Cover Page
Cover Page - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 28, 2020 | Jun. 30, 2019 | |
Cover page. | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Transition Report | false | ||
Entity File Number | 001-34962 | ||
Entity Registrant Name | Zogenix, Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 20-5300780 | ||
Entity Address, Address Line One | 5959 Horton Street | ||
Entity Address, Address Line Two | Suite 500 | ||
Entity Address, City or Town | Emeryville | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 94608 | ||
City Area Code | 510 | ||
Local Phone Number | 550-8300 | ||
Title of 12(b) Security | Common Stock, $0.001 par value per share | ||
Trading Symbol | ZGNX | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 1.8 | ||
Entity Common Stock, Shares Outstanding | 45,378,246 | ||
Documents Incorporated by Reference | Portions of the registrant’s definitive Proxy Statement to be filed for its 2020 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K. Such proxy statement will be filed with the Securities and Exchange Commission within 120 days of the registrant’s fiscal year ended December 31, 2019. | ||
Entity Central Index Key | 0001375151 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 62,070 | $ 68,454 |
Marketable securities | 189,085 | 445,733 |
Prepaid expenses | 8,593 | 6,718 |
Acquisition holdback amount placed in escrow | 25,000 | 0 |
Other current assets | 2,491 | 11,825 |
Total current assets | 287,239 | 532,730 |
Property and equipment, net | 9,424 | 2,870 |
Operating lease right-of-use assets | 7,774 | |
Indefinite-lived intangible asset | 102,500 | 102,500 |
Goodwill | 6,234 | 6,234 |
Other noncurrent assets | 1,079 | 3,997 |
Total assets | 414,250 | 648,331 |
Current liabilities: | ||
Accounts payable | 7,979 | 7,989 |
Accrued clinical trial expenses | 18,666 | 10,621 |
Other Accrued Liabilities, Current | 11,451 | 7,465 |
Acquisition holdback liability | 24,444 | 0 |
Deferred revenue, current | 5,927 | 0 |
Current portion of operating lease liabilities | 1,322 | |
Current portion of contingent consideration | 25,600 | 32,300 |
Total current liabilities | 95,389 | 58,375 |
Deferred revenue, noncurrent | 7,425 | 0 |
Operating lease liabilities, net of current portion | 10,752 | |
Contingent consideration, net of current portion | 38,200 | 45,900 |
Deferred tax liability | 17,425 | 17,425 |
Deferred rent and lease incentive obligation | 3,830 | |
Total liabilities | 169,191 | 125,530 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock, $.001 par value; 10,000 shares authorized, none issued and outstanding | 0 | 0 |
Common stock, $.001 par value; 100,000 and 50,000 shares authorized and 45,272 and 42,078 shares issued and outstanding at December 31, 2019 and 2018, respectively | 45 | 42 |
Additional paid-in capital | 1,360,092 | 1,218,710 |
Accumulated other comprehensive income | 379 | 3 |
Accumulated deficit | (1,115,457) | (695,954) |
Total stockholders’ equity | 245,059 | 522,801 |
Total liabilities and stockholders’ equity | $ 414,250 | $ 648,331 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2019 | May 21, 2019 | May 20, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||||
Preferred stock par value (in usd per share) | $ 0.001 | $ 0.001 | ||
Preferred stock authorized (shares) | 10,000,000 | 10,000,000 | ||
Preferred stock issued (shares) | 0 | 0 | ||
Preferred stock outstanding (shares) | 0 | 0 | ||
Common stock, par value (in usd per share) | $ 0.001 | $ 0.001 | ||
Common stock authorized (shares) | 100,000,000 | 100,000,000 | 50,000,000 | 50,000,000 |
Common stock issued (shares) | 45,272,088 | 42,078,164 | ||
Common stock outstanding (shares) | 45,272,088 | 42,078,164 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues [Abstract] | |||
Collaboration revenue | $ 3,648 | $ 0 | $ 0 |
Contract manufacturing revenue | 0 | 0 | 9,821 |
Total collaboration and contract manufacturing revenue | 3,648 | 0 | 9,821 |
Operating Expenses [Abstract] | |||
Cost of contract manufacturing | 0 | 0 | 10,729 |
Research and development | 115,639 | 100,925 | 67,449 |
Selling, general and administrative | 60,792 | 38,950 | 25,885 |
Acquired in-process research and development and related costs | 251,438 | 0 | 0 |
Loss on contract termination | 0 | 0 | 478 |
Change in fair value of contingent consideration | 5,600 | 1,300 | 24,100 |
Asset impairment charges | 0 | 0 | 1,116 |
Total operating expenses | 433,469 | 141,175 | 129,757 |
Loss from operations | (429,821) | (141,175) | (119,936) |
Other income (expense): | |||
Interest income | 9,804 | 7,170 | 1,090 |
Interest expense | (2) | (6) | (2,644) |
Loss on extinguishment of debt | 0 | 0 | (4,876) |
Change in fair value of common stock warrant liabilities | 145 | 169 | 297 |
Other income (expense), net | 371 | 10,126 | 47 |
Total other income (expense) | 10,318 | 17,459 | (6,086) |
Loss from continuing operations | (419,503) | (123,716) | (126,022) |
Loss from discontinued operations | 0 | (198) | (795) |
Net loss | $ (419,503) | $ (123,914) | $ (126,817) |
Net loss per share, basic and diluted: | |||
Continuing operations (in usd per share) | $ (9.74) | $ (3.27) | $ (4.62) |
Discontinued operations (in usd per share) | 0 | 0 | (0.03) |
Net loss per share, basic and diluted (in dollars per share) | $ (9.74) | $ (3.27) | $ (4.65) |
Weighted average common shares outstanding, basic and diluted | |||
Weighted average common shares outstanding, basic and diluted (shares) | 43,078 | 37,884 | 27,301 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (56,060) | $ (419,503) | $ (123,914) | $ (126,817) |
Other comprehensive income: | ||||
Net unrealized gains on marketable securities, net of tax | 702 | 3 | 0 | |
Reclassification adjustments for realization of gain on sale of marketable securities included in net loss, net of tax | (326) | 0 | 0 | |
Total other comprehensive income | $ 376 | 3 | 0 | |
Comprehensive loss | $ (419,127) | $ (123,911) | $ (126,817) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income | Accumulated Deficit |
Beginning balance at Dec. 31, 2016 | $ 120,756 | $ 25 | $ 565,954 | $ 0 | $ (445,223) |
Beginning balance (shares) at Dec. 31, 2016 | 24,813 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (126,817) | (126,817) | |||
Issuance of common stock, net | 290,591 | $ 9 | 290,582 | ||
Issuance of common stock, net (shares) | 9,256 | ||||
Issuance of common stock upon net exercise of common stock warrants | 0 | ||||
Issuance of common stock upon net exercise of common stock warrants (shares) | 26 | ||||
Issuance of common stock under employee equity plans | 10,836 | $ 1 | 10,835 | ||
Issuance of common stock under employee equity plans (shares) | 713 | ||||
Stock-based compensation | 6,155 | 6,155 | |||
Ending balance at Dec. 31, 2017 | 301,521 | $ 35 | 873,526 | 0 | (572,040) |
Ending balance (shares) at Dec. 31, 2017 | 34,808 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (123,914) | (123,914) | |||
Other comprehensive income, net of tax | 3 | 3 | |||
Issuance of common stock, net | 323,135 | $ 7 | 323,128 | ||
Issuance of common stock, net (shares) | 6,740 | ||||
Issuance of common stock under employee equity plans | 7,994 | 7,994 | |||
Issuance of common stock under employee equity plans (shares) | 563 | ||||
Shares repurchased for tax withholdings related to net share settlement of employee equity awards | (1,430) | (1,430) | |||
Shares repurchased for tax withholdings related to net share settlement of employee equity awards (shares) | (33) | ||||
Stock-based compensation | 15,492 | 15,492 | |||
Ending balance at Dec. 31, 2018 | 522,801 | $ 42 | 1,218,710 | 3 | (695,954) |
Ending balance (shares) at Dec. 31, 2018 | 42,078 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (419,503) | (419,503) | |||
Other comprehensive income, net of tax | 376 | 376 | |||
Issuance of common stock, net | 42,576 | $ 1 | 42,575 | ||
Issuance of common stock, net (shares) | 904 | ||||
Issuance of common stock under employee equity plans | 10,182 | 10,182 | |||
Issuance of common stock under employee equity plans (shares) | 712 | ||||
Shares repurchased for tax withholdings related to net share settlement of employee equity awards | (744) | (744) | |||
Shares repurchased for tax withholdings related to net share settlement of employee equity awards (shares) | (17) | ||||
Issuance of common stock as consideration for asset acquisition | 68,124 | $ 2 | 68,122 | ||
Issuance of common stock in connection with asset acquisition (shares) | 1,595 | ||||
Stock-based compensation | 21,247 | 21,247 | |||
Ending balance at Dec. 31, 2019 | $ 245,059 | $ 45 | $ 1,360,092 | $ 379 | $ (1,115,457) |
Ending balance (shares) at Dec. 31, 2019 | 45,272 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||
Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating activities: | ||||||||
Net loss | $ (56,060) | $ (35,202) | $ (22,433) | $ (30,180) | $ (419,503) | $ (123,914) | $ (126,817) | |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Stock-based compensation | 21,247 | 15,492 | 6,155 | |||||
Depreciation | 1,268 | 155 | 425 | |||||
Amortization of debt issuance costs and debt discount | 0 | 0 | 887 | |||||
Net accretion and amortization of investments in marketable securities | (4,887) | (1,998) | 0 | |||||
Realized gain on sale of marketable securities | (326) | 0 | 0 | |||||
Change in fair value of common stock warrant liabilities | (145) | (169) | (297) | |||||
Acquired in-process research and development assets and related costs | 251,437 | 0 | $ 0 | |||||
Change in fair value of contingent consideration | 5,600 | 1,300 | 24,100 | |||||
Inventory write-down | 0 | 0 | 2,232 | |||||
Asset impairment charges | 0 | 0 | 1,116 | |||||
Loss on extinguishment of debt | 0 | 0 | 4,876 | |||||
Changes in operating assets and liabilities: | ||||||||
Trade accounts receivable | 0 | 0 | 9,356 | |||||
Inventory | 0 | 0 | 2,583 | |||||
Prepaid expenses and other current assets | 7,573 | (9,335) | (801) | |||||
Other assets | (4,502) | 266 | (2,784) | |||||
Accounts payable, accrued and other liabilities | 5,647 | 6,545 | 4,340 | |||||
Operating lease liability | 11,720 | |||||||
Deferred revenue | 13,352 | 0 | (1,245) | |||||
Net cash used in operating activities | (111,519) | (111,658) | (75,874) | |||||
Cash flows from investing activities: | ||||||||
Cash paid for asset acquisitions, net of cash acquired | (179,624) | 0 | 0 | |||||
Purchases of marketable securities | (329,641) | (569,515) | 0 | |||||
Proceeds from maturities of marketable securities | 415,020 | 125,783 | 0 | |||||
Proceeds from sale of marketable securities | 176,858 | 0 | 0 | |||||
Purchases of property and equipment | (9,492) | (1,018) | (76) | |||||
Net cash provided by (used) in investing activities | 73,121 | (444,750) | (76) | |||||
Cash flows from financing activities: | ||||||||
Payment of contingent consideration amounts previously established in purchase accounting | (20,000) | 0 | 0 | |||||
Principal repayments of long-term debt | 0 | 0 | (20,000) | |||||
Payment of fees to extinguish long-term debt | 0 | 0 | (1,865) | |||||
Proceeds from issuance of common stock under equity incentive plans | 10,182 | 9,654 | 9,176 | |||||
Taxes paid related to net share settlement of equity awards | (744) | (1,430) | 0 | |||||
Proceeds from issuance of common stock, net of issuance costs | 42,576 | 323,135 | 290,591 | |||||
Net cash provided by financing activities | 32,014 | 331,359 | 277,902 | |||||
Net (decrease) increase in cash and cash equivalents | (6,384) | (225,049) | 201,952 | |||||
Cash and cash equivalents at beginning of period | $ 68,454 | $ 293,503 | 68,454 | 293,503 | 91,551 | |||
Cash and cash equivalents at end of period | $ 62,070 | $ 68,454 | 62,070 | 68,454 | 293,503 | $ 91,551 | ||
Supplemental disclosure of cash flow information: | ||||||||
Cash paid for interest | 0 | 0 | 1,475 | |||||
Noncash investing and financing activities: | ||||||||
Common stock issued as consideration for asset acquisition | 68,124 | 0 | 0 | |||||
Net liabilities assumed in connection with asset acquisition | 3,688 | 0 | 0 | |||||
Purchases of property and equipment in accounts payable and accrued liabilities | 0 | 1,762 | 0 | |||||
Extinguishment of note payable advanced by a customer under a contract manufacturing supply agreement through net settlement of our receivables from the customer | $ 0 | $ 0 | $ 7,000 |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | Organization and Description of Business We are global pharmaceutical company committed to developing and commercializing transformative therapies to improve the lives of patients and their families living with rare diseases. We are currently focused on developing and commercializing therapies to address rare or orphan disorders. Our lead product candidate, Fintepla (ZX008, fenfluramine) is currently being developed for the treatment of seizures associated with Dravet syndrome and Lennox-Gastaut syndrome (LGS). In addition to Fintepla, we recently added MT1621 to our late-stage development pipeline. In September 2019, we acquired all the outstanding equity interests in Modis Therapeutics, Inc. (Modis), a privately-held biopharmaceutical company focused on developing novel therapies for rare genetic diseases with high unmet medical need. Modis’ lead product candidate, MT1621, is an investigational deoxynucleoside substrate enhancement therapy in development for the treatment of thymidine kinase 2 deficiency (TK2d), an inherited mitochondrial DNA depletion disorder that predominantly affects children and is often fatal. See Note 3 for additional information. Zogenix, Inc., headquartered in Emeryville, California, was founded in May 2006 and was incorporated in the State of Delaware on May 11, 2006 as SJ2 Therapeutics, Inc. In August 2006, we changed our name to Zogenix, Inc. We currently do not generate any revenue from contracts with customers and we have no approved products for commercial marketing or sale. Previously, we performed contract manufacturing services for one customer under a long-term supply agreement, which was terminated in 2017. Future Funding Requirements Excluding gains from two discrete business divestitures, we have incurred significant net losses and negative cash flows from operating activities since inception resulting in an accumulated deficit of $1.1 billion as of December 31, 2019. We expect to continue to incur significant operating losses and negative cash flows from operations as we continue to advance our product candidates through development and commercialization. Additionally, pursuant to our acquisition of Brabant Pharma Limited (Brabant) in 2014 to obtain worldwide development and commercialization rights to Fintepla, we are required to make additional payments to the former shareholders of Brabant in the event we achieve certain regulatory and sales milestones with Fintepla (See Notes 5 and 8). In addition, our asset acquisition of Modis in September 2019 requires us to make additional payments to the former shareholders of Modis in the event we achieve certain regulatory milestones (See Note 3). Historically, we have relied primarily on the proceeds from equity offerings to finance our operations. Until such time, if ever, we can generate a sufficient amount of revenue to finance our cash requirements, we may need to continue to rely on additional financing to achieve our business objectives. However, if such financing is not available at adequate levels when needed, we may be required to significantly delay, scale back or discontinue one or more of our product development programs or commercialization efforts or other aspects of our business plans, and our operating results and financial condition would be adversely affected. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) and include the accounts of Zogenix and its wholly-owned subsidiaries. All intercompany transactions have been eliminated in consolidation. Certain reclassifications have been made to the prior period amounts to conform to the current year presentation. More specifically, accrued compensation, other accrued liabilities and common stock warrant liabilities, which were previously presented separately on the consolidated balance sheet, have been reclassified into a single caption, other current liabilities. These reclassifications did not affect our financial position, net loss, comprehensive loss, or cash flows as of and for the periods presented. Use of Estimates The preparation of financial statements in conformity with 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Revenue Recognition We analyze our collaboration arrangements to assess whether such arrangements, or transactions between arrangement participants, involve joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards dependent on the commercial success of such activities or are more akin to a vendor-customer relationship. In making this evaluation, we consider whether the activities of the collaboration are considered to be distinct and deemed to be within the scope of the collaborative arrangement guidance and those that are more reflective of a vendor-customer relationship and, therefore, within the scope of the revenue with contracts with customers guidance. This assessment is performed throughout the life of the arrangement based on changes in the responsibilities of all parties in the arrangement. For elements of collaboration arrangements that are not accounted for pursuant to the revenue from contracts with customers guidance, an appropriate recognition method is determined and applied consistently, generally by analogy to the revenue from contracts with customers guidance. Amounts related to transactions with a counterparty in a collaborative arrangement that is not a customer are presented as collaboration revenue and on a separate line item from revenue recognized from contracts with customers, if any, in our consolidated statements of operations. Amounts received prior to satisfying the revenue recognition criteria are recorded as deferred revenue in the consolidated balance sheets. If the related efforts underlying the deferred revenue is expected to be satisfied within the next twelve months this will be classified in current liabilities. Unconditional rights to receive consideration in advance of performance are recorded as receivables and deferred revenue in the consolidated balance sheets when we have a contractual right to bill and receive the payment, performance is expected to commence shortly and there is less than a year between billing and performance. Amounts recognized for satisfied performance obligations prior to the right to payment becoming unconditional are recorded as contract assets in the consolidated balance sheets. If we expect to have an unconditional right to receive consideration in the next twelve months, this will be classified in current assets. A net contract asset or liability is presented for each contract with a customer. For arrangements or transactions between arrangement participants determined to be within the scope of the contracts with customers guidance, we perform the following steps to determine the appropriate amount of revenue to be recognized as we fulfill our obligations: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations based on estimated selling prices; and (v) recognition of revenue when (or as) we satisfy each performance obligation. At contract inception, we assess the goods or services promised in a contract with a customer and identify those distinct goods and services that represent a performance obligation. A promised good or service may not be identified as a performance obligation if it is immaterial in the context of the contract with the customer, if it is not separately identifiable from other promises in the contract (either because it is not capable of being separated or because it is not separable in the context of the contract), or if the performance obligation does not provide the customer with a material right. We consider the terms of the contract and our customary business practices to determine the transaction price. The transaction price is the amount of consideration to which we expect to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. Variable consideration will only be included in the transaction price when it is not considered constrained, which is when it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. If it is determined that multiple performance obligations exist, the transaction price is allocated at the inception of the agreement to all identified performance obligations based on the relative stand-alone selling prices unless the transaction price is variable and meets the criteria to be allocated entirely to one or more, but not all, performance obligations in the contract. The relative selling price for each performance obligation is based on observable prices if it is available. If observable prices are not available, we estimate stand-alone selling price for the performance obligation utilizing the estimated cost of the performance obligation with an estimated assumed margin. Once the transaction price has been allocated to a performance obligation using the applicable methodology, it is not subject to reassessment for subsequent changes in stand-alone selling prices. Revenue is recognized when, or as, we satisfy a performance obligation by transferring a promised good or service to a customer. An asset is transferred when, or as, the customer obtains control of that asset. For performance obligations that are satisfied over time, we recognize revenue using an input or output measure of progress that best depicts our satisfaction of the relevant performance obligation. Revenues from performance obligations associated with a purchase order of Fintepla will be recognized when the customer obtains control of our product, which will occur at a point in time which may be upon shipment or delivery to the customer. After contract inception, the transaction price is reassessed at every period end and updated for changes such as resolution of uncertain events. Any change in the overall transaction price is allocated to the performance obligations on the same methodology as at contract inception. Management may be required to exercise judgment in estimating revenue to be recognized. Judgment is required in identifying performance obligations, estimating the transaction price, estimating the stand-alone selling prices of identified performance obligations, which may include forecasted revenue, development timelines, reimbursement rates for personnel costs, discount rates and probabilities of technical and regulatory success, and estimating the progress towards satisfaction of performance obligations. Revenue generated in 2017 consisted of contract manufacturing services provided for one customer under a long-term supply agreement, which was terminated in 2017. Contract manufacturing revenue was recognized under the legacy revenue recognition standard when all of the following criteria for revenue recognition have been met: (1) persuasive evidence of an arrangement existed (2) delivery has occurred or services have been rendered; (3) the fee was fixed or determinable; and (4) collectability was reasonably assured. Acquisitions We evaluate acquisitions of assets and other similar transactions to assess whether or not the transaction should be accounted for as a business combination or asset acquisition by first applying a screen test to determine if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If the screen is met, the transaction is accounted for as an asset acquisition. If the screen is not met, further determination is required as to whether or not we have acquired inputs and processes that have the ability to create outputs which would meet the definition of a business. Significant judgment is required in the application of the screen test to determine whether an acquisition is a business combination or an acquisition of assets. If the transaction is determined not to be a business combination, it is accounted for as an asset acquisition. For asset acquisitions, a cost accumulation model is used to determine the cost of an asset acquisition. Common stock issued as consideration in an asset acquisition is generally measured based on the acquisition date fair value of the equity interests issued . Direct transaction costs are recognized as part of the cost of an asset acquisition. We also evaluate which elements of a transaction should be accounted for as a part of an asset acquisition and which should be accounted for separately. Consideration deposited into escrow accounts are evaluated to determine whether it should be included as part of the cost of an asset acquisition or accounted for as contingent consideration. Amounts held in escrow where we have legal title to such balances but where such accounts are not held in our name, are recorded on a gross basis as an asset with a corresponding liability in our consolidated balance sheet. The cost of an asset acquisition, including transaction costs, are allocated to identifiable assets acquired and liabilities assumed based on a relative fair value basis. Goodwill is not recognized in an asset acquisition. Any difference between the cost of an asset acquisition and the fair value of the net assets acquired is allocated to the non-monetary identifiable assets based on their relative fair values. Assets acquired as part of an asset acquisition that are considered to be in-process research and development (IPR&D) are immediately expensed unless there is an alternative future use in other research and development projects . In addition to upfront consideration, our asset acquisitions may also include contingent consideration payments to be made for future milestone events or royalties on net sales of future products. We assess whether such contingent consideration meets the definition of a