Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Feb. 25, 2019 | Jun. 30, 2018 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | FLXN | ||
Entity Registrant Name | Flexion Therapeutics Inc | ||
Entity Central Index Key | 1,419,600 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 37,992,513 | ||
Entity Public Float | $ 859,717,982 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash and cash equivalents | $ 87,229 | $ 127,789 |
Marketable securities | 171,555 | 264,589 |
Accounts receivable, net | 13,121 | 410 |
Inventories | 7,637 | 1,799 |
Prepaid expenses and other current assets | 5,500 | 3,403 |
Total current assets | 285,042 | 397,990 |
Property and equipment, net | 10,710 | 11,189 |
Long-term investments | 31,538 | |
Restricted cash | 600 | |
Total assets | 295,752 | 441,317 |
Current liabilities | ||
Accounts payable | 12,340 | 6,222 |
Accrued expenses and other current liabilities | 14,310 | 14,383 |
Current portion of long-term debt | 9,967 | 9,967 |
Total current liabilities | 36,617 | 30,572 |
Long-term debt, net | 3,640 | 12,936 |
2024 convertible notes, net | 144,879 | 137,107 |
Other long-term liabilities | 537 | 428 |
Total liabilities | 185,673 | 181,043 |
Commitments and contingencies | ||
Preferred Stock, $0.001 par value; 10,000,000 shares authorized at December 31, 2018 and December 31, 2017 and 0 shares issued and outstanding at December 31, 2018 and December 31, 2017 | 0 | 0 |
Stockholders’ equity | ||
Common stock, $0.001 par value; 100,000,000 shares authorized; 37,946,341 and 37,610,897 shares issued and outstanding, at December 31, 2018 and December 31, 2017, respectively | 38 | 38 |
Additional paid-in capital | 628,944 | 609,810 |
Accumulated other comprehensive loss | (77) | (407) |
Accumulated deficit | (518,826) | (349,167) |
Total stockholders’ equity | 110,079 | 260,274 |
Total liabilities and stockholders’ equity | $ 295,752 | $ 441,317 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Statement Of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 37,946,341 | 37,610,897 |
Common stock, shares outstanding | 37,946,341 | 37,610,897 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues | |||
Product revenue, net | $ 22,524 | $ 355 | |
Type of Revenue [Extensible List] | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember |
Operating expenses | |||
Cost of sales | $ 7,336 | $ 4 | |
Type of Cost, Good or Service [Extensible List] | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember |
Research and development | $ 53,079 | $ 51,231 | $ 41,314 |
Selling, general and administrative | 121,311 | 78,801 | 28,466 |
Total operating expenses | 181,726 | 130,036 | 69,780 |
Loss from operations | (159,202) | (129,681) | (69,780) |
Other (expense) income | |||
Interest income | 4,567 | 3,718 | 1,521 |
Interest expense | (15,712) | (11,268) | (1,748) |
Other income (expense) | 688 | (250) | (1,887) |
Total other (expense) income | (10,457) | (7,800) | (2,114) |
Net loss | $ (169,659) | $ (137,481) | $ (71,894) |
Net loss per common share, basic and diluted | $ (4.49) | $ (4.16) | $ (2.84) |
Weighted average common shares outstanding, basic and diluted | 37,751 | 33,027 | 25,297 |
Other comprehensive income (loss) | |||
Unrealized gains (losses) from available-for-sale securities, net of tax of $0 | $ 330 | $ (336) | $ 26 |
Total other comprehensive income (loss) | 330 | (336) | 26 |
Comprehensive loss | $ (169,329) | $ (137,817) | $ (71,868) |
Consolidated Statements of Op_2
Consolidated Statements of Operations and Comprehensive Loss (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Statement [Abstract] | |||
Unrealized gains (losses) from available-for-sale securities, tax | $ 0 | $ 0 | $ 0 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock [Member] | Additional Paid-in-Capital [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Accumulated Deficit [Member] |
Balance at Dec. 31, 2015 | $ 103,986 | $ 22 | $ 243,853 | $ (97) | $ (139,792) |
Balance (in shares) at Dec. 31, 2015 | 21,570 | ||||
Issuance of common stock net of issuance costs | 147,501 | $ 10 | 147,491 | ||
Issuance of common stock net of issuance costs (in shares) | 10,040 | ||||
Issuance of common stock for equity awards, net of shares withheld for taxes | 167 | 167 | |||
Issuance of common stock for equity awards, net of shares withheld for taxes(in shares) | 30 | ||||
Employee stock purchase plan | 476 | 476 | |||
Employee stock purchase plan (in shares) | 27 | ||||
Stock-based compensation expense | 6,770 | 6,770 | |||
Net loss | (71,894) | (71,894) | |||
Other comprehensive income (loss) | 26 | 26 | |||
Balance at Dec. 31, 2016 | 187,032 | $ 32 | 398,757 | (71) | (211,686) |
Balance (in shares) at Dec. 31, 2016 | 31,667 | ||||
Issuance of common stock net of issuance costs | 132,177 | $ 6 | 132,171 | ||
Issuance of common stock net of issuance costs (in shares) | 5,520 | ||||
Issuance of common stock for equity awards, net of shares withheld for taxes | 3,858 | 3,858 | |||
Issuance of common stock for equity awards, net of shares withheld for taxes(in shares) | 334 | ||||
Employee stock purchase plan | 1,016 | 1,016 | |||
Employee stock purchase plan (in shares) | 90 | ||||
Stock-based compensation expense | 11,542 | 11,542 | |||
Portion of convertible debt proceeds allocated to equity component | 62,466 | 62,466 | |||
Net loss | (137,481) | (137,481) | |||
Other comprehensive income (loss) | (336) | (336) | |||
Balance at Dec. 31, 2017 | 260,274 | $ 38 | 609,810 | (407) | (349,167) |
Balance (in shares) at Dec. 31, 2017 | 37,611 | ||||
Issuance of common stock for equity awards, net of shares withheld for taxes | 1,653 | 1,653 | |||
Issuance of common stock for equity awards, net of shares withheld for taxes(in shares) | 197 | ||||
Employee stock purchase plan | 2,022 | 2,022 | |||
Employee stock purchase plan (in shares) | 138 | ||||
Stock-based compensation expense | 15,459 | 15,459 | |||
Net loss | (169,659) | (169,659) | |||
Other comprehensive income (loss) | 330 | 330 | |||
Balance at Dec. 31, 2018 | $ 110,079 | $ 38 | $ 628,944 | $ (77) | $ (518,826) |
Balance (in shares) at Dec. 31, 2018 | 37,946 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities | |||
Net loss | $ (169,659) | $ (137,481) | $ (71,894) |
Adjustments to reconcile net loss to cash used in operating activities: | |||
Depreciation | 1,714 | 2,008 | 1,151 |
Stock-based compensation expense | 15,459 | 11,542 | 6,770 |
Other non-cash charges | 37 | ||
(Accretion) Amortization of (discount) premium on marketable securities | (1,320) | 333 | 729 |
Loss on disposal of fixed assets | 2,283 | ||
Amortization of debt discount and debt issuance costs | 7,805 | 4,826 | |
Premium paid on securities purchased | (214) | (857) | (543) |
Changes in operating assets and liabilities: | |||
Accounts receivable | (12,711) | (410) | 95 |
Inventory | (5,244) | (1,799) | |
Prepaid expenses, other current and long-term assets | (2,097) | 387 | (2,873) |
Accounts payable | 5,141 | 4,188 | (993) |
Accrued expenses and other current and long-term liabilities | 707 | 9,432 | 2,766 |
Net cash used in operating activities | (160,419) | (107,831) | (62,472) |
Cash flows from investing activities | |||
Purchases of property and equipment | (852) | (2,146) | (8,440) |
Purchases of marketable securities | (222,482) | (356,754) | (196,061) |
Sale and redemption of marketable securities | 348,918 | 240,228 | 72,147 |
Net cash provided by (used in) investing activities | 125,584 | (118,672) | (132,354) |
Cash flows from financing activities | |||
Proceeds from the issuance of 2024 convertible notes | 201,250 | ||
Payment of debt issuance costs | (6,470) | (42) | |
Proceeds from the offering of common stock | 132,666 | 147,889 | |
Payments on notes payable | (10,000) | (8,333) | |
Proceeds from issuance of notes payable | 15,000 | ||
Payments of public offering costs | (490) | (293) | |
Proceeds from the exercise of stock options | 1,653 | 3,858 | 167 |
Proceeds from employee stock purchase plan | 2,022 | 1,016 | 476 |
Net cash (used in) provided by financing activities | (6,325) | 323,497 | 163,197 |
Net (decrease) increase in cash, cash equivalents, and restricted cash | (41,160) | 96,994 | (31,629) |
Cash, cash equivalents, and restricted cash at beginning of period | 128,389 | 31,395 | 63,024 |
Cash, cash equivalents, and restricted cash at end of period | 87,229 | 128,389 | 31,395 |
Supplemental disclosures of cash flow information: | |||
Cash paid for interest | 7,874 | 5,080 | 1,297 |
Supplemental disclosures of non-cash financing activities: | |||
Public offering costs included in accounts payable or accrued expenses | 95 | ||
Portion of debt proceeds allocated to equity component | 62,466 | ||
Purchases of property and equipment in accounts payable and accrued expenses | $ 986 | $ 9 | $ 622 |
Nature of the Business
Nature of the Business | 12 Months Ended |
Dec. 31, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Nature of the Business | 1. Nature of the Business Flexion Therapeutics, Inc. (“Flexion” or the “Company”) was incorporated under the laws of the state of Delaware on November 5, 2007. Flexion is a biopharmaceutical company focused on the discovery, development and commercialization of novel, local therapies for the treatment of patients with musculoskeletal conditions, beginning with osteoarthritis, (“OA”), a type of degenerative arthritis. The Company has an approved product, ZILRETTA®, which it markets in the United States. ZILRETTA is the first and only extended-release, intra-articular, or IA (meaning in the joint), injection indicated for the management of OA knee pain. ZILRETTA is a non-opioid therapy that employs Flexion’s proprietary microsphere technology to provide effective pain relief. The pivotal Phase 3 trial, on which the approval of ZILRETTA was based, showed that ZILRETTA met the primary endpoint of pain reduction at Week 12, with statistically significant pain relief extending through Week 16. The Company is subject to risks and uncertainties common to companies in the biopharmaceutical industry, including, but not limited to, new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations, and the ability to secure additional capital to fund operations. Successfully commercializing ZILRETTA requires significant sales and marketing efforts and the Company’s pipeline programs may require significant additional research and development efforts, including extensive preclinical and clinical testing. These activities will in turn require significant amounts of capital, qualified personnel and adequate infrastructure. There can be no assurance when, if ever, the Company will realize significant revenue from the sales of ZILRETTA or if the development efforts supporting the Company’s pipeline, including future clinical trials, will be successful. The accompanying consolidated financial statements have been prepared on a basis which assumes that the Company will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the normal course of business. The Company has incurred recurring losses and negative cash flows from operations. As of December 31, 2018, the Company had cash, cash equivalents, and marketable securities of approximately |
Financing Transactions
Financing Transactions | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Financing Transactions | 2. Financing Transactions On June 8, 2016, the Company completed a follow-on public offering of its common stock, which resulted in the sale of 5,900,000 shares of the Company’s common stock at a price to the public of $14.00 per share including shares sold pursuant to the partial exercise of the underwriters’ option to purchase additional shares. The Company received net proceeds from the follow-on financing of $77.4 million after deducting underwriting discounts, commissions, and offering costs paid by the Company. On November 15, 2016, the Company completed a follow-on public offering of its common stock, which resulted in the sale of 4,140,000 shares of the Company’s common stock at a price to the public of $18.00 per share including shares sold pursuant to the exercise in full of the underwriters’ option to purchase additional shares. The Company received net proceeds from the follow-on financing of $70.1 million after deducting underwriting discounts, commissions, and offering costs paid by the Company. On May 2, 2017, the Company issued an aggregate of $201.3 million principal amount of the 2024 Convertible Notes. The 2024 Convertible Notes have a maturity date of May 1, 2024 are unsecured and accrue interest at a rate of 3.375% per annum, payable semi-annually on May 1 and November 1 of each year, beginning November 1, 2017. The Company received $194.8 million for the sale of the 2024 Convertible Notes, after deducting fees and expenses of $6.5 million. On October 16, 2017, the Company completed a follow-on public offering of its common stock, which resulted in the sale of 5,520,000 shares of the Company’s common stock at a price to the public of $25.50 per share including shares sold pursuant to the exercise in full of the underwriters’ option to purchase additional shares. The Company received net proceeds from the follow-on financing of $132.2 million after deducting underwriting discounts, commissions, and offering costs paid by the Company. The Company’s total issued common stock as of December 31, 2018 was 37,946,341 shares. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 3. Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) and Generally Accepted Accounting Principles (“GAAP”) for financial information, including the accounts of the Company and its wholly owned subsidiary after elimination of all significant intercompany accounts and transactions. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and judgments that may affect the reported amounts of assets and liabilities, expenses and related disclosures. The Company bases estimates and judgments on historical experience and on various other factors that it believes to be reasonable under the circumstances. The most significant estimates in these consolidated financial statements include estimates related to revenue, useful lives with respect to long-lived assets, such as property and equipment and leasehold improvements, accounting for stock-based compensation, and accrued expenses, including preclinical and clinical development costs. The Company’s actual results may differ from these estimates under different assumptions or conditions. The Company evaluates its estimates on an ongoing basis. Changes in estimates are reflected in reported results in the period in which they become known by the Company’s management. Revenue Recognition On October 6, 2017, the FDA approved ZILRETTA. The Company entered into a limited number of arrangements with specialty distributors and a specialty pharmacy in the U.S. to distribute ZILRETTA. These arrangements are the Company’s initial contracts with customers and, as a result the Company adopted Accounting Standards Codification (“ASC”) Topic 606 - Revenue from Contracts with Customers To determine revenue recognition for arrangements that an entity determines are within the scope of Topic 606, the entity performs the following five 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) the entity satisfies a performance obligation. The Company only applies the five-step model to arrangements that meet the definition of a contract with a customer under Topic 606, including when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of Topic 606, the Company assesses the goods or services promised within each contract, determines those that are performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. For a complete discussion of accounting for product revenue, see Product Revenue, Net (below). Product Revenue, Net — The Company sells ZILRETTA to its customers who then subsequently resell ZILRETTA to physicians, clinics and certain medical centers or hospitals. In addition to distribution agreements with customers, the Company enters into arrangements with government payers that provide for government mandated rebates and chargebacks with respect to the purchase of ZILRETTA. The Company recognizes revenue on product sales when the customer obtains control of the Company's product, which occurs at a point in time (upon delivery to the customer). The Company has determined that the delivery of ZILRETTA to its customers constitutes a single performance obligation. There are no other promises to deliver goods or services beyond what is specified in each accepted customer order. The Company has assessed the existence of a significant financing component in the agreements with its customers. The trade payment terms with our customers do not exceed one year and therefore the Company has elected to apply the practical expedient and no amount of consideration has been allocated as a financing component. Product revenues are recorded net of applicable reserves for variable consideration, including discounts and allowances. Transaction Price, including Variable Consideration — Revenues from product sales are recorded at the net sales price (transaction price), which includes estimates of variable consideration for which reserves are established. Components of variable consideration include trade discounts and allowances, product returns, government chargebacks, discounts and rebates, and other incentives, such as voluntary patient assistance, and other fee for service amounts that are detailed within contracts between the Company and its customers relating to the Company’s sale of its products. These reserves, as detailed below, are based on the amounts earned, or to be claimed on the related sales, and are classified as reductions of accounts receivable (if the amount is payable to the customer) or a current liability (if the amount is payable to a party other than a customer). These estimates take into consideration a range of possible outcomes which are probability-weighted in accordance with the expected value method in Topic 606 for relevant factors such as current contractual and statutory requirements, specific known market events and trends, industry data, and forecasted customer buying and payment patterns. Overall, these reserves reflect the Company’s best estimates of the amount of consideration to which it is entitled based on the terms of the respective underlying contracts. The amount of variable consideration which is included in the transaction price may be constrained, and is included in the net sales price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized under the contract will not occur in a future period. Actual amounts of consideration ultimately received may differ from the Company’s estimates. If actual results in the future vary from the Company’s original estimates, the Company will adjust these estimates, which would affect net product revenue and earnings in the period such variances become known. Trade Discounts and Allowances —The Company compensates (through trade discounts and allowances) its customers for sales order management, data, and distribution services. However, the Company has determined such services received to date are not distinct from the Company’s sale of products to the customer and, therefore, these payments have been recorded as a reduction of revenue within the statement of operations and comprehensive loss through December 31, 2018, as well as a reduction to trade receivables, net on the consolidated balance sheets. Product Returns — Consistent with industry practice, the Company generally offers customers a limited right of return for product that has been purchased from the Company based on the product’s expiration date. The Company estimates the amount of its product sales that may be returned by its customers and records this estimate as a reduction of revenue in the period the related product revenue is recognized, as well as within accrued expenses and other current liabilities, net, on the consolidated balance sheets. The Company currently estimates product return liabilities using available industry data and its own sales information, including its visibility into the inventory remaining in the distribution channel. The Company has received an immaterial amount of returns to date and believes that returns of ZILRETTA will be minimal. The Company’s limited right of return allows for eligible returns of ZILRETTA in the following circumstances: • Shipment errors that were the result of an error by the Company; • Quantity delivered that is greater or less than the quantity ordered; • Product distributed by the Company that is damaged in transit prior to receipt by the customer; • Expired product, previously purchased directly from the Company, that is returned during the period beginning three months prior to the product’s expiration date and ending three months after the product’s expiration date; • Product subject to a recall; and • Product that the Company, at its sole discretion, have specified to be returned. Government Chargebacks, Discounts and Rebates — Chargebacks for fees and discounts to qualified government healthcare providers represent the estimated obligations resulting from contractual commitments to sell products to qualified VA hospitals and 340b entities at prices lower than the list prices charged to customers who directly purchase the product from the Company. The 340b Drug Discount Program is a US federal government program created in 1992 that requires drug manufacturers to provide outpatient drugs to eligible