation | The consolidated financial statements include the accounts of Aerie and its wholly-owned subsidiaries. All intercompany accounts, transactions and profits have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of income and expenses during the reporting periods. Significant items subject to such estimates and assumptions include the valuation of stock options and operating expense accruals. Actual results could differ from the Company’s estimates. |
Segment Information | Segment Information Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business as one operating segment. |
Cash Equivalents | Cash Equivalents The Company’s cash and cash equivalents are held principally at several financial institutions and at times may exceed insured limits. The Company has placed these funds in high quality institutions in order to minimize risk relating to exceeding insured limits. |
Inventories | Inventories Prior to the date the Company obtains regulatory approval for any of its product candidates, manufacturing costs related to commercial production are expensed as selling, general and administrative expense. Once regulatory approval is obtained, the Company capitalizes such costs as inventory. Rhopressa ® obtained regulatory approval on December 18, 2017, but no inventory was produced from the approval date through year end; therefore, no inventory has been capitalized on the consolidated balance sheet as of December 31, 2017. Inventories will be stated at the lower of cost or estimated realizable value. The Company will determine the cost of inventory using the first-in, first-out (“FIFO”) method. |
Property, Plant and Equipment, Net | Property, Plant and Equipment, Net Property, plant and equipment is recorded at historical cost. Depreciation is calculated using the straight-line method over the estimated useful lives of the related assets. Construction-in-progress reflects amounts incurred for property, plant or equipment construction or improvements that have not been yet placed in service, which primarily relates to the build-out of the Company’s manufacturing plant in Ireland. Repairs and maintenance are expensed when incurred. Upon retirement or sale, the cost of the assets disposed of and the related accumulated depreciation are removed from the accounts, and any resulting gain or loss is included in the determination of net loss. The Company capitalizes certain costs incurred in connection with obtaining or developing internal-use software including external direct costs of materials and services involved with the software development. Capitalized software costs are included in property, plant and equipment and are amortized over its useful life beginning when the software project is substantially complete and the asset is ready for its intended use. Costs incurred during the preliminary project stage and post-implementation stage, along with maintenance and training costs, are expensed as incurred. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by a comparison of the carrying amount of an asset or asset group to estimated undiscounted future cash flows expected to be generated by the asset or asset group. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fair value of the asset. |
Acquisitions | Acquisitions The Company evaluates acquisitions to determine whether the acquisition is a business combination or an acquisition of assets under ASC Topic 805. Business combinations are accounted for using the acquisition method of accounting, whereby assets acquired and liabilities assumed are recorded as of the acquisition date at their respective fair values and excess of the fair value of the consideration transferred over the fair value of the net assets acquired is recorded as goodwill. In an asset acquisition that does not constitute a business, no goodwill is recognized, and the net assets acquired are generally recorded at cost. See below for an explanation of a new ASU adopted as of July 1, 2017, which clarifies the definition of a business and provides a screen to determine when an integrated set of assets and activities is not a business. Significant judgment is required in estimating the fair value of intangible assets and in a determination of whether an acquisition is a business combination or an acquisition of assets. The fair value estimates are based on available historical information and on future expectations and assumptions deemed reasonable by management, but are inherently uncertain. |
Research and Development Costs | Research and Development Costs Research and development costs are charged to expense as incurred and include, but are not limited to: • employee-related expenses including salaries, benefits, travel and stock-based compensation expense for research and development personnel; • expenses incurred under agreements with contract research organizations (“CROs”), contract manufacturing organizations and service providers that assist in conducting clinical and preclinical studies; • costs associated with any collaboration arrangements, licenses or acquisitions of preclinical molecules, product candidates or technologies; • costs associated with preclinical activities and development activities; • costs associated with regulatory operations; and • depreciation expense for assets used in research and development activities. Costs for certain development activities, such as clinical studies, are recognized based on an evaluation of the progress to completion of specific tasks using data such as patient enrollment, clinical site activations, or information provided to the Company by its vendors on their actual costs incurred. Payments for these activities are based on the terms of the individual arrangements, which may differ from the patterns of costs incurred, and are reflected in the consolidated financial statements as prepaid expenses or accrued expenses as deemed appropriate. No material adjustments to these estimates have been recorded in these consolidated financial statements. Research and development costs also include the cost of IPR&D projects acquired as part of an asset acquisition that have no alternative future use. Milestone payments due to third parties in connection with research and development activities prior to regulatory approval are expensed as incurred, while milestone payments due to third parties upon, or subsequent to, regulatory approval are capitalized and amortized over the estimate useful life. |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation for awards granted to employees and non-employees is measured at grant date, based on the estimated fair value of the award. The Company estimates the fair value of options to purchase common stock using a Black-Scholes option pricing model. The Black-Scholes option pricing model utilizes assumptions including expected term, volatility, a risk-free interest rate, and an expected dividend yield. The Company utilized the guidance set forth in the Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin 107, Share-Based Payment (“SAB 107”), to determine the expected term of options, as it does not have sufficient historical exercise and post-vesting termination data to provide a reasonable basis upon which to estimate the expected term of stock options granted to employees. The simplified method utilizes the midpoint between the vesting date and the maximum contractual expiration date as the expected term. Volatility is based on the historical volatility of the Company as well as several public entities that are similar to the Company. The risk-free interest rate is based on the yields of U.S. Treasury securities with maturities similar to the expected term. The fair value of restricted stock awards (“RSAs”), including restricted stock awards with non-market performance and service conditions (“PSAs”) is determined based on the fair value of Aerie’s common stock on the date of grant. Compensation expense related to RSAs is recognized ratably over the vesting period. As the PSAs have multiple performance conditions, compensation expense is recognized for each vesting tranche over the respective requisite service period of each tranche if and when the Company’s management deems it probable that the performance conditions will be satisfied. Stock-based compensation related to stock options, RSAs and PSAs is expensed on a straight-line basis over the relevant vesting period. The fair value of unvested awards granted to non-employees is remeasured each period until the related service is complete. Compensation expense for employee stock purchase plan rights (“stock purchase rights”) is measured and recognized on the date that Aerie becomes obligated to issue shares of common stock and is based on the difference between the fair value of Aerie’s common stock and the purchase price on such date. As of the adoption of ASU 2016-09 on January 1, 2017 (see “Adoption of New Accounting Standards” below), the Company accounts for forfeitures as they occur. All stock-based compensation expense is recorded between selling, general and administrative and research and development costs in the consolidated statements of operations and comprehensive loss based upon the underlying employees’ roles within the Company. |