derivative. Contingent consideration payments in an asset acquisition not required to be accounted for as derivatives are recognized when the contingency is resolved, and the consideration is paid or becomes payable. Contingent consideration payments required to be accounted for as derivatives are recorded at fair value on the date of the acquisition and are subsequently remeasured to fair value at each reporting date . Contingent consideration payments made prior to regulatory approval are expensed as incurred. Contingent consideration payments made subsequent to regulatory approval are capitalized as intangible assets and amortized, subject to impairment assessments. We classify cash payments related to purchased intangibles in an asset acquisition, including IPR&D assets, as a cash outflow from investing activities because we expect to generate future income and cash flows from these assets if they can be developed into commercially successful products. If the acquisition is determined to be a business combination, all tangible and intangible assets acquired, including any IPR&D asset, and liabilities assumed, including contingent consideration, are recorded at their fair value. Goodwill is recognized for any difference between the price of acquisition and our fair value determination. In addition, direct transaction costs in connection with business combinations are expensed as incurred, rather than capitalized. Fair Value of Financial Instruments Our financial instruments, including cash and cash equivalents, other current assets, accounts payable and accrued liabilities are carried at cost, which approximates their fair value because of the short-term nature of these financial instruments. See Notes 6 and 7 for financial instruments measured or disclosed at fair value for marketable securities, contingent consideration liabilities and common stock warrant liabilities. Cash Equivalents and Marketable Securities We consider cash equivalents to be only those investments which are highly liquid, readily convertible to cash and have an original maturity of three months or less at the date of purchase. We invest our excess cash in marketable securities with high credit ratings including money market funds and certificates of deposit, securities issued by the U.S. government and its agencies, corporate debt securities and commercial paper. All of our marketable securities have been accounted for as available-for-sale and carried at fair value. We have classified all of our available-for-sale marketable securities, including those with maturity dates beyond one year, as current assets on the consolidated balance sheets as we may sell these securities at any time for use in current operations even if they have not yet reached maturity. The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity, which is included in interest income on the consolidated statements of operations and comprehensive loss. Realized gains and losses and declines in value determined to be other than temporary, if any, on marketable securities are included in other income (expense). Gains and losses on sales are recorded based on the trade date and determined using the specific identification method. We evaluate our marketable securities to assess whether those with unrealized loss positions are other-than-temporarily impaired. We consider impairments to be other than temporary if they are related to deterioration in credit risk or if it is likely we will sell the securities before the recovery of their cost basis. To date, there have been no declines in value deemed to be other than temporary for any of our marketable securities. Concentration of Credit Risk Financial instruments that potentially subject us to concentrations of credit risk are cash equivalents and marketable securities. As stated in our investment policy, the primary objective of our investment activities is to preserve principal and maintain a desired level of liquidity to meet working capital needs. Accordingly, our investment portfolio consists of investment-grade rated securities with active secondary or resale markets and is subject to established guidelines relative to diversification and maturities to maintain safety and liquidity. Historically, we have not experienced any material credit losses on our investments and we believe our exposure to credit risk related to our investing activities are limited. We maintain amounts on deposit with various financial institutions, which may exceed federally insured limits. However, management periodically evaluates the credit-worthiness of those institutions, and we have not experienced any losses on such deposits. Concentration of Supplier Risk Certain materials and key components that we utilize in our operations are obtained through single suppliers. Since the suppliers of key components and materials must be named in a New Drug Application (NDA) filed with the FDA for a product, significant delays can occur if the qualification of a new supplier is required. If delivery of material from our suppliers were interrupted for any reason, we may be unable to supply any of our product candidates for clinical trials. Property and Equipment, Net Property and equipment is recorded at cost, net of accumulated depreciation. Depreciation is calculated on a straight-line basis over the estimated useful lives of the respective assets and primarily consists of the following: Computer equipment and software 3 years Furniture and fixtures 3-7 years Leasehold improvements Shorter of estimated useful life or lease term Depreciation expense for 2019, 2018 and 2017 was $1.3 million, $0.2 million and $0.4 million, respectively. Segment Information Operating segments are defined as components of an enterprise for which discrete financial information is available that is evaluated on a regular basis by our chief operating decision-maker (CODM) in deciding how to allocate resources to an individual segment and in assessing performance of the segment. We operate as a single business segment: the research, development and commercialization of pharmaceutical products. Our CODM, which is our President/Chief Executive Officer, reviews our operating results on a consolidated basis and manages our operations as a single operating segment. Substantially all of our long-lived assets are located in the United States. Goodwill The goodwill balance of $6.2 million at December 31, 2019 and 2018 is directly attributable to our business acquisition of Brabant Pharma Limited (Brabant) in 2014 to obtain worldwide development and commercialization rights to Fintepla. Goodwill represents the excess of the purchase price of acquired businesses over the estimated fair value assigned to the individual assets acquired and liabilities assumed. Goodwill is not amortized, but instead is reviewed for impairment at least annually on our assessment date of October 1, or more frequently if events occur or circumstances change that would indicate the carrying amount may be impaired. Goodwill is assigned to, and impairment testing is performed at, the reporting unit level. We determined we have only one reporting unit, which is the same as our operating segment, as well as our reportable segment. Accordingly, our impairment testing is performed at the entity-wide level. For 2019, we performed a quantitative impairment test by comparing the fair value of our net assets with their carrying amounts. As we have a single reporting unit, an appropriate measure of the fair value of our net assets is our market capitalization on the assessment date. Our market capitalization, excluding any potential adjustment for a control premium, exceeded the carrying amount of our net assets as of October 1, 2019 by a significant amount and we determined our goodwill was not impaired. There were no goodwill impairment losses recorded for all periods presented. Indefinite-Lived Intangible Assets The indefinite-lived intangible asset balance of $102.5 million at both December 31, 2019 and 2018 consists of IPR&D related to Fintepla acquired through the business acquisition of Brabant in 2014. IPR&D represents the fair value assigned to incomplete research projects that we acquire through business combinations which, at the time of acquisition, have not reached technological feasibility, regardless of whether they have alternative use. The primary basis for determining the technological feasibility of these projects at the time of acquisition is obtaining regulatory approval to market the underlying products in an applicable geographic region. The amounts are capitalized and are accounted for as indefinite-lived intangible assets, subject to impairment testing until completion or abandonment of the associated research and development efforts. If the research and development efforts are successfully completed and commercial feasibility is reached, we will make a determination as to the then useful life of the intangible asset and begin amortization. Upon permanent abandonment, we would write-off the remaining carrying amount of the associated IPR&D intangible asset. Indefinite-lived intangible assets are not amortized, but instead are reviewed for impairment at least annually as of October 1, or more frequently if events occur or circumstances change that would indicate the carrying amount may be impaired. In performing each annual impairment assessment and any interim impairment assessment, the accounting guidance allows an entity the option to first assess qualitative factors to determine whether it is necessary to perform a quantitative test. If we believe, as a result of our qualitative assessment, that it is more-likely-than-not that the fair value of our IPR&D asset is less than its carrying amount, the quantitative impairment test is required. Otherwise, no further testing is required. When performing a qualitative test, we consider the results of our most recent quantitative impairment test and identify the most relevant divers of the fair value for the IPR&D asset. The most relevant drivers of fair value we have identified are consistent with the assumptions used in the quantitative estimate of the IPR&D asset discussed below. Using these drivers of fair value, we identify events and circumstances that may have an effect on the fair value of the IPR&D asset since the last time the IPR&D’s fair value was quantitatively determined. We then weigh these factors to determine and conclude if it is not more likely than not that the IPR&D asset is impaired. If it is more-likely-than-not that the IPR&D asset is impaired, we will proceed with quantitatively determining the fair value of the IPR&D asset. Under a quantitative test, we use an income approach to determine the fair value of our IPR&D asset. This approach calculates fair value by estimating the after-tax cash flows attributable to an in-process project over its useful life and then discounting these after-tax cash flows back to a present value. This estimate includes judgmental assumptions regarding the estimates that market participants would make in evaluating the IPR&D asset, including the probability of successfully completing clinical trials and obtaining regulatory approval to market the IPR&D asset, the timing of and the expected costs to complete IPR&D projects, future net cash flows from potential drug sales, which are based on estimates of the sales price of the drug, the number of patients who will be diagnosed and treated and our competitive position in the marketplace, and appropriate discount and tax rates. If the fair value is less than the carrying amount based on our test, any impairment loss is recognized in our consolidated statements of operations by adjusting the carrying value of the IPR&D asset on our consolidated balance sheet to its fair value. For 2019, we performed a qualitative test and concluded that it is more-likely-than-not that the fair value of our IPR&D asset exceeded its carrying value and no further testing was deemed necessary. There were no impairment losses recorded for our indefinite-lived intangible asset in any of the years presented. Long-Lived Assets Long-lived assets, including right-of-use operating lease assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets (group) may not be recoverable. Recoverability of assets is determined by comparing the estimated undiscounted net cash flows of the operations related to the assets (asset group) to their carrying amount. If the carrying value of the assets (asset group) exceeds its undiscounted cash flows, we then compare the fair value of the assets (asset group) to its carrying value to determine the impairment loss. The impairment loss will be allocated to the carrying values of the long-lived assets (asset group), but not below their individual fair values. Common Stock Warrant Liabilities In accordance with accounting guidance for common stock warrants that may potentially require cash settlement under certain circumstances, we classify such common stock warrants as current liabilities on the consolidated balance sheet. At each reporting date, the warrant liability is adjusted for changes in fair value with an offsetting change recorded as a component of other income (expense) in our consolidated statements of operations. Research and Development Expense and Accruals Research and development costs are expensed as incurred unless there is an alternative future use in other research and development projects. Research and development costs include personnel-related costs, outside contracted services including clinical trial costs, facilities costs, fees paid to consultants, milestone payments prior to FDA approval, license fees prior to FDA approval, professional services, travel costs, dues and subscriptions, depreciation, materials used in clinical trials and research and development and costs incurred related to our agreement with Nippon Shinyaku Co., Ltd. We expense costs relating to the purchase and production of pre-approval inventories as research and development expense in the period incurred until FDA approval is received. Payments made prior to the receipt of goods or services to be used in research and development are recorded as prepaid assets on our consolidated balance sheets until the goods or services are realized or consumed. We classify such prepaid assets as current or non-current assets based on our estimates of the timing of when the goods or services will be realized or consumed. Our expense accruals for clinical trials are based on estimates of the services received from clinical trial investigational sites, contract research organizations (CROs), contract manufacturing organizations (CMOs) and other third-party vendors that support us in our research and development efforts. Payments under some of our contracts with these service providers depend on factors such as the achievement of clinical milestones such as the successful enrollment of certain numbers of patients, site initiation, reservation of manufacturing capacity, or completion of a clinical trial. In accruing for these services at each reporting date, we estimate the time period over which services will be performed and the level of effort to be expended in each period. If available, we obtain information regarding unbilled services directly from these service providers. However, we may be required to estimate our accrual based only on information available to us. Once established, accruals are adjusted from time to time, as appropriate, in light of additional information. Amounts ultimately incurred in relation to amounts accrued for these services at a reporting date may be substantially higher or lower than our estimates. Income Taxes Income taxes are accounted for under the asset and liability method of accounting. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. We provide a valuation allowance against net deferred tax assets unless, based upon the available evidence, it is more likely than not that the deferred tax asset will be realized. We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the tax position. U.K.’s Research and Development (R&D) Tax Relief Scheme We carry out extensive research and development activities that benefit from U.K.’s small and medium-sized enterprises (SME) R&D tax relief scheme, whereby an entity has an option to receive an enhanced U.K. tax deduction on its eligible R&D activities or, when an SME entity is in a net operating loss position, elect to surrender net operating losses that arise from its eligible R&D activities in exchange for a cash payment from the U.K. tax authorities. As the tax incentives may be received without regard to an entity’s actual tax liability, they are not subject to accounting for income taxes. Amounts realized under the SME R&D tax relief scheme are recorded as a component of other income after an election for tax relief in the form of cash payments has been made for a discrete tax year by submitting a claim, and collectability is deemed probable and reasonably assured. Foreign Currency Translation and Transactions We have certain foreign operations where their functional currency was determined to be their local currency. Local currency assets and liabilities are translated to U.S. Dollars at the rates of exchange in effect on the balance sheet date, and local currency revenues and expenses are translated to U.S. Dollars at average rates of exchange in effect during the period. The resulting translation gains or losses are included in our consolidated statements of comprehensive income (loss) as a component of other comprehensive income (loss) and in the consolidated statements of stockholders’ equity. We also recognize gains and losses on transactions that are denominated in a currency other than the respective entity’s functional currency in other expense, net in the consolidated statements of operations. Gains and losses from foreign currency translation and transactions were not material for all periods presented. Other Comprehensive Income (Loss) Components of other comprehensive income (loss) include changes in fair value of our available-for-sale marketable securities and reclassification adjustments from realization of gain (loss) on sale of marketable securities included in net loss. Stock-Based Compensation We recognize stock-based compensation for all equity awards made to employees based upon the awards’ estimated grant date fair value. For equity awards that vest subject to the satisfaction of service requirements, compensation expense is measured based on the fair value of the award on the date of grant and expense is recognized on a straight-line basis over the requisite service period. We account for forfeitures as they occur. From time to time, we may grant broad-based restricted stock units to employees, including executive officers, that vest upon the satisfaction of both service-based and performance-based vesting conditions. The performance-based vesting conditions are generally satisfied upon regulatory approval of a product candidate we have been developing. We recognize stock-based compensation over the requisite service period for awards with a performance condition if the performance condition is deemed probable of being met. Since obtaining regulatory approval involves numerous risks and uncertainties, many of which are outside of our control, achievement of regulatory approval is not deemed to be probable until the event occurs. As a result, our stock-based compensation expense may experience fluctuations, which may impact our reported financial results and period-to-period comparisons of our consolidated statements of operations. Valuation of Stock Options The fair value of each option granted was estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions: • Expected term—The expected term represents the estimated length of time over which we expect an option will be outstanding. We used the simplified method, as provided for under the applicable guidance for entities with a limited history of relevant stock option exercise activity, to estimate the expected term. • Expected volatility—The expected volatility was calculated based on our historical stock prices over the expected term. • Risk-free interest rate—The risk-free interest rate was based on the U.S. Treasury yield curve i |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2019 | |
Asset Acquisition [Abstract] | |
Acquisitions | Acquisitions Asset Acquisition of Modis On September 6, 2019, the date the transaction closed, we acquired all of the outstanding equity interests of Modis, a privately-held biopharmaceutical company, to expand our late-stage development pipeline. Modis was formed in May 2016 through a collaboration with academic experts in mitochondrial biology. Modis holds an exclusive worldwide license from Columbia University in New York City (Columbia) to certain intellectual property rights owned or controlled by Columbia to develop and commercialize MT1621. MT1621 is an investigational deoxynucleoside substrate enhancement therapy (SET) for the treatment of thymidine kinase 2 deficiency (TK2d), an inherited mitochondrial DNA depletion disorder that predominantly affects children and is often fatal. Aggregate upfront consideration transferred of approximately $246.5 million consisted of $175.5 million in cash payments made and 1,595,025 unregistered shares of our common stock issued to the outstanding shareholders of Modis as well as employee award holders under the legacy Modis 2017 Stock Plan (Modis Plan). The fair value of common stock issued as acquisition consideration was $68.1 million on the date the transaction closed. Also included in the aggregate upfront consideration transferred were $3.5 million of transaction costs incurred, reduced by a net working capital adjustment receivable of $0.6 million. Pursuant to the terms of the Modis purchase agreement, certain unvested awards held by employees under the Modis Plan converted into the right to receive a pro-rata share of the purchase consideration at the date of acquisition, with no future service requirement. A component of the total consideration transferred was attributed to the unvested awards with a fair value of $4.9 million and was accounted for as a separate transaction from the asset acquisition. This amount was immediately expensed and included in acquired in-process research and development and related costs in the consolidated statements of operations for the year ended December 31, 2019. Of the upfront cash consideration, $25.0 million was deposited into an escrow account to fund post-closing net working capital adjustments, and general representations and warranties for a one-year period. In addition, the former shareholders of Modis are eligible to receive milestone payments consisting of $100.0 million upon FDA approval and $50.0 million upon EMA approval of MT1621, as well as a 5% royalty on any future net sales of specified Modis products. The upfront cash consideration was funded by our cash and marketable securities on hand. The shares of our common stock provided as consideration were subsequently registered under our existing shelf registration statement on Form S-3 (No. 333-220759). We determined substantially all of the fair value of Modis was concentrated in a single IPR&D asset group, which included license rights, clinical trial data, clinical trial development plans, research and development materials, formulations and intellectual property related to MT1621. Accordingly, the acquired set of assets and activities did not meet the definition of a business. As a result, we accounted for the transaction as an asset acquisition and allocated the remaining upfront consideration transferred to the identifiable tangible and intangible assets acquired and liabilities assumed based on their relative fair values resulting in $244.5 million being assigned to the IPR&D asset associated with MT1621 and $2.8 million for assumed net liabilities. In connection with the acquisition, 13 former Modis employees continued their employment with Zogenix on an at-will basis. The relative fair value attributed to this assembled workforce was deemed to be insignificant. As of the acquisition date, Modis had completed a pivotal Phase 2 retrospective treatment clinical trial study (RETRO) of MT1621 substrate enhancement therapy in patients with TK2d and commenced a Phase 2 prospective, open-label extension clinical trial study of patients with TK2d. As the MT1621 program had not yet reached technological feasibility and had no alternative future use, the purchased IPR&D asset was expensed immediately subsequent to the acquisition within our consolidated statements of operations. As we had no tax basis in the acquired IPR&D asset, and the acquired IPR&D asset was expensed prior to the measurement of any deferred taxes, no deferred taxes were recognized for the initial differences between the amounts recognized for financial reporting and tax purposes. Amounts placed in escrow of $25.0 million to cover net working capital adjustments and sellers’ general representations and warranties during the one-year period from the acquisition date was recorded within current assets with a corresponding current liability, net of working capital adjustment of $0.6 million on our consolidated balance sheet at December 31, 2019. The milestone payments due upon FDA or EMA approval and royalty payments on future net sales of MT1621 products were determined to be contingent consideration. We determined the contingent consideration was not subject to derivative accounting and will be recognized when the contingency is resolved, and the consideration is paid or becomes payable. The nature of the remaining efforts for completion of the MT1621 program primarily consist of performing clinical trials and validating contract manufacturing abilities, the cost, length and success of which are extremely difficult to determine. Numerous risks and uncertainties can delay or stop clinical development of a pharmaceutical product prior to the receipt of marketing approval, including, but not limited to, results from clinical trials that do not support continuing development, issues related to manufacturing or intellectual property protection, and other events or circumstances that cause unanticipated delays, technical problems or other difficulties. Given these risks and uncertainties, there can be no assurance that the development of MT1621 will be successfully completed. If the development of MT1621 is not successful, in whole or in part, or completed in a timely manner, we may not realize the expected financial benefits from the development of MT1621. Other Asset Acquisitions In December 2019, we paid a total of $2.0 million to acquire an option to license rights for a preclinical development program for orphan central nervous system disorders in an asset acquisition. The project had not yet reached technological feasibility and had no alternative future use which resulted in a write-off of IPR&D to acquired in-process research and development and related costs in our consolidated statement of operations. |
