Cover
Cover - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Feb. 25, 2022 | Jun. 30, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2021 | ||
Current Fiscal Year End Date | --12-31 | ||
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 | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 863 | ||
Entity Common Stock, Shares Outstanding | 56,227,441 | ||
Documents Incorporated by Reference | Portions of the registrant’s definitive Proxy Statement to be filed for its 2022 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, 2021. | ||
Entity Central Index Key | 0001375151 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2021 | |
Audit Information [Abstract] | |
Auditor Firm ID | 42 |
Auditor Name | Ernst & Young LLP |
Auditor Location | Redwood City, California |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 101,180 | $ 166,916 |
Marketable securities | 200,535 | 338,193 |
Accounts receivable, net | 10,139 | 3,824 |
Inventory | 5,492 | 1,026 |
Prepaid expenses | 12,487 | 7,279 |
Other current assets | 24,735 | 4,936 |
Total current assets | 354,568 | 522,174 |
Property and equipment, net | 7,197 | 8,724 |
Operating lease right-of-use assets | 6,605 | 7,748 |
Intangible asset, net | 90,673 | 98,558 |
Goodwill | 6,234 | 6,234 |
Other non-current assets | 3,212 | 7,692 |
Total assets | 468,489 | 651,130 |
Current liabilities: | ||
Accounts payable | 21,998 | 11,945 |
Accrued and other current liabilities | 55,413 | 54,964 |
Deferred revenue, current | 5,089 | 5,318 |
Current portion of operating lease liabilities | 1,694 | 1,688 |
Current portion of contingent consideration | 13,500 | 8,800 |
Total current liabilities | 97,694 | 82,715 |
Deferred revenue, non-current | 3,257 | 5,479 |
Operating lease liabilities, net of current portion | 8,617 | 10,314 |
Contingent consideration, net of current portion | 21,785 | 33,600 |
Convertible debt | 158,165 | 149,353 |
Total liabilities | 289,518 | 281,461 |
Commitments and contingencies (Note 12) | ||
Stockholders’ equity: | ||
Preferred stock, $0.001 par value; 10,000 shares authorized, none issued and outstanding | 0 | 0 |
Common stock, $0.001 par value; 200,000 and 100,000 shares authorized and 56,095 and 55,736 shares issued and outstanding at December 31, 2021 and 2020, respectively | 56 | 56 |
Additional paid-in capital | 1,731,153 | 1,694,524 |
Accumulated other comprehensive loss | 15 | (71) |
Accumulated deficit | (1,552,253) | (1,324,840) |
Total stockholders’ equity | 178,971 | 369,669 |
Total liabilities and stockholders’ equity | $ 468,489 | $ 651,130 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2021 | May 31, 2021 | Apr. 30, 2021 | Dec. 31, 2020 |
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) | 200,000,000 | 200,000,000 | 100,000,000 | 100,000,000 |
Common stock issued (shares) | 56,095,000 | 55,736,000 | ||
Common stock outstanding (shares) | 56,095,000 | 55,736,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenues: | |||
Net product sales | $ 74,740 | $ 9,587 | $ 0 |
Collaboration revenue | 6,950 | 4,056 | 3,648 |
Total revenues | 81,690 | 13,643 | 3,648 |
Operating costs and expenses: | |||
Cost of product sales (excluding intangible asset amortization) | 4,834 | 542 | 0 |
Research and development | 142,659 | 138,002 | 115,639 |
Selling, general and administrative | 148,524 | 99,574 | 60,792 |
Intangible asset amortization | 7,885 | 3,942 | 0 |
Acquired in-process research and development and related costs | 0 | 10,700 | 251,438 |
Change in fair value of contingent consideration | 1,885 | 8,600 | 5,600 |
Total operating expenses | 305,787 | 261,360 | 433,469 |
Loss from operations | (224,097) | (247,717) | (429,821) |
Other income (expense): | |||
Interest income | 659 | 2,891 | 9,804 |
Interest expense | (15,276) | (3,759) | (2) |
Other income, net | 11,406 | 21,777 | 516 |
Loss from operations before income taxes | (227,308) | (226,808) | (419,503) |
Income tax expense (benefit) | 105 | (17,425) | 0 |
Net loss | $ (227,413) | $ (209,383) | $ (419,503) |
Net loss per share, basic (in dollars per share) | $ (4.07) | $ (3.90) | $ (9.74) |
Net loss per share, diluted (in dollars per share) | $ (4.07) | $ (3.90) | $ (9.74) |
Weighted average common shares outstanding, basic (in shares) | 55,880 | 53,706 | 43,078 |
Weighted average common shares outstanding, diluted (in shares) | 55,880 | 53,706 | 43,078 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | |||
Net loss | $ (227,413) | $ (209,383) | $ (419,503) |
Other comprehensive income (loss): | |||
Net unrealized (loss) gains on marketable securities | (202) | (183) | 702 |
Reclassification adjustments for realization of gain on sale of marketable securities included in net loss | 0 | (7) | (326) |
Foreign currency translation gain (loss) | 288 | (260) | 0 |
Total other comprehensive income (loss) | 86 | (450) | 376 |
Comprehensive loss | $ (227,327) | $ (209,833) | $ (419,127) |
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 (Loss) | Accumulated Deficit |
Beginning balance at Dec. 31, 2018 | $ 522,801 | $ 42 | $ 1,218,710 | $ 3 | $ (695,954) |
Beginning balance (shares) at Dec. 31, 2018 | 42,078 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (419,503) | (419,503) | |||
Other comprehensive income (loss) | 376 | 376 | |||
Issuance of common stock, net of issuance costs | 42,576 | $ 1 | 42,575 | ||
Issuance of common stock, net of issuance costs (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 in connection with 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 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (209,383) | (209,383) | |||
Other comprehensive income (loss) | (450) | (450) | |||
Issuance of common stock, net of issuance costs | 226,576 | $ 10 | 226,566 | ||
Issuance of common stock, net of issuance costs (shares) | 10,000 | ||||
Equity component of convertible debt | 75,333 | 75,333 | |||
Issuance of common stock under employee equity plans | 5,515 | $ 1 | 5,514 | ||
Issuance of common stock under employee equity plans (shares) | 546 | ||||
Shares repurchased for tax withholdings related to net share settlement of employee equity awards | (2,157) | (2,157) | |||
Shares repurchased for tax withholdings related to net share settlement of employee equity awards (shares) | (82) | ||||
Stock-based compensation | 29,176 | 29,176 | |||
Ending balance at Dec. 31, 2020 | 369,669 | $ 56 | 1,694,524 | (71) | (1,324,840) |
Ending balance (shares) at Dec. 31, 2020 | 55,736 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (227,413) | (227,413) | |||
Other comprehensive income (loss) | 86 | 86 | |||
Issuance of common stock under employee equity plans | 1,962 | $ 0 | 1,962 | ||
Issuance of common stock under employee equity plans (shares) | 466 | ||||
Shares repurchased for tax withholdings related to net share settlement of employee equity awards | (1,788) | (1,788) | |||
Shares repurchased for tax withholdings related to net share settlement of employee equity awards (shares) | (107) | ||||
Stock-based compensation | 36,455 | 36,455 | |||
Ending balance at Dec. 31, 2021 | $ 178,971 | $ 56 | $ 1,731,153 | $ 15 | $ (1,552,253) |
Ending balance (shares) at Dec. 31, 2021 | 56,095 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flows from operating activities: | |||
Net loss | $ (227,413) | $ (209,383) | $ (419,503) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Stock-based compensation | 35,463 | 29,176 | 21,247 |
Depreciation and amortization | 9,455 | 5,465 | 1,268 |
Deferred income taxes | 0 | (17,425) | 0 |
Noncash lease expense | 1,143 | 1,137 | 1,221 |
Amortization of debt discount and issuance costs | 8,812 | 2,143 | 0 |
Net accretion and amortization of investments in marketable securities | (20) | (570) | (4,887) |
Acquired in-process research and development (IPR&D) | 0 | 10,700 | 251,437 |
Change in fair value of contingent consideration | 1,885 | 8,600 | 5,600 |
Other | (2) | (205) | (471) |
Changes in operating assets and liabilities: | |||
Accounts receivable | (6,315) | (3,824) | 0 |
Inventory | (3,474) | (1,026) | 0 |
Prepaid expenses and other current assets | (25,007) | (575) | 7,573 |
Other assets | 4,480 | (1,613) | (5,723) |
Accounts payable, accrued and other current liabilities | 21,330 | 13,711 | 5,647 |
Contingent consideration liability | (1,500) | 0 | 0 |
Operating lease liability | (1,691) | (1,287) | 11,720 |
Deferred revenue | (2,451) | (2,555) | 13,352 |
Net cash used in operating activities | (185,305) | (167,531) | (111,519) |
Cash flows from investing activities: | |||
Cash paid for IPR&D assets | 0 | (10,700) | (179,624) |
Purchase of Tevard note receivable | 0 | (5,000) | 0 |
Purchases of marketable securities | (416,155) | (509,335) | (329,641) |
Proceeds from maturities of marketable securities | 540,133 | 347,627 | 415,020 |
Proceeds from sale of marketable securities | 13,500 | 12,987 | 176,858 |
Purchases of property and equipment | (83) | (679) | (9,492) |
Net cash provided by (used in) investing activities | 137,395 | (165,100) | 73,121 |
Cash flows from financing activities: | |||
Payments for contingent consideration liability | (18,000) | (15,000) | (20,000) |
Proceeds from issuance of common stock under equity incentive plans | 1,962 | 5,515 | 10,182 |
Payments of tax withholding obligation on vesting restricted stock units | (1,788) | (2,157) | (744) |
Net proceeds from issuance of convertible debt | 0 | 223,100 | 0 |
Payment of debt issuance costs | 0 | (557) | 0 |
Proceeds from issuance of common stock, net | 0 | 226,576 | 42,576 |
Net cash provided by financing activities | (17,826) | 437,477 | 32,014 |
Net increase (decrease) in cash and cash equivalents | (65,736) | 104,846 | (6,384) |
Cash and cash equivalents at beginning of period | 166,916 | 62,070 | 68,454 |
Cash and cash equivalents at end of period | 101,180 | 166,916 | 62,070 |
Supplemental Cash Flow Information [Abstract] | |||
Cash paid for interest | 6,378 | 0 | 0 |
Noncash investing and financing activities: | |||
Common stock issued as consideration for asset acquisition | 0 | 0 | 68,124 |
Net liabilities assumed in connection with asset acquisition | $ 0 | $ 0 | $ 3,688 |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | Organization and Description of Business Zogenix Inc., and subsidiaries (also referred to as Zogenix, we, our or us) is a global biopharmaceutical company committed to developing and commercializing therapies with the potential to transform the lives of patients and their families living with rare diseases. Our first rare disease therapy, Fintepla (fenfluramine) oral solution, has been approved by the U.S. Food and Drug Administration (FDA) and the European Medicines Agency (EMA) for the treatment of seizures associated with Dravet syndrome, a rare, devastating, severe lifelong epilepsy. Fintepla is also currently under development in Japan. We also have two additional late-stage development programs underway: one for Fintepla for the treatment of seizures associated with Lennox-Gastaut syndrome (LGS), and one for MT-1621, an investigational therapy for the treatment of thymidine kinase 2 deficiency (TK2d), a rare genetic disease. We were formed as a Delaware corporation on May 11, 2006 as SJ2 Therapeutics, Inc. We changed our name to Zogenix Inc. on August 28, 2006. We operate as a single operating segment engaged in the research, development and commercialization of pharmaceutical products, and our headquarters are located in Emeryville, California. Liquidity As of December 31, 2021, our cash, cash equivalents and marketable securities totaled $301.7 million. 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 $1.6 billion as of December 31, 2021. We expect to incur operating losses and negative cash flow for additional future periods due to costs associated with the commercialization of Fintepla for Dravet syndrome and pre-commercialization activities related to Fintepla for LGS in the U.S. and in the EU, the advancement of our clinical programs related to MT-1621 and CDD, and other infrastructure support costs. In addition, excluding amounts accrued for contingent consideration related to our acquisition of Brabant, we may be required to pay $100.0 million and $50.0 million in milestone payments upon regulatory approval of MT-1621 by the FDA and the EMA, respectively, related to our acquisition of Modis (See Note 4). These contingent consideration payments have not be recognized in the consolidated balance sheets as the regulatory approval contingency has not been resolved and the consideration is not yet payable. Historically, we have relied primarily on the proceeds from equity and convertible debt offerings to finance our operations. We believe our cash, cash equivalents and marketable securities balances will be sufficient to meet our anticipated operating requirements for at least the next 12 months following the date of issuance of these consolidated financial statements. 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, there is no assurance that such financings could be consummated on acceptable terms or at all. Market volatility resulting from the global novel coronavirus disease (COVID-19) pandemic or other factors could also adversely impact our ability to access capital when and as needed. Failure to raise sufficient capital when needed could require us 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, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation The consolidated financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States (GAAP). The consolidated financial statements include the accounts of Zogenix Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Variable Interest Entities We consolidate a variable interest entity (VIE) if we are the primary beneficiary, defined as the party that has both the power to direct the activities that most significantly impact the VIE’s economic performance and the obligation to absorb losses of or the right to receive benefits from the VIE that could potentially be significant to the VIE. A variable interest is a contractual, ownership or other interest that changes with changes in the fair value of the VIE’s net assets exclusive of variable interests. To determine whether a variable interest we hold could potentially be significant to the VIE, we consider both qualitative and quantitative factors regarding the nature, size and form of our involvement with the VIE. Changes in the economic interests (either by us or third parties) or amendments to the governing documents of the VIE could affect an entity's status as a VIE or the determination of the primary beneficiary. If we are determined to be the primary beneficiary of a VIE, we would include the assets, liabilities, noncontrolling interests and results of activities of the VIE in our consolidated financial statements. The primary beneficiary evaluation is updated continuously. 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Revenue Recognition Our revenues consist of product sales of Fintepla and revenues derived from our collaboration arrangement with Nippon Shinyaku Co., Ltd. (Shinyaku). See Note 3. Net Product Revenues We recognize revenue when control of the promised good or service is transferred to the customer, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. We determine revenue recognition through the following steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) we satisfy a performance obligation. We only apply the five-step model to contracts when collectability of the consideration to which we are entitled in exchange for the goods or services we transfer to the customer is determined to be probable. We distribute Fintepla in the U.S. through and arrangement with a specialty distributor who is our customer. The specialty distributor subsequently resells our product through its related specialty pharmacy provider to patients and health care providers. Separately, we have or may enter into payment arrangements with various third-party payers including pharmacy benefit managers, private healthcare insurers and government healthcare programs who provide coverage and reimbursement for our products that have been proscribed to a patient. We distribute Fintepla in Europe (currently in Germany and France) through a third-party logistics provider (3PL) for distribution to pharmacies in those countries. The pharmacies are our customers, who subsequently resell our product directly to patients and health care providers. Revenue from product sales is recorded at the net sales price (transaction price), which includes estimates of consideration payable to our customer and third-party payers for which reserves are established and that result from government rebates, chargebacks, co-pay assistance, prompt-payment discounts and other allowances that are offered under arrangements between us, our customer, and third-party payers related to the sales of Fintepla. These reserves are classified as either reductions of accounts receivable (if the amounts are payable to our customer) or as refund liabilities within current liabilities (if the amounts are payable to a party other than our customer). Amounts billed or invoiced are included in accounts receivable, net on our consolidated balance sheet. Under our current product sales arrangements, we do not have contract assets (unbilled receivables), as we generally invoice our customer before or at the time of revenue recognition, nor contract liabilities, as we do not receive prepayments from our customers prior to product delivery. We recognize product revenues when a customer obtains control of our product, which occurs at a point in time and is typically upon delivery to the customer or, in the case of products that are subject to consignment agreements, when the customer takes title of the product from our consigned inventory location for shipment directly to a patient or healthcare provider. In the event the variable consideration is constrained, we include an amount to the extent it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur in a future reporting period. Depending on the type of variable consideration, we use either the most likely method or expected value method to estimate variable consideration related to Fintepla product sales. We do not have any material constraints on our variable consideration included within the transaction price for Fintepla product sales. The actual amount of consideration ultimately received may differ from our estimates. If actual results in the future vary from estimates, the estimates will be adjusted, which will affect our revenue from net product sales in the period that such variances become known. Each unit of Fintepla that is ordered by our customers represent a separate performance obligation that is completed when the customer obtains control of our product. We record product revenues, net of variable consideration, any applicable constraint, and consideration payable to parties other the customer at that point in time. We record shipping and handling costs within cost of product sales on our consolidated statements of operations. We classify payments to customers or its affiliates for certain services, to the extent that the services provided are distinct from the sale of our product and we can reasonably estimate its fair value, as selling, general and administrative expenses on our consolidated statements of operations. We have elected to exclude taxes collected from our customers and remitted to governmental authorities from the measurement of the transaction price. We sell Fintepla to our customer at wholesale acquisition cost, and calculate product revenue from Fintepla sales, net of variable consideration and consideration payable to parties other than our customer. Variable consideration and consideration payable to parties other than the customer consists of estimates related to the following categories: Trade Discounts and Allowances : We provide customers with discounts for prompt payment and we also pay fees to our exclusive specialty distributor in the U.S. for distribution services rendered that are not distinct from product sales. We expect customers to earn these discounts and fees, and accordingly we deduct these discounts and fees in full from our gross product revenue and accounts receivable at the time we recognize the related revenue. Government Rebates : Fintepla is eligible for purchase by, or qualifies for reimbursement from, Medicaid and other U.S. and foreign government programs that are eligible for rebates on the price they pay for Fintepla. To determine the appropriate amount to reserve for these rebates, we identify the government-funded health insurer of patients who receive Fintepla as sold by our customers, apply the applicable government discount to these sales, and estimate the portion of total rebates that we anticipate will be claimed. Other Rebates and Chargebacks : We may contract with various third-party payers for coverage and reimbursement of Fintepla. We estimate the rebates and chargebacks that we expect to be obligated to provide to such third-party payers based upon the terms of the applicable arrangement or negotiations with such third-party payers and our visibility regarding the payer mix. Patient Assistance Program : We provide financial assistance to eligible patients whose insurance policies have high deductibles or co-payments and deduct our estimate of the amount of such assistance from gross product revenue. Product Returns : In the U.S., we do not provide contractual return rights to our customer, except in instances where the product is damaged or defective, which we expect to be rare. In Europe, our customers have limited return rights. Because of the pricing of Fintepla and the limited number of patients, the retail pharmacies carry a limited inventory. Based on these factors and the fact that we have not experienced significant product returns to date, management has concluded that product returns will be minimal. In the future, if any of these factors and/or the history of product returns change, an allowance for product returns may be required. Collaboration Revenue 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. Cost of Product Sales (Excluding Intangible Asset Amortization) Cost of product sales (excluding intangible asset amortization) includes the cost of producing and distributing inventories that are related to product revenues during the respective period (including salary-related and stock-based compensation expenses for employees involved with production and distribution, freight and indirect overhead costs) and third-party royalties payable on our net product revenues. Cost of product sales may also include costs related to excess or obsolete inventory adjustment charges, abnormal costs, unabsorbed manufacturing and overhead costs, and manufacturing variances. For the years ended December 31, 2021 and 2020, other than royalties and packaging costs, substantially all of our Fintepla inventory sold had a zero-cost basis as it was manufactured prior to the FDA’s approval. Accounts Receivable, Net We record accounts receivable, net of certain fees paid to our customer for distribution services rendered to us that are not distinct from sales of product to our customer, prompt payment discounts and chargebacks based on contractual terms. We are also subject to credit risk from our accounts receivable related to our product sales. Accounts receivable are stated net of an allowance that reflects our current estimate of credit losses expected to occur over the life of the receivable. In developing our allowance for expected credit losses, we use assumptions to capture the risk of loss, even if remote, based on a number of factors including existing contractual payment terms, individual customer circumstances, historical payment patterns of our customers, a review of the local economic environment and its potential impact on expected future customer payment patterns. The payment terms on our trade receivables are relatively short, generally 30 days. As a result, our collection risk is mitigated to a certain extent by the fact that sales are collected in a relatively short period of time, allowing for the ability to reduce exposure on defaults if collection issues are identified. As of December 31, 2021 and 2020, our sole specialty distributor customer in the U.S. accounted for approximately 83% and 100% of our accounts receivable, net. On a quarterly basis, we update our allowance as necessary to reflect expected credit losses over the remaining lives of the accounts receivable for outstanding trade receivables that are past due, have known disputes or have experienced any negative credit events that may result in future collectability issues. We do not currently expect our current or future exposures to credit losses to have a significant impact on us. The estimated allowance for expected credit losses was not material as of December 31, 2021 or 2020, nor were the changes to the allowance during any of the periods presented. However, our customers’ ability to pay us on a timely basis, or at all, could be affected by factors specific to their respective businesses and/or by economic conditions, including those related to the COVID-19 pandemic, the extent of which cannot be fully predicted. Accounts receivable, net, excludes amounts payable to us related to regulatory milestones earned under the Shinyaku Agreement. As of December 31, 2021, we recorded a $3.0 million receivable related to the achievement of a regulatory milestone upon submission of a Japanese new drug application (JNDA) for Dravet syndrome within other current assets on the consolidated balance sheets. Inventory Inventory is recorded at the lower of cost or net realizable value, with cost determined on a first-in, first-out basis. Inventory costs include third-party contract manufacturing, third-party packaging services, freight, salaries, wages and stock-based compensation for personnel involved in the manufacturing process, and indirect overhead costs. We periodically review our inventories to identify obsolete, slow moving, excess or otherwise unsaleable items. If obsolete, slow moving, excess or unsaleable items are observed and there are no alternate uses for the inventory, we record a write-down to net realizable value. The determination of net realizable value requires judgment including consideration of many factors, such as estimates of future product demand, product net selling prices, current and future market conditions and potential product obsolescence, among others. Prior to regulatory approval, we expense costs associated with the manufacture of our product candidates to research and development expense unless we are reasonably certain such costs have future commercial use and net realizable value. Since we consider attaining regulatory approval of a product candidate to be highly uncertain and difficult to predict, we expect only in rare instances will pre-launch inventory be capitalized, if at all. 