Investments | Investments The Company determines the appropriate classification of its investments in debt and equity securities at the time of purchase. The Company’s investments are comprised of certificates of deposit, commercial paper, corporate bonds and government agency securities that are classified as available-for-sale in accordance with ASC Topic 320, Investments—Debt and Equity Securities . The Company classifies investments available to fund current operations as current assets on its consolidated balance sheets. Investments are classified as long-term assets on the consolidated balance sheets if (i) the Company has the intent and ability to hold the investments for a period of at least one year and (ii) the contractual maturity date of the investments is greater than one year. Available-for-sale investments are recorded at fair value, with unrealized gains or losses included in comprehensive loss on the consolidated statements of operations and comprehensive loss and in accumulated other comprehensive loss on the consolidated balance sheets. Realized gains and losses are determined using the specific identification method and are included as a component of other income (expense), net. Realized gains or losses were immaterial for the years ended December 31, 2017 , 2016 and 2015 . The Company reviews investments for other-than-temporary impairment whenever the fair value of an investment is less than the amortized cost and evidence indicates that an investment’s carrying amount is not recoverable within a reasonable period of time. To determine whether an impairment is other-than-temporary, the Company considers its intent to sell, or whether it is more likely than not that the Company will be required to sell the investment before recovery of the investment’s amortized cost basis. Evidence considered in this assessment includes reasons for the impairment, the severity and the duration of the impairment and changes in value subsequent to period end. |
Fair Value Measurements | Fair Value Measurements The Company records certain financial assets and liabilities at fair value in accordance with the provisions of ASC Topic 820, Fair Value Measurements and Disclosures . As defined in the guidance, fair value, defined as an exit price, represents the amount that would be received to sell an asset or pay to transfer a liability in an orderly transaction between market participants. As a result, fair value is a market-based approach that should be determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering these assumptions, the guidance defines a three-tier value hierarchy that prioritizes the inputs used in the valuation methodologies in measuring fair value. • Level 1—Unadjusted quoted prices in active, accessible markets for identical assets or liabilities. • Level 2—Other inputs that are directly or indirectly observable in the marketplace. • Level 3—Unobservable inputs that are supported by little or no market activity. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There were no transfers between the different levels of the fair value hierarchy in 2017 or in 2016. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss is comprised of net loss and other comprehensive loss. Other comprehensive loss includes changes in stockholders’ equity that are excluded from net income (loss), specifically changes in unrealized gains and losses on the Company’s available-for-sale securities. |
Income Taxes | Income Taxes Deferred tax assets or liabilities are recorded for temporary differences between financial statement and tax basis of assets and liabilities, using enacted rates in effect for the year in which the differences are expected to reverse. A valuation allowance is recorded if it is more likely than not that a deferred tax asset will not be realized. The Company has provided a full valuation allowance on its deferred tax assets that consist of federal and state net operating losses, stock-based compensation and tax credits as of December 31, 2017 and 2016 (Note 8). The Company reduced its valuation allowance during the year ended December 31, 2017 for federal alternative minimum tax (“AMT”) carryforwards that became refundable under the Tax Act (defined herein). See Note 8 for additional information. The Company recognizes the impact of an uncertain tax position in the consolidated financial statements only if it is more likely than not that the tax position will be sustained upon examination by the taxing authorities. The Company’s policy is to record interest and penalties on uncertain tax positions as income tax expense. |
Recently Adopted and Issued Standards | Adoption of New Accounting Standards In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business . The new standard clarifies the definition of a business and provides a screen to determine when an integrated set of assets and activities is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired, or disposed of, is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. The new standard was effective for the Company beginning on January 1, 2018; however, Aerie elected to early adopt this standard as of July 1, 2017. Under this guidance, the October 4, 2017 transaction to acquire assets from Envisia was determined to meet the criteria of an asset acquisition rather than a business combination resulting in a $24.8 million charge to research and development expense on the consolidated statement of operations and comprehensive loss in the three months ended December 31, 2017. See Note 1 for additional information. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Shared-Based Payment Accounting, which provides guidance related to how companies account for certain aspects of share-based payment awards to employees, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. This ASU was effective for the Company beginning on January 1, 2017, with different transition methods for the various provisions. The adoption of ASU 2016-09 had the following impact on the consolidated financial statements and accounting policies: • The Company elected to adopt a new policy to recognize forfeitures in the period in which they occur. Prior to the adoption of this guidance, forfeitures were estimated such that expense was recognized for the shares expected to vest, and adjustments were made if actual forfeitures differed from those estimates. The financial statement impact of this policy change was immaterial under the modified retrospective adoption. • Classification of excess tax benefits on the statement of cash flows has been prospectively adopted and classified within operating activities in the statement of cash flows for the year ended December 31, 2017. In prior periods, excess tax benefits are shown within financing activities. • Classification of taxes paid on employees’ behalf through withholding of shares on restricted stock awards on the statement of cash flows will continue to be classified within financing activities. Recently Issued Accounting Standards In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting , which clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. Under ASU 2017-09, an entity will not apply modification accounting to a share-based payment award if the award’s fair value, vesting conditions and classification as an equity or liability instrument are the same immediately before and after the change. ASU 2017-09 will be applied prospectively to awards modified on or after the adoption date. The guidance became effective for the Company beginning on January 1, 2018. The impact of the adoption of this guidance on its consolidated financial statements would be dependent on future modifications to share-based payment awards, if any. In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory , which eliminates the exception to the principle in ASC Topic 740, Income Taxes , that generally requires comprehensive recognition of current and deferred income taxes for all intra-entity sales of assets other than inventory. As a result, a reporting entity would recognize the tax expense from the sale of the asset in the seller’s tax jurisdiction when the transfer occurs, even though the pre-tax effects of that transaction are eliminated in consolidation. This ASU became effective for the Company on January 1, 2018, and must be applied on a modified retrospective basis through a cumulative-effect adjustment directly to accumulated deficit as of the beginning of the period of adoption. At December 31, 2017, the Company had $2.1 million of income tax effects deferred from past intercompany transactions that are recorded as prepaid assets within other assets, net, at December 31, 2017 that will be adjusted through the opening accumulated deficit as of January 1, 2018. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which requires that financial assets measured at amortized cost be presented at the net amount expected to be collected. Currently, U.S. GAAP delays recognition of the full amount of credit losses until the loss is probable of occurring. Under this ASU, the income statement will reflect an entity’s current estimate of all expected credit losses. The measurement of expected credit losses will be based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. Credit losses relating to available-for-sale debt securities will be recorded through an allowance for credit losses rather than as a direct write-down of the security. This ASU is effective for the Company beginning on January 1, 2020, with early adoption permitted beginning on January 1, 2019. The new guidance prescribes different transition methods for the various provisions. The Company is currently evaluating the impact of ASU 2016-13 on its consolidated financial statements and disclosures. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) , which requires lessees to recognize a right of use asset and related lease liability for those leases classified as operating leases at the commencement date and for those leases that have lease terms of more than 12 months. The guidance is effective for the Company beginning on January 1, 2019, and all annual and interim periods thereafter, with early adoption permitted, and must be adopted using a modified retrospective transition approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements, and provides for certain practical expedients. The Company is currently evaluating the impact of ASU 2016-02 on its consolidated financial statements and disclosures. In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities , which provides guidance related to the accounting for equity investments, financial liabilities under the fair value option and the presentation and disclosure requirements for financial instruments. The guidance became effective for the Company beginning on January 1, 2018 and prescribes different transition methods for the various provisions. The Company does not expect ASU 2016-01 to have a material impact on its consolidated financial statements and disclosures. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) . The standard states that an entity should recognize revenue based on the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The FASB has subsequently issued amendments to ASU 2014-09 that have the same effective date of January 1, 2018. The future impact of ASU 2014-09 will be dependent on the nature of the Company’s forthcoming revenue contracts and arrangements, if any. |
Net Loss per Common Share | Net Loss per Common Share Basic net loss per common share (“Basic EPS”) is calculated by dividing the net loss by the weighted average number of shares of common stock outstanding for the period, without consideration for potentially dilutive securities with the exception of warrants for common stock with a $0.05 exercise price, which are exercisable for nominal consideration and are therefore included in the calculation of the weighted-average number of shares of common stock as common stock equivalents. Diluted net loss per share (“Diluted EPS”) gives effect to all dilutive potential shares of common stock outstanding during this period. For Diluted EPS, net loss used in calculating Basic EPS is adjusted for certain items related to the dilutive securities. For all periods presented, Aerie’s potential common stock equivalents have been excluded from the computation of Diluted EPS as their inclusion would have had an anti-dilutive effect. |
Significant Accounting Polici23
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Schedule of Estimated Useful Lives | Estimated useful lives by major asset category are as follows: Manufacturing equipment 10 years Laboratory equipment 7 years Furniture and fixtures 5 years Software and computer equipment 3 years Leasehold improvements Lower of estimated useful life or term of lease and equipment, net consists of the following: (in thousands) DECEMBER 31, 2017 2016 Manufacturing equipment $ 2,082 $ 1,689 Laboratory equipment 3,602 2,537 Furniture and fixtures 1,209 808 Software and computer equipment 1,932 1,732 Leasehold improvements 1,887 641 Construction-in-progress 24,228 2,695 34,940 10,102 Less: Accumulated depreciation (3,008 ) (2,245 ) $ 31,932 $ 7,857 |
Schedule of Computation of Diluted EPS | The potential common stock equivalents that have been excluded from the computation of Diluted EPS consist of the following: DECEMBER 31, 2017 2016 2015 2014 Convertible Notes 5,040,323 5,040,323 5,040,323 Outstanding stock options 6,457,343 5,255,930 4,583,586 Stock purchase warrants 157,500 157,500 157,500 Nonvested restricted stock awards 447,049 164,194 119,993 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Cash, Cash Equivalents and Investments | Cash, cash equivalents and investments as of December 31, 2017 included the following: GROSS GROSS AMORTIZED UNREALIZED UNREALIZED FAIR (in thousands) COST GAINS LOSSES VALUE Cash and cash equivalents: Cash and money market funds $ 197,569 $ — $ — $ 197,569 Total cash and cash equivalents $ 197,569 $ — $ — $ 197,569 Investments: Commercial paper (due within 1 year) $ 30,883 $ — $ — $ 30,883 Corporate bonds (due within 1 year) 21,231 — (28 ) 21,203 Total investments $ 52,114 $ — $ (28 ) $ 52,086 Total cash, cash equivalents and investments $ 249,683 $ — $ (28 ) $ 249,655 Cash, cash equivalents and investments as of December 31, 2016 included the following: GROSS GROSS AMORTIZED UNREALIZED UNREALIZED FAIR (in thousands) COST GAINS LOSSES VALUE Cash and cash equivalents: Cash and money market funds $ 196,445 $ — $ — $ 196,445 Commercial paper 1,500 — — 1,500 Total cash and cash equivalents $ 197,945 $ — $ — $ 197,945 Investments: Certificates of deposit (due within 1 year) $ 6,920 $ 4 $ (1 ) $ 6,923 Corporate bonds (due within 1 year) 27,615 4 (75 ) 27,544 Government agencies (due within 1 year) 1,250 — — 1,250 Total investments $ 35,785 $ 8 $ (76 ) $ 35,717 Total cash, cash equivalents and investments $ 233,730 $ 8 $ (76 ) $ 233,662 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | The following tables summarize the fair value of financial assets and liabilities that are measured at fair value and the classification by level of input within the fair value hierarchy: FAIR VALUE MEASUREMENTS AS OF DECEMBER 31, 2017 (in thousands) LEVEL 1 LEVEL 2 LEVEL 3 TOTAL Cash and cash equivalents: Cash and money market funds $ 197,569 $ — $ — $ 197,569 Total cash and cash equivalents: $ 197,569 $ — $ — $ 197,569 Investments: Commercial paper $ — $ 30,883 $ — $ 30,883 Corporate bonds — 21,203 — 21,203 Total investments $ — $ 52,086 $ — $ 52,086 Total cash, cash equivalents and investments: $ 197,569 $ 52,086 $ — $ 249,655 FAIR VALUE MEASUREMENTS AS OF DECEMBER 31, 2016 (in thousands) LEVEL 1 LEVEL 2 LEVEL 3 TOTAL Cash and cash equivalents: Cash and money market funds $ 196,445 $ — $ — $ 196,445 Commercial paper — 1,500 — 1,500 Total cash and cash equivalents: $ 196,445 $ 1,500 $ — $ 197,945 Investments: Certificates of deposit $ — $ 6,923 $ — $ 6,923 Corporate bonds — 27,544 — 27,544 Government agencies — 1,250 — 1,250 Total investments $ — $ 35,717 $ — $ 35,717 Total cash, cash equivalents and investments: $ 196,445 $ 37,217 $ — $ 233,662 |
