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 | |||
Entity Registrant Name | Retrophin, Inc. | ||
Entity Central Index Key | 1,438,533 | ||
Trading Symbol | rtrx | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Common Stock, Shares Outstanding | 41,412,835 | ||
Entity Public Float | $ 912,685,763 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Small Business | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 102,873 | $ 99,394 |
Marketable securities | 368,668 | 201,236 |
Accounts receivable, net | 14,490 | 13,872 |
Inventory, net | 5,619 | 5,351 |
Prepaid expenses and other current assets | 2,312 | 3,112 |
Prepaid taxes | 1,716 | 2,842 |
Total current assets | 495,678 | 325,807 |
Property and equipment, net | 3,146 | 3,230 |
Other assets | 7,709 | 5,556 |
Investment-equity | 15,000 | 0 |
Intangible assets, net | 186,691 | 184,817 |
Goodwill | 936 | 936 |
Total assets | 709,160 | 520,346 |
Current liabilities: | ||
Accounts payable | 6,954 | 18,938 |
Accrued expenses | 49,695 | 36,018 |
Guaranteed minimum royalty, short term | 2,100 | 2,000 |
Other current liabilities | 4,065 | 3,902 |
Business combination-related contingent consideration | 19,350 | 9,100 |
Convertible debt | 22,457 | 0 |
Derivative financial instruments, warrants | 0 | 15,710 |
Total current liabilities | 104,621 | 85,668 |
Convertible debt | 195,091 | 45,077 |
Other noncurrent liabilities | 4,496 | 2,472 |
Guaranteed minimum royalty, long term | 13,049 | 13,095 |
Business combination-related contingent consideration, less current portion | 73,650 | 80,900 |
Total liabilities | 390,907 | 227,212 |
Stockholders' Equity: | ||
Preferred stock $0.0001 par value; 20,000,000 shares authorized; 0 issued and outstanding as of December 31, 2018 and 2017, respectively | 0 | 0 |
Common stock $0.0001 par value; 100,000,000 shares authorized; 41,389,524 and 39,373,745 issued and outstanding as of December 31, 2018 and 2017, respectively | 4 | 4 |
Additional paid-in capital | 589,795 | 471,800 |
Accumulated deficit | (270,017) | (177,655) |
Accumulated other comprehensive loss | (1,529) | (1,015) |
Total stockholders' equity | 318,253 | 293,134 |
Total liabilities and stockholders' equity | $ 709,160 | $ 520,346 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Preferred Stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 41,389,524 | 39,373,745 |
Common stock, shares outstanding (in shares) | 41,389,524 | 39,373,745 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Statement [Abstract] | |||
Net product sales | $ 164,246 | $ 154,937 | $ 133,591 |
Operating expenses: | |||
Cost of goods sold | 5,527 | 3,605 | 4,554 |
Research and development | 123,757 | 78,168 | 70,822 |
Selling, general and administrative | 103,654 | 101,333 | 91,941 |
Change in fair value of contingent consideration | 11,590 | 19,389 | 18,383 |
Restructuring | (242) | 3,608 | 893 |
Legal fee settlement | 0 | 2,625 | 5,212 |
Total operating expenses | 244,286 | 208,728 | 191,805 |
Operating loss | (80,040) | (53,791) | (58,214) |
Other Income (expense), net: | |||
Other income (expense), net | (474) | 1,107 | (264) |
Interest income | 5,499 | 3,234 | 3,975 |
Interest expense | (9,810) | (4,422) | (4,734) |
Loss on extinguishment of debt | (17,042) | 0 | 0 |
Change in fair value of derivative instruments | 0 | (4,491) | 1,655 |
Total other income (expense), net | (21,827) | (4,572) | 632 |
Loss before benefit (provision) for income taxes | (101,867) | (58,363) | (57,582) |
Income tax benefit (provision) | (811) | (1,368) | 9,679 |
Net loss | $ (102,678) | $ (59,731) | $ (47,903) |
Net loss per common share: | |||
Basic (in USD per shares) | $ (2.54) | $ (1.54) | $ (1.29) |
Diluted (in USD per shares) | $ (2.54) | $ (1.54) | $ (1.29) |
Weighted average common shares outstanding: | |||
Basic (in shares) | 40,433,171 | 38,769,816 | 36,997,865 |
Diluted (in shares) | 40,433,171 | 38,769,816 | 38,288,012 |
Comprehensive loss: | |||
Net loss | $ (102,678) | $ (59,731) | $ (47,903) |
Foreign currency translation gain (loss) | 39 | (339) | 93 |
Unrealized gain (loss) on marketable securities | (553) | (186) | 99 |
Comprehensive loss | $ (103,192) | $ (60,256) | $ (47,711) |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid in Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit |
Beginning balance (in shares) at Dec. 31, 2015 | 36,465,853 | ||||
Beginning balance at Dec. 31, 2015 | $ 299,971 | $ 4 | $ 365,802 | $ (682) | $ (65,153) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Share based compensation | 29,102 | 29,102 | |||
Legal fee settlement-short swing profit recovery | 2,025 | 2,025 | |||
Exercise of warrants and reclassification of derivative liability (in shares) | 898,633 | ||||
Exercise of warrants and reclassification of derivative liability | 20,720 | 20,720 | |||
Unrealized gain/(loss) on marketable securities | 99 | 99 | |||
Foreign currency translation adjustments | 96 | 3 | 93 | ||
Issuance of common shares under the equity incentive plan and proceeds from exercise. (in shares) | 542,183 | ||||
Issuance of common shares under the equity incentive plan and proceeds from exercise. | 4,016 | 4,016 | |||
Tax shortfall from stock option exercises | (359) | (359) | |||
Net loss | (47,903) | (47,903) | |||
Ending balance (in shares) at Dec. 31, 2016 | 37,906,669 | ||||
Ending balance at Dec. 31, 2016 | 307,767 | $ 4 | 421,309 | (490) | (113,056) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Share based compensation | 26,645 | 26,645 | |||
Legal fee settlement-short swing profit recovery | 0 | ||||
Exercise of warrants and reclassification of derivative liability (in shares) | 607,481 | ||||
Exercise of warrants and reclassification of derivative liability | 14,866 | 14,866 | |||
Unrealized gain/(loss) on marketable securities | (186) | (186) | |||
Foreign currency translation adjustments | (339) | (339) | |||
Issuance of common shares under the equity incentive plan and proceeds from exercise. (in shares) | 819,573 | ||||
Issuance of common shares under the equity incentive plan and proceeds from exercise. | 8,087 | 8,087 | |||
ESPP stock purchase and expense (in shares) | 40,022 | ||||
ESPP stock purchase and expense | 893 | 893 | |||
Net loss | (59,731) | (59,731) | |||
Ending balance (in shares) at Dec. 31, 2017 | 39,373,745 | ||||
Ending balance at Dec. 31, 2017 | 293,134 | $ 4 | 471,800 | (1,015) | (177,655) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Share based compensation | 19,494 | 19,494 | |||
Legal fee settlement-short swing profit recovery | 0 | ||||
Exercise of warrants and reclassification of derivative liability (in shares) | 1,036,054 | ||||
Exercise of warrants and reclassification of derivative liability | 5,305 | 5,305 | |||
Unrealized gain/(loss) on marketable securities | (553) | (553) | |||
Foreign currency translation adjustments | 39 | 39 | |||
Issuance of common shares under the equity incentive plan and proceeds from exercise. (in shares) | 892,713 | ||||
Issuance of common shares under the equity incentive plan and proceeds from exercise. | 10,588 | 10,588 | |||
ESPP stock purchase and expense (in shares) | 87,012 | ||||
ESPP stock purchase and expense | 2,269 | 2,269 | |||
Convertible debt issue | 74,945 | 74,945 | |||
Net loss | (102,678) | (102,678) | |||
Ending balance (in shares) at Dec. 31, 2018 | 41,389,524 | ||||
Ending balance at Dec. 31, 2018 | $ 318,253 | $ 4 | $ 589,795 | $ (1,529) | $ (270,017) |
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 | $ (102,678) | $ (59,731) | $ (47,903) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 18,668 | 17,804 | 16,135 |
Deferred income tax | 0 | (6,425) | (22,661) |
Settlement expense | 0 | 2,625 | 5,212 |
Loss on extinguishment of debt | 17,042 | 0 | 0 |
Loss on allowance for inventory | 2,457 | 609 | 262 |
Accretion on notes receivable | 0 | (651) | (1,927) |
Accretion on contingent consideration | 1,357 | 1,723 | 1,976 |
Amortization of debt discount and deferred financing costs | 3,398 | 656 | 656 |
Amortization of premiums on investments | 382 | 1,338 | 1,097 |
Share based compensation | 19,774 | 26,874 | 29,102 |
Legal accrual reversal | 0 | 0 | (2,967) |
Change in estimated fair value of contingent consideration | 11,590 | 19,389 | 18,383 |
Payments from change in fair value of contingent consideration | (8,085) | (3,949) | (4,416) |
Change in estimated fair value of liability classified warrants | 0 | 4,491 | (1,655) |
Foreign currency transaction gain | 464 | (1,081) | 0 |
Other operating activities | (396) | (83) | 54 |
Changes in operating assets and liabilities, net of business acquisitions: | |||
Accounts receivable | 152 | 4,945 | (6,090) |
Inventory | (2,773) | (1,706) | (568) |
Prepaid expenses and other current assets | (1,358) | (2,702) | (2,447) |
Prepaid income taxes | 1,126 | 621 | 4,644 |
Accounts payable | (2,708) | 2,060 | (2,916) |
Accrued expenses and other current liabilities | 16,630 | 596 | 12,588 |
Net cash provided by (used in) operating activities | (24,958) | 7,403 | (3,441) |
Cash Flows from Investing Activities: | |||
Purchase of fixed assets | (727) | (887) | (1,428) |
Purchase of intangible assets | (18,974) | (13,122) | (10,496) |
Investment - Equity | (15,000) | 0 | 0 |
Proceeds from the sale/maturity of marketable securities | 162,755 | 114,526 | 159,520 |
Purchase of marketable securities | (331,345) | (102,415) | (184,111) |
Proceeds from the maturity of notes receivable | 0 | 47,500 | 47,500 |
Cash paid upon acquisition, net of cash acquired | 0 | 0 | (615) |
Net cash provided by (used in) investing activities | (203,291) | 45,602 | 10,370 |
Cash Flows from Financing Activities: | |||
Payment of acquisition-related contingent consideration | (9,721) | (4,099) | (10,511) |
Payment of other liability | (1,000) | (852) | (1,000) |
Payment of guaranteed minimum royalty | (2,000) | (2,000) | (2,000) |
Proceeds from exercise of warrants | 5,305 | 3,645 | 6,005 |
Proceeds from exercise of stock options | 10,588 | 8,087 | 4,016 |
Proceeds from issuance of 2025 convertible senior notes | 276,000 | 0 | 0 |
Repurchase of 2019 convertible senior notes including premium | (40,203) | 0 | 0 |
Payment of debt issuance and financing costs | (8,820) | 0 | 0 |
Other financing activities | 1,714 | 664 | (359) |
Net cash provided by (used in) financing activities | 231,863 | 5,445 | (3,849) |
Effect of exchange rate changes on cash | (135) | (58) | 117 |
Net increase in cash and cash equivalents | 3,479 | 58,392 | 3,197 |
Cash and cash equivalents, beginning of year | 99,394 | 41,002 | 37,805 |
Cash and cash equivalents, end of year | 102,873 | 99,394 | 41,002 |
Supplemental Disclosure of Cash Flow Information: | |||
Cash paid for interest | 1,880 | 2,070 | 2,070 |
Cash paid for income taxes | 218 | 7,172 | 7,933 |
Non-cash Investing and financing activities: | |||
Short swing profit judgment offset with settlement expense accrual | 0 | 0 | 2,025 |
Reclassification of derivative liability to equity due to exercise of warrants | 0 | 11,221 | 14,715 |
Accrued royalty in excess of minimum payable to the sellers of Thiola | 14,572 | 13,247 | 11,206 |
Term extension of current Thiola agreement | 0 | 5,885 | 0 |
Present value of contingent consideration payable upon acquisition related to L-UDCA | 0 | 0 | 25,000 |
Adoption of ASU 2017-11 - reclassification of derivative liability of warrants with down round provisions | $ 15,710 | $ 0 | $ 0 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS | DESCRIPTION OF BUSINESS Organization and Description of Business Retrophin, Inc. (“we”, “our”, “us”, “Retrophin” and the “Company”) refers to Retrophin, Inc., a Delaware corporation, as well as our direct and indirect subsidiaries. Retrophin is a fully integrated biopharmaceutical company headquartered in San Diego, California focused on identifying, developing and delivering life-changing therapies to people with rare diseases. We regularly evaluate and, where appropriate, act on opportunities to expand our product pipeline through licenses and acquisitions of products in areas that will serve patients with serious or rare diseases and that we believe offer attractive growth characteristics. The Company is developing the following pipeline products: The Company is developing fosmetpantotenate (RE-024), a novel small molecule, as a potential treatment for PKAN. PKAN is a genetic neurodegenerative disorder that is typically diagnosed in the first decade of life. Sparsentan , also known as RE-021, is an investigational product candidate with a dual mechanism of action, a potent angiotensin receptor blocker (“ARB”) and selective endothelin receptor antagonist (“ERA”), with in vitro selectivity toward endothelin receptor type A. Sparsentan is currently being evaluated in two pivotal Phase 3 clinical studies in the following indications: • Focal segmental glomerulosclerosis ("FSGS") is a rare kidney disease characterized by proteinuria where the glomeruli become progressively scarred. FSGS is a leading cause of end-stage renal disease. • Immunoglobulin A nephropathy ("IgAN") is an immune-complex-mediated glomerulonephritis characterized by hematuria, proteinuria, and variable rates of progressive renal failure. IgAN is the most common primary glomerular disease. The Company is a party to a joint development agreement with Censa Pharmaceuticals Inc., a privately held biotechnology company focused on developing therapies for orphan metabolic diseases, to evaluate sepiapterin ("CNSA-001") for the treatment of phenylketonuria (PKU). In September 2017, the Company entered a three-way Cooperative Research and Development Agreement ("CRADA") with the National Institutes of Health’s National Center for Advancing Translational Sciences (NCATS) and patient advocacy foundation NGLY1.org to collaborate on research efforts aimed at the identification of potential small molecule therapeutics for NGLY1 deficiency. Liquid ursodeoxycholic acid ("L-UDCA") is a liquid formulation of ursodeoxycholic acid being developed for the treatment of a rare liver disease called primary biliary cholangitis ("PBC"). The Company obtained the rights to L-UDCA in 2016 with the intention of making L-UDCA commercially available to the subset of PBC patients who have difficulty swallowing. The Company sells the following three products: • Chenodal (chenodiol tablets) is approved in the United States for the treatment of patients suffering from gallstones in whom surgery poses an unacceptable health risk due to disease or advanced age. Chenodal has been the standard of care for cerebrotendinous xanthomatosis (" CTX") patients for more than three decades and the Company is currently pursuing adding this indication to the label. • Cholbam (cholic acid capsules) is approved in the United States for the treatment of bile acid synthesis disorders due to single enzyme defects and is further indicated for adjunctive treatment of patients with peroxisomal disorders. • Thiola (tiopronin tablets) is approved in the United States for the prevention of cystine (kidney) stone formation in patients with severe homozygous cystinuria. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A summary of the significant accounting policies applied in the preparation of the accompanying consolidated financial statements follows: Principles of Consolidation The consolidated financial statements represent the consolidation of the accounts of the Company and its subsidiaries in conformity with accounting principles generally accepted in the United States ("U.S. GAAP"). All intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates In preparing financial statements in conformity with U.S. GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of expenses during the reporting period. Due to inherent uncertainty involved in making estimates, actual results reported in future periods may be affected by changes in these estimates. On an ongoing basis, the Company evaluates its estimates and assumptions. These estimates and assumptions include revenue recognition, valuing equity securities in share-based payments, estimating expenses of contracted research organizations, estimating fair value of equity instruments recorded as derivative liabilities, estimating the fair value of net assets acquired in business combinations, estimating the useful lives of depreciable and amortizable assets, goodwill impairment, estimating the fair value of contingent consideration, estimating of valuation allowances and uncertain tax positions, and estimates associated with the assessment of impairment for long lived assets. Revenue Recognition Product sales for the years ended December 31, 2018 , 2017 and 2016 consisted of sales of Chenodal, Cholbam and Thiola. Effective January 1, 2018, the Company adopted Accounting Standards Codification (" ASC"), Topic 606, Revenue from Contracts with Customers, using the full retrospective transition method. This standard applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance, collaboration arrangements and financial instruments. Under Topic 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. 