health care organizations and covered entities at significantly reduced prices. Customers charge the Company for the difference between what they pay for the product and the statutory selling price to the qualified government entity. These reserves are established in the same period that the related revenue is recognized, resulting in a reduction of product revenue and trade receivables, net. Chargeback amounts are generally determined at the time of resale to the qualified government healthcare provider by customers, and the Company generally issues credits for such amounts within a few weeks of the Customer’s notification to the Company of the resale. Reserves for chargebacks consist of credits that the Company expects to issue for units that remain in the distribution channel inventories at each reporting period-end that the Company expects will be sold to qualified healthcare providers, and chargebacks that customers have claimed, but for which the Company has not yet issued a credit. Government Rebates — The Company is subject to discount obligations under state Medicaid programs and Medicare. These reserves are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability which is included in accrued expenses and other current liabilities on the consolidated balance sheets. For Medicare, the Company also estimates the number of patients in the prescription drug coverage gap for whom the Company will owe an additional liability under the Medicare Part D program. The Company anticipates its exposure to utilization from the Medicare Part D coverage gap discount program to be immaterial. For Medicaid programs, the Company estimates the portion of sales attributed to Medicaid patients and records a liability for the rebates to be paid to the respective state Medicaid programs. The Company’s liability for these rebates consists of invoices received for claims from prior quarters that have not been paid or for which an invoice has not yet been received, estimates of claims for the current quarter, and estimated future claims that will be made for product that has been recognized as revenue, but which remains in the distribution channel inventories at the end of each reporting period. Other Incentives — Other incentives which the Company offers include voluntary patient assistance programs, such as the co-pay assistance program, which are intended to provide financial assistance to qualified commercially-insured patients with prescription drug co-payments required by payers. The calculation of the accrual for co-pay assistance is based on an estimate of claims and the cost per claim that the Company expects to receive associated with product that has been recognized as revenue, but remains in the distribution channel inventories at the end of each reporting period. The adjustments are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability which is included as a component of accrued expenses and other current liabilities on the consolidated balance sheets. To date, the Company’s only source of product revenue has been from the U.S. sales of ZILRETTA, which it began shipping to customers in October 2017. The following table summarizes activity in each of the product revenue allowance and reserve categories for the years ended December 31, 2018 and 2017: (In thousands) Trade Discounts, Allowances and Government Chargebacks Government Rebates and Other Incentives Returns Total Balance as of January 1, 2017 $ — $ — $ — $ — Provision related to sales in the current year 100 15 2 117 Credit or payments made during the period (40 ) 0 0 (40 ) Balance as of December 31, 2017 60 15 2 77 Provision related to sales in the current year 1,688 502 124 2,314 Credit or payments made during the period (1,147 ) (26 ) (1 ) (1,174 ) Balance as of December 31, 2018 $ 601 $ 491 $ 125 $ 1,217 Inventory The Company values its inventories at the lower of cost or estimated net realizable value. The Company determines the cost of its inventories, which includes amounts related to materials and manufacturing overhead, on a first-in, first-out basis. The Company performs an assessment of the recoverability of capitalized inventory during each reporting period, and it writes down any excess and obsolete inventories to their estimated realizable value in the period in which the impairment is first identified. Such impairment charges, should they occur, are recorded within cost of sales. The determination of whether inventory costs will be realizable requires estimates by management. If actual market conditions are less favorable than projected by management, additional write-downs of inventory may be required, which would be recorded as a cost of sales in the consolidated statements of operations and comprehensive loss. The Company capitalizes inventory costs associated with the Company’s products after regulatory approval when, based on management’s judgment, future commercialization is considered probable and the future economic benefit is expected to be realized. Inventory acquired prior to receipt of marketing approval of a product candidate is expensed as research and development expense as incurred. Inventory that can be used in either the production of clinical or commercial product is expensed as research and development expense when selected for use in a clinical manufacturing campaign. Inventory produced that will be used in promotional marketing campaigns is expensed to selling, general and administrative expense when it is selected for use in a marketing program. Consolidation The accompanying consolidated financial statements include the Company and its wholly-owned subsidiary, Flexion Therapeutics Securities Corporation. The Company has eliminated all intercompany transactions for the years ended December 31, 2018, 2017 and 2016. In addition, Flexion Therapeutics, Inc. is registered to do business in the United Kingdom through its branch office located in Swindon, United Kingdom. Accounts Receivable Accounts receivable are recorded net of customer allowances for distribution fees and chargebacks, and doubtful accounts. Allowances for distribution fees and chargebacks are based on contractual terms. The Company estimates the allowance for doubtful accounts based on existing contractual payment terms, actual payment patterns of its customers and individual customer circumstances. At December 31, 2018, the Company determined that an allowance for doubtful accounts was not required. No accounts were written off during the year ended December 31, 2018. Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less at the date of purchase to be cash equivalents. The Company currently invests available cash in money market funds of a major financial institution, corporate bonds, government obligations and commercial paper. Marketable Securities Marketable securities consist of investments with original maturities greater than ninety days and less than one year from the balance sheet date. Long-term investments consist of investments with maturities of greater than one year. The Company classifies all of its investments, which consist solely of debt securities, as available-for-sale. Accordingly, these investments are recorded at fair value, which is based on quoted market prices. Unrealized gains and losses are recorded as a component of other comprehensive income (loss). Realized gains and losses are determined on a specific identification basis and are included in other income (loss). Amortization and accretion of discounts and premiums is recorded in other income. Restricted Cash The balance at December 31, 2017 consists of $600,000 in an account at a commercial bank to collateralize a credit card account, which is classified as long-term restricted cash. The restriction was released during 2018 and therefore the balance has been reclassified within Cash and Cash Equivalents. Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Depreciation and amortization expense is recognized using the straight-line method over the following estimated useful lives: Estimated Useful Life (Years) Computers, office equipment, and minor computer software 3 Computer software 7 Manufacturing equipment 7-10 Furniture and fixtures 5 Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the related asset. Costs of major additions and betterments are capitalized and depreciated on a straight-line basis over their useful lives. Repairs and maintenance costs are expensed as incurred. Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is credited or charged to income. Property and equipment includes construction-in-progress, that is not yet in service. Foreign Currencies The Company maintains a bank account designated in British Pounds. All foreign currency payables and cash balances are measured at the applicable exchange rate at the end of the reporting period. All associated gains and losses from foreign currency transactions are reflected in the consolidated statements of operations. Impairment of Long-Lived Assets The Company reviews its long-lived assets, including property and equipment, for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. Factors that the Company considers in deciding when to perform an impairment review include significant underperformance of the business in relation to expectations, significant negative industry or economic trends, and significant changes or planned changes in the use of the assets. If an impairment review is performed to evaluate a long-lived asset for recoverability, the Company compares forecasts of undiscounted cash flows expected to result from the use and eventual disposition of the long-lived asset to its carrying value. An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of an asset are less than its carrying amount. The impairment loss would be based on the excess of the carrying value of the impaired asset over its fair value, determined based on discounted cash flows. Debt Issuance Costs, net As of December 31, 2018 and 2017, the carrying value of debt issuance costs was $3.5 million and $4.1 million, respectively, and was presented as a direct deduction from the carrying amounts of long-term debt. In addition, $0.6 million, $0.4 million, and $37,000, respectively, of debt issuance costs were amortized and recognized as other expense in the statement of operations for the years ended December 31, 2018, 2017 and 2016. Research and Development Research and development expenses are comprised of costs incurred in performing research and development activities, including salaries and benefits, facilities costs, overhead costs, depreciation, clinical trial and related clinical manufacturing costs, contract services and other related costs. Research and development costs are expensed to operations as the related obligation is incurred. As part of the process of preparing its financial statements, the Company is required to estimate its accrued expenses. This process involves reviewing open contracts and purchase orders, communicating with applicable internal and vendor personnel to identify services that have been performed on the Company’s behalf and estimating the level of service performed and the associated cost incurred for the service when the Company has not yet been invoiced or otherwise notified of the actual cost. The majority of the Company’s service providers invoice it monthly in arrears for services performed or when contractual milestones are met. The Company makes estimates of its accrued expenses as of each balance sheet date in its financial statements based on facts and circumstances known to it at that time. The Company periodically confirms the accuracy of its estimates with the service providers and makes adjustments if necessary. Examples of estimated accrued research and development expenses include fees paid to: • CROs in connection with clinical studies; • investigative sites in connection with clinical studies; • vendors related to product manufacturing, development and distribution of clinical supplies; and • vendors in connection with preclinical development activities. The Company records expenses related to clinical studies and manufacturing development activities based on its estimates of the services received and efforts expended pursuant to contracts with multiple CROs and manufacturing vendors that conduct and manage these activities on the Company’s behalf. The financial terms of these agreements are subject to negotiation, vary from contract to contract, and may result in uneven payment flows. The Company makes estimates of its accrued expenses as of each balance sheet date in its financial statements based on facts and circumstances known to it. If timelines or contracts are modified based upon changes in the clinical trial protocol or scope of work to be performed, the Company modifies its estimates of accrued expenses accordingly on a prospective basis. If the Company does not identify costs that it has begun to incur, or if it underestimates or overestimates the level of services performed or the costs of these services, the Company’s actual expenses could differ from its estimates. To date, the Company has not adjusted its estimates at any particular balance sheet date in any material amount. Patent Costs All patent-related costs incurred in connection with filing and prosecuting patent applications are recorded as general and administrative expenses as incurred, as recoverability of such expenditures is uncertain. Accounting for Stock-Based Compensation The Company measures all stock options and other stock based-awards granted to employees at the fair value at the date of grant using the Black-Scholes option-pricing model. The fair value of the awards is recognized as expense over the requisite service period, which is generally the vesting period of the respective award. The straight-line method of expense recognition is applied to all awards with service-only conditions. The Company accounts for forfeitures as they occur and does not estimate future forfeitures. As such, previously recognized compensation expense for an award is reversed in the period that the award is forfeited. For stock awards that have a performance condition, the Company recognizes compensation expense based on its assessment of the probability that the performance condition will be achieved, using an accelerated attribution model, over the explicit or implicit service period. For stock-based awards granted to non-employees, compensation expense is recognized over the period during which services are rendered by such non-employees until completed. At the end of each financial reporting period prior to completion of the service, the fair value of these awards is re-measured using the then current fair value of the Company’s common stock and updated assumption inputs in the Black-Scholes option-pricing model. Effective January 1, 2019, the Company will adopt ASU No. 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting The Company classifies stock-based compensation expense in the consolidated statements of operations in the same manner in which the award recipient’s payroll costs are classified, or in the case of a non-employee, in the same manner as the award recipient’s service costs are classified. Concentration of Credit Risk and Significant Suppliers Financial instruments that potentially expose the Company to concentration of credit risk consist primarily of commercial paper and corporate bonds. The Company generally invests its cash in money market funds, government and corporate bonds, and commercial paper at one financial institution. The Company does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. The Company is completely dependent on third-party manufacturers and product suppliers for research and commercial activities. In particular, the Company relies on a limited number of manufacturers and relies on them to purchase from third-party suppliers the materials necessary to produce its product candidates for its clinical trials and for commercial supply. These programs would be adversely affected by a significant interruption in the supply of active pharmaceutical ingredients. For the years ended December 31, 2018 and 2017, two individual customers accounted for 81% and 94%, respectively, of the Company’s total revenue and 82% and 94%, respectively, of the Company’s total accounts receivable. No other customer accounted for more than 10% of net product revenue or accounts receivable for the year ended December 31, 2018. Comprehensive Loss Comprehensive loss includes net loss as well as other changes in stockholders’ equity that result from transactions and economic events other than those with stockholders. The Company’s only element of other comprehensive income (loss) in all periods presented was unrealized gains (losses) on available-for-sale securities. Income Taxes The Company accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the estimated future tax consequences of events that have been recognized in the financial statements or in the Company’s tax returns. Deferred taxes are determined based on the differences between financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted rates in effect for the year in which these temporary differences are expected to be recovered or settled. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. The Company assesses the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely than not that all or a portion of deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense. Potential recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies. The Company accounts for uncertainty in income taxes recognized in the financial statements by applying a two-step process to determine the amount of tax benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination by the taxing authorities. If the tax position is deemed more-likely-than-not to be sustained, the tax position is then assessed to determine the amount of benefit to recognize in the financial statements. The amount of benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. The provision for income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits, that are considered appropriate as well as the related net interest and penalties. Fair Value Measurements Fair value is defined as the exchange 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 at the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable: • Level 1 — Quoted market prices in active markets for identical assets or liabilities. Level 1 consists primarily of financial instruments whose value is based on quoted market prices, such as exchange-traded instruments and listed equities. • Level 2 — Observable inputs (other than Level 1 quoted prices) such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. • Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. The Company’s financial instruments consist of cash equivalents, marketable securities, restricted cash, accounts payable and accrued expenses, its term loan and 2024 Convertible Notes (Note 10). The estimated fair value of the Company’s financial instruments, with the exception of the 2024 Convertible Notes, approximates their carrying values. The fair value of the 2024 Convertible Notes, which differs from their carrying value, is influenced by interest rates, stock price and stock price volatility and is determined by prices for the 2024 Convertible Notes observed in market trading. The market for trading of the 2024 Convertible Notes is not considered to be an active market and therefore the estimate of fair value is based on Level 2 inputs. The estimated fair value of the 2024 Convertible Notes, face value of $201.3 million, was $173.1 million at December 31, 2018. Net Loss Per Share The Company follows the two-class method when computing net loss per share as the Company has issued shares that meet the definition of participating securities. The two-class method determines net loss per share for each class of common and participating securities according to dividends declared or accumulated and participation rights in undistributed earnings. The two-class method requires income available to common stockholders for the period to be allocated between common and participating securities based on their respective rights to receive dividends as if all income for the period had been distributed. Basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding for the period. Diluted net loss attributable to common stockholders is computed by adjusting net loss attributable to common stockholders to reallocate undistributed earnings based on the potential impact of dilutive securities, including the assumed conversion of our 2024 Convertible Notes, outstanding stock options and unvested restricted common stock, except where the result would be anti-dilutive. Diluted net loss per share attributable to common stockholders is computed by dividing the diluted net loss attributable to common stockholders by the weighted average number of common shares outstanding for the period, including potential dilutive common shares assuming the dilutiv |
Fair Value of Financial Assets