Property, Plant and Equipment26
Property, Plant and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment, Net | Estimated useful lives by major asset category are as follows: Manufacturing equipment 10 years Laboratory equipment 7 years Furniture and fixtures 5 years Software and computer equipment 3 years Leasehold improvements Lower of estimated useful life or term of lease and equipment, net consists of the following: (in thousands) DECEMBER 31, 2017 2016 Manufacturing equipment $ 2,082 $ 1,689 Laboratory equipment 3,602 2,537 Furniture and fixtures 1,209 808 Software and computer equipment 1,932 1,732 Leasehold improvements 1,887 641 Construction-in-progress 24,228 2,695 34,940 10,102 Less: Accumulated depreciation (3,008 ) (2,245 ) $ 31,932 $ 7,857 |
Schedule of Minimum Expected Lease Payments | Minimum expected lease payments were as follows at December 31, 2017 (a) : (in thousands) 2018 $ 262 2019 262 2020 262 2021 262 2022 271 2023 and thereafter 1,579 Total minimum lease payments (b) $ 2,898 (a) Uses foreign exchange rates in effect at December 31, 2017 . (b) This represents the obligation through the minimum lease term of September 2027. If the Company utilizes the leased space through the full term of the lease, expiring in September 2037, the total rental payments would be $6.5 million . |
Accrued Expenses & Other Curr27
Accrued Expenses & Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Payables and Accruals [Abstract] | |
Summary of Accrued Expenses & Other Current Liabilities | Accrued expenses and other current liabilities consist of the following: DECEMBER 31, (in thousands) 2017 2016 Accrued expenses and other current liabilities: Accrued compensation and benefits $ 7,886 $ 4,111 Accrued consulting and professional fees 3,841 1,142 Accrued research and development (1) 1,855 5,998 Accrued other (2) 5,357 2,510 $ 18,939 $ 13,761 (1) Comprised of accruals such as fees for investigative sites, contract research organizations, contract manufacturing organizations and other service providers that assist in conducting preclinical research studies and clinical trials. (2) Comprised of accruals related to commercial manufacturing activities, interest payable and other business-related expenses. |
Convertible Notes Convertible N
Convertible Notes Convertible Notes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Convertible Debt | The table below summarizes the carrying value of the 2014 Convertible Notes as of December 31, 2017 and 2016: DECEMBER 31, (in thousands) 2017 2016 Gross proceeds $ 125,000 $ 125,000 Unamortized debt discount and issuance costs (1,155 ) (1,461 ) Carrying value $ 123,845 $123,539 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Components of Provision for Income Taxes | The provision for income taxes is based on net loss before income taxes as follows: DECEMBER 31, (in thousands) 2017 2016 2015 Net loss before income taxes: United States $ (133,113 ) $ (88,123 ) $ (59,211 ) Other (13,750 ) (10,743 ) (15,013 ) Net loss before income taxes $ (146,863 ) $ (98,866 ) $ (74,224 ) The components of the provision for income taxes are as follows: DECEMBER 31, (in thousands, except percentages) 2017 2016 2015 Provision for income taxes: Current: United States $ (24 ) $ 193 $ 139 Other — — — Total $ (24 ) $ 193 $ 139 Deferred: United States $ (1,734 ) $ — $ — Other — — — Total (1,734 ) — — Provision for income taxes $ (1,758 ) $ 193 $ 139 Effective tax rate 1.20 % (0.19 )% (0.19 )% |
Summary of Significant Components of Company's Net Deferred Income Tax Assets | Significant components of the Company’s net deferred income tax assets as of December 31, 2017 and 2016 consist of the following: DECEMBER 31, (in thousands) 2017 2016 Net deferred tax assets: Net operating loss carryforwards $ 58,172 $ 39,188 Stock-based compensation 13,681 11,845 U.S. tax credit carryforwards 4,182 4,566 Envisia asset acquisition 7,107 — Other assets, net 242 1,138 Valuation allowance (83,384 ) (56,737 ) Total net deferred income taxes $ — $ — |
Reconciliation of U.S. Statutory Rate and Effective Tax Rate | A reconciliation of the statutory tax rates and the effective tax rates for the years ended December 31, 2017 , 2016 and 2015 is as follows: DECEMBER 31, 2017 2016 2015 U.S. federal tax rate 35.00 % 35.00 % 35.00 % Impact of federal tax legislation 25.82 % — % — % State income taxes, net of federal benefit 7.71 % 5.34 % (0.90 )% Taxable gain resulting from IP Assignment — % — % (75.31 )% Non-taxable foreign loss (0.51 )% (2.69 )% (6.98 )% Tax deferral from IP Assignment (0.10 )% (0.19 )% 3.56 % Other (2.11 )% (1.45 )% 0.02 % Change in valuation allowance (64.61 )% (36.20 )% 44.42 % Effective tax rate 1.20 % (0.19 )% (0.19 )% |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Schedule of Warrants Outstanding | As of December 31, 2017 , the following equity classified warrants were outstanding: NUMBER OF UNDERLYING SHARES EXERCISE PRICE PER SHARE WARRANT EXPIRATION DATE 75,000 $5.00 February 2019 75,000 $5.00 November 2019 7,500 $5.00 August 2020 223,482 $0.05 December 2019 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation Expense for Options Granted and Restricted Stock as Reflected in the Statement of Operations | Stock-based compensation expense for options granted, RSAs, PSAs and stock purchase rights are reflected in the consolidated statements of operations and comprehensive loss as follows: YEAR ENDED DECEMBER 31, (in thousands) 2017 2016 2015 Selling, general and administrative $ 19,972 $ 13,013 $ 10,445 Research and development 6,106 3,781 2,500 Total $ 26,078 $ 16,794 $ 12,945 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | eighted average assumptions utilized in the fair value calculation for options to purchase common stock as of December 31, 2017 , 2016 and 2015 are as follows: YEAR ENDED DECEMBER 31, 2017 2016 2015 Expected term (years) 6.0 6.0 6.1 Expected stock price volatility 84 % 84 % 74 % Risk-free interest rate 2.0 % 1.4 % 1.6 % Dividend yield — % — % — % |
Schedule of Stock Options Activity | The following table summarizes the stock option activity under the Plans: NUMBER OF SHARES WEIGHTED AVERAGE EXERCISE PRICE WEIGHTED AGGREGATE (000’s) Options outstanding at December 31, 2016 5,255,930 $ 14.34 Granted 1,477,759 48.64 Exercised (241,050 ) 12.21 Canceled (35,296 ) 36.98 Options outstanding at December 31, 2017 6,457,343 $ 22.15 7.1 $ 243,240 Options exercisable at December 31, 2017 4,187,293 $ 13.55 6.2 $ 193,465 |
Schedule of Stock Options Outstanding and Exercisable Option Plans | The following table provides additional information about stock options that are outstanding and exercisable at December 31, 2017 : EXERCISE OPTIONS OUTSTANDING WEIGHTED AVERAGE REMAINING CONTRACTUAL LIFE (YEARS) OPTIONS EXERCISABLE $0.20 - $10.00 2,002,112 5.2 2,002,112 $10.01 - $16.00 401,578 7.9 199,514 $16.01 - $22.00 1,526,818 7.0 1,197,197 $22.01 - $27.00 294,030 7.3 184,671 $27.01 - $41.00 899,046 7.8 473,259 $41.01 - $64.90 1,333,759 9.4 130,540 6,457,343 4,187,293 |