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, promissory note receivable, 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 Note 7 for financial instruments measured or disclosed at fair value for marketable securities, contingent consideration liabilities and our convertible senior notes. 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 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 periodically assess our available-for-sale marketable securities for impairment. For debt securities in an unrealized loss position, this assessment first takes into account our intent to sell, or whether it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis. If either of these criteria are met, the debt security’s amortized cost basis is written down to fair value through interest and other, net. For debt securities in an unrealized loss position that do not meet the aforementioned criteria, we assess whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, we consider the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and any adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss may exist, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses will be recorded in other income (expense), net, limited by the amount that the fair value is less than the amortized cost basis. Any additional impairment not recorded through an allowance for credit losses is recognized in other comprehensive loss. Changes in the allowance for credit losses are recorded as provision for (or reversal of) credit loss expense. Losses are charged against the allowance when management believes the uncollectability of an available-for-sale security is confirmed or when either of the criteria regarding intent or requirement to sell is met. These changes are recorded in other income (expense), net. Concentration of Credit Risk As is common in the pharmaceutical industry for products treating rare diseases, Fintepla is distributed through exclusive arrangements with a specialty distributor in the U.S. and through a third-party logistics (3PL) provider who distributes to pharmacies throughout Europe (currently, in Germany and France). As a result, our accounts receivable balance at December 31, 2021 and 2020 is highly concentrated with our U.S. customer, who accounted for 83% and 100% of the balance, respectively. In addition, our investments in cash equivalents and marketable securities potentially subject us to concentrations of credit risk. 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 creditworthiness 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) or supplemental NDA (sNDA) 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 approved products or product candidates for clinical trials. Impact of COVID-19 Pandemic The full extent to which the ongoing coronavirus disease 2019 (COVID-19 pandemic) will directly or indirectly impact our business continues to evolve and its results on our operations and financial condition, will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning COVID-19, including any related variants, and the actions taken to contain it or treat COVID-19. Our ability to successfully commercialize and generate revenue from Fintepla may be directly or indirectly impacted by the COVID-19 pandemic. In addition to our ongoing launch of Fintepla for Dravet syndrome in existing and new markets, we are preparing for a potential product launch of Fintepla for LGS in the U.S., which the FDA granted our supplemental New Drug Application (sNDA) Priority Review with a Prescription Drug User Fee Act (PDUFA) target action date in March 2022. While restrictive safety measures are in place, our sales professionals did not have the same level of in-person interactions with physicians and healthcare providers to conduct educational and promotional activities for Fintepla as they would have absent the COVID-19 pandemic. In response, we have implemented a virtual sales model to supplement traditional means of customer engagement. Although some of these restrictions have been, and may continue to be lifted in certain j |
Revenues
Revenues | 12 Months Ended |
Dec. 31, 2021 | |
Disaggregation of Revenue [Abstract] | |
Revenues | Revenues Net Product Sales We record product sales of Fintepla at the net sales price (transaction price), which includes estimates of consideration payable to our customers and third-party payers for which reserves are established and that result from government rebates, chargebacks, co-pay assistance, prompt-payment discounts and other allowances that are offered under arrangements between us, our customers, and third-party payers. Fintepla for Dravet syndrome was approved for marketing by the United States Food and Drug Administration (FDA) in the U.S. in June 2020 and by the European Medicine Agency (EMA) in Europe in December 2020. The following table presents our net product sales of Fintepla disaggregated by geographical area: Year Ended December 31, (In thousands) 2021 2020 United States $ 65,683 $ 9,587 Europe 9,057 — Total net product sales $ 74,740 $ 9,587 The following table summarizes the provisions, and credits/payments, for sales-related deductions. (In thousands) Rebates Trade Discounts, Distributor Fees and Other Total Balance at December 31, 2019 $ — $ — $ — Provisions 1,203 380 1,583 Credits/payments (42) (251) (293) Balance at December 31, 2020 $ 1,161 $ 129 $ 1,290 Provisions 10,096 2,775 12,872 Credits/payments (6,972) (2,679) (9,651) Balance at December 31, 2021 4,285 225 4,511 Customer Concentration Our specialty distributor in the U.S. accounted for 88% and 100% of net product revenue for the years ended December 31, 2021 and 2020, respectively. Collaboration Revenue 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. 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 seizures associated with 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. As of December 31, 2021, the total transaction price was $23.0 million and consisted of i) the initial $20.0 million fixed consideration and ii) a $3.0 million regulatory submission milestone that was achieved in the fourth quarter of 2021 related to the Dravet syndrome program. The $3.0 million in variable consideration was allocated to the Dravet syndrome program. The remaining variable consideration was determined to 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. Changes in estimates of total internal and external costs expected to be incurred are recognized in the period of change as a cumulative catch-up adjustment to collaboration revenue. For the years ended December 31, 2021 and 2020, we recognized collaboration revenue of $7.0 million and $4.1 million, respectively. As of December 31, 2021, $8.3 million related to this arrangement 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 early 2024. 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 separate performance obligation as we did not grant Shinyaku intellectual property rights. The agreed upon price for the supply of Fintepla (cost plus a fixed transfer price mark-up, fixed percentage of aggregate sales of Fintepla by Shinyaku per year, the net price mark-up and sales milestones) to Shinyaku does not represent a material right, and therefore is not a performance obligation, and such pricing on an aggregate basis represents the standalone selling price a distributor would typically pay for such a product in that region or market. There are also no minimum purchase commitments. The transaction price to be allocated to the performance obligation will include the fixed consideration associated with the cost-plus price of Fintepla and variable consideration associated with a fixed percentage of aggregate sales of Fintepla by Shinyaku per year, the net price mark-up and sales milestones subject to the constraint. To date, Shinyaku has not provided us with any purchase orders and thus no revenue has been recognized for the supply of Fintepla. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | Acquisitions Asset Acquisition of Modis In September 2019, 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. MT-1621 is an investigational deoxynucleoside substrate enhancement therapy (SET) for the treatment of TK2d, an inherited mitochondrial DNA depletion disease 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, which was subsequently released in 2020. In addition, the former shareholders of Modis were eligible to receive milestone payments consisting of $100.0 million upon FDA approval and $50.0 million upon EMA approval of MT-1621, as well as a 5% royalty on any future net sales of specified Modis products. The upfront cash consideration was funded by 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 MT-1621. 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 MT-1621 and $2.8 million for assumed net liabilities. As of the acquisition date, Modis had completed a pivotal Phase 2 retrospective treatment clinical trial study (RETRO) of MT-1621 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 MT-1621 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. The milestone payments due upon FDA or EMA approval and royalty payments on future net sales of MT-1621 products were determined to be contingent consideration and not subject to derivative accounting. Any contingent consideration will be recognized when the contingency is resolved and the consideration becomes payable. As of December 31, 2021 and 2020, no such amounts were deemed to be payable. The nature of the remaining efforts for completion of the MT-1621 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 MT-1621 will be successfully completed. If the development of MT-1621 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 MT-1621. |
Strategic License Agreements
Strategic License Agreements | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Strategic License Agreements | Strategic License Agreements Fintepla Universities of Antwerp and Leuven in Belgium As a result of our acquisition of Brabant, we have a collaboration and license agreement with the Universities of Antwerp and Leuven in Belgium (the Universities) that runs through September 2045. Under the terms of the agreement (the Universities 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 or certain related conditions stemming from infantile epilepsy such as LGS, as well as certain other intellectual property. Under the Universities Agreement, net product sales of Fintepla are subject to royalties in the mid-single-digit percentage, or in the case of a sublicense, a percentage in the mid-twenties of the sub-licensing revenues. In December 2021, we executed an amendment to the Universities Agreement, which provided for a one-time payment of $7.0 million related to our previous collaboration activities and consideration received to date under the Shinyaku Agreement. The amendment clarified that the Universities’ are entitled to 15% of any regulatory or sales-based milestones under the Shinyaku Agreement, if achieved, as well as the method of calculating royalties due for supplying Fintepla, if approved for marketing, to Shinyaku, the exclusive distributor of Fintepla for Japan. The $7.0 million has been recorded within accrued and other current liabilities in the consolidated balance sheet at December 31, 2021 and included in research and development expense in the consolidated statement of operations for the year ended December 31, 2021 as a cost of developing Fintepla under the Shinyaku Agreement, which has not yet been approved for marketing in Japan. The $7.0 million was subsequently paid in February 2022. MT-1621 License Agreement with Columbia University As a result of our acquisition of Modis in September 2019, 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 MT-1621. 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. No amounts were due or accrued under this agreement at December 31, 2021 or 2020. Other License Agreement Assumed We also became party to a license agreement between two other research institutions related to MT-1621 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. No amounts were due or accrued under this agreement at December 31, 2021 or 2020. Tevard Collaboration, Option and License Agreement In October 2019, we entered into an option agreement with Tevard Biosciences (Tevard), a privately-held company focused on tRNA-based gene therapies. Under the agreement, Tevard granted us an option to license exclusive rights related to a preclinical development program to identify and develop novel tRNA-based gene therapies for Dravet syndrome. During 2020, we extended the option period to exercise our license rights prior to entering into a collaboration, option and license agreement with Tevard. Payments made under the option agreement were nonrefundable, but may be credited against the upfront payment due if we exercise our option on the preclinical development program. Payments made under the option agreement of $2.0 million in 2019 and $5.5 million in 2020 were included in acquired IPR&D expense and related costs in our consolidated statement of operations. In December 2020, we exercised the option on the Dravet syndrome program and entered into a collaboration, option and license agreement with Tevard (the Tevard Agreement). The financial terms of the Tevard Agreement included an upfront payment of $5.2 million. In connection with the transaction, we also purchased a convertible promissory note issued by Tevard in the amount of $5.0 million. The note matures in December 2022 and carries interest at 3.5% per year. The note will automatically convert into equity securities issued by Tevard in their next equity financing transaction at a conversion price equal to the price paid per share by other investors of the financing transaction. In addition to the upfront payments, we have agreed to fund Tevard’s early discovery activities under the licensed Dravet syndrome program in accordance with the development plan as determined by the parties to the agreement. Once Tevard completes the early discovery activities for a program, we will be responsible for any potential future development and commercialization activities. Tevard is also eligible to receive additional development, regulatory and commercial-related milestone payments of up to $100.0 million for the Dravet program, as well as tiered royalties on future net sales in the single digits that result from the collaboration. We are also entitled to rights of negotiation and rights of first refusal to potentially obtain licenses to compounds subsequently discovered and developed by Tevard. The agreement, if not terminated sooner, would expire upon the expiration of all applicable royalty terms under the agreement with respect to a licensed program or product; however, we have the unilateral right to terminate the agreement with 180 days advanced notice At the inception of the agreement and through December 31, 2021, we determined Tevard is a VIE in which we held variable interests through our licensed Dravet syndrome program and convertible promissory note. We determined that we are not the primary beneficiary of Tevard as we do not have voting control or other forms of power to direct activities that most significantly impact Tevard’s economic performance. In accounting for the Tevard Agreement, we excluded from consideration all prior payments made under the option agreement, which was previously expensed to acquired IPR&D. Upon entering the Tevard Agreement, we made an upfront payment of $10.2 million in exchange for a license to the Dravet syndrome program and the convertible promissory note. The upfront payment was allocated between the acquired IPR&D asset and the convertible promissory note based on their relative fair values of $5.2 million and $5.0 million, respectively. The estimated fair value of the acquired IPR&D asset was determined based on information from discussions with Tevard’s management team regarding the potential of the Dravet syndrome program as well as our management team’s expectations regarding the timing, future cost and commercial potential for the program. The estimated fair value of the convertible promissory note was determined based on a discounted cash flow analysis, adjusted for credit and market risk, and consideration of the fair value of the embedded conversion feature with a conversion price not more favorable than other investors participating in an equity financing transaction. The $5.2 million of consideration allocated to the IPR&D asset was determined to have no alternative future use and was immediately charged to acquired IPR&D expense in our consolidated statements of operations and classified as cash used in investing activities on the consolidated statements of cash flows. The $5.0 million of consideration allocated to the convertible promissory note was included in other noncurrent assets on our consolidated balance sheet and carried at amortized costs and classified as cash used in investing activities on the consolidated statements of cash flows. Payments made to fund Tevard’s costs incurred under the Dravet syndrome program after the execution of the Tevard Agreement is reflected as research and development expense in our statements of operations. For the years ended December 31, 2021 and 2020, amounts recorded as research and development expense associated with funding the Dravet syndrome program were $3.5 million and $0.7 million, respectively. At each reporting period, we evaluate the note receivable for current expected credit loss by considering factors such as historical experience, market data, issuer-specific factors, and current economic conditions. As of December 31, 2021, no provision for current expected credit losses was deemed necessary based on the expected timing of an equity financing that would result in the automatic conversion of the note receivable to equity securities of Tevard and their existing cash on hand was sufficient to meet their operating requirements prior to the consummation of a financing transaction. As of December 31, 2021, we do not have any current legal or contractual obligations to provide financing to Tevard and our maximum exposure to future loss is limited to the $5.0 million note receivable, which matures in December 2022. While we have committed to fund the Dravet syndrome development program for Tevard’s early discovery activities, our obligation to fund these efforts is contingent upon continued involvement in the program and/or the lack of any adverse events which could cause the discontinuance of the program. Our exposure to future losses is limited as we have the unilateral right to terminate the agreement with 180 days advanced notice. |
Cash and Cash Equivalents, and
Cash and Cash Equivalents, and Marketable Securities | 12 Months Ended |
Dec. 31, 2021 | |
Cash and Cash Equivalents [Abstract] | |
Cash and Cash Equivalents, and Marketable Securities | Cash and Cash Equivalents, and Marketable Securities The following table summarizes the amortized cost and fair value of our cash and cash equivalents and marketable securities by major investment category: December 31, 2021 (In thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Cash and cash equivalents: Cash $ 32,852 $ — $ — $ 32,852 Money market funds 29,991 — — 29,991 Commercial paper 35,337 — — 35,337 Certificates of deposit 3,000 — — 3,000 Total cash and cash equivalents 101,180 — — 101,180 Marketable securities: Commercial paper 141,718 — — 141,718 Certificates of deposit 32,253 — — 32,253 U.S. Government-sponsored enterprises debt securities 6,200 — — 6,200 Corporate debt securities 20,377 — (13) 20,364 Total marketable securities 200,548 — (13) 200,535 Total cash and cash equivalents and marketable securities $ 301,728 $ — $ (13) $ 301,715 As of December 31, 2021, all investments in marketable securities have contractual maturities due within one year. We regularly review our available-for-sale marketable securities in an unrealized loss position and evaluate the current expected credit loss by considering factors such as historical experience, market data, issuer-specific factors, and current economic conditions. As of December 31, 2021, the aggregate difference between the amortized cost and fair value of each security in an unrealized loss position was de minimis. Since any provision for expected credit losses for a security held is limited to the amount the fair value is less than its amortized cost, no allowance for expected credit loss was deemed necessary at December 31, 2021. December 31, 2020 (In thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Cash and cash equivalents: Cash $ 23,887 $ — $ — $ 23,887 Money market funds 80,986 — — 80,986 Commercial paper 61,043 — — 61,043 Certificates of deposit 1,000 — — 1,000 Total cash and cash equivalents 166,916 — — 166,916 Marketable securities: U.S. Treasuries 43,050 1 (1) 43,050 Commercial paper 210,986 — — 210,986 Certificates of deposit 44,480 — — 44,480 U.S. Government-sponsored enterprises debt securities 6,200 17 — 6,217 Corporate debt securities 33,288 172 — 33,460 Total marketable securities 338,004 190 (1) 338,193 Total cash and cash equivalents and marketable securities $ 504,920 $ 190 $ (1) $ 505,109 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, 2021 | |