Collaborative Arrangement
Collaborative Arrangement | 12 Months Ended |
Dec. 31, 2019 | |
Disaggregation of Revenue [Abstract] | |
Collaborative Arrangement | Collaborative Arrangement In March 2019, we entered into an agreement (Shinyaku Agreement) with Nippon Shinyaku Co., Ltd. (Shinyaku) for the exclusive distribution of Fintepla in Japan for the treatment of Dravet syndrome and LGS. As part of the Shinyaku Agreement, we are responsible for completing the global clinical development and all regulatory approval activities for Fintepla to support the submission of new drug applications in Japan for Dravet syndrome and LGS. Shinyaku will be responsible for the commercialization activities including the promotion, marketing, sale and distribution of Fintepla in Japan. Upon regulatory approval of Fintepla in Japan, Shinyaku will also act as our exclusive distributor for commercial shipment and distribution of Fintepla in Japan. If we pursue global development of Fintepla for indications other than Dravet syndrome or LGS, Shinyaku has the option to participate in the development for such indications in Japan, subject to cost sharing requirements pursuant to the agreement. Activities under the Shinyaku Agreement will be governed by a joint steering committee (JSC) consisting of three representatives from each party to the agreement. All decisions of the JSC are to be made by a unanimous vote with tie-breaking rights provided to each party for certain matters related to development, regulatory approval and commercialization. Shinyaku has agreed to support development and regulatory approval of Fintepla in Japan by actively participating in the design of non-clinical, clinical and manufacturing requirements needed for regulatory submission, actively planning and participating in product labeling decisions and discussions with the Japanese Ministry of Health, Labor and Welfare (MHLW) and obtained distribution exclusivity through the payment of $20.0 million, of which $17.0 million has been received with the remainder payable over the next two years. We will be actively running the clinical trials, performing manufacturing validation activities, preparing regulatory filings and holding discussions with MHLW, and negotiating pricing. We and Shinyaku have agreed to proportionally share the Japan specific development costs that may arise outside of the initial development plan and any post-approval clinical study costs in Japan. In addition, we can earn up to $66.0 million from Shinyaku for the achievement of certain regulatory milestones related to the treatment of Dravet syndrome and the treatment of LGS. After regulatory approval of Fintepla in Japan has been obtained, we have agreed to supply Shinyaku with Fintepla upon receipt of purchase orders at our actual manufacturing cost plus a fixed transfer price mark-up, a fixed percentage of Shinyaku's net sales of Fintepla in Japan for such fiscal year, and a net price mark-up based on a percent of the applicable aggregate sales of Fintepla by Shinyaku for such fiscal year. The net price mark-up percentage increases with Shinyaku’s sales of Fintepla annual net sales in Japan and ranges between mid-twenties and is capped at a low thirties of the aggregate annual net sales for an applicable fiscal year. In addition, we can earn up to an additional $42.5 million tied to the achievement of certain net sales milestones by Shinyaku through the term of the agreement. The Shinyaku Agreement expires in September of 2045, unless earlier terminated by either party for a change in control, a material breach, bankruptcy, dissolution, or winding up of such other party. The Shinyaku Agreement may be also terminated by either party: (1) with one year prior written notice to the other party on or after the date of the first commercial sale of a competing generic version of the Fintepla in Japan, (2) if, prior to the launch of the Fintepla in Japan, a party has a good faith concern, based on credible evidence, that such launch is not likely to be possible with commercially reasonable efforts, or (3) if a party believes Fintepla poses a substantial safety concern. We may also terminate the agreement following the second anniversary of the first commercial sale of the Fintepla in Japan if Shinyaku has failed to achieve or maintain certain diligence obligations under the Shinyaku Agreement. Shinyaku may also terminate the agreement if, prior to the launch of the Fintepla in Japan, Shinyaku has a good faith concern that Fintepla will not be commercially viable in Japan. We concluded that collaborative activities under the Shinyaku Agreement prior to regulatory approval are within the scope of the collaborative arrangements guidance as both parties are active participants and are exposed to significant risks and rewards dependent on the success of commercializing Fintepla in Japan. Shinyaku is not a customer as it does not obtain an output of our development and regulatory approval activities for Fintepla as they were not provided a license to its intellectual property or the ability to manufacture the product, and we do not consider performing development and regulatory approval services to be a part of our ongoing activities. We considered the revenue from contracts with customers guidance by analogy in determining the unit of account, and the recognition and measurement of such unit of account for collaborative activities under the Shinyaku Agreement and concluded that there are two development programs akin to performance obligations related to collaborative activities for development and regulatory approval efforts for Dravet and LGS. Participation on the JSC was concluded to be both quantitatively and qualitatively immaterial in the context of the Shinyaku Agreement. We are the principal as it relates to the collaborative development and regulatory approval activities primarily because we are responsible for the acceptability of the results of the work of the third-party vendors that are used to assist us in performing such activities. Therefore, such collaboration revenue has been presented on a gross basis in our consolidated statements of operations apart from research and development expenses incurred. The initial collaboration consideration allocated on a relative standalone selling price basis to each associated development program was determined using the most likely method to consist solely of the fixed consideration payments of $20.0 million. Analogizing to the revenue from contracts with customers variable consideration guidance, all potential regulatory milestone payment consideration will be included in the collaboration consideration if and when it is probable that a significant reversal in the amount of cumulative collaboration consideration recognized will not occur when the uncertainty associated with the variable collaboration consideration is subsequently resolved. We determined at contract inception and as of December 31, 2019, this consideration should be fully constrained, as the achievement of the events tied to these regulatory milestone payments was highly dependent on factors outside of our control. Collaboration revenue is being recognized over time as the collaborative activities related to each development program are rendered. We determined an input method is a reasonable representative depiction of the performance of the collaborative activities under the Shinyaku Agreement. The method of measuring progress towards completion incorporates actual internal and external costs incurred, relative to total internal and external costs expected to be incurred over an estimated period to satisfy the collaborative activities. The period over which total costs are estimated reflects our estimate of the period over which it will perform the collaborative activities for each development program. We expect to recognize collaboration revenue for each development program over periods ranging from three As of December 31, 2019, we had received $17.0 million out of the $20.0 million in fixed consideration. The remaining $3.0 million will be billed in accordance with the terms of the agreement and will be recorded when there is an unconditional right to receive this payment. During 2019, we recognized collaboration revenue of $3.6 million. As of December 31, 2019, $13.4 million related to this agreement was recorded as deferred revenue, which is classified as either current or net of current portion in the accompanying consolidated balance sheets based on the period over which the collaboration revenue is expected to be recognized. We expect to recognize collaboration revenue related to these collaborative activities through the end of 2023. We concluded that the supply of Fintepla to Shinyaku will be within the scope of the revenue from contracts with customers guidance if regulatory approval in Japan occurs and when a purchase order is received from Shinyaku. Such activity is considered to be a vendor customer relationship as Shinyaku will be a party that has contracted with an us to obtain goods or services that are an output of our ordinary activities in exchange for consideration and selling approved commercial product to a customer is expected to be part of our ongoing activities. Each purchase order for a shipment of Fintepla will be identified as a |
Strategic License Agreements
Strategic License Agreements | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Strategic License Agreements | Strategic License Agreements Fintepla Brabant In October 2014, we acquired Brabant in a business acquisition and obtained worldwide development and commercialization rights to Fintepla, one of our lead product candidates. Under the terms of the acquisition, we agreed to make future milestone payments to the former owners of Brabant for up to $95.0 million in the event we achieve certain milestones with respect to Fintepla, consisting of $50.0 million in regulatory milestones and $45.0 million in sales milestones. In 2019, our Fintepla MAA submission for the treatment of Dravet syndrome was accepted by the EMA for filing and our NDA submission for the treatment of Dravet syndrome was accepted by the FDA for filing. Each acceptance by the respective regulatory agency triggered a $10.0 million milestone payment. To date, we have paid $20.0 million of the maximum $50.0 million in regulatory milestones under the purchase agreement. Universities of Antwerp and Leuven in Belgium (the Universities) In addition, we have a collaboration and license agreement with the that runs through September 2045. Under the terms of the agreement, the Universities granted us an exclusive worldwide license to use the data obtained from a study related to low-dose fenfluramine for the treatment of Dravet syndrome, as well as certain other intellectual property. We are required to pay a mid-single-digit percentage royalty on net sales of products containing low-dose fenfluramine for the treatment of Dravet syndrome or, in the case of a sublicense of products containing low-dose fenfluramine for the treatment of Dravet syndrome, a percentage in the mid-twenties of the sub-licensing revenues. The agreement may be terminated by the Universities if we (a) do not use commercially reasonable efforts to (i) develop and commercialize products containing low-dose fenfluramine for the treatment of Dravet syndrome or related conditions stemming from infantile epilepsy, or (ii) seek approval of products containing low-dose fenfluramine for the treatment of Dravet syndrome in the United States; or (b) if we become insolvent or makes an assignment for the benefit of creditors or should any petition in bankruptcy, or similar relief, be filed by or against us. We can terminate the agreement upon specified prior written notice to the Universities. MT1621 License Agreement with Columbia University As a result of our acquisition of Modis, we became party to the Exclusive License Agreement, by and between Modis and the Trustees of Columbia University in the City of New York, dated as of September 26, 2016, related to MT1621. We are required to use commercially reasonable efforts to develop and commercialize licensed products worldwide, including to meet certain development and commercialization milestones within specified periods of time. Upon the achievement of certain regulatory and commercial milestones, we are required to pay Columbia University up to $2.9 million and $25.0 million, respectively, as well as tiered royalties on sales for each licensed product, at percentages ranging from the mid-single digits to the high single-digits. The royalty obligations and License Agreement will expire on a country-by-country and product-by-product basis upon the later of (i) 15 years after the first bona fide commercial sale of a licensed product, (ii) the expiration of the last to expire valid patent claim covering a licensed product in a country or (iii) expiration of any regulatory exclusivity covering such licensed product. The License Agreement may be terminated by either by Columbia or by us in the event of an uncured material breach by the other party, or by Columbia in the event we are subject to specified bankruptcy, insolvency or similar circumstances. We can terminate the License Agreement either in its entirety or on a product-by-product and country-by-country basis, upon specified prior written notice to Columbia, provided we are not exploiting licensed products in such countries. Other License Agreement Assumed We also became party to a license agreement between two other research institutions related to MT1621 where we may be required to pay up to $3.0 million for research, development and regulatory milestone events and up to $10.0 million for certain sales milestone events. We are also required to pay tiered royalties ranging from low to mid-single digits on net sales of licensed product. |
Cash, Cash Equivalents and Mark
Cash, Cash Equivalents and Marketable Securities | 12 Months Ended |
Dec. 31, 2019 | |
Cash and Cash Equivalents [Abstract] | |
Cash, Cash Equivalents and Marketable Securities | Cash, Cash Equivalents and Marketable Securities The following table summarizes the amortized cost and fair value of our cash, cash equivalents and marketable securities by major investment category as of December 31, 2019 and 2018 (in thousands): December 31, 2019 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Current assets: Cash and cash equivalents: Cash $ 43,058 $ — $ — $ 43,058 Money market funds 11,527 — — 11,527 Commercial paper 7,485 — — 7,485 Total cash and cash equivalents $ 62,070 $ — $ — $ 62,070 Marketable securities: Commercial paper $ 73,366 $ — $ — $ 73,366 Corporate debt securities 74,038 381 (2) 74,417 Certificates of deposit 41,302 — — 41,302 Total marketable securities $ 188,706 $ 381 $ (2) $ 189,085 Total cash, cash equivalents and marketable securities $ 250,776 $ 381 $ (2) $ 251,155 December 31, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Current assets: Cash and cash equivalents: Cash $ 5,222 $ — $ — $ 5,222 Money market funds 63,232 — — 63,232 Total cash and cash equivalents $ 68,454 $ — $ — $ 68,454 Marketable securities: Commercial paper $ 152,940 $ — $ — $ 152,940 Corporate debt securities 60,622 58 (75) 60,605 Certificates of deposit 128,647 — — 128,647 U.S. Treasuries 103,521 31 (11) 103,541 Total marketable securities $ 445,730 $ 89 $ (86) $ 445,733 Total cash, cash equivalents and marketable securities $ 514,184 $ 89 $ (86) $ 514,187 The following table summarizes the amortized cost and fair value of marketable securities based on stated effective maturities as of December 31, 2019 (in thousands): Amortized Cost Estimated Due within one year $ 156,620 $ 156,833 Due between one and two years 32,086 32,252 Total $ 188,706 $ 189,085 As of December 31, 2019, no individual security has been in a continuous loss position for greater than 12 months. There were no other-than-temporary impairment write-downs on marketable securities in any of the years presented. See Note 7 for further information regarding the fair value of our financial instruments. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. A three-level valuation hierarchy has been established under GAAP for disclosure of fair value measurements. The valuation hierarchy is based on the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows: • Level 1 - Observable inputs such as quoted prices in active markets; • Level 2 - Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and • Level 3 - Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. The following tables summarize assets and liabilities recognized or disclosed at fair value on a recurring basis at December 31, 2019 and 2018 (in thousands): December 31, 2019 Level 1 Level 2 Level 3 Total Assets: Cash equivalents: Money market funds $ 11,527 $ — $ — $ 11,527 Commercial paper 7,485 7,485 Marketable securities: Commercial paper — $ 73,366 — 73,366 Corporate debt securities — 74,417 — 74,417 Certificates of deposit — 41,302 — 41,302 Total assets (1) $ 11,527 $ 196,570 $ — $ 208,097 Liabilities: Common stock warrant liabilities (2) $ — $ — $ 198 $ 198 Contingent consideration liabilities (3) — — 63,800 63,800 Total liabilities $ — $ — $ 63,998 $ 63,998 December 31, 2018 Level 1 Level 2 Level 3 Total Assets: Cash equivalents: Money market funds $ 63,232 $ — $ — $ 63,232 Marketable securities: Commercial paper — 152,940 — 152,940 Corporate debt securities — 60,605 — 60,605 Certificates of deposit — 128,647 — 128,647 U.S. Treasury securities — 103,541 — 103,541 Total assets (1) $ 63,232 $ 445,733 $ — $ 508,965 Liabilities: Common stock warrant liabilities (2) $ — $ — $ 343 $ 343 Contingent consideration liabilities (3) — — 78,200 78,200 Total liabilities $ — $ — $ 78,543 $ 78,543 (1) Fair value is determined by taking into consideration valuations obtained from third-party pricing services. The third-party pricing services utilize industry standard valuation models, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include reported trades of and broker/dealer quotes on the same or similar securities; issuer credit spreads; benchmark securities; and other observable inputs. (2) Represents the fair value of common stock warrants outstanding that may require cash settlement under certain circumstances. As of December 31, 2019 and 2018, common stock warrant liabilities consists of warrants issued in July 2011 in connection with a debt financing arrangement. The warrants entitle the holder to purchase up to 28,125 shares of common stock at an exercise price of $72.00 per share and expires in July 2021. (3) In connection with the acquisition of Brabant in 2014 (See Note 5), we may be required to pay future consideration that is contingent upon the achievement of specified development, regulatory approval or sales-based milestone events. We estimate the fair value of contingent purchase consideration liabilities using a probability-weighted income approach, which reflects the probability and timing of future payments. This fair value measurement is based on significant Level 3 inputs such as the anticipated timelines and probability of achieving development, regulatory approval or sales-based milestone events and projected revenues. The resulting probability-weighted cash flows are discounted at risk-adjusted rates. Subsequent to the acquisition date, at each reporting period prior to settlement, we remeasure these liabilities by performing a review of the assumptions discussed above and record an adjustment to reflect any changes in the estimated fair value of our contingent consideration liabilities. In the absence of any significant changes in key assumptions during a reporting period, the fair value of the contingent consideration liability is expected to increase each period with the recognition of change in fair value of contingent consideration resulting from the passage of time at the applicable discount rate as we approach the payment dates of the contingent consideration. Significant judgment is used in determining Level 3 inputs and fair value measurements as of a reporting date. Updates to assumptions could have a significant impact on our results of operations in a reporting period and actual results may differ from estimates. For example, significant increases in the estimated probability of achieving a milestone or projected revenues would result in a significantly higher fair value measurement while significant decreases in the estimated probability of achieving a milestone or projected revenues would result in a significantly lower fair value measurement. Significant increases in the discount rate or in the anticipated timelines would result in a significantly lower fair value measurement while significant decreases in the discount rate or anticipated timelines would result in a significantly higher fair value measurement. Through December 31, 2019, we have made milestone payments of $20.0 million. The potential amount of future payments that we may be required to make related to the remaining contingent consideration is between zero, if none of the remaining milestones are achieved, to a maximum of $75.0 million (undiscounted). As of December 31, 2019, we classified $25.6 million of the total contingent consideration liabilities of $38.2 million as current liabilities. The balance sheet classification between current and non-current liabilities was based upon our reasonable expectation as to the timing of settlement of certain specified milestones. There have been no transfers between fair value measurement levels for all periods presented. See Note 6 for further information regarding the carrying value of our financial instruments. The following table provides a reconciliation of assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the years ended December 31, 2019 and 2018 (in thousands): Contingent Consideration Common Stock Warrant Liabilities Balance at December 31, 2017 $ 76,900 $ 512 Settlements — — Changes in fair value 1,300 (169) Balance at December 31, 2018 78,200 343 Settlements (20,000) — Changes in fair value 5,600 (145) Balance at December 31, 2019 $ 63,800 $ 198 Changes in the estimated fair value of contingent consideration are reflected as operating expenses in the consolidated statements of operations. Changes in the estimated fair value of common stock warrant liabilities are included as a component of other income (expense) in the consolidated statements of operations. |
Balance Sheet Components
Balance Sheet Components | 12 Months Ended |
Dec. 31, 2019 | |
Balance Sheet Related Disclosures [Abstract] | |