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 contracts when it is probable that the entity will collect substantially all the consideration it is entitled to in exchange for the goods or services it transfers to the customer. Revenue from product sales is recorded at delivery, net of applicable provisions for rebates under government (including medicaid) programs, commercial rebates, prompt pay discounts, and other sales-related deductions. We review our estimates of rebates and other applicable provisions each period and record any necessary adjustments in the current period. See Note 3 for further discussion. Research and Development Costs Research and development includes expenses related to sparsentan, fosmetpantotenate and our other pipeline programs. We expense all research and development costs as they are incurred. Our research and development costs are comprised of salaries and bonuses, benefits, non-cash share-based compensation, license fees, milestones under license agreements, costs paid to third-party contractors to perform research, conduct clinical trials, and develop drug materials and delivery devices, and associated overhead expenses and facilities costs. We charge direct internal and external program costs to the respective development programs. We also incur indirect costs that are not allocated to specific programs because such costs benefit multiple development programs and allow us to increase our pharmaceutical development capabilities. These consist of internal shared resources related to the development and maintenance of systems and processes applicable to all of our programs. Clinical Trial Expenses We record expenses in connection with our clinical trials under contracts with contract research organizations (CROs) that support conducting and managing clinical trials. The financial terms and activities of these agreements vary from contract to contract and may result in uneven expense levels. Generally, these agreements set forth activities that drive the recording of expenses such as start-up and initiation activities, enrollment and treatment of patients, or the completion of other clinical trial activities. Expenses related to clinical trials are accrued based on our estimates and/or representations from service providers regarding work performed, including actual level of patient enrollment, completion of patient studies and progress of the clinical trials. Other incidental costs related to patient enrollment or treatment are accrued when reasonably certain. If the amounts we are obligated to pay under our clinical trial agreements are modified (for instance, as a result of changes in the clinical trial protocol or scope of work to be performed), we adjust our accruals accordingly on a prospective basis. Revisions to our contractual payment obligations are charged to expense in the period in which the facts that give rise to the revision become reasonably certain. We currently have three Phase 3 clinical trials in process that are in varying stages of activity, with ongoing non-clinical support trials. As such, clinical trial expenses will vary depending on the all the factors set forth above and may fluctuate significantly from quarter to quarter. Employee Stock-Based Compensation The Company recognizes all employee share-based compensation as a cost in the financial statements. Equity-classified awards principally related to stock options, restricted stock units (“RSUs”) and performance stock units ("PSUs"), are measured at the grant date fair value of the award. The Company determines grant date fair value of stock option awards using the Black-Scholes option-pricing model. The fair value of RSUs and PSUs are determined using the closing price of the Company’s common stock on the grant date. For service based vesting grants, expense is recognized over the requisite service period based on the number of options or shares expected to ultimately vest. For PSUs, expense is recognized over the implicit service period, assuming vesting is probable. No expense is recognized for PSUs if it is not probable the vesting criteria will be satisfied. Forfeitures are accounted for as they occur. Initial Vesting Term Stock Options 3 to 4 years Restricted Stock Units 2 to 4 years Earnings (Loss) Per Share We calculate our basic earnings per share by dividing net income by the weighted average number of shares outstanding during the period. The diluted earnings per share computation includes the effect, if any, of shares that would be issuable upon the exercise of outstanding stock options, derivative liability, convertible debt and RSUs, reduced by the number of shares which are assumed to be purchased by the Company from the resulting proceeds at the average market price during the year, when such amounts are dilutive to the earnings per share calculation. Cash and Cash Equivalents We consider all highly liquid marketable securities with an original maturity of three months or less to be cash equivalents. Due to the short-term maturity of such investments, the carrying amounts are a reasonable estimate of fair value. Marketable Securities The Company accounts for marketable securities held as “available-for-sale” in accordance with ASC 320, “Investments Debt and Equity Securities” (“ASC 320”). The Company classifies these investments as current assets and carries them at fair value. Unrealized gains and losses are recorded as a separate component of stockholders’ equity as accumulated other comprehensive loss. Realized gains or losses on marketable security transactions are reported in the Consolidated Statements of Operations and Comprehensive Income (Loss). Marketable securities are maintained at one financial institution and are governed by the Company’s investment policy as approved by the Company's Board of Directors. Trade and Notes Receivable Trade Receivables, Net Trade accounts receivable are recorded net of allowances for prompt payment and doubtful accounts. Estimates for allowances for doubtful accounts are determined based on existing contractual obligations, historical payment patterns and individual customer circumstances. The allowance for doubtful accounts was zero and $0.2 million at December 31, 2018 and 2017 , respectively. For the years ended December 31, 2018, 2017 and 2016, bad debt expense recorded in the Statement of Operations and Comprehensive Income (Loss) was approximately zero , $0.2 million and $0.2 million , respectively. Notes Receivable Notes receivable arose from the sale of a pediatric priority review voucher (the "PRV"). On July 2, 2015, the Company sold and transferred the PRV to Sanofi for $245.0 million . $150.0 million was received upon closing, and $47.5 million was due on each of the first and second anniversaries of the closing. In accordance with U.S. GAAP, the Company recorded the future short term and long term notes receivable at their present value of $46.2 million and $44.9 million , respectively, at the date of the sale using a discount rate of 2.8% . The accretion on the notes receivables totaled $0.7 million and $1.9 million for 2017 and 2016, respectively, and is recorded in interest expense, net, in the Consolidated Statements of Operations and Comprehensive Income (Loss). The first and second annual payments were received on July 1, 2016 and June 30, 2017 in accordance with the terms of the sale agreement. As of December 31, 2018 , there are no outstanding notes receivable. Inventory and Related Reserves Inventory, which is recorded at the lower of cost or net realizable value, includes materials, labor, and other direct and indirect costs and are valued using the first-in, first-out method. The Company periodically analyzes its inventory levels to identify inventory that may expire prior to expected sale or has a cost basis in excess of its estimated realizable value, and writes down such inventory as appropriate. In addition, the Company's products are subject to strict quality control and monitoring which the Company’s manufacturers perform throughout their manufacturing process. The Company does not directly manufacture any product. The Company has single suppliers for products Chenodal and Thiola, and prospectively arranges for manufacture from contract service providers for its product Cholbam. The inventory reserve was $1.8 million and $0.7 million at December 31, 2018 and 2017 , respectively. Inventory, net of reserve, consisted of the following at December 31, 2018 and 2017 ( in thousands ): December 31, 2018 December 31, 2017 Raw material $ 4,689 $ 3,435 Finished goods 930 1,916 Total inventory $ 5,619 $ 5,351 Segment Information The Company currently operates in one business segment focused on the development and commercialization of innovative therapies for people with serious and life threatening rare diseases and medical conditions. The Company is not organized by market and is managed and operated as one business. A single management team reports to the chief operating decision maker who comprehensively manages the entire business. The Company does not operate any separate lines of business or separate business entities with respect to its products. Accordingly, the Company does not accumulate discrete financial information with respect to separate products, other than revenues, and does not have separately reportable segments. Property and Equipment, net Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is computed using the straight-line method over the related estimated useful lives as presented in the table below. Significant additions and improvements are capitalized, while repairs and maintenance are charged to expense as incurred. Property and equipment purchased for specific research and development projects with no alternative use is expensed as incurred. The major classifications of property and equipment, including their respective expected useful lives, consists of the following: Computers and equipment 3 years Furniture and fixtures 7 years Leasehold improvements Shorter of length of lease or life of the asset Intangible Assets, Net Our intangible assets consist of licenses, purchased technology and acquired in-process research and development (IPR&D). Intangible assets with definite lives are amortized on a straight-line basis over their estimated useful lives and are reviewed periodically for impairment. Intangible assets related to IPR&D projects are considered to be indefinite-lived until the completion or abandonment of the associated research and development efforts. During the period the assets are considered indefinite-lived, they will not be amortized but will be tested for impairment. If and when development is complete, which generally occurs when regulatory approval to market a product is obtained, the associated assets are deemed finite-lived and are amortized over a period that best reflects the economic benefits provided by these assets. Goodwill Goodwill represents the excess of purchase price over fair value of net assets acquired in a business combination and is not amortized. Goodwill is subject to impairment testing at least annually or when a triggering event occurs that could indicate a potential impairment. The Company has one segment and one reporting unit and as such reviews goodwill for impairment at the consolidated level. For the years ended December 31, 2018 , 2017 and 2016 there were no impairments to goodwill. Impairment of Long-Lived Assets Our long-lived assets are primarily comprised of intangible assets and property and equipment. We evaluate our finite-lived intangible assets, other than goodwill and property and equipment, for impairment whenever events or changes in circumstances indicate the carrying value of an asset or group of assets may not be recoverable. If these circumstances exist, recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset group to future undiscounted net cash flows expected to be generated by the use and eventual disposition of the asset group. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. In addition, indefinite-lived intangible assets, comprised of IPR&D, are reviewed for impairment annually and whenever events or changes in circumstances indicate that it is more likely than not that the asset is impaired by comparing the fair value to the carrying value of the asset. To determine the fair value of the asset, the Company used the multi-period excess earnings method of the income approach. The more significant assumptions inherent in the application of this method include: the amount and timing of projected future cash flows (including revenue, cost of sales, research and development costs, and sales and marketing expenses), and the discount rate selected to measure the risks inherent in the future cash flows. There were no impairments related to intangible assets in the years ended December 31, 2018 , 2017 and 2016 . Contingent Consideration We record contingent consideration resulting from a business combination at its fair value on the acquisition date. On a quarterly basis, we revalue these obligations and record increases or decreases from their fair value as an adjustment to the consolidated statement of operations. Changes to contingent consideration obligations can result from changes to discount rates, accretion of the liability due to the passage of time, changes in revenue forecasts and changes in our estimates of the likelihood or timing of achieving commercial milestones. Income Taxes The Company follows ASC 740, Income Taxes, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the asset will not be realized. The standard addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC 740, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the tax authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. ASC 740 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The Company’s policy is to record estimated interest and penalty related to the underpayment of income taxes or unrecognized tax benefits as a component of its income tax provision. Reclassifications Certain reclassifications have been made to the prior year financial statements in order to conform to the current year’s presentation. Patents The Company expenses external costs, such as filing fees and associated attorney fees, incurred to obtain issued patents and patent applications pending. The Company also expenses costs associated with maintaining and defending patents subsequent to their issuance in the period incurred. Derivative Financial Instruments, Warrants The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. However, since 2013, the Company has issued five tranches of common stock purchase warrants to secure financing, remediate covenant violations and provide consideration for amendments with respect to a credit facility extinguished in 2015. Historically, the Company accounted for these instruments, which did not have fixed settlement provisions, as derivative instruments in accordance with FASB ASC 815-40, Derivative and Hedging - Contracts in Entity’s Own Equity. This was due to an anti-dilution provision for the warrants that provided for a reduction to the exercise price if the Company issued equity or equity linked instruments in the future at an effective price per share less than the exercise price then in effect for the warrant ("down round provision"). As such, the warrants were re-measured at each balance sheet date based on estimated fair value. Changes in estimated fair value were recorded as non-cash adjustments within other income (expenses), net, in the Company’s Consolidated Statements of Operations and Comprehensive Income (Loss) . As of January 1, 2018, the Company early adopted ASU 2017-11, which revised the guidance for instruments with down round provisions. As such the Company treats outstanding warrants as free-standing equity linked instruments that will be recorded to equity in the Consolidated Balance Sheet. The fair value of the derivative liability balance as of December 31, 2017 of $15.7 million was reclassified by means of a cumulative-effect adjustment to equity as of January 1, 2018. Recently Adopted Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. Under the new standard, revenue is recognized at the time a good or service is transferred to a customer for the amount of consideration for which the entity expects to be entitled for that specific good or service. Entities may use a full retrospective approach or report the cumulative effect as of the date of adoption. The Company adopted the new standard on January 1, 2018 using the full retrospective approach and there was no impact on timing or recognition of revenue. See Note 3 for further discussion. In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory. The new guidance changes the accounting for income tax effects of intra-entity transfers of assets other than inventory. Under the new guidance, the selling (transferring) entity is required to recognize a current tax expense or benefit upon transfer of the asset. Similarly, the purchasing (receiving) entity is required to recognize a deferred tax asset or deferred tax liability, as well as the related deferred tax benefit or expense, upon receipt of the asset. As of January 1, 2017, the Company reversed the balance of $4.9 million in its prepaid tax asset account as a charge to retained earnings. In July 2017, the FASB issued ASU No. 