Fair Value of Financial Assets and Liabilities | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Assets and Liabilities | 4. Fair Value of Financial Assets and Liabilities The following tables present information about the Company’s assets that are measured at fair value on a recurring basis as of December 31, 2018 and 2017 and indicate the level of the fair value hierarchy utilized to determine such fair value: Fair Value Measurements as of December 31, 2018 Units: (In thousands) Level 1 Level 2 Level 3 Total Assets: Cash equivalents $ — $ 57,739 $ — $ 57,739 Marketable securities — 171,555 — 171,555 $ — $ 229,294 $ — $ 229,294 Fair Value Measurements as of December 31, 2017 Units: (In thousands) Level 1 Level 2 Level 3 Total Assets: Cash equivalents $ — $ 109,196 $ — $ 109,196 Marketable securities — 296,127 — 296,127 $ — $ 405,323 $ — $ 405,323 As of December 31, 2018 and 2017, the Company’s cash equivalents that are invested in money market funds and overnight repurchase contracts are valued based on Level 2 inputs. The Company measures the fair value of marketable securities using Level 2 inputs and primarily relies on quoted prices in active markets for similar marketable securities. Amortization and accretion of discounts and premiums are recorded in other income. The Company has a term loan outstanding under its 2015 credit facility with MidCap Financial Funding XIII Trust and Silicon Valley Bank (the “2015 term loan”). The amount outstanding on its 2015 term loan is reported at its carrying value in the accompanying balance sheet. The Company determined the fair value of the 2015 term loan using an income approach that utilizes a discounted cash flow analysis based on current market interest rates for debt issuances with similar remaining years to maturity, adjusted for credit risk. The 2015 term loan was valued using Level 2 inputs as of December 31, 2018 and 2017. The result of the calculation yielded a fair value that approximates its carrying value. On May 2, 2017 the Company issued 3.375% convertible senior notes due 2024 (the “2024 Convertible Notes”) with embedded conversion features. The Company estimated the fair value of the 2024 Convertible Notes using a discounted cash flow approach to derive the value of a debt instrument using the expected cash flows and the estimated yield related to the convertible notes. The significant assumptions used in estimating the expected cash flows were: the estimated market yield based on an implied yield and credit quality analysis of a term loan with similar attributes, and the average implied volatility of the Company’s traded and quoted options available as of May 2, 2017. The Company recorded approximately $136.7 million as the fair value of the liability on May 2, 2017, with a corresponding amount recorded as a discount on the initial issuance of the 2024 Convertible Notes of approximately $64.5 million. The debt discount was recorded to equity and is being amortized to the debt liability over the life of the 2024 Convertible Notes using the effective interest method. The fair value of the 2024 Convertible Notes, which differs from their carrying value, is influenced by interest rates, stock price and stock price volatility and is determined by prices for the 2024 Convertible Notes observed in market trading. The market for trading of the 2024 Convertible Notes is not considered to be an active market and therefore the estimate of fair value is based on Level 2 inputs. The estimated fair value of the 2024 Convertible Notes, face value of $201.3 million, was $173.1 million at December 31, 2018. |
Marketable Securities
Marketable Securities | 12 Months Ended |
Dec. 31, 2018 | |
Investments Debt And Equity Securities [Abstract] | |
Marketable Securities | 5. Marketable Securities As of December 31, 2018 and 2017, the fair value of available-for-sale marketable securities by type of security was as follows: December 31, 2018 (In thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Commercial paper $ 36,723 $ — $ — $ 36,723 U.S. government obligations $ 39,910 $ — $ (12 ) $ 39,898 Corporate bonds $ 94,999 $ 20 $ (85 ) $ 94,934 $ 171,632 $ 20 $ (97 ) $ 171,555 December 31, 2017 (In thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Commercial paper $ 22,436 $ — $ 22,436 U.S. government obligations $ 121,470 $ — $ (136 ) $ 121,334 Corporate bonds $ 152,630 $ — $ (273 ) $ 152,357 $ 296,536 $ — $ (409 ) $ 296,127 As of December 31, 2018 and 2017, marketable securities consisted of approximately $171.6 million and $264.6 million, respectively, of investments that mature within 12 months. As of December 31, 2017, long-term investments consisted of approximately $31.5 million of investments that mature after one year but within two years or less from the balance sheet date. There were no investments with maturities greater than 12 months as of December 31, 2018. |
Prepaid Expenses and Other Cur
Prepaid Expenses and Other Current Assets | 12 Months Ended |
Dec. 31, 2018 | |
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract] | |
Prepaid Expenses and Other Current Assets | 6. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following as of December 31, 2018 and 2017: December 31, (in thousands) 2018 2017 Prepaid expenses $ 4,717 $ 2,359 Deposits 66 66 Interest receivable on marketable securities 717 978 Total prepaid expenses and other current assets $ 5,500 $ 3,403 |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Inventory | 7. Inventory Inventory consisted of the following as of December 31, 2018 and 2017: December 31, (In thousands) 2018 2017 Raw materials $ 2,367 $ 928 Work in process 3,553 746 Finished goods 1,717 125 Total inventories $ 7,637 $ 1,799 Inventory acquired prior to receipt of the marketing approval for ZILRETTA, totaling approximately $3.7 million, was expensed as research and development expense as incurred. The Company began to capitalize the costs associated with the production of ZILRETTA upon receipt of FDA approval of ZILRETTA on October 6, 2017. As of December 31, 2018, all of the finished goods inventory that was previously expensed had been sold to customers. Finished goods manufactured by the Company have a shelf life of approximately 24 months from the date of manufacture. |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2018 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment, Net | 8. Property and Equipment, Net Property and equipment, net, as of December 31, 2018 and 2017 consisted of the following: December 31, (In thousands) 2018 2017 Computer and office equipment $ 1,133 $ 1,124 Manufacturing equipment 12,000 11,780 Furniture and fixtures 604 456 Software 434 434 Leasehold improvements 815 474 Construction—in progress 1,416 305 16,402 14,573 Less: Accumulated depreciation (5,692 ) (3,384 ) Total property and equipment, net $ 10,710 $ 11,189 Depreciation expense for the years ended December 31, 2018, 2017 and 2016 was $1.7 million, $2.0 million, and $1.2 million, respectively. No property or equipment was disposed of during the years ended December 31, 2018 and 2017. During the year ended December 31, 2016, $2.7 million of property and equipment was disposed of, resulting in a loss of $2.3 million. Construction in progress consists of equipment purchases related to the expansion of the Company’s manufacturing capabilities at its contract manufacturer, Patheon U.K. Limited, as well as equipment related to the Company’s portfolio expansion efforts that have not yet been placed into service. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 12 Months Ended |
Dec. 31, 2018 | |
Payables And Accruals [Abstract] | |
Accrued Expenses and Other Current Liabilities | 9. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following as of December 31, 2018 and 2017: December 31, (In thousands) 2018 2017 Research and development $ 1,216 $ 1,023 Payroll and other employee-related expenses 8,207 9,309 Professional services fees 2,544 2,591 Interest expense 1,195 1,249 Product revenue reserves 616 15 Accrual for employee stock purchase plan 251 141 Other 281 55 Total accrued expenses and other current liabilities $ 14,310 $ 14,383 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Debt | 10. Debt Term Loan On August 4, 2015, the Company entered into a credit and security agreement with MidCap Financial Trust, as agent, and MidCap Financial Funding XIII Trust and Silicon Valley Bank, as lenders, (the “Lenders”), to borrow up to $30.0 million in term loans. The Company concurrently borrowed an initial term loan of $15.0 million under the facility. The Company granted the Lenders a security interest in substantially all of its personal property, rights and assets, other than intellectual property, to secure the payment of all amounts owed under the credit facility. The Company agreed not to encumber any of its intellectual property without the Lenders’ prior written consent. The Company also agreed to maintain a balance in cash or cash equivalents at Silicon Valley Bank equal to the principal balance of the loan plus 5% for so long as the Company maintains any cash or cash equivalents in non-secured bank accounts. In addition, pursuant to the credit and security agreement, the Company is prohibited from paying cash dividends without prior consent of the Lenders. On July 22, 2016, the Company borrowed the remaining $15.0 million under the credit and security agreement, in the form of a second term loan. The second term loan is subject to the same credit terms as the initial term loan under the facility. The credit and security agreement also contains certain representations, warranties, and covenants of the Company as well as a material adverse event clause. As of December 31, 2018, the Company was compliant with all covenants. Borrowings under the credit facility accrue interest monthly at a fixed interest rate of 6.25% per annum. Following an interest-only period of 19 months, principal will be due in 36 equal monthly installments commencing March 1, 2017 and ending February 1, 2020 (the “maturity date”). Upon the maturity date, the Company will be obligated to pay a final payment equal to 9% of the total principal amounts borrowed under the facility. The final payment amount is being accreted to the carrying value of the debt using the straight line method, which approximates the effective interest method. As of December 31, 2018, the carrying value of the term loan was approximately $13.6 million, of which $10.0 million was due within 12 months and $3.6 million was due in greater than 12 months. In connection with the credit and security agreement, the Company incurred debt issuance costs totaling approximately $150,000. These costs are being amortized over the estimated term of the debt using the straight-line method which approximates the effective interest method. The Company deducted the debt issuance costs from the carrying amount of the debt as of December 31, 2018 and 2017. As of December 31, 2018, annual principal and interest payments due under the 2015 term loan are as follows: Year Aggregate Minimum Payments (in thousands) 2019 10,448 2020 4,383 Total $ 14,831 Less interest (497 ) Less unamortized portion of final payment (727 ) Total $ 13,607 2024 Convertible Notes On May 2, 2017 the Company issued an aggregate of $201.3 million principal amount of the 2024 Convertible Notes. The 2024 Convertible Notes have a maturity date of May 1, 2024, are unsecured and accrue interest at a rate of 3.375% per annum, payable semi-annually on May 1 and November 1 of each year, beginning November 1, 2017. The Company received $194.8 million in proceeds for the sale of the 2024 Convertible Notes, after deducting fees and expenses of $6.5 million. Upon conversion of the 2024 Convertible Notes, at the election of each holder of a 2024 Convertible Note (the “Holder”), the note will be convertible into cash, shares of the Company’s common stock, or a combination thereof, at the Company’s election (subject to certain limitations in the 2015 term loan), at a conversion rate of approximately 37.3413 shares of common stock per $1,000 principal amount of the 2024 Convertible Notes, which corresponds to an initial conversion price of approximately $26.78 per share of the Company’s common stock. The conversion rate is subject to adjustment from time to time upon the occurrence of certain events, including, but not limited to, fundamental change events and certain corporate events that occur prior to the maturity date of the notes. In addition, if the Company delivers a notice of redemption, the Company will increase, in certain circumstances, the conversion rate for a Holder who elects to convert its notes in connection with such a corporate event or notice of redemption, as the case may be. At any time prior to the close of business on the business day immediately preceding February 1, 2024, Holders may convert all, or any portion, of the 2024 Convertible Notes at their option only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on June 30, 2017 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any ten consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; (3) if the Company calls any or all of the notes for redemption, at any time prior to the close of business on the business day immediately preceding the redemption date; and (4) upon the occurrence of specified corporate events. On or after February 1, 2024, until the close of business on the business day immediately preceding the maturity date, Holders may convert their notes at any time, regardless of the foregoing circumstances. The Company may redeem, for cash, all or any portion of the 2024 Convertible Notes, at its option, on or after May 6, 2020 if the last reported sale price of the Company’s common stock has been at least 130% of the conversion price for at least 20 trading days during any 30 consecutive day trading period, at a redemption price equal to 100% of the principal amount of the 2024 Convertible Notes to be redeemed, plus accrued and unpaid interest, subject to the Holders’ right to convert as described above. The 2024 Convertible Notes are considered convertible debt with a cash conversion feature. Per ASC 470-20, Debt with Conversion and Other Options, the Company has separated the convertible debt into liability and equity components based on the fair value of a similar debt instrument excluding the embedded conversion option. The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature. The allocation was performed in a manner that reflected our non-convertible debt borrowing rate for similar debt. The equity component of the 2024 Convertible Notes was recognized as a debt discount and represents the difference between the proceeds from the issuance of the 2024 Convertible Notes and the fair value of the liability of the 2024 Convertible Notes on their respective dates of issuance. The excess of the principal amount of the liability component over its carrying amount (“debt discount”) is amortized to interest expense using the effective interest method over seven years. The equity component is not re-measured as long as it continues to meet the conditions for equity classification. In connection with the issuance of the 2024 Convertible Notes, the Company incurred approximately $6.5 million of debt issuance costs, which primarily consisted of underwriting, legal and other professional fees, and allocated these costs to the liability and equity components based on the allocation of the proceeds. Of the total d ebt issuance costs, $4.4 million were allocated to the liability component equity component and is recorded as a reduction to additional paid-in capital. Debt discount and issuance rate year ended December 31, 2018 $14.0 The table below summarizes the carrying value of the 2024 Convertible Notes as of December 31, 2018: ( in thousands Gross proceeds $ 201,250 Portion of proceeds allocated to equity component (additional paid-in capital) (64,541 ) Debt issuance costs (6,470 ) Portion of issuance costs allocated to equity component (additional paid-in capital) 2,075 Amortization of debt discount and debt issuance costs 12,565 Carrying value 2024 Convertible Notes $ 144,879 |
Stockholders_ Equity
Stockholders’ Equity | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Stockholders’ Equity | 11. Stockholders’ Equity On February 17, 2014, the Company filed an amended and restated Certificate of Incorporation (the “Restated Certificate”) in connection with the closing of the Company’s initial public offering. As of December 31, 2018, under the Restated Certificate, the Company is authorized to issue 10,000,000 shares of preferred stock with a par value of $0.001 per share. On June 7, 2016, the Company completed a follow-on public offering of its common stock, which resulted in the sale of 5,900,000 shares of the Company’s common stock at a price to the public of $14.00 per share including shares sold pursuant to the exercise in full of the underwriters’ option to purchase additional shares. On November 15, 2016, the Company completed a follow-on public offering of its common stock, which resulted in the sale of 4,140,000 shares of the Company’s common stock at a price to the public of $18.00 per share including shares sold pursuant to the exercise in full of the underwriters’ option to purchase additional shares. On October 16, 2017, the Company completed a follow-on public offering of its common stock, which resulted in the sale of 5,520,000 shares of the Company’s common stock at a price to the public of $25.50 per share including shares sold pursuant to the exercise in full of the underwriters’ option to purchase additional shares. Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company’s stockholders. Common stockholders are entitled to receive dividends, as may be declared by the board of directors, if any, subject to the preferential dividend rights of any holders of Preferred Stock. As of December 31, 2018, no dividends have been declared. |
Stock Plans
Stock Plans | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock Plans | 12. Stock Plans 2013 Equity Incentive Plan On January 27, 2014, the Company’s stockholders approved the 2013 Equity Incentive Plan (the “2013 Plan”), which became effective on February 11, 2014, the date of execution of the underwriting agreement pursuant to which the Company’s common stock was priced for its initial public offering. Prior to the effective date of the 2013 Plan, the Company granted stock-based awards pursuant to the 2009 Stock Incentive Plan (the “2009 Plan), which had similar features to the 2013 Plan. The 2013 Plan provides for the grant of incentive stock options (“ISOs”), non-statutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance-based stock awards, and other forms of equity compensation. Initially, the maximum number of shares of the Company’s common stock that may be issued pursuant to stock awards under the 2013 Plan was 2,337,616, which is the sum of (i) 1,230,012 shares, plus (ii) the number of shares remaining available for grant under the 2009 Plan, plus (iii) any shares subject to outstanding stock options or other stock awards that would have otherwise returned to the 2009 Plan (such as upon the expiration or termination of a stock award prior to vesting). Additionally, the number of shares of common stock reserved for issuance under the 2013 Plan automatically increases on January 1 of each year, beginning on January 1, 2015 and continuing through and including January 1, 2023, by 4% of the total number of shares of the Company’s capital stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares determined by the board of directors. The maximum number of shares that may be issued upon the exercise of ISOs under the 2013 Plan is 4,684,989 shares. On September 11, 2017, the Company’s compensation committee approved an amendment to the 2013 Plan to reserve an additional 1,500,000 of the Company’s common stock to be used exclusively for grants of inducement awards to individuals who were not previously employees or non-employee directors of the Company (or following a bona fide period of non-employment with the Company). As of December 31, 2018, 2,800,276 shares were available for future issuance under the 2013 Plan. As of December 31, 2018, there were 282,011 options outstanding under the 2009 Plan and 4,153,045 options outstanding under the 2013 Plan, including 630,209 shares underlying outstanding stock options granted as inducement awards under the 2013 Plan. Employee Stock Purchase Plan On January 27, 2014, the Company’s stockholders approved the Employee Stock Purchase Plan. A total of 209,102 shares of common stock were reserved for issuance under this plan. The Employee Stock Purchase Plan became effective on February 11, 2014, the date of execution of the underwriting agreement pursuant to which the Company’s common stock was priced for its initial public offering. During the years ended December 31, 2018 and 2017, 138,405 and 89,704 shares, respectively, were purchased by employees under the plan. Additionally, the number of shares of common stock reserved for issuance under the Employee Stock Purchase Plan automatically increases on January 1 of each year, beginning on January 1, 2015 and continuing through and including January 1, 2023, by 1% of the total number of shares of the Company’s capital stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares determined by the board of directors. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation | 13. Stock-Based Compensation Stock Options During the years ended December 31, 2018, 2017 and 2016, the Company granted stock options for the purchase of 1,127,263, 1,448,100, and 1,816,575 shares of common stock, respectively, to certain employees and directors. The vesting conditions for most of these awards are time-based, and the awards typically vest 25% after one year and monthly thereafter for the next 36 months, except for annual option grants to non-employee directors of the Company whose initial grants vest 25% after one year and monthly thereafter for the next 24 months and whose annual grants vest in equal monthly installments during the 12-month period following the grant date, pursuant to the Company’s Non-Employee Director Compensation Policy. Options granted have a maximum term of up to 10 years. Stock Option Valuation The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. Prior to February 2014, the Company was privately held with a limited operating history and accordingly it utilized data from representative peer companies to estimate expected stock price volatility from its inception to its initial public offering. The Company selected peer companies from the biopharmaceutical industry with similar characteristics as the Company, including stage of product development, market capitalization and therapeutic focus. Since its initial public offering in February 2014, the Company has continued to use volatility data from a representative peer group to estimate expected stock price volatility and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded stock price for a period of time that is commensurate with the expected term (in years) of the Company’s stock options. December 31, 2018 2017 2016 Risk-free interest rates 2.67% - 3.06% 1.97% - 2.29% 0.74% - 1.75% Expected dividend yield 0.00% 0.00% 0.00% Expected term (in years) 6.0 6.0 5.6 Expected volatility 69.8% - 75.3% 69.9% - 72.8% 67.3% - 99.9% The following table summarizes stock option activity for the year ended December 31, 2018: (In thousands, except per share amounts) Shares Under Weighted Exercise Outstanding as of December 31, 2017 3,800 $ 17.75 Granted 1,127 $ 23.33 Exercised (166 ) $ 11.88 Cancelled (326 ) $ 20.21 Outstanding as of December 31, 2018 4,435 $ 19.21 Options vested and expected to vest at December 31, 2018 4,435 $ 19.21 Options exercisable at December 31, 2018 2,369 $ 17.13 The aggregate intrinsic value of options is calculated as the difference between the exercise price of the options and the fair value of the Company’s common stock for those options that had exercise prices lower than the fair value of the Company’s common stock. A total of 165,684, 308,011, and 30,195 options were exercised during the years ended December 31, 2018, 2017 and 2016, respectively. The aggregate intrinsic value of stock options exercised was $2.3 million, $2.9 million, and $0.2 million for the years ended December 31, 2018, 2017 and 2016, respectively. At December 31, 2018, 2017 and 2016, the Company had options for the purchase of 4,435,056, 3,799,965, and 3,079,175 shares of common stock outstanding, with a weighted average remaining contractual term of 7.6, 8.0, and 7.8 years, respectively, and with a weighted average exercise price of $19.21, $17.75, and $14.84 per share, respectively. At December 31, 2018, 2017 and 2016 there were options for the purchase of 2,368,955, 1,688,652, and 1,173,671 shares of common stock exercisable under these stock option awards, with a weighted average remaining contractual life of 6.6, 6.8, and 6.7 years, respectively, and an aggregate intrinsic value of $2.6 million, $17.0 million, and $8.7 million, respectively. The weighted average grant date fair value of options granted during the years ended December 31, 2018, 2017 and 2016 was $15.12, $14.33, and $11.50, respectively. Restricted Stock Units On January 4, 2016, the Company granted 189,300 restricted stock units, (“RSUs”), with performance and time-based vesting conditions to certain executives. These RSUs began vesting, and the underlying shares of common stock became deliverable, beginning when ZILRETTA was approved (the “Milestone”). The number of shares eligible for vesting varied based on the timing of achieving the Milestone. As a result of the Milestone being achieved on October 6, 2017, the number of shares of the Company’s common stock earned under these awards was 122,800, subject to ongoing employment with the Company for a period of two years. The 122,800 shares had an approximate value of $2.2 million as of the original grant date of which $1.6 million was recognized in the fourth quarter of 2017 upon achieving the Milestone and the remaining $0.6 million will be recognized over a period of two years. During the year ended December 31, 2018, the Company awarded 239,366 RSUs to employees at an average grant date fair value of $22.90 per share. The RSUs vest in four substantially equal installments on each of the first four anniversaries of the vesting commencement date, subject to the employee’s continued employment with, or services to, the Company on each vesting date. Compensation expense is recognized on a straight-line basis. The following table summarizes the RSU activity for the year ended December 31, 2018: (In thousands, except per share amounts) Number of Shares Weighted Grant Date Fair Value Per Share Nonvested balance as of December 31, 2017 82 $ 16.43 Granted 239 22.90 Cancelled (23 ) 22.31 Vested/Released (47 ) 17.97 Nonvested balance as of December 31, 2018 252 $ 22.25 Stock-based Compensation The Company recorded stock-based compensation expense related to stock options, restricted stock and shares purchased under the Employee Stock Purchase Plan for the years ended December 31, 2018, 2017 and 2016 as follows: Year Ended December 31, (In thousands) 2018 2017 2016 Research and development $ 4,728 $ 3,979 $ 2,341 Selling, general and administrative 10,731 7,563 4,429 Total $ 15,459 $ 11,542 $ 6,770 As of December 31, 2018, unrecognized stock-based compensation expense for stock options outstanding was $25.7 million which is expected to be recognized over a weighted average period of 2.6 years. As of December 31, 2018, unrecognized stock-based compensation expense for RSUs outstanding was $4.0 million which is expected to be recognized over a period of 3.0 years. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 1 4 . Commitments and Contingencies Operating Leases Burlington Lease In May 2013, the Company entered into a lease for office space in Burlington, Massachusetts (the “Lease”). The term of the Lease was for 42-months with minimum monthly lease payments beginning at $17,588 per month and escalating over the term of the Lease. In July 2015, the Company amended the Lease to add approximately 4,700 square feet of additional office space, with the option to lease an additional 5,400 square feet in the same building in Burlington, Massachusetts. In addition, at the time, the Company leased approximately 6,700 square feet of temporary space for use prior to delivery of the additional space. This amendment also extended the term of the Lease through October 31, 2019. On September 30, 2015, the Company exercised its option for the additional 5,400 square feet of office space. On September 21, 2016, the Company entered into another amendment to extend the Lease for the 6,700 square feet of temporary space until October 31, 2017. On April 7, 2017, the Company further amended the Lease to extend the term to October 31, 2023 on the then-existing office space, including the temporary space, consisting of approximately 28,600 square feet of office space in Burlington, Massachusetts. From November 2016 through October 2017, the Company’s lease payment for this space was approximately $80,000 per month. Also, as part of this amendment to the Lease, the Company leased an additional 1,471 square feet of office space beginning in 2018. The lease payment for the 1,471 square feet of office space is approximately $4,100 per month. On October 6, 2017, the Company exercised its option for an additional 6,450 square feet of space, and the term for the space commenced in April 2018. The Company has approximately 36,500 square feet of office space in Burlington, Massachusetts under a lease term expiring on October 31, 2023. Starting in December 2017, the Company’s minimum monthly lease payment is approximately $87,000 and it increases over the life of the amended Lease. In addition to the base rent for the office space, which increases over the term of the amended Lease, the Company is responsible for its share of operating expenses and real estate taxes. Woburn Lease In February 2017, the Company entered into a five-year lease for laboratory space located in Woburn, Massachusetts with a monthly lease payment of approximately $15,000, which increases over the term of the lease, plus a share of operating expenses. The total cash obligations for the term of the lease are approximately $0.9 million. The Company incurred rent expense of $1.1 million, $1.0 million, and $0.7 million for the years ended December 31, 2018, 2017 and 2016, respectively. Future minimum lease payments under the Company’s lease obligations are as follows: Year Aggregate Minimum Payments (in thousands) 2019 1,491 2020 1,533 2021 1,576 2022 1,447 2023 1,203 Total $ 7,250 Manufacturing and Supply Agreement with Patheon U.K. Limited In July 2015, the Company and Patheon U.K. Limited (“Patheon”) entered into a Manufacturing and Supply Agreement (the “Manufacturing Agreement”) and Technical Transfer and Service Agreement (the “Technical Transfer Agreement”) for the manufacture of ZILRETTA. Patheon agreed in the Technical Transfer Agreement to undertake certain transfer activities and construction services needed to prepare Patheon’s United Kingdom facility for the commercial manufacture of ZILRETTA in dedicated manufacturing suites. The Company provided Patheon with certain equipment and materials necessary to manufacture ZILRETTA and pays Patheon a monthly fee for such activities and reimburses Patheon for certain material, equipment and miscellaneous expenses and additional services. The initial term of the Manufacturing Agreement is 10 years from approval by the FDA of the Patheon manufacturing suites for ZILRETTA, or until October 6, 2027. The Company pays a monthly base fee to Patheon for the operation of the manufacturing suites and a per product fee for each vial based upon a forecast of commercial demand. The Company also reimburses Patheon for purchases of materials and equipment made on its behalf, certain nominal expenses and additional services. The Manufacturing Agreement will remain in full effect unless and until it expires or is terminated. Upon termination of the Manufacturing Agreement (other than termination by Flexion in the event that Patheon does not meet the construction and manufacturing milestones or for a breach by Patheon), Flexion will be obligated to pay for the costs incurred by Patheon associated with the removal of our manufacturing equipment and for Patheon’s termination costs up to a capped amount. Future minimum payments under the Company’s agreed obligations under the Manufacturing Agreement with Patheon are as follows: Year Aggregate Minimum Payments (in thousands) 2019 8,027 2020 8,027 2021 8,027 2022 8,027 2023 8,027 2024 and thereafter 30,102 Total $ 70,237 Evonik Supply Agreement In November 2016, the Company entered into a Supply Agreement with Evonik Corporation (“Evonik”) for the purchase of PLGA which is used in the manufacturing of potential clinical and commercial supply of ZILRETTA. Pursuant to the Supply Agreement, Flexion is obligated to submit rolling monthly forecasts to Evonik for PLGA supply, a portion of which will constitute binding orders. In addition, Flexion agreed to certain minimum purchase requirements and which do not apply (i) during periods in which Evonik is in material breach of the Supply Agreement or is unable to perform its obligations due to a force majeure event, (ii) with respect to orders that Evonik is unable to supply in excess of binding orders, (iii) for orders Evonik is unable to timely deliver or does not deliver conforming product and provides a credit for such order, or (iv) during an uncured material quality failure by Evonik. Flexion agreed to purchase PLGA batches at a specified price per gram in U.S. dollars, subject to adjustment from time to time, including due to changes in price indices and in the event the initial term of the Supply Agreement is extended. The total term of the agreement is five years. Upon termination of the Supply Agreement (other than termination due to the expiration of the term of the agreement or due to bankruptcy of either Evonik or Flexion), Flexion is obligated to pay the costs associated with the binding supply forecast provided to Evonik. The Supply Agreement will renew for two successive two-year terms upon mutual written consent by both parties. Southwest Research Institute License Agreement On July 25, 2014, the Company entered into an exclusive worldwide license agreement with Southwest Research Institute (“SwRI”) with respect to the use of SwRI’s proprietary microsphere manufacturing technologies for certain steroids formulated with PLGA, including ZILRETTA. Under the agreement, the Company paid an upfront fee of $120,000 to SwRI. In February 2017, Flexion executed an agreement with SwRI to transfer manufacturing equipment to SwRI in consideration for SwRI deeming the additional milestone payment to have been fully paid by Flexion. FX201 Related Agreement In December 2017, the Company entered into a definitive agreement with GeneQuine Biotherapeutics GmbH (“GeneQuine”) to acquire the global rights to FX201. As part of the asset purchase transaction with GeneQuine, the Company made an upfront payment to GeneQuine of $2.0 million. In 2018, the Company paid GeneQuine a $750,000 milestone payment for initiating a GLP toxicology study of FX201. The Company may also be required to make additional milestone payments during the development of FX201, including up to $7.75 million through Phase 2 proof of concept (“PoC”) clinical trial and, following successful PoC, up to an additional $54.0 million in development and global regulatory approval milestone payments. The transaction was accounted for as an asset acquisition, as it did not qualify as a business combination. The upfront fee was attributed to the intellectual property acquired, and recognized as research and development expense in December 2017 as the FX201 product candidate had not been commercially approved, and had no alternative future use. Future milestone payments earned prior to regulatory approval of FX201 would be recognized as research and development expense in the period when the milestone events become probable of being achieved. Future milestones earned upon regulatory approval would be recognized as an intangible asset and amortized to expense over the estimated life of FX201. The first milestone of $750,000 was achieved on October 24, 2018 when the GLP toxicology study was initiated upon the dosing of the first animals. This milestone was recognized as research and development expense. As of December 31, 2018, no other milestones under the arrangement have been achieved. As part of the transaction, the Company became the direct licensee of certain underlying Baylor College of Medicine (“Baylor”) patents and other proprietary rights related to FX201 for human applications. The Baylor license agreement grants the Company an exclusive, royalty-bearing, world-wide right and license (with a right to sublicense) for human applications under its patent and other proprietary rights directly related to FX201, with a similar non-exclusive license to certain Baylor intellectual property rights that are not specific to FX201. The license agreement with Baylor includes a low single-digit royalty on net sales of FX201 and requires the Company to use reasonable efforts to develop FX201 according to timelines set out in the license agreement. In December 2017, the Company also entered into a Master Production Services Agreement with SAFC Carlsbad, Inc., a part of MilliporeSigma, for the manufacturing of pre-clinical and initial clinical supplies of FX201. |
Net Loss Per Share
Net Loss Per Share | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | 15. Net Loss Per Share Basic and diluted net loss per share attributable to common stockholders was calculated as follows for the years ended December 31, 2018, 2017 and 2016: Year ended December 31, (In thousands) 2018 2017 2016 Numerator: Net loss $ (169,659 ) $ (137,481 ) $ (71,894 ) Net loss: $ (169,659 ) $ (137,481 ) $ (71,894 ) Denominator: Weighted average common shares outstanding, basic and diluted 37,751 33,027 25,297 Net loss per share, basic and diluted $ (4.49 ) $ (4.16 ) $ (2.84 ) The following common stock equivalents were excluded from the calculation of diluted net loss per share as including them would have an anti-dilutive effect: Year ended December 31, 2018 2017 2016 Shares issuable upon conversion of the 2024 convertible notes 7,515 5,017 — Stock Options 4,498 3,602 2,345 Restricted Stock Units 266 147 188 12,279 8,766 2,533 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 16. Income Taxes The Company has generated losses since inception. Accordingly, there is no tax provision or benefit for the years ended December 31, 2018, 2017 and 2016, respectively. A reconciliation of the U.S. federal statutory income tax rate to the Company’s effective income tax rate is as follows: Year Ended December 31, 2018 2017 2016 Federal statutory income tax rate 21.0 % 34.0 % 34.0 % State taxes, net of federal benefit 8.0 3.0 5.0 Federal and state research and development tax credits 1.0 0.9 2.7 Change in deferred tax asset valuation allowance (27.4 ) (11.6 ) (40.0 ) Tax rate change (1.9 ) (25.1 ) — Other (0.7 ) (1.2 ) (1.7 ) Effective income tax rate — % — % — % The Company’s net deferred tax assets consisted of the following: December 31, 2018 2017 Net operating loss carryforwards $ 76,723 $ 48,496 Research and development tax credit carryforwards 9,965 7,725 Accruals and other temporary differences 7,808 3,578 Debt discount (14,165 ) (14,630 ) Capitalized research and development expenses, net 41,048 29,673 Total deferred tax assets 121,379 74,842 Valuation allowance (121,379 ) (74,842 ) Net deferred tax asset $ — $ — As of December 31, 2018, the Company had federal and state net operating loss (“NOL”) carryforwards of approximately $298.9 million and $219.4 million, respectively, which begin to expire in 2029 for federal purposes and in 2030 for state purposes. Approximately $109.4 million of the federal NOLs have an indefinite carryforward. In addition, the Company had federal and state research and development tax credit carryforwards of approximately $7.1 million and $3.5 million, respectively, available to reduce future tax liabilities, which begin to expire in 2029 for federal purposes and 2025 for state purposes. Management of the Company has evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets, which are comprised principally of NOL carryforwards and capitalized research and development expenses. Management has considered the Company’s history of cumulative net losses incurred since inception, as well as its lack of commercialization of any products or generation of any revenue from product sales since inception and determined that it is more likely than not that the Company will not realize the benefits of its deferred tax assets. As a result, a full valuation allowance has been established at December 31, 2018, 2017 and 2016. During 2017, we recorded tax charges for the impact of the Tax Act effects using the current available information and technical guidance on the interpretations of the Tax Act. As permitted by SEC Staff Accounting Bulletin 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act, we recorded provisional estimates and have subsequently finalized our accounting analysis based on the guidance, interpretations, and data available as of December 31, 2018. Adjustments made in the fourth quarter of 2018 upon finalization of our accounting analysis were not material to our consolidated financial statements. Section 382 of the Internal Revenue Code of 1986, as amended (“Section 382”), contains rules that limit the ability of a company that undergoes an ownership change to utilize its NOLs, and tax credits existing as of the date of such ownership change. Under the rules, such an ownership change is generally any change in ownership of more than 50% of a company’s stock within a rolling three-year period. The rules generally operate by focusing on changes in ownership among stockholders considered by the rules as owning, directly or indirectly, 5% or more of the stock of a company and any change in ownership arising from new issuances of stock by the company. The Company has experienced multiple ownership changes since its inception, however, based on the annual limitations calculated at each ownership change date, substantially all NOL carryforwards will be available to offset future taxable income. Approximately $0.3 million of NOLs will expire unused. Future ownership changes as defined by Section 382 may further limit the amount of NOL carryforwards that could be utilized annually to offset future taxable income. Changes in the valuation allowance for deferred tax assets during the years ended December 31, 2018, 2017 and 2016 were as follows: Year Ended December 31, 2018 2017 2016 Valuation allowance as of beginning of year $ (74,842 ) $ (83,434 ) $ (54,773 ) Decreases recorded as benefit to income tax provision 1,913 36,606 4,771 Decreases recorded as benefit to equity 0 24,537 — Increases recorded to income tax provision (48,450 ) (52,551 ) (33,432 ) Valuation allowance as of end of year $ (121,379 ) $ (74,842 ) $ (83,434 ) In each reporting period, the Company considers whether a tax position of the Company is more likely than not to be sustained upon examination, including resolution of any related appeals of litigation processes, based on the technical merits of the position. For tax positions meeting the more likely than not threshold, the tax amount recognized in the financial statements is reduced by the largest benefit that has a greater than fifty percent likelihood of being realized upon the ultimate settlement with the relevant taxing authority. No liabilities for unrecognized tax benefits were recorded as of December 31, 2018 and 2017. The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by federal and state jurisdictions, where applicable. There are currently no pending tax examinations. The Company’s tax years are still open under statute from 2013 to the present. Earlier years may be examined to the extent that tax credit or NOL carryforwards are used in future periods. The resolution of tax matters is not expected to have a material effect on the Company’s consolidated financial statements. |