Balance Sheet Components | Balance Sheet Components The following tables provide details of selected balance sheet components (in thousands): Property and Equipment, Net Property and equipment, net consisted of the following (in thousands): December 31, 2019 2018 Computer equipment and software $ 291 $ 216 Leasehold improvements 9,431 3,210 Furniture and fixtures 978 880 Total 10,700 4,306 Less accumulated depreciation (1,276) (1,436) Property and equipment, net $ 9,424 $ 2,870 Other Current Liabilities: Accrued and other current liabilities consisted of the following (in thousands): December 31, 2019 2018 Accrued compensation 7,179 5,277 Other accrued liabilities 4,074 1,845 Common stock warrant liabilities 198 343 Total $ 11,451 $ 7,465 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies On April 12, 2019, a plaintiff stockholder filed a class action lawsuit against us and certain of our executive officers alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act in the United States District Court for the Northern District of California captioned Lake v. Zogenix , Case No. 3:19-cv-01975-RS. The plaintiff sought to represent a class of investors who purchased our stock between February 6, 2019 and April 8, 2019, and alleges that certain statements made during this period regarding the prospects for our NDA for Fintepla were false or misleading. On October 4, 2019, we filed a motion to dismiss the complaint in the action. On January 27, 2020, the court entered an order dismissing the complaint without prejudice. Rather than amend the complaint, the plaintiffs opted to voluntarily dismiss their claims. A final judgment in favor of Zogenix and our executive officers was filed on February 13, 2020. On January 17, 2020, a plaintiff stockholder filed a shareholder derivative lawsuit against our directors and officers alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act, breach of fiduciary duties, unjust enrichment, and waste of corporate assets, in the United States District Court for the Northern District of California captioned Lui v. Farr , Case No. 3:20-cv-00390. The plaintiff alleges that certain statements regarding the prospects for our NDA for Fintepla were false or misleading, and that we failed to maintain adequate internal controls in connection with its FDA submission process. We believe the allegations lack merit and intend to defend the claims vigorously. It is not possible to determine the outcome of this matter and while we do not believe a loss is probable, we cannot reasonably estimate the maximum potential exposure or the range of possible loss. We may become involved in various legal proceedings and claims that arise in the ordinary course of business. Such matters are subject to uncertainty and there can be no assurance that such legal proceedings will not have a material adverse effect on our business, results of operations, financial position or cash flows. See Notes 3 and 5 for our commitments under collaboration and licensing agreements. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Leases | Leases We have non-cancelable operating leases consisting of administrative and research and development office space for our Emeryville, California headquarters and former headquarters in San Diego, California that will expire in May 2027 and March 2020, respectively. Our Emeryville lease includes a renewal option for an additional five years, which was not included in our determination of the lease term under the legacy lease standard as renewal was not reasonably assured at the inception of the lease. As a result, the renewal option to extend the lease was not included in determining our ROU assets and lease liabilities. Our former headquarters has been subleased to an unrelated third party for the remainder of our original lease term, which expires on March 31, 2020. As part of our acquisition of Modis in September 2019, we assumed the lease for Modis’ headquarters in Oakland, California. The Oakland lease expires in July 2021 and has been included in our ROU assets and lease liabilities in our consolidated balance sheets. We do not have any material finance leases or service contracts with lease arrangements. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Information regarding lease expense, remaining lease term, discount rate, and other select lease information for the year ended December 31, 2019 were as follows (in thousands): Year Ended December 31, 2019 Components of lease costs: Operating lease cost $ 2,045 Short-term lease cost (1) 851 Sublease income (580) Total lease expense $ 2,316 (1) Short-term lease cost included $0.2 million related to a short-term lease that expired in March 2019. Other lease information Year Ended December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities $ 1,842 Right-of-use lease assets obtained in exchange for new lease liabilities, noncash $ 354 Supplemental balance sheet information related to operating leases December 31, 2019 Right-of-use assets $ 7,774 Current portion of operating lease liabilities $ 1,322 Operating lease liabilities, net of current portion 10,752 Total operating lease liabilities 12,074 Weighted average remaining lease term 7.2 years Weighted average discount rate, weighted based on the remaining balance of lease payments 6.0 % Maturities of operating lease liabilities as of December 31, 2019 were as follows (in thousands): Operating Lease 2020 $ 1,986 2021 1,957 2022 1,894 2023 1,951 2024 2,010 Thereafter 5,101 Total lease payments 14,899 Less: imputed interest (2,825) Total operating lease liabilities $ 12,074 Prior to the adoption of the new lease standard on January 1, 2019, our leases were all classified as operating leases. As a result, they were not required to be recorded on the consolidated balance sheets. Total rent expense under operating leases for the years ended December 31, 2018 and 2017 was $1.6 million and $1.8 million, respectively. As of December 31, 2018, future minimum rental payments under our non-cancelable operating leases and future minimum payments to be received from subleases were as follows (in thousands): Gross Rental Payments Sublease Rental Income Net Rental Payments 2019 $ 1,777 $ (576) $ 1,201 2020 1,788 (148) 1,640 2021 1,839 — 1,839 2022 1,894 — 1,894 2023 1,951 — 1,951 Thereafter 7,296 — 7,296 Total $ 16,545 $ (724) $ 15,821 |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Preferred Stock We have 10,000,000 shares of preferred stock authorized for issuance, par value of $0.001 per share. As of December 31, 2019 and 2018, no shares of preferred stock were issued and outstanding. Common Stock On May 21, 2019, our stockholders approved and we filed an amendment to our Fifth Amended and Restated Certificate of Incorporation, as amended, to increase the total number of authorized shares of common stock from 50,000,000 to 100,000,000. Each holder of our common stock, par value of $0.001 per share, is entitled to one vote for each share of such stock held. As of December 31, 2019 and 2018, there were 45,272,088 and 42,078,164 shares of common stock issued and outstanding. The following table presents common stock reserved for future issuance for the following equity instruments as of December 31, 2019 and 2018 (in thousands): December 31, 2019 2018 Stock options and RSUs outstanding 4,692 4,033 Warrants to purchase common stock 28 28 Available for future grants under employee equity plans 4,926 1,684 Total common stock reserved for future issuance 9,646 5,745 Sale of Common Stock At-the-Market Offerings In May 2016, we entered into an at-the-market sales agreement (the ATM Sales Agreement) with Cantor Fitzgerald & Co. (Cantor) pursuant to which Cantor agreed to act as a sales agent in connection with sales of our common stock from time to time pursuant to an effective registration statement. In May 2016, we filed a registration on Form S-3, which was declared effective by the SEC on May 24, 2016, which included a prospectus covering the offering, issuance and sale of up to $25.0 million in gross aggregate proceeds of common stock from time to time, through Cantor as our sales agent. In the third quarter of 2017, we sold 1,550,880 shares of our common stock resulting in net proceeds of approximately $19.4 million, after deducting commissions and other offering expenses. In December 2017, we filed a prospectus supplement (the 2017 ATM Prospectus), to our automatic “shelf” registration statement on Form S-3 registering the offering, issuance and sale of up to $75.0 million in gross aggregate proceeds of common stock pursuant to the ATM Sales Agreement. During the years ended December 31, 2019 and 2018, we sold 903,573 and 740,417 shares of common stock, respectively, resulting in net proceeds of approximately $42.6 million and $30.3 million, respectively, after deducting commissions and other offering costs. As of December 31, 2019, there were no amounts remaining for future sales under the 2017 ATM Prospectus. Underwritten Public Offerings In October 2017, we completed an underwritten public offering for the sale of 7,700,000 shares of our common stock. The shares were sold at an offering price of $37.50 per share. Net proceeds raised from the offering amounted to approximately $271.3 million, after deducting underwriting discounts and commissions and other offering expenses. In August 2018, we completed an underwritten public offering for the sale of 6,000,000 shares of our common stock. The shares were sold at an offering price of $52.00 per share. Net proceeds raised from the offering amounted to approximately$292.9 million, after deducting underwriting discounts and commissions and other offering expenses. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Summary of Equity Incentive Plans 2006 Plan We granted options under our 2006 Equity Incentive Award Plan, as amended (2006 Plan) until the adoption of our 2010 Plan (discussed below) in November 2010, which serves as the successor plan to the 2006 Plan. While no further grants may be made from the 2006 Plan, outstanding options to purchase 20,218 shares of common stock as of December 31, 2019 remained subject to the terms under the 2006 Plan. 2010 Plan Our 2010 Equity Incentive Award Plan (2010 Plan), which was previously amended in June 2012, provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock units and rights to purchase restricted stock to eligible recipients. Service-based options granted pursuant to the 2010 Plan has a contractual term of ten years and generally vest over four years. Performance-based awards are subject to the employee’s continued service and become vested based on the completion of the applicable performance conditions. On May 21, 2019, our stockholders approved the amendment and restatement of our 2010 Plan (2010 Restated Plan). The 2010 Restated Plan included the following material changes: (1) the aggregate number of shares available for issuance under the plan increased from 7.5 million to 11.5 million shares; (2) the evergreen provision that provided for automatic annual increases based on 4% of common stock issued and outstanding as of each January 1 was eliminated; and (3) the extension of the expiration date of the plan to March 2029. As of December 31, 2019, 4,907,684 shares remained available for future grants. Subsequent to the 2010 Restated Plan's effective date on May 21, 2019, all future equity awards will be issued from this plan (other than shares available for purchase under our 2010 Employee Stock Purchase Plan). Inducement Plan In December 2013, our board of directors adopted the Employment Inducement Equity Incentive Award Plan (Inducement Plan) and initially reserved 337,500 shares of common stock for issuance, which was subsequently increased to 637,500 shares in May 2018. The Inducement Plan is a non-shareholder approved stock plan adopted pursuant to the “inducement exception” provided under Nasdaq listing rules. The Inducement Plan was used exclusively for the issuance of non-statutory stock options and restricted stock units to certain new hires who satisfy the requirements to be granted inducement grants under Nasdaq rules as an inducement material to the individual’s entry into employment with us. The terms of the Inducement Plan are substantially similar to the terms of our 2010 Restated Plan. Subsequent to the effective date of our 2010 Restated Plan on May 21, 2019, we no longer issue grants under the Inducement Plan. Employee Stock Purchase Plan In November 2010, our board of directors adopted the 2010 Employee Stock Purchase Plan (ESPP), which allows employees to purchase shares of our common stock during specified offering periods at a discount to the fair market value at the time of purchase. The ESPP has a term of 10 years and will expire in November 2020. The ESPP is implemented by overlapping, twelve twelve Common stock may be purchased under the ESPP at a price equal to 85% of the fair market value of our common stock on either the date of purchase or the first day of an offering period, whichever is lower. Eligible employees may elect to withhold up to 20% of their compensation through payroll deductions during an offering period for the purchase of stock. The ESPP contains a reset provision whereby if the price of our common stock on the first day of a new offering period is less than the price on the first day of any preceding offering period, all participants in a preceding offering period with a higher first day price will be automatically withdrawn from such offering periods and re-enrolled in the new offering period. The reset feature, when triggered, will be accounted for as a modification to the original offering period, resulting in incremental expense to be recognized over the twelve The ESPP limits the maximum number of shares that may be purchased by any one participant in an offering period to 2,500 shares. In addition, the Internal Revenue Code limits purchases under an ESPP to $25,000 worth of stock in any one calendar year, valued as of the first day of an offering period. As of December 31, 2019, 18,347 shares of common stock were available for purchase, which number increased by 31,250 shares as of January 1, 2020 in accordance with the evergreen provision under the ESPP. Equity Incentive Plan Activity The following sections summarize activity under our equity incentive plans. Stock Options The following table summarizes our stock option activity for 2019: Shares (in thousands) Weighted Average Exercise Price Weighted Average Remaining Contractual Term (years) Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2018 3,744 $ 20.69 Granted 1,247 $ 48.88 Exercised (647) $ 14.49 Canceled (91) $ 35.17 Outstanding at December 31, 2019 4,253 $ 29.59 6.8 $ 96,524 Exercisable at December 31, 2019 2,556 $ 21.24 5.6 79,083 The total intrinsic value of options exercised during 2019, 2018 and 2017 was $22.4 million, $11.8 million and $14.3 million, respectively. Restricted Stock Units (RSUs) The following table summarizes the Company’s restricted stock unit activity for 2019: Shares (in thousands) Weighted Average Fair Value per RSU at Grant Date Nonvested at December 31, 2018 289 $ 25.56 Granted 235 50.46 Vested (37) 43.10 Canceled (48) 29.71 Nonvested at December 31, 2019 439 36.97 The total intrinsic value of RSUs vested during 2019 and 2018 was $1.9 million and $4.2 million, respectively. There were no RSUs vested during 2017. As of December 31, 2019, outstanding RSUs included approximately 130,000 shares granted in March 2017 to employees and executives that are performance-based. These performance-based RSUs vest upon FDA approval of our NDA for Fintepla, provided such approval occurs within five years following the grant date. Since obtaining FDA approval involves numerous risks and uncertainties, many of which are outside of our control, this performance condition is not deemed to be probable until the event actually occurs. Accordingly, no compensation expense has been recognized to date. As of December 31, 2019, total unrecognized compensation costs related to such awards were $1.4 million. As of December 31, 2019, restricted stock units outstanding not subject to a performance condition had a weighted average remaining contractual term of 1.5 years with an intrinsic value of $16.1 million. In October 2015, we granted employees certain performance-based stock options for retention purposes. The stock options would vest upon satisfaction of a specified regulatory milestone within three years of the date of grant. In 2017, management determined the achievement of the performance condition was no longer probable and the cumulative compensation expense previously recognized of $0.7 million was reversed. In September 2018, these awards were modified to allow for 90% of such options outstanding at the modification date to vest immediately. The remaining 10% of the awards were canceled in October 2018 since the performance condition was not met. This improbable to probable modification resulted in the calculation and recognition of incremental stock-based compensation expense of $3.5 million in 2018. ESPP Employees purchased 28,146 shares, 32,679 shares and 35,934 shares under our ESPP during 2019, 2018 and 2017, respectively. Valuation of Equity Awards We use the Black-Scholes option-pricing model for determining the estimated fair value and stock-based compensation related to stock options and ESPP awards. A summary of the assumptions used to estimate the fair values of stock option grants for the years presented is as follows: Year Ended December 31, 2019 2018 2017 Risk free interest rate 1.4% to 2.6% 2.3% to 3.0% 1.8% to 2.3% Expected term 5.3 to 6.1 years 5.3 to 6.1 years 5.1 to 6.1 years Expected volatility 73.5% to 82.3% 80.1% to 85.2% 75.1% to 85.8% Expected dividend yield —% —% —% Weighted-average fair value of option on grant date $32.64 $30.87 $7.43 The fair value of ESPP awards were not material for all periods presented. Stock-Based Compensation Expense Allocation The following table summarizes the components of total stock-based compensation expense included in the consolidated statements of operations for the periods presented (in thousands): Year Ended December 31, 2019 2018 2017 Cost of contract manufacturing $ — $ — $ 71 Research and development 8,293 6,317 1,933 Selling, general and administrative 12,954 9,175 4,151 Total $ 21,247 $ 15,492 $ 6,155 |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2019 | |
Postemployment Benefits [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans We maintain defined contribution retirement plans for our employees. We established a 401(k) Plan for our U.S. employees and a defined benefit pension plan for our U.K. employees by which participants may defer taxation on a portion of their earnings, subject to a maximum amount under each applicable plan. We may make discretionary matching contributions to the plans on behalf of participants in any plan year. Any discretionary matching contributions made on behalf of participants become immediately vested and non-forfeitable to the participant. Total expense recognized by us for discretionary matching contributions made in 2019, 2018 and 2017 was $0.5 million, $0.2 million, and $0.2 million, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For financial reporting purposes, the components of loss from continuing operations before income taxes were as follows (in thousands): December 31, 2019 2018 2017 United States $ (325,769) $ (35,838) $ (32,112) Foreign (93,734) (87,878) (93,910) Total $ (419,503) $ (123,716) $ (126,022) At December 31, 2019, our federal, state, and foreign net operating loss carryforwards, including the acquired net operating losses from our acquisition of Modis, were approximately $389.5 million, $234.6 million and $227.7 million, respectively, which may be subject to limitations as described below. If not utilized, a significant portion of our federal tax loss carryforwards incurred prior to 2018 will begin to expire in 2029 and the state tax loss carryforwards incurred prior to 2018 will begin to expire in 2021. Under the Tax Cut and Jobs Act of 2017 (Tax Act), federal net operating losses incurred in 2018 and in future years may be carried forward indefinitely. However, the deductibility of such federal net operating losses is limited to 80% of taxable income. It is uncertain if and to what extent various states will conform to the Tax Act. Our net operating losses in the U.K. do not expire, but deductiblility of the net operating losses is limited to 50% of taxable income, subject to a regulatory established allowance per group. In addition, we have federal and California research and development income tax credit carryforwards of approximately $6.0 million and $4.0 million. If not utilized, the federal research and development income tax credit carryforwards will begin to expire in 2027. The California research and development income tax credit carryforwards do not expire and can be carried forward indefinitely. As of December 31, 2019, we had federal orphan drug tax credit carryforwards of $2.0 million, which begin to expire in 2036. Due to the net operating loss carryforwards, all years remain open for income tax examination by tax authorities in the United States, various states and foreign tax jurisdictions in which we file tax returns. We are currently not under audit by any tax jurisdiction. As of December 31, 2019, we have experienced at least three ownership changes. The first ownership change occurred in August 2006 and resulted in a reduction to our net operating loss carryforwards of $1.9 million. We had a second ownership change in September 2011 which resulted in reductions to our federal net operating loss carryforwards of $121.1 million, research and development income tax credits of $3.0 million, and California net operating loss carryforwards of $53.3 million. We had a third ownership change in January 2014, which did not result in any reductions of federal and California net operating loss carryforwards or research and development income tax credits. We recently completed an evaluation of the potential effect of Section 382 on our ability to utilize our net operating losses, including those acquired from our acquisition of Modis. However, we do not anticipate these limitations will significantly impact our ability to utilize our operating losses and tax credit carryforwards. Pursuant to the IRC, the use of our net operating loss and research and development income tax credit carryforwards may be limited in the event of a future cumulative change in ownership of more than 50% within a three-year period. A reconciliation of income tax provision to amounts computed by applying the statutory federal income tax rate to loss from continuing operations before income taxes is shown as follows (in thousands): December 31, 2019 2018 2017 Income tax at federal statutory rate $ (88,096) $ (26,022) $ (42,846) State taxes, net of federal benefit (65) (8) (19) Non-deductible acquired IPR&D charge and other expenses (1) 52,044 — — Change in valuation allowance 21,155 16,949 (11,208) Impact of U.S. statutory rate change on revaluing deferred tax assets — — 36,085 Impact of foreign rate change on deferred taxes 1,887 1,961 1,619 Other permanent differences 4,101 (701) 8,086 State tax rate benefit (18) 169 56 Foreign rate differential 1,883 1,731 10,636 Stock-based compensation (2,674) (1,344) (2,462) Net operating losses surrendered under U.K.’s R&D tax relief scheme 9,349 6,322 — Credits and other 434 943 53 Income tax provision $ — $ — $ — (1) Amounts attributable to our asset acquisition of Modis. See Note 3 for additional information. The Tax Act has resulted in significant changes to the U.S. corporate income tax system. These changes include a federal statutory rate reduction from 35% to a flat rate of 21% for tax years beginning after December 31, 2017, limitation of the deduction for net operating losses to 80% of current year taxable income and elimination of net operating loss carrybacks, implementing a territorial tax system, and requiring a mandatory one-time tax on U.S. owned undistributed foreign earnings and profits known as the transition tax. Pursuant to Staff Accounting Bulletin No. 118, an entity may select between one of three scenarios to determine a reasonable estimate arising from the Tax Act. We were able to provide a reasonable estimate for the revaluation of deferred taxes and the effects of the transition tax on undistributed foreign earnings and profits. As a result, for the year ended December 31, 2017, we recorded a $36.1 million reduction in deferred tax assets for the revaluation of deferred taxes, which was offset by a corresponding decrease to our full valuation allowance. During the fourth quarter of 2018, we completed our accounting for the impact of the Tax Act and determined there were no material changes to our original analysis. The significant components of deferred tax assets (liabilities) were as follows (in thousands): December 31, 2019 2018 Deferred tax assets: Federal and state net operating loss carryforwards $ 134,009 $ 103,187 Capitalized research and development 925 1,537 Accrued expenses 1,311 1,300 Research and development credits 5,343 5,343 Amortization 1028 528 Lease liability 2,547 — Stock-based compensation 6,464 5,868 Other, net 1,979 775 Total deferred tax assets 153,606 118,538 Less: valuation allowance (151,544) (118,064) Total deferred tax assets, net of valuation allowance 2,062 474 Deferred tax liabilities: Operating lease right-of-use asset $ (1,640) $ — IPR&D (17,425) (17,425) Depreciation (422) (474) Total deferred tax liabilities (19,487) (17,899) Total net deferred tax liabilities $ (17,425) $ (17,425) For the years ended December 31, 2019, 2018 and 2017, no income tax provision was recorded due to recurring losses and our assessment a full valuation allowance should be established against any net deferred tax assets due to the uncertainty regarding our ability to realize them in the future. The increase in valuation allowance of $33.5 million during 2019 was attributable to our current year taxable loss and deferred tax assets related to acquired net operating loss carryovers from our acquisition of Modis. As of December 31, 2019 and 2018, the net deferred tax liability of $17.4 million on the consolidated balance sheets is related to book and tax basis differences for intangible assets with indefinite lives from our 2014 business acquisition of Brabant. In accordance with accounting for income taxes guidance, the deferred tax liability related to the intangible assets cannot be used to offset deferred tax assets when determining the amount of the valuation allowance for deferred tax assets which are not more-likely-than-not to be realized. This results in a net deferred tax liability, even though we have a full valuation allowance on our other net deferred tax assets. This net deferred tax liability will continue to be reflected on the balance sheet until the related intangible assets are no longer held by us. We recognize liabilities for uncertain tax positions based on a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more than 50% likely of being realized upon ultimate settlement. The following table summarizes the activity related to our unrecognized tax benefits (in thousands): December 31, 2019 2018 2017 Beginning balance of unrecognized tax benefits $ 1,487 $ 2,030 $ 1,248 Gross increases based on tax positions related to current year 1,495 — 633 Gross increases based on tax positions related to prior years 559 91 149 Gross decreases based on tax positions related to prior years — (634) — Settlements with taxing authorities — — — Expiration of statute of limitations — — — Ending balance of unrecognized tax benefits $ 3,541 $ 1,487 $ 2,030 As at December 31, 2019 and 2018, there were no unrecognized tax benefits that, if recognized, would affect our effective tax rate as any tax benefit would increase a deferred tax asset, which is currently offset by a full valuation allowance. We record interest and, if applicable, penalties related to income tax matters as a component of income tax expense. No interest or penalties have been recorded for all periods presented. We do not expect any significant increases or decreases to our unrecognized tax benefits in the next twelve months. |