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity | The following table summarizes the RSA, including PSAs, activity under the Plans: NUMBER OF SH ARES WEIGHTED AVERAGE FAIR VALUE PER SHARE Nonvested RSAs at December 31, 2016 164,194 $ 19.87 Granted 344,512 48.03 Vested (59,091 ) 22.57 Canceled (2,566 ) 43.90 Nonvested RSAs at December 31, 2017 447,049 $ 41.08 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Summary of Future Minimum Lease Payments | Minimum lease payments under operating leases were as follows at December 31, 2017 : (in thousands) 2018 $ 2,739 2019 3,046 2020 2,788 2021 2,360 2022 538 2023 and thereafter 577 Total minimum lease payments $ 12,048 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Long-Lived Assets by Location | The following table presents total long-lived assets by location: DECEMBER 31, (in thousands) 2017 2016 United States $ 6,609 $ 5,161 Ireland 25,323 2,696 Total long-lived assets $ 31,932 $ 7,857 |
Selected Quarterly Financial 34
Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summary of Quarterly Financial Information | The following table presents selected unaudited quarterly financial information for the years ended December 31, 2017 and 2016 . The results for any quarter are not necessarily indicative of future quarterly results and, accordingly, period to period comparisons should not be relied upon as an indication of future performance. FOR THE QUARTER ENDED (in thousands, except per share amounts) DECEMBER 31, SEPTEMBER 30, JUNE 30, MARCH 31, 2017 Operating expenses $ 60,314 $ 32,182 $ 27,768 $ 25,429 Net loss $ (58,513 ) $ (32,372 ) $ (28,433 ) $ (25,787 ) Net loss per common share—basic and diluted $ (1.60 ) $ (0.89 ) $ (0.82 ) $ (0.76 ) DECEMBER 31, SEPTEMBER 30, JUNE 30, MARCH 31, 2016 Operating expenses $ 28,757 $ 23,315 $ 22,690 $ 22,110 Net loss $ (29,322 ) $ (23,814 ) $ (23,219 ) $ (22,704 ) Net loss per common share—basic and diluted $ (0.87 ) $ (0.81 ) $ (0.87 ) $ (0.85 ) |
The Company The Company (Detail
The Company The Company (Details) $ in Thousands | Oct. 04, 2017USD ($)shares | Dec. 31, 2017USD ($)Segment | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) |
Organization, Consolidation and Presentation of Financial Statements [Line Items] | ||||
Number of business segments | Segment | 1 | |||
Research and development | $ 24,802 | $ 72,078 | $ 52,394 | $ 44,451 |
Rhopressa | ||||
Organization, Consolidation and Presentation of Financial Statements [Line Items] | ||||
Percentage of dosage designed to reduce elevated intraocular pressure | 0.02% | |||
Latanoprost | ||||
Organization, Consolidation and Presentation of Financial Statements [Line Items] | ||||
Percentage of dosage designed to reduce elevated intraocular pressure | 0.005% | |||
Envisia Therapeutics Inc. | ||||
Organization, Consolidation and Presentation of Financial Statements [Line Items] | ||||
Upfront cash payment | $ 10,500 | |||
Stock issued during period (in shares) | shares | 263,146 | |||
Stock issued during period, value | $ 14,300 | |||
Milestone payments contingent upon the achievement of certain approvals | $ 45,000 |
Significant Accounting Polici36
Significant Accounting Policies - Additional Information (Details) | Oct. 04, 2017USD ($) | Dec. 31, 2017USD ($)Segment$ / shares | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) |
Significant Accounting Policies [Line Items] | |||||
Number of operating segments | Segment | 1 | ||||
Tax benefits recognized for stock-based compensation | $ 0 | ||||
Realized gains (losses) recognized from investment | $ 0 | $ 0 | |||
Interest or penalties accrued for uncertain tax positions | 0 | ||||
Warrants exercise price (in dollars per share) | $ / shares | $ 0.05 | ||||
Research and development | $ 24,802,000 | $ 72,078,000 | 52,394,000 | 44,451,000 | |
Income tax effect | (1,758,000) | $ 193,000 | $ 139,000 | ||
Long-term Receivable | Accounting Standards Update 2016-16, Income Tax Effect Deferred From Past Intercompany Transactions | |||||
Significant Accounting Policies [Line Items] | |||||
Income tax effect | $ 2,100,000 |
Significant Accounting Polici37
Significant Accounting Policies - Schedule of Estimated Useful Lives (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Manufacturing equipment | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life (years) | 10 years |
Laboratory equipment | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life (years) | 7 years |
Furniture and fixtures | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life (years) | 5 years |
Software and computer equipment | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life (years) | 3 years |
Significant Accounting Polici38
Significant Accounting Policies - Schedule of Computation of Diluted EPS (Details) - shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
2014 Convertible Notes | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Potential common stock equivalents excluded from the computation of diluted net loss (in shares) | 5,040,323 | 5,040,323 | 5,040,323 |
Outstanding stock options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Potential common stock equivalents excluded from the computation of diluted net loss (in shares) | 6,457,343 | 5,255,930 | 4,583,586 |
Stock purchase warrants | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Potential common stock equivalents excluded from the computation of diluted net loss (in shares) | 157,500 | 157,500 | 157,500 |
Nonvested restricted stock awards | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Potential common stock equivalents excluded from the computation of diluted net loss (in shares) | 447,049 | 164,194 | 119,993 |
Investments (Details)
Investments (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Cash and cash equivalents: | ||||
Cash and cash equivalents | $ 197,569 | $ 197,945 | $ 91,060 | $ 85,586 |
Cash and Cash Equivalents, Fair Value Disclosure | 197,569 | 197,945 | ||
Investments: | ||||
Investments, amortized cost | 52,114 | 35,785 | ||
Investments, gross unrealized gains | 0 | 8 | ||
Investments, gross unrealized losses | (28) | (76) | ||
Investments, fair value | 52,086 | 35,717 | ||
Total cash, cash equivalents, and investments, amortized cost | 249,683 | 233,730 | ||
Total cash, cash equivalents, and investments, fair value | 249,655 | 233,662 | ||
Commercial paper (due within 1 year) | ||||
Investments: | ||||
Investments, amortized cost | 30,883 | |||
Investments, gross unrealized gains | 0 | |||
Investments, gross unrealized losses | 0 | |||
Investments, fair value | 30,883 | |||
Certificates of deposit (due within 1 year) | ||||
Investments: | ||||
Investments, amortized cost | 6,920 | |||
Investments, gross unrealized gains | 4 | |||
Investments, gross unrealized losses | (1) | |||
Investments, fair value | 6,923 | |||
Corporate bonds (due within 1 year) | ||||
Investments: | ||||
Investments, amortized cost | 21,231 | 27,615 | ||
Investments, gross unrealized gains | 0 | 4 | ||
Investments, gross unrealized losses | (28) | (75) | ||
Investments, fair value | 21,203 | 27,544 | ||
Government agencies (due within 1 year) | ||||
Investments: | ||||
Investments, amortized cost | 1,250 | |||
Investments, gross unrealized gains | 0 | |||
Investments, gross unrealized losses | 0 | |||
Investments, fair value | 1,250 | |||
Cash and money market funds | ||||
Cash and cash equivalents: | ||||
Cash and cash equivalents | 197,569 | 196,445 | ||
Cash and Cash Equivalents, Fair Value Disclosure | $ 197,569 | 196,445 | ||
Commercial paper (due within 1 year) | ||||
Cash and cash equivalents: | ||||
Cash and cash equivalents | 1,500 | |||
Cash and Cash Equivalents, Fair Value Disclosure | $ 1,500 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2014 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Principal amount of debt issued | $ 125,000,000 | $ 125,000,000 | |
Cash and cash equivalents, fair value | 197,569,000 | 197,945,000 | |
Total investments | 52,086,000 | 35,717,000 | |
Total cash, cash equivalents and investments: | 249,655,000 | 233,662,000 | |
Fair value, inputs, level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents, fair value | 197,569,000 | 196,445,000 | |
Total investments | 0 | 0 | |
Total cash, cash equivalents and investments: | 197,569,000 | 196,445,000 | |
Fair value, inputs, level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents, fair value | 0 | 1,500,000 | |
Total investments | 52,086,000 | 35,717,000 | |