Quarterly Financial Data (unaud
Quarterly Financial Data (unaudited) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data (unaudited) | 17. Quarterly Financial Data (unaudited) The following information has been derived from unaudited consolidated financial statements that, in the opinion of management, include all recurring adjustments necessary for a fair statement of such information. Three Months Ended March 31, June 30, September 30, December 31, (in thousands, except per share amounts) 2018 2018 2018 2018 Revenues $ 2,194 $ 3,797 $ 6,990 $ 9,543 Gross profit (504 ) 2,851 5,371 7,470 Net loss (41,569 ) (43,875 ) (43,640 ) (40,575 ) Net loss per common share—basic and diluted $ (1.10 ) $ (1.16 ) $ (1.15 ) $ (1.07 ) Weighted average common shares—basic and diluted 37,620 37,697 37,818 37,867 Three Months Ended March 31, June 30, September 30, December 31, (in thousands, except per share amounts) 2017 2017 2017 2017 Revenues $ 0 $ 0 $ 0 $ 355 Gross profit 0 0 0 351 Net loss (23,879 ) (28,880 ) (34,188 ) (50,534 ) Net loss per common share—basic and diluted $ (0.75 ) $ (0.91 ) $ (1.07 ) $ (1.38 ) Weighted average common shares—basic and diluted 31,704 31,826 31,931 36,644 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) and Generally Accepted Accounting Principles (“GAAP”) for financial information, including the accounts of the Company and its wholly owned subsidiary after elimination of all significant intercompany accounts and transactions. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and judgments that may affect the reported amounts of assets and liabilities, expenses and related disclosures. The Company bases estimates and judgments on historical experience and on various other factors that it believes to be reasonable under the circumstances. The most significant estimates in these consolidated financial statements include estimates related to revenue, useful lives with respect to long-lived assets, such as property and equipment and leasehold improvements, accounting for stock-based compensation, and accrued expenses, including preclinical and clinical development costs. The Company’s actual results may differ from these estimates under different assumptions or conditions. The Company evaluates its estimates on an ongoing basis. Changes in estimates are reflected in reported results in the period in which they become known by the Company’s management. |
Revenue Recognition | Revenue Recognition On October 6, 2017, the FDA approved ZILRETTA. The Company entered into a limited number of arrangements with specialty distributors and a specialty pharmacy in the U.S. to distribute ZILRETTA. These arrangements are the Company’s initial contracts with customers and, as a result the Company adopted Accounting Standards Codification (“ASC”) Topic 606 - Revenue from Contracts with Customers To determine revenue recognition for arrangements that an entity determines are within the scope of Topic 606, the entity performs the following five 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) the entity satisfies a performance obligation. The Company only applies the five-step model to arrangements that meet the definition of a contract with a customer under Topic 606, including when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of Topic 606, the Company assesses the goods or services promised within each contract, determines those that are performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. For a complete discussion of accounting for product revenue, see Product Revenue, Net (below). Product Revenue, Net — The Company sells ZILRETTA to its customers who then subsequently resell ZILRETTA to physicians, clinics and certain medical centers or hospitals. In addition to distribution agreements with customers, the Company enters into arrangements with government payers that provide for government mandated rebates and chargebacks with respect to the purchase of ZILRETTA. The Company recognizes revenue on product sales when the customer obtains control of the Company's product, which occurs at a point in time (upon delivery to the customer). The Company has determined that the delivery of ZILRETTA to its customers constitutes a single performance obligation. There are no other promises to deliver goods or services beyond what is specified in each accepted customer order. The Company has assessed the existence of a significant financing component in the agreements with its customers. The trade payment terms with our customers do not exceed one year and therefore the Company has elected to apply the practical expedient and no amount of consideration has been allocated as a financing component. Product revenues are recorded net of applicable reserves for variable consideration, including discounts and allowances. Transaction Price, including Variable Consideration — Revenues from product sales are recorded at the net sales price (transaction price), which includes estimates of variable consideration for which reserves are established. Components of variable consideration include trade discounts and allowances, product returns, government chargebacks, discounts and rebates, and other incentives, such as voluntary patient assistance, and other fee for service amounts that are detailed within contracts between the Company and its customers relating to the Company’s sale of its products. These reserves, as detailed below, are based on the amounts earned, or to be claimed on the related sales, and are classified as reductions of accounts receivable (if the amount is payable to the customer) or a current liability (if the amount is payable to a party other than a customer). These estimates take into consideration a range of possible outcomes which are probability-weighted in accordance with the expected value method in Topic 606 for relevant factors such as current contractual and statutory requirements, specific known market events and trends, industry data, and forecasted customer buying and payment patterns. Overall, these reserves reflect the Company’s best estimates of the amount of consideration to which it is entitled based on the terms of the respective underlying contracts. The amount of variable consideration which is included in the transaction price may be constrained, and is included in the net sales price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized under the contract will not occur in a future period. Actual amounts of consideration ultimately received may differ from the Company’s estimates. If actual results in the future vary from the Company’s original estimates, the Company will adjust these estimates, which would affect net product revenue and earnings in the period such variances become known. Trade Discounts and Allowances —The Company compensates (through trade discounts and allowances) its customers for sales order management, data, and distribution services. However, the Company has determined such services received to date are not distinct from the Company’s sale of products to the customer and, therefore, these payments have been recorded as a reduction of revenue within the statement of operations and comprehensive loss through December 31, 2018, as well as a reduction to trade receivables, net on the consolidated balance sheets. Product Returns — Consistent with industry practice, the Company generally offers customers a limited right of return for product that has been purchased from the Company based on the product’s expiration date. The Company estimates the amount of its product sales that may be returned by its customers and records this estimate as a reduction of revenue in the period the related product revenue is recognized, as well as within accrued expenses and other current liabilities, net, on the consolidated balance sheets. The Company currently estimates product return liabilities using available industry data and its own sales information, including its visibility into the inventory remaining in the distribution channel. The Company has received an immaterial amount of returns to date and believes that returns of ZILRETTA will be minimal. The Company’s limited right of return allows for eligible returns of ZILRETTA in the following circumstances: • Shipment errors that were the result of an error by the Company; • Quantity delivered that is greater or less than the quantity ordered; • Product distributed by the Company that is damaged in transit prior to receipt by the customer; • Expired product, previously purchased directly from the Company, that is returned during the period beginning three months prior to the product’s expiration date and ending three months after the product’s expiration date; • Product subject to a recall; and • Product that the Company, at its sole discretion, have specified to be returned. Government Chargebacks, Discounts and Rebates — Chargebacks for fees and discounts to qualified government healthcare providers represent the estimated obligations resulting from contractual commitments to sell products to qualified VA hospitals and 340b entities at prices lower than the list prices charged to customers who directly purchase the product from the Company. The 340b Drug Discount Program is a US federal government program created in 1992 that requires drug manufacturers to provide outpatient drugs to eligible health care organizations and covered entities at significantly reduced prices. Customers charge the Company for the difference between what they pay for the product and the statutory selling price to the qualified government entity. These reserves are established in the same period that the related revenue is recognized, resulting in a reduction of product revenue and trade receivables, net. Chargeback amounts are generally determined at the time of resale to the qualified government healthcare provider by customers, and the Company generally issues credits for such amounts within a few weeks of the Customer’s notification to the Company of the resale. Reserves for chargebacks consist of credits that the Company expects to issue for units that remain in the distribution channel inventories at each reporting period-end that the Company expects will be sold to qualified healthcare providers, and chargebacks that customers have claimed, but for which the Company has not yet issued a credit. Government Rebates — The Company is subject to discount obligations under state Medicaid programs and Medicare. These reserves are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability which is included in accrued expenses and other current liabilities on the consolidated balance sheets. For Medicare, the Company also estimates the number of patients in the prescription drug coverage gap for whom the Company will owe an additional liability under the Medicare Part D program. The Company anticipates its exposure to utilization from the Medicare Part D coverage gap discount program to be immaterial. For Medicaid programs, the Company estimates the portion of sales attributed to Medicaid patients and records a liability for the rebates to be paid to the respective state Medicaid programs. The Company’s liability for these rebates consists of invoices received for claims from prior quarters that have not been paid or for which an invoice has not yet been received, estimates of claims for the current quarter, and estimated future claims that will be made for product that has been recognized as revenue, but which remains in the distribution channel inventories at the end of each reporting period. Other Incentives — Other incentives which the Company offers include voluntary patient assistance programs, such as the co-pay assistance program, which are intended to provide financial assistance to qualified commercially-insured patients with prescription drug co-payments required by payers. The calculation of the accrual for co-pay assistance is based on an estimate of claims and the cost per claim that the Company expects to receive associated with product that has been recognized as revenue, but remains in the distribution channel inventories at the end of each reporting period. The adjustments are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability which is included as a component of accrued expenses and other current liabilities on the consolidated balance sheets. To date, the Company’s only source of product revenue has been from the U.S. sales of ZILRETTA, which it began shipping to customers in October 2017. The following table summarizes activity in each of the product revenue allowance and reserve categories for the years ended December 31, 2018 and 2017: (In thousands) Trade Discounts, Allowances and Government Chargebacks Government Rebates and Other Incentives Returns Total Balance as of January 1, 2017 $ — $ — $ — $ — Provision related to sales in the current year 100 15 2 117 Credit or payments made during the period (40 ) 0 0 (40 ) Balance as of December 31, 2017 60 15 2 77 Provision related to sales in the current year 1,688 502 124 2,314 Credit or payments made during the period (1,147 ) (26 ) (1 ) (1,174 ) Balance as of December 31, 2018 $ 601 $ 491 $ 125 $ 1,217 Inventory The Company values its inventories at the lower of cost or estimated net realizable value. The Company determines the cost of its inventories, which includes amounts related to materials and manufacturing overhead, on a first-in, first-out basis. The Company performs an assessment of the recoverability of capitalized inventory during each reporting period, and it writes down any excess and obsolete inventories to their estimated realizable value in the period in which the impairment is first identified. Such impairment charges, should they occur, are recorded within cost of sales. The determination of whether inventory costs will be realizable requires estimates by management. If actual market conditions are less favorable than projected by management, additional write-downs of inventory may be required, which would be recorded as a cost of sales in the consolidated statements of operations and comprehensive loss. The Company capitalizes inventory costs associated with the Company’s products after regulatory approval when, based on management’s judgment, future commercialization is considered probable and the future economic benefit is expected to be realized. Inventory acquired prior to receipt of marketing approval of a product candidate is expensed as research and development expense as incurred. Inventory that can be used in either the production of clinical or commercial product is expensed as research and development expense when selected for use in a clinical manufacturing campaign. Inventory produced that will be used in promotional marketing campaigns is expensed to selling, general and administrative expense when it is selected for use in a marketing program. |
Consolidation | Consolidation The accompanying consolidated financial statements include the Company and its wholly-owned subsidiary, Flexion Therapeutics Securities Corporation. The Company has eliminated all intercompany transactions for the years ended December 31, 2018, 2017 and 2016. In addition, Flexion Therapeutics, Inc. is registered to do business in the United Kingdom through its branch office located in Swindon, United Kingdom. |
Accounts Receivable | Accounts Receivable Accounts receivable are recorded net of customer allowances for distribution fees and chargebacks, and doubtful accounts. Allowances for distribution fees and chargebacks are based on contractual terms. The Company estimates the allowance for doubtful accounts based on existing contractual payment terms, actual payment patterns of its customers and individual customer circumstances. At December 31, 2018, the Company determined that an allowance for doubtful accounts was not required. No accounts were written off during the year ended December 31, 2018. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less at the date of purchase to be cash equivalents. The Company currently invests available cash in money market funds of a major financial institution, corporate bonds, government obligations and commercial paper. |
Marketable Securities | Marketable Securities Marketable securities consist of investments with original maturities greater than ninety days and less than one year from the balance sheet date. Long-term investments consist of investments with maturities of greater than one year. The Company classifies all of its investments, which consist solely of debt securities, as available-for-sale. Accordingly, these investments are recorded at fair value, which is based on quoted market prices. Unrealized gains and losses are recorded as a component of other comprehensive income (loss). Realized gains and losses are determined on a specific identification basis and are included in other income (loss). Amortization and accretion of discounts and premiums is recorded in other income. |
Restricted Cash | Restricted Cash The balance at December 31, 2017 consists of $600,000 in an account at a commercial bank to collateralize a credit card account, which is classified as long-term restricted cash. The restriction was released during 2018 and therefore the balance has been reclassified within Cash and Cash Equivalents. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Depreciation and amortization expense is recognized using the straight-line method over the following estimated useful lives: Estimated Useful Life (Years) Computers, office equipment, and minor computer software 3 Computer software 7 Manufacturing equipment 7-10 Furniture and fixtures 5 Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the related asset. Costs of major additions and betterments are capitalized and depreciated on a straight-line basis over their useful lives. Repairs and maintenance costs are expensed as incurred. Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is credited or charged to income. Property and equipment includes construction-in-progress, that is not yet in service. |
Foreign Currencies | Foreign Currencies The Company maintains a bank account designated in British Pounds. All foreign currency payables and cash balances are measured at the applicable exchange rate at the end of the reporting period. All associated gains and losses from foreign currency transactions are reflected in the consolidated statements of operations. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company reviews its long-lived assets, including property and equipment, for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. Factors that the Company considers in deciding when to perform an impairment review include significant underperformance of the business in relation to expectations, significant negative industry or economic trends, and significant changes or planned changes in the use of the assets. If an impairment review is performed to evaluate a long-lived asset for recoverability, the Company compares forecasts of undiscounted cash flows expected to result from the use and eventual disposition of the long-lived asset to its carrying value. An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of an asset are less than its carrying amount. The impairment loss would be based on the excess of the carrying value of the impaired asset over its fair value, determined based on discounted cash flows. |
Debt Issuance Costs, net | Debt Issuance Costs, net As of December 31, 2018 and 2017, the carrying value of debt issuance costs was $3.5 million and $4.1 million, respectively, and was presented as a direct deduction from the carrying amounts of long-term debt. In addition, $0.6 million, $0.4 million, and $37,000, respectively, of debt issuance costs were amortized and recognized as other expense in the statement of operations for the years ended December 31, 2018, 2017 and 2016. |