UK's R&D Tax Relief Scheme
UK's R&D Tax Relief Scheme | 12 Months Ended |
Dec. 31, 2019 | |
Other Income and Expenses [Abstract] | |
UK's R&D Tax Relief Scheme | U.K.’s R&D Tax Relief Scheme We conduct extensive research and development activities that benefit from U.K.’s small and medium-sized enterprises (SME) R&D tax relief scheme. Under this tax relief scheme, a SME has an option to receive an enhanced U.K. tax deduction on its eligible R&D activities or, when an SME entity is in a net operating loss position, can elect to surrender net operating losses that arise from its eligible R&D activities in exchange for a cash payment from the U.K. tax authorities. As the tax incentives may be received without regard to an entity’s actual tax liability, they are not subject to accounting for income taxes. Amounts recognized by us for cash payment claims under the SME R&D tax relief scheme are recorded as a component of other income after an election for tax relief has been made by submitting a claim for a discrete tax year and collectability is deemed probable and reasonably assured. Other income for 2018 included $10.1 million for claims related to our 2015 and 2016 U.K. tax years. As of December 31, 2019, we have made similar elections and submitted two individual claims for refundable cash credits related to our 2017 and 2018 U.K. tax years. Amounts submitted for reimbursement for qualifying expenditures incurred in 2017 and 2018 are higher than claims received for prior tax years due to increases in qualifing expenditures incurred in those periods. We have not recorded a receivable for these refundable cash credits at December 31, 2019 as collectability was not probable or reasonably assured. For our 2019 tax year, we have not yet decided whether to seek tax relief by surrendering some of our losses for refundable cash credits or electing to receive enhanced U.K. tax deductions on our eligible R&D activities. Under U.K’s tax legislation, there is a two |
Selected Quarterly Financial In
Selected Quarterly Financial Information (Unaudited) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financial Information (Unaudited) | Selected Quarterly Financial Information (Unaudited) The following tables show a summary of our quarterly financial information for each of the four quarters of 2019 and 2018 and have been prepared in accordance with GAAP for interim financial information. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. 2019 Quarter Ended March 31 June 30 September 30 December 31 (in thousands, except per share amounts) Revenue $ — $ 1,069 $ 630 $ 1,949 Loss from continuing operations $ (35,202) $ (37,763) $ (290,478) $ (56,060) Loss from discontinued operations $ — $ — $ — $ — Net loss $ (35,202) $ (37,763) $ (290,478) $ (56,060) Net loss per share, basic and diluted $ (0.83) $ (0.89) $ (6.75) $ (1.26) 2018 Quarter Ended March 31 June 30 September 30 December 31 (in thousands, except per share amounts) Revenue $ — $ — $ — $ — Loss from continuing operations $ (30,180) $ (28,839) $ (42,264) $ (22,433) Loss from discontinued operations $ — $ (198) $ — $ — Net loss $ (30,180) $ (29,037) $ (42,264) $ (22,433) Net loss per share, basic and diluted $ (0.87) $ (0.83) $ (1.08) $ (0.53) |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) and include the accounts of Zogenix and its wholly-owned subsidiaries. |
Consolidation | All intercompany transactions have been eliminated in consolidation. |
Reclassifications | Certain reclassifications have been made to the prior period amounts to conform to the current year presentation. More specifically, accrued compensation, other accrued liabilities and common stock warrant liabilities, which were previously presented separately on the consolidated balance sheet, have been reclassified into a single caption, other current liabilities. These reclassifications did not affect our financial position, net loss, comprehensive loss, or cash flows as of and for the periods presented. |
Use of Estimates | Use of EstimatesThe preparation of financial statements in conformity with 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Revenue Recognition | Revenue Recognition We analyze our collaboration arrangements to assess whether such arrangements, or transactions between arrangement participants, involve joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards dependent on the commercial success of such activities or are more akin to a vendor-customer relationship. In making this evaluation, we consider whether the activities of the collaboration are considered to be distinct and deemed to be within the scope of the collaborative arrangement guidance and those that are more reflective of a vendor-customer relationship and, therefore, within the scope of the revenue with contracts with customers guidance. This assessment is performed throughout the life of the arrangement based on changes in the responsibilities of all parties in the arrangement. For elements of collaboration arrangements that are not accounted for pursuant to the revenue from contracts with customers guidance, an appropriate recognition method is determined and applied consistently, generally by analogy to the revenue from contracts with customers guidance. Amounts related to transactions with a counterparty in a collaborative arrangement that is not a customer are presented as collaboration revenue and on a separate line item from revenue recognized from contracts with customers, if any, in our consolidated statements of operations. Amounts received prior to satisfying the revenue recognition criteria are recorded as deferred revenue in the consolidated balance sheets. If the related efforts underlying the deferred revenue is expected to be satisfied within the next twelve months this will be classified in current liabilities. Unconditional rights to receive consideration in advance of performance are recorded as receivables and deferred revenue in the consolidated balance sheets when we have a contractual right to bill and receive the payment, performance is expected to commence shortly and there is less than a year between billing and performance. Amounts recognized for satisfied performance obligations prior to the right to payment becoming unconditional are recorded as contract assets in the consolidated balance sheets. If we expect to have an unconditional right to receive consideration in the next twelve months, this will be classified in current assets. A net contract asset or liability is presented for each contract with a customer. For arrangements or transactions between arrangement participants determined to be within the scope of the contracts with customers guidance, we perform the following steps to determine the appropriate amount of revenue to be recognized as we fulfill our obligations: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations based on estimated selling prices; and (v) recognition of revenue when (or as) we satisfy each performance obligation. At contract inception, we assess the goods or services promised in a contract with a customer and identify those distinct goods and services that represent a performance obligation. A promised good or service may not be identified as a performance obligation if it is immaterial in the context of the contract with the customer, if it is not separately identifiable from other promises in the contract (either because it is not capable of being separated or because it is not separable in the context of the contract), or if the performance obligation does not provide the customer with a material right. We consider the terms of the contract and our customary business practices to determine the transaction price. The transaction price is the amount of consideration to which we expect to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. Variable consideration will only be included in the transaction price when it is not considered constrained, which is when it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. If it is determined that multiple performance obligations exist, the transaction price is allocated at the inception of the agreement to all identified performance obligations based on the relative stand-alone selling prices unless the transaction price is variable and meets the criteria to be allocated entirely to one or more, but not all, performance obligations in the contract. The relative selling price for each performance obligation is based on observable prices if it is available. If observable prices are not available, we estimate stand-alone selling price for the performance obligation utilizing the estimated cost of the performance obligation with an estimated assumed margin. Once the transaction price has been allocated to a performance obligation using the applicable methodology, it is not subject to reassessment for subsequent changes in stand-alone selling prices. Revenue is recognized when, or as, we satisfy a performance obligation by transferring a promised good or service to a customer. An asset is transferred when, or as, the customer obtains control of that asset. For performance obligations that are satisfied over time, we recognize revenue using an input or output measure of progress that best depicts our satisfaction of the relevant performance obligation. Revenues from performance obligations associated with a purchase order of Fintepla will be recognized when the customer obtains control of our product, which will occur at a point in time which may be upon shipment or delivery to the customer. After contract inception, the transaction price is reassessed at every period end and updated for changes such as resolution of uncertain events. Any change in the overall transaction price is allocated to the performance obligations on the same methodology as at contract inception. Management may be required to exercise judgment in estimating revenue to be recognized. Judgment is required in identifying performance obligations, estimating the transaction price, estimating the stand-alone selling prices of identified performance obligations, which may include forecasted revenue, development timelines, reimbursement rates for personnel costs, discount rates and probabilities of technical and regulatory success, and estimating the progress towards satisfaction of performance obligations. Revenue generated in 2017 consisted of contract manufacturing services provided for one customer under a long-term supply agreement, which was terminated in 2017. Contract manufacturing revenue was recognized under the legacy revenue recognition standard when all of the following criteria for revenue recognition have been met: (1) persuasive evidence of an arrangement existed (2) delivery has occurred or services have been rendered; (3) the fee was fixed or determinable; and (4) collectability was reasonably assured. |
Acquisitions | We evaluate acquisitions of assets and other similar transactions to assess whether or not the transaction should be accounted for as a business combination or asset acquisition by first applying a screen test to determine if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If the screen is met, the transaction is accounted for as an asset acquisition. If the screen is not met, further determination is required as to whether or not we have acquired inputs and processes that have the ability to create outputs which would meet the definition of a business. Significant judgment is required in the application of the screen test to determine whether an acquisition is a business combination or an acquisition of assets. If the transaction is determined not to be a business combination, it is accounted for as an asset acquisition. For asset acquisitions, a cost accumulation model is used to determine the cost of an asset acquisition. Common stock issued as consideration in an asset acquisition is generally measured based on the acquisition date fair value of the equity interests issued . Direct transaction costs are recognized as part of the cost of an asset acquisition. We also evaluate which elements of a transaction should be accounted for as a part of an asset acquisition and which should be accounted for separately. Consideration deposited into escrow accounts are evaluated to determine whether it should be included as part of the cost of an asset acquisition or accounted for as contingent consideration. Amounts held in escrow where we have legal title to such balances but where such accounts are not held in our name, are recorded on a gross basis as an asset with a corresponding liability in our consolidated balance sheet. The cost of an asset acquisition, including transaction costs, are allocated to identifiable assets acquired and liabilities assumed based on a relative fair value basis. Goodwill is not recognized in an asset acquisition. Any difference between the cost of an asset acquisition and the fair value of the net assets acquired is allocated to the non-monetary identifiable assets based on their relative fair values. Assets acquired as part of an asset acquisition that are considered to be in-process research and development (IPR&D) are immediately expensed unless there is an alternative future use in other research and development projects . In addition to upfront consideration, our asset acquisitions may also include contingent consideration payments to be made for future milestone events or royalties on net sales of future products. We assess whether such contingent consideration meets the definition of a derivative. Contingent consideration payments in an asset acquisition not required to be accounted for as derivatives are recognized when the contingency is resolved, and the consideration is paid or becomes payable. Contingent consideration payments required to be accounted for as derivatives are recorded at fair value on the date of the acquisition and are subsequently remeasured to fair value at each reporting date . Contingent consideration payments made prior to regulatory approval are expensed as incurred. Contingent consideration payments made subsequent to regulatory approval are capitalized as intangible assets and amortized, subject to impairment assessments. |
Acquisitions | If the acquisition is determined to be a business combination, all tangible and intangible assets acquired, including any IPR&D asset, and liabilities assumed, including contingent consideration, are recorded at their fair value. Goodwill is recognized for any difference between the price of acquisition and our fair value determination. In addition, direct transaction costs in connection with business combinations are expensed as incurred, rather than capitalized. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Our financial instruments, including cash and cash equivalents, other current assets, accounts payable and accrued liabilities are carried at cost, which approximates their fair value because of the short-term nature of these financial instruments. See Notes 6 and 7 for financial instruments measured or disclosed at fair value for marketable securities, contingent consideration liabilities and common stock warrant liabilities. |
Cash Equivalents and Marketable Securities | Cash Equivalents and Marketable Securities We consider cash equivalents to be only those investments which are highly liquid, readily convertible to cash and have an original maturity of three months or less at the date of purchase. We invest our excess cash in marketable securities with high credit ratings including money market funds and certificates of deposit, securities issued by the U.S. government and its agencies, corporate debt securities and commercial paper. All of our marketable securities have been accounted for as available-for-sale and carried at fair value. We have classified all of our available-for-sale marketable securities, including those with maturity dates beyond one year, as current assets on the consolidated balance sheets as we may sell these securities at any time for use in current operations even if they have not yet reached maturity. The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity, which is included in interest income on the consolidated statements of operations and comprehensive loss. Realized gains and losses and declines in value determined to be other than temporary, if any, on marketable securities are included in other income (expense). Gains and losses on sales are recorded based on the trade date and determined using the specific identification method. We evaluate our marketable securities to assess whether those with unrealized loss positions are other-than-temporarily impaired. We consider impairments to be other than temporary if they are related to deterioration in credit risk or if it is likely we will sell the securities before the recovery of their cost basis. To date, there have been no declines in value deemed to be other than temporary for any of our marketable securities. |
Concentration of Credit Risk and Supplier Risk | Concentration of Credit Risk Financial instruments that potentially subject us to concentrations of credit risk are cash equivalents and marketable securities. As stated in our investment policy, the primary objective of our investment activities is to preserve principal and maintain a desired level of liquidity to meet working capital needs. Accordingly, our investment portfolio consists of investment-grade rated securities with active secondary or resale markets and is subject to established guidelines relative to diversification and maturities to maintain safety and liquidity. Historically, we have not experienced any material credit losses on our investments and we believe our exposure to credit risk related to our investing activities are limited. We maintain amounts on deposit with various financial institutions, which may exceed federally insured limits. However, management periodically evaluates the credit-worthiness of those institutions, and we have not experienced any losses on such deposits. Concentration of Supplier Risk Certain materials and key components that we utilize in our operations are obtained through single suppliers. Since the suppliers of key components and materials must be named in a New Drug Application (NDA) filed with the FDA for a product, significant delays can occur if the qualification of a new supplier is required. If delivery of material from our suppliers were interrupted for any reason, we may be unable to supply any of our product candidates for clinical trials. |
Property and Equipment, Net | Property and Equipment, Net Property and equipment is recorded at cost, net of accumulated depreciation. Depreciation is calculated on a straight-line basis over the estimated useful lives of the respective assets and primarily consists of the following: Computer equipment and software 3 years Furniture and fixtures 3-7 years Leasehold improvements Shorter of estimated useful life or lease term |
Segment Information | Segment Information Operating segments are defined as components of an enterprise for which discrete financial information is available that is evaluated on a regular basis by our chief operating decision-maker (CODM) in deciding how to allocate resources to an individual segment and in assessing performance of the segment. We operate as a single business segment: the research, development and commercialization of pharmaceutical products. Our CODM, which is our President/Chief Executive Officer, reviews our operating results on a consolidated basis and manages our operations as a single operating segment. Substantially all of our long-lived assets are located in the United States. |
Goodwill and Indefinite-Lived Intangible Asset | Goodwill The goodwill balance of $6.2 million at December 31, 2019 and 2018 is directly attributable to our business acquisition of Brabant Pharma Limited (Brabant) in 2014 to obtain worldwide development and commercialization rights to Fintepla. Goodwill represents the excess of the purchase price of acquired businesses over the estimated fair value assigned to the individual assets acquired and liabilities assumed. Goodwill is not amortized, but instead is reviewed for impairment at least annually on our assessment date of October 1, or more frequently if events occur or circumstances change that would indicate the carrying amount may be impaired. Goodwill is assigned to, and impairment testing is performed at, the reporting unit level. We determined we have only one reporting unit, which is the same as our operating segment, as well as our reportable segment. Accordingly, our impairment testing is performed at the entity-wide level. For 2019, we performed a quantitative impairment test by comparing the fair value of our net assets with their carrying amounts. As we have a single reporting unit, an appropriate measure of the fair value of our net assets is our market capitalization on the assessment date. Our market capitalization, excluding any potential adjustment for a control premium, exceeded the carrying amount of our net assets as of October 1, 2019 by a significant amount and we determined our goodwill was not impaired. There were no goodwill impairment losses recorded for all periods presented. Indefinite-Lived Intangible Assets The indefinite-lived intangible asset balance of $102.5 million at both December 31, 2019 and 2018 consists of IPR&D related to Fintepla acquired through the business acquisition of Brabant in 2014. IPR&D represents the fair value assigned to incomplete research projects that we acquire through business combinations which, at the time of acquisition, have not reached technological feasibility, regardless of whether they have alternative use. The primary basis for determining the technological feasibility of these projects at the time of acquisition is obtaining regulatory approval to market the underlying products in an applicable geographic region. The amounts are capitalized and are accounted for as indefinite-lived intangible assets, subject to impairment testing until completion or abandonment of the associated research and development efforts. If the research and development efforts are successfully completed and commercial feasibility is reached, we will make a determination as to the then useful life of the intangible asset and begin amortization. Upon permanent abandonment, we would write-off the remaining carrying amount of the associated IPR&D intangible asset. Indefinite-lived intangible assets are not amortized, but instead are reviewed for impairment at least annually as of October 1, or more frequently if events occur or circumstances change that would indicate the carrying amount may be impaired. In performing each annual impairment assessment and any interim impairment assessment, the accounting guidance allows an entity the option to first assess qualitative factors to determine whether it is necessary to perform a quantitative test. If we believe, as a result of our qualitative assessment, that it is more-likely-than-not that the fair value of our IPR&D asset is less than its carrying amount, the quantitative impairment test is required. Otherwise, no further testing is required. When performing a qualitative test, we consider the results of our most recent quantitative impairment test and identify the most relevant divers of the fair value for the IPR&D asset. The most relevant drivers of fair value we have identified are consistent with the assumptions used in the quantitative estimate of the IPR&D asset discussed below. Using these drivers of fair value, we identify events and circumstances that may have an effect on the fair value of the IPR&D asset since the last time the IPR&D’s fair value was quantitatively determined. We then weigh these factors to determine and conclude if it is not more likely than not that the IPR&D asset is impaired. If it is more-likely-than-not that the IPR&D asset is impaired, we will proceed with quantitatively determining the fair value of the IPR&D asset. Under a quantitative test, we use an income approach to determine the fair value of our IPR&D asset. This approach calculates fair value by estimating the after-tax cash flows attributable to an in-process project over its useful life and then discounting these after-tax cash flows back to a present value. This estimate includes judgmental assumptions regarding the estimates that market participants would make in evaluating the IPR&D asset, including the probability of successfully completing clinical trials and obtaining regulatory approval to market the IPR&D asset, the timing of and the expected costs to complete IPR&D projects, future net cash flows from potential drug sales, which are based on estimates of the sales price of the drug, the number of patients who will be diagnosed and treated and our competitive position in the marketplace, and appropriate discount and tax rates. If the fair value is less than the carrying amount based on our test, any impairment loss is recognized in our consolidated statements of operations by adjusting the carrying value of the IPR&D asset on our consolidated balance sheet to its fair value. |
Long-Lived Assets | Long-Lived AssetsLong-lived assets, including right-of-use operating lease assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets (group) may not be recoverable. Recoverability of assets is determined by comparing the estimated undiscounted net cash flows of the operations related to the assets (asset group) to their carrying amount. If the carrying value of the assets (asset group) exceeds its undiscounted cash flows, we then compare the fair value of the assets (asset group) to its carrying value to determine the impairment loss. The impairment loss will be allocated to the carrying values of the long-lived assets (asset group), but not below their individual fair values. |