Total cash, cash equivalents and investments: | 52,086,000 | 37,217,000 | |
Fair value, inputs, level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments | 0 | 0 | |
Total cash, cash equivalents and investments: | 0 | 0 | |
Convertible debt | 2014 Notes | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Principal amount of debt issued | 125,000,000 | 125,000,000 | $ 125,000,000 |
Long-term debt, fair value | 327,600,000 | 209,600,000 | |
Commercial paper | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments | 30,883,000 | ||
Commercial paper | Fair value, inputs, level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments | 30,883,000 | ||
Certificates of deposit | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments | 6,923,000 | ||
Certificates of deposit | Fair value, inputs, level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments | 6,923,000 | ||
Corporate bonds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments | 21,203,000 | 27,544,000 | |
Corporate bonds | Fair value, inputs, level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments | 21,203,000 | 27,544,000 | |
Government agencies | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments | 1,250,000 | ||
Government agencies | Fair value, inputs, level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments | 1,250,000 | ||
Cash and money market funds | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents, fair value | 197,569,000 | 196,445,000 | |
Cash and money market funds | Fair value, inputs, level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents, fair value | $ 197,569,000 | 196,445,000 | |
Commercial paper | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents, fair value | 1,500,000 | ||
Commercial paper | Fair value, inputs, level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents, fair value | 0 | ||
Commercial paper | Fair value, inputs, level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents, fair value | $ 1,500,000 |
Property, Plant and Equipment41
Property, Plant and Equipment, Net - Property, Plant and Equipment, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 34,940 | $ 10,102 |
Less: Accumulated depreciation | (3,008) | (2,245) |
Property and equipment, net | 31,932 | 7,857 |
Manufacturing equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 2,082 | 1,689 |
Laboratory equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 3,602 | 2,537 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,209 | 808 |
Software and computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,932 | 1,732 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,887 | 641 |
Construction-in-progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 24,228 | $ 2,695 |
Property, Plant and Equipment42
Property, Plant and Equipment, Net - Additional Information (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2017USD ($)ft² | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Property, Plant and Equipment [Line Items] | ||||
Depreciation expense | $ 1,410 | $ 970 | $ 252 | |
Area of interior floor space | ft² | 30,000 | |||
Rent expense | 2,000 | 1,400 | $ 1,500 | |
Capital lease obligations | 5,700 | |||
Foreign currency transaction loss unrealized | 600 | |||
Property, Plant and Equipment | ||||
Property, Plant and Equipment [Line Items] | ||||
Amount of property, plant and equipment and build-out facility | $ 4,200 | 17,400 | $ 2,700 | |
Other Current Liabilities | ||||
Property, Plant and Equipment [Line Items] | ||||
Capital lease obligations | $ 300 |
Property, Plant and Equipment43
Property, Plant and Equipment, Net - Schedule of Minimum Expected Lease Payments (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Property, Plant and Equipment [Abstract] | |
2,018 | $ 262 |
2,019 | 262 |
2,020 | 262 |
2,021 | 262 |
2,022 | 271 |
2023 and thereafter | 1,579 |
Total minimum lease payments | 2,898 |
Rental payments | $ 6,500 |
Accrued Expenses & Other Curr44
Accrued Expenses & Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Accrued expenses and other current liabilities: | ||
Accrued compensation and benefits | $ 7,886 | $ 4,111 |
Accrued consulting and professional fees | 3,841 | 1,142 |
Accrued research and development | 1,855 | 5,998 |
Accrued other | 5,357 | 2,510 |
Accrued expenses and other current liabilities | $ 18,939 | $ 13,761 |
Convertible Notes - Narrative (
Convertible Notes - Narrative (Details) | 12 Months Ended | |||
Dec. 31, 2017USD ($)d$ / sharesshares | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Sep. 30, 2014USD ($) | |
Debt Instrument [Line Items] | ||||
Principal amount of debt issued | $ 125,000,000 | $ 125,000,000 | ||
Maturity period for 2014 convertible notes | 7 years | |||
Unamortized debt discount and issuance costs | $ (1,155,000) | (1,461,000) | ||
Amortization of debt discount and issuance costs | $ 300,000 | 300,000 | $ 300,000 | |
Convertible debt | ||||
Debt Instrument [Line Items] | ||||
Initial conversion rate (in percentage) | 0.04032 | |||
Maximum increase to initial conversion rate (in shares) | shares | 0.01207 | |||
Convertible debt | 2014 Notes | ||||
Debt Instrument [Line Items] | ||||
Principal amount of debt issued | $ 125,000,000 | 125,000,000 | $ 125,000,000 | |
Convertible notes, interest rate (in percentage) | 1.75% | |||
Debt instrument, convertible, stock price trigger (in dollars per share) | $ / shares | $ 30 | |||
Debt instrument, convertible, threshold trading days | d | 30 | |||
Ownership cap for holder and affiliates (in percentage) | 9.985% | |||
Conversion price of notes (in dollars per share) | $ / shares | $ 24.80 | |||
Initial conversion, premium over closing price (in percentage) | 30.00% | |||
Default provisions, qualifying percentage of ownership (more than) | 50.00% | |||
Percentage of voting rights pledged as collateral | 65.00% | |||
Interest expense related to 2014 convertible note | $ 2,100,000 | $ 2,200,000 | $ 2,200,000 | |
Unamortized debt discount and issuance costs | $ (2,146,000) |
Convertible Notes - Reconciliat
Convertible Notes - Reconciliation of Convertible Debt (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Debt Disclosure [Abstract] | ||
Gross proceeds | $ 125,000,000 | $ 125,000,000 |
Unamortized debt discount and issuance costs | (1,155,000) | (1,461,000) |
Carrying value | $ 123,845,000 | $ 123,539,000 |
Income Taxes Income Taxes - Pro
Income Taxes Income Taxes - Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Net loss before income taxes: | |||
Net loss before income taxes | $ (146,863) | $ (98,866) | $ (74,224) |
Current: | |||
United States | (24) | 193 | 139 |
Other | 0 | 0 | 0 |
Total | (24) | 193 | 139 |
Deferred: | |||
United States | (1,734) | 0 | 0 |
Other | 0 | 0 | 0 |
Total | (1,734) | 0 | 0 |
Provision for income taxes | $ (1,758) | $ 193 | $ 139 |
Effective tax rate (in percentage) | 1.20% | (0.19%) | (0.19%) |
United States | |||
Net loss before income taxes: | |||
Net loss before income taxes | $ (133,113) | $ (88,123) | $ (59,211) |
Other | |||
Net loss before income taxes: | |||
Net loss before income taxes | $ (13,750) | $ (10,743) | $ (15,013) |
Income Taxes - Summary of Signi
Income Taxes - Summary of Significant Components of Company's Net Deferred Income Tax Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Net deferred tax assets: | ||
Net operating loss carryforwards | $ 58,172 | $ 39,188 |
Stock-based compensation | 13,681 | 11,845 |
U.S. tax credit carryforwards | 4,182 | 4,566 |
Envisia asset acquisition | 7,107 | 0 |
Other assets | 242 | 1,138 |
Valuation allowance | (83,384) | (56,737) |
Total net deferred income taxes | $ 0 | $ 0 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of U.S. Statutory Rate and Effective Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
U.S. federal tax rate | 35.00% | 35.00% | 35.00% |
Impact of federal tax legislation | 25.82% | 0.00% | 0.00% |
State income taxes, net of federal benefit | 7.71% | 5.34% | (0.90%) |
Taxable gain resulting from IP Assignment | 0.00% | 0.00% | (75.31%) |
Non-taxable foreign loss | (0.51%) | (2.69%) | (6.98%) |
Tax deferral from IP Assignment | (0.10%) | (0.19%) | 3.56% |
Other | (2.11%) | (1.45%) | 0.02% |
Valuation allowance | (64.61%) | (36.20%) | 44.42% |