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, 2021 and 2020: December 31, 2021 (In thousands) Level 1 Level 2 Level 3 Total Assets: Cash equivalents: Money market funds $ 29,991 $ — $ — $ 29,991 Commercial paper — 35,337 — 35,337 Certificates of deposit — 3,000 — 3,000 Marketable securities: Commercial paper — 141,718 — 141,718 Certificates of deposit — 32,253 — 32,253 U.S. Government-sponsored enterprises debt securities — 6,200 — 6,200 Corporate debt securities — 20,364 — 20,364 Total assets $ 29,991 $ 238,872 $ — $ 268,863 Liabilities: Contingent consideration — — $ 35,285 $ 35,285 Total liabilities $ — $ — $ 35,285 $ 35,285 December 31, 2020 (In thousands) Level 1 Level 2 Level 3 Total Assets: Cash equivalents: Money market funds $ 80,986 $ — $ — $ 80,986 Commercial paper — 61,043 — 61,043 Certificates of deposit — 1,000 — 1,000 Marketable securities: U.S. Treasuries — 43,050 — 43,050 Commercial paper — 210,986 — 210,986 Certificates of deposit — 44,480 — 44,480 U.S. Government-sponsored enterprises debt securities — 6,217 — 6,217 Corporate debt securities — 33,460 — 33,460 Total assets $ 80,986 $ 400,236 $ — $ 481,222 Liabilities: Contingent consideration — — $ 42,400 $ 42,400 Total liabilities $ — $ — $ 42,400 $ 42,400 Level 1 and Level 2 Valuation Inputs Level 1 and Level 2 financial instruments are comprised of investments in money market funds and fixed-income securities. We estimate the fair value of our Level 2 financial instruments 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. Level 3 Valuation Inputs Contingent Consideration Our financial liabilities valued based upon Level 3 inputs are comprised of the contingent consideration arrangement related to the business acquisition of Brabant in October 2014 which included the intellectual property rights for our product, Fintepla (fenfluramine). Under the arrangement, we may be required to pay future consideration that is contingent upon the achievement of specified development, regulatory approval and sales-based milestone events for Fintepla. Prior to regulatory approval, we estimate the fair value of contingent consideration liabilities using a probability-weighted discounted cash flow analysis, which reflects the probability and timing of future payments and a risk-adjusted discount rate. This fair value measurement is based on Level 3 inputs such as the probability and anticipated timelines of achieving milestones related to development, regulatory approvals and product sales goals. The resulting probability-weighted cash flows are discounted at risk-adjusted rates. Following the achievements of regulatory approval milestones and upon commencement of product sales, the fair value measurement is based on projected product sales (based on internal operational budgets and long-range strategic plans), discount rates and projected payment dates. The following table provides a reconciliation of contingent consideration liabilities measured at fair value on a recurring basis using unobservable inputs (Level 3) for the years ended December 31, 2021 and 2020: (In thousands) Contingent Consideration Balance at December 31, 2019 63,800 Settlements (1) (30,000) Changes in fair value 8,600 Balance at December 31, 2020 42,400 Settlements (1) (9,000) Changes in fair value 1,885 Balance at December 31, 2021 $ 35,285 ———————————— (1) As of December 31, 2021 and 2020, outstanding obligations related to achieved milestones of $4.5 million and $15.0 million, respectively, were no longer contingent. As a result, the amounts have been reclassified from contingent consideration to accounts payable at December 31, 2021 and accrued and other current liabilities at December 31 2020 on the consolidated balance sheets. Payments of acquisition-related contingent consideration, to the extent they relate to estimated liabilities as of the date of acquisition, are reflected within financing activities in the consolidated statements of cash flows. Payments in excess of acquisition date liabilities are classified within operating activities. Payments of contingent consideration totaled $15.0 million for the year ended December 31, 2020 were reflected within financing activities. Payments of contingent consideration totaled $19.5 million for the year ended December 31, 2021 and consisted of $18.0 million reflected within financing activities and $1.5 million reflected in operating activities. As of December 31, 2021, the contingent consideration liabilities was $35.3 million and consisted of Fintepla sales-based milestones with a maximum payout of $36.0 million (undiscounted). Each additional $36.0 million in Fintepla sales triggers a $4.5 million payout for a maximum of 8 remaining sales-based milestone payments. The following table summarizes the unobservable inputs used in the fair value measurement of our contingent consideration liability as of December 31, 2021. Fair Value as of Valuation Technique Unobservable Input Range Weighted Average (1) Discount rate 0.0% — 2.0% 1.0% $35,285 Discounted cash flow Probability of payment 100% 100% Projected year of payment 2022 — 2023 2022 ———————————— (1) Unobservable inputs were weighted by the relative fair value of each sales-based milestone payment. As of December 31, 2021, we classified $13.5 million of the total contingent consideration liabilities of $35.3 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 the remaining sales-based milestones. Convertible Senior Notes |
Other Balance Sheet Details
Other Balance Sheet Details | 12 Months Ended |
Dec. 31, 2021 | |
Balance Sheet Related Disclosures [Abstract] | |
Other Balance Sheet Details | Other Balance Sheet Details Inventory Components of our inventory consists of the following: December 31, (In thousands) 2021 2020 Raw materials $ 1,301 $ 391 Work in process 2,387 243 Finished goods 1,804 392 Total $ 5,492 $ 1,026 Prior to receiving FDA approval for Fintepla, we recorded all manufacturing product costs as research and development expense. As of December 31, 2021 and 2020, no write-downs of inventory were deemed necessary. Other Current Assets Other current assets consist of the following: December 31, (In thousands) 2021 2020 Receivable for U.K. R&D tax relief scheme $ 12,359 $ — Note receivable from Tevard 5,000 — Receivable under collaboration agreement 3,000 1,500 Other 4,376 3,436 Total $ 24,735 $ 4,936 Property and Equipment, Net Property and equipment, net consists of the following: December 31, (In thousands) 2021 2020 Computer equipment and software $ 233 $ 429 Leasehold improvements 9,998 9,835 Furniture and fixtures 1,134 1,266 Total 11,365 11,530 Less accumulated depreciation (4,168) (2,806) Property and equipment, net $ 7,197 $ 8,724 Depreciation expense for the years ended December 31, 2021, 2020 and 2019 was $1.6 million, $1.5 million, and $1.3 million, respectively. Accrued and Other Current Liabilities Accrued and other current liabilities consist of the following: December 31, (In thousands) 2021 2020 Accrued clinical trial costs $ 13,537 $ 16,477 Accrued compensation 16,399 10,917 Accrued milestone payment — 15,000 Accrued license amendment fee 7,000 — Accrued royalties 4,250 479 Other accrued liabilities 14,227 12,091 Total $ 55,413 $ 54,964 |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible Asset The following table provides details of the carrying amount of our intangible asset: December 31, (In thousands) 2021 2020 Finite-lived intangible asset $ 102,500 $ 102,500 Accumulated amortization (11,827) (3,942) Net carrying value $ 90,673 $ 98,558 Our intangible asset consists of worldwide development, commercialization and related intellectual property rights including patents and licenses for our product, Fintepla (fenfluramine), which at the time of our acquisition in October 2014 was classified as an indefinite-lived IPR&D asset. Upon FDA approval of Fintepla in June 2020, this indefinite-lived asset was reclassified to a finite-lived intangible asset subject to amortization. In July 2020, we commercially launched Fintepla and commenced amortization of this asset on a straight-line basis over its estimated useful life. Due to the inherent subjectivity of forecasting the timing in which the cash flows may be generated from this intangible asset over a long-term time horizon, we concluded the pattern of economic benefit cannot be reliably determined. As such, we elected to use the straight-line method of amortization for this intangible asset over 13 years. As of December 31, 2021, the carrying value of the intangible asset will be amortized over its estimated remaining useful life of 11.5 years as follows: (In thousands) Amortization Expense 2022 $ 7,885 2023 7,885 2024 7,885 2025 7,885 2026 7,885 Thereafter 51,248 Total $ 90,673 |
Convertible Senior Notes
Convertible Senior Notes | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Convertible Senior Notes | Convertible Senior Notes In September and October 2020, we issued $230.0 million principal amount of 2.75% convertible senior notes due 2027 in a private offering (collectively, the Convertible Senior Notes or Notes). Total proceeds realized from the sale of the Notes, net of issuance costs of $7.5 million, were $222.5 million. The Notes are governed by an indenture (the Indenture), dated as of September 28, 2020, between Zogenix and U.S. Bank National Association, as trustee. Under the Indenture, the Notes are senior, unsecured obligations of Zogenix, are equal in right of payment with its future senior, unsecured indebtedness of Zogenix, and structurally subordinated to all indebtedness and liabilities of its subsidiaries. The principal amount of the Notes was issued at par value and the Notes accrue interest at a rate of 2.75% per year, payable semi-annually in arrears on April 1 and October 1 of each year, beginning on April 1, 2021. The Notes mature on October 1, 2027, unless earlier converted by the holders or redeemed or repurchased by us in accordance with their terms prior to such date. The Indenture contains customary terms and covenants, including certain events of default upon which the Notes may be due and payable immediately, but does not contain any financial covenants. The Notes are convertible, subject to certain conditions described below, into shares of our common stock at an initial conversion rate of 41.1794 shares per $1,000 principal amount of the Notes, which represents an initial conversion price of approximately $24.28 per share, subject to adjustments upon the occurrence of certain events. Certain corporate events described in the Indenture may increase the conversion rate for holders who elect to convert their Notes in connection with such corporate event should they occur. We also may choose to repurchase outstanding Notes through open-market transactions, including through Rule 10b5-1 trading plan to facilitate open-market repurchases, or otherwise, from time to time. Holders may convert the Notes in multiples of $1,000 principal amount at any time prior to October 1, 2027, but only in the following circumstances: • during any calendar quarter ending after December 31, 2020, if our closing stock price exceeds 130% of the conversion price on each of at least 20 trading days of the last 30 consecutive trading days of the immediately preceding calendar quarter; • during the five consecutive business day period after any 10 consecutive trading day period in which the Notes’ trading price is less than 98% of the product of our closing stock price times the conversion rate; or • the occurrence of certain corporate events, such as a change of control, merger, default or liquidation. In addition, holders may also convert their Notes at their option at any time beginning on July 1, 2027 until the close of business on the second scheduled trading day immediately before the maturity date for the Notes, without regard to the foregoing circumstances. Upon conversion, we will pay or deliver, as the case may be, cash, shares of our common stock or a combination thereof at our election. We may not redeem the Notes prior to October 7, 2024. On or after October 7, 2024, the Notes are redeemable for cash, in whole or in part (subject to minimum redemption amounts), at our option at any time, and from time to time, before the 40th scheduled trading day immediately before October 1, 2027, at a cash redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, but only if our closing stock price exceeds 130% of the conversion price on (1) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date we send the related redemption notice; and (2) the trading day immediately before the date we send such notice. In addition, calling any note for redemption will constitute a make-whole fundamental change with respect to that Note, in which case the conversion rate applicable to the conversion of that Note will be increased in certain circumstances if it is converted after it is called for redemption. The Indenture contains representations and warranties by us, indemnification provisions in favor of the lenders and customary affirmative and negative covenants related to timing filings and reporting, and events of default. As of December 31, 2021, we were in compliance with all covenants under the Indenture. In accounting for the issuance of the Notes, we performed an assessment of all embedded features of the debt instrument to determine if (i) such features should be bifurcated and separately accounted for, and (ii) if bifurcation requirements are met, whether such features should be classified and accounted for as equity or liability instruments. If the embedded feature meets the requirements to be bifurcated and accounted for as a liability, the fair value of the embedded feature is measured initially, included as a liability on the consolidated balance sheets and re-measured to fair value at each reporting period. We determined the embedded conversion feature in the Notes is not required to be separately accounted for as a derivative liability instrument because it is considered to be indexed to our common stock. However, since the Notes may be settled with a combination of cash and shares, at our election, we are required to separate the Notes into debt and equity components. The value assigned to the debt component is the estimated fair value, as of the issuance date, of a similar debt instrument issued by us without the conversion feature. The difference between the full principal amount of the Notes and this estimated fair value was recorded as a debt discount on the Notes, with a corresponding offset to additional paid-in capital (the equity component). In addition, debt issuance costs associated with the Notes were allocated to the debt and equity components in proportion to the allocation of the full principal amount to those components. At issuance, the debt component of the Notes was estimated to have a fair value of $152.1 million based on contractual cash flows discounted at our estimated non-convertible debt borrowing rate of 9.7%. Our determination of an appropriate discount rate was based on a yield curve derived from then-recent publicly-traded bond offerings with a similar term for companies with similar credit ratings to us (Level 2 inputs). As a result, the equity component of $77.9 million, which represents the difference between the proceeds from the issuance of the Notes and the fair value of the debt component, was recognized as a debt discount. In addition, debt issuance costs of $7.5 million related to the issuance of the Notes were comprised of $4.9 million attributable to the debt component, and recorded as debt discount, with the remaining $2.5 million attributable to the equity component and netted with the equity component discussed above resulting in $75.3 million recorded to additional paid-in capital within stockholders’ equity on the consolidated balance sheet. The debt discount and issuance costs of $82.8 million are being amortized as interest expense over the expected term of the Notes of seven years using the effective interest rate of 9.9%. For the year ended December 31, 2021, the effective interest rate on the liability component of the Notes remained unchanged from the date of issuance. The unamortized debt discount and issuance costs of $71.8 million as of December 31, 2021 will be amortized over the estimated remaining term of approximately 5.8 years. In addition, the equity component continues to meet the conditions for equity classification. During the fourth quarter of 2021, the closing price of our common stock did not exceed 130% of the applicable conversion price of the Notes on at least 20 of the last 30 consecutive trading days of the quarter; furthermore, no other conditions allowing holders of the Notes to convert were met as of December 31, 2021. Therefore, the Notes are not convertible for the first quarter of 2022 and are classified as long-term debt. If the closing price conditions are met in a future quarter, the Notes will be convertible at the holders’ option during the immediately following quarter. Based on the closing price of our common stock of $16.25 per share on December 31, 2021, the if-converted value of the Notes was less than the outstanding principal balance. In January 2022, we entered into a definitive agreement and plan of merger with UCB S.A. (See Note 19). The contemplated transaction represents a specified corporate event under the Indenture. Upon closing of the transaction, if at all, each holder of Notes will be entitled to convert such holder’s Notes into the right to receive merger consideration in respect of each share into which the Notes would have been convertible pursuant to the applicable conversion rate under the Indenture, including any make-whole adjustment in connection with the contemplated transaction as may be applicable under the Indenture. The following table provides information on the Notes balance: December 31, (In thousands) 2021 2020 Liability component Principal amount of Notes $ 230,000 $ 230,000 Less: Unamortized debt discount and issuance costs (71,835) (80,647) Net carrying amount $ 158,165 $ 149,353 Equity component — net carrying value $ 75,333 $ 75,333 Interest expense related to the Notes was included in other income (expense), net on the consolidated statements of operations as follows: Year Ended December 31, (In thousands) 2021 2020 Contractual coupon interest $ 8,811 $ 1,600 Amortization of debt discount and issuance costs 6,359 2,143 Total interest expense $ 15,170 $ 3,743 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Leases | Leases We have noncancelable operating leases consisting of administrative and research and development office space for our headquarters in Emeryville, California and our U.K. subsidiary in Maidenhead, United Kingdom. The leases will expire in May 2027 and February 2025, respectively. We also maintain limited office space in Ireland, Germany, Italy and Japan. Our Emeryville lease includes a renewal option for an additional five years, which is not included in the operating lease liabilities as we determined renewal was not reasonably assured at lease inception under the legacy lease standard. The operating lease liabilities also included a lease related to the former headquarters of Modis in Oakland, California until its expiration in July 2021. 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. The components of lease expense were as follows: Year Ended December 31, (In thousands) 2021 2020 2019 Components of lease costs: Operating lease cost $ 1,799 $ 1,989 $ 2,045 Short-term lease cost 438 444 851 Sublease income — (115) (580) Total lease expense $ 2,237 $ 2,318 $ 2,316 Supplemental cash flow information related to operating leases was as follows: Year Ended December 31, (In thousands) 2021 2020 2019 Cash used in operating activities: Cash paid for amounts included in the measurement of lease liabilities $ 2,330 $ 2,178 $ 1,842 Noncash investing activities: Right-of-use lease assets obtained in exchange for new lease liabilities — 1,156 354 Supplemental balance sheet information related to leases was as follows: December 31, (In thousands) 2021 2020 Right-of-use assets $ 6,605 $ 7,748 Current portion of operating lease liabilities 1,694 1,688 Operating lease liabilities, net of current portion 8,617 10,314 Total operating lease liabilities $ 10,311 $ 12,002 Weighted average remaining lease term (in years) 5.2 6.0 Weighted average discount rate, weighted based on the remaining balance of lease payments 6.2 % 6.2 % The following table reconciles the undiscounted future lease payments under noncancelable operating leases with terms of more than one year to the total operating lease liabilities recognized on the consolidated balance sheet as of December 31, 2021 (in thousands): Years Ending December 31: Operating Leases 2022 $ 2,261 2023 2,318 2024 2,326 2025 2,070 2026 2,132 2027 899 Total lease payments 12,006 Less: imputed interest (1,695) Total operating lease liabilities $ 10,311 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation In July 2020, we received a letter, notifying us that Apotex Inc. and Apotex Corp. (collectively, “Apotex”) submitted to FDA an abbreviated new drug application (“ANDA”) for a generic version of 2.2 mg base/ml Fintepla (fenfluramine hydrochloride) that included “Paragraph IV” certifications (pursuant to 21 U.S.C. § 355(j)(2)(A)(vii)(IV)) with respect to two of our patents covering Fintepla. These patents are listed in FDA’s list of Approved Drug Products with Therapeutic Equivalence Evaluations, commonly referred to as the Orange Book, for Fintepla. The letter included a statement setting forth the basis for Apotex’s opinion that these patents are invalid and/or will not be infringed by the manufacture, use or sale of Apotex’s fenfluramine hydrochloride oral solution, 2.2 mg base/ml product. In August 2021, we filed a complaint against Apotex Inc. and Apotex Corp. for infringement based on these Paragraph IV certifications. In October 2021, we received a letter notifying us that Apotex had amended its ANDA and submitted additional Paragraph IV certifications with respect two additional Orange Book-listed patents covering Fintepla. The letter included a statement setting forth the basis for Apotex’s opinion that these two additional patents are also invalid and/or will not be infringed by the manufacture, use or sale of Apotex’s fenfluramine hydrochloride oral solution, 2.2 mg base/ml product. In October 2021, we filed a second complaint against Apotex Inc. and Apotex Corp. for infringement based on these additional paragraph IV certifications. These cases have since been consolidated. In August 2021, we received a letter notifying us that Lupin Limited (“Lupin”) submitted to FDA an abbreviated new drug application (“ANDA”) for a generic version of 2.2 mg base/ml Fintepla (fenfluramine hydrochloride) that contains “Paragraph IV” certifications. These patents are listed in FDA’s list of Approved Drug Products with Therapeutic Equivalence Evaluations, commonly referred to as the Orange Book, for Fintepla. The letter included a statement setting forth the basis for Apotex’s opinion that these patents are invalid and/or will not be infringed by the manufacture, use or sale of Lupin’s fenfluramine hydrochloride oral solution, 2.2 mg base/ml product. In October 2021, we filed a complaint against Lupin for patent infringement under the Hatch-Waxman Act in the United States District Court for the District of Delaware. Fintepla has Orphan Drug exclusivity, which prevents FDA from approving an ANDA referencing Fintepla until June 2027. We intend to vigorously enforce our intellectual property rights relating to Fintepla. We cannot predict the ultimate outcome of these actions, and we may spend significant resources enforcing and defending these patents. If we are unsuccessful, some or all of our claims in the patents may be narrowed or invalidated and the patent protection for our products could be shortened, allowing for the sale of generic versions of these products earlier than their patent expiration, which could have a significant negative effect on our revenues and results of operations. Merger-Related Litigation Subsequent to year end and following the announcement of the execution of the Agreement and Plan of Merger, dated January 18, 2022, by and among UCB S.A., Zinc Merger Sub, Inc. and Zogenix, Inc. (see Note 19 — Subsequent Event), several complaints related to the merger have been filed. The complaints named as defendants include Zogenix and members of