Common Stock Warrant Liabilities | Common Stock Warrant Liabilities In accordance with accounting guidance for common stock warrants that may potentially require cash settlement under certain circumstances, we classify such common stock warrants as current liabilities on the consolidated balance sheet. At each reporting date, the warrant liability is adjusted for changes in fair value with an offsetting change recorded as a component of other income (expense) in our consolidated statements of operations. |
Research and Development Expense and Accruals | Research and Development Expense and Accruals Research and development costs are expensed as incurred unless there is an alternative future use in other research and development projects. Research and development costs include personnel-related costs, outside contracted services including clinical trial costs, facilities costs, fees paid to consultants, milestone payments prior to FDA approval, license fees prior to FDA approval, professional services, travel costs, dues and subscriptions, depreciation, materials used in clinical trials and research and development and costs incurred related to our agreement with Nippon Shinyaku Co., Ltd. We expense costs relating to the purchase and production of pre-approval inventories as research and development expense in the period incurred until FDA approval is received. Payments made prior to the receipt of goods or services to be used in research and development are recorded as prepaid assets on our consolidated balance sheets until the goods or services are realized or consumed. We classify such prepaid assets as current or non-current assets based on our estimates of the timing of when the goods or services will be realized or consumed. Our expense accruals for clinical trials are based on estimates of the services received from clinical trial investigational sites, contract research organizations (CROs), contract manufacturing organizations (CMOs) and other third-party vendors that support us in our research and development efforts. Payments under some of our contracts with these service providers depend on factors such as the achievement of clinical milestones such as the successful enrollment of certain numbers of patients, site initiation, reservation of manufacturing capacity, or completion of a clinical trial. In accruing for these services at each reporting date, we estimate the time period over which services will be performed and the level of effort to be expended in each |
Income Taxes and U.K.'s Research and Development (R&D) Tax Relief Scheme | Income Taxes Income taxes are accounted for under the asset and liability method of accounting. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. We provide a valuation allowance against net deferred tax assets unless, based upon the available evidence, it is more likely than not that the deferred tax asset will be realized. We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the tax position. U.K.’s Research and Development (R&D) Tax Relief Scheme |
Foreign Currency Translation and Transactions | Foreign Currency Translation and TransactionsWe have certain foreign operations where their functional currency was determined to be their local currency. Local currency assets and liabilities are translated to U.S. Dollars at the rates of exchange in effect on the balance sheet date, and local currency revenues and expenses are translated to U.S. Dollars at average rates of exchange in effect during the period. The resulting translation gains or losses are included in our consolidated statements of comprehensive income (loss) as a component of other comprehensive income (loss) and in the consolidated statements of stockholders’ equity. We also recognize gains and losses on transactions that are denominated in a currency other than the respective entity’s functional currency in other expense, net in the consolidated statements of operations. Gains and losses from foreign currency translation and transactions were not material for all periods presented. |
Other Comprehensive Income (Loss) | Other Comprehensive Income (Loss) Components of other comprehensive income (loss) include changes in fair value of our available-for-sale marketable securities and reclassification adjustments from realization of gain (loss) on sale of marketable securities included in net loss. |
Stock-Based Compensation | Stock-Based Compensation We recognize stock-based compensation for all equity awards made to employees based upon the awards’ estimated grant date fair value. For equity awards that vest subject to the satisfaction of service requirements, compensation expense is measured based on the fair value of the award on the date of grant and expense is recognized on a straight-line basis over the requisite service period. We account for forfeitures as they occur. From time to time, we may grant broad-based restricted stock units to employees, including executive officers, that vest upon the satisfaction of both service-based and performance-based vesting conditions. The performance-based vesting conditions are generally satisfied upon regulatory approval of a product candidate we have been developing. We recognize stock-based compensation over the requisite service period for awards with a performance condition if the performance condition is deemed probable of being met. Since obtaining regulatory approval involves numerous risks and uncertainties, many of which are outside of our control, achievement of regulatory approval is not deemed to be probable until the event occurs. As a result, our stock-based compensation expense may experience fluctuations, which may impact our reported financial results and period-to-period comparisons of our consolidated statements of operations. Valuation of Stock Options The fair value of each option granted was estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions: • Expected term—The expected term represents the estimated length of time over which we expect an option will be outstanding. We used the simplified method, as provided for under the applicable guidance for entities with a limited history of relevant stock option exercise activity, to estimate the expected term. • Expected volatility—The expected volatility was calculated based on our historical stock prices over the expected term. • Risk-free interest rate—The risk-free interest rate was based on the U.S. Treasury yield curve in effect at the time of grant and with a maturity that approximated the expected term of the option. • Expected dividend yield—The expected dividend yield was based on our historical practice and anticipated dividends over the expected term of the option. Valuation of Restricted Stock Units The fair value of each restricted stock unit was based on our closing stock price on the date of grant. |
Loss from Continuing Operations per Share | Loss from Continuing Operations per Share Basic net loss from continuing operations per share is calculated by dividing the net loss from continuing operations by the weighted average number of common shares outstanding for the period reduced by weighted average shares subject to repurchase, without consideration for common stock equivalents. Diluted net loss from continuing operations per share is computed by dividing the net loss from continuing operations by the weighted average number of common share equivalents outstanding for the period determined using the treasury-stock method and as-if converted method, as applicable. For purposes of this calculation, stock options, restricted stock units and warrants to purchase common stock are considered to be common stock equivalents and are only included in the calculation of diluted net loss from continuing operations per share when their effect is dilutive. The calculation of diluted loss per share also requires that, to the extent the average market price of the underlying shares for the reporting period exceeds the exercise price of the warrants to purchase common stock and the presumed exercise of such securities are dilutive to loss per share for the period, adjustments to net income or net loss used in the calculation are required to remove the change in fair value of the common stock warrant liability for the period. In addition, adjustments to the denominator are similarly made to reflect the related dilutive shares. |
Accounting Pronouncements | Accounting Pronouncements Recently Adopted Collaborative Arrangements Accounting Standards Update (ASU) 2018-18, Collaborative Arrangements: Clarifying the Interaction between Topic 808 and Topic 606 makes targeted improvements for collaborative arrangements by (1) clarifying that certain transactions between collaborative arrangement participants should be accounted for as revenue under the contract with customer guidance (Topic 606) when the collaborative arrangement participant is a customer, (2) adding unit of account guidance to assess whether the collaborative arrangement, or a part of the arrangement, is with a customer and (3) precluding a company from presenting transactions with collaborative arrangement participants that are not directly related to sales to third parties together with revenue from contracts with customers. Entities must apply the guidance retrospectively as of the date of their initial application of Topic 606 and should recognize the cumulative effect of initially applying the amendments as an adjustment to opening retained earnings as of the later of (1) the earliest annual period presented and (2) the annual period that includes the date of the entity’s initial application of Topic 606. ASU 2018-18 is effective for fiscal years beginning after December 15, 2019, including interim periods therein. Early adoption is permitted. We elected to early adopt this standard effective January 1, 2019 and have applied its guidance to our arrangement entered into in March 2019 with Nippon Shinyaku Co., Ltd. (See Note 4). No retrospective adjustment to our consolidated financial statements was required as a result of our application of these amendments. Leases ASU 2016-02, Leases (Topic 842) establishes a right-of-use (ROU) asset model that requires all lessees to recognize ROU assets and liabilities for leases with a duration greater than one year on the balance sheet as well as provide disclosures with respect to certain qualitative and quantitative information regarding the amount, timing and uncertainty of cash flows arising from leases. We adopted Topic 842 effective January 1, 2019 using the modified retrospective approach and elected the package of practical expedients permitted under the transition guidance within the new standard. Consequently, prior period financial information and related disclosures have not been adjusted and will continue to be presented in accordance with the previous lease standard. In addition, we elected the package of transition provisions available for existing contracts, which allowed us to carryforward our historical assessments of (1) whether contracts are or contain leases, (2) lease classification and (3) initial direct lease costs for existing leases. We did not elect the practical expedient allowing the use-of-hindsight which would require us to reassess the lease term of our leases based on all facts and circumstances through the effective date and did not elect the practical expedient pertaining to land easements as this is not applicable to the current contract portfolio. The adoption of Topic 842 did not have a material impact on our consolidated statements of operations and cash flows. The impact on our consolidated balance sheet as of January 1, 2019 was as follows (in thousands): December 31, 2018 Adjustments Due to the January 1, 2019 Assets Operating lease right-of-use assets $ — $ 8,641 $ 8,641 Liabilities Other accrued liabilities 1,845 $ (363) $ 1,482 Current portion of operating lease liabilities — 1,058 1,058 Operating lease liabilities, net of current portion — 11,776 11,776 Deferred rent and lease incentive obligation 3,830 (3,830) — Total $ 5,675 $ 8,641 $ 14,316 Upon adoption on January 1, 2019, we recorded operating lease ROU assets and lease liabilities of $8.6 million and $12.8 million, respectively, with the difference between ROU assets and lease liabilities attributed to the reclassifications of deferred rent and lease incentive obligations, a cease-use liability and initial direct leasing costs as a component of ROU assets. Prior to January 1, 2019, we recognized related rent expense on a straight-line basis over the term of the lease. Incentives granted under our operating lease, including allowances for leasehold improvements and rent holidays, were recognized as reductions to rent expense on a straight-line basis over the term of the lease. Deferred rent consisted of the difference between rent expense recognized on a straight-line basis and cash rent payments. Subsequent to the adoption of Topic 842 on January 1, 2019, we determine whether the arrangement is or contains a lease at the inception of the arrangement and if such a lease is classified as a financing lease or operating lease at lease commencement. All of our leases are classified as operating leases. Leases with an initial term greater than one year are recorded on our consolidated balance sheet at December 31, 2019 as lease ROU assets and lease liabilities. If a lease contains an option to renew, the renewal option is included in the calculation of lease liabilities if we are reasonably certain at lease commencement the renewal option will be exercised. Lease liabilities and their corresponding ROU assets are measured at the present value of the remaining lease payments, discounted at an appropriate incremental borrowing rate at lease commencement, or as of January 1, 2019, for our existing leases. Management uses judgment to estimate the appropriate incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. Certain adjustments to the ROU asset may be required for items such as initial direct lease costs, lease incentives, scheduled rent escalations and impairment charges if we determine the ROU asset is impaired. Operating lease expense is recognized on a straight-line basis over the lease term. We elected the post-transition practical expedient to not separate lease components from non-lease components for all existing lease classes. We also elected a policy of not recording leases on our consolidated balance sheets when a lease has a term of one year or less. Accounting Pronouncements Issued But Not Yet Effective ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments revises the measurement of credit losses for most financial instruments measured at amortized cost, including trade receivables, from an incurred loss methodology to an expected loss methodology which results in earlier recognition of credit losses. Under the incurred loss model, a loss is not recognized until it is probable that the loss-causing event has already occurred. The new standard introduces a forward-looking expected credit loss model that requires an estimate of the expected credit losses over the life of the instrument by considering all relevant information including historical experience, current conditions, and reasonable and supportable forecasts that affect collectability. In addition, this standard also modifies the impairment model for available-for-sale debt securities, which are measured at fair value, by eliminating the consideration for the length of time fair value has been less than amortized cost when assessing credit loss for a debt security and provides for reversals of credit losses through income upon credit improvement. The new standard is effective for us beginning January 1, 2020. We will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted (modified-retrospective approach). A prospective transition approach is required for debt securities for which an other-than-temporary impairment had been recognized before the effective date. Based on the composition of our investment portfolio, which reflects our primary investment objective of capital preservation, current market conditions and historical credit loss activity, the adoption of this new standard is not expected to have a material impact on our consolidated financial statements or related disclosures. ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (ASU 2017-04) simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. The implied fair value for a reporting unit is determined in the same manner as the amount of goodwill recognized in a business acquisition of the reporting unit. Under the amendments in ASU 2017-04, an entity shall recognize an impairment charge for the amount by which the carrying amount of a reporting unit exceeds its fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The updated guidance requires adoption on a prospective basis. ASU 2017-04 is effective for us beginning January 1, 2020. The adoption of this standard update is not expected to have a material impact on our consolidated financial statements; however, any goodwill impairment losses recognized subsequent to adoption will be measured following the updated standard. ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement modifies the disclosure requirements in Topic 820 by removing certain disclosure requirements related to the fair value hierarchy, modifying existing disclosure requirements related to measurement uncertainty and adding new disclosure requirements, such as disclosing the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and disclosing the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. This ASU is effective for us beginning January 1, 2020. The adoption of this standard update is not expected to have a material impact on our consolidated financial statements, but certain disclosures related to the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements will need to be disclosed. ASU 2019-12, Simplifying the Accounting for Income Taxes (Topic 740) removes certain exceptions to the general principles in Topic 740 related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The new guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. This ASU is effective for us for all interim and annual periods beginning January 1, 2021, with early adoption permitted. We are currently evaluating the impact of adopting this ASU on our consolidated financial statements and related disclosures. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Depreciation Useful lives | Depreciation is calculated on a straight-line basis over the estimated useful lives of the respective assets and primarily consists of the following: Computer equipment and software 3 years Furniture and fixtures 3-7 years Leasehold improvements Shorter of estimated useful life or lease term |
Schedule of Computation of Basic and Diluted Net Loss per Share | The following table presents the computation of basic and diluted loss from continuing operations per share (in thousands, except per share amounts): Year Ended December 31, 2019 2018 2017 Numerator Net loss from continuing operations $ (419,503) $ (123,716) $ (126,022) Denominator Weighted average common shares outstanding, basic and diluted 43,078 37,884 27,301 Loss from continuing operations per share, basic and diluted $ (9.74) $ (3.27) $ (4.62) |
Schedule of Potential Common Shares Excluded From Calculation of Diluted Net Loss per Share | The following table presents the potential common shares outstanding that were excluded from the computation of diluted loss from continuing operations per share of common stock for the periods presented because including them would have been antidilutive (in thousands): Year Ended December 31, 2019 2018 2017 Shares subject to outstanding common stock options 4,085 3,770 3,865 Shares subject to outstanding restricted stock units 382 289 237 Shares subject to outstanding warrants to purchase common stock 28 33 282 4,495 4,092 4,384 |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | The adoption of Topic 842 did not have a material impact on our consolidated statements of operations and cash flows. The impact on our consolidated balance sheet as of January 1, 2019 was as follows (in thousands): December 31, 2018 Adjustments Due to the January 1, 2019 Assets Operating lease right-of-use assets $ — $ 8,641 $ 8,641 Liabilities Other accrued liabilities 1,845 $ (363) $ 1,482 Current portion of operating lease liabilities — 1,058 1,058 Operating lease liabilities, net of current portion — 11,776 11,776 Deferred rent and lease incentive obligation 3,830 (3,830) — Total $ 5,675 $ 8,641 $ 14,316 |
Cash, Cash Equivalents and Ma_2
Cash, Cash Equivalents and Marketable Securities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Cash and Cash Equivalents [Abstract] | |
Amortized Cost and Fair Value of Cash, Cash Equivalents and Marketable Securities | The following table summarizes the amortized cost and fair value of our cash, cash equivalents and marketable securities by major investment category as of December 31, 2019 and 2018 (in thousands): December 31, 2019 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Current assets: Cash and cash equivalents: Cash $ 43,058 $ — $ — $ 43,058 Money market funds 11,527 — — 11,527 Commercial paper 7,485 — — 7,485 Total cash and cash equivalents $ 62,070 $ — $ — $ 62,070 Marketable securities: Commercial paper $ 73,366 $ — $ — $ 73,366 Corporate debt securities 74,038 381 (2) 74,417 Certificates of deposit 41,302 — — 41,302 Total marketable securities $ 188,706 $ 381 $ (2) $ 189,085 Total cash, cash equivalents and marketable securities $ 250,776 $ 381 $ (2) $ 251,155 December 31, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Current assets: Cash and cash equivalents: Cash $ 5,222 $ — $ — $ 5,222 Money market funds 63,232 — — 63,232 Total cash and cash equivalents $ 68,454 $ — $ — $ 68,454 Marketable securities: Commercial paper $ 152,940 $ — $ — $ 152,940 Corporate debt securities 60,622 58 (75) 60,605 Certificates of deposit 128,647 — — 128,647 U.S. Treasuries 103,521 31 (11) 103,541 Total marketable securities $ 445,730 $ 89 $ (86) $ 445,733 Total cash, cash equivalents and marketable securities $ 514,184 $ 89 $ (86) $ 514,187 |
Cost and Fair Values of Marketable Securities | The following table summarizes the amortized cost and fair value of marketable securities based on stated effective maturities as of December 31, 2019 (in thousands): Amortized Cost Estimated Due within one year $ 156,620 $ 156,833 Due between one and two years 32,086 32,252 Total $ 188,706 $ 189,085 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of assets recognized or disclosed at fair value on recurring basis | The following tables summarize assets and liabilities recognized or disclosed at fair value on a recurring basis at December 31, 2019 and 2018 (in thousands): December 31, 2019 Level 1 Level 2 Level 3 Total Assets: Cash equivalents: Money market funds $ 11,527 $ — $ — $ 11,527 Commercial paper 7,485 7,485 Marketable securities: Commercial paper — $ 73,366 — 73,366 Corporate debt securities — 74,417 — 74,417 Certificates of deposit — 41,302 — 41,302 Total assets (1) $ 11,527 $ 196,570 $ — $ 208,097 Liabilities: Common stock warrant liabilities (2) $ — $ — $ 198 $ 198 Contingent consideration liabilities (3) — — 63,800 63,800 Total liabilities $ — $ — $ 63,998 $ 63,998 December 31, 2018 Level 1 Level 2 Level 3 Total Assets: Cash equivalents: Money market funds $ 63,232 $ — $ — $ 63,232 Marketable securities: Commercial paper — 152,940 — 152,940 Corporate debt securities — 60,605 — 60,605 Certificates of deposit — 128,647 — 128,647 U.S. Treasury securities — 103,541 — 103,541 Total assets (1) $ 63,232 $ 445,733 $ — $ 508,965 Liabilities: Common stock warrant liabilities (2) $ — $ — $ 343 $ 343 Contingent consideration liabilities (3) — — 78,200 78,200 Total liabilities $ — $ — $ 78,543 $ 78,543 (1) Fair value is determined by taking into consideration valuations obtained from third-party pricing services. The third-party pricing services utilize industry standard valuation models, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include reported trades of and broker/dealer quotes on the same or similar securities; issuer credit spreads; benchmark securities; and other observable inputs. (2) Represents the fair value of common stock warrants outstanding that may require cash settlement under certain circumstances. As of December 31, 2019 and 2018, common stock warrant liabilities consists of warrants issued in July 2011 in connection with a debt financing arrangement. The warrants entitle the holder to purchase up to 28,125 shares of common stock at an exercise price of $72.00 per share and expires in July 2021. (3) In connection with the acquisition of Brabant in 2014 (See Note 5), we may be required to pay future consideration that is contingent upon the achievement of specified development, regulatory approval or sales-based milestone events. We estimate the fair value of contingent purchase consideration liabilities using a probability-weighted income approach, which reflects the probability and timing of future payments. This fair value measurement is based on significant Level 3 inputs such as the anticipated timelines and probability of achieving development, regulatory approval or sales-based milestone events and projected revenues. The resulting probability-weighted cash flows are discounted at risk-adjusted rates. Subsequent to the acquisition date, at each reporting period prior to settlement, we remeasure these liabilities by performing a review of the assumptions discussed above and record an adjustment to reflect any changes in the estimated fair value of our contingent consideration liabilities. In the absence of any significant changes in key assumptions during a reporting period, the fair value of the contingent consideration liability is expected to increase each period with the recognition of change in fair value of contingent consideration resulting from the passage of time at the applicable discount rate as we approach the payment dates of the contingent consideration. Significant judgment is used in determining Level 3 inputs and fair value measurements as of a reporting date. Updates to assumptions could have a significant impact on our results of operations in a reporting period and actual results may differ from estimates. For example, significant increases in the estimated probability of achieving a milestone or projected revenues would result in a significantly higher fair value measurement while significant decreases in the estimated probability of achieving a milestone or projected revenues would result in a significantly lower fair value measurement. Significant increases in the discount rate or in the anticipated timelines would result in a significantly lower fair value measurement while significant decreases in the discount rate or anticipated timelines would result in a significantly higher fair value measurement. Through December 31, 2019, we have made milestone payments of $20.0 million. The potential amount of future payments that we may be required to make related to the remaining contingent consideration is between zero, if none of the remaining milestones are achieved, to a maximum of $75.0 million (undiscounted). As of December 31, 2019, we classified $25.6 million of the total contingent consideration liabilities of $38.2 million as current liabilities. The balance sheet classification between current and non-current liabilities was based upon our reasonable expectation as to the timing of settlement of certain specified milestones. |