Effective tax rate | 1.20% | (0.19%) | (0.19%) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Tax Credit Carryforward [Line Items] | |||
Deferred tax liabilities as a result of TCJA | $ 34,200 | ||
Valuation allowance | $ 83,384 | $ 56,737 | |
Period of cumulative changes in ownership interests | 3 years | ||
Percentage of cumulative changes in ownership interests | 50.00% | ||
Income tax effect | $ (1,758) | $ 193 | $ 139 |
Federal tax authority | |||
Tax Credit Carryforward [Line Items] | |||
Valuation allowance | 1,700 | ||
Net operating loss carry-forwards | 196,200 | ||
State tax authority | |||
Tax Credit Carryforward [Line Items] | |||
Net operating loss carry-forwards | 271,300 | ||
Non-qualified stock options | Federal tax authority | |||
Tax Credit Carryforward [Line Items] | |||
Net operating loss carry-forwards | 8,900 | ||
Non-qualified stock options | State tax authority | |||
Tax Credit Carryforward [Line Items] | |||
Net operating loss carry-forwards | 2,300 | ||
Income Tax Expense | |||
Tax Credit Carryforward [Line Items] | |||
Income tax expense recorded in prepaid asset | $ 2,800 | ||
Accumulated Deficit | |||
Tax Credit Carryforward [Line Items] | |||
Net operating loss carry-forwards | $ 3,700 |
Stockholders' Equity - Narrariv
Stockholders' Equity - Narrarive (Details) $ / shares in Units, $ in Thousands | Jan. 23, 2018shares | May 25, 2017USD ($)$ / sharesshares | Sep. 15, 2016USD ($)$ / sharesshares | Jan. 31, 2018USD ($)shares | Feb. 26, 2018USD ($) | Dec. 31, 2017USD ($)voteshares | Dec. 31, 2016USD ($)shares | Dec. 31, 2015USD ($)shares |
Class of Stock [Line Items] | ||||||||
Proceeds from sale of common stock | $ | $ 134,215 | $ 167,383 | $ 50,451 | |||||
Number of voting rights | vote | 1 | |||||||
Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock issued and sold under sales agreement (in shares) | shares | 1,100,000 | 4,200,000 | 1,754,556 | |||||
Proceeds from sale of common stock | $ | $ 72,700 | $ 61,100 | $ 50,400 | |||||
New shares issued under shelf registration (in shares) | shares | 1,400,000 | |||||||
Price per share issued under underwriting agreement (in dollars per share) | $ / shares | $ 53.75 | |||||||
RBC Capital Markets LLC and Cantor Fitzgerald and Co | Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Shelf registration statement, aggregate dollar amount | $ | $ 96,200 | |||||||
Cantor Fitzgerald and Co. | Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Proceeds from sale of common stock | $ | $ 71,000 | |||||||
New shares issued under shelf registration (in shares) | shares | 2,500,000 | |||||||
Price per share issued under underwriting agreement (in dollars per share) | $ / shares | $ 29.50 | |||||||
Subsequent Event | Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock issued and sold under sales agreement (in shares) | shares | 1,000,000 | |||||||
Proceeds from sale of common stock | $ | $ 62,300 | $ 136,200 | ||||||
New shares issued under shelf registration (in shares) | shares | 1,300,000 |
Stockholders_ Equity - Schedule
Stockholders’ Equity - Schedule of Warrants (Details) | Dec. 31, 2017$ / sharesshares |
Class of Warrant or Right [Line Items] | |
Exercise price per share (in dollars per share) | $ 0.05 |
February 2019 | Common Stock | |
Class of Warrant or Right [Line Items] | |
Number of underlying shares (in shares) | shares | 75,000 |
Exercise price per share (in dollars per share) | $ 5 |
November 2019 | Common Stock | |
Class of Warrant or Right [Line Items] | |
Number of underlying shares (in shares) | shares | 75,000 |
Exercise price per share (in dollars per share) | $ 5 |
August 2020 | Common Stock | |
Class of Warrant or Right [Line Items] | |
Number of underlying shares (in shares) | shares | 7,500 |
Exercise price per share (in dollars per share) | $ 5 |
December 2019 | Common Stock | |
Class of Warrant or Right [Line Items] | |
Number of underlying shares (in shares) | shares | 223,482 |
Exercise price per share (in dollars per share) | $ 0.05 |
Stock-based Compensation - Stoc
Stock-based Compensation - Stock-based Compensation Expense for Options Granted and Restricted Stock as Reflected in the Statement of Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 26,078 | $ 16,794 | $ 12,945 |
Selling, general and administrative | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | 19,972 | 13,013 | 10,445 |
Research and development | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 6,106 | $ 3,781 | $ 2,500 |
Stock-based Compensation - Addi
Stock-based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | Oct. 30, 2013 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 07, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based awards, shares granted (in shares) | 1,477,759 | ||||
Weighted average grant date fair value (in dollars per share) | $ 35.01 | $ 14.48 | $ 16.19 | ||
Aggregate intrinsic value of options exercised | $ 8,600 | $ 3,900 | $ 4,300 | ||
Estimated fair value of common stock (in dollars per share) | $ 59.75 | ||||
Aerie pharmaceutical stock plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized compensation expense | $ 57,100 | ||||
Compensation cost, weighted average recognition period | 2 years 11 months 23 days | ||||
Stock-based awards, shares granted (in shares) | 0 | ||||
2013 equity plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Equity awards (in shares) | 5,729,068 | ||||
Inducement Award Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Equity awards (in shares) | 874,500 | 418,000 | |||
Minimum | Aerie pharmaceutical stock plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based awards, expiration period | 1 year | ||||
Maximum | Aerie pharmaceutical stock plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based awards, expiration period | 4 years | ||||
Restricted stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Compensation cost, weighted average recognition period | 2 years 9 months 29 days | ||||
Unrecognized compensation expense | $ 11,600 | ||||
Fair value of restricted stock vested | $ 1,300 | $ 900 | $ 200 | ||
Shares issued (in shares) | 344,512 | ||||
Restricted Stock With Non-Market Performance Conditions | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares issued (in shares) | 98,817 | ||||
Employee stock purchase plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Lump sum percentage (equal to) | 85.00% | ||||
Fair value equivalent of common stock | $ 25 | ||||
Shares issued (in shares) | 645,814 |
Stock-based Compensation - Sche
Stock-based Compensation - Schedule of Key Assumptions Utilized in Fair Value Calculation (Details) - Stock options | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term (years) | 6 years 9 days | 5 years 11 months 25 days | 6 years 26 days |
Expected stock price volatility (in percentage) | 84.21% | 83.94% | 74.11% |
Risk-free interest rate (in percentage) | 2.04% | 1.43% | 1.63% |
Dividend yield (in percentage) | 0.00% | 0.00% | 0.00% |
Stock-based Compensation Stock-
Stock-based Compensation Stock-based Compensation - Schedule of Stock Options Activity (Details) $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($)$ / sharesshares | |
NUMBER OF SHARES | |
Options outstanding at beginning of year (in shares) | shares | 5,255,930 |
Granted (in shares) | shares | 1,477,759 |
Exercised (in shares) | shares | (241,050) |
Canceled (in shares) | shares | (35,296) |
Options outstanding at end of year (in shares) | shares | 6,457,343 |
Options exercisable at end of year (in shares) | shares | 4,187,293 |
WEIGHTED AVERAGE EXERCISE PRICE | |
Options outstanding at beginning of year, weighted average exercise price (in dollars per share) | $ / shares | $ 14.34 |
Granted (in dollars per share) | $ / shares | 48.64 |
Exercised (in dollars per share) | $ / shares | 12.21 |
Canceled (in dollars per share) | $ / shares | 36.98 |
Options outstanding at end of year, weighted average exercise price (in dollars per share) | $ / shares | 22.15 |
Options exercisable, weighted average exercise price (in dollars per share) | $ / shares | $ 13.55 |
WEIGHTED AVERAGE REMAINING CONTRACTUAL LIFE (YEARS) | |
Options outstanding (in years) | 7 years 1 month 6 days |