our board of directors as well in one complaint, UCB S.A. and Zinc Merger Sub, Inc. as defendants. The Complaints generally allege that the defendants violated Section 14(d), 14(e) and 20(a) of the Securities Exchange Act of 1934, as well as Rules 14a-9 and 14d-9 promulgated thereunder. Specifically, one or more of the Complaints allege that the Schedule 14D-9 (as amended or supplemented from time to time), the “Schedule 14D-9” filed on February 1, 2022 with the SEC by Zogenix fails to disclose material information and/or materially misrepresents information concerning the sales process leading up to the merger, potential conflicts of interest of BofA Securities and Zogenix insiders, our financial projections, the financial analyses of BofA Securities, and the financial analyses of SVB Leerink. The complaint in the Finuliar Action also asserts state law claims against the members of our board of directors alleging that they breached their fiduciary duty of candor/disclosure by causing or permitting the Schedule 14D-9 to be filed. The relief sought in one or more of the Complaints includes enjoining the consummation of the merger, enjoining defendants from filing any amendment to the Schedule 14D-9 unless certain allegedly material information is included, directing defendants to disseminate an amended Schedule 14D-9 that does not contain any untrue statements of material fact and that states all material facts required in it or necessary to make the statements therein not misleading, declaring that defendants violated Sections 14(d), 14(e), and 20(a) of the Exchange Act and Rules 14a-9 and 14d-9 promulgated thereunder, rescinding, to the extent already consummated, the merger and awarding rescissory damages, directing defendants to account for all alleged damages suffered as a result of defendants’ alleged wrongdoing, awarding the plaintiffs their respective costs and disbursements, and granting other and further equitable relief as the Court may deem just and proper. We cannot currently predict the ultimate outcome of such claims or estimate a range of loss. Indemnification Agreements In the ordinary course of business, we may provide indemnification of varying scope and terms to vendors, lessors, customers and other parties with respect to certain matters including, but not limited to, losses arising out of breach of such agreements or from intellectual property infringement claims made by third parties. These indemnities include indemnities to our directors and officers to the maximum extent permitted under applicable Delaware law. The maximum potential amount of future payments that we could be required to make under these indemnification agreements is, in many cases, unlimited. We have not incurred any material costs as a result of such indemnifications and is not currently aware of any indemnification claims. Unconditional Purchase Obligations We have supply agreements for the manufacture of active pharmaceutical ingredient (API) used in Fintepla and procurement of raw materials (other than the API) used to formulate, fill, test and release an oral solution of Fintepla. As of December 31, 2021, annual minimum purchase commitments under these supply agreements were not material. In addition, we enter into contracts in the normal course of business with CROs for preclinical studies and clinical trials and contract manufacturing organizations for the manufacture of drug materials. The contracts are cancellable, with varying provisions regarding termination. If a contract with a specific vendor were to be cancelled, |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Preferred Stock We have 10.0 million shares of preferred stock authorized for issuance, par value of $0.001 per share. As of December 31, 2021 and 2020, no shares of preferred stock were issued and outstanding. Common Stock In May 2021, 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 100.0 million to 200.0 million. 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, 2021 and 2020, there were 56.1 million and 55.7 million shares of common stock issued and outstanding. The following table presents common stock reserved for future issuance for the following financial instruments: December 31, (In thousands) 2021 2020 Outstanding stock options and stock unit awards 7,790 5,703 Warrants to purchase common stock — 28 Reserved for future grants under employee equity plans 6,914 3,899 Reserved for issuance upon conversion of convertible senior notes 12,313 12,313 Total 27,017 21,943 At December 31, 2021, we had approximately 116.9 million shares of authorized and unreserved common stock available for issuance. Sale of Common Stock At-the-Market Offerings We have 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 December 2017, we filed a prospectus supplement 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 under the ATM Sales Agreement. For the year ended December 31, 2019, we sold approximately 0.9 million shares of common stock resulting in net proceeds of approximately $42.6 million, after deducting commissions and other offering costs. In June 2020, we filed a prospectus supplement to our automatic “shelf” registration statement on Form S-3 registering the offering, issuance and sale of up to $200.0 million in gross aggregate proceeds of our common stock under the ATM Sales Agreement. During 2020, we sold approximately 0.2 million shares of common stock and realized net proceeds of approximately $4.9 million, after deducting commissions and other offering costs. Underwritten Public Offerings In March 2020, we completed an underwritten public offering of 9.8 million shares of our common stock at an offering price of $23.50 per share, including 1.3 million shares sold pursuant to the underwriters’ full exercise of their option to purchase additional shares. Net proceeds realized from the offering amounted to approximately $221.7 million, after deducting commissions and other offering costs. Accumulated Other Comprehensive Income A summary of changes in the balances of each component of accumulated other comprehensive loss, net of tax, follows: (In thousands) Net Unrealized Gains (Losses) on Marketable Securities Foreign Currency Translation Adjustments Accumulated Other Comprehensive Income Balance at December 31, 2018 3 — 3 Amounts arising during the period 702 — 702 Reclassification adjustments (326) — (326) Balance at December 31, 2019 379 — 379 Amounts arising during the period (197) (260) (457) Reclassification adjustments 7 — 7 Balance at December 31, 2020 $ 189 $ (260) $ (71) Amounts arising during the period (202) 288 86 Balance at December 31, 2021 $ (13) $ 28 $ 15 |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation We have various equity incentive plans under which we grant employees and non-employee directors stock options, time-based restricted stock units (RSUs) and performance-based stock units (PSUs). Options granted generally have a contractual term of ten years and have a per share exercise price equal to the closing price of our common stock on the date of grant. Options and RSUs typically vest over a four-year period from the date of grant. We also grant broad-based PSUs to employees, including executive officers, that vest upon the satisfaction of both time-based and performance-based vesting conditions. The following is a description of our various equity incentive plans. Summary of Stock-Based Compensation Plans 2010 Plan The 2010 Equity Incentive Award Plan (2010 Plan) was adopted by our board of directors and became effective in November 2010. The 2010 Plan was amended and restated in each of June 2012, May 2019 and May 2021. The May 2019 amendment was approved by our stockholders at our 2019 Annual Meeting of Stockholders and provided for an increase to the aggregate number of shares authorized for issuance under the plan from 7,500,000 to 11,500,000. In addition, the expiration date of the plan was extended to March 2029. The May 2021 amendment was approved by our stockholders at our 2021 Annual Meeting of Stockholders and provided for an increase to the aggregate number of shares authorized for issuance under the plan to 16,000,000 shares. In addition, the expiration date of the plan was extended to May 2031. The 2010 Plan provides for the issuance of incentive and non-statutory stock options, restricted shares, performance shares, stock appreciation rights, RSUs, PSUs and other stock-based incentives to officers, employees and others. 2013 and 2021 Inducement Plans In December 2013 and May 2021, our board of directors adopted the 2013 Employment Inducement Equity Incentive Award Plan (2013 Inducement Plan) and the 2021 Employment Inducement Equity Incentive Award Plan (2021 Inducement Plan), respectively. Both inducement plans are non-shareholder approved stock plans adopted pursuant to the “inducement exception” provided under Nasdaq listing rules. The inducement plans are 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 both inducement plans are substantially similar to the terms of our 2010 Plan. The 2013 Inducement Plan was adopted in December 2013 and initially reserved 337,500 shares of common stock for issuance, which was subsequently increased to 637,500 shares in May 2018. In connection with seeking stockholder approval of the amended and restated 2010 Plan in May 2019, we agreed not to make further awards under the 2013 Inducement Plan. The 2021 Inducement Plan was adopted in May 2021 and initially reserved 1,000,000 shares of common stock for issuance. Employee Stock Purchase Plan In November 2010, our board of directors adopted an 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. In May 2020, our shareholders approved an amendment and restatement of the ESPP, which provided for an increase to the aggregate number of shares authorized for issuance from 375,000 to 875,000 shares and to eliminate the annual evergreen feature, which automatically added 31,250 shares to the aggregate shares authorized for issuance on January 1 of each year under the plan. In addition, the expiration date of the ESPP was modified from October 2020 to the date that all shares authorized have been issued. The ESPP is implemented by overlapping, twelve-month offering periods and each offering period may contain up to two purchase periods of six months each. At any one time, there may be up to two offering periods under the ESPP. In general, a new twelve-month offering period commences on each June 1st and December 1st of a calendar year. 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-month period of the new offering. The ESPP limits the maximum number of shares that may be purchased by any one participant in an offering period to 5,000 shares. In addition, the Internal Revenue Code (IRC) 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, 2021, 6,528,510 common shares were available for future equity award grants under the 2010 Plan and 2021 Inducement Plan and 385,515 common shares were available for issuance under the ESPP. Stock-Based Compensation Plan Activity The following sections summarize activity under our stock-based compensation plans. Stock Options The following table summarizes our stock option activity for the year ended December 31, 2021: Shares (in thousands) Weighted Average Exercise Price Weighted Average Remaining Contractual Term (years) Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2020 5,311 $ 29.12 Granted 1,833 17.79 Exercised (58) 10.08 Canceled (401) 28.71 Outstanding at December 31, 2021 6,685 $ 26.20 6.9 $ 7,926 Exercisable at December 31, 2021 4,101 $ 27.00 5.7 $ 7,232 The total intrinsic value of options exercised for the years ended December 31, 2021, 2020 and 2019 was $0.4 million, $5.1 million and $22.4 million, respectively. Stock Unit Awards The following table summarizes our stock unit awards activity for the year ended December 31, 2021: RSUs PSUs Shares (in thousands) Weighted Average Shares (in thousands) Weighted Average Nonvested at December 31, 2020 393 $ 37.68 — $ — Granted 616 17.66 494 19.53 Vested (144) 39.98 (152) 19.85 Canceled (61) 25.24 (42) 19.99 Nonvested at December 31, 2021 804 $ 22.85 300 $ 19.30 The total intrinsic value of stock unit awards vested for the years ended December 31, 2021, 2020 and 2019 was $5.0 million, $5.7 million and $1.9 million, respectively. ESPP Employees purchased 112,337 shares, 51,745 shares and 28,146 shares under our ESPP for the years ended December 31, 2021, 2020 and 2019, 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. 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, 2021 2020 2019 Risk free interest rate 0.5% to 1.4% 0.3% to 1.8% 1.4% to 2.6% Expected term 5.3 to 6.1 years 5.3 to 6.1 years 5.3 to 6.1 years Expected volatility 70.0% to 73.7% 73.2% to 76.7% 73.5% to 82.3% Expected dividend yield —% —% —% Weighted-average fair value of option on grant date $11.36 $17.86 $32.64 The fair value of RSUs and PSUs are based on the closing price of our common stock on the date of grant. The fair value of ESPP awards issued was 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: Year Ended December 31, (In thousands) 2021 2020 2019 Research and development 12,962 12,139 8,293 Selling, general and administrative 22,501 17,037 12,954 Total $ 35,463 $ 29,176 $ 21,247 Stock-based compensation of $1.0 million was capitalized into inventory for the year ended December 31, 2021. |
Net Loss Per Share
Net Loss Per Share | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Net Loss Per Share Basic net loss per share is calculated by dividing net loss by the weighted average number of shares outstanding for the period. Diluted net loss per share is calculated by dividing net loss by the weighted average number of shares of common stock and potential dilutive common stock equivalents outstanding during the period if the effect is dilutive. Our potentially dilutive shares of common stock include outstanding stock options, RSUs, PSUs, warrants to purchase common stock and rights under our Notes. The following table presents the computation of basic and diluted loss per share (in thousands, except per share amounts): Year Ended December 31, 2021 2020 2019 Numerator Net loss $ (227,413) $ (209,383) $ (419,503) Denominator Weighted average common shares outstanding, basic and diluted 55,880 53,706 43,078 Net loss per share, basic and diluted $ (4.07) $ (3.90) $ (9.74) The following table presents the potential common shares outstanding that were excluded from the computation of diluted loss per share of common stock for the periods presented because including them would have been antidilutive: Year Ended December 31, (In thousands) 2021 2020 2019 Shares subject to outstanding stock options 6,242 4,966 4,085 Shares subject to outstanding RSUs and PSUs 1,051 464 382 Shares subject to outstanding warrants to purchase common stock 15 28 28 Shares issuable upon conversion of Notes 9,471 4,415 — Total 16,779 9,873 4,495 |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2021 | |
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 2021, 2020 and 2019 was $2.5 million, $1.2 million, and $0.5 million, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For financial reporting purposes, the components of loss from continuing operations before income taxes are presented in the following table. Year Ended December 31, (In thousands) 2021 2020 2019 United States $ (193,176) $ (170,812) $ (325,769) Foreign (34,132) (55,996) (93,734) Total $ (227,308) $ (226,808) $ (419,503) The following table summarizes carryforwards of net operating losses and tax credits as of December 31, 2021. (in millions) Amount Federal net operating losses $ 669.2 State net operating losses 427.7 Foreign net operating losses 289.2 Federal research and development credits 6.4 State research and development credits 4.2 Orphan drug research and development credits 2.0 At December 31, 2021, our federal, state, and foreign (primarily related to the U.K.) net operating loss carryforwards, including the acquired net operating losses from our acquisition of Modis, were approximately $669.2 million, $427.7 million and $289.2 million, respectively, which may be subject to limitations as described below. If not utilized, a significant portion of our federal net operating loss carryforwards incurred prior to 2018 will begin to expire in 2029 and the state net operating loss carryforwards incurred prior to 2018 will begin to expire in 2022. 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. As of December 31, 2021, of the $669.2 million in total federal net operating loss carryforwards, $414.7 million do not expire. It is uncertain if and to what extent various states will conform to the Tax Act. In the U.K., our net operating loss carryforwards do not expire, but the use of net operating loss carryforwards in relation to U.K. taxable income incurred on or after April 1, 2017 will be limited each year to £5.0 million plus an incremental 50% of U.K. 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 $6.4 million and $4.2 million. If not utilized, the federal research and development income tax credit carryforwards will begin to expire in 2031. The California research and development income tax credit carryforwards do not expire and can be carried forward indefinitely. As of December 31, 2021, 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, 2021, 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. Any operating losses and other tax attributes generated by us subsequent to January 2014, including those acquired from our acquisition of Modis, are currently not subject to any IRC Section 382 limitations. 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, 2021 2020 2019 Income tax at federal statutory rate $ (47,735) $ (47,630) $ (88,096) State taxes, net of federal benefit (5,803) (4,316) (65) Non-deductible acquired IPR&D charge and other expenses (1) — — 52,044 Change in valuation allowance 54,799 40,039 21,155 Impact of foreign rate change on deferred taxes (12,405) (2,950) 1,887 Other permanent differences 2,117 3,993 4,101 State tax rate benefit 164 (1,346) (18) Foreign rate differential 393 752 1,883 Stock-based compensation 2,484 1,180 (2,674) Net operating losses surrendered under U.K.’s R&D tax relief scheme — — 9,349 State apportionment adjustments 482 (2,673) 48 Impact of foreign exchange rate differences 5,679 (4,532) — Credits and other (70) 58 386 Income tax expense (benefit) $ 105 $ (17,425) $ — (1) Represents amounts attributable to our asset acquisition of Modis. See Note 4 for additional information. The significant components of deferred tax assets (liabilities) are as follows: December 31, (In thousands) 2021 2020 Deferred tax assets: Federal, state and foreign net operating loss carryforwards $ 237,708 $ 186,963 Capitalized research and development 666 486 Accrued expenses 5,895 2,498 Research and development credits 5,343 5,343 Amortization 2,718 2,949 Lease liability 2,291 2,534 Stock-based compensation 10,212 7,878 Other, net 2,523 2,690 Total deferred tax assets 267,356 211,341 Less: valuation allowance (231,335) (176,594) Total deferred tax assets, net of valuation allowance $ 36,021 $ 34,747 Deferred tax liabilities: Operating lease right-of-use asset $ (1,423) $ (1,585) IPR&D (18,573) (15,857) Discount on Notes (16,025) (17,305) Total deferred tax liabilities (36,021) (34,747) Total net deferred tax liabilities $ — $ — For the year ended December 31, 2021, a provision for income taxes of $0.1 million has been recognized related primarily to our subsidiaries located outside of the United States. For the year ended December 31, 2020, income tax benefit of $17.4 million resulted from a change in our valuation allowance balance associated with the completion of our in-process research and development program for Fintepla. Prior to regulatory approval of Fintepla in June 2020, our indefinite-lived asset was not subject to amortization. Upon completion of the IPR&D program, the indefinite-lived intangible asset was reclassified to an intangible asset subject to amortization over its estimated useful life. As a result, future reversals of deferred tax liabilities related to finite-lived intangible assets provided a source of income when assessing the realizability of our U.K. net operating loss carryforwards. We therefore recorded a $17.4 million income tax benefit in 2020 with a corresponding reduction to our valuation allowance on our U.K. deferred tax assets. The income tax benefit included the effects of foreign exchange differences on remeasurement of the deferred tax liability. An immaterial portion of the adjustment for foreign exchange differences was related to prior periods. As of December 31, 2021 and 2020, we have established a full valuation allowance against our U.S. and foreign deferred tax assets that are in excess of our reversing taxable temporary differences in those jurisdictions as we determined it is more likely than not that the tax benefit will not be realized. The increase in valuation allowance of $54.7 million during 2021 was primarily attributable to tax benefits generated from current period net operating losses. The increase in valuation allowance of $25.1 million during 2020 was primarily attributable to tax benefits generated from net operating losses, offset by the impact of tax benefits from intangibles that became subject to amortization for financial statement purposes discussed above. 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, 2021 2020 2019 Beginning balance of unrecognized tax benefits $ 3,638 $ 3,541 $ 1,487 Gross increases based on tax positions related to current year — — 1,495 Gross increases based on tax positions related to prior years 97 559 Gross decreases based on tax positions related to prior years — — — Settlements with taxing authorities — — — Expiration of statute of limitations — — — Ending balance of unrecognized tax benefits $ 3,638 $ 3,638 $ 3,541 As at December 31, 2021 and 2020, 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, 2021 | |
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 (SMEs) R&D tax relief scheme. Under this tax relief scheme, a SME can make an election (i) 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, or (ii) 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. There is two-year window after the end of a tax year to seek relief under this scheme. 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. In December 2019, we elected to surrender net operating losses by submitting claims to receive cash payments of $9.9 million and $9.8 million related to our 2017 and 2018 tax years, respectively. For the year ended December 31, 2020, we recognized income and collected cash of $19.7 million upon approval of our submitted claims by the U.K. tax authorities as a component of other income, net on the consolidated statement of operations. In December 2021, we submitted a claim for $12.4 million related to eligible R&D activities incurred in our 2019 tax year and the amount was recognized as other income for the year ended December 31, 2021. As of December 31, 2021, a $12.4 million receivable was recorded within other current assets on the consolidated balance sheets. For our 2020 tax year, we have not yet decided whether to seek tax relief by surrendering some of our losses for a tax credit cash rebate claim or electing to receive enhanced U.K. tax deductions on our eligible R&D activities. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventOn January 18, 2022, we entered into a definitive agreement and plan of merger (the Merger Agreement) with UCB S.A., a société anonyme formed under the laws of Belgium (UCB) and its subsidiary, Zinc Merger Sub, Inc., a Delaware corporation (Purchaser) pursuant to which, among other things, Purchaser will be merged with and into Zogenix (the Merger), with Zogenix surviving the Merger as a wholly-owned subsidiary of UCB, subject to the terms and conditions of the Merger Agreement. Under the terms of the Merger Agreement, and upon the terms and subject to the conditions thereof, Purchaser commenced a tender offer to purchase all of the outstanding common shares of Zogenix for (i) $26.00 per share in cash, without interest and less any applicable tax withholding, plus (ii) one non-transferrable contingent value right per common share representing the right to receive a contingent payment of $2.00 in cash, without interest and less any applicable tax withholding, which amount will become payable, if at all, if a specified milestone is achieved on or prior to December 31, 2023. The boards of directors of both Zogenix and UCB have unanimously approved the transaction.The obligation of UCB and Purchaser to consummate the tender offer is subject to the tender of a majority of our outstanding common shares in the Offer and other customary conditions. If these conditions are satisfied and the tender offer closes, Purchaser will acquire any remaining shares through a merger pursuant to section 251(h) of the Delaware General Corporate Law. The completion of the Merger is subject to customary conditions, including, among others, the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, the absence of any order or law that has the effect of enjoining or otherwise prohibiting the completion of the Merger, each party’s representations and warranties being true and correct as of the closing, generally to a “Material Adverse Effect” standard. The Merger Agreement provides for a termination fee of $59.0 million payable by us under certain circumstances, including if we terminate the Merger Agreement to accept a superior proposal and enter into a definitive written agreement with respect to such proposal |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The consolidated financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) |