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features. These amendments simplify the accounting for certain financial instruments with down round features. The amendments require companies to disregard the down round feature when assessing whether the instrument is indexed to its own stock, for purposes of determining liability or equity classification. See Note 15 for further discussion. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. The new guidance dictates that, when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, it should be treated as an acquisition or disposal of an asset. The guidance was adopted as of January 1, 2018. Recently Issued Accounting Pronouncements From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its consolidated financial position or results of operations upon adoption. In February 2016, the FASB issued ASU No. 2016-02, Leases. The new standard establishes a right-of-use ("ROU") model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. Subsequently, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842, ASU No. 2018-11, Targeted Improvements, and ASU No. 2018-20, Narrow-Scope Improvements for Lessors, to clarify and amend the guidance in ASU No. 2016-02. The ASUs are effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted. We will adopt the ASUs on January 1, 2019 on a modified retrospective basis through a cumulative adjustment to our beginning accumulated deficit balance. Prior comparative periods will not be restated under this method, and we will adopt all available practical expedients, as applicable. The Company has finished its search for leases and reviewed the related contacts and determined its impact to the consolidated balance sheet is less than 5% of total assets and liabilities as of January 1, 2019. No material cumulative-effect adjustment to equity is expected. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. Topic 326 amends guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities. For assets held at amortized cost basis, Topic 326 eliminates the probable initial recognition threshold in current GAAP and, instead, requires an entity to reflect its current estimate of all expected credit losses. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected. For available for sale debt securities, credit losses should be measured in a manner similar to current GAAP, however Topic 326 will require that credit losses be presented as an allowance rather than as a write-down. This ASU update affects entities holding financial assets and net investment in leases that are not accounted for at fair value through net income. The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. This update is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company is currently evaluating whether the adoption of the new standard will have a material effect on its consolidated financial statements and related disclosures. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | REVENUE RECOGNITION Product Revenue, Net Product sales for the years ended December 31, 2018 , 2017 and 2016 consisted of sales of Chenodal, Cholbam and Thiola. Effective January 1, 2018, the Company adopted Accounting Standards Codification (" ASC"), Topic 606, Revenue from Contracts with Customers, using the full retrospective transition method. This standard applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance, collaboration arrangements and financial instruments. Under Topic 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. 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 contracts when it is probable that the entity will collect substantially all the consideration it is entitled to in exchange for the goods or services it transfers to the customer. The Company sells Chenodal and Cholbam (Kolbam), which are aggregated as bile acid products, and Thiola through direct-to-patient distributors. The Company sells its products worldwide, with more than 95% of the revenue generated in North America. Revenues from product sales are recognized when the customer obtains control of the Company’s product, which occurs upon delivery to the customer. The Company receives payments from its product sales based on terms that generally are within 60 days of delivery of product to the patient. Deductions from Revenue Revenues from product sales are recorded at the net sales price, which includes provisions resulting from discounts, rebates and co-pay assistance that is offered to its customers, health care providers, payors and other indirect customers relating to the Company’s sales of its products. These provisions are based on the amounts earned or to be claimed on the related sales and are classified as a reduction of accounts receivable (if the amount is payable to the customer) or as a current liability (if the amount is payable to a party other than a customer). Where appropriate, these reserves take into consideration the Company’s historical experience, current contractual and statutory requirements and specific known market events and trends. 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 contract. If actual results in the future vary from the Company’s provisions, the Company will adjust the provision, which would affect net product revenue and earnings in the period such variances become known. Our historical experience is that such adjustments have been immaterial. Government Rebates: We calculate the rebates that we will be obligated to provide to government programs and deduct these estimated amounts from our gross product sales at the time the revenues are recognized. Allowances for government rebates and discounts are established based on actual payer information, which is reasonably estimated at the time of delivery, and the government-mandated discounts applicable to government-funded programs. Rebate discounts are included in other current liabilities in the accompanying consolidated balance sheets. Commercial Rebates: We calculate the rebates that we incur due to contracts with certain commercial payors and deduct these amounts from our gross product sales at the time the revenues are recognized. Allowances for commercial rebates are established based on actual payer information, which is reasonably estimated at the time of delivery. Rebate discounts are included in other current liabilities in the accompanying consolidated balance sheets. Prompt Pay Discounts : We offer discounts to certain customers for prompt payments. We accrue for the calculated prompt pay discount based on the gross amount of each invoice for those customers at the time of sale. Product Returns: Consistent with industry practice, we offer our customers a limited right to return product purchased directly from the Company, which is principally based upon the product’s expiration date. Generally, shipments are only made upon a patient prescription thus returns are minimal. Co-pay Assistance: We offer a co-pay assistance program, which is intended to provide financial assistance to qualified commercially insured patients with prescription drug co-payments required by payors. The calculation of the accrual for co-pay assistance is based on an identification of claims and the cost per claim associated with product that has been recognized as revenue. The following table summarizes net product revenues for the twelve months ended December 31, 2018 , 2017 and 2016 ( in thousands ): Twelve Months Ended December 31, 2018 2017 2016 Thiola 89,176 82,311 71,199 Bile acid products 75,070 72,626 62,392 Total net product revenue 164,246 154,937 133,591 |
FUTURE ACQUISITION RIGHT AND JO
FUTURE ACQUISITION RIGHT AND JOINT DEVELOPMENT AGREEMENT | 12 Months Ended |
Dec. 31, 2018 | |
Future Acquisition Right And Joint Development Agreement [Abstract] | |
FUTURE ACQUISITION RIGHT AND JOINT DEVELOPMENT AGREEMENT | FUTURE ACQUISITION RIGHT AND JOINT DEVELOPMENT AGREEMENT Censa Pharmaceuticals Inc. In December 2017, the Company entered into a Future Acquisition Right and Joint Development Agreement (the “Option Agreement”) with Censa, which became effective in January 2018. The Company has agreed to fund certain development activities of Censa’s CNSA-001 program, in an aggregate amount expected to be approximately $17 million through proof of concept, and has the right, but not the obligation, to acquire Censa (the “Option”) on the terms and subject to the conditions set forth in a separate Agreement and Plan of Merger. In exchange for the Option, the Company paid $10 million , and an additional $5 million upon Censa’s completion of a specified development milestone set forth in the Option Agreement. If the Company exercises the Option, the Company will acquire Censa for $65 million in upfront consideration, subject to certain adjustments, paid as a combination of 20% in cash and 80% in shares of the Company’s common stock, valued at a fixed price of $21.40 per share; provided, however, that Censa may elect on behalf of its equity holders to receive the upfront consideration in 100% cash if the average price per share of the Company’s common stock for the ten trading days ending on the date the Company provides a notice of interest to exercise the Option is less than $19.26 . In addition, if the Company exercises the Option and acquires Censa, the Company would be required to make further cash payments to Censa’s equity holders of up to an aggregate of $25 million if the CNSA-001 program achieves specified development and commercial milestones. The Company determined that Censa is a variable interest entity ("VIE") and concluded that the Company is not the primary beneficiary of the VIE. As such, the Company did not consolidate Censa’s results into its consolidated financial statements. The Company will continue to monitor facts and circumstances for changes that could potentially result in the Company becoming the primary beneficiary. Through December 31, 2018, the Company has paid Censa $10.0 million as an upfront payment, $16.8 million in development funding, and $5.0 million related to a development milestone. The Company capitalized the upfront and milestone payments and expensed the development funding paid to research and development expense in the Consolidated Statement of Operations and Comprehensive Income (Loss) . The Company is treating the upfront payment and milestone payment, both of which are compensation for the Option, as a cost-method investment with a total carrying value of $15.0 million as of December 31, 2018. BUSINESS COMBINATION AND ASSET TRANSACTIONS Amendment to Trademark License and Supply Agreement In November 2017, the Company amended their agreement with the manufacturer of Thiola to extend the term of the current exclusive U.S. and Canada licensing agreement by an additional five years, to 2029. The royalty rate and guaranteed minimum payment were also extended through the new agreement term. Upon execution of the amendment, the Company capitalized an additional $5.9 million in intangible assets and recorded a guaranteed minimum liability for the same amount. In November 2018, the license agreement was amended to extend the territorial rights beyond the United States and Canada. As consideration for the expanded territory the Company paid an up-front fee of $0.3 million and will pay guaranteed minimum royalties equaling the greater of $0.1 million or 20% of our Thiola net sales generated from outside of the United States during each calendar year. Upon execution of the amendment, the Company capitalized an additional $1.0 million in intangible assets and recorded a guaranteed minimum liability of $0.7 million related to this amendment. Acquisition of Liquid Ursodeoxycholic Acid (L-UDCA) On June 20, 2016, the Company signed a definitive agreement to purchase the rights, titles, licenses and ownership of L-UDCA from Asklepion Pharmaceuticals, LLC ("Asklepion"). The acquisition was accounted for under the acquisition method of accounting in accordance with Accounting Standard Codification ("ASC") 805. The fair value of assets acquired and liabilities assumed was based upon an independent third-party valuation and the Company’s estimates. Critical estimates in valuing certain intangible assets include but are not limited to future expected cash flows from acquired product rights for L-UDCA, licenses, trade names and developed technologies, present value and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. The purchase included $25.5 million for an intangible asset with a definite life related to product rights in the U.S. The useful life related to the acquired product rights is expected to be approximately 17 years once the NDA is approved by the FDA. Until approval, the asset is considered IPR&D with an indefinite life and is not amortized. The contingent consideration of $25.0 million (present value) recorded during the period ended June 30, 2016, is related to an agreement to pay an additional cash amount in the form of milestones and sales royalties through 2035. The accrued contingent consideration was recorded as a liability at acquisition-date fair value using the income approach with an assumed discount rate of 12.0% over the applicable term. The undiscounted amount the Company could pay as contingent consideration under the agreement is up to $70.3 million . The purchase price allocation of $25.5 million as of the acquisition completion date of June 16, 2016 was as follows ( in thousands ): Cash paid upon consummation $ 500 Present value of contingent consideration 25,000 Total purchase price $ 25,500 Fair Value of Assets Acquired and Liabilities Assumed Acquired product rights: L-UDCA (intangible asset) $ 25,500 Total purchase price $ 25,500 Unaudited pro forma information for the transaction is not presented, because the effects of such transaction are considered immaterial to the Company. Divestiture of Assets: Sale of Assets to Sanofi The FDA granted Asklepion a Pediatric PRV, awarded to encourage development of new drugs and biologics for the prevention and treatment of rare pediatric diseases. A Pediatric PRV is transferable and provides the bearer with FDA priority review classification for a new drug application. The Pediatric PRV was transferred to the Company under the terms of the asset purchase agreement between the Company and Asklepion dated January 12, 2015, pursuant to which the Company acquired Cholbam. On July 2, 2015, the Company sold and transferred the Pediatric PRV to Sanofi for $245.0 million . $150.0 million was received upon closing, and $47.5 million was due on each of the first and second anniversaries of the closing. In accordance with U.S. GAAP, the Company recorded the future short term and long term notes receivable at their present value of $46.2 million and $44.9 million , respectively, at the date of the sale using a discount rate of 2.8% . The gain from the sale of the asset was approximately $140.0 million , net of $4.9 million in fees contractually due as part of the Cholbam acquisition. The first and second annual payments were received on July 1, 2016 and June 30, 2017 in accordance with the terms of the sale agreement. |
BUSINESS COMBINATION AND ASSET