Options exercisable (in years) | 6 years 2 months 12 days |
AGGREGATE INTRINSIC VALUE | |
Options outstanding | $ | $ 243,240 |
Options exercisable | $ | $ 193,465 |
Stock-based Compensation - Sc57
Stock-based Compensation - Schedule of Stock Options Outstanding and Exercisable Option Plans (Details) | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Options outstanding (in shares) | 6,457,343 |
Options exercisable (in shares) | 4,187,293 |
$0.20 - $10.00 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Options outstanding (in shares) | 2,002,112 |
Options outstanding, weighted average remaining contractual life (in years) | 5 years 2 months 22 days |
Options exercisable (in shares) | 2,002,112 |
$10.01 - $16.00 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Options outstanding (in shares) | 401,578 |
Options outstanding, weighted average remaining contractual life (in years) | 7 years 11 months 2 days |
Options exercisable (in shares) | 199,514 |
$16.01 - $22.00 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Options outstanding (in shares) | 1,526,818 |
Options outstanding, weighted average remaining contractual life (in years) | 6 years 11 months 16 days |
Options exercisable (in shares) | 1,197,197 |
$22.01 - $27.00 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Options outstanding (in shares) | 294,030 |
Options outstanding, weighted average remaining contractual life (in years) | 7 years 3 months 28 days |
Options exercisable (in shares) | 184,671 |
$27.01 - $41.00 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Options outstanding (in shares) | 899,046 |
Options outstanding, weighted average remaining contractual life (in years) | 7 years 9 months 11 days |
Options exercisable (in shares) | 473,259 |
$41.01 - $64.90 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Options outstanding (in shares) | 1,333,759 |
Options outstanding, weighted average remaining contractual life (in years) | 9 years 4 months 25 days |
Options exercisable (in shares) | 130,540 |
Minimum | $0.20 - $10.00 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price, lower range limit (in dollars per share) | $ / shares | $ 0.20 |
Minimum | $10.01 - $16.00 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price, lower range limit (in dollars per share) | $ / shares | 10.01 |
Minimum | $16.01 - $22.00 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price, lower range limit (in dollars per share) | $ / shares | 16.01 |
Minimum | $22.01 - $27.00 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price, lower range limit (in dollars per share) | $ / shares | 22.01 |
Minimum | $27.01 - $41.00 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price, lower range limit (in dollars per share) | $ / shares | 27.01 |
Minimum | $41.01 - $64.90 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price, lower range limit (in dollars per share) | $ / shares | 41.01 |
Maximum | $0.20 - $10.00 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price, upper range limit (in dollars per share) | $ / shares | 10 |
Maximum | $10.01 - $16.00 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price, upper range limit (in dollars per share) | $ / shares | 16 |
Maximum | $16.01 - $22.00 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price, upper range limit (in dollars per share) | $ / shares | 22 |
Maximum | $22.01 - $27.00 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price, upper range limit (in dollars per share) | $ / shares | 27 |
Maximum | $27.01 - $41.00 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price, upper range limit (in dollars per share) | $ / shares | 41 |
Maximum | $41.01 - $64.90 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Exercise price, upper range limit (in dollars per share) | $ / shares | $ 64.90 |
Stock-based Compensation - Sc58
Stock-based Compensation - Schedule of Restricted Stock Activity (Details) - Restricted stock | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
NUMBER OF SH ARES | |
RSAs outstanding, beginning (in shares) | shares | 164,194 |
Granted, number of shares (in shares) | shares | 344,512 |
Vested (in shares) | shares | (59,091) |
Cancelled (in shares) | shares | (2,566) |
RSAs outstanding, ending (in shares) | shares | 447,049 |
WEIGHTED AVERAGE FAIR VALUE PER SHARE | |
RSAs outstanding, weighted average exercise price, beginning (in dollars per share) | $ / shares | $ 19.87 |
Granted, weighted average exercise price (in dollars per share) | $ / shares | 48.03 |
Vested, Weighted average exercise price (in dollars per share) | $ / shares | 22.57 |
Cancelled, weighted average exercise price (in dollars per share) | $ / shares | 43.90 |
RSAs outstanding, weighted average exercise price, ending (in dollars per share) | $ / shares | $ 41.08 |
Commitments and Contingencies -
Commitments and Contingencies - Summary of Future Minimum Lease Payments (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,018 | $ 2,739 |
2,019 | 3,046 |
2,020 | 2,788 |
2,021 | 2,360 |
2,022 | 538 |
2023 and thereafter | 577 |
Total minimum lease payments | $ 12,048 |
Commitments and Contingencies60
Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Thousands | Oct. 04, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Loss Contingencies [Line Items] | ||||
Rent expense | $ 2,000 | $ 1,400 | $ 1,500 | |
Minimum lease payments 2018 | 262 | |||
Minimum lease payments 2019 | $ 262 | |||
Milestone period | 15 years | |||
Envisia Therapeutics Inc. | ||||
Loss Contingencies [Line Items] | ||||
Minimum lease payments 2018 | $ 454 | |||
Minimum lease payments 2019 | $ 235 | |||
Milestone payments contingent upon the achievement of certain approvals (up to) | $ 45,000 |
Segment Information - Schedule
Segment Information - Schedule of Long-Lived Assets (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Jan. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | |||
Total long-lived assets | $ 31,932 | $ 7,857 | |
United States | |||
Segment Reporting Information [Line Items] | |||
Total long-lived assets | 6,609 | 5,161 | |
Ireland | |||
Segment Reporting Information [Line Items] | |||
Total long-lived assets | 25,323 | 2,696 | |
Property, Plant and Equipment | |||
Segment Reporting Information [Line Items] | |||
Amount of property, plant and equipment and build-out facility | $ 4,200 | 17,400 | $ 2,700 |
Property, Plant and Equipment | Ireland | |||
Segment Reporting Information [Line Items] | |||
Amount of property, plant and equipment and build-out facility | $ 4,200 |
Selected Quarterly Financial 62
Selected Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Operating expenses | $ 60,314 | $ 32,182 | $ 27,768 | $ 25,429 | $ 28,757 | $ 23,315 | $ 22,690 | $ 22,110 | $ 145,693 | $ 96,872 | $ 75,086 |
Net loss | $ (58,513) | $ (32,372) | $ (28,433) | $ (25,787) | $ (29,322) | $ (23,814) | $ (23,219) | $ (22,704) | |||
Net loss per common share—basic and diluted (in dollars per share) | $ (1.60) | $ (0.89) | $ (0.82) | $ (0.76) | $ (0.87) | $ (0.81) | $ (0.87) | $ (0.85) | $ (4.11) | $ (3.40) | $ (2.88) |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Thousands | Jan. 23, 2018 | May 25, 2017 | Jan. 31, 2018 | Feb. 26, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Subsequent Event [Line Items] | |||||||
Proceeds from sale of common stock, net | $ 134,215 | $ 167,383 | $ 50,451 | ||||
Common Stock | |||||||
Subsequent Event [Line Items] | |||||||
Common stock issued and sold under sales agreement (in shares) | 1,100,000 | 4,200,000 | 1,754,556 | ||||
Proceeds from sale of common stock, net | $ 72,700 | $ 61,100 | $ 50,400 | ||||
New shares issued under shelf registration (in shares) | 1,400,000 | ||||||
Price per share issued under underwriting agreement (in dollars per share) | $ 53.75 | ||||||
Common Stock | Subsequent Event | |||||||
Subsequent Event [Line Items] | |||||||
Common stock issued and sold under sales agreement (in shares) | 1,000,000 | ||||||
Proceeds from sale of common stock, net | $ 62,300 | $ 136,200 | |||||
New shares issued under shelf registration (in shares) | 1,300,000 | ||||||
Proceeds from issuance of common stock, net of underwriting discounts, fees and expenses | $ 74,000 |