Reclassifications | . |
Consolidation | The consolidated financial statements include the accounts of Zogenix Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
Variable Interest Entities | Variable Interest Entities We consolidate a variable interest entity (VIE) if we are the primary beneficiary, defined as the party that has both the power to direct the activities that most significantly impact the VIE’s economic performance and the |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated 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 Our revenues consist of product sales of Fintepla and revenues derived from our collaboration arrangement with Nippon Shinyaku Co., Ltd. (Shinyaku). See Note 3. Net Product Revenues We recognize revenue when control of the promised good or service is transferred to the customer, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. We determine revenue recognition through the following steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) we satisfy a performance obligation. We only apply the five-step model to contracts when collectability of the consideration to which we are entitled in exchange for the goods or services we transfer to the customer is determined to be probable. We distribute Fintepla in the U.S. through and arrangement with a specialty distributor who is our customer. The specialty distributor subsequently resells our product through its related specialty pharmacy provider to patients and health care providers. Separately, we have or may enter into payment arrangements with various third-party payers including pharmacy benefit managers, private healthcare insurers and government healthcare programs who provide coverage and reimbursement for our products that have been proscribed to a patient. We distribute Fintepla in Europe (currently in Germany and France) through a third-party logistics provider (3PL) for distribution to pharmacies in those countries. The pharmacies are our customers, who subsequently resell our product directly to patients and health care providers. Revenue from product sales is recorded at the net sales price (transaction price), which includes estimates of consideration payable to our customer and third-party payers for which reserves are established and that result from government rebates, chargebacks, co-pay assistance, prompt-payment discounts and other allowances that are offered under arrangements between us, our customer, and third-party payers related to the sales of Fintepla. These reserves are classified as either reductions of accounts receivable (if the amounts are payable to our customer) or as refund liabilities within current liabilities (if the amounts are payable to a party other than our customer). Amounts billed or invoiced are included in accounts receivable, net on our consolidated balance sheet. Under our current product sales arrangements, we do not have contract assets (unbilled receivables), as we generally invoice our customer before or at the time of revenue recognition, nor contract liabilities, as we do not receive prepayments from our customers prior to product delivery. We recognize product revenues when a customer obtains control of our product, which occurs at a point in time and is typically upon delivery to the customer or, in the case of products that are subject to consignment agreements, when the customer takes title of the product from our consigned inventory location for shipment directly to a patient or healthcare provider. In the event the variable consideration is constrained, we include an amount to the extent it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur in a future reporting period. Depending on the type of variable consideration, we use either the most likely method or expected value method to estimate variable consideration related to Fintepla product sales. We do not have any material constraints on our variable consideration included within the transaction price for Fintepla product sales. The actual amount of consideration ultimately received may differ from our estimates. If actual results in the future vary from estimates, the estimates will be adjusted, which will affect our revenue from net product sales in the period that such variances become known. Each unit of Fintepla that is ordered by our customers represent a separate performance obligation that is completed when the customer obtains control of our product. We record product revenues, net of variable consideration, any applicable constraint, and consideration payable to parties other the customer at that point in time. We record shipping and handling costs within cost of product sales on our consolidated statements of operations. We classify payments to customers or its affiliates for certain services, to the extent that the services provided are distinct from the sale of our product and we can reasonably estimate its fair value, as selling, general and administrative expenses on our consolidated statements of operations. We have elected to exclude taxes collected from our customers and remitted to governmental authorities from the measurement of the transaction price. We sell Fintepla to our customer at wholesale acquisition cost, and calculate product revenue from Fintepla sales, net of variable consideration and consideration payable to parties other than our customer. Variable consideration and consideration payable to parties other than the customer consists of estimates related to the following categories: Trade Discounts and Allowances : We provide customers with discounts for prompt payment and we also pay fees to our exclusive specialty distributor in the U.S. for distribution services rendered that are not distinct from product sales. We expect customers to earn these discounts and fees, and accordingly we deduct these discounts and fees in full from our gross product revenue and accounts receivable at the time we recognize the related revenue. Government Rebates : Fintepla is eligible for purchase by, or qualifies for reimbursement from, Medicaid and other U.S. and foreign government programs that are eligible for rebates on the price they pay for Fintepla. To determine the appropriate amount to reserve for these rebates, we identify the government-funded health insurer of patients who receive Fintepla as sold by our customers, apply the applicable government discount to these sales, and estimate the portion of total rebates that we anticipate will be claimed. Other Rebates and Chargebacks : We may contract with various third-party payers for coverage and reimbursement of Fintepla. We estimate the rebates and chargebacks that we expect to be obligated to provide to such third-party payers based upon the terms of the applicable arrangement or negotiations with such third-party payers and our visibility regarding the payer mix. Patient Assistance Program : We provide financial assistance to eligible patients whose insurance policies have high deductibles or co-payments and deduct our estimate of the amount of such assistance from gross product revenue. Product Returns : In the U.S., we do not provide contractual return rights to our customer, except in instances where the product is damaged or defective, which we expect to be rare. In Europe, our customers have limited return rights. Because of the pricing of Fintepla and the limited number of patients, the retail pharmacies carry a limited inventory. Based on these factors and the fact that we have not experienced significant product returns to date, management has concluded that product returns will be minimal. In the future, if any of these factors and/or the history of product returns change, an allowance for product returns may be required. Collaboration Revenue 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. Cost of Product Sales (Excluding Intangible Asset Amortization) Cost of product sales (excluding intangible asset amortization) includes the cost of producing and distributing inventories that are related to product revenues during the respective period (including salary-related and stock-based compensation expenses for employees involved with production and distribution, freight and indirect overhead costs) and third-party royalties payable on our net product revenues. Cost of product sales may also include costs related to excess or obsolete inventory adjustment charges, abnormal costs, unabsorbed manufacturing and overhead costs, and manufacturing variances. |
Accounts Receivable, Net | Accounts Receivable, Net We record accounts receivable, net of certain fees paid to our customer for distribution services rendered to us that are not distinct from sales of product to our customer, prompt payment discounts and chargebacks based on contractual terms. We are also subject to credit risk from our accounts receivable related to our product sales. Accounts receivable are stated net of an allowance that reflects our current estimate of credit losses expected to occur over the life of the receivable. In developing our allowance for expected credit losses, we use assumptions to capture the risk of loss, even if remote, based on a number of factors including existing contractual payment terms, individual customer circumstances, historical payment patterns of our customers, a review of the local economic environment and its potential impact on expected future customer payment patterns. The payment terms on our trade receivables are relatively short, generally 30 days. As a result, our collection risk is mitigated to a certain extent by the fact that sales are collected in a relatively short period of time, allowing for the ability to reduce exposure on defaults if collection issues are identified. As of December 31, 2021 and 2020, our sole specialty distributor customer in the U.S. accounted for approximately 83% and 100% of our accounts receivable, net. On a quarterly basis, we update our allowance as necessary to reflect expected credit losses over the remaining lives of the accounts receivable for outstanding trade receivables that are past due, have known disputes or have experienced any negative credit events that may result in future collectability issues. We do not currently expect our current or future exposures to credit losses to have a significant impact on us. The estimated allowance for expected credit losses was not material as of December 31, 2021 or 2020, nor were the changes to the allowance during any of the periods presented. However, our customers’ ability to pay us on a timely basis, or at all, could be affected by factors specific to their respective businesses and/or by economic conditions, including those related to the COVID-19 pandemic, the extent of which cannot be fully predicted. |
Inventory | Inventory Inventory is recorded at the lower of cost or net realizable value, with cost determined on a first-in, first-out basis. Inventory costs include third-party contract manufacturing, third-party packaging services, freight, salaries, wages and stock-based compensation for personnel involved in the manufacturing process, and indirect overhead costs. We periodically review our inventories to identify obsolete, slow moving, excess or otherwise unsaleable items. If obsolete, slow moving, excess or unsaleable items are observed and there are no alternate uses for the inventory, we record a write-down to net realizable value. The determination of net realizable value requires judgment including consideration of many factors, such as estimates of future product demand, product net selling prices, current and future market conditions and potential product obsolescence, among others. Prior to regulatory approval, we expense costs associated with the manufacture of our product candidates to research and development expense unless we are reasonably certain such costs have future commercial use and net realizable value. Since we consider attaining regulatory approval of a product candidate to be highly uncertain and difficult to predict, we expect only in rare instances will pre-launch inventory be capitalized, if at all. |
Acquisitions | 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. |
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, promissory note receivable, 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 Note 7 for financial instruments measured or disclosed at fair value for marketable securities, contingent consideration liabilities and our convertible senior notes. |
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 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 periodically assess our available-for-sale marketable securities for impairment. For debt securities in an unrealized loss position, this assessment first takes into account our intent to sell, or whether it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis. If either of these criteria are met, the debt security’s amortized cost basis is written down to fair value through interest and other, net. For debt securities in an unrealized loss position that do not meet the aforementioned criteria, we assess whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, we consider the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and any adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss may exist, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses will be recorded in other income (expense), net, limited by the amount that the fair value is less than the amortized cost basis. Any additional impairment not recorded through an allowance for credit losses is recognized in other comprehensive loss. Changes in the allowance for credit losses are recorded as provision for (or reversal of) credit loss expense. Losses are charged against the allowance when management believes the uncollectability of an available-for-sale security is confirmed or when either of the criteria regarding intent or requirement to sell is met. These changes are recorded in other income (expense), net. |
Concentration of Credit Risk, Concentration of Supplier Risk, and Impact of COVID-19 Pandemic | Concentration of Credit Risk As is common in the pharmaceutical industry for products treating rare diseases, Fintepla is distributed through exclusive arrangements with a specialty distributor in the U.S. and through a third-party logistics (3PL) provider who distributes to pharmacies throughout Europe (currently, in Germany and France). As a result, our accounts receivable balance at December 31, 2021 and 2020 is highly concentrated with our U.S. customer, who accounted for 83% and 100% of the balance, respectively. In addition, our investments in cash equivalents and marketable securities potentially subject us to concentrations of credit risk. 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 creditworthiness 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) or supplemental NDA (sNDA) 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 approved products or product candidates for clinical trials. Impact of COVID-19 Pandemic The full extent to which the ongoing coronavirus disease 2019 (COVID-19 pandemic) will directly or indirectly impact our business continues to evolve and its results on our operations and financial condition, will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning COVID-19, including any related variants, and the actions taken to contain it or treat COVID-19. Our ability to successfully commercialize and generate revenue from Fintepla may be directly or indirectly impacted by the COVID-19 pandemic. In addition to our ongoing launch of Fintepla for Dravet syndrome in existing and new markets, we are preparing for a potential product launch of Fintepla for LGS in the U.S., which the FDA granted our supplemental New Drug Application (sNDA) Priority Review with a Prescription Drug User Fee Act (PDUFA) target action date in March 2022. While restrictive safety measures are in place, our sales professionals did not have the same level of in-person interactions with physicians and healthcare providers to conduct educational and promotional activities for Fintepla as they would have absent the COVID-19 pandemic. In response, we have implemented a virtual sales model to supplement traditional means of customer engagement. Although some of these restrictions have been, and may continue to be lifted in certain jurisdictions, the impact of prior and continued COVID-19 related safety measures, and the potential for re-imposition of restrictions due to local surges and new waves of infection, including those caused by certain variants of the virus, may adversely affect the ability of our sales professionals to effectively market Fintepla, which may have a negative impact on our sales and our market penetration. In addition, the evolving COVID-19 pandemic could directly or indirectly impact the pace of patient enrollment of our Phase 3 study of Fintepla for the treatment of seizures associated with CDKL5 syndrome (CDD), which we initiated in September 2021. To date, we have not experienced any significant interruptions in our ability to supply Fintepla for commercial use in Dravet syndrome or clinical trials for LGS, or MT1621 to our patients currently enrolled in our clinical trials. We currently do not anticipate any interruptions in supply. Any delays in the completion of our clinical trials and any disruption in our supply chain could have a material adverse effect on our business, results of operations and financial condition. As of December 31, 2021, the COVID-19 pandemic has not impacted the carrying values of our inventory, finite-lived intangible asset, goodwill, long-lived assets and right-of-use assets. Our future assessment of the magnitude and duration of COVID-19, as well as other factors, could result in material impacts to our consolidated financial statements in future reporting periods. Adjustments may be made in subsequent periods to reflect more current estimates and assumptions about matters that are inherently uncertain. Actual results may differ. |
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 Upon sale or retirement of the assets, the cost and related accumulated depreciation are removed from the consolidated balance sheet and the resulting gain or loss is recognized in the consolidated statement of operations. Expenditures for maintenance and repairs are expensed as incurred. |
Goodwill and Purchased Intangible Assets | Goodwill Goodwill represents the difference between the purchase price and the estimated fair value of the net assets acquired in a business acquisition. The goodwill balance of $6.2 million at December 31, 2021 and 2020 is directly attributable to our acquisition of Brabant Pharma Limited (Brabant) in 2014 to obtain worldwide development and commercialization rights to Fintepla. 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 the year ended December 31, 2021, 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, 2021 by a significant amount and we determined our goodwill was not impaired. There were no goodwill impairment charges for all periods presented. Purchased Intangible Asset In connection with the acquisition of Brabant, we also recorded an in-process research and development (IPR&D) asset with an estimated fair value of $102.5 million on the acquisition date. Intangible assets acquired in a business combination related to IPR&D projects are considered to be indefinite-lived until the completion or abandonment of the associated research and development efforts. In connection with the FDA’s approval of Fintepla for marketing in June 2020, we determined the project under development was considered complete and its useful life was no longer indefinite. Prior to the commencement of amortization over its estimated useful life, we performed a final impairment test utilizing a qualitative test and determined there was no impairment. Intangible assets subject to amortization are assessed for impairment as long-lived assets. Finite-lived intangible assets are amortized using the method that best reflects how their economic benefits are utilized or, if a pattern of economic benefits cannot be reliably determined, on a straight-line basis over their estimated useful lives (see Note 9). |
Impairment Assessments Related to Long-Lived Assets | Impairment Assessments Related to Long-Lived Assets Long-lived assets, including finite-lived intangible assets and 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 their 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. If we determine that events and circumstances warrant a revision to the remaining period of amortization or depreciation for a specific long-lived asset, its remaining estimated useful life will be revised, and the remaining carrying amount of the long-lived asset will be depreciated or amortized prospectively over the revised remaining estimated useful life. There were no impairment charges or changes to estimated useful lives for long-lived assets (groups) for all periods presented. |
Leases | Leases We determine whether the contract 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 a term greater than one year are included in operating lease right-of-use assets (ROU asset), current portion of lease liabilities, and lease liabilities, net of current portion in our consolidated balance sheet. 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. 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 do not separate lease components from non-lease components for all existing lease classes. We also do not record leases on our consolidated balance sheets when a lease has a term of one year or less. |
Contingent Consideration Related to Business Acquisitions | Contingent Consideration Related to Business Acquisitions In connection with the acquisition of Brabant in 2014, we may be required to pay future consideration that is contingent upon the achievement of specified development, regulatory approval and sales-based milestone events for Fintepla. Prior to regulatory approval, we estimate the fair value of contingent consideration liabilities using a probability-weighted discounted cash flow analysis, which reflects the probability and timing of future payments and a risk-adjusted discount rate. 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. Adjustments to the estimated fair value of contingent consideration are included within operating expenses in the consolidated statements of operations. 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. 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 consolidated results of operations in a reporting period and actual results may differ from estimates. For example, increases in the projected product revenues would decrease the time to payment and bring the contingent consideration liability closer to its undiscounted amount; decreases in these items would have the opposite effect. Increases in the discount rate or to the projected timing of payments would bring the contingent consideration liability further from its undiscounted amount; decreases in these items would have the opposite effect. |