Research and Development | Research and Development Research and development expenses are comprised of costs incurred in performing research and development activities, including salaries and benefits, facilities costs, overhead costs, depreciation, clinical trial and related clinical manufacturing costs, contract services and other related costs. Research and development costs are expensed to operations as the related obligation is incurred. As part of the process of preparing its financial statements, the Company is required to estimate its accrued expenses. This process involves reviewing open contracts and purchase orders, communicating with applicable internal and vendor personnel to identify services that have been performed on the Company’s behalf and estimating the level of service performed and the associated cost incurred for the service when the Company has not yet been invoiced or otherwise notified of the actual cost. The majority of the Company’s service providers invoice it monthly in arrears for services performed or when contractual milestones are met. The Company makes estimates of its accrued expenses as of each balance sheet date in its financial statements based on facts and circumstances known to it at that time. The Company periodically confirms the accuracy of its estimates with the service providers and makes adjustments if necessary. Examples of estimated accrued research and development expenses include fees paid to: • CROs in connection with clinical studies; • investigative sites in connection with clinical studies; • vendors related to product manufacturing, development and distribution of clinical supplies; and • vendors in connection with preclinical development activities. The Company records expenses related to clinical studies and manufacturing development activities based on its estimates of the services received and efforts expended pursuant to contracts with multiple CROs and manufacturing vendors that conduct and manage these activities on the Company’s behalf. The financial terms of these agreements are subject to negotiation, vary from contract to contract, and may result in uneven payment flows. The Company makes estimates of its accrued expenses as of each balance sheet date in its financial statements based on facts and circumstances known to it. If timelines or contracts are modified based upon changes in the clinical trial protocol or scope of work to be performed, the Company modifies its estimates of accrued expenses accordingly on a prospective basis. If the Company does not identify costs that it has begun to incur, or if it underestimates or overestimates the level of services performed or the costs of these services, the Company’s actual expenses could differ from its estimates. To date, the Company has not adjusted its estimates at any particular balance sheet date in any material amount. |
Patent Costs | Patent Costs All patent-related costs incurred in connection with filing and prosecuting patent applications are recorded as general and administrative expenses as incurred, as recoverability of such expenditures is uncertain. |
Accounting for Stock-Based Compensation | Accounting for Stock-Based Compensation The Company measures all stock options and other stock based-awards granted to employees at the fair value at the date of grant using the Black-Scholes option-pricing model. The fair value of the awards is recognized as expense over the requisite service period, which is generally the vesting period of the respective award. The straight-line method of expense recognition is applied to all awards with service-only conditions. The Company accounts for forfeitures as they occur and does not estimate future forfeitures. As such, previously recognized compensation expense for an award is reversed in the period that the award is forfeited. For stock awards that have a performance condition, the Company recognizes compensation expense based on its assessment of the probability that the performance condition will be achieved, using an accelerated attribution model, over the explicit or implicit service period. For stock-based awards granted to non-employees, compensation expense is recognized over the period during which services are rendered by such non-employees until completed. At the end of each financial reporting period prior to completion of the service, the fair value of these awards is re-measured using the then current fair value of the Company’s common stock and updated assumption inputs in the Black-Scholes option-pricing model. Effective January 1, 2019, the Company will adopt ASU No. 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting The Company classifies stock-based compensation expense in the consolidated statements of operations in the same manner in which the award recipient’s payroll costs are classified, or in the case of a non-employee, in the same manner as the award recipient’s service costs are classified. |
Concentration of Credit Risk and Significant Suppliers | Concentration of Credit Risk and Significant Suppliers Financial instruments that potentially expose the Company to concentration of credit risk consist primarily of commercial paper and corporate bonds. The Company generally invests its cash in money market funds, government and corporate bonds, and commercial paper at one financial institution. The Company does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. The Company is completely dependent on third-party manufacturers and product suppliers for research and commercial activities. In particular, the Company relies on a limited number of manufacturers and relies on them to purchase from third-party suppliers the materials necessary to produce its product candidates for its clinical trials and for commercial supply. These programs would be adversely affected by a significant interruption in the supply of active pharmaceutical ingredients. For the years ended December 31, 2018 and 2017, two individual customers accounted for 81% and 94%, respectively, of the Company’s total revenue and 82% and 94%, respectively, of the Company’s total accounts receivable. No other customer accounted for more than 10% of net product revenue or accounts receivable for the year ended December 31, 2018. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss includes net loss as well as other changes in stockholders’ equity that result from transactions and economic events other than those with stockholders. The Company’s only element of other comprehensive income (loss) in all periods presented was unrealized gains (losses) on available-for-sale securities. |
Income Taxes | Income Taxes The Company accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the estimated future tax consequences of events that have been recognized in the financial statements or in the Company’s tax returns. Deferred taxes are determined based on the differences between financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted rates in effect for the year in which these temporary differences are expected to be recovered or settled. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. The Company assesses the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely than not that all or a portion of deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense. Potential recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies. The Company accounts for uncertainty in income taxes recognized in the financial statements by applying a two-step process to determine the amount of tax benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination by the taxing authorities. If the tax position is deemed more-likely-than-not to be sustained, the tax position is then assessed to determine the amount of benefit to recognize in the financial statements. The amount of benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. The provision for income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits, that are considered appropriate as well as the related net interest and penalties. |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the exchange 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 at the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable: • Level 1 — Quoted market prices in active markets for identical assets or liabilities. Level 1 consists primarily of financial instruments whose value is based on quoted market prices, such as exchange-traded instruments and listed equities. • Level 2 — Observable inputs (other than Level 1 quoted prices) such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. • Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. The Company’s financial instruments consist of cash equivalents, marketable securities, restricted cash, accounts payable and accrued expenses, its term loan and 2024 Convertible Notes (Note 10). The estimated fair value of the Company’s financial instruments, with the exception of the 2024 Convertible Notes, approximates their carrying values. The fair value of the 2024 Convertible Notes, which differs from their carrying value, is influenced by interest rates, stock price and stock price volatility and is determined by prices for the 2024 Convertible Notes observed in market trading. The market for trading of the 2024 Convertible Notes is not considered to be an active market and therefore the estimate of fair value is based on Level 2 inputs. The estimated fair value of the 2024 Convertible Notes, face value of $201.3 million, was $173.1 million at December 31, 2018. |
Net Loss Per Share | Net Loss Per Share The Company follows the two-class method when computing net loss per share as the Company has issued shares that meet the definition of participating securities. The two-class method determines net loss per share for each class of common and participating securities according to dividends declared or accumulated and participation rights in undistributed earnings. The two-class method requires income available to common stockholders for the period to be allocated between common and participating securities based on their respective rights to receive dividends as if all income for the period had been distributed. Basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding for the period. Diluted net loss attributable to common stockholders is computed by adjusting net loss attributable to common stockholders to reallocate undistributed earnings based on the potential impact of dilutive securities, including the assumed conversion of our 2024 Convertible Notes, outstanding stock options and unvested restricted common stock, except where the result would be anti-dilutive. Diluted net loss per share attributable to common stockholders is computed by dividing the diluted net loss attributable to common stockholders by the weighted average number of common shares outstanding for the period, including potential dilutive common shares assuming the dilutive effect of the conversion of the 2024 Convertible Notes, the exercise of outstanding stock options and the vesting unvested restricted common stock. In the diluted net loss per share calculation, net loss would also be adjusted for the elimination of interest expense on the 2024 Convertible Notes, if the impact was not anti-dilutive. For periods in which the Company has reported net losses, diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders, since dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. Potential common shares will always be anti-dilutive for periods in which the Company has reported a net loss. Diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders for the years ended December 31, 2018, 2017 and 2016. |
Segment Data | Segment Data The Company manages its operations as a single operating segment for the purposes of assessing performance and making operating decisions. The Company is a biopharmaceutical company focused on the development and commercialization of novel, local therapies. All revenues for the years ended December 31, 2018 and 2017 were generated in the United States. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Accounting Standards Recently Adopted In January 2016, the Financial Accounting Standards Board, (“FASB”), issued ASU No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities In August 2016, the FASB issued ASU 2016-15 , Statement of Cash Flows In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation Accounting Standards Recently Issued In February 2016, the FASB issued ASU 2016-02, Leases (“ASU 2016-02”), to increase transparency and comparability among organizations by recognizing lease assets and liabilities, including for operating leases, on the balance sheet and disclosing key information about leasing arrangements. ASU 2016-02 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company adopted ASU 2016-02 on January 1, 2019 using the transition approach approved by the FASB in July 2018 as part of ASU 2018-11. Under this method, the Company will initially apply the new lease requirements at the effective date (i.e., January 1, 2019), report comparative periods presented in the financial statements in the period of adoption under current GAAP (i.e., ASC 840, Leases), and provide the required disclosures under ASC 842 for the current year and ASC 840 for all periods presented under ASC 840. We have substantially completed our assessment of the new lease standard. We expect that this standard will have a material effect on our financial statements due to the recognition of new right-of-use, or ROU, assets and lease liabilities on our consolidated balance sheet for real estate and equipment leases. We continue to finalize our calculations related to the new standard, including the calculation of lease versus nonlease components in an embedded lease within our supply agreement with Patheon. As part of our implementation process, we have assessed our lease arrangements and evaluated practical expedient and accounting policy elections to meet the reporting requirements of this standard. We are also continuing to evaluate the changes in controls and processes that are necessary to implement the new standard, but do not expect material changes. We expect to elect the package of practical expedients which allows us to not reassess (1) whether existing contracts contain leases, (2) the lease classification for existing leases, and (3) whether existing initial direct costs meet the new definition. We do not plan to elect the hindsight practical expedient which permits entities to use hindsight in determining the lease term. Consequently, on adoption, we expect to recognize additional operating liabilities with corresponding ROU assets of approximately the same amount based on the present value of the remaining minimum rental payments under current leasing standards for existing operating leases. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In June 2018, the FASB issued ASU No. 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting In July 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Product Revenue Allowance And Reserve Categories | The following table summarizes activity in each of the product revenue allowance and reserve categories for the years ended December 31, 2018 and 2017: (In thousands) Trade Discounts, Allowances and Government Chargebacks Government Rebates and Other Incentives Returns Total Balance as of January 1, 2017 $ — $ — $ — $ — Provision related to sales in the current year 100 15 2 117 Credit or payments made during the period (40 ) 0 0 (40 ) Balance as of December 31, 2017 60 15 2 77 Provision related to sales in the current year 1,688 502 124 2,314 Credit or payments made during the period (1,147 ) (26 ) (1 ) (1,174 ) Balance as of December 31, 2018 $ 601 $ 491 $ 125 $ 1,217 |
Property Plant and Equipment Estimated Useful Lives | Property and equipment are stated at cost less accumulated depreciation. Depreciation and amortization expense is recognized using the straight-line method over the following estimated useful lives: Estimated Useful Life (Years) Computers, office equipment, and minor computer software 3 Computer software 7 Manufacturing equipment 7-10 Furniture and fixtures 5 |
Fair Value of Financial Asset_2
Fair Value of Financial Assets and Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets Measured at Fair Value on Recurring Basis | The following tables present information about the Company’s assets that are measured at fair value on a recurring basis as of December 31, 2018 and 2017 and indicate the level of the fair value hierarchy utilized to determine such fair value: Fair Value Measurements as of December 31, 2018 Units: (In thousands) Level 1 Level 2 Level 3 Total Assets: Cash equivalents $ — $ 57,739 $ — $ 57,739 Marketable securities — 171,555 — 171,555 $ — $ 229,294 $ — $ 229,294 Fair Value Measurements as of December 31, 2017 Units: (In thousands) Level 1 Level 2 Level 3 Total Assets: Cash equivalents $ — $ 109,196 $ — $ 109,196 Marketable securities — 296,127 — 296,127 $ — $ 405,323 $ — $ 405,323 |
Marketable Securities (Tables)
Marketable Securities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Investments Debt And Equity Securities [Abstract] | |
Summary of Fair Value of Available-for-Sale Marketable Securities by Type of Security | As of December 31, 2018 and 2017, the fair value of available-for-sale marketable securities by type of security was as follows: December 31, 2018 (In thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Commercial paper $ 36,723 $ — $ — $ 36,723 U.S. government obligations $ 39,910 $ — $ (12 ) $ 39,898 Corporate bonds $ 94,999 $ 20 $ (85 ) $ 94,934 $ 171,632 $ 20 $ (97 ) $ 171,555 December 31, 2017 (In thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Commercial paper $ 22,436 $ — $ 22,436 U.S. government obligations $ 121,470 $ — $ (136 ) $ 121,334 Corporate bonds $ 152,630 $ — $ (273 ) $ 152,357 $ 296,536 $ — $ (409 ) $ 296,127 |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract] | |
Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consisted of the following as of December 31, 2018 and 2017: December 31, (in thousands) 2018 2017 Prepaid expenses $ 4,717 $ 2,359 Deposits 66 66 Interest receivable on marketable securities 717 978 Total prepaid expenses and other current assets $ 5,500 $ 3,403 |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventory consisted of the following as of December 31, 2018 and 2017: December 31, (In thousands) 2018 2017 Raw materials $ 2,367 $ 928 Work in process 3,553 746 Finished goods 1,717 125 Total inventories $ 7,637 $ 1,799 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property Plant And Equipment [Abstract] | |
Components of Property and Equipment | Property and equipment, net, as of December 31, 2018 and 2017 consisted of the following: December 31, (In thousands) 2018 2017 Computer and office equipment $ 1,133 $ 1,124 Manufacturing equipment 12,000 11,780 Furniture and fixtures 604 456 Software 434 434 Leasehold improvements 815 474 Construction—in progress 1,416 305 16,402 14,573 Less: Accumulated depreciation (5,692 ) (3,384 ) Total property and equipment, net $ 10,710 $ 11,189 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Payables And Accruals [Abstract] | |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following as of December 31, 2018 and 2017: December 31, (In thousands) 2018 2017 Research and development $ 1,216 $ 1,023 Payroll and other employee-related expenses 8,207 9,309 Professional services fees 2,544 2,591 Interest expense 1,195 1,249 Product revenue reserves 616 15 Accrual for employee stock purchase plan 251 141 Other 281 55 Total accrued expenses and other current liabilities $ 14,310 $ 14,383 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Annual Principal and Interest Payments Due Under Term Loan | As of December 31, 2018, annual principal and interest payments due under the 2015 term loan are as follows: Year Aggregate Minimum Payments (in thousands) 2019 10,448 2020 4,383 Total $ 14,831 Less interest (497 ) Less unamortized portion of final payment (727 ) Total $ 13,607 |
Summary of Carrying Value of Convertible Notes | The table below summarizes the carrying value of the 2024 Convertible Notes as of December 31, 2018: ( in thousands Gross proceeds $ 201,250 Portion of proceeds allocated to equity component (additional paid-in capital) (64,541 ) Debt issuance costs (6,470 ) Portion of issuance costs allocated to equity component (additional paid-in capital) 2,075 Amortization of debt discount and debt issuance costs 12,565 Carrying value 2024 Convertible Notes $ 144,879 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Schedule of Relevant Data Used to Estimate Fair Value of Stock Option Grants | The relevant data used to determine the value of the stock option grants for the years ended December 31, 2018, 2017 and 2016 is as follows: December 31, 2018 2017 2016 Risk-free interest rates 2.67% - 3.06% 1.97% - 2.29% 0.74% - 1.75% Expected dividend yield 0.00% 0.00% 0.00% Expected term (in years) 6.0 6.0 5.6 Expected volatility 69.8% - 75.3% 69.9% - 72.8% 67.3% - 99.9% |
Summary of Stock Option Activity | The following table summarizes stock option activity for the year ended December 31, 2018: (In thousands, except per share amounts) Shares Under Weighted Exercise Outstanding as of December 31, 2017 3,800 $ 17.75 Granted 1,127 $ 23.33 Exercised (166 ) $ 11.88 Cancelled (326 ) $ 20.21 Outstanding as of December 31, 2018 4,435 $ 19.21 Options vested and expected to vest at December 31, 2018 4,435 $ 19.21 Options exercisable at December 31, 2018 2,369 $ 17.13 |
Summary of of RSU Activity | The following table summarizes the RSU activity for the year ended December 31, 2018: (In thousands, except per share amounts) Number of Shares Weighted Grant Date Fair Value Per Share Nonvested balance as of December 31, 2017 82 $ 16.43 Granted 239 22.90 Cancelled (23 ) 22.31 Vested/Released (47 ) 17.97 Nonvested balance as of December 31, 2018 252 $ 22.25 |