BUSINESS COMBINATION AND ASSET TRANSACTIONS | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATION AND ASSET TRANSACTIONS | FUTURE ACQUISITION RIGHT AND JOINT DEVELOPMENT AGREEMENT Censa Pharmaceuticals Inc. In December 2017, the Company entered into a Future Acquisition Right and Joint Development Agreement (the “Option Agreement”) with Censa, which became effective in January 2018. The Company has agreed to fund certain development activities of Censa’s CNSA-001 program, in an aggregate amount expected to be approximately $17 million through proof of concept, and has the right, but not the obligation, to acquire Censa (the “Option”) on the terms and subject to the conditions set forth in a separate Agreement and Plan of Merger. In exchange for the Option, the Company paid $10 million , and an additional $5 million upon Censa’s completion of a specified development milestone set forth in the Option Agreement. If the Company exercises the Option, the Company will acquire Censa for $65 million in upfront consideration, subject to certain adjustments, paid as a combination of 20% in cash and 80% in shares of the Company’s common stock, valued at a fixed price of $21.40 per share; provided, however, that Censa may elect on behalf of its equity holders to receive the upfront consideration in 100% cash if the average price per share of the Company’s common stock for the ten trading days ending on the date the Company provides a notice of interest to exercise the Option is less than $19.26 . In addition, if the Company exercises the Option and acquires Censa, the Company would be required to make further cash payments to Censa’s equity holders of up to an aggregate of $25 million if the CNSA-001 program achieves specified development and commercial milestones. The Company determined that Censa is a variable interest entity ("VIE") and concluded that the Company is not the primary beneficiary of the VIE. As such, the Company did not consolidate Censa’s results into its consolidated financial statements. The Company will continue to monitor facts and circumstances for changes that could potentially result in the Company becoming the primary beneficiary. Through December 31, 2018, the Company has paid Censa $10.0 million as an upfront payment, $16.8 million in development funding, and $5.0 million related to a development milestone. The Company capitalized the upfront and milestone payments and expensed the development funding paid to research and development expense in the Consolidated Statement of Operations and Comprehensive Income (Loss) . The Company is treating the upfront payment and milestone payment, both of which are compensation for the Option, as a cost-method investment with a total carrying value of $15.0 million as of December 31, 2018. BUSINESS COMBINATION AND ASSET TRANSACTIONS Amendment to Trademark License and Supply Agreement In November 2017, the Company amended their agreement with the manufacturer of Thiola to extend the term of the current exclusive U.S. and Canada licensing agreement by an additional five years, to 2029. The royalty rate and guaranteed minimum payment were also extended through the new agreement term. Upon execution of the amendment, the Company capitalized an additional $5.9 million in intangible assets and recorded a guaranteed minimum liability for the same amount. In November 2018, the license agreement was amended to extend the territorial rights beyond the United States and Canada. As consideration for the expanded territory the Company paid an up-front fee of $0.3 million and will pay guaranteed minimum royalties equaling the greater of $0.1 million or 20% of our Thiola net sales generated from outside of the United States during each calendar year. Upon execution of the amendment, the Company capitalized an additional $1.0 million in intangible assets and recorded a guaranteed minimum liability of $0.7 million related to this amendment. Acquisition of Liquid Ursodeoxycholic Acid (L-UDCA) On June 20, 2016, the Company signed a definitive agreement to purchase the rights, titles, licenses and ownership of L-UDCA from Asklepion Pharmaceuticals, LLC ("Asklepion"). The acquisition was accounted for under the acquisition method of accounting in accordance with Accounting Standard Codification ("ASC") 805. The fair value of assets acquired and liabilities assumed was based upon an independent third-party valuation and the Company’s estimates. Critical estimates in valuing certain intangible assets include but are not limited to future expected cash flows from acquired product rights for L-UDCA, licenses, trade names and developed technologies, present value and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. The purchase included $25.5 million for an intangible asset with a definite life related to product rights in the U.S. The useful life related to the acquired product rights is expected to be approximately 17 years once the NDA is approved by the FDA. Until approval, the asset is considered IPR&D with an indefinite life and is not amortized. The contingent consideration of $25.0 million (present value) recorded during the period ended June 30, 2016, is related to an agreement to pay an additional cash amount in the form of milestones and sales royalties through 2035. The accrued contingent consideration was recorded as a liability at acquisition-date fair value using the income approach with an assumed discount rate of 12.0% over the applicable term. The undiscounted amount the Company could pay as contingent consideration under the agreement is up to $70.3 million . The purchase price allocation of $25.5 million as of the acquisition completion date of June 16, 2016 was as follows ( in thousands ): Cash paid upon consummation $ 500 Present value of contingent consideration 25,000 Total purchase price $ 25,500 Fair Value of Assets Acquired and Liabilities Assumed Acquired product rights: L-UDCA (intangible asset) $ 25,500 Total purchase price $ 25,500 Unaudited pro forma information for the transaction is not presented, because the effects of such transaction are considered immaterial to the Company. Divestiture of Assets: Sale of Assets to Sanofi The FDA granted Asklepion a Pediatric PRV, awarded to encourage development of new drugs and biologics for the prevention and treatment of rare pediatric diseases. A Pediatric PRV is transferable and provides the bearer with FDA priority review classification for a new drug application. The Pediatric PRV was transferred to the Company under the terms of the asset purchase agreement between the Company and Asklepion dated January 12, 2015, pursuant to which the Company acquired Cholbam. On July 2, 2015, the Company sold and transferred the Pediatric PRV to Sanofi for $245.0 million . $150.0 million was received upon closing, and $47.5 million was due on each of the first and second anniversaries of the closing. In accordance with U.S. GAAP, the Company recorded the future short term and long term notes receivable at their present value of $46.2 million and $44.9 million , respectively, at the date of the sale using a discount rate of 2.8% . The gain from the sale of the asset was approximately $140.0 million , net of $4.9 million in fees contractually due as part of the Cholbam acquisition. The first and second annual payments were received on July 1, 2016 and June 30, 2017 in accordance with the terms of the sale agreement. |
MARKETABLE SECURITIES
MARKETABLE SECURITIES | 12 Months Ended |
Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
MARKETABLE SECURITIES | MARKETABLE SECURITIES The Company's marketable securities as of December 31, 2018 and 2017 were comprised of available-for-sale marketable securities which are carried at fair value, with the unrealized gains and losses reported in accumulated other comprehensive income (loss). The amortized cost of debt securities in this category are adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization and accretion is included in interest income (loss). Realized gains and losses and declines in value judged to be other-than-temporary, if any, on available-for-sale securities are included in other income or expense. The cost of securities sold is based on the specific identification method. Interest and dividends on securities classified as available-for-sale are included in interest income. All available-for-sale securities are classified as current assets, even if the maturity when acquired by the Company is greater than one year due to the ability to liquidate within the next 12 months. Marketable securities consist of the following ( in thousands ): As of December 31, 2018 2017 Marketable Securities: Commercial paper 59,255 6,897 Corporate debt securities 299,413 164,297 Securities of government sponsored entities 10,000 30,042 Total Marketable Securities: $ 368,668 $ 201,236 The following is a summary of short-term marketable securities classified as available-for-sale as of December 31, 2018 ( in thousands ): Contractual Maturity (in years) Amortized Cost Unrealized Gains Unrealized Losses Aggregate Estimated Fair Value Marketable Securities: Commercial paper Less than 1 $ 59,313 $ — $ (58 ) $ 59,255 Corporate debt securities Less than 1 149,824 — (604 ) 149,220 Total maturity less than 1 year 209,137 — (662 ) 208,475 Corporate debt securities 1 to 2 150,813 18 (638 ) 150,193 Securities of government-sponsored entities 1 to 2 9,997 4 (1 ) 10,000 Total maturity 1 to 2 years 160,810 22 (639 ) 160,193 Total available-for-sale securities $ 369,947 $ 22 $ (1,301 ) $ 368,668 The following is a summary of short-term marketable securities classified as available-for-sale as of December 31, 2017 ( in thousands ): Contractual Maturity (in years) Amortized Cost Unrealized Losses Aggregate Estimated Fair Value Marketable Securities: Commercial paper Less than 1 $ 6,911 $ (14 ) $ 6,897 Corporate debt securities Less than 1 86,531 (198 ) 86,333 Securities of government-sponsored entities 30,132 (90 ) 30,042 Total maturity less than 1 year 123,574 (302 ) 123,272 Corporate debt securities 1 to 2 78,388 (424 ) 77,964 Total maturity 1 to 2 years 78,388 (424 ) 77,964 Total available-for-sale securities $ 201,962 $ (726 ) $ 201,236 During 2018 and 2017, the Company had no realized gains or losses on marketable securities. During 2016 , the Company realized a gain of less than $0.1 million on marketable securities. The Company received proceeds from the sale or maturity of marketable securities of $162.8 million , $114.5 million and $159.5 million for 2018 , 2017 and 2016 , respectively. The primary objective of the Company’s investment portfolio is to enhance overall returns while preserving capital and liquidity. The Company’s investment policy limits interest-bearing security investments to certain types of instruments issued by institutions with primarily investment grade credit ratings and places restrictions on maturities and concentration by asset class and issuer. The Company reviews the available-for-sale investments for other-than-temporary declines in fair value below cost basis each quarter and whenever events or changes in circumstances indicate that the cost basis of an asset may not be recoverable. This evaluation is based on a number of factors, including the length of time and the extent to which the fair value has been below the cost basis and adverse conditions related specifically to the security, including any changes to the credit rating of the security, and the intent to sell, or whether the Company will more likely than not be required to sell the security before recovery of its amortized cost basis. The assessment of whether a security is other-than-temporarily impaired could change in the future due to new developments or changes in assumptions related to any particular security. As of December 31, 2018 and 2017 , the Company believed the cost basis for available-for-sale investments were recoverable in all material respects. For both December 31, 2018 and 2017 , any investments in an unrealized loss position for longer than 12 months were immaterial. |
NOTES PAYABLE
NOTES PAYABLE | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | NOTES PAYABLE Convertible Senior Notes Due 2025 On September 10, 2018, the Company completed its registered underwritten public offering of $276 million aggregate principal amount of 2.50% Convertible Senior Notes due 2025 ("2025 Notes") and entered into a base indenture and supplemental indenture agreement ("2025 Indenture") with respect to the 2025 Notes. The 2025 Notes will mature on September 15, 2025 ("Maturity Date”), unless earlier repurchased, redeemed, or converted. The 2025 Notes are senior unsecured obligations of the Company and bear interest at an annual rate of 2.50% , payable semi-annually in arrears on March 15 and September 15 of each year, beginning on March 15, 2019. The composition of the Company’s 2025 Notes are as follows ( in thousands ): December 31, 2018 December 31, 2017 2.50% convertible senior notes due 2025 $ 276,000 $ — Unamortized debt discount (74,836 ) — Unamortized debt issuance costs (6,073 ) — Total 2025 Notes, net of unamortized debt discount and debt issuance costs $ 195,091 $ — The net proceeds from the issuance of the 2025 Notes were approximately $267.2 million , after deducting commissions and the offering expenses payable by the Company. A portion of the net proceeds from the 2025 Notes were used by the Company to repurchase $23.4 million aggregate principal amount of its 4.5% senior convertible notes due in 2019 in privately-negotiated transactions. Holders may convert their 2025 Notes at their option only in the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on December 31, 2018 (and only during such calendar quarter), if the last reported sale price per share of the Company’s common stock for each of at least 20 trading days, whether or not consecutive, during the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter exceeds 130% of the conversion price on the applicable trading day; (2) during the five consecutive business days immediately after any 10 consecutive trading day period (“measurement period”) if the trading price per $1,000 principal amount of 2025 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price per share of the Company’s common stock on such trading day and the conversion rate on such trading day; (3) upon the occurrence of certain corporate events or distributions on the Company’s common stock; (4) if the Company calls the 2025 Notes for redemption; and (5) at any time from, and including, May 15, 2025 until the close of business on the scheduled trading day immediately before the Maturity Date. The Company will settle conversions by paying or delivering, as applicable, cash, shares of the Company’s common stock, or a combination of cash and shares of the Company’s common stock, at the Company’s election, based on the applicable conversion rate. The initial conversion rate for the 2025 Notes is 25.7739 shares of the Company’s common stock per $1,000 principal amount of 2025 Notes, which represents an initial conversion price of approximately $38.80 per share. If a “make-whole fundamental change” (as defined in the 2025 Indenture) occurs, then the company will, in certain circumstances, increase the conversion rate for a specified period of time. The 2025 Notes will be redeemable, in whole or in part, at the Company’s option at any time, and from time to time, on or after September 15, 2022 and, in the case of any partial redemption, on or before the 40th scheduled trading day before the Maturity Date, at a cash redemption price equal to the principal amount of the 2025 Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, but only if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price on each of at least 20 trading days during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice. If a fundamental change (as defined in the 2025 Indenture) occurs, then, subject to certain exceptions, holders may require the Company to repurchase their 2025 Notes at a cash repurchase price equal to the principal amount of the 2025 Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date. As of December 31, 2018 , the 2025 Notes had a market price of $897 per $1,000 or $247.7 million principal amount. In the event of conversion, holders would forgo all future interest payments, any unpaid accrued interest and the possibility of further stock price appreciation. Upon the receipt of conversion requests, the settlement of the 2025 Notes will be paid pursuant to the terms of the 2025 Indenture. In the event that all of the 2025 Notes are converted, the Company would be required to repay the $276.0 million in principal value and any conversion premium in any combination of cash and shares of its common stock at the Company’s option. In addition, calling the 2025 Notes for redemption will constitute a “make whole fundamental change.” The 2025 Notes are the Company’s general unsecured obligations that rank senior in right of payment to all of its indebtedness that is expressly subordinated in right of payment to the 2025 Notes, and equal in right of payment to the Company’s unsecured indebtedness. The 2025 Notes are currently classified on the Company’s consolidated balance sheet at December 31, 2018 as long-term debt. Under ASC 470-20, Debt with Conversion and Other Options, an entity must separately account for the liability and equity components of convertible debt instruments (such as the 2025 Notes) that may be settled entirely or partially in cash upon conversion, in a manner that reflects the issuer’s economic interest cost. The liability component of the instrument is valued in a manner that reflects the market interest rate for a similar nonconvertible instrument at the date of issuance. The initial carrying value of the liability component was $198.6 million . The equity component of $77.4 million , representing the conversion option, was determined by deducting the fair value of the liability component from the par value of the 2025 Notes and is recorded in additional paid-in capital on the consolidated balance sheet at the issuance date. That equity component is treated as a discount on the liability component of the 2025 Notes, which is amortized over the seven year term of the 2025 Notes using the effective interest rate method. The equity component is not re-measured as long as it continues to meet the conditions for equity classification. The Company allocated the total transaction costs of approximately $8.8 million related to the issuance of