Segment Information | Segment InformationOperating 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 operating segment engaged in 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 U.S. |
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 regulatory approval, license fees prior to regulatory 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 regulatory 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) 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, 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. |
Advertising Costs | Advertising Costs Advertising costs, which include promotional expenses are expensed as incurred and recorded within selling, general and administrative expenses. For the years ended December 31, 2021 and 2020, advertising costs totaled $4.4 million and $1.6 million. |
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 Transactions We have certain foreign operations where their functional currency was determined to be their local currency. For these foreign subsidiaries, the local currency of their monetary 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 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 subsidiary’s functional currency in other income (expense), net in the consolidated statements of operations. |
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, reclassification adjustments from realization of gain (loss) on sale of marketable securities included in net loss and foreign currency translation adjustments. |
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. Stock-based compensation is classified in the accompanying statements of operations based on the function to which the related services are provided. 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. 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. 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. |
Net Loss per Share | Net Loss per Share Basic net loss per share is calculated by dividing the net loss by the weighted average number of shares of common stock outstanding during the period, without consideration of common stock equivalents. Diluted net loss per share is the same as basic net loss per share, since the effects of potentially dilutive securities are antidilutive given our net loss. |
Accounting Pronouncements Issued But Not Yet Effective | Accounting Pronouncements Issued But Not Yet Effective Account Standard Update (ASU) 2020-06, Debt — Debt with Conversion and Other Options (subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (subtopic 815-40) (ASU 2020-06) simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible debt instruments with cash conversion features. Specifically, ASU 2020-06 removes the existing guidance that we currently follow for our convertible senior notes, which requires entities to account for cash conversion features in equity separately from the host contract. These amendments are expected to result in more freestanding financial instruments qualifying for equity classification and, as a result, not accounted for as derivatives, as well as fewer embedded features requiring separate accounting from the host contract. In addition, ASU 2020-06 eliminates the treasury stock method when calculating diluted earnings per share for convertible instruments that can be settled in whole or in part with equity and requires the use of the if-converted method. Early adoption is permitted, but no earlier than the fiscal year beginning after December 15, 2020. The standard can be applied using a full or modified retrospective approach. ASU 2020-06 will be effective for us as of January 1, 2022. When effective, we expect the accounting for our convertible senior notes as a single unit of account will: i) increase the carrying value of our convertible notes to be closer to its outstanding principal balance, ii) decrease our interest expense over the expected life of the financial instrument, and iii) result in the debt instrument’s effective interest rate to be closer to the stated coupon rate. In addition, the use of the treasury stock method, which allows an entity with a stated policy of settling convertible instruments with a combination of cash and shares to exclude shares issuable upon conversion that it expects to settle with cash when calculating diluted earnings per share, is no longer permitted. Even if we have the intent and ability to settle conversions by paying the conversion value in cash, up to the principal amount being converted and any excess in shares, the adoption of ASU 2020-06 will require that we presume such instruments will be settled by issuance of shares (the “if-converted method”). As a result, our diluted earnings per share under ASU 2020-06 may be lower than if we were able to apply the treasury stock method when calculating the dilutive effect of our senior convertible notes in earnings per share. We will adopt the new guidance in the annual period beginning January 1, 2022, on a modified retrospective basis. On the date of adoption, we expect to record a net decrease to additional paid-in capital of approximately $75.3 million to remove the equity component separately recorded for the conversion features associated with the convertible debt instruments and equity component associated with the issuance costs, an increase of approximately $65.6 million in the carrying value of our senior convertible notes to reflect the full principal amount of the Notes outstanding net of issuance costs, and a decrease of approximately $9.7 million to accumulated deficit. These preliminary estimates could change as we continue with our implementation efforts. We do not expect an impact to the our statements of operations or cash flows as the result of the adoption of this ASU. ASU 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities About Government Assistance . This ASU provided guidance to increase the transparency of government assistance including the disclosure of i) the types of assistance, ii) an entity’s accounting for the assistance, and iii) the effect of the assistance on an entity’s financial statements. Under the new guidance, an entity is required to provide the following annual disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy: i) information about the nature of the transactions and the related accounting policy used to account for the transactions, ii) the line items on the balance sheet and income statement that are affected by the transactions, and the amounts applicable to each financial statement line item and, iii) significant terms and conditions of the transactions, including commitments and contingencies. This update is effective for us on January 1, 2022, with early adoption permitted. The amendments should be applied either i) prospectively to all transactions within the scope of the amendments that are reflected in financial statements at the date of initial application and new transactions that are entered into after the date of initial application or ii) retrospectively to those transactions. We have not yet adopted this standard, but have described in Note 18, the U.K.’s R&D Tax Relief Scheme from which we benefit. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
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 |
Revenues (Tables)
Revenues (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Disaggregation of Revenue [Abstract] | |
Schedule of Net Product Sales of Fintepla Disaggregated by Geographical Area | The following table presents our net product sales of Fintepla disaggregated by geographical area: Year Ended December 31, (In thousands) 2021 2020 United States $ 65,683 $ 9,587 Europe 9,057 — Total net product sales $ 74,740 $ 9,587 |
Revenue Provisions, and Credits or Payments for Sales-related Deductions | The following table summarizes the provisions, and credits/payments, for sales-related deductions. (In thousands) Rebates Trade Discounts, Distributor Fees and Other Total Balance at December 31, 2019 $ — $ — $ — Provisions 1,203 380 1,583 Credits/payments (42) (251) (293) Balance at December 31, 2020 $ 1,161 $ 129 $ 1,290 Provisions 10,096 2,775 12,872 Credits/payments (6,972) (2,679) (9,651) Balance at December 31, 2021 4,285 225 4,511 |
Cash and Cash Equivalents, an_2
Cash and Cash Equivalents, and Marketable Securities (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
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 and cash equivalents and marketable securities by major investment category: December 31, 2021 (In thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Cash and cash equivalents: Cash $ 32,852 $ — $ — $ 32,852 Money market funds 29,991 — — 29,991 Commercial paper 35,337 — — 35,337 Certificates of deposit 3,000 — — 3,000 Total cash and cash equivalents 101,180 — — 101,180 Marketable securities: Commercial paper 141,718 — — 141,718 Certificates of deposit 32,253 — — 32,253 U.S. Government-sponsored enterprises debt securities 6,200 — — 6,200 Corporate debt securities 20,377 — (13) 20,364 Total marketable securities 200,548 — (13) 200,535 Total cash and cash equivalents and marketable securities $ 301,728 $ — $ (13) $ 301,715 As of December 31, 2021, all investments in marketable securities have contractual maturities due within one year. We regularly review our available-for-sale marketable securities in an unrealized loss position and evaluate the current expected credit loss by considering factors such as historical experience, market data, issuer-specific factors, and current economic conditions. As of December 31, 2021, the aggregate difference between the amortized cost and fair value of each security in an unrealized loss position was de minimis. Since any provision for expected credit losses for a security held is limited to the amount the fair value is less than its amortized cost, no allowance for expected credit loss was deemed necessary at December 31, 2021. December 31, 2020 (In thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Cash and cash equivalents: Cash $ 23,887 $ — $ — $ 23,887 Money market funds 80,986 — — 80,986 Commercial paper 61,043 — — 61,043 Certificates of deposit 1,000 — — 1,000 Total cash and cash equivalents 166,916 — — 166,916 Marketable securities: U.S. Treasuries 43,050 1 (1) 43,050 Commercial paper 210,986 — — 210,986 Certificates of deposit 44,480 — — 44,480 U.S. Government-sponsored enterprises debt securities 6,200 17 — 6,217 Corporate debt securities 33,288 172 — 33,460 Total marketable securities 338,004 190 (1) 338,193 Total cash and cash equivalents and marketable securities $ 504,920 $ 190 $ (1) $ 505,109 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
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, 2021 and 2020: December 31, 2021 (In thousands) Level 1 Level 2 Level 3 Total Assets: Cash equivalents: Money market funds $ 29,991 $ — $ — $ 29,991 Commercial paper — 35,337 — 35,337 Certificates of deposit — 3,000 — 3,000 Marketable securities: Commercial paper — 141,718 — 141,718 Certificates of deposit — 32,253 — 32,253 U.S. Government-sponsored enterprises debt securities — 6,200 — 6,200 Corporate debt securities — 20,364 — 20,364 Total assets $ 29,991 $ 238,872 $ — $ 268,863 Liabilities: Contingent consideration — — $ 35,285 $ 35,285 Total liabilities $ — $ — $ 35,285 $ 35,285 December 31, 2020 (In thousands) Level 1 Level 2 Level 3 Total Assets: Cash equivalents: Money market funds $ 80,986 $ — $ — $ 80,986 Commercial paper — 61,043 — 61,043 Certificates of deposit — 1,000 — 1,000 Marketable securities: U.S. Treasuries — 43,050 — 43,050 Commercial paper — 210,986 — 210,986 Certificates of deposit — 44,480 — 44,480 U.S. Government-sponsored enterprises debt securities — 6,217 — 6,217 Corporate debt securities — 33,460 — 33,460 Total assets $ 80,986 $ 400,236 $ — $ 481,222 Liabilities: Contingent consideration — — $ 42,400 $ 42,400 Total liabilities $ — $ — $ 42,400 $ 42,400 Level 1 and Level 2 Valuation Inputs Level 1 and Level 2 financial instruments are comprised of investments in money market funds and fixed-income securities. We estimate the fair value of our Level 2 financial instruments 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. Level 3 Valuation Inputs Contingent Consideration Our financial liabilities valued based upon Level 3 inputs are comprised of the contingent consideration arrangement related to the business acquisition of Brabant in October 2014 which included the intellectual property rights for our product, Fintepla (fenfluramine). Under the arrangement, we may be required to pay future consideration that is contingent upon the achievement of specified development, regulatory approval and sales-based milestone events for Fintepla. Prior to regulatory approval, we estimate the fair value of contingent consideration liabilities using a probability-weighted discounted cash flow analysis, which reflects the probability and timing of future payments and a risk-adjusted discount rate. This fair value measurement is based on Level 3 inputs such as the probability and anticipated timelines of achieving milestones related to development, regulatory approvals and product sales goals. The resulting probability-weighted cash flows are discounted at risk-adjusted rates. Following the achievements of regulatory approval milestones and upon commencement of product sales, the fair value measurement is based on projected product sales (based on internal operational budgets and long-range strategic plans), discount rates and projected payment dates. |
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, 2021 and 2020: December 31, 2021 (In thousands) Level 1 Level 2 Level 3 Total Assets: Cash equivalents: Money market funds $ 29,991 $ — $ — $ 29,991 Commercial paper — 35,337 — 35,337 Certificates of deposit — 3,000 — 3,000 Marketable securities: Commercial paper — 141,718 — 141,718 Certificates of deposit — 32,253 — 32,253 U.S. Government-sponsored enterprises debt securities — 6,200 — 6,200 Corporate debt securities — 20,364 — 20,364 Total assets $ 29,991 $ 238,872 $ — $ 268,863 Liabilities: Contingent consideration — — $ 35,285 $ 35,285 Total liabilities $ — $ — $ 35,285 $ 35,285 December 31, 2020 (In thousands) Level 1 Level 2 Level 3 Total Assets: Cash equivalents: Money market funds $ 80,986 $ — $ — $ 80,986 Commercial paper — 61,043 — 61,043 Certificates of deposit — 1,000 — 1,000 Marketable securities: U.S. Treasuries — 43,050 — 43,050 Commercial paper — 210,986 — 210,986 Certificates of deposit — 44,480 — 44,480 U.S. Government-sponsored enterprises debt securities — 6,217 — 6,217 Corporate debt securities — 33,460 — 33,460 Total assets $ 80,986 $ 400,236 $ — $ 481,222 Liabilities: Contingent consideration — — $ 42,400 $ 42,400 Total liabilities $ — $ — $ 42,400 $ 42,400 Level 1 and Level 2 Valuation Inputs Level 1 and Level 2 financial instruments are comprised of investments in money market funds and fixed-income securities. We estimate the fair value of our Level 2 financial instruments 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. Level 3 Valuation Inputs Contingent Consideration Our financial liabilities valued based upon Level 3 inputs are comprised of the contingent consideration arrangement related to the business acquisition of Brabant in October 2014 which included the intellectual property rights for our product, Fintepla (fenfluramine). Under the arrangement, we may be required to pay future consideration that is contingent upon the achievement of specified development, regulatory approval and sales-based milestone events for Fintepla. Prior to regulatory approval, we estimate the fair value of contingent consideration liabilities using a probability-weighted discounted cash flow analysis, which reflects the probability and timing of future payments and a risk-adjusted discount rate. This fair value measurement is based on Level 3 inputs such as the probability and anticipated timelines of achieving milestones related to development, regulatory approvals and product sales goals. The resulting probability-weighted cash flows are discounted at risk-adjusted rates. Following the achievements of regulatory approval milestones and upon commencement of product sales, the fair value measurement is based on projected product sales (based on internal operational budgets and long-range strategic plans), discount rates and projected payment dates. |
Reconciliation of Liabilities Measured at Fair Value Using Significant Observable Inputs (Level 3) | The following table provides a reconciliation of contingent consideration liabilities measured at fair value on a recurring basis using unobservable inputs (Level 3) for the years ended December 31, 2021 and 2020: (In thousands) Contingent Consideration Balance at December 31, 2019 63,800 Settlements (1) (30,000) Changes in fair value 8,600 Balance at December 31, 2020 42,400 Settlements (1) (9,000) Changes in fair value 1,885 Balance at December 31, 2021 $ 35,285 ———————————— (1) As of December 31, 2021 and 2020, outstanding obligations related to achieved milestones of $4.5 million and $15.0 million, respectively, were no longer contingent. As a result, the amounts have been reclassified from contingent consideration to accounts payable at December 31, 2021 and accrued and other current liabilities at December 31 2020 on the consolidated balance sheets. |
Reconciliation of Assets Measured at Fair Value Using Significant Observable Inputs (Level 3) | The following table provides a reconciliation of contingent consideration liabilities measured at fair value on a recurring basis using unobservable inputs (Level 3) for the years ended December 31, 2021 and 2020: (In thousands) Contingent Consideration Balance at December 31, 2019 63,800 Settlements (1) (30,000) Changes in fair value 8,600 Balance at December 31, 2020 42,400 Settlements (1) (9,000) Changes in fair value 1,885 Balance at December 31, 2021 $ 35,285 ———————————— (1) As of December 31, 2021 and 2020, outstanding obligations related to achieved milestones of $4.5 million and $15.0 million, respectively, were no longer contingent. As a result, the amounts have been reclassified from contingent consideration to accounts payable at December 31, 2021 and accrued and other current liabilities at December 31 2020 on the consolidated balance sheets. |
Significant Unobservable Inputs Used | The following table summarizes the unobservable inputs used in the fair value measurement of our contingent consideration liability as of December 31, 2021. Fair Value as of Valuation Technique Unobservable Input Range Weighted Average (1) Discount rate 0.0% — 2.0% 1.0% $35,285 Discounted cash flow Probability of payment 100% 100% Projected year of payment 2022 — 2023 2022 ———————————— (1) Unobservable inputs were weighted by the relative fair value of each sales-based milestone payment. |
Other Balance Sheet Details (Ta
Other Balance Sheet Details (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Balance Sheet Related Disclosures [Abstract] | |
Inventory | nventory consists of the following: December 31, (In thousands) 2021 2020 Raw materials $ 1,301 $ 391 Work in process 2,387 243 Finished goods 1,804 392 Total $ 5,492 $ 1,026 |
Other Current Assets | Other current assets consist of the following: December 31, (In thousands) 2021 2020 Receivable for U.K. R&D tax relief scheme $ 12,359 $ — Note receivable from Tevard 5,000 — Receivable under collaboration agreement 3,000 1,500 Other 4,376 3,436 Total $ 24,735 $ 4,936 |
Property and Equipment, Net | Property and equipment, net consists of the following: December 31, (In thousands) 2021 2020 Computer equipment and software $ 233 $ 429 Leasehold improvements 9,998 9,835 Furniture and fixtures 1,134 1,266 Total 11,365 11,530 Less accumulated depreciation (4,168) (2,806) Property and equipment, net $ 7,197 $ 8,724 |
Other Long-Term Liabilities | Accrued and other current liabilities consist of the following: December 31, (In thousands) 2021 2020 Accrued clinical trial costs $ 13,537 $ 16,477 Accrued compensation 16,399 10,917 Accrued milestone payment — 15,000 Accrued license amendment fee 7,000 — Accrued royalties 4,250 479 Other accrued liabilities 14,227 12,091 Total $ 55,413 $ 54,964 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | The following table provides details of the carrying amount of our intangible asset: December 31, (In thousands) 2021 2020 Finite-lived intangible asset $ 102,500 $ 102,500 Accumulated amortization (11,827) (3,942) Net carrying value $ 90,673 $ 98,558 |
Schedule of Intangible Assets | The following table provides details of the carrying amount of our intangible asset: December 31, (In thousands) 2021 2020 Finite-lived intangible asset $ 102,500 $ 102,500 Accumulated amortization (11,827) (3,942) Net carrying value $ 90,673 $ 98,558 |
Schedule of estimated future amortization of intangible assets | As of December 31, 2021, the carrying value of the intangible asset will be amortized over its estimated remaining useful life of 11.5 years as follows: (In thousands) Amortization Expense 2022 $ 7,885 2023 7,885 2024 7,885 2025 7,885 2026 7,885 Thereafter 51,248 Total $ 90,673 |
Convertible Senior Notes (Table
Convertible Senior Notes (Table) | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | The following table provides information on the Notes balance: December 31, (In thousands) 2021 2020 Liability component Principal amount of Notes $ 230,000 $ 230,000 Less: Unamortized debt discount and issuance costs (71,835) (80,647) Net carrying amount $ 158,165 $ 149,353 Equity component — net carrying value $ 75,333 $ 75,333 Interest expense related to the Notes was included in other income (expense), net on the consolidated statements of operations as follows: Year Ended December 31, (In thousands) 2021 2020 Contractual coupon interest $ 8,811 $ 1,600 Amortization of debt discount and issuance costs 6,359 2,143 Total interest expense $ 15,170 $ 3,743 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Components of lease costs | The components of lease expense were as follows: Year Ended December 31, (In thousands) 2021 2020 2019 Components of lease costs: Operating lease cost $ 1,799 $ 1,989 $ 2,045 Short-term lease cost 438 444 851 Sublease income — (115) (580) Total lease expense $ 2,237 $ 2,318 $ 2,316 Supplemental cash flow information related to operating leases was as follows: Year Ended December 31, (In thousands) 2021 2020 2019 Cash used in operating activities: Cash paid for amounts included in the measurement of lease liabilities $ 2,330 $ 2,178 $ 1,842 Noncash investing activities: Right-of-use lease assets obtained in exchange for new lease liabilities — 1,156 354 |
Supplemental balance sheet information related to operating leases | Supplemental balance sheet information related to leases was as follows: December 31, (In thousands) 2021 2020 Right-of-use assets $ 6,605 $ 7,748 Current portion of operating lease liabilities 1,694 1,688 Operating lease liabilities, net of current portion 8,617 10,314 Total operating lease liabilities $ 10,311 $ 12,002 Weighted average remaining lease term (in years) 5.2 6.0 Weighted average discount rate, weighted based on the remaining balance of lease payments 6.2 % 6.2 % |
Maturities of operating lease liabilities | The following table reconciles the undiscounted future lease payments under noncancelable operating leases with terms of more than one year to the total operating lease liabilities recognized on the consolidated balance sheet as of December 31, 2021 (in thousands): Years Ending December 31: Operating Leases 2022 $ 2,261 2023 2,318 2024 2,326 2025 2,070 2026 2,132 2027 899 Total lease payments 12,006 Less: imputed interest (1,695) Total operating lease liabilities $ 10,311 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Summary of Common Stock Reserved for Future Issuance | The following table presents common stock reserved for future issuance for the following financial instruments: December 31, (In thousands) 2021 2020 Outstanding stock options and stock unit awards 7,790 5,703 Warrants to purchase common stock — 28 Reserved for future grants under employee equity plans 6,914 3,899 Reserved for issuance upon conversion of convertible senior notes 12,313 12,313 Total 27,017 21,943 |