Stock-Based Compensation Expense Related to Stock Options, Restricted Stock and Shares Purchased Under Employee Stock Purchase Plan | The Company recorded stock-based compensation expense related to stock options, restricted stock and shares purchased under the Employee Stock Purchase Plan for the years ended December 31, 2018, 2017 and 2016 as follows: Year Ended December 31, (In thousands) 2018 2017 2016 Research and development $ 4,728 $ 3,979 $ 2,341 Selling, general and administrative 10,731 7,563 4,429 Total $ 15,459 $ 11,542 $ 6,770 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Future Minimum Lease Payments under Operating Leases | Future minimum lease payments under the Company’s lease obligations are as follows: Year Aggregate Minimum Payments (in thousands) 2019 1,491 2020 1,533 2021 1,576 2022 1,447 2023 1,203 Total $ 7,250 |
Schedule of Future Minimum Payments under Manufacturing Agreement with Patheon | Future minimum payments under the Company’s agreed obligations under the Manufacturing Agreement with Patheon are as follows: Year Aggregate Minimum Payments (in thousands) 2019 8,027 2020 8,027 2021 8,027 2022 8,027 2023 8,027 2024 and thereafter 30,102 Total $ 70,237 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Net Loss Per Share Attributable to Common Stockholders | Basic and diluted net loss per share attributable to common stockholders was calculated as follows for the years ended December 31, 2018, 2017 and 2016: Year ended December 31, (In thousands) 2018 2017 2016 Numerator: Net loss $ (169,659 ) $ (137,481 ) $ (71,894 ) Net loss: $ (169,659 ) $ (137,481 ) $ (71,894 ) Denominator: Weighted average common shares outstanding, basic and diluted 37,751 33,027 25,297 Net loss per share, basic and diluted $ (4.49 ) $ (4.16 ) $ (2.84 ) |
Schedule of Common Stock Equivalents Excluded from Calculation of Diluted Net Loss Per Share, as Including them Would have Anti-dilutive Effect | The following common stock equivalents were excluded from the calculation of diluted net loss per share as including them would have an anti-dilutive effect: Year ended December 31, 2018 2017 2016 Shares issuable upon conversion of the 2024 convertible notes 7,515 5,017 — Stock Options 4,498 3,602 2,345 Restricted Stock Units 266 147 188 12,279 8,766 2,533 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Reconciliation of U.S. Federal Statutory Income Tax Rate to Company's Effective Income Tax Rate | A reconciliation of the U.S. federal statutory income tax rate to the Company’s effective income tax rate is as follows: Year Ended December 31, 2018 2017 2016 Federal statutory income tax rate 21.0 % 34.0 % 34.0 % State taxes, net of federal benefit 8.0 3.0 5.0 Federal and state research and development tax credits 1.0 0.9 2.7 Change in deferred tax asset valuation allowance (27.4 ) (11.6 ) (40.0 ) Tax rate change (1.9 ) (25.1 ) — Other (0.7 ) (1.2 ) (1.7 ) Effective income tax rate — % — % — % |
Net Deferred Tax Assets | The Company’s net deferred tax assets consisted of the following: December 31, 2018 2017 Net operating loss carryforwards $ 76,723 $ 48,496 Research and development tax credit carryforwards 9,965 7,725 Accruals and other temporary differences 7,808 3,578 Debt discount (14,165 ) (14,630 ) Capitalized research and development expenses, net 41,048 29,673 Total deferred tax assets 121,379 74,842 Valuation allowance (121,379 ) (74,842 ) Net deferred tax asset $ — $ — |
Changes in Valuation Allowance for Deferred Tax Assets | Changes in the valuation allowance for deferred tax assets during the years ended December 31, 2018, 2017 and 2016 were as follows: Year Ended December 31, 2018 2017 2016 Valuation allowance as of beginning of year $ (74,842 ) $ (83,434 ) $ (54,773 ) Decreases recorded as benefit to income tax provision 1,913 36,606 4,771 Decreases recorded as benefit to equity 0 24,537 — Increases recorded to income tax provision (48,450 ) (52,551 ) (33,432 ) Valuation allowance as of end of year $ (121,379 ) $ (74,842 ) $ (83,434 ) |
Quarterly Financial Data (una_2
Quarterly Financial Data (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Recurring Adjustments Necessary for Fair Statement | The following information has been derived from unaudited consolidated financial statements that, in the opinion of management, include all recurring adjustments necessary for a fair statement of such information. Three Months Ended March 31, June 30, September 30, December 31, (in thousands, except per share amounts) 2018 2018 2018 2018 Revenues $ 2,194 $ 3,797 $ 6,990 $ 9,543 Gross profit (504 ) 2,851 5,371 7,470 Net loss (41,569 ) (43,875 ) (43,640 ) (40,575 ) Net loss per common share—basic and diluted $ (1.10 ) $ (1.16 ) $ (1.15 ) $ (1.07 ) Weighted average common shares—basic and diluted 37,620 37,697 37,818 37,867 Three Months Ended March 31, June 30, September 30, December 31, (in thousands, except per share amounts) 2017 2017 2017 2017 Revenues $ 0 $ 0 $ 0 $ 355 Gross profit 0 0 0 351 Net loss (23,879 ) (28,880 ) (34,188 ) (50,534 ) Net loss per common share—basic and diluted $ (0.75 ) $ (0.91 ) $ (1.07 ) $ (1.38 ) Weighted average common shares—basic and diluted 31,704 31,826 31,931 36,644 |
Nature of the Business - Additi
Nature of the Business - Additional Information (Detail) $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Incorporation date | Nov. 5, 2007 |
Cash and cash equivalents and marketable securities | $ 258.8 |
Financing Transactions - Additi
Financing Transactions - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | Oct. 16, 2017 | May 02, 2017 | Nov. 15, 2016 | Jun. 08, 2016 | Jun. 07, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Class Of Stock [Line Items] | ||||||||
Net proceeds from follow-on public offering | $ 132,666 | $ 147,889 | ||||||
Common stock, shares issued | 37,946,341 | 37,610,897 | ||||||
2024 Convertible Notes [Member] | ||||||||
Class Of Stock [Line Items] | ||||||||
Debt instrument principal amount | $ 201,300 | $ 201,300 | ||||||
Debt instrument maturity date | May 1, 2024 | |||||||
Debt instrument interest rate | 3.375% | 3.375% | ||||||
Debt instrument frequency of periodic payment | semi-annually | |||||||
Debt instrument date of first required payment | Nov. 1, 2017 | |||||||
Net proceeds from offering of convertible senior notes | $ 194,800 | |||||||
Debt issuance costs | $ 6,500 | $ 68,900 | ||||||
Follow On Public Offering [Member] | ||||||||
Class Of Stock [Line Items] | ||||||||
Common stock, shares issued | 5,520,000 | 4,140,000 | 5,900,000 | 5,900,000 | ||||
Sale of common stock price per share | $ 25.50 | $ 18 | $ 14 | $ 14 | ||||
Net proceeds from follow-on public offering | $ 132,200 | $ 70,100 | $ 77,400 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Detail) | 12 Months Ended | ||||
Dec. 31, 2018USD ($)Customer | Dec. 31, 2017USD ($)Customer | Dec. 31, 2016USD ($) | May 02, 2017USD ($) | Dec. 31, 2015USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | |||||
Accounts written off | $ 0 | ||||
Long-term restricted cash | $ 600,000 | ||||
Carrying value of debt issuance costs reported in prepaid expenses and other current assets | 3,500,000 | 4,100,000 | |||
Amortization of debt issuance costs recognized as other expense | $ 600,000 | $ 400,000 | $ 37,000 | ||
Number of major customers | Customer | 2 | 2 | |||
Number of customers accounted for more than 10% of accounts receivable | Customer | 0 | ||||
Number of customers accounted for more than 10% of net product revenue | Customer | 0 | ||||
ASU 2016-18 [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Restricted Cash | $ 0 | $ 600,000 | $ 500,000 | $ 100,000 | |
2024 Convertible Notes [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Convertible Notes, face value | 201,300,000 | $ 201,300,000 | |||
Estimated fair value of Convertible Notes | $ 173,100,000 | ||||
Customer Concentration Risk [Member] | Total Revenue [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Concentration risk, percentage | 81.00% | 94.00% | |||
Customer Concentration Risk [Member] | Total Accounts Receivable [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Concentration risk, percentage | 82.00% | 94.00% | |||
Commercial Bank [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Long-term restricted cash | $ 600,000 | ||||
ZILRETTA [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Product return, period prior to expiration | 3 months | ||||
Product return, period after expiration | 3 months | ||||
Maximum [Member] | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Trade Payment Term | 1 year |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Summary of Product Revenue Allowance And Reserve Categories (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Trade Discounts, Allowances and Government Chargebacks [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Beginning Balance | $ 60 | |
Provision related to sales in the current year | 1,688 | $ 100 |
Credit or payments made during the period | (1,147) | (40) |
Ending Balance | 601 | 60 |
Government Rebates and Other Incentives [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Beginning Balance | 15 | |
Provision related to sales in the current year | 502 | 15 |
Credit or payments made during the period | (26) | 0 |
Ending Balance | 491 | 15 |
Returns [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Beginning Balance | 2 | |
Provision related to sales in the current year | 124 | 2 |
Credit or payments made during the period | (1) | 0 |
Ending Balance | 125 | 2 |
Product Revenue Allowance and Reserve [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Beginning Balance | 77 | |
Provision related to sales in the current year | 2,314 | 117 |
Credit or payments made during the period | (1,174) | (40) |
Ending Balance | $ 1,217 | $ 77 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Property Plant and Equipment Estimated Useful Lives (Detail) | 12 Months Ended |
Dec. 31, 2018 | |
Computers, Office Equipment, and Minor Computer Software [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life (Years) | 3 years |
Computer Software [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life (Years) | 7 years |
Manufacturing Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life (Years) | 7 years |
Manufacturing Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life (Years) | 10 years |
Furniture and Fixtures [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life (Years) | 5 years |
Fair Value of Financial Asset_3
Fair Value of Financial Assets and Liabilities - Schedule of Assets Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | $ 171,555 | $ 296,127 |
Fair Value Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 57,739 | 109,196 |
Marketable securities | 171,555 | 296,127 |
Assets, Total | 229,294 | 405,323 |
Fair Value Measurements, Recurring [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 57,739 | 109,196 |
Marketable securities | 171,555 | 296,127 |
Assets, Total | $ 229,294 | $ 405,323 |
Fair Value of Financial Asset_4
Fair Value of Financial Assets and Liabilities - Additional Information (Detail) - 2024 Convertible Notes [Member] - USD ($) $ in Millions | Dec. 31, 2018 | May 02, 2017 |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Fair value of liability | $ 136.7 | |
Unamortized debt discount | $ 64.5 | |
Debt instrument interest rate | 3.375% | 3.375% |
Convertible Notes, face value | $ 201.3 | $ 201.3 |
Estimated fair value of Convertible Notes | $ 173.1 |
Marketable Securities - Summary
Marketable Securities - Summary of Fair Value of Available-for-Sale Marketable Securities by Type of Security (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $ 171,632 | $ 296,536 |
Gross Unrealized Gains | 20 | |
Gross Unrealized Losses | (97) | (409) |
Fair Value | 171,555 | 296,127 |
Commercial Paper [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 36,723 | 22,436 |
Fair Value | 36,723 | 22,436 |
U.S. Government Obligations [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 39,910 | 121,470 |
Gross Unrealized Losses | (12) | (136) |
Fair Value | 39,898 | 121,334 |
Corporate Bonds [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 94,999 | 152,630 |
Gross Unrealized Gains | 20 | |
Gross Unrealized Losses | (85) | (273) |
Fair Value | $ 94,934 | $ 152,357 |
Marketable Securities - Additio
Marketable Securities - Additional Information (Detail) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Investments Debt And Equity Securities [Abstract] | ||
Marketable securities | $ 171,555,000 | $ 264,589,000 |
Long-term investment, marketable securities | $ 0 | $ 31,500,000 |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets - Prepaid Expenses and Other Current Assets (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract] | ||
Prepaid expenses | $ 4,717 | $ 2,359 |
Deposits | 66 | 66 |
Interest receivable on marketable securities | 717 | 978 |
Total prepaid expenses and other current assets | $ 5,500 | $ 3,403 |
Inventory - Schedule of Invento
Inventory - Schedule of Inventory (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 2,367 | $ 928 |
Work in process | 3,553 | 746 |
Finished goods | 1,717 | 125 |
Total inventories | $ 7,637 | $ 1,799 |
Inventory - Additional Informat
Inventory - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Inventory [Line Items] | |||
Research and development expense | $ 53,079,000 | $ 51,231,000 | $ 41,314,000 |
Inventory finished goods shelf life | 24 months | ||
Write-downs to inventory | $ 0 | ||
Product [Member] | United Kingdom Facility at Patheon UK Limited [Member] | |||
Inventory [Line Items] | |||
Cost of sales expense for unabsorbed manufacturing and overhead costs | 5,000,000 | ||
ZILRETTA [Member] | |||
Inventory [Line Items] | |||
Research and development expense | $ 3,700,000 |
Property and Equipment, Net - C
Property and Equipment, Net - Components of Property and Equipment (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | $ 16,402 | $ 14,573 |
Less: Accumulated depreciation | (5,692) | (3,384) |
Total property and equipment, net | 10,710 | 11,189 |
Computer and Office Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 1,133 | 1,124 |
Manufacturing Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 12,000 | 11,780 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 604 | 456 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 815 | 474 |
Construction-in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | 1,416 | 305 |
Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment gross | $ 434 | $ 434 |
Property and Equipment, Net - A
Property and Equipment, Net - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property Plant And Equipment [Abstract] | |||
Depreciation | $ 1,714,000 | $ 2,008,000 | $ 1,151,000 |
Property and equipment disposals | $ 0 | $ 0 | 2,700,000 |
Gain (Loss) on sale of property and equipment | $ (2,300,000) |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities - Schedule of Accrued Expenses and Other Current Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Payables And Accruals [Abstract] | ||
Research and development | $ 1,216 | $ 1,023 |
Payroll and other employee-related expenses | 8,207 | 9,309 |
Professional services fees | 2,544 | 2,591 |
Interest expense | 1,195 | 1,249 |
Product revenue reserves | 616 | 15 |
Accrual for employee stock purchase plan | 251 | 141 |
Other | 281 | 55 |
Total accrued expenses and other current liabilities | $ 14,310 | $ 14,383 |
Debt - Additional Information (
Debt - Additional Information (Detail) | May 02, 2017USD ($) | Jul. 22, 2016USD ($) | Aug. 04, 2015USD ($) | Dec. 31, 2018USD ($)d$ / sharesshares | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Debt Instrument [Line Items] | ||||||
Term loan due within 12 months | $ 9,967,000 | $ 9,967,000 | ||||
Term loan due in greater than 12 months | 3,640,000 | 12,936,000 | ||||
Equity component of Convertible Notes recorded as additional paid-in capital | 62,466,000 | |||||
Debt issuance costs | $ 6,470,000 | $ 42,000 | ||||
2015 Term Loan [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Carrying value of term loan | 13,607,000 | |||||
Liability component of Convertible Notes recorded as long-term debt | $ 14,831,000 | |||||
Mid Cap Financial Trust [Member] | 2015 Term Loan [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Term loan, maximum borrowings | $ 30,000,000 | |||||
Debt instrument description | The Company also agreed to maintain a balance in cash or cash equivalents at Silicon Valley Bank equal to the principal balance of the loan plus 5%. | |||||
Debt instrument percentage of cash or cash equivalents addition to principal balance | 5.00% | |||||
Debt instrument interest rate | 6.25% | |||||
Term loan, payment description | Interest-only period of 19 months, principal will be due in 36 equal monthly installments. | |||||
Term loan, first periodic payment date | Mar. 1, 2017 | |||||
Debt instrument maturity date | Feb. 1, 2020 | |||||
Interest on final payment | 9.00% | |||||
Carrying value of term loan | $ 13,600,000 | |||||
Term loan due within 12 months | 10,000,000 | |||||
Term loan due in greater than 12 months | $ 3,600,000 | |||||
Debt issuance costs | $ 150,000 | |||||
Mid Cap Financial Trust [Member] | 2015 Term Loan [Member] | Interest-Only-Strip [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Term loan, Interest payment period | 19 months | |||||
Mid Cap Financial Trust [Member] | 2015 Term Loan [Member] | Principal-Only-Strip [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Term loan, Interest payment period | 36 months | |||||
Mid Cap Financial Trust [Member] | 2015 Term Loan [Member] | Initial Term Loan [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Term loan, currently borrowed | $ 15,000,000 | |||||
Mid Cap Financial Trust [Member] | 2015 Term Loan [Member] | Second Term Loan [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Term loan remaining amount borrowed | $ 15,000,000 | |||||
2024 Convertible Notes [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument interest rate | 3.375% | 3.375% | ||||
Term loan, first periodic payment date | Nov. 1, 2017 | |||||
Debt instrument maturity date | May 1, 2024 | |||||
Debt issuance costs | $ 6,470,000 | |||||
Debt instrument principal amount | $ 201,300,000 | $ 201,300,000 | ||||
Debt instrument interest rate | 3.375% | 9.71% | ||||
Debt instrument frequency of periodic payment | semi-annually | |||||
Net proceeds from offering of convertible senior notes | $ 194,800,000 | |||||
Debt discount and issuance costs | 6,500,000 | $ 68,900,000 | ||||
Number of shares issued upon conversion of $1,000 debt principal amount | shares | 37.3413 | |||||
Debt instrument convertible initial conversion price per share of common stock | $ / shares | $ 26.78 | |||||
Number of days within 30 consecutive trading days in which the closing price of the entity's common stock must exceed the conversion price for the notes to be convertible into common stock | d | 20 | |||||
Number of consecutive trading days during which the closing price of the entity's common stock must exceed the conversion price for at least 20 days in order for the notes to be convertible into common stock | d | 30 | |||||
Percentage of the closing sales price of the entity's common stock that the conversion price must exceed in order for the notes to be convertible | 130.00% | |||||
Number of consecutive business days immediately after any five consecutive trading day period during the note measurement period | d | 5 | |||||
Number of consecutive trading days before five consecutive business days during the note measurement period | d | 10 | |||||
Liability component of Convertible Notes recorded as long-term debt | 136,700,000 | |||||
Equity component of Convertible Notes recorded as additional paid-in capital | $ 64,500,000 | |||||
Debt instrument effective interest rate period | 7 years | |||||
Debt issuance costs | $ 6,500,000 | |||||
Debt issuance costs allocated to liability component | 4,400,000 | |||||
Debt issuance costs allocated to equity component reduction to additional paid-in capital | 2,100,000 | |||||
Interest expense | 14,000,000 | |||||
Amortization of debt discount | $ 7,200,000 | |||||
2024 Convertible Notes [Member] | On or After February 1, 2024 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Number of days within 30 consecutive trading days in which the closing price of the entity's common stock must exceed the conversion price for the notes to be convertible into common stock | d | 20 | |||||
Number of consecutive trading days during which the closing price of the entity's common stock must exceed the conversion price for at least 20 days in order for the notes to be convertible into common stock | d | 30 | |||||
Percentage of the closing sales price of the entity's common stock that the conversion price must exceed in order for the notes to be convertible | 130.00% | |||||
Debt instrument redemption date | May 6, 2020 | |||||
Redemption price percentage of principal amount to be redeemed | 100.00% | |||||
2024 Convertible Notes [Member] | Maximum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument conversion obligation trading price as percentage of product common stock closing sale price and conversion rate | 98.00% |
Debt - Schedule of Annual Princ
Debt - Schedule of Annual Principal and Interest Payments Due Under Term Loan (Detail) - 2015 Term Loan [Member] $ in Thousands | Dec. 31, 2018USD ($) |
Long-term Debt, Fiscal Year Maturity [Abstract] | |
2,019 | $ 10,448 |
2,020 | 4,383 |
Total | 14,831 |
Less interest | (497) |
Less unamortized portion of final payment | (727) |
Total | $ 13,607 |
Debt - Summary of Carrying Valu
Debt - Summary of Carrying Value of Convertible Notes (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | ||
Gross proceeds | $ 201,250 | |