the 2025 Notes to the liability and equity components of the 2025 Notes based on their relative values. Transaction costs attributable to the liability component are amortized to interest expense over the seven-year term of the 2025 Notes, and transaction costs attributable to the equity component are netted with the equity component in stockholders’ equity. The effective interest rate on the liability components of the 2025 Notes for the period from the date of issuance through December 31, 2018 was 7.7% . The following table sets forth total interest expense recognized related to the 2025 Notes ( in thousands ): Twelve Months Ended December 31, 2018 2017 Contractual interest expense $ 2,108 $ — Amortization of debt discount 2,582 — Amortization of debt issuance costs 273 — Total interest expense for the 2025 Notes $ 4,963 $ — The 2025 Notes do not contain any financial or operating covenants or any restrictions on the payment of dividends, the issuance of other indebtedness or the issuance or repurchase of securities by the Company. The 2025 Indenture contains customary events of default with respect to the 2025 Notes, including that upon certain events of default, 100% of the principal and accrued and unpaid interest on the 2025 Notes will automatically become due and payable. Convertible Senior Notes Due 2019 On May 29, 2014, the Company entered into a Note Purchase Agreement relating to a private placement by the Company of $46 million aggregate principal senior convertible notes due 2019 (the “2019 Notes”) which are convertible into shares of the Company’s common stock at an initial conversion price of $17.41 per share. The conversion price is subject to customary anti-dilution protection. The 2019 Notes bear interest at a rate of 4.5% per annum, payable semiannually in arrears on May 15 and November 15 of each year, beginning on November 15, 2014. The 2019 Notes mature on May 30, 2019 unless earlier converted or repurchased in accordance with the terms. The aggregate carrying value of the 2019 Notes on their issuance was $43 million , which was net of the $3 million debt discount. In September 2018, the Company used part of the net proceeds from the issuance of the 2025 Notes discussed above to repurchase $23.4 million aggregate principal value of the 2019 Notes in privately-negotiated transactions for approximately $40.2 million in cash. The partial repurchase of the 2019 Notes resulted in a $17.0 million loss on early extinguishment of debt. As of December 31, 2018 the fair value of a share of common stock was $22.63 , exceeding the initial conversion price per share of the 2019 Notes. If the debt holders were to convert the Company would be required to issue 1,297,530 shares of common stock assuming that no fundamental change in the Company had occurred. The Company has reserved sufficient shares of its common stock to satisfy the conversion requirements related to the 2019 Notes. As of December 31, 2018 , the convert value exceeded the carrying value by approximately $6.8 million . In estimating the fair value of the Company’s convertible debt, the Company performed an analysis on the straight-debt portion and the conversion feature. To estimate the fair value of conversion feature, the Company used the Monte Carlo Simulation as of December 31, 2018. To estimate the fair value of straight-debt portion, excluding the conversion feature, the Company discounted to present value the scheduled coupon payments and principal repayment, using an appropriate fair market yield . As of December 31, 2018 the fair value of the debt was estimated at $30.0 million using level 2 inputs. The net carrying amount of the Notes consists of the following ( in thousands ): December 31, 2018 2017 Aggregate principle amount of Notes $ 22,590 $ 46,000 Unamortized debt discount and debt issuance costs (133 ) (923 ) $ 22,457 $ 45,077 Interest Expense Total interest expense recognized for the years ended December 31, 2018 , 2017 and 2016 was $9.8 million , $4.4 million and $4.7 million , respectively. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The Company accounts for financial instruments in accordance with ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”). ASC 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under ASC 820 are described below: Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2 – Quoted prices in markets that are not active or financial instruments for which all significant inputs are observable, either directly or indirectly; and Level 3 – Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. In estimating the fair value of the Company’s contingent consideration, the Company used the Monte Carlo Simulation model as of December 31, 2018, a probability-based expected method as of December 31, 2017 and the comparable uncontrolled transaction (“CUT”) method in 2016 for royalty payments based on projected revenues. Based on the fair value hierarchy, the Company classified contingent consideration within Level 3 because valuation inputs are based on projected revenues discounted to a present value. Financial instruments with carrying values approximating fair value include cash and cash equivalents, accounts receivable, notes receivable, deposits on lease agreements, and accounts payable, due to their short term nature. The following table presents the Company’s asset and liabilities that are measured and recognized at fair value on a recurring basis, classified under the appropriate level of the fair value hierarchy as of December 31, 2018 (in thousands): As of December, 2018 Fair Value Hierarchy at December 31, 2018 Total carrying and estimated fair value Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Asset: Cash and Cash Equivalents $ 102,873 $ 62,978 $ 39,895 $ — Marketable securities, available-for-sale 368,668 — 368,668 — Total $ 471,541 $ 62,978 $ 408,563 $ — Liabilities: Business combination-related contingent consideration 93,000 — — 93,000 Total $ 93,000 $ — $ — $ 93,000 The following table presents the Company’s assets and liabilities that are measured and recognized at fair value on a recurring basis, classified under the appropriate level of the fair value hierarchy as of December 31, 2017 (in thousands): As of December, 2017 Fair Value Hierarchy at December 31, 2017 Total carrying and Quoted prices in Significant other Significant Asset: Cash and Cash Equivalents $ 99,394 $ 92,726 $ 6,668 $ — Marketable securities, available-for-sale 201,236 — 201,236 — Total $ 300,630 $ 92,726 $ 207,904 $ — Liabilities: Derivative liability related to warrants $ 15,710 $ — $ — $ 15,710 Business combination-related contingent consideration 90,000 — — 90,000 Total $ 105,710 $ — $ — $ 105,710 The following table sets forth a summary of changes in the estimated fair value of the Company’s Level 3 derivative liability for the year ended December 31, 2017 (in thousands) : Fair Value Measurements of Common Stock Warrants (Level 3) 2017 Balance at January 1, $ 22,440 Reclassification of derivative liability to equity upon exercise of warrants (11,221 ) Change in estimated fair value of liability classified warrants 4,491 Balance at December 31, $ 15,710 The following table sets forth a summary of changes in the estimated fair value of the Company's Level 3 business combination-related contingent consideration for the years ended December 31, 2018 and 2017 (in thousands) : Fair Value Measurements of Acquisition-Related Contingent Consideration (Level 3) 2018 2017 Balance at January 1, $ 90,000 $ 87,478 Increase from revaluation of contingent consideration 11,590 19,389 Contractual Payments (6,373 ) (6,006 ) Contractual Payments accrued at December 31 (2,171 ) (11,012 ) Foreign currency impact (46 ) 151 Balance at December 31, $ 93,000 $ 90,000 |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | INTANGIBLE ASSETS Ligand License Agreement In 2013, the Company entered into a $2.5 million agreement with Ligand for a worldwide sublicense to develop, manufacture and commercialize a drug technology compound including sparsentan (the “Ligand License Agreement”). The cost of the Ligand License Agreement, which is presented net of amortization in the accompanying Consolidated Balance Sheet in intangible assets, net, is being amortized to research and development on a straight-line basis through September 30, 2023. As consideration for the license, we are required to make substantial payments upon the achievement of certain milestones, totaling up to $114.1 million . Through 2018 , we have made milestone payments to Ligand of $7.2 million under the terms of the Ligand License Agreement. Should we commercialize sparsentan or any products containing related compounds, we will be obligated to pay to Ligand an escalating annual royalty between 15% and 17% of net sales of all such products. In September 2015, the Ligand License Agreement was amended to facilitate sub-licensing in Asia-Pacific. As consideration for the amendment the Company paid $1.0 million . In March 2018, the Ligand License Agreement was amended to update certain development milestones set forth in the Sublicense Agreement to comport with the current development timeline for sparsentan. As consideration, the Company paid Ligand $4.6 million , which replaced the amount that would have been due upon initiation of the first Phase 3 trial for sparsentan. Manchester Pharmaceuticals LLC In 2014, the Company acquired intangible assets with finite lives related to the Chenodal product rights, trade names, and customer relationships with the values of $67.8 million , $0.2 million , and $0.4 million , respectively. The useful lives related to the acquired product rights, trade names, and customer relationships are expected to be approximately 16 , 1 and, 10 years, respectively. Amortization of product rights, trade names and customer relationships are being recorded in selling, general and administrative expense over their respective lives. Thiola License Agreement The Company entered into a license agreement with Mission Pharmacal in 2014, in which the Company obtained an exclusive, royalty-bearing license to market, sell and commercialize Thiola (tiopronin) in the United States and Canada, and a non-exclusive license to use know-how relating to Thiola to the extent necessary to market Thiola. The initial term of the license is 10 years and will automatically renew thereafter for periods of one year. The Company paid Mission an up-front license fee of $3 million and will pay guaranteed minimum royalties during each calendar year the greater of $2 million or twenty percent ( 20% ) of the Company’s net sales of Thiola through May 28, 2024. In November 2017, the Company amended its agreement with Mission to extend the term of the current exclusive U.S. and Canada licensing agreement by an additional five years, to 2029. The royalty rate and guaranteed minimum payment were also extended through the new agreement term. Upon execution of the amendment, the Company capitalized an additional $5.9 million in intangible assets and recorded a guaranteed minimum liability for the same amount. In November 2018, the Company amended its agreement with Mission to extend the territorial rights beyond the United States and Canada. As consideration for the expanded territory the Company paid an up-front fee of $0.3 million and will pay guaranteed minimum royalties equaling the greater of $0.1 million or 20% of our Thiola net sales generated from outside of the United States during each calendar year. Upon execution of the amendment, the Company capitalized an additional $1.0 million in intangible assets and recorded a guaranteed minimum liability of $0.7 million related to this amendment. The present value of guaranteed minimum royalties payable using a discount rate of ranging from approximately 7% to 11% based on the Company’s then borrowing rate is $15.2 million and $15.1 million as of December 31, 2018 and 2017, respectively. As of December 31, 2018 , the guaranteed minimum royalty current and long term liability was approximately $2.1 million and $13.1 million , respectively, and is recorded as guaranteed minimum royalty in the Consolidated Balance Sheet. As of December 31, 2017 , the guaranteed minimum royalty current and long term liability was approximately $2.0 million and $13.1 million , respectively, and is recorded as guaranteed minimum royalty in the Consolidated Balance Sheet. The Company has capitalized $70.0 million related to the Thiola intangible asset which consists of the up-front license fee, professional fees, present value of the guaranteed minimum royalties and any additional payments through 2018 in excess of minimum royalties. There are 10.4 years remaining in the term of the license agreement. Cholbam (Kolbam) Asset Purchase On March 31, 2015, the Company completed its acquisition from Asklepion of all worldwide rights, titles and ownership of Cholbam, including all related contracts, data assets, intellectual property, regulatory assets and the PRV. The Company capitalized $75.9 million and $7.3 million for the U.S. and international economic interest, respectively. L-UDCA On June 20, 2016, the Company signed a definitive agreement to purchase the rights, titles, and ownership of L-UDCA from Asklepion. The purchase included $25.5 million for an intangible asset with a definite life related to product rights for the U.S. The useful life related to the acquired product rights is expected to be approximately 17 years once the NDA is approved by the FDA. Until approval, the asset is considered IPR&D with an indefinite life and is not amortized. Amortizable intangible assets as of December 31, 2018 ( in thousands ): Useful Life Gross Carrying Accumulated Net Book Value Chenodal Product Rights 16 $ 67,849 $ (20,213 ) $ 47,636 Thiola License 15 70,009 (14,523 ) 55,486 Economic Interest - U.S. revenue Cholbam 10 75,900 (28,487 ) 47,413 Economic Interest - International revenue Cholbam 10 7,700 (2,890 ) 4,810 Economic Interest - L-UDCA (acquired IPR&D) Indefinite 25,500 — 25,500 Ligand License 11 7,900 (2,397 ) 5,503 Manchester Customer Relationships 10 403 (192 ) 211 Manchester Trade Name 1 175 (175 ) — Internal use software 5 207 (75 ) 132 Total $ 255,643 $ (68,952 ) $ 186,691 Amortizable intangible assets as of December 31, 2017 ( in thousands ): Useful Life Gross Carrying Accumulated Net Book Value Chenodal Product Rights 16 $ 67,849 $ (15,976 ) $ 51,873 Thiola License 10 54,471 (10,168 ) 44,303 Economic Interest - U.S. revenue Cholbam 10 75,900 (20,903 ) 54,997 Economic Interest - International revenue Cholbam 10 8,058 (2,219 ) 5,839 Economic Interest - L-UDCA (acquired IPR&D) Indefinite 25,500 — 25,500 Ligand License 11 3,300 (1,420 ) 1,880 Manchester Customer Relationships 10 403 (152 ) 251 Manchester Trade Name 1 175 (175 ) — Internal use software 5 207 (33 ) 174 Total $ 235,863 $ (51,046 ) $ 184,817 The following table summarizes amortization expense for the twelve months ended December 31, 2018 , 2017 and 2016 ( in thousands ): 2018 2017 2016 Research and development $ 976 $ 327 $ 328 Selling, general and administrative 17,052 17,004 15,665 Total amortization expense $ 18,028 $ 17,331 $ 15,993 As of December 31, 2018 , amortization expense (excluding infinite lived IPR&D) for the next five years is expected to be as follows ( in thousands ): 2019 $ 19,166 2020 19,210 2021 19,158 2022 19,125 2023 18,825 Thereafter 65,707 Total $ 161,191 |
ACCRUED EXPENSES