Schedule of Accumulated Other Comprehensive Income | A summary of changes in the balances of each component of accumulated other comprehensive loss, net of tax, follows: (In thousands) Net Unrealized Gains (Losses) on Marketable Securities Foreign Currency Translation Adjustments Accumulated Other Comprehensive Income Balance at December 31, 2018 3 — 3 Amounts arising during the period 702 — 702 Reclassification adjustments (326) — (326) Balance at December 31, 2019 379 — 379 Amounts arising during the period (197) (260) (457) Reclassification adjustments 7 — 7 Balance at December 31, 2020 $ 189 $ (260) $ (71) Amounts arising during the period (202) 288 86 Balance at December 31, 2021 $ (13) $ 28 $ 15 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock Options Activity | The following table summarizes our stock option activity for the year ended December 31, 2021: Shares (in thousands) Weighted Average Exercise Price Weighted Average Remaining Contractual Term (years) Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2020 5,311 $ 29.12 Granted 1,833 17.79 Exercised (58) 10.08 Canceled (401) 28.71 Outstanding at December 31, 2021 6,685 $ 26.20 6.9 $ 7,926 Exercisable at December 31, 2021 4,101 $ 27.00 5.7 $ 7,232 |
Schedule of Restricted Stock Units Activity | The following table summarizes our stock unit awards activity for the year ended December 31, 2021: RSUs PSUs Shares (in thousands) Weighted Average Shares (in thousands) Weighted Average Nonvested at December 31, 2020 393 $ 37.68 — $ — Granted 616 17.66 494 19.53 Vested (144) 39.98 (152) 19.85 Canceled (61) 25.24 (42) 19.99 Nonvested at December 31, 2021 804 $ 22.85 300 $ 19.30 |
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, 2021 2020 2019 Risk free interest rate 0.5% to 1.4% 0.3% to 1.8% 1.4% to 2.6% Expected term 5.3 to 6.1 years 5.3 to 6.1 years 5.3 to 6.1 years Expected volatility 70.0% to 73.7% 73.2% to 76.7% 73.5% to 82.3% Expected dividend yield —% —% —% Weighted-average fair value of option on grant date $11.36 $17.86 $32.64 |
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: Year Ended December 31, (In thousands) 2021 2020 2019 Research and development 12,962 12,139 8,293 Selling, general and administrative 22,501 17,037 12,954 Total $ 35,463 $ 29,176 $ 21,247 Stock-based compensation of $1.0 million was capitalized into inventory for the year ended December 31, 2021. |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Basic and diluted net loss per share | The following table presents the computation of basic and diluted loss per share (in thousands, except per share amounts): Year Ended December 31, 2021 2020 2019 Numerator Net loss $ (227,413) $ (209,383) $ (419,503) Denominator Weighted average common shares outstanding, basic and diluted 55,880 53,706 43,078 Net loss per share, basic and diluted $ (4.07) $ (3.90) $ (9.74) |
Schedule of antidilutive securities excluded from computation of diluted net loss per share | The following table presents the potential common shares outstanding that were excluded from the computation of diluted loss per share of common stock for the periods presented because including them would have been antidilutive: Year Ended December 31, (In thousands) 2021 2020 2019 Shares subject to outstanding stock options 6,242 4,966 4,085 Shares subject to outstanding RSUs and PSUs 1,051 464 382 Shares subject to outstanding warrants to purchase common stock 15 28 28 Shares issuable upon conversion of Notes 9,471 4,415 — Total 16,779 9,873 4,495 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
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 are presented in the following table. Year Ended December 31, (In thousands) 2021 2020 2019 United States $ (193,176) $ (170,812) $ (325,769) Foreign (34,132) (55,996) (93,734) Total $ (227,308) $ (226,808) $ (419,503) |
Summary of Tax Credit Carryforwards | The following table summarizes carryforwards of net operating losses and tax credits as of December 31, 2021. (in millions) Amount Federal net operating losses $ 669.2 State net operating losses 427.7 Foreign net operating losses 289.2 Federal research and development credits 6.4 State research and development credits 4.2 Orphan drug research and development credits 2.0 |
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, 2021 2020 2019 Income tax at federal statutory rate $ (47,735) $ (47,630) $ (88,096) State taxes, net of federal benefit (5,803) (4,316) (65) Non-deductible acquired IPR&D charge and other expenses (1) — — 52,044 Change in valuation allowance 54,799 40,039 21,155 Impact of foreign rate change on deferred taxes (12,405) (2,950) 1,887 Other permanent differences 2,117 3,993 4,101 State tax rate benefit 164 (1,346) (18) Foreign rate differential 393 752 1,883 Stock-based compensation 2,484 1,180 (2,674) Net operating losses surrendered under U.K.’s R&D tax relief scheme — — 9,349 State apportionment adjustments 482 (2,673) 48 Impact of foreign exchange rate differences 5,679 (4,532) — Credits and other (70) 58 386 Income tax expense (benefit) $ 105 $ (17,425) $ — (1) Represents amounts attributable to our asset acquisition of Modis. See Note 4 for additional information. |
Schedule of Deferred Tax Assets | The significant components of deferred tax assets (liabilities) are as follows: December 31, (In thousands) 2021 2020 Deferred tax assets: Federal, state and foreign net operating loss carryforwards $ 237,708 $ 186,963 Capitalized research and development 666 486 Accrued expenses 5,895 2,498 Research and development credits 5,343 5,343 Amortization 2,718 2,949 Lease liability 2,291 2,534 Stock-based compensation 10,212 7,878 Other, net 2,523 2,690 Total deferred tax assets 267,356 211,341 Less: valuation allowance (231,335) (176,594) Total deferred tax assets, net of valuation allowance $ 36,021 $ 34,747 Deferred tax liabilities: Operating lease right-of-use asset $ (1,423) $ (1,585) IPR&D (18,573) (15,857) Discount on Notes (16,025) (17,305) Total deferred tax liabilities (36,021) (34,747) Total net deferred tax liabilities $ — $ — |
Summary of Unrecognized Tax Benefits | The following table summarizes the activity related to our unrecognized tax benefits (in thousands): December 31, 2021 2020 2019 Beginning balance of unrecognized tax benefits $ 3,638 $ 3,541 $ 1,487 Gross increases based on tax positions related to current year — — 1,495 Gross increases based on tax positions related to prior years 97 559 Gross decreases based on tax positions related to prior years — — — Settlements with taxing authorities — — — Expiration of statute of limitations — — — Ending balance of unrecognized tax benefits $ 3,638 $ 3,638 $ 3,541 |
Organization and Description _2
Organization and Description of Business (Detail) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021USD ($)programdivestiture | Dec. 31, 2020USD ($) | |
Business Acquisition, Contingent Consideration [Line Items] | ||
Number of development programs underway with other research institutions | program | 2 | |
Total cash, cash equivalents and marketable securities at fair value | $ 301,715 | $ 505,109 |
Number of discrete business divestitures | divestiture | 2 | |
Accumulated deficit | $ 1,552,253 | $ 1,324,840 |
Cash, cash equivalents and marketable securities balances, anticipated operating requirements | 12 months | |
Upon FDA approval | ||
Business Acquisition, Contingent Consideration [Line Items] | ||
Accrued for contingent consideration related to our acquisition | $ 100,000 | |
Upon EMA Approval in Europe | ||
Business Acquisition, Contingent Consideration [Line Items] | ||
Accrued for contingent consideration related to our acquisition | $ 50,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) | 12 Months Ended | ||||
Dec. 31, 2021USD ($)segment | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Jan. 01, 2022USD ($) | Dec. 31, 2018USD ($) | |
Property, Plant and Equipment [Line Items] | |||||
Standard payment terms | 30 days | ||||
Accounts receivable, net | $ 10,139,000 | $ 3,824,000 | |||
Goodwill | $ 6,234,000 | 6,234,000 | |||
Number of reporting units | segment | 1 | ||||
Number of operating segments | segment | 1 | ||||
Goodwill impairment | $ 0 | 0 | $ 0 | ||
Impairment of IPR&D | 0 | ||||
Finite-lived intangible asset | 102,500,000 | 102,500,000 | |||
Impairment of long-lived assets | $ 0 | 0 | 0 | ||
Non-lease term | 1 year | ||||
Advertising Expense | $ 4,400,000 | 1,600,000 | |||
Stockholders' deficit | 178,971,000 | 369,669,000 | 245,059,000 | $ 522,801,000 | |
Additional Paid-in Capital | |||||
Property, Plant and Equipment [Line Items] | |||||
Stockholders' deficit | 1,731,153,000 | 1,694,524,000 | 1,360,092,000 | 1,218,710,000 | |
Accumulated Deficit | |||||
Property, Plant and Equipment [Line Items] | |||||
Stockholders' deficit | (1,552,253,000) | $ (1,324,840,000) | $ (1,115,457,000) | $ (695,954,000) | |
Accounting Standards Update 2020-06 | Cumulative Effect, Period of Adoption, Adjustment | Planned adoption | |||||
Property, Plant and Equipment [Line Items] | |||||
Fair value of convertible debt | $ 65,600,000 | ||||
Accounting Standards Update 2020-06 | Cumulative Effect, Period of Adoption, Adjustment | Additional Paid-in Capital | Planned adoption | |||||
Property, Plant and Equipment [Line Items] | |||||
Stockholders' deficit | 75,300,000 | ||||
Accounting Standards Update 2020-06 | Cumulative Effect, Period of Adoption, Adjustment | Accumulated Deficit | Planned adoption | |||||
Property, Plant and Equipment [Line Items] | |||||
Stockholders' deficit | $ 9,700,000 | ||||
Shinyaku | |||||
Property, Plant and Equipment [Line Items] | |||||
Accounts receivable, net | $ 3,000,000 | ||||
Accounts Receivable | Customer Concentration Risk | U.S. Customer | |||||
Property, Plant and Equipment [Line Items] | |||||
Concentration percentage (percent) | 83.00% | 100.00% | |||
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 | ||||
IPR&D | |||||
Property, Plant and Equipment [Line Items] | |||||
Fair value of intangible assets acquired | $ 102,500,000 |
Revenue - Net Product Sales of
Revenue - Net Product Sales of Fintepla Disaggregated by Geographical Area (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||
Total net product sales | $ 74,740 | $ 9,587 |
United States | ||
Disaggregation of Revenue [Line Items] | ||
Total net product sales | 65,683 | 9,587 |
Europe | ||
Disaggregation of Revenue [Line Items] | ||
Total net product sales | $ 9,057 | $ 0 |
Revenues - Sales-related Provis
Revenues - Sales-related Provisions, Credits and Payments (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Sales-related Provisions, Credits and Payments [Roll Forward] | ||
Balance at beginning of period | $ 1,290 | $ 0 |
Provisions | 12,872 | 1,583 |
Credits/payments | 9,651 | (293) |
Balance at end of period | 4,511 | 1,290 |
Rebates | ||
Sales-related Provisions, Credits and Payments [Roll Forward] | ||
Balance at beginning of period | 1,161 | 0 |
Provisions | 10,096 | 1,203 |
Credits/payments | 6,972 | (42) |
Balance at end of period | 4,285 | 1,161 |
Trade Discounts, Distributor Fees and Other | ||
Sales-related Provisions, Credits and Payments [Roll Forward] | ||
Balance at beginning of period | 129 | 0 |
Provisions | 2,775 | 380 |
Credits/payments | 2,679 | (251) |
Balance at end of period | $ 225 | $ 129 |
Revenues - Narrative (Details)
Revenues - Narrative (Details) | 12 Months Ended | 22 Months Ended | |||
Dec. 31, 2021USD ($)representative | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2020USD ($) | Mar. 31, 2019USD ($) | |
Disaggregation of Revenue [Line Items] | |||||
Net product sales | $ 74,740,000 | $ 9,587,000 | $ 0 | ||
Number of joint steering committee (JSC) representatives | representative | 3 | ||||
Written notice period to the other party | 1 year | ||||
Total transaction price | $ 23,000,000 | ||||
Deferred revenue | $ 8,300,000 | ||||
Revenue recognized | $ 0 | ||||
U.S. Customer | Revenue | Customer Concentration Risk | |||||
Disaggregation of Revenue [Line Items] | |||||
Concentration percentage (percent) | 88.00% | 100.00% | |||
Fixed-price Contract | |||||
Disaggregation of Revenue [Line Items] | |||||
Payment due for collaborative agreement | $ 20,000,000 | $ 20,000,000 | |||
Variable Consideration Priced Contract | |||||
Disaggregation of Revenue [Line Items] | |||||
Payment due for collaborative agreement | 3,000,000 | ||||
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 | ||||
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 |
Acquisitions (Details)
Acquisitions (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Asset Acquisition [Line Items] | ||||
Cash payments for asset acquisitions | $ 0 | $ 10,700 | $ 179,624 | |
Modis Acquisition | ||||
Asset Acquisition [Line Items] | ||||
Consideration transferred | $ 246,500 | |||
Cash payments for asset acquisitions | 175,500 | |||
Net working capital adjustment receivable | 600 | |||
Acquisition holdback 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 | |||
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 | |||
Aggregate upfront consideration | $ 3,500 | |||
Common Stock | Modis Acquisition | ||||
Asset Acquisition [Line Items] | ||||
Shares issued as part of asset acquisition consideration (shares) | 1,595,025 | |||
Fair value of stock issued for asset acquisition | $ 68,100 |
Strategic License Agreements (D
Strategic License Agreements (Details) $ in Thousands | Sep. 26, 2019USD ($)institution | Feb. 28, 2022USD ($) | Oct. 31, 2021USD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||
Research and development expense | $ 0 | $ 10,700 | $ 251,437 | |||
Universities Of Antwerp And Leuven In Belgium (The Universities) And Amendment Fee | Strategic license agreement | ||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||
One-time amendment fee | $ 7,000 | |||||
Future regulatory and sales-based milestones payable rate (percent) | 15.00% | |||||
Refund liability | 7,000 | |||||
Universities Of Antwerp And Leuven In Belgium (The Universities) And Amendment Fee | Strategic license agreement | Subsequent Event | ||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||
Payment of one-time payment due for collaboration activities | $ 7,000 | |||||
Columbia University | ||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||
Amounts due or accrued | 0 | 0 | ||||
Two other research institutions | ||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||
Number of research institutions party to license agreement | institution | 2 | |||||
Amounts due or accrued | 0 | 0 | ||||
Tevard Biosciences | ||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||
Option agreement, amount paid | 5,500 | $ 2,000 | ||||
Collaboration agreement consideration | 5,200 | |||||
Promissory notes purchased | $ 5,000 | 5,000 | ||||
Advance notice needed | 180 days | |||||
Collaboration agreement, upfront payment | 10,200 | |||||
In progress research and development | $ 5,200 | |||||
Research and development expense | $ 3,500 | $ 700 | ||||
Tevard Biosciences | Convertible Note Receivable | ||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||
Interest rate (percent) | 3.50% | |||||
Tevard Biosciences | Maximum | ||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||
Additional milestone payments | $ 100,000 | |||||
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 Regulatory Milestones | Modis Acquisition | Columbia University | ||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||
Contingent payment under license agreement | $ 2,900 | |||||
Upon Achievement of Certain Commercial Milestone Events | Two other research institutions | ||||||
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 | Two other research institutions | ||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||
Contingent payment under license agreement | $ 3,000 |
Cash and Cash Equivalents, an_3
Cash and Cash Equivalents, and Marketable Securities - Amortized Cost and Fair Value of Cash, Cash Equivalents and Marketable Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Cash and Cash Equivalents [Line Items] | ||
Cash | $ 32,852 | $ 23,887 |
Total cash and cash equivalents | 101,180 | 166,916 |
Amortized Cost | 200,548 | 338,004 |
Gross Unrealized Gains | 0 | 190 |
Gross Unrealized Losses | (13) | (1) |
Marketable securities | 200,535 | 338,193 |
Total cash and cash equivalents and marketable securities | 301,728 | 504,920 |
Total cash, cash equivalents and marketable securities at fair value | 301,715 | 505,109 |
Money market funds | ||
Cash and Cash Equivalents [Line Items] | ||
Cash equivalents | 29,991 | 80,986 |
Commercial paper | ||
Cash and Cash Equivalents [Line Items] | ||
Cash equivalents | 35,337 | 61,043 |
Amortized Cost | 141,718 | 210,986 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Marketable securities | 141,718 | 210,986 |
Certificates of deposit | ||
Cash and Cash Equivalents [Line Items] | ||
Cash equivalents | 3,000 | 1,000 |
Amortized Cost | 32,253 | 44,480 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Marketable securities | 32,253 | 44,480 |
U.S. Treasuries | ||
Cash and Cash Equivalents [Line Items] | ||
Amortized Cost | 43,050 | |
Gross Unrealized Gains | 1 | |
Gross Unrealized Losses | (1) | |
Marketable securities | 43,050 | |
U.S. Government-sponsored enterprises debt securities | ||
Cash and Cash Equivalents [Line Items] | ||
Amortized Cost | 6,200 | 6,200 |
Gross Unrealized Gains | 0 | 17 |
Gross Unrealized Losses | 0 | 0 |
Marketable securities | 6,200 | 6,217 |
Corporate debt securities | ||
Cash and Cash Equivalents [Line Items] | ||
Amortized Cost | 20,377 | 33,288 |
Gross Unrealized Gains | 0 | 172 |
Gross Unrealized Losses | (13) | 0 |
Marketable securities | $ 20,364 | $ 33,460 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | $ 200,535 | $ 338,193 |
Total assets | 268,863 | 481,222 |
Contingent consideration | 35,285 | 42,400 |
Total liabilities | 35,285 | 42,400 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 29,991 | 80,986 |
Contingent consideration | 0 | 0 |
Total liabilities | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 238,872 | 400,236 |
Contingent consideration | 0 | 0 |
Total liabilities | 0 | 0 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets | 0 | 0 |
Contingent consideration | 35,285 | 42,400 |
Total liabilities | 35,285 | 42,400 |
Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 29,991 | 80,986 |
Money market funds | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 29,991 | 80,986 |
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 | 35,337 | 61,043 |
Marketable securities | 141,718 | 210,986 |
Commercial paper | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Marketable securities | 0 | 0 |
Commercial paper | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 35,337 | 61,043 |
Marketable securities | 141,718 | 210,986 |
Commercial paper | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Marketable securities | 0 | 0 |
Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 3,000 | 1,000 |
Marketable securities | 32,253 | 44,480 |
Certificates of deposit | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Marketable securities | 0 | 0 |
Certificates of deposit | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 3,000 | 1,000 |
Marketable securities | 32,253 | 44,480 |
Certificates of deposit | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Marketable securities | 0 | 0 |
U.S. Treasuries | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 43,050 | |
U.S. Treasuries | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | |
U.S. Treasuries | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 43,050 | |
U.S. Treasuries | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | |
U.S. Government-sponsored enterprises debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 6,200 | 6,217 |
U.S. Government-sponsored enterprises debt securities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
U.S. Government-sponsored enterprises debt securities | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 6,200 | 6,217 |
U.S. Government-sponsored enterprises debt securities | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 20,364 | 33,460 |
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 | 20,364 | 33,460 |
Corporate debt securities | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | $ 0 | $ 0 |
Fair Value Measurements - Recon
Fair Value Measurements - Reconciliation of Liabilities Measured at Fair Value Using Significant Unobservable Inputs (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Contingent Consideration | ||
Beginning Balance | $ 42,400 | $ 63,800 |
Settlements | (9,000) | (30,000) |
Changes in fair value | $ 1,885 | 8,600 |
Ending Balance | $ 42,400 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021USD ($)milestone_payment | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Business consideration liabilities | $ 35,285 | $ 42,400 | |
Payment for contingent amounts - financing activities | 18,000 | 15,000 | $ 20,000 |
Paid of contingent consideration | 19,500 | ||
Payment for contingent amounts - operating activities | 1,500 | ||
Current portion of contingent consideration | 13,500 | 8,800 | |
Brabant | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Business consideration liabilities | $ 35,300 | ||
Sales-based milestones with a maximum payout | 36.0 million | ||
Installments of sales-based milestone payments | $ 4,500 | ||
Number of remaining sales-based milestone payments | milestone_payment | 8 | ||
Reclassification, due to achievement of milestones | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Business consideration liabilities | $ 4,500 | 15,000 | |
Convertible Senior Notes, Excluding Over-Allotment Option Notes | Convertible notes | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value of convertible notes | $ 231,200 | $ 260,500 |
Fair Value Measurements - Signi
Fair Value Measurements - Significant Inputs Used in Fair Value Measurement (Details) $ in Thousands | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Recurring basis, liability value | $ 42,400 | $ 63,800 | |
Discounted Cash Flow | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Recurring basis, liability value | $ 35,285 | ||
Discount rate | Weighted average | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Measurement input (percent) | 0.010 | ||
Probability of payment | Discounted Cash Flow | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Measurement input (percent) | 1 | ||
Probability of payment | Discounted Cash Flow | Minimum | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Measurement input (percent) | 0 | ||
Probability of payment | Discounted Cash Flow | Maximum | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Measurement input (percent) | 0.020 | ||
Probability of payment | Discounted Cash Flow | Weighted average | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Measurement input (percent) | 1 |
Other Balance Sheet Details - I
Other Balance Sheet Details - Inventory (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Balance Sheet Related Disclosures [Abstract] | ||
Raw materials | $ 1,301 | $ 391 |
Work in process | 2,387 | 243 |
Finished goods | 1,804 | 392 |
Total | 5,492 | 1,026 |
Inventory write-downs | $ 0 | $ 0 |
Other Balance Sheet Details - O
Other Balance Sheet Details - Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Balance Sheet Related Disclosures [Abstract] | ||
Receivable for U.K. R&D tax relief scheme | $ 12,359 | $ 0 |
Note receivable from Tevard | 5,000 | 0 |
Receivable under collaboration agreement | 3,000 | 1,500 |
Other | 4,376 | 3,436 |
Other current assets | $ 24,735 | $ 4,936 |
Other Balance Sheet Details - P
Other Balance Sheet Details - Property and Equipment, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment | $ 11,365 | $ 11,530 | |
Less accumulated depreciation | (4,168) | (2,806) | |
Property and equipment, net | 7,197 | 8,724 | |
Depreciation | 1,600 | 1,500 | $ 1,300 |