Schedule of liabilities recognized or disclosed at fair value on recurring basis | The following tables summarize assets and liabilities recognized or disclosed at fair value on a recurring basis at December 31, 2019 and 2018 (in thousands): December 31, 2019 Level 1 Level 2 Level 3 Total Assets: Cash equivalents: Money market funds $ 11,527 $ — $ — $ 11,527 Commercial paper 7,485 7,485 Marketable securities: Commercial paper — $ 73,366 — 73,366 Corporate debt securities — 74,417 — 74,417 Certificates of deposit — 41,302 — 41,302 Total assets (1) $ 11,527 $ 196,570 $ — $ 208,097 Liabilities: Common stock warrant liabilities (2) $ — $ — $ 198 $ 198 Contingent consideration liabilities (3) — — 63,800 63,800 Total liabilities $ — $ — $ 63,998 $ 63,998 December 31, 2018 Level 1 Level 2 Level 3 Total Assets: Cash equivalents: Money market funds $ 63,232 $ — $ — $ 63,232 Marketable securities: Commercial paper — 152,940 — 152,940 Corporate debt securities — 60,605 — 60,605 Certificates of deposit — 128,647 — 128,647 U.S. Treasury securities — 103,541 — 103,541 Total assets (1) $ 63,232 $ 445,733 $ — $ 508,965 Liabilities: Common stock warrant liabilities (2) $ — $ — $ 343 $ 343 Contingent consideration liabilities (3) — — 78,200 78,200 Total liabilities $ — $ — $ 78,543 $ 78,543 (1) Fair value is determined by taking into consideration valuations obtained from third-party pricing services. The third-party pricing services utilize industry standard valuation models, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include reported trades of and broker/dealer quotes on the same or similar securities; issuer credit spreads; benchmark securities; and other observable inputs. (2) Represents the fair value of common stock warrants outstanding that may require cash settlement under certain circumstances. As of December 31, 2019 and 2018, common stock warrant liabilities consists of warrants issued in July 2011 in connection with a debt financing arrangement. The warrants entitle the holder to purchase up to 28,125 shares of common stock at an exercise price of $72.00 per share and expires in July 2021. (3) In connection with the acquisition of Brabant in 2014 (See Note 5), we may be required to pay future consideration that is contingent upon the achievement of specified development, regulatory approval or sales-based milestone events. We estimate the fair value of contingent purchase consideration liabilities using a probability-weighted income approach, which reflects the probability and timing of future payments. This fair value measurement is based on significant Level 3 inputs such as the anticipated timelines and probability of achieving development, regulatory approval or sales-based milestone events and projected revenues. The resulting probability-weighted cash flows are discounted at risk-adjusted rates. Subsequent to the acquisition date, at each reporting period prior to settlement, we remeasure these liabilities by performing a review of the assumptions discussed above and record an adjustment to reflect any changes in the estimated fair value of our contingent consideration liabilities. In the absence of any significant changes in key assumptions during a reporting period, the fair value of the contingent consideration liability is expected to increase each period with the recognition of change in fair value of contingent consideration resulting from the passage of time at the applicable discount rate as we approach the payment dates of the contingent consideration. Significant judgment is used in determining Level 3 inputs and fair value measurements as of a reporting date. Updates to assumptions could have a significant impact on our results of operations in a reporting period and actual results may differ from estimates. For example, significant increases in the estimated probability of achieving a milestone or projected revenues would result in a significantly higher fair value measurement while significant decreases in the estimated probability of achieving a milestone or projected revenues would result in a significantly lower fair value measurement. Significant increases in the discount rate or in the anticipated timelines would result in a significantly lower fair value measurement while significant decreases in the discount rate or anticipated timelines would result in a significantly higher fair value measurement. Through December 31, 2019, we have made milestone payments of $20.0 million. The potential amount of future payments that we may be required to make related to the remaining contingent consideration is between zero, if none of the remaining milestones are achieved, to a maximum of $75.0 million (undiscounted). As of December 31, 2019, we classified $25.6 million of the total contingent consideration liabilities of $38.2 million as current liabilities. The balance sheet classification between current and non-current liabilities was based upon our reasonable expectation as to the timing of settlement of certain specified milestones. |
Reconciliation of Liabilities Measured at Fair Value Using Significant Observable Inputs (Level 3) | The following table provides a reconciliation of assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the years ended December 31, 2019 and 2018 (in thousands): Contingent Consideration Common Stock Warrant Liabilities Balance at December 31, 2017 $ 76,900 $ 512 Settlements — — Changes in fair value 1,300 (169) Balance at December 31, 2018 78,200 343 Settlements (20,000) — Changes in fair value 5,600 (145) Balance at December 31, 2019 $ 63,800 $ 198 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Balance Sheet Related Disclosures [Abstract] | |
Property and Equipment, Net | Property and equipment, net consisted of the following (in thousands): December 31, 2019 2018 Computer equipment and software $ 291 $ 216 Leasehold improvements 9,431 3,210 Furniture and fixtures 978 880 Total 10,700 4,306 Less accumulated depreciation (1,276) (1,436) Property and equipment, net $ 9,424 $ 2,870 |
Other Long-Term Liabilities | Accrued and other current liabilities consisted of the following (in thousands): December 31, 2019 2018 Accrued compensation 7,179 5,277 Other accrued liabilities 4,074 1,845 Common stock warrant liabilities 198 343 Total $ 11,451 $ 7,465 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Components of lease costs | Information regarding lease expense, remaining lease term, discount rate, and other select lease information for the year ended December 31, 2019 were as follows (in thousands): Year Ended December 31, 2019 Components of lease costs: Operating lease cost $ 2,045 Short-term lease cost (1) 851 Sublease income (580) Total lease expense $ 2,316 (1) Short-term lease cost included $0.2 million related to a short-term lease that expired in March 2019. Other lease information Year Ended December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities $ 1,842 Right-of-use lease assets obtained in exchange for new lease liabilities, noncash $ 354 |
Supplemental balance sheet information related to operating leases | Supplemental balance sheet information related to operating leases December 31, 2019 Right-of-use assets $ 7,774 Current portion of operating lease liabilities $ 1,322 Operating lease liabilities, net of current portion 10,752 Total operating lease liabilities 12,074 Weighted average remaining lease term 7.2 years Weighted average discount rate, weighted based on the remaining balance of lease payments 6.0 % |
Maturities of operating lease liabilities | Maturities of operating lease liabilities as of December 31, 2019 were as follows (in thousands): Operating Lease 2020 $ 1,986 2021 1,957 2022 1,894 2023 1,951 2024 2,010 Thereafter 5,101 Total lease payments 14,899 Less: imputed interest (2,825) Total operating lease liabilities $ 12,074 |
Schedule of future minimum rental payments under non-cancelable operating leases and future minimum payments to be received | As of December 31, 2018, future minimum rental payments under our non-cancelable operating leases and future minimum payments to be received from subleases were as follows (in thousands): Gross Rental Payments Sublease Rental Income Net Rental Payments 2019 $ 1,777 $ (576) $ 1,201 2020 1,788 (148) 1,640 2021 1,839 — 1,839 2022 1,894 — 1,894 2023 1,951 — 1,951 Thereafter 7,296 — 7,296 Total $ 16,545 $ (724) $ 15,821 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Summary of Common Stock Reserved for Future Issuance | The following table presents common stock reserved for future issuance for the following equity instruments as of December 31, 2019 and 2018 (in thousands): December 31, 2019 2018 Stock options and RSUs outstanding 4,692 4,033 Warrants to purchase common stock 28 28 Available for future grants under employee equity plans 4,926 1,684 Total common stock reserved for future issuance 9,646 5,745 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock Options Activity | The following table summarizes our stock option activity for 2019: Shares (in thousands) Weighted Average Exercise Price Weighted Average Remaining Contractual Term (years) Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2018 3,744 $ 20.69 Granted 1,247 $ 48.88 Exercised (647) $ 14.49 Canceled (91) $ 35.17 Outstanding at December 31, 2019 4,253 $ 29.59 6.8 $ 96,524 Exercisable at December 31, 2019 2,556 $ 21.24 5.6 79,083 |
Schedule of Restricted Stock Units Activity | The following table summarizes the Company’s restricted stock unit activity for 2019: Shares (in thousands) Weighted Average Fair Value per RSU at Grant Date Nonvested at December 31, 2018 289 $ 25.56 Granted 235 50.46 Vested (37) 43.10 Canceled (48) 29.71 Nonvested at December 31, 2019 439 36.97 |
Assumptions used in the Black-Scholes Option-Pricing Model | A summary of the assumptions used to estimate the fair values of stock option grants for the years presented is as follows: Year Ended December 31, 2019 2018 2017 Risk free interest rate 1.4% to 2.6% 2.3% to 3.0% 1.8% to 2.3% Expected term 5.3 to 6.1 years 5.3 to 6.1 years 5.1 to 6.1 years Expected volatility 73.5% to 82.3% 80.1% to 85.2% 75.1% to 85.8% Expected dividend yield —% —% —% Weighted-average fair value of option on grant date $32.64 $30.87 $7.43 |
Stock-Based Compensation Expense | The following table summarizes the components of total stock-based compensation expense included in the consolidated statements of operations for the periods presented (in thousands): Year Ended December 31, 2019 2018 2017 Cost of contract manufacturing $ — $ — $ 71 Research and development 8,293 6,317 1,933 Selling, general and administrative 12,954 9,175 4,151 Total $ 21,247 $ 15,492 $ 6,155 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Domestic and Foreign Components of Loss before Provision for Income Taxes | For financial reporting purposes, the components of loss from continuing operations before income taxes were as follows (in thousands): December 31, 2019 2018 2017 United States $ (325,769) $ (35,838) $ (32,112) Foreign (93,734) (87,878) (93,910) Total $ (419,503) $ (123,716) $ (126,022) |
Reconciliation of Income Tax to Expense (Benefit) | A reconciliation of income tax provision to amounts computed by applying the statutory federal income tax rate to loss from continuing operations before income taxes is shown as follows (in thousands): December 31, 2019 2018 2017 Income tax at federal statutory rate $ (88,096) $ (26,022) $ (42,846) State taxes, net of federal benefit (65) (8) (19) Non-deductible acquired IPR&D charge and other expenses (1) 52,044 — — Change in valuation allowance 21,155 16,949 (11,208) Impact of U.S. statutory rate change on revaluing deferred tax assets — — 36,085 Impact of foreign rate change on deferred taxes 1,887 1,961 1,619 Other permanent differences 4,101 (701) 8,086 State tax rate benefit (18) 169 56 Foreign rate differential 1,883 1,731 10,636 Stock-based compensation (2,674) (1,344) (2,462) Net operating losses surrendered under U.K.’s R&D tax relief scheme 9,349 6,322 — Credits and other 434 943 53 Income tax provision $ — $ — $ — (1) Amounts attributable to our asset acquisition of Modis. See Note 3 for additional information. |
Schedule of Deferred Tax Assets | The significant components of deferred tax assets (liabilities) were as follows (in thousands): December 31, 2019 2018 Deferred tax assets: Federal and state net operating loss carryforwards $ 134,009 $ 103,187 Capitalized research and development 925 1,537 Accrued expenses 1,311 1,300 Research and development credits 5,343 5,343 Amortization 1028 528 Lease liability 2,547 — Stock-based compensation 6,464 5,868 Other, net 1,979 775 Total deferred tax assets 153,606 118,538 Less: valuation allowance (151,544) (118,064) Total deferred tax assets, net of valuation allowance 2,062 474 Deferred tax liabilities: Operating lease right-of-use asset $ (1,640) $ — IPR&D (17,425) (17,425) Depreciation (422) (474) Total deferred tax liabilities (19,487) (17,899) Total net deferred tax liabilities $ (17,425) $ (17,425) |
Summary of Unrecognized Tax Benefits | The following table summarizes the activity related to our unrecognized tax benefits (in thousands): December 31, 2019 2018 2017 Beginning balance of unrecognized tax benefits $ 1,487 $ 2,030 $ 1,248 Gross increases based on tax positions related to current year 1,495 — 633 Gross increases based on tax positions related to prior years 559 91 149 Gross decreases based on tax positions related to prior years — (634) — Settlements with taxing authorities — — — Expiration of statute of limitations — — — Ending balance of unrecognized tax benefits $ 3,541 $ 1,487 $ 2,030 |
Selected Quarterly Financial _2
Selected Quarterly Financial Information (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | The following tables show a summary of our quarterly financial information for each of the four quarters of 2019 and 2018 and have been prepared in accordance with GAAP for interim financial information. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. 2019 Quarter Ended March 31 June 30 September 30 December 31 (in thousands, except per share amounts) Revenue $ — $ 1,069 $ 630 $ 1,949 Loss from continuing operations $ (35,202) $ (37,763) $ (290,478) $ (56,060) Loss from discontinued operations $ — $ — $ — $ — Net loss $ (35,202) $ (37,763) $ (290,478) $ (56,060) Net loss per share, basic and diluted $ (0.83) $ (0.89) $ (6.75) $ (1.26) 2018 Quarter Ended March 31 June 30 September 30 December 31 (in thousands, except per share amounts) Revenue $ — $ — $ — $ — Loss from continuing operations $ (30,180) $ (28,839) $ (42,264) $ (22,433) Loss from discontinued operations $ — $ (198) $ — $ — Net loss $ (30,180) $ (29,037) $ (42,264) $ (22,433) Net loss per share, basic and diluted $ (0.87) $ (0.83) $ (1.08) $ (0.53) |
Organization and Description _2
Organization and Description of Business - Narrative (Detail) $ in Thousands | 164 Months Ended | |
Dec. 31, 2019USD ($)numberOfDivestitures | Dec. 31, 2018USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Number of discrete business divestitures | numberOfDivestitures | 2 | |
Accumulated deficit | $ | $ 1,115,457 | $ 695,954 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narrative (Details) | 12 Months Ended | |||
Dec. 31, 2019USD ($)numberOfReportingUnits | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Jan. 01, 2019USD ($) | |
Property, Plant and Equipment [Line Items] | ||||
Depreciation | $ 1,268,000 | $ 155,000 | $ 425,000 | |
Goodwill | $ 6,234,000 | 6,234,000 | ||
Number of reporting units | numberOfReportingUnits | 1 | |||
Goodwill impairment | $ 0 | 0 | 0 | |
Indefinite-lived intangible asset | 102,500,000 | 102,500,000 | ||
Asset impairment charges | 0 | 0 | 1,116,000 | |
Operating lease right-of-use assets | 7,774,000 | $ 8,641,000 | ||
Lease liability | $ 12,074,000 | |||
Computer equipment and software | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment, useful life | 3 years | |||
Furniture and fixtures | Minimum | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment, useful life | 3 years | |||
Furniture and fixtures | Maximum | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment, useful life | 7 years | |||
Topic 842 | ||||
Property, Plant and Equipment [Line Items] | ||||
Operating lease right-of-use assets | 8,641,000 | |||
Lease liability | $ 12,800,000 | |||
IPR&D | ||||
Property, Plant and Equipment [Line Items] | ||||
Indefinite-lived intangible asset | $ 102,500,000 | 102,500,000 | ||
Impairment of IPR&D | $ 0 | $ 0 | $ 0 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Basic and Diluted Net (Loss) Income Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Numerator | |||
Net loss from continuing operations | $ (419,503) | $ (123,716) | $ (126,022) |
Denominator | |||
Weighted average common shares outstanding, basic and diluted (shares) | 43,078 | 37,884 | 27,301 |
Loss from continuing operations per share, basic and diluted (in usd per share) | $ (9.74) | $ (3.27) | $ (4.62) |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Calculation of Diluted Net Loss Per Share (Detail) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Potential common shares outstanding excluded from calculation of diluted net income per share (shares) | 4,495 | 4,092 | 4,384 |
Shares subject to outstanding common stock options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Potential common shares outstanding excluded from calculation of diluted net income per share (shares) | 4,085 | 3,770 | 3,865 |
Shares subject to outstanding restricted stock units | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Potential common shares outstanding excluded from calculation of diluted net income per share (shares) | 382 | 289 | 237 |
Shares subject to outstanding warrants to purchase common stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Potential common shares outstanding excluded from calculation of diluted net income per share (shares) | 28 | 33 | 282 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Impact of Adopting Topic 842 on Condensed Consolidated Balance Sheets (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Assets [Abstract] | |||
Operating lease right-of-use assets | $ 7,774 | $ 8,641 | |
Liabilities and stockholders’ equity: | |||
Other accrued liabilities | 1,482 | $ 1,845 | |
Current portion of operating lease liabilities | 1,322 | 1,058 | |
Operating lease liabilities, net of current portion | $ 10,752 | 11,776 | |
Deferred rent and lease incentive obligation | 3,830 | ||
Total | 14,316 | $ 5,675 | |
Topic 842 | |||
Assets [Abstract] | |||
Operating lease right-of-use assets | 8,641 | ||
Liabilities and stockholders’ equity: | |||
Other accrued liabilities | (363) | ||
Current portion of operating lease liabilities | 1,058 | ||
Operating lease liabilities, net of current portion | 11,776 | ||
Deferred rent and lease incentive obligation | (3,830) | ||
Total | $ 8,641 |
Acquisitions (Details)
Acquisitions (Details) $ in Thousands | Sep. 06, 2019USD ($)employeeshares | Dec. 31, 2019USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Asset Acquisition [Line Items] | |||||
Cash payments for asset acquisitions | $ 179,624 | $ 0 | $ 0 | ||
Acquisition holdback amount placed in escrow | $ 25,000 | $ 25,000 | $ 0 | ||
Modis Acquisition | |||||
Asset Acquisition [Line Items] | |||||
Consideration transferred | $ 246,500 | ||||
Cash payments for asset acquisitions | 175,500 | ||||
Aggregate upfront consideration | 3,500 | ||||
Net working capital adjustment receivable | 600 | ||||
Acquisition holdback amount placed in escrow | $ 25,000 | ||||
Royalty on future sales (percent) | 5.00% | ||||
Fair value of intangible assets acquired | $ 244,500 | ||||
Fair value of liabilities assumed | $ 2,800 | ||||
Number of former Modis employees that continued employment subsequent to the acquisition | employee | 13 | ||||
Modis Acquisition | Upon FDA approval | |||||
Asset Acquisition [Line Items] | |||||
Milestone payments | $ 100,000 | ||||
Modis Acquisition | Upon EMA Approval in Europe | |||||
Asset Acquisition [Line Items] | |||||
Milestone payments | 50,000 | ||||
Modis Acquisition | Unvested Awards | |||||
Asset Acquisition [Line Items] | |||||
Fair value of stock issued for asset acquisition | $ 4,900 | ||||
Other asset acquisitions | |||||
Asset Acquisition [Line Items] | |||||
Cash payments for asset acquisitions | $ 2,000 | ||||
Common Stock | Modis Acquisition | |||||
Asset Acquisition [Line Items] | |||||
Shares issued as part of asset acquisition consideration (shares) | shares | 1,595,025 | ||||
Fair value of stock issued for asset acquisition | $ 68,100 |
Collaborative Arrangement (Deta
Collaborative Arrangement (Details) - USD ($) | 10 Months Ended | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2019 | |
Disaggregation of Revenue [Line Items] | |||||
Remaining fixed consideration to be received | $ 3,000,000 | $ 3,000,000 | |||
Collaboration revenue | 3,648,000 | $ 0 | $ 0 | ||
Deferred revenue | 13,400,000 | $ 13,400,000 | |||
Revenue recognized | $ 0 | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | Minimum | |||||
Disaggregation of Revenue [Line Items] | |||||
Period over which recognition of collaboration revenue is expected | 3 years | 3 years | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | Maximum | |||||
Disaggregation of Revenue [Line Items] | |||||
Period over which recognition of collaboration revenue is expected | 4 years | 4 years | |||
Fixed-price Contract | |||||
Disaggregation of Revenue [Line Items] | |||||
Payment due for collaborative agreement | $ 20,000,000 | ||||
Payment made toward collaborative agreement | $ 17,000,000 | ||||
Period over which remainder of payment will be made | 2 years | ||||
Variable Consideration Priced Contract | Upon Achievement of Regulatory Milestones | |||||
Disaggregation of Revenue [Line Items] | |||||
Additional amount that can be earned upon achievement of regulatory milestones | $ 66,000,000 | $ 66,000,000 | |||
Variable Consideration Priced Contract | Upon Achievement of Net Sales Milestones | |||||
Disaggregation of Revenue [Line Items] | |||||
Additional amounts that could be earned by achievement of net sales milestones | $ 42,500,000 | $ 42,500,000 |
Strategic License Agreements -
Strategic License Agreements - Narrative (Details) - USD ($) $ in Thousands | Sep. 26, 2019 | Oct. 24, 2014 | Oct. 31, 2014 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2019 | Sep. 06, 2019 |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Contingent development milestone payment | $ 10,000 | $ 10,000 | ||||||
Payment for contingent amounts | $ 20,000 | $ 0 | $ 0 | |||||
Modis Acquisition | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Expiration period of license agreement following first bona fide sale of licensed product | 15 years | |||||||
Upon Achievement of Certain Commercial Milestone Events | Modis Acquisition | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Contingent payment under license agreement | $ 10,000 | |||||||
Upon Achievement of Certain Commercial Milestone Events | Modis Acquisition | Columbia University | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Contingent payment under license agreement | $ 25,000 | |||||||
Upon Achievement of Research, Development and Regulatory Milestone | Modis Acquisition | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Contingent payment under license agreement | $ 3,000 | |||||||
Upon Achievement of Regulatory Milestones | Modis Acquisition | Columbia University | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Contingent payment under license agreement | $ 2,900 | |||||||
Brabant Pharma Limited | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Aggregate amount of contingent liabilities | $ 95,000 | |||||||
Brabant Pharma Limited | Regulatory Milestones | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Aggregate amount of contingent liabilities | $ 50,000 | 50,000 | ||||||
Payment for contingent amounts | $ 20,000 | |||||||