ACCRUED EXPENSES | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES | ACCRUED EXPENSES Accrued expenses consist of the following at December 31, 2018 and 2017 ( in thousands ): 2018 2017 Compensation related costs $ 10,446 $ 7,749 Research and development 16,515 6,989 Government rebate reserves 8,464 5,883 Selling, general and administrative 2,990 3,896 Royalty/contingent consideration 6,805 6,429 Restructuring expenses — 3,549 Miscellaneous accrued expenses 4,475 1,523 Total accrued expenses $ 49,695 $ 36,018 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Leases Facilities Base Rent Lease Expiration Corporate Headquarters San Diego, CA $2.3 million July 2024 In July 2016, the Company entered into an agreement to lease 23,107 square feet of office space, which commenced in December 2016, for a term of 7 years and 7 months. Under the terms of the lease, the Company will pay base annual rent (subject to an annual fixed percentage increase), plus property taxes, and other normal and necessary expenses, such as utilities, repairs, security and maintenance. Certain incentives were included in the lease, including approximately $1.5 million in tenant improvement allowances and seven months of rent abatement. The Company has the right to extend the lease for five years. In July 2017, the Company amended the office lease to add an additional 22,339 square feet of office space in an adjacent building. Following is a schedule of the future minimum rental commitments for our operating lease as of December 31, 2018 ( in thousands ): Rental Payments 2019 $ 2,343 2020 2,414 2021 2,486 2022 2,560 2023 2,637 Thereafter 1,585 $ 14,025 Legal Proceedings In August 2017, Martin Shkreli, the Company’s former Chief Executive Officer, was convicted on securities fraud charges following investigations by the U.S. Attorney for the Eastern District of New York and the U.S Securities and Exchange Commission. The Company was not a target of these investigations and cooperated with them fully. Mr. Shkreli has appealed his conviction to the United States Court of Appeals for the Second Circuit, and the appeal will likely not be decided until later in 2019. In connection with the trial and pending appeal proceedings, Mr. Shkreli sought advancement of his legal fees from the Company, and the Company has advanced a total of $5.4 million in legal fees, of which $3.8 million has been reimbursed by its directors’ and officers’ insurance carriers. Pending the outcome of Mr. Shkreli's appeal, the insurance carriers have reserved their rights to assert that certain of the advanced funds pertain to claims excluded from coverage under the relevant insurance policy and are therefore recoverable by the carriers. As a result, the final amount of the reimbursement from the insurance carriers is not currently estimable. In addition, a portion of these and the other legal fees the Company has advanced to Mr. Shkreli will be subject to reimbursement by Mr. Shkreli under Delaware law in the event it is ultimately determined that Mr. Shkreli is not entitled to be indemnified by the Company in these proceedings. In August 2015, the Company filed a lawsuit in federal district court for the Southern District of New York against Mr. Shkreli, asserting that he breached his fiduciary duty of loyalty during his tenure as the Company’s Chief Executive Officer and a member of its Board of Directors. Mr. Shkreli served a demand for JAMS arbitration on Retrophin, claiming that Retrophin had breached his December 2013 employment agreement. In response to Mr. Shkreli’s arbitration demand, the Company asserted counterclaims in the arbitration that are substantially similar to the claims it previously asserted in the federal lawsuit against Mr. Shkreli. In October 2018, after the arbitration panel determined that Retrophin's counterclaims were arbitrable, the Company voluntarily dismissed the federal action without prejudice. The Company does not expect the claims and counterclaims in the arbitration to be heard by the arbitration panel before mid-2019. In connection with these proceedings, Mr. Shkreli sought advancement of his legal fees from the Company relating to his defense of the Company’s claims against him. The Company has advanced, and expects to continue to advance, certain of these legal fees to Mr. Shkreli. For the years ended December 31, 2018 and 2017, the Company recorded zero and $2.6 million in expenses and paid zero and $3.6 million related to advancements for Mr. Shkreli, respectively. The Company received zero and $2.6 million in reimbursement from its directors’ and officers’ insurance carriers during the year ended December 31, 2018 and 2017, respectively. The reimbursement in 2017 is recorded as a liability on the Consolidated Balance Sheet pending the outcome of an appeal, if any. From time to time the Company is involved in legal proceedings arising in the ordinary course of business. On October 23, 2018, Spring Pharmaceuticals, LLC (Spring) filed a lawsuit against the Company, Martin Shkreli, Mission Pharmacal Company and Alamo Pharma Services, Inc. in the United States District Court for the Eastern District of Pennsylvania alleging that the Company violated various federal and state antitrust and unfair competition laws by allegedly refusing to sell samples of the Thiola ® brand drug so that Spring can conduct the bioequivalence testing needed to submit an ANDA to the FDA for approval to market a generic version of the product. Spring is seeking injunctive relief and damages. The Company intends to vigorously defend against Spring’s claims. On January 15, 2019, the Company filed a motion to dismiss the lawsuit, which is in the process of being briefed. The Company is not aware of any other proceedings or claims that could have, individually or in the aggregate, a material adverse effect on its results of operations or financial condition. |
STOCKHOLDERS_ EQUITY _ DEFICIT
STOCKHOLDERS’ EQUITY / DEFICIT | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY / DEFICIT | STOCKHOLDERS’ EQUITY / DEFICIT Common Stock The Company is currently authorized to issue up to 100,000,000 shares of $0.0001 par value common stock. All issued shares of common stock are entitled to vote on a 1 share/ 1 vote basis. Preferred Stock The Company is currently authorized to issue up to 20,000,000 shares of $0.0001 par value preferred stock, of which 1,000 shares are designated Class "A" Preferred shares, $0.001 par value. Class A Preferred Shares are not entitled to interest, have certain liquidation preferences, special voting rights and other provisions. No preferred stock has been issued to date. 2015 Equity Incentive Plan On June 8, 2015, the Company's stockholders approved the 2015 Equity Incentive Plan (the "2015 Plan"). The 2015 Plan is intended as the successor to and continuation of the Company’s 2014 Incentive Compensation Plan. Stockholders approved 1.4 million new shares to be issued under the 2015 Plan, in addition to 0.6 million unallocated shares remaining available for issuance under the 2014 Incentive Compensation Plan that were added to the 2015 Plan. On May 18, 2016, the Company's stockholders approved an amendment to the 2015 Plan (the "Amended 2015 Plan"). The amendment provides for an additional 1.6 million new shares to be issued under the Amended 2015 Plan, in addition to 0.7 million unallocated shares remaining available for issuance. The amendment also includes a provision that on or after March 21, 2016, the number of shares available for issuance under the Amended 2015 Plan will be reduced by one share for each share subject to a stock option or stock appreciation right and by 2.0 shares for each share subject to any other type of stock award issued pursuant to the Amended 2015 Plan, and any such shares will return to the share reserve at the same rates upon cancellation or other forfeiture of such awards or shares. On May 17, 2017, the Company's stockholders approved an amendment to the Amended 2015 Plan. The amendment provides for an additional 1.8 million new shares to be issued under the Amended 2015 Plan. 2018 Equity Incentive Plan On May 9, 2018, the Company's stockholders approved the 2018 Equity Incentive Plan (the "2018 Plan"). The 2018 Plan is intended as the successor to and continuation of the Amended 2015 Plan. Stockholders approved 1.8 million new shares to be issued under the 2018 Plan, in addition to 1.6 million unallocated shares remaining available for issuance under the Amended 2015 Plan that were added to the 2018 Plan. 2017 Employee Stock Purchase Plan The 2017 Employee Stock Purchase Plan ("2017 ESPP") originated with 380,000 shares of common stock available for issuance. Beginning on January 1, 2018, and ending on (and including) January 1, 2026, the number of shares of common stock available for issuance under the 2017 ESPP shall increase by an amount equal to the lesser of (i) one percent ( 1% ) of the total number of shares of common stock outstanding on December 31st of the preceding calendar year and (ii) 300,000 shares of common stock. Substantially all employees are eligible to participate and, through payroll deductions, can purchase shares on established dates semi-annually. The purchase price per share sold pursuant to the 2017 ESPP will be the lower of (i) 85% of the fair market value of common stock on the first day of the offering period or (ii) 85% of the fair market value on the purchase date. Each offering period will span up to six months. Purchases may be up to 15% of qualified compensation, with an annual limit of $25,000 . The 2017 ESPP is intended to qualify as an “employee stock purchase plan” under Section 423 of the Internal Revenue Code. As of December 31, 2018 , there were approximately 680,000 shares authorized and 552,966 shares reserved for future issuance under the 2017 ESPP. Stock Options The fair values of stock option grants during the year ended December 31, 2018 , 2017 and 2016 were calculated on the date of grant using the Black-Scholes option pricing model. Compensation expense is recognized over the period of service, generally the vesting period. During the year ended December 31, 2018 , 1,349,250 stock options were granted by the Company. The following weighted average assumptions were used in the Black-Scholes options pricing model to estimate the fair value of stock options for the specified reporting periods: Twelve Months Ended December 31, 2018 2017 2016 Risk free rate 2.80 % 2.10 % 1.20 % Expected volatility 68 % 70 % 68 % Expected life (in years) 6.2 6.1 5.8 Expected dividend yield — — — The risk-free interest rate was based on rates established by the Federal Reserve. The Company’s expected volatility was based on analysis of the Company’s volatility, as well as the volatilities of guideline companies. The expected life of the Company’s options was determined using the simplified method as a result of limited historical data regarding the Company’s exercise activity. The dividend yield is based upon the fact that the Company has not historically paid dividends, and does not expect to pay dividends in the foreseeable future. The following table summarizes our stock option activity and related information for the years ended December 31, 2018 : Weighted Average Shares Underlying Options Exercise Price Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2017 7,153,668 $ 17.16 6.95 $ 39,010 Granted 1,349,250 25.56 — — Forfeited and expired (476,369 ) 24.50 — — Exercised (749,212 ) 14.13 — 9,325 Outstanding at December 31, 2018 7,277,337 $ 18.55 6.94 $ 40,650 The following table summarizes our stock options exercisable at December 31, 2018 , 2017 and 2016 : Weighted Average Shares Underlying Options Exercise Price Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) 2016 3,793,017 $ 14.94 6.82 $ 23,358 2017 4,610,233 $ 15.97 5.85 $ 31,991 2018 4,834,781 $ 16.81 5.98 $ 35,387 The weighted average grant date fair value of options granted was $16.21 , $11.77 , and $10.09 during the years ended December 31, 2018 , 2017 and 2016 , respectively. The aggregate intrinsic value for outstanding options is calculated as the difference between the exercise price of the underlying awards and the closing price of the Company’s common stock of $22.63 , $21.07 and $18.93 as of December 31, 2018 , 2017 and 2016, respectively. Unrecognized compensation cost associated with unvested stock options amounts to $30.0 million as of December 31, 2018 , which will be expensed over a weighted average remaining vesting period of 2.7 years. Restricted Stock Units As of December 31, 2018 , there was approximately $7.9 million of unrecognized compensation cost related to restricted stock units ("RSUs") granted. This amount is expected to be recognized over a weighted average period of 2.9 years . The following table summarizes our restricted stock unit activity for the year ended December 31, 2018 : Number of RSUs Weighted Average Grant Date Fair Value Unvested December 31, 2017 94,832 $ 20.19 Granted 395,311 25.40 Vested (58,251 ) 20.08 Forfeited/cancelled (31,466 ) 25.20 Unvested December 31, 2018 400,426 $ 24.95 Performance-based Stock Units As of December 31, 2018 , there was approximately $1.6 million of unrecognized compensation cost related to performance-based stock units ("PSUs") granted. This amount is expected to be recognized over a weighted average period of 1.3 years. The following table summarizes our performance-based stock unit activity for the year ended December 31, 2018 : Number of PSUs Weighted Average Grant Date Fair Value Unvested December 31, 2017 250,500 $ 20.63 Granted 66,500 25.75 Vested (85,250 ) 22.33 Forfeited/cancelled (5,000 ) 18.46 Unvested December 31, 2018 226,750 $ 21.54 Share Based Compensation Total non-cash stock-based compensation expense consisted of the following for the years ended December 31, 2018 , 2017 and 2016 ( in thousands ): Twelve Months Ended December 31, 2018 2017 2016 Selling, general and administrative expenses $ 13,550 $ 17,924 $ 18,614 Research and development expenses 6,224 8,950 10,488 Total $ 19,774 $ 26,874 $ 29,102 Exercise of Warrants During the twelve months ended December 31, 2018 , 2017 and 2016 , the Company issued the following shares of common stock upon the exercise of warrants for cash received by the Company: ( in thousands except share amounts ) Shares Issued Cash Received Derivative Liability Reclassified as Equity Change in Fair Value Expense 2016 898,633 $ 6,005 $ 14,715 $ 2,909 2017 607,481 $ 3,645 $ 11,221 $ 3,033 2018 1,036,054 $ 5,305 n/a n/a As of December 31, 2018 there are no warrants for common shares outstanding. See Note 15 for further discussion. |
EARNINGS (LOSS) PER SHARE
EARNINGS (LOSS) PER SHARE | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
EARNINGS (LOSS) PER SHARE | EARNINGS (LOSS) PER SHARE Basic earnings (loss) per share (“EPS”) represents net income (loss) attributable to common shareholders divided by the weighted average number of common shares outstanding during the measurement period. Diluted EPS represents net income attributable to common shareholders divided by the weighted average number of common shares outstanding during the measurement period while also giving effect to all potentially dilutive common shares that were outstanding during the period using the treasury stock method. Basic and diluted EPS is calculated as follows (net income amounts are stated in thousands) : For the year ended December 31, 2018 2017 2016 Shares Net loss EPS Shares Net loss EPS Shares Net Income EPS Basic Earnings per Share 40,433,171 $ (102,678 ) $ (2.54 ) 38,769,816 $ (59,731 ) $ (1.54 ) 36,997,865 $ (47,903 ) $ (1.29 ) Dilutive shares related to warrants — — — — 1,290,147 — Change in fair value of derivative instruments — — — — — (1,655 ) Dilutive Earnings per Share 40,433,171 $ (102,678 ) $ (2.54 ) 38,769,816 $ (59,731 ) $ (1.54 ) 38,288,012 $ (49,558 ) $ (1.29 ) For the years ended December 31, 2018 , 2017 and 2016 , the following shares were excluded because they were anti-dilutive: For the year ended December 31, 2018 2017 2016 Convertible Debt 8,410,932 2,642,160 2,642,160 Restricted Stock 395,034 157,319 444,942 Options 7,210,576 7,080,998 6,286,584 Warrants 282,807 1,159,424 — Total Anti-Dilutive Shares 16,299,349 11,039,901 9,373,686 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES For financial reporting purposes, net income (loss) before income taxes includes the following components ( in thousands ): Year Ended December 31, 2018 2017 2016 United States $ (87,573 ) $ (55,611 ) $ (52,750 ) Foreign (14,294 ) (2,752 ) (4,832 ) Total $ (101,867 ) $ (58,363 ) $ (57,582 ) The components of the provision (benefit) for income taxes, in the Consolidated Statement of Operations are as follows ( in thousands ): 2018 2017 2016 Current Federal $ 698 $ 6,991 $ 13,137 State 113 802 (155 ) 811 7,793 12,982 Deferred Federal — (7,965 ) (18,814 ) State — 1,540 (3,847 ) — (6,425 ) (22,661 ) Total tax provision (benefit) $ 811 $ 1,368 $ (9,679 ) The following is a reconciliation of the statutory federal income tax rate to the Company’s effective tax rate expressed as a percentage of income (loss) before income taxes: 2018 2017 2016 Statutory rate - federal (21.00 )% (35.00 )% (35.00 )% State taxes, net of federal benefit (4.44 )% (3.30 )% (3.16 )% Change in FV of derivative liability (warrants) — % 2.82 % 1.10 % Change in federal tax rate — % 23.29 % — % Convertible Debt 21.77 % — % — % Loss on extinguishment of debt 4.09 % — % — % Other permanent differences 0.10 % 1.04 % 2.05 % Tax credits (11.86 )% (5.79 )% (1.58 )% Return to provision adjustments and other true-ups 1.42 % (3.48 )% (1.15 )% Other 1.06 % 1.25 % 3.09 % Change in valuation allowance 9.79 % 21.62 % 16.30 % Income tax provision (benefit) 0.93 % 2.45 % (18.35 )% The significant components of the Company’s deferred tax assets and liabilities as of December 31, 2018 and 2017 are as follows ( in thousands ): 2018 2017 Deferred Tax Assets: Net operating loss $ 9,700 $ 1,099 Research and development and other tax credits 14,715 1,599 Contingent consideration 23,459 23,080 Other accrued expenses 3,710 2,603 Stock based compensation 16,761 15,695 Other 555 358 68,900 44,434 Deferred Tax Liabilities: Intangible assets (14,288 ) (16,810 ) Convertible Debt (18,419 ) — Tax basis depreciation less than book depreciation — — (32,707 ) (16,810 ) Net deferred tax assets (liabilities) before valuation allowance 36,194 27,624 Valuation allowance (36,194 ) (27,624 ) Total deferred tax liability $ — $ — The Company has established a full valuation allowance against its U.S. federal and state deferred tax assets due to the uncertainty surrounding the realization of such assets in future periods. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences become deductible. Management considers the scheduled reversal of deferred liabilities and tax planning strategies in making this assessment and evaluates the recoverability of the deferred tax assets as of each reporting date. At such time as it is determined that it is more likely than not that deferred assets are realizable, the valuation allowance will be reduced accordingly and recorded as a tax benefit. The Company has recorded a valuation allowance of $36.2 million as of December 31, 2018 to reflect the estimated amount of deferred tax assets that may not be realized. The Company increased its valuation allowance by $8.6 million for the year ended December 31, 2018. At December 31, 2018, the Company had available unused U.S. federal and state net operating loss (“NOL”) carryforwards of $36.5 million and $33.1 million , respectively, all of which are fully offset by a valuation allowance. The U.S. federal NOL carryforwards generated for tax years ending on or prior to December 31, 2017 and the state tax loss carryforwards will begin to expire in 2030 and 2022, respectively. In addition, at December 31, 2018, the Company had federal orphan drug tax credit carryforwards of $12.8 million that begin to expire in 2037 unless utilized, federal research and development tax credit carryforwards of $0.5 million that begin to expire in 2038 unless utilized and California Competes tax credit carryforwards of $2.0 million that begin to expire in 2022. The Company has international subsidiaries whose operations are not material for the year ended December 31, 2018. The Company accounts for uncertain tax benefits in accordance with the provisions of ASC 740-10 of the Accounting for Uncertainty in Income Taxes . A s of December 31, 2018 the Company had no unrecognized tax benefits. The Company does not anticipate that the amount of unrecognized tax benefits as of December 31, 2018 will change materially within the following 12 months. A reconciliation of the Company's unrecognized tax benefits for the years 2018 and 2017 is provided in the following table ( in thousands ): 2018 2017 Balance as of January 1: $ — $ 1,500 Increase in current period positions — — Decrease in prior period positions — (1,500 ) Increase in prior period positions — — Balance as of December 31: $ — $ — The Company files income tax returns in the U.S. federal jurisdiction, various state and local, and foreign jurisdictions. The Company’s income tax returns are open to examination by federal, state and foreign tax authorities, generally for the years ended December 31, 2015 and later. The Company’s policy is to record estimated interest and penalties related to the underpayment of income taxes or unrecognized tax benefits as a component of its income tax provision. During the years ended 2018, 2017 and 2016, the Company did not recognize any interest or penalties in its Consolidated Statements of Operations and Comprehensive Income (Loss) and there were no accruals recorded for interest or penalties at December 31, 2018 and 2017. U.S. Tax Reform The Tax Act of 2017 was enacted on December 22, 2017. The Tax Act of 2017 reduces the US federal corporate tax rate from 35% to 21%, as well as making several other significant changes to the tax law, effective January 1, 2018. Pursuant to the Securities and Exchange Commission Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (SAB 118), given the amount and complexity of the changes in tax law resulting from the Tax Act of 2017, the Company had not finalized the accounting for the income tax effects of the Tax Act of 2017 as of December 31, 2017. We completed our accounting for Tax Reform on December 22, 2018 and as of December 31, 2018, the Company's accounting for the following elements of the Tax Act of 2017 were completed and there were no changes to the provisional amounts previously recorded. Revaluation of deferred tax assets and liabilities We have remeasured our deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21% plus state and local tax. The Company recorded a decrease related to our deferred tax assets and liabilities of $13.0 million as a result of the tax rate decrease, with a corresponding adjustment to our valuation allowance for the year ended December 31, 2017. Valuation allowances The Company must assess whether its valuation allowance analyses for deferred tax assets are affected by various aspects of the Tax Act of 2017 (e.g., deemed repatriation of deferred foreign income, future GILTI inclusions, new categories of foreign tax credits). At December 31, 2017, the Company increased its valuation allowance by $12.0 million as a result of the Tax Act of 2017 and its effects on the realizability of our deferred tax assets. |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS | DERIVATIVE FINANCIAL INSTRUMENTS Since 2013, the Company has issued 5 tranches of common stock purchase warrants to secure financing, remediate covenant violations related to a credit facility and provide consideration for credit facility amendments. Historically, the Company accounted for these instruments, which do not have fixed settlement provisions, as derivative instruments in accordance with FASB ASC 815-40, Derivative and Hedging - Contracts in Entity’s Own Equity. This was due to an anti-dilution provision for the warrants that provides for a reduction to the exercise price if the Company issues equity or equity linked instruments in the future at an effective price per share less than the exercise price then in effect for the warrant ("down round provision"). As such, the warrants were re-measured at each balance sheet date based on estimated fair value. Changes in estimated fair value were recorded as non-cash adjustments within other income (expenses), net, in the Company’s As of January 1, 2018, the Company early adopted ASU 2017-11, which revised the guidance for instruments with down round provisions. As such the Company treats outstanding warrants as free-standing equity linked instruments that will be recorded to equity in the Consolidated Balance Sheet. The fair value of the derivative liability balance as of December 31, 2017 of $15.7 million was reclassified by means of a cumulative-effect adjustment to equity as of January 1, 2018. The following table presents the Company’s derivative warrant issuances and balances outstanding during the years ended December 31, 2018 and 2017 : Weighted Average Warrants Exercise Price Grant Date Fair Value Outstanding at December 31, 2016 1,766,905 $ 7.23 $ 3.87 Issued — — — Canceled — — — Exercised 607,481 6.00 3.33 Outstanding at December 31, 2017 1,159,424 $ 7.86 $ 4.15 Issued — — — Canceled 554 5.99 3.33 Exercised 1,158,870 7.88 4.15 Outstanding at December 31, 2018 — — — As of December 31, 2018 there are no outstanding warrants. |
RETIREMENT PLAN
RETIREMENT PLAN | 12 Months Ended |
Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |
RETIREMENT PLAN | RETIREMENT PLAN The Company has a 401(k) defined contribution savings plan for the benefit of all eligible employees. Employer matching contributions were $0.9 million , $0.6 million , and $0.5 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. |
RESTRUCTURING
RESTRUCTURING | 12 Months Ended |
Dec. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | RESTRUCTURING On March 7, 2017, the Company initiated a plan to consolidate its operations to its corporate headquarters in San Diego, California. The Company adjusted employee related separation charges by $0.2 million in the current year as a result of this consolidation. The following table presents a reconciliation of the restructuring liability recorded within accrued expenses on the Company's Condensed Consolidated Balance Sheets ( in thousands ): Twelve Months Ended December 31, 2018 2017 Liability, beginning of period $ 3,549 $ 893 Restructuring expenses — 3,608 Cash settlements (3,307 ) (897 ) Adjustments to previous estimates (242 ) (55 ) Liability, end of period $ — $ 3,549 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Property, plant and equipment, net consisted of the following (in thousands ): December 31, 2018 2017 Computers and equipment $ 506 $ 436 Furniture and fixtures 1,150 945 Leasehold improvements 2,628 2,071 Construction-in-progress — 363 4,284 3,815 Less: Accumulated depreciation (1,138 ) (585 ) Total property and equipment, net $ 3,146 $ 3,230 The construction-in-process balance consists of costs related to the Company’s leasehold improvements at its facilities in San Diego, California. Depreciation expense for the years ended December 31, 2018 , 2017 and 2016 was $0.6 million , $0.5 million and $0.1 million , respectively. The Company has not capitalized interest related to the property and equipment purchases. |
QUARTERLY FINANCIAL INFORMATION
QUARTERLY FINANCIAL INFORMATION (UNAUDITED) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
QUARTERLY FINANCIAL INFORMATION (UNAUDITED) | QUARTERLY FINANCIAL INFORMATION (UNAUDITED) The following table presents selected consolidated statements of operations data for each quarter for the fiscal years ended December 31, 2018 and 2017 (unaudited, in thousands, except for per share data) : Fourth Quarter Third Quarter Second Quarter First Quarter For the year ended December 31, 2018: Net product sales $ 43,771 $ 40,706 $ 41,337 $ 38,432 Total operating expenses 48,756 76,289 62,897 56,344 Operating loss (4,985 ) (35,583 ) (21,560 ) (17,912 ) Total other income (expense), net (2,470 ) (18,518 ) 1 (602 ) (237 ) Loss before provision for income taxes (7,455 ) (54,101 ) (22,162 ) (18,149 ) Income tax benefit (provision) — (415 ) (167 ) (229 ) Net income (loss) $ (7,455 ) $ (54,516 ) $ (22,329 ) $ (18,378 ) Net Loss per common share Basic $ (0.18 ) $ (1.34 ) $ (0.56 ) $ (0.46 ) Diluted $ (0.18 ) $ (1.34 ) $ (0.56 ) $ (0.46 ) For the year ended December 31, 2017: Net product sales $ 42,177 $ 40,340 $ 38,800 $ 33,620 Total operating expenses 57,354 50,948 52,398 48,028 Operating loss (15,177 ) (10,608 ) (13,598 ) (14,408 ) Total other income (expense), net 4,139 (8,409 ) (1,556 ) 1,254 Income (loss) before provision for income taxes (11,038 ) (19,017 ) (15,154 ) (13,154 ) Income tax benefit (provision) (6,580 ) 1,223 1,925 2,064 Net income (loss) $ (17,618 ) $ (17,794 ) $ (13,229 ) $ (11,090 ) Net income (loss) per common share Basic $ (0.45 ) $ (0.46 ) $ (0.34 ) $ (0.29 ) Diluted $ (0.55 ) $ (0.46 ) $ (0.34 ) $ (0.32 ) 1 In September 2018, the Company executed a partial repurchase of the 2019 Notes that resulted in a $17.0 million loss on early extinguishment of debt. See Note 7 for further discussion. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements represent the consolidation of the accounts of the Company and its subsidiaries in conformity with accounting principles generally accepted in the United States ("U.S. GAAP"). All intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates In preparing financial statements in conformity with U.S. GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of expenses during the reporting period. Due to inherent uncertainty involved in making estimates, actual results reported in future periods may be affected by changes in these estimates. On an ongoing basis, the Company evaluates its estimates and assumptions. These estimates and assumptions include revenue recognition, valuing equity securities in share-based payments, estimating expenses of contracted research organizations, estimating fair value of equity instruments recorded as derivative liabilities, estimating the fair value of net assets acquired in business combinations, estimating the useful lives of depreciable and amortizable assets, goodwill impairment, estimating the fair value of contingent consideration, estimating of valuation allowances and uncertain tax positions, and estimates associated with the assessment of impairment for long lived assets. |
Revenue Recognition | Revenue Recognition Product sales for the years ended December 31, 2018 , 2017 and 2016 consisted of sales of Chenodal, Cholbam and Thiola. Effective January 1, 2018, the Company adopted Accounting Standards Codification (" ASC"), Topic 606, Revenue from Contracts with Customers, using the full retrospective transition method. This standard applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance, collaboration arrangements and financial instruments. Under Topic 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. 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 contracts when it is probable that the entity will collect substantially all the consideration it is entitled to in exchange for the goods or services it transfers to the customer. Revenue from product sales is recorded at delivery, net of applicable provisions for rebates under government (including medicaid) programs, commercial rebates, prompt pay discounts, and other sales-related deductions. We review our estimates of rebates and other applicable provisions each period and record any necessary adjustments in the current period. Patents The Company expenses external costs, such as filing fees and associated attorney fees, incurred to obtain issued patents and patent applications pending. The Company also expenses costs associated with maintaining and defending patents subsequent to their issuance in the period incurred. |
Research and Development Costs | Research and Development Costs Research and development includes expenses related to sparsentan, fosmetpantotenate and our other pipeline programs. We expense all research and development costs as they are incurred. Our research and development costs are comprised of salaries and bonuses, benefits, non-cash share-based compensation, license fees, milestones under license agreements, costs paid to third-party contractors to perform research, conduct clinical trials, and develop drug materials and delivery devices, and associated overhead expenses and facilities costs. We charge direct internal and external program costs to the respective development programs. We also incur indirect costs that are not allocated to specific programs because such costs benefit multiple development programs and allow us to increase our pharmaceutical development capabilities. These consist of internal shared resources related to the development and maintenance of systems and processes applicable to all of our programs. |
Clinical Trial Expenses | Clinical Trial Expenses We record expenses in connection with our clinical trials under contracts with contract research organizations (CROs) that support conducting and managing clinical trials. The financial terms and activities of these agreements vary from contract to contract and may result in uneven expense levels. Generally, these agreements set forth activities that drive the recording of expenses such as start-up and initiation activities, enrollment and treatment of patients, or the completion of other clinical trial activities. Expenses related to clinical trials are accrued based on our estimates and/or representations from service providers regarding work performed, including actual level of patient enrollment, completion of patient studies and progress of the clinical trials. Other incidental costs related to patient enrollment or treatment are accrued when reasonably certain. If the amounts we are obligated to pay under our clinical trial agreements are modified (for instance, as a result of changes in the clinical trial protocol or scope of work to be performed), we adjust our accruals accordingly on a prospective basis. Revisions to our contractual payment obligations are charged to expense in the period in which the facts that give rise to the revision become reasonably certain. We currently have three Phase 3 clinical trials in process that are in varying stages of activity, with ongoing non-clinical support trials. As such, clinical trial expenses will vary depending on the all the factors set forth above and may fluctuate significantly from quarter to quarter. |
Employee Stock-Based Compensation | Employee Stock-Based Compensation The Company recognizes all employee share-based compensation as a cost in the financial statements. Equity-classified awards principally related to stock options, restricted stock units (“RSUs”) and performance stock units ("PSUs"), are measured at the grant date fair value of the award. The Company determines grant date fair value of stock option awards using the Black-Scholes option-pricing model. The fair value of RSUs and PSUs are determined using the closing price of the Company’s common stock on the grant date. For service based vesting grants, expense is recognized over the requisite service period based on the number of options or shares expected to ultimately vest. For PSUs, expense is recognized over the implicit service period, assuming vesting is probable. No expense is recognized for PSUs if it is not probable the vesting criteria will be satisfied. Forfeitures are accounted for as they occur. Initial Vesting Term Stock Options 3 to 4 years Restricted Stock Units 2 to 4 years |