Amortization of debt discount and debt issuance costs | $ 7,805 | 4,826 |
Carrying value 2024 Convertible Notes | 144,879 | $ 137,107 |
2024 Convertible Notes [Member] | ||
Debt Instrument [Line Items] | ||
Gross proceeds | 201,250 | |
Gross proceeds, Portion of proceeds allocated to equity component (additional paid-in capital) | (64,541) | |
Debt issuance costs | (6,470) | |
Debt issuance costs, Portion of issuance costs allocated to equity component (additional paid-in capital) | 2,075 | |
Amortization of debt discount and debt issuance costs | 12,565 | |
Carrying value 2024 Convertible Notes | $ 144,879 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional information (Detail) - USD ($) | Oct. 16, 2017 | Nov. 15, 2016 | Jun. 08, 2016 | Jun. 07, 2016 | Dec. 31, 2018 | Dec. 31, 2017 |
Class Of Stock [Line Items] | ||||||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | ||||
Preferred stock, par value | $ 0.001 | $ 0.001 | ||||
Number of vote per common stock | Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company’s stockholders. | |||||
Dividend declared | $ 0 | |||||
Follow On Public Offering [Member] | ||||||
Class Of Stock [Line Items] | ||||||
Common stock, shares issued | 5,520,000 | 4,140,000 | 5,900,000 | 5,900,000 | ||
Sale of common stock price per share | $ 25.50 | $ 18 | $ 14 | $ 14 |
Stock Plans - Additional Inform
Stock Plans - Additional Information (Detail) - shares | Sep. 11, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Class of Stock [Line Items] | ||||
Options to purchase common stock, outstanding | 4,435,056 | 3,799,965 | 3,079,175 | |
2013 Equity Incentive Plan [Member] | ||||
Class of Stock [Line Items] | ||||
Description of aggregate number of shares common stock that may be issued | Initially, the maximum number of shares of the Company’s common stock that may be issued pursuant to stock awards under the 2013 Plan was 2,337,616, which is the sum of (i) 1,230,012 shares, plus (ii) the number of shares remaining available for grant under the 2009 Plan, plus (iii) any shares subject to outstanding stock options or other stock awards that would have otherwise returned to the 2009 Plan (such as upon the expiration or termination of a stock award prior to vesting). | |||
Share based compensation, shares issued in period | 1,230,012 | |||
Percentage of outstanding shares of common stock | 4.00% | |||
Additional shares of common stock reserved | 1,500,000 | |||
Number of shares available for future issuance | 2,800,276 | |||
Options to purchase common stock, outstanding | 4,153,045 | |||
2013 Equity Incentive Plan [Member] | Inducement Awards [Member] | ||||
Class of Stock [Line Items] | ||||
Options to purchase common stock, outstanding | 630,209 | |||
2009 Stock Incentive Plan [Member] | ||||
Class of Stock [Line Items] | ||||
Options to purchase common stock, outstanding | 282,011 | |||
Employees Stock Purchase Plan [Member] | ||||
Class of Stock [Line Items] | ||||
Percentage of outstanding shares of common stock | 1.00% | |||
Number of shares available for future issuance | 209,102 | |||
Number of shares purchased by employees | 138,405 | 89,704 | ||
Maximum [Member] | 2013 Equity Incentive Plan [Member] | ||||
Class of Stock [Line Items] | ||||
Share based compensation, authorized | 2,337,616 | |||
Number of options exercised | 4,684,989 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) $ / shares in Units, $ in Millions | Oct. 06, 2017USD ($)shares | Jan. 04, 2016shares | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2018USD ($)Installment$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock options granted | shares | 1,127,000 | |||||
Number of options exercised | shares | 165,684 | 308,011 | 30,195 | |||
Aggregate intrinsic value of stock options exercised | $ | $ 2.3 | $ 2.9 | $ 0.2 | |||
Options to purchase common stock, outstanding | shares | 3,799,965 | 4,435,056 | 3,799,965 | 3,079,175 | ||
Weighted average remaining contractual term | 7 years 7 months 6 days | 8 years | 7 years 9 months 18 days | |||
Weighted average exercise price | $ / shares | $ 17.75 | $ 19.21 | $ 17.75 | $ 14.84 | ||
Options exercisable, shares | shares | 1,688,652 | 2,368,955 | 1,688,652 | 1,173,671 | ||
Weighted average remaining contractual term | 6 years 7 months 6 days | 6 years 9 months 18 days | 6 years 8 months 12 days | |||
Aggregate intrinsic value, stock options exercisable | $ | $ 17 | $ 2.6 | $ 17 | $ 8.7 | ||
Weighted average grant date fair value of options granted | $ / shares | $ 15.12 | $ 14.33 | $ 11.50 | |||
Unrecognized stock-based compensation expense | $ | $ 25.7 | |||||
Unrecognized compensation costs, weighted-average recognition periods | 2 years 7 months 6 days | |||||
Employee Stock Option [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock options granted | shares | 1,127,263 | 1,448,100 | 1,816,575 | |||
Awards vesting right | The vesting conditions for most of these awards are time-based, and the awards typically vest 25% after one year and monthly thereafter for the next 36 months | |||||
Employee Stock Option [Member] | Vesting after One Year and Monthly Thereafter for the Next 36 Months [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Percentage of share based award, vested | 25.00% | |||||
Employee Stock Option [Member] | Non Employee Directors [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Awards vesting right | Annual option grants to non-employee directors of the Company whose initial grants vest 25% after one year and monthly thereafter for the next 24 months | |||||
Employee Stock Option [Member] | Non Employee Directors [Member] | Vesting after One Year and Monthly Thereafter for the Next 24 Months [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Percentage of share based award, vested | 25.00% | |||||
Restricted Stock Units (RSUs) [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Awards vesting right | The RSUs vest in four substantially equal installments on each of the first four anniversaries of the vesting commencement date, subject to the employee’s continued employment with, or services to, the Company on each vesting date. | |||||
Share based compensation, number of shares granted | shares | 122,800 | 189,300 | 239,366 | |||
Grant date fair value of restricted common stock units under performance-based vesting | $ | $ 2.2 | $ 1.6 | ||||
Unrecognized stock-based compensation expense | $ | $ 4 | |||||
Unrecognized compensation costs, weighted-average recognition periods | 3 years | |||||
Weighted average grant date fair value, shares granted, per share | $ / shares | $ 22.90 | |||||
Restricted Stock Units (RSUs) [Member] | January 4, 2016 [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Unrecognized stock-based compensation expense | $ | $ 0.6 | |||||
Unrecognized compensation costs, weighted-average recognition periods | 2 years | |||||
Restricted Stock Units (RSUs) [Member] | First Anniversary [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share based compensation, award vesting installments | Installment | 4 | |||||
Restricted Stock Units (RSUs) [Member] | Second Anniversary [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share based compensation, award vesting installments | Installment | 4 | |||||
Restricted Stock Units (RSUs) [Member] | Third Anniversary [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share based compensation, award vesting installments | Installment | 4 | |||||
Restricted Stock Units (RSUs) [Member] | Fourth Anniversary [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share based compensation, award vesting installments | Installment | 4 | |||||
Maximum [Member] | Employee Stock Option [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share based award, expiration period | 10 years |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Relevant Data Used to Estimate Fair Value of Stock Option Grants (Detail) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |||
Risk-free interest rates, Minimum | 2.67% | 1.97% | 0.74% |
Risk-free interest rates, Maximum | 3.06% | 2.29% | 1.75% |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Expected term (in years) | 6 years | 6 years | 5 years 7 months 6 days |
Expected volatility, Minimum | 69.80% | 69.90% | 67.30% |
Expected volatility, Maximum | 75.30% | 72.80% | 99.90% |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock Option Activity (Detail) - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |||
Shares Issuable Under Options, Beginning balance | 3,799,965 | 3,079,175 | |
Shares Issuable Under Options, Granted | 1,127,000 | ||
Shares Issuable Under Options, Exercised | (165,684) | (308,011) | (30,195) |
Shares Issuable Under Options, Cancelled | (326,000) | ||
Shares Issuable Under Options, Ending balance | 4,435,056 | 3,799,965 | 3,079,175 |
Shares Issuable Under Options, Options vested and expected to vest at December 31, 2018 | 4,435,000 | ||
Shares Issuable Under Options, Options exercisable at December 31, 2018 | 2,368,955 | 1,688,652 | 1,173,671 |
Weighted Average Exercise Price, Beginning balance | $ 17.75 | $ 14.84 | |
Weighted Average Exercise Price, Granted | 23.33 | ||
Weighted Average Exercise Price, Exercised | 11.88 | ||
Weighted Average Exercise Price, Cancelled | 20.21 | ||
Weighted Average Exercise Price, Ending balance | 19.21 | $ 17.75 | $ 14.84 |
Weighted Average Exercise Price, Options vested and expected to vest | 19.21 | ||
Weighted Average Exercise Price, Options exercisable | $ 17.13 |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of of RSU Activity (Detail) - Restricted Stock Units (RSUs) [Member] - $ / shares | Oct. 06, 2017 | Jan. 04, 2016 | Dec. 31, 2018 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of Shares, Beginning balance | 82,000 | ||
Number of Shares, Granted | 122,800 | 189,300 | 239,366 |
Number of Shares, Cancelled | (23,000) | ||
Number of Shares, Vested/Released | (47,000) | ||
Number of Shares, Ending balance | 252,000 | ||
Weighted Average Grant Date Fair Value Per Share, Beginning balance | $ 16.43 | ||
Weighted Average Grant Date Fair Value Per Share, Granted | 22.90 | ||
Weighted Average Grant Date Fair Value Per Share, Cancelled | 22.31 | ||
Weighted Average Grant Date Fair Value Per Share, Vested/Released | 17.97 | ||
Weighted Average Grant Date Fair Value Per Share, Ending balance | $ 22.25 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock-Based Compensation Expense Related to Stock Options, Restricted Stock and Shares Purchased Under Employee Stock Purchase Plan (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 15,459 | $ 11,542 | $ 6,770 |
Research and Development [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | 4,728 | 3,979 | 2,341 |
Selling, General and Administrative [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 10,731 | $ 7,563 | $ 4,429 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) | Oct. 24, 2018USD ($) | Oct. 06, 2017USD ($)ft² | Apr. 07, 2017USD ($)ft² | Sep. 21, 2016ft² | Jul. 25, 2014USD ($) | Dec. 31, 2017USD ($) | Feb. 28, 2017USD ($) | Nov. 30, 2016Term | Jul. 31, 2015ft² | May 31, 2013USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Oct. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2015ft² |
Commitment And Contingencies [Line Items] | |||||||||||||||
Operating lease term | 42 months | ||||||||||||||
Minimum monthly lease payments | $ 17,588 | ||||||||||||||
Rent expense | $ 1,100,000 | $ 1,000,000 | $ 700,000 | ||||||||||||
GeneQuine Biotherapeutics GmbH (“GeneQuine”) [Member] | Definitive Agreement [Member] | |||||||||||||||
Commitment And Contingencies [Line Items] | |||||||||||||||
License agreement, upfront fee paid | $ 2,000,000 | ||||||||||||||
Milestone, Revenue recognized | 0 | ||||||||||||||
Research and development milestone payment | $ 750,000 | $ 750,000 | |||||||||||||
GeneQuine Biotherapeutics GmbH (“GeneQuine”) [Member] | Definitive Agreement [Member] | Maximum [Member] | |||||||||||||||
Commitment And Contingencies [Line Items] | |||||||||||||||
Additional milestone payments | $ 54,000,000 | ||||||||||||||
ZILRETTA [Member] | Southwest Research Institute (SwRI) [Member] | Upon FDA First Approval [Member] | |||||||||||||||
Commitment And Contingencies [Line Items] | |||||||||||||||
License agreement, upfront fee paid | $ 120,000 | ||||||||||||||
Evonik Corporation [Member] | |||||||||||||||
Commitment And Contingencies [Line Items] | |||||||||||||||
Supply agreement period | 5 years | ||||||||||||||
Supply agreement renewal term | 2 years | ||||||||||||||
Number of renewal terms | Term | 2 | ||||||||||||||
Supply agreement description | The Supply Agreement will renew for two successive two-year terms upon mutual written consent by both parties. | ||||||||||||||
Manufacturing and Supply Agreement with Patheon UK Limited [Member] | |||||||||||||||
Commitment And Contingencies [Line Items] | |||||||||||||||
Manufacturing agreement period | 10 years | ||||||||||||||
Phase 2 Proof of Concept (PoC) Clinical Trial [Member] | GeneQuine Biotherapeutics GmbH (“GeneQuine”) [Member] | Definitive Agreement [Member] | Maximum [Member] | |||||||||||||||
Commitment And Contingencies [Line Items] | |||||||||||||||
Additional milestone payments | $ 7,750,000 | ||||||||||||||
Burlington Massachusetts [Member] | |||||||||||||||
Commitment And Contingencies [Line Items] | |||||||||||||||
Minimum monthly lease payments | $ 87,000 | $ 80,000 | |||||||||||||
Additional leased office space | ft² | 6,450 | 1,471 | 4,700 | ||||||||||||
Extended leased office space | ft² | 5,400 | 5,400 | |||||||||||||
Office space leased on temporary agreement | ft² | 6,700 | 6,700 | |||||||||||||
Lease termination date | Oct. 31, 2023 | Oct. 31, 2023 | Oct. 31, 2019 | ||||||||||||
Temporary lease termination date | Oct. 31, 2017 | ||||||||||||||
Operating lease office space | ft² | 36,500 | 28,600 | |||||||||||||
Lease payment per month for additional office space | $ 4,100 | ||||||||||||||
Operating lease commencement date | 2018-04 | ||||||||||||||
Woburn, Massachusetts [Member] | |||||||||||||||
Commitment And Contingencies [Line Items] | |||||||||||||||
Operating lease term | 5 years | ||||||||||||||
Monthly lease payment | $ 15,000 | ||||||||||||||
Total cash obligations for lease | $ 900,000 |
Commitments and Contingencies_2
Commitments and Contingencies - Future Minimum Lease Payments under Operating Leases (Detail) $ in Thousands | Dec. 31, 2018USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
2,019 | $ 1,491 |
2,020 | 1,533 |
2,021 | 1,576 |
2,022 | 1,447 |
2,023 | 1,203 |
Total | $ 7,250 |
Commitments and Contingencies_3
Commitments and Contingencies - Schedule of Future Minimum Payments under Manufacturing Agreement with Patheon (Detail) - Manufacturing and Supply Agreement with Patheon UK Limited [Member] $ in Thousands | Dec. 31, 2018USD ($) |
Property Subject To Or Available For Operating Lease [Line Items] | |
2,019 | $ 8,027 |
2,020 | 8,027 |
2,021 | 8,027 |
2,022 | 8,027 |
2,023 | 8,027 |
2024 and thereafter | 30,102 |
Total | $ 70,237 |
Net Loss Per Share - Schedule o
Net Loss Per Share - Schedule of Basic and Diluted Net Loss Per Share Attributable to Common Stockholders (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Numerator: | |||||||||||
Net loss | $ (40,575) | $ (43,640) | $ (43,875) | $ (41,569) | $ (50,534) | $ (34,188) | $ (28,880) | $ (23,879) | $ (169,659) | $ (137,481) | $ (71,894) |
Net loss: | $ (40,575) | $ (43,640) | $ (43,875) | $ (41,569) | $ (50,534) | $ (34,188) | $ (28,880) | $ (23,879) | $ (169,659) | $ (137,481) | $ (71,894) |
Denominator: | |||||||||||
Weighted average common shares outstanding, basic and diluted | 37,867 | 37,818 | 37,697 | 37,620 | 36,644 | 31,931 | 31,826 | 31,704 | 37,751 | 33,027 | 25,297 |
Net loss per share, basic and diluted | $ (1.07) | $ (1.15) | $ (1.16) | $ (1.10) | $ (1.38) | $ (1.07) | $ (0.91) | $ (0.75) | $ (4.49) | $ (4.16) | $ (2.84) |
Net Loss per Share - Schedule_2
Net Loss per Share - Schedule of Common Stock Equivalents Excluded from Calculation of Diluted Net Loss Per Share, as Including them Would have Anti-dilutive Effect (Detail) - shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Common stock equivalents excluded from calculation of diluted net loss per share, as including them would have anti-dilutive effect | 12,279 | 8,766 | 2,533 |
Shares Issuable Upon Conversion of the 2024 Convertible Notes [Member] | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Common stock equivalents excluded from calculation of diluted net loss per share, as including them would have anti-dilutive effect | 7,515 | 5,017 | |
Stock Options [Member] | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Common stock equivalents excluded from calculation of diluted net loss per share, as including them would have anti-dilutive effect | 4,498 | 3,602 | 2,345 |
Restricted Stock Units [Member] | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Common stock equivalents excluded from calculation of diluted net loss per share, as including them would have anti-dilutive effect | 266 | 147 | 188 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax [Line Items] | |||
Tax provision or benefit | $ 0 | $ 0 | $ 0 |
Limit of utilization of net operating losses (NOLs) and tax credits description | Under the rules, such an ownership change is generally any change in ownership of more than 50% of a company’s stock within a rolling three-year period. The rules generally operate by focusing on changes in ownership among stockholders considered by the rules as owning, directly or indirectly, 5% or more of the stock of a company and any change in ownership arising from new issuances of stock by the company. | ||
Expiring operating loss carryforwards | $ 300,000 | ||
Liabilities for unrecognized tax benefits | 0 | $ 0 | |
Federal [Member] | |||
Income Tax [Line Items] | |||
Net operating loss carryforwards | $ 298,900,000 | ||
Operating loss carryforwards expiration year | 2,029 | ||
Net operating losses indefinite carryforward | $ 109,400,000 | ||
Federal [Member] | Research and Development Tax Credit Carryforwards [Member] | |||
Income Tax [Line Items] | |||
Tax credit carryforwards | $ 7,100,000 | ||
Tax credit expiration year | 2,029 | ||
State and Local Jurisdiction [Member] | |||
Income Tax [Line Items] | |||
Net operating loss carryforwards | $ 219,400,000 | ||
Operating loss carryforwards expiration year | 2,030 | ||
State and Local Jurisdiction [Member] | Research and Development Tax Credit Carryforwards [Member] | |||
Income Tax [Line Items] | |||
Tax credit carryforwards | $ 3,500,000 | ||
Tax credit expiration year | 2,025 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of U.S. Federal Statutory Income Tax Rate to Company's Effective Income Tax Rate (Detail) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Federal statutory income tax rate | 21.00% | 34.00% | 34.00% |
State taxes, net of federal benefit | 8.00% | 3.00% | 5.00% |
Federal and state research and development tax credits | 1.00% | 0.90% | 2.70% |
Change in deferred tax asset valuation allowance | (27.40%) | (11.60%) | (40.00%) |
Tax rate change | (1.90%) | (25.10%) | 0.00% |
Other | (0.70%) | (1.20%) | (1.70%) |
Effective income tax rate | 0.00% | 0.00% | 0.00% |
Income Taxes - Net Deferred Tax
Income Taxes - Net Deferred Tax Assets (Detail) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Income Tax Disclosure [Abstract] | ||||
Net operating loss carryforwards | $ 76,723 | $ 48,496 | ||
Research and development tax credit carryforwards | 9,965 | 7,725 | ||
Accruals and other temporary differences | 7,808 | 3,578 | ||
Debt discount | (14,165) | (14,630) | ||
Capitalized research and development expenses, net | 41,048 | 29,673 | ||
Total deferred tax assets | 121,379 | 74,842 | ||
Valuation allowance | (121,379) | (74,842) | $ (83,434) | $ (54,773) |
Net deferred tax asset | $ 0 | $ 0 |
Income Taxes - Changes in Valua
Income Taxes - Changes in Valuation Allowance for Deferred Tax Assets (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Valuation Allowance [Line Items] | |||
Valuation allowance as of beginning of year | $ (74,842) | $ (83,434) | $ (54,773) |
Valuation allowance as of end of year | (121,379) | (74,842) | (83,434) |
Decreases Recorded as Benefit to Income Tax Provision [Member] | |||
Valuation Allowance [Line Items] | |||
Decreases (increases) recorded as benefit to income tax provision | 1,913 | 36,606 | 4,771 |
Decreases Recorded as Benefit to Equity [Member] | |||
Valuation Allowance [Line Items] | |||
Decreases (increases) recorded as benefit to income tax provision | 0 | 24,537 | |
Increases Recorded to Income Tax Provision [Member] | |||
Valuation Allowance [Line Items] | |||
Decreases (increases) recorded as benefit to income tax provision | $ (48,450) | $ (52,551) | $ (33,432) |
Quarterly Financial Data (una_3
Quarterly Financial Data (unaudited) - Recurring Adjustments Necessary for Fair Statement (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenues | $ 9,543 | $ 6,990 | $ 3,797 | $ 2,194 | $ 355 | $ 0 | $ 0 | $ 0 | $ 22,524 | $ 355 | |
Gross profit | 7,470 | 5,371 | 2,851 | (504) | 351 | 0 | 0 | 0 | |||
Net loss | $ (40,575) | $ (43,640) | $ (43,875) | $ (41,569) | $ (50,534) | $ (34,188) | $ (28,880) | $ (23,879) | $ (169,659) | $ (137,481) | $ (71,894) |
Net loss per common share—basic and diluted | $ (1.07) | $ (1.15) | $ (1.16) | $ (1.10) | $ (1.38) | $ (1.07) | $ (0.91) | $ (0.75) | $ (4.49) | $ (4.16) | $ (2.84) |
Weighted average common shares—basic and diluted | 37,867 | 37,818 | 37,697 | 37,620 | 36,644 | 31,931 | 31,826 | 31,704 | 37,751 | 33,027 | 25,297 |