Brabant Pharma Limited | Sales Milestones | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Aggregate amount of contingent liabilities | $ 45,000 |
Cash, Cash Equivalents and Ma_3
Cash, Cash Equivalents and Marketable Securities - Amortized Cost and Fair Value of Cash, Cash Equivalents and Marketable Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Cash and Cash Equivalents [Line Items] | ||
Cash | $ 43,058 | $ 5,222 |
Cash and cash equivalents | 62,070 | 68,454 |
Gross Unrealized Gains | 381 | 89 |
Gross Unrealized Losses | (2) | (86) |
Total cash, cash equivalents and marketable securities | 250,776 | 514,184 |
Total cash, cash equivalents and marketable securities at fair value | 251,155 | 514,187 |
Money market funds | ||
Cash and Cash Equivalents [Line Items] | ||
Money market funds | 11,527 | 63,232 |
Marketable securities | ||
Cash and Cash Equivalents [Line Items] | ||
Amortized Cost | 188,706 | 445,730 |
Gross Unrealized Gains | 381 | 89 |
Gross Unrealized Losses | (2) | (86) |
Marketable securities | 189,085 | 445,733 |
Commercial paper | ||
Cash and Cash Equivalents [Line Items] | ||
Money market funds | 7,485 | |
Amortized Cost | 73,366 | 152,940 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Marketable securities | 73,366 | 152,940 |
Corporate debt securities | ||
Cash and Cash Equivalents [Line Items] | ||
Amortized Cost | 74,038 | 60,622 |
Gross Unrealized Gains | 381 | 58 |
Gross Unrealized Losses | (2) | (75) |
Marketable securities | 74,417 | 60,605 |
Certificates of deposits | ||
Cash and Cash Equivalents [Line Items] | ||
Amortized Cost | 41,302 | 128,647 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Marketable securities | $ 41,302 | 128,647 |
U.S Treasury securities | ||
Cash and Cash Equivalents [Line Items] | ||
Amortized Cost | 103,521 | |
Gross Unrealized Gains | 31 | |
Gross Unrealized Losses | (11) | |
Marketable securities | $ 103,541 |
Cash, Cash Equivalents and Ma_4
Cash, Cash Equivalents and Marketable Securities - Amortized Cost and Fair Value of Marketable Securities by Maturity (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Amortized Cost | |
Due within one year | $ 156,620 |
Due between one and two years | 32,086 |
Total | 188,706 |
Estimated Fair Value | |
Due within one year | 156,833 |
Due between one and two years | 32,252 |
Total | $ 189,085 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | $ 208,097 | $ 508,965 |
Total liabilities | 63,998 | 78,543 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 11,527 | 63,232 |
Total liabilities | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 196,570 | 445,733 |
Total liabilities | 0 | 0 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 0 | 0 |
Total liabilities | 63,998 | 78,543 |
Common stock warrant liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities | 198 | 343 |
Common stock warrant liabilities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities | 0 | 0 |
Common stock warrant liabilities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities | 0 | 0 |
Common stock warrant liabilities | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities | 198 | 343 |
Contingent purchase consideration | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities | 63,800 | 78,200 |
Contingent purchase consideration | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities | 0 | 0 |
Contingent purchase consideration | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities | 0 | 0 |
Contingent purchase consideration | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities | 63,800 | 78,200 |
Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 11,527 | 63,232 |
Money market funds | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 11,527 | 63,232 |
Money market funds | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Money market funds | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Commercial paper | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 7,485 | |
Marketable securities | 73,366 | 152,940 |
Commercial paper | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | ||
Marketable securities | 0 | 0 |
Commercial paper | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 7,485 | |
Marketable securities | 73,366 | 152,940 |
Commercial paper | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | ||
Marketable securities | 0 | 0 |
Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 74,417 | 60,605 |
Corporate debt securities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
Corporate debt securities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 74,417 | 60,605 |
Corporate debt securities | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
Certificates of deposits | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 41,302 | 128,647 |
Certificates of deposits | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
Certificates of deposits | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 41,302 | 128,647 |
Certificates of deposits | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | $ 0 | 0 |
U.S Treasury securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 103,541 | |
U.S Treasury securities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | |
U.S Treasury securities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 103,541 | |
U.S Treasury securities | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | $ 0 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Current portion of contingent consideration | $ 25,600,000 | $ 32,300,000 |
Brabant Pharma Limited | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Potential contingent payment, minimum | 0 | |
Potential contingent payment, maximum | 75,000,000 | |
Current portion of contingent consideration | 25,600,000 | |
Business Combination, Contingent Consideration, Liability | $ 38,200,000 | |
Warrants From July 2011 Debt Financing [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Number of common stock that can be purchased (shares) | 28,125 | |
Exercise price of warrants (in usd per share) | $ 72 |
Fair Value Measurements - Recon
Fair Value Measurements - Reconciliation of Liabilities Measured at Fair Value Using Significant Unobservable Inputs (Details) - Level 3 - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Contingent purchase consideration | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning Balance | $ 78,200 | $ 76,900 |
Settlements | (20,000) | 0 |
Changes in fair value | 5,600 | 1,300 |
Ending Balance | 63,800 | 78,200 |
Common stock warrant liabilities | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning Balance | 343 | 512 |
Settlements | 0 | 0 |
Changes in fair value | (145) | (169) |
Ending Balance | $ 198 | $ 343 |
Balance Sheet Components - Prop
Balance Sheet Components - Property and Equipment, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 10,700 | $ 4,306 |
Less accumulated depreciation | (1,276) | (1,436) |
Property and equipment, net | 9,424 | 2,870 |
Computer equipment and software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 291 | 216 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 9,431 | 3,210 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 978 | $ 880 |
Balance Sheet Components - Othe
Balance Sheet Components - Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Balance Sheet Related Disclosures [Abstract] | ||
Accrued compensation | $ 7,179 | $ 5,277 |
Other accrued liabilities | 4,074 | 1,845 |
Common stock warrant liabilities | 198 | 343 |
Total | $ 11,451 | $ 7,465 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Lessee, Lease, Description [Line Items] | |||
Short-term lease cost | $ 851 | ||
Rent expense | $ 1,600 | $ 1,800 | |
Emeryville, California lease | |||
Lessee, Lease, Description [Line Items] | |||
Additional renewal term | 5 years | ||
Short-term lease terminated in March 2019 | |||
Lessee, Lease, Description [Line Items] | |||
Short-term lease cost | $ 200 |
Leases - Information Related to
Leases - Information Related to Operating Leases (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Lease, Cost [Abstract] | |
Operating lease cost | $ 2,045 |
Short-term lease cost | 851 |
Sublease income | (580) |
Total lease expense | 2,316 |
Cash paid for amounts included in measurement of lease liabilities | 1,842 |
Right-of-use lease assets obtained in exchange for new lease liabilities, noncash | $ 354 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Jan. 01, 2019 |
Leases [Abstract] | ||
Operating lease right-of-use assets | $ 7,774 | $ 8,641 |
Current portion of operating lease liabilities | 1,322 | 1,058 |
Operating lease liabilities, net of current portion | 10,752 | $ 11,776 |
Total operating lease liabilities | $ 12,074 | |
Weighted average remaining lease term | 7 years 2 months 12 days | |
Weighted average discount rate, weighted based on the remaining balance of lease payments (percent) | 6.00% |
Leases - Maturities of Operatin
Leases - Maturities of Operating Lease Liabilities (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | |
2020 | $ 1,986 |
2021 | 1,957 |
2022 | 1,894 |
2023 | 1,951 |
2024 | 2,010 |
Thereafter | 5,101 |
Total lease payments | 14,899 |
Less: imputed interest | (2,825) |
Total operating lease liabilities | $ 12,074 |
Leases - Future Minimum Lease P
Leases - Future Minimum Lease Payments (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2020 Gross lease payment due | $ 1,777 |
2021 Gross lease payment due | 1,788 |
2022 Gross lease payment due | 1,839 |
2023 Gross lease payment due | 1,894 |
2024 Gross lease payment due | 1,951 |
Thereafter | 7,296 |
Total Gross lease payment due | 16,545 |
2020 Sublease income | (576) |
2021 Sublease income | (148) |
2022 Sublease income | 0 |
2023 Sublease income | 0 |
2024 Sublease income | 0 |
Thereafter | 0 |
Total Sublease income | (724) |
2020 Net lease payment due | 1,201 |
2021 Net lease payment due | 1,640 |
2022 Net lease payment due | 1,839 |
2023 Net lease payment due | 1,894 |
2024 Net lease payment due | 1,951 |
Thereafter | 7,296 |
Total Net lease payment due | $ 15,821 |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||
Aug. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2017USD ($) | Oct. 31, 2017USD ($)$ / sharesshares | May 31, 2016USD ($) | Sep. 30, 2017USD ($)shares | Dec. 31, 2019USD ($)vote$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | May 21, 2019shares | May 20, 2019shares | |
Subsidiary, Sale of Stock [Line Items] | |||||||||
Preferred stock authorized (shares) | 10,000,000 | 10,000,000 | |||||||
Preferred stock par value (in usd per share) | $ / shares | $ 0.001 | $ 0.001 | |||||||
Preferred stock issued (shares) | 0 | 0 | |||||||
Preferred stock outstanding (shares) | 0 | 0 | |||||||
Common stock authorized (shares) | 100,000,000 | 50,000,000 | 100,000,000 | 50,000,000 | |||||
Common stock, par value (in usd per share) | $ / shares | $ 0.001 | $ 0.001 | |||||||
Number of votes entitled to for each common share held | vote | 1 | ||||||||
Common stock issued (shares) | 45,272,088 | 42,078,164 | |||||||
Common stock outstanding (shares) | 45,272,088 | 42,078,164 | |||||||
ATM | |||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||
Gross aggregate proceeds to be received upon stock issuance | $ | $ 75 | $ 25 | |||||||
Stock issued (shares) | 1,550,880 | 903,573 | 740,417 | ||||||
Net proceeds from stock issuance | $ | $ 19.4 | $ 42.6 | $ 30.3 | ||||||
Underwritten Public Offer | |||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||
Stock issued (shares) | 6,000,000 | 7,700,000 | |||||||
Net proceeds from stock issuance | $ | $ 292.9 | $ 271.3 | |||||||
Stock offer price (in usd per share) | $ / shares | $ 52 | $ 37.50 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Common Stock Reserved for Future Issuance (Details) - shares shares in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Class of Stock [Line Items] | ||
Common stock reserved for future issuance (shares) | 9,646 | 5,745 |
Shares subject to outstanding warrants to purchase common stock | ||
Class of Stock [Line Items] | ||
Common stock reserved for future issuance (shares) | 28 | 28 |
Stock options and RSUs outstanding | ||
Class of Stock [Line Items] | ||
Common stock reserved for future issuance (shares) | 4,692 | 4,033 |
Available for future grants under employee equity plans | ||
Class of Stock [Line Items] | ||
Common stock reserved for future issuance (shares) | 4,926 | 1,684 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Detail) | Jan. 01, 2020shares | Oct. 31, 2018 | Sep. 30, 2018 | Mar. 31, 2017shares | Oct. 31, 2015 | Dec. 31, 2019USD ($)purchase_periodoffering_periodshares | Dec. 31, 2018USD ($)shares | Dec. 31, 2017USD ($)shares | May 21, 2019shares | May 20, 2019shares | May 31, 2018shares | Dec. 31, 2013shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Common stock reserved for future issuance (shares) | 9,646,000 | 5,745,000 | ||||||||||
Intrinsic value of options exercised | $ | $ 22,400,000 | $ 11,800,000 | $ 14,300,000 | |||||||||
Stock-based compensation (reversal) | $ | 21,247,000 | $ 15,492,000 | 6,155,000 | |||||||||
Shares subject to outstanding common stock options | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Total unrecognized compensation costs | $ | $ 58,200,000 | |||||||||||
Recognition over weighted average periods | 2 years 8 months 12 days | |||||||||||
Employee Stock | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Common stock reserved for future issuance (shares) | 4,926,000 | 1,684,000 | ||||||||||
Shares subject to outstanding restricted stock units | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Vesting term | 5 years | |||||||||||
Restricted stock units vested (in shares) | 37,000 | |||||||||||
Intrinsic value of RSUs that vested | $ | $ 1,900,000 | $ 4,200,000 | ||||||||||
Number of restricted stock units granted (in shares) | 130,000 | 235,000 | ||||||||||
Stock-based compensation (reversal) | $ | $ 0 | |||||||||||
Weighted average remaining contractual term | 1 year 6 months | |||||||||||
Intrinsic value of restricted stock units, nonvested | $ | $ 16,100,000 | |||||||||||
Total unrecognized compensation costs | $ | $ 1,400,000 | |||||||||||
Performance-based stock options | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Vesting term | 3 years | |||||||||||
Stock-based compensation (reversal) | $ | $ 3,500,000 | $ (700,000) | ||||||||||
Percentage of outstanding options that vested (percent) | 90.00% | |||||||||||
Percentage of awards that were cancelled (percent) | 10.00% | |||||||||||
2006 Plan | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Shares of common stock reserved | 20,218 | |||||||||||
2010 Plan | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Shares of common stock reserved | 7,500,000 | |||||||||||
Expected term | 10 years | |||||||||||
Vesting term | 4 years | |||||||||||
Restated 2010 Plan | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Shares of common stock reserved | 4,907,684 | 11,500,000 | ||||||||||
Percent of additional shares authorized provision | 4.00% | |||||||||||
Inducement Plan | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Shares of common stock reserved | 637,500 | 337,500 | ||||||||||
Employee Stock Purchase Plan | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Limit on purchases under the ESPP per calendar year | $ | $ 25,000 | |||||||||||
Employee Stock Purchase Plan | Employee Stock | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Expected term | 10 years | |||||||||||
Duration of each offering period under the ESPP | 12 months | |||||||||||
Number of purchase periods permitted under the ESPP | purchase_period | 2 | |||||||||||
Duration of each purchase period under the ESPP | 6 months | |||||||||||
Number of offering periods permitted under the ESPP | offering_period | 2 | |||||||||||
Percentage of purchase price | 85.00% | |||||||||||
Maximum percentage of employee withholding | 20.00% | |||||||||||
Maximum number of shares per employee | 2,500 | |||||||||||
Common stock reserved for future issuance (shares) | 18,347 | |||||||||||
Increase in shares available for purchase (shares) | 31,250 | |||||||||||
Number of shares purchased during period (shares) | 28,146 | 32,679 | 35,934 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Stock-Based Compensation Activity (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Outstanding beginning balance (in shares) | shares | 3,744 |
Granted (in shares) | shares | 1,247 |
Exercised (in shares) | shares | (647) |
Canceled (in shares) | shares | (91) |
Outstanding ending balance (in shares) | shares | 4,253 |
Exercisable at end of period (in shares) | shares | 2,556 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | |
Outstanding weighted average exercise price, beginning balance (in usd per share) | $ / shares | $ 20.69 |
Granted weighted average exercise price (in usd per share) | $ / shares | 48.88 |
Exercised weighted average exercise price (in usd per share) | $ / shares | 14.49 |
Canceled weighted average exercise price (in usd per share) | $ / shares | 35.17 |
Outstanding weighted average exercise price, ending balance (in usd per share) | $ / shares | 29.59 |
Exercisable weighted average exercise price at end of period (in usd per share) | $ / shares | $ 21.24 |
Outstanding, weighted average remaining term at end of period | 6 years 9 months 18 days |
Exercisable, weighted average remaining term at end of period | 5 years 7 months 6 days |
Outstanding, intrinsic value at end of period | $ | $ 96,524 |
Exercisable, intrinsic value at end of period | $ | $ 79,083 |
Stock-Based Compensation - Sc_2
Stock-Based Compensation - Schedule of Restricted Stock Unit Activity (Details) - Shares subject to outstanding restricted stock units - $ / shares shares in Thousands | 1 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Number of restricted stock units, beginning balance (in shares) | 289 | |
Number of restricted stock units granted (in shares) | 130 | 235 |
Restricted stock units vested (in shares) | (37) | |
Restricted stock units forfeited (in shares) | (48) | |
Number of restricted stock units, ending balance (in shares) | 439 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||
Weighted-average grant date fair value per share, beginning balance (in usd per share) | $ 25.56 | |
Weighted-average grant date fair value per share, granted (in usd per share) | 50.46 | |
Weighted-average grant date fair value per share, vested (in usd per share) | 43.10 | |
Weighted-average grant date fair value per share, canceled (in usd per share) | 29.71 | |
Weighted-average grant date fair value per share, ending balance (in usd per share) | $ 36.97 |
Stock-Based Compensation - Assu
Stock-Based Compensation - Assumptions used in Black-Scholes Option-Pricing Model (Detail) - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average fair value of option on grant date (in usd per share) | $ 32.64 | $ 30.87 | $ 7.43 |
Shares subject to outstanding common stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk free interest rate, minimum (percent) | 1.40% | 2.30% | 1.80% |
Risk free interest rate, maximum (percent) | 2.60% | 3.00% | 2.30% |
Expected volatility, minimum (percent) | 73.50% | 80.10% | 75.10% |
Expected volatility, maximum (percent) | 82.30% | 85.20% | 85.80% |
Expected dividend yield (percent) | 0.00% | 0.00% | 0.00% |
Shares subject to outstanding common stock options | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term | 5 years 3 months 18 days | 5 years 3 months 18 days | 5 years 1 month 6 days |
Shares subject to outstanding common stock options | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term | 6 years 1 month 6 days | 6 years 1 month 6 days | 6 years 1 month 6 days |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock-Based Compensation Expense (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | $ 21,247 | $ 15,492 | $ 6,155 |
Cost of contract manufacturing | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | 0 | 0 | 71 |
Research and development | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | 8,293 | 6,317 | 1,933 |
Selling, general and administrative | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | $ 12,954 | $ 9,175 | $ 4,151 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Postemployment Benefits [Abstract] | |||
Employer's discretionary matching contributions | $ 0.5 | $ 0.2 | $ 0.2 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) | 12 Months Ended | ||||
Dec. 31, 2019USD ($)ownership_change | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2011USD ($) | Aug. 31, 2006USD ($) | |
Operating Loss Carryforwards [Line Items] | |||||
Number of changes in ownership | ownership_change | 3 | ||||
Increase (decrease) in deferred tax asset valuation allowance | $ 33,500,000 | $ (36,100,000) | |||
Income tax expense (benefits) | 0 | 0 | $ 0 | ||
Net deferred tax liability | 17,425,000 | 17,425,000 | |||
Less valuation allowance | 151,544,000 | 118,064,000 | |||
Unrecognized tax benefits that, if recognized, would affect effective tax rate | 0 | 0 | |||
Interest or penalties recorded | 0 | 0 | $ 0 | ||
Interest or penalties accrued | 0 | $ 0 | |||
Internal Revenue Service (IRS) | |||||
Operating Loss Carryforwards [Line Items] | |||||
Net operating losses | 389,500,000 | ||||
Tax credit carryforward, amount | 6,000,000 | ||||
Operating loss carryforwards decrease | $ 121,100,000 | $ 1,900,000 | |||
Tax credit carryforwards, decrease | 3,000,000 | ||||
Internal Revenue Service (IRS) | Drug Tax Credit Carryforward | |||||
Operating Loss Carryforwards [Line Items] | |||||
Tax credit carryforward, amount | 2,000,000 | ||||
State and Local Jurisdiction | |||||
Operating Loss Carryforwards [Line Items] | |||||
Tax credit carryforward, amount | 4,000,000 | ||||
Operating loss carryforwards decrease | $ 53,300,000 | ||||
State and Local Jurisdiction | California | |||||
Operating Loss Carryforwards [Line Items] | |||||
Net operating losses | 234,600,000 | ||||
Foreign Tax Authority | |||||
Operating Loss Carryforwards [Line Items] | |||||
Net operating losses | $ 227,700,000 |
Income Taxes - Schedule of Dome
Income Taxes - Schedule of Domestic and Foreign Components of Loss before Tax Provision (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
United States | $ (325,769) | $ (35,838) | $ (32,112) |
Foreign | (93,734) | (87,878) | (93,910) |
Total | $ (419,503) | $ (123,716) | $ (126,022) |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Income Tax to Expense (Benefit) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Income tax at federal statutory rate | $ (88,096,000) | $ (26,022,000) | $ (42,846,000) |
State taxes, net of federal benefit | (65,000) | (8,000) | (19,000) |
Non-deductible acquired IPR&D charge and other expenses | 52,044,000 | 0 | 0 |
Change in valuation allowance | 21,155,000 | 16,949,000 | (11,208,000) |
Impact of U.S. statutory tax rate change on revaluing deferred tax asset | 0 | 0 | 36,085,000 |
Impact of foreign rate change on deferred tax assets | 1,887,000 | 1,961,000 | 1,619,000 |
Other permanent differences | 4,101,000 | (701,000) | 8,086,000 |
State tax rate benefit | (18,000) | 169,000 | 56,000 |
Foreign rate differential | 1,883,000 | 1,731,000 | 10,636,000 |
Stock-based compensation | (2,674,000) | (1,344,000) | (2,462,000) |
Net operating losses surrendered under U.K.’s R&D tax relief scheme | 9,349,000 | 6,322,000 | 0 |
Credits and other | 434,000 | 943,000 | 53,000 |
Income tax benefit | $ 0 | $ 0 | $ 0 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Income Tax Disclosure [Abstract] | ||
Net operating losses | $ 134,009 | $ 103,187 |
Capitalized research and development | 925 | 1,537 |
Accrued expenses | 1,311 | 1,300 |
Research and development credits | 5,343 | 5,343 |
Amortization | 1,028 | 528 |
Deferred Tax Assets, Lease Liability | 2,547 | |
Stock-based compensation | 6,464 | 5,868 |
Other, net | 1,979 | 775 |
Total deferred tax assets | 153,606 | 118,538 |
Less valuation allowance | (151,544) | (118,064) |
Net deferred tax assets | 2,062 | 474 |
Operating lease right-of-use asset | (1,640) | |
IPR&D | (17,425) | (17,425) |
Depreciation | (422) | (474) |
Total deferred tax liabilities | (19,487) | (17,899) |
Net deferred tax liability | $ (17,425) | $ (17,425) |
Income Taxes - Schedule of Unre
Income Taxes - Schedule of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Beginning balance of unrecognized tax benefits | $ 1,487 | $ 2,030 | $ 1,248 |
Gross increases based on tax positions related to current year | 1,495 | 0 | 633 |
Gross decreases based on tax positions related to prior years | 0 | (634) | 0 |
Gross increases based on tax positions related to prior year | 559 | 91 | 149 |
Settlements with taxing authorities | 0 | 0 | 0 |
Expiration of statue of limitations | 0 | 0 | 0 |
Ending balance of unrecognized tax benefits | $ 3,541 | $ 1,487 | $ 2,030 |
UK's R&D Tax Relief Scheme (Det
UK's R&D Tax Relief Scheme (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019segment | Dec. 31, 2018USD ($) | |
Other Income and Expenses [Abstract] | ||
Claims recognized in current period | $ | $ 10,100 | |
Number of claims for refundable cash credit | segment | 2 | |
Tax relief eligibility period after end of tax year | 2 years |
Selected Quarterly Financial _3
Selected Quarterly Financial Information (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenue | $ 1,949 | $ 630 | $ 1,069 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 3,648 | $ 0 | $ 9,821 |
Loss from continuing operations | (56,060) | (290,478) | (37,763) | (35,202) | (22,433) | (42,264) | (28,839) | (30,180) | (419,503) | ||
Loss from discontinued operations | 0 | 0 | 0 | 0 | 0 | 0 | (198) | 0 | 0 | (198) | (795) |
Net loss | $ (56,060) | $ (290,478) | $ (37,763) | $ (35,202) | $ (22,433) | $ (42,264) | $ (29,037) | $ (30,180) | $ (419,503) | $ (123,914) | $ (126,817) |
Net loss per share, basic and diluted (in dollars per share) | $ (1.26) | $ (6.75) | $ (0.89) | $ (0.83) | $ (0.53) | $ (1.08) | $ (0.83) | $ (0.87) | $ (9.74) | $ (3.27) | $ (4.65) |