Earnings (Loss) Per Share | Earnings (Loss) Per Share We calculate our basic earnings per share by dividing net income by the weighted average number of shares outstanding during the period. The diluted earnings per share computation includes the effect, if any, of shares that would be issuable upon the exercise of outstanding stock options, derivative liability, convertible debt and RSUs, reduced by the number of shares which are assumed to be purchased by the Company from the resulting proceeds at the average market price during the year, when such amounts are dilutive to the earnings per share calculation. |
Cash and Cash Equivalents | Cash and Cash Equivalents We consider all highly liquid marketable securities with an original maturity of three months or less to be cash equivalents. Due to the short-term maturity of such investments, the carrying amounts are a reasonable estimate of fair value. |
Marketable Securities | Marketable Securities The Company accounts for marketable securities held as “available-for-sale” in accordance with ASC 320, “Investments Debt and Equity Securities” (“ASC 320”). The Company classifies these investments as current assets and carries them at fair value. Unrealized gains and losses are recorded as a separate component of stockholders’ equity as accumulated other comprehensive loss. Realized gains or losses on marketable security transactions are reported in the Consolidated Statements of Operations and Comprehensive Income (Loss). Marketable securities are maintained at one financial institution and are governed by the Company’s investment policy as approved by the Company's Board of Directors. |
Trade and Notes Receivable | Trade and Notes Receivable Trade Receivables, Net Trade accounts receivable are recorded net of allowances for prompt payment and doubtful accounts. Estimates for allowances for doubtful accounts are determined based on existing contractual obligations, historical payment patterns and individual customer circumstances. |
Inventory and Related Reserves | Inventory and Related Reserves Inventory, which is recorded at the lower of cost or net realizable value, includes materials, labor, and other direct and indirect costs and are valued using the first-in, first-out method. The Company periodically analyzes its inventory levels to identify inventory that may expire prior to expected sale or has a cost basis in excess of its estimated realizable value, and writes down such inventory as appropriate. In addition, the Company's products are subject to strict quality control and monitoring which the Company’s manufacturers perform throughout their manufacturing process. The Company does not directly manufacture any product. The Company has single suppliers for products Chenodal and Thiola, and prospectively arranges for manufacture from contract service providers for its product Cholbam. |
Segment Information | Segment Information The Company currently operates in one business segment focused on the development and commercialization of innovative therapies for people with serious and life threatening rare diseases and medical conditions. The Company is not organized by market and is managed and operated as one business. A single management team reports to the chief operating decision maker who comprehensively manages the entire business. The Company does not operate any separate lines of business or separate business entities with respect to its products. Accordingly, the Company does not accumulate discrete financial information with respect to separate products, other than revenues, and does not have separately reportable segments. |
Property and Equipment, net | Property and Equipment, net Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is computed using the straight-line method over the related estimated useful lives as presented in the table below. Significant additions and improvements are capitalized, while repairs and maintenance are charged to expense as incurred. Property and equipment purchased for specific research and development projects with no alternative use is expensed as incurred. The major classifications of property and equipment, including their respective expected useful lives, consists of the following: Computers and equipment 3 years Furniture and fixtures 7 years Leasehold improvements Shorter of length of lease or life of the asset |
Intangible Assets, Net | Intangible Assets, Net Our intangible assets consist of licenses, purchased technology and acquired in-process research and development (IPR&D). Intangible assets with definite lives are amortized on a straight-line basis over their estimated useful lives and are reviewed periodically for impairment. Intangible assets related to IPR&D projects are considered to be indefinite-lived until the completion or abandonment of the associated research and development efforts. During the period the assets are considered indefinite-lived, they will not be amortized but will be tested for impairment. If and when development is complete, which generally occurs when regulatory approval to market a product is obtained, the associated assets are deemed finite-lived and are amortized over a period that best reflects the economic benefits provided by these assets. |
Goodwill | Goodwill Goodwill represents the excess of purchase price over fair value of net assets acquired in a business combination and is not amortized. Goodwill is subject to impairment testing at least annually or when a triggering event occurs that could indicate a potential impairment. The Company has one segment and one reporting unit and as such reviews goodwill for impairment at the consolidated level. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Our long-lived assets are primarily comprised of intangible assets and property and equipment. We evaluate our finite-lived intangible assets, other than goodwill and property and equipment, for impairment whenever events or changes in circumstances indicate the carrying value of an asset or group of assets may not be recoverable. If these circumstances exist, recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset group to future undiscounted net cash flows expected to be generated by the use and eventual disposition of the asset group. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. In addition, indefinite-lived intangible assets, comprised of IPR&D, are reviewed for impairment annually and whenever events or changes in circumstances indicate that it is more likely than not that the asset is impaired by comparing the fair value to the carrying value of the asset. To determine the fair value of the asset, the Company used the multi-period excess earnings method of the income approach. The more significant assumptions inherent in the application of this method include: the amount and timing of projected future cash flows (including revenue, cost of sales, research and development costs, and sales and marketing expenses), and the discount rate selected to measure the risks inherent in the future cash flows. |
Contingent Consideration | Contingent Consideration We record contingent consideration resulting from a business combination at its fair value on the acquisition date. On a quarterly basis, we revalue these obligations and record increases or decreases from their fair value as an adjustment to the consolidated statement of operations. Changes to contingent consideration obligations can result from changes to discount rates, accretion of the liability due to the passage of time, changes in revenue forecasts and changes in our estimates of the likelihood or timing of achieving commercial milestones. The Company accounts for financial instruments in accordance with ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”). ASC 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under ASC 820 are described below: Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2 – Quoted prices in markets that are not active or financial instruments for which all significant inputs are observable, either directly or indirectly; and Level 3 – Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. In estimating the fair value of the Company’s contingent consideration, the Company used the Monte Carlo Simulation model as of December 31, 2018, a probability-based expected method as of December 31, 2017 and the comparable uncontrolled transaction (“CUT”) method in 2016 for royalty payments based on projected revenues. Based on the fair value hierarchy, the Company classified contingent consideration within Level 3 because valuation inputs are based on projected revenues discounted to a present value. Financial instruments with carrying values approximating fair value include cash and cash equivalents, accounts receivable, notes receivable, deposits on lease agreements, and accounts payable, due to their short term nature. |
Income Taxes | Income Taxes The Company follows ASC 740, Income Taxes, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the asset will not be realized. The standard addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC 740, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the tax authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. ASC 740 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The Company’s policy is to record estimated interest and penalty related to the underpayment of income taxes or unrecognized tax benefits as a component of its income tax provision. |
Reclassifications | Reclassifications Certain reclassifications have been made to the prior year financial statements in order to conform to the current year’s presentation. |
Derivative Financial Instruments, Warrants | Derivative Financial Instruments, Warrants The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. However, since 2013, the Company has issued five tranches of common stock purchase warrants to secure financing, remediate covenant violations and provide consideration for amendments with respect to a credit facility extinguished in 2015. Historically, the Company accounted for these instruments, which did not have fixed settlement provisions, as derivative instruments in accordance with FASB ASC 815-40, Derivative and Hedging - Contracts in Entity’s Own Equity. This was due to an anti-dilution provision for the warrants that provided for a reduction to the exercise price if the Company issued equity or equity linked instruments in the future at an effective price per share less than the exercise price then in effect for the warrant ("down round provision"). As such, the warrants were re-measured at each balance sheet date based on estimated fair value. Changes in estimated fair value were recorded as non-cash adjustments within other income (expenses), net, in the Company’s Consolidated Statements of Operations and Comprehensive Income (Loss) . As of January 1, 2018, the Company early adopted ASU 2017-11, which revised the guidance for instruments with down round provisions. As such the Company treats outstanding warrants as free-standing equity linked instruments that will be recorded to equity in the Consolidated Balance Sheet. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its consolidated financial position or results of operations upon adoption. In February 2016, the FASB issued ASU No. 2016-02, Leases. The new standard establishes a right-of-use ("ROU") model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. Subsequently, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842, ASU No. 2018-11, Targeted Improvements, and ASU No. 2018-20, Narrow-Scope Improvements for Lessors, to clarify and amend the guidance in ASU No. 2016-02. The ASUs are effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted. We will adopt the ASUs on January 1, 2019 on a modified retrospective basis through a cumulative adjustment to our beginning accumulated deficit balance. Prior comparative periods will not be restated under this method, and we will adopt all available practical expedients, as applicable. The Company has finished its search for leases and reviewed the related contacts and determined its impact to the consolidated balance sheet is less than 5% of total assets and liabilities as of January 1, 2019. No material cumulative-effect adjustment to equity is expected. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. Topic 326 amends guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities. For assets held at amortized cost basis, Topic 326 eliminates the probable initial recognition threshold in current GAAP and, instead, requires an entity to reflect its current estimate of all expected credit losses. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected. For available for sale debt securities, credit losses should be measured in a manner similar to current GAAP, however Topic 326 will require that credit losses be presented as an allowance rather than as a write-down. This ASU update affects entities holding financial assets and net investment in leases that are not accounted for at fair value through net income. The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. This update is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company is currently evaluating whether the adoption of the new standard will have a material effect on its consolidated financial statements and related disclosures. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Vesting Award Terms | Initial Vesting Term Stock Options 3 to 4 years Restricted Stock Units 2 to 4 years |
Schedule of inventory, net of reserve | Inventory, net of reserve, consisted of the following at December 31, 2018 and 2017 ( in thousands ): December 31, 2018 December 31, 2017 Raw material $ 4,689 $ 3,435 Finished goods 930 1,916 Total inventory $ 5,619 $ 5,351 |
Schedule of major classifications of property, equipment and software, including their respective expected useful lives | The major classifications of property and equipment, including their respective expected useful lives, consists of the following: Computers and equipment 3 years Furniture and fixtures 7 years Leasehold improvements Shorter of length of lease or life of the asset Property, plant and equipment, net consisted of the following (in thousands ): December 31, 2018 2017 Computers and equipment $ 506 $ 436 Furniture and fixtures 1,150 945 Leasehold improvements 2,628 2,071 Construction-in-progress — 363 4,284 3,815 Less: Accumulated depreciation (1,138 ) (585 ) Total property and equipment, net $ 3,146 $ 3,230 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Net Product Revenue | The following table summarizes net product revenues for the twelve months ended December 31, 2018 , 2017 and 2016 ( in thousands ): Twelve Months Ended December 31, 2018 2017 2016 Thiola 89,176 82,311 71,199 Bile acid products 75,070 72,626 62,392 Total net product revenue 164,246 154,937 133,591 |
BUSINESS COMBINATION AND ASSE_2
BUSINESS COMBINATION AND ASSET TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Schedule of purchase price allocation | The purchase price allocation of $25.5 million as of the acquisition completion date of June 16, 2016 was as follows ( in thousands ): Cash paid upon consummation $ 500 Present value of contingent consideration 25,000 Total purchase price $ 25,500 Fair Value of Assets Acquired and Liabilities Assumed Acquired product rights: L-UDCA (intangible asset) $ 25,500 Total purchase price $ 25,500 |
MARKETABLE SECURITIES (Tables)
MARKETABLE SECURITIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of marketable securities | Marketable securities consist of the following ( in thousands ): As of December 31, 2018 2017 Marketable Securities: Commercial paper 59,255 6,897 Corporate debt securities 299,413 164,297 Securities of government sponsored entities 10,000 30,042 Total Marketable Securities: $ 368,668 $ 201,236 |
Schedule of available for sale securities | The following is a summary of short-term marketable securities classified as available-for-sale as of December 31, 2018 ( in thousands ): Contractual Maturity (in years) Amortized Cost Unrealized Gains Unrealized Losses Aggregate Estimated Fair Value Marketable Securities: Commercial paper Less than 1 $ 59,313 $ — $ (58 ) $ 59,255 Corporate debt securities Less than 1 149,824 — (604 ) 149,220 Total maturity less than 1 year 209,137 — (662 ) 208,475 Corporate debt securities 1 to 2 150,813 18 (638 ) 150,193 Securities of government-sponsored entities 1 to 2 9,997 4 (1 ) 10,000 Total maturity 1 to 2 years 160,810 22 (639 ) 160,193 Total available-for-sale securities $ 369,947 $ 22 $ (1,301 ) $ 368,668 The following is a summary of short-term marketable securities classified as available-for-sale as of December 31, 2017 ( in thousands ): Contractual Maturity (in years) Amortized Cost Unrealized Losses Aggregate Estimated Fair Value Marketable Securities: Commercial paper Less than 1 $ 6,911 $ (14 ) $ 6,897 Corporate debt securities Less than 1 