Computer equipment and software | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment | 233 | 429 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment | 9,998 | 9,835 | |
Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment | $ 1,134 | $ 1,266 |
Other Balance Sheet Details -_2
Other Balance Sheet Details - Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Balance Sheet Related Disclosures [Abstract] | ||
Accrued clinical trial costs | $ 13,537 | $ 16,477 |
Accrued compensation | 16,399 | 10,917 |
Accrued milestone payment | 0 | 15,000 |
Accrued License Amendment Fee | 7,000 | 0 |
Accrued royalties | 4,250 | 479 |
Other accrued liabilities | 14,227 | 12,091 |
Total | $ 55,413 | $ 54,964 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Finite-lived intangible asset | $ 102,500 | $ 102,500 |
Accumulated amortization | (11,827) | (3,942) |
Intangible asset, net | $ 90,673 | $ 98,558 |
Intangible Assets - Estimated A
Intangible Assets - Estimated Amortization Expense (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended |
Jul. 31, 2020 | Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Estimated useful life of intangible asset | 13 years | 11 years 6 months |
Amortization Expense | ||
2022 | $ 7,885 | |
2023 | 7,885 | |
2024 | 7,885 | |
2025 | 7,885 | |
2026 | 7,885 | |
Thereafter | 51,248 | |
Total | $ 90,673 |
Convertible Senior Notes - Narr
Convertible Senior Notes - Narrative (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | 12 Months Ended | |
Oct. 05, 2020USD ($)d$ / shares | Oct. 31, 2020USD ($) | Dec. 31, 2021USD ($)d$ / shares | Dec. 31, 2021USD ($)$ / shares | Dec. 31, 2020USD ($) | |
Debt Instrument [Line Items] | |||||
Number of trading days | d | 20 | ||||
Consecutive trading days | d | 30 | ||||
Share price (in usd per share) | $ / shares | $ 16.25 | $ 16.25 | |||
Net equity component of debt issuance costs | $ 75,333 | ||||
Borrowing rate | Discounted Cash Flow | |||||
Debt Instrument [Line Items] | |||||
Debt borrowing rate (percent) | 9.70% | 9.70% | |||
Convertible notes | Convertible Senior Notes Due 2027 | |||||
Debt Instrument [Line Items] | |||||
Debt principal issued | $ 230,000 | ||||
Interest rate (percent) | 2.75% | ||||
Debt issuance costs | $ 7,500 | $ 7,500 | |||
Net proceeds from issuance of convertible debt | $ 222,500 | ||||
Conversion ratio | 0.0411794 | ||||
Initial conversion price (in usd per share) | $ / shares | $ 24.28 | ||||
Fair value of convertible debt | $ 152,100 | ||||
Equity component — net carrying value | 77,900 | ||||
Debt component of debt issuance costs | 4,900 | ||||
Equity component of debt issuance costs | 2,500 | ||||
Net equity component of debt issuance costs | 75,300 | ||||
Debt discount and issuance costs | $ 82,800 | $ 71,835 | $ 71,835 | $ 80,647 | |
Remaining term | 7 years | 5 years 9 months 18 days | |||
Effective interest rate (percent) | 9.90% | ||||
Convertible notes | Convertible Senior Notes Due 2027 | Debt conversion, scenario one | |||||
Debt Instrument [Line Items] | |||||
Closing stock price threshold as percentage of conversion price (percent) | 130.00% | 130.00% | |||
Number of trading days | d | 20 | ||||
Consecutive trading days | d | 30 | ||||
Convertible notes | Convertible Senior Notes Due 2027 | Debt conversion, scenario two | |||||
Debt Instrument [Line Items] | |||||
Closing stock price threshold as percentage of conversion price (percent) | 98.00% | ||||
Number of trading days | d | 5 | ||||
Consecutive trading days | d | 10 | ||||
Convertible notes | Convertible Senior Notes Due 2027 | Debt conversion, scenario three | |||||
Debt Instrument [Line Items] | |||||
Closing stock price threshold as percentage of conversion price (percent) | 130.00% | ||||
Number of trading days | d | 20 | ||||
Consecutive trading days | d | 30 | ||||
Debt conversion, percentage of principal (percent) | 100.00% |
Convertible Senior Notes - Sche
Convertible Senior Notes - Schedule of Debt (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Oct. 05, 2020 | |
Debt Instrument [Line Items] | ||||
Amortization of debt discount and issuance costs | $ 8,812 | $ 2,143 | $ 0 | |
Convertible notes | Convertible Senior Notes Due 2027 | ||||
Debt Instrument [Line Items] | ||||
Principal amount of Notes | 230,000 | 230,000 | ||
Less: Unamortized debt discount and issuance costs | (71,835) | (80,647) | $ (82,800) | |
Net carrying amount | 158,165 | 149,353 | ||
Equity component — net carrying value | 75,333 | 75,333 | ||
Contractual coupon interest | 8,811 | 1,600 | ||
Amortization of debt discount and issuance costs | 6,359 | 2,143 | ||
Total interest expense | $ 15,170 | $ 3,743 |
Leases - Narrative (Details)
Leases - Narrative (Details) | Dec. 31, 2021 |
Emeryville, California lease | |
Lessee, Lease, Description [Line Items] | |
Additional renewal term | 5 years |
Leases - Information Related to
Leases - Information Related to Operating Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Components of lease costs: | |||
Operating lease cost | $ 1,799 | $ 1,989 | $ 2,045 |
Short-term lease cost | 438 | 444 | 851 |
Sublease income | 0 | (115) | (580) |
Total lease expense | 2,237 | 2,318 | 2,316 |
Cash paid for amounts included in the measurement of lease liabilities | 2,330 | 2,178 | 1,842 |
Right-of-use lease assets obtained in exchange for new lease liabilities | $ 0 | $ 1,156 | $ 354 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
Operating lease right-of-use assets | $ 6,605 | $ 7,748 |
Current portion of operating lease liabilities | 1,694 | 1,688 |
Operating lease liabilities, net of current portion | 8,617 | 10,314 |
Total operating lease liabilities | $ 10,311 | $ 12,002 |
Weighted average remaining lease term (in years) | 5 years 2 months 12 days | 6 years |
Weighted average discount rate, weighted based on the remaining balance of lease payments (percent) | 6.20% | 6.20% |
Leases - Maturities of Operatin
Leases - Maturities of Operating Lease Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Operating Leases | ||
2022 | $ 2,261 | |
2023 | 2,318 | |
2024 | 2,326 | |
2025 | 2,070 | |
2026 | 2,132 | |
2027 | 899 | |
Total lease payments | 12,006 | |
Less: imputed interest | (1,695) | |
Total operating lease liabilities | $ 10,311 | $ 12,002 |
Commitments and Contingencies (
Commitments and Contingencies (Details) | Oct. 28, 2021segment | Aug. 30, 2021patent |
Apotex Inc. and Apotex Corp. | ||
Loss Contingencies [Line Items] | ||
Number of patents allegedly infringed | 2 | 2 |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) $ / shares in Units, $ in Millions | 1 Months Ended | 12 Months Ended | ||||||
Mar. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2017USD ($) | Dec. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2019USD ($)shares | Dec. 31, 2021vote$ / sharesshares | May 31, 2021shares | Apr. 30, 2021shares | Jun. 30, 2020USD ($) | |
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 | 200,000,000 | 200,000,000 | 100,000,000 | ||||
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) | 55,736,000 | 56,095,000 | ||||||
Common stock outstanding (shares) | 55,736,000 | 56,095,000 | ||||||
Common stock authorized for issuance and unreserved (shares) | 116,900,000 | |||||||
Stock issued (shares) | 200,000 | |||||||
Net proceeds from stock issuance | $ | $ 4.9 | |||||||
Gross aggregate proceeds authorized under offering | $ | $ 200 | |||||||
ATM | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Gross aggregate proceeds to be received upon stock issuance | $ | $ 75 | |||||||
Stock issued (shares) | 900,000 | |||||||
Net proceeds from stock issuance | $ | $ 42.6 | |||||||
Underwritten Public Offer | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Stock issued (shares) | 9,800,000 | |||||||
Net proceeds from stock issuance | $ | $ 221.7 | |||||||
Stock offer price (in usd per share) | $ / shares | $ 23.50 | |||||||
Over-Allotment option | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Stock issued (shares) | 1,300,000 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Common Stock Reserved for Future Issuance (Details) - shares shares in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Class of Stock [Line Items] | ||
Common stock reserved for future issuance (shares) | 27,017 | 21,943 |
Convertible senior notes | ||
Class of Stock [Line Items] | ||
Common stock reserved for future issuance (shares) | 12,313 | 12,313 |
Warrants | ||
Class of Stock [Line Items] | ||
Common stock reserved for future issuance (shares) | 0 | 28 |
Outstanding stock options and stock unit awards | ||
Class of Stock [Line Items] | ||
Common stock reserved for future issuance (shares) | 7,790 | 5,703 |
Reserved for future grants under employee equity plans | ||
Class of Stock [Line Items] | ||
Common stock reserved for future issuance (shares) | 6,914 | 3,899 |
Stockholders' Equity - Accumula
Stockholders' Equity - Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | $ 369,669 | $ 245,059 | $ 522,801 |
Amounts arising during the period | (457) | 702 | |
Reclassification adjustments | 7 | (326) | |
Ending balance | 178,971 | 369,669 | 245,059 |
Net Unrealized Gains (Losses) on Marketable Securities | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | 189 | 379 | 3 |
Amounts arising during the period | (202) | (197) | 702 |
Reclassification adjustments | 7 | (326) | |
Ending balance | (13) | 189 | 379 |
Foreign Currency Translation Adjustments | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | (260) | 0 | 0 |
Amounts arising during the period | 288 | (260) | 0 |
Reclassification adjustments | 0 | 0 | |
Ending balance | 28 | (260) | 0 |
Accumulated Other Comprehensive Income (Loss) | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | (71) | 379 | 3 |
Amounts arising during the period | 86 | ||
Ending balance | $ 15 | $ (71) | $ 379 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Detail) | 12 Months Ended | ||||||||
Dec. 31, 2021USD ($)offeringPeriodpurchase_periodshares | Dec. 31, 2020USD ($)shares | Dec. 31, 2019USD ($)shares | May 31, 2021shares | May 29, 2020shares | May 28, 2020shares | May 31, 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) | 27,017,000 | 21,943,000 | |||||||
Intrinsic value of options exercised | $ | $ 400,000 | $ 5,100,000 | $ 22,400,000 | ||||||
Stock-based compensation capitalized | $ | 1,000,000 | ||||||||
Options | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Total unrecognized compensation costs | $ | $ 54,400,000 | ||||||||
Recognition over weighted average periods | 2 years 7 months 6 days | ||||||||
ESPP | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Shares of common stock reserved (shares) | 875,000 | 375,000 | |||||||
Number of additional shares authorized for issuance (shares) | 31,250 | ||||||||
Common stock reserved for future issuance (shares) | 6,914,000 | 3,899,000 | |||||||
RSUs | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Intrinsic value of RSUs that vested | $ | $ 5,000,000 | $ 5,700,000 | $ 1,900,000 | ||||||
2010 Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Expected term | 10 years | ||||||||
Vesting term | 4 years | ||||||||
2010 Plan | Minimum | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Shares of common stock reserved (shares) | 7,500,000 | ||||||||
2010 Plan | Maximum | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Shares of common stock reserved (shares) | 11,500,000 | ||||||||
2010 Plan | ESPP | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Common stock reserved for future issuance (shares) | 6,528,510 | ||||||||
Restated 2010 Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Shares of common stock reserved (shares) | 16,000,000 | ||||||||
2013 Inducement Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Shares of common stock reserved (shares) | 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 | ESPP | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
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 | offeringPeriod | 2 | ||||||||
Percentage of purchase price (percent) | 85.00% | ||||||||
Maximum percentage of employee withholding (percent) | 20.00% | ||||||||
Maximum number of shares per employee (shares) | 5,000 | ||||||||
Number of shares purchased during period (shares) | 112,337 | 51,745 | 28,146 | ||||||
2021 Inducement Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Common stock reserved for future issuance (shares) | 1,000,000 | ||||||||
2021 Inducement Plan | ESPP | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Common stock reserved for future issuance (shares) | 385,515 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Stock-Based Compensation Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Outstanding beginning balance (in shares) | 5,311 | |
Granted (in shares) | 1,833 | |
Exercised (in shares) | (58) | |
Canceled (in shares) | (401) | |
Outstanding ending balance (in shares) | 6,685 | 5,311 |
Exercisable at end of period (in shares) | 4,101 | |
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) | $ 29.12 | |
Granted weighted average exercise price (in usd per share) | 17.79 | |
Exercised weighted average exercise price (in usd per share) | 10.08 | |
Canceled weighted average exercise price (in usd per share) | 28.71 | |
Outstanding weighted average exercise price, ending balance (in usd per share) | 26.20 | $ 29.12 |
Exercisable weighted average exercise price at end of period (in usd per share) | $ 27 | |
Outstanding, weighted average remaining term at end of period | 6 years 10 months 24 days | |
Exercisable, weighted average remaining term at end of period | 5 years 8 months 12 days | |
Outstanding, intrinsic value at end of period | $ 7,926 | |
Exercisable, intrinsic value at end of period | $ 7,232 |
Stock-Based Compensation - Sc_2
Stock-Based Compensation - Schedule of Restricted Stock Unit Activity (Details) shares in Thousands | 12 Months Ended |
Dec. 31, 2021$ / sharesshares | |
RSUs | |
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) | shares | 393 |
Number of restricted stock units granted (in shares) | shares | 616 |
Restricted stock units vested (in shares) | shares | (144) |
Restricted stock units canceled (in shares) | shares | (61) |
Number of restricted stock units, ending balance (in shares) | shares | 804 |
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) | $ / shares | $ 37.68 |
Weighted-average grant date fair value per share, granted (in usd per share) | $ / shares | 17.66 |
Weighted-average grant date fair value per share, vested (in usd per share) | $ / shares | 39.98 |
Weighted-average grant date fair value per share, canceled (in usd per share) | $ / shares | 25.24 |
Weighted-average grant date fair value per share, ending balance (in usd per share) | $ / shares | $ 22.85 |
PSUs | |
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) | shares | 0 |
Number of restricted stock units granted (in shares) | shares | 494 |
Restricted stock units vested (in shares) | shares | (152) |
Restricted stock units canceled (in shares) | shares | (42) |
Number of restricted stock units, ending balance (in shares) | shares | 300 |
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) | $ / shares | $ 0 |
Weighted-average grant date fair value per share, granted (in usd per share) | $ / shares | 19.53 |
Weighted-average grant date fair value per share, vested (in usd per share) | $ / shares | 19.85 |
Weighted-average grant date fair value per share, canceled (in usd per share) | $ / shares | 19.99 |
Weighted-average grant date fair value per share, ending balance (in usd per share) | $ / shares | $ 19.30 |
Stock-Based Compensation - Assu
Stock-Based Compensation - Assumptions used in Black-Scholes Option-Pricing Model (Detail) - $ / shares | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average fair value of option on grant date (in usd per share) | $ 11.36 | $ 17.86 | $ 32.64 |
Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk free interest rate, minimum (percent) | 0.50% | 0.30% | 1.40% |
Risk free interest rate, maximum (percent) | 1.40% | 1.80% | 2.60% |
Expected volatility, minimum (percent) | 70.00% | 73.20% | 73.50% |
Expected volatility, maximum (percent) | 73.70% | 76.70% | 82.30% |
Expected dividend yield (percent) | 0.00% | 0.00% | 0.00% |
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 3 months 18 days |
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, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | $ 35,463 | $ 29,176 | $ 21,247 |
Research and development | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | 12,962 | 12,139 | 8,293 |
Selling, general and administrative | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Stock-based compensation expense | $ 22,501 | $ 17,037 | $ 12,954 |
Net Loss Per Share - Reconcilia
Net Loss Per Share - Reconciliation of Numerator and Denominators in Computing Net Loss per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Numerator | |||
Net loss | $ (227,413) | $ (209,383) | $ (419,503) |
Denominator | |||
Weighted average common shares outstanding, basic (in shares) | 55,880 | 53,706 | 43,078 |
Weighted average common shares outstanding, diluted (in shares) | 55,880 | 53,706 | 43,078 |
Net loss per share, basic (in dollars per share) | $ (4.07) | $ (3.90) | $ (9.74) |
Net loss per share, diluted (in dollars per share) | $ (4.07) | $ (3.90) | $ (9.74) |
Net Loss Per Share - Antidiluti
Net Loss Per Share - Antidilutive Securities (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities excluded from computation of earnings per share amount (in shares) | 16,779 | 9,873 | 4,495 |
Shares subject to outstanding stock options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities excluded from computation of earnings per share amount (in shares) | 6,242 | 4,966 | 4,085 |
Shares subject to outstanding RSUs and PSUs | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities excluded from computation of earnings per share amount (in shares) | 1,051 | 464 | 382 |
Shares subject to outstanding warrants to purchase common stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities excluded from computation of earnings per share amount (in shares) | 15 | 28 | 28 |
Shares issuable upon conversion of Notes | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities excluded from computation of earnings per share amount (in shares) | 9,471 | 4,415 | 0 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Postemployment Benefits [Abstract] | |||
Employer's discretionary matching contributions | $ 2.5 | $ 1.2 | $ 0.5 |
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, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |||
United States | $ (193,176) | $ (170,812) | $ (325,769) |
Foreign | (34,132) | (55,996) | (93,734) |
Loss from operations before income taxes | $ (227,308) | $ (226,808) | $ (419,503) |
Income Taxes - Operating Loss a
Income Taxes - Operating Loss and Credit Carryforwards (Details) $ in Millions | Dec. 31, 2021USD ($) |
Internal Revenue Service (IRS) | |
Operating Loss Carryforwards [Line Items] | |
Net operating losses | $ 669.2 |
Tax credit carryforward, amount | 6.4 |
Internal Revenue Service (IRS) | Drug Tax Credit Carryforward | |
Operating Loss Carryforwards [Line Items] | |
Tax credit carryforward, amount | 2 |
State and Local Jurisdiction | |
Operating Loss Carryforwards [Line Items] | |
Net operating losses | 427.7 |
Tax credit carryforward, amount | 4.2 |
Foreign Tax Authority | |
Operating Loss Carryforwards [Line Items] | |
Net operating losses | $ 289.2 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) | 12 Months Ended | ||||
Dec. 31, 2021USD ($)ownership_change | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2011USD ($) | Aug. 31, 2006USD ($) | |
Operating Loss Carryforwards [Line Items] | |||||
Number of changes in ownership | ownership_change | 3 | ||||
Income tax provision (benefit) | $ 105,000 | $ (17,425,000) | $ 0 | ||
Increase (decrease) in deferred tax asset valuation allowance | 54,700,000 | 25,100,000 | |||
Net deferred tax liability | 0 | 0 | |||
Less valuation allowance | 231,335,000 | 176,594,000 | |||
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 | $ 0 | ||
Internal Revenue Service (IRS) | |||||
Operating Loss Carryforwards [Line Items] | |||||
Net operating losses | 669,200,000 | ||||
Operating loss carryforwards that do not expire | 414,700,000 | ||||
Tax credit carryforward, amount | 6,400,000 | ||||
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] | |||||
Net operating losses | 427,700,000 | ||||
Tax credit carryforward, amount | 4,200,000 | ||||
Operating loss carryforwards decrease | $ 53,300,000 | ||||
Foreign Tax Authority | |||||
Operating Loss Carryforwards [Line Items] | |||||
Net operating losses | $ 289,200,000 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Income Tax to Expense (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |||
Income tax at federal statutory rate | $ (47,735) | $ (47,630) | $ (88,096) |
State taxes, net of federal benefit | (5,803) | (4,316) | (65) |
Non-deductible acquired IPR&D charge and other expenses | 0 | 0 | 52,044 |
Change in valuation allowance | 54,799 | 40,039 | 21,155 |
Impact of foreign rate change on deferred taxes | (12,405) | (2,950) | 1,887 |
Other permanent differences | 2,117 | 3,993 | 4,101 |
State tax rate benefit | 164 | (1,346) | (18) |
Foreign rate differential | 393 | 752 | 1,883 |
Stock-based compensation | 2,484 | 1,180 | (2,674) |
Net operating losses surrendered under U.K.’s R&D tax relief scheme | 0 | 0 | 9,349 |
State apportionment adjustments | 482 | (2,673) | 48 |
Impact of foreign exchange rate differences | 5,679 | (4,532) | 0 |
Credits and other | (70) | 58 | 386 |
Income tax expense (benefit) | $ 105 | $ (17,425) | $ 0 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Income Tax Disclosure [Abstract] | ||
Federal, state and foreign net operating loss carryforwards | $ 237,708 | $ 186,963 |
Capitalized research and development | 666 | 486 |
Accrued expenses | 5,895 | 2,498 |
Research and development credits | 5,343 | 5,343 |
Amortization | 2,718 | 2,949 |
Lease liability | 2,291 | 2,534 |
Stock-based compensation | 10,212 | 7,878 |
Other, net | 2,523 | 2,690 |
Total deferred tax assets | 267,356 | 211,341 |
Less: valuation allowance | (231,335) | (176,594) |
Total deferred tax assets, net of valuation allowance | 36,021 | 34,747 |
Operating lease right-of-use asset | (1,423) | (1,585) |
IPR&D | (18,573) | (15,857) |
Discount on Notes | (16,025) | (17,305) |
Total deferred tax liabilities | (36,021) | (34,747) |
Total net deferred tax liabilities | $ 0 | $ 0 |
Income Taxes - Schedule of Unre
Income Taxes - Schedule of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Beginning balance of unrecognized tax benefits | $ 3,638 | $ 3,541 | $ 1,487 |
Gross increases based on tax positions related to current year | 0 | 0 | 1,495 |
Gross increases based on tax positions related to prior year | 97 | 559 | |
Gross decreases based on tax positions related to prior years | 0 | 0 | 0 |
Settlements with taxing authorities | 0 | 0 | 0 |
Expiration of statue of limitations | 0 | 0 | 0 |
Ending balance of unrecognized tax benefits | $ 3,638 | $ 3,638 | $ 3,541 |
UK's R&D Tax Relief Scheme (Det
UK's R&D Tax Relief Scheme (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Operating Loss Carryforwards [Line Items] | |||
Claim for refundable cash credit | $ 12.4 | ||
Tax year 2017 | |||
Operating Loss Carryforwards [Line Items] | |||
Claim for refundable cash credit | $ 9.9 | ||
Tax year 2018 | |||
Operating Loss Carryforwards [Line Items] | |||
Claim for refundable cash credit | $ 9.8 | ||
2017 and 2018 tax year claims | |||
Operating Loss Carryforwards [Line Items] | |||
Claim for refundable cash credit | $ 19.7 | ||
Tax year 2019 | |||
Operating Loss Carryforwards [Line Items] | |||
Claim for refundable cash credit | $ 12.4 | ||
Foreign Tax Authority | U.K. tax legislation | |||
Operating Loss Carryforwards [Line Items] | |||
Window to seek relief under U.K. tax legislature | 2 years |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event - UCB S. A . | Jan. 18, 2022USD ($)right$ / shares |
Subsequent Event [Line Items] | |
Business acquisition, share price (in usd per share) | $ / shares | $ 26 |
Number of non-transferrable contingent value rights per share | right | 1 |
Contingent payment amount | $ 2 |
Termination fee | $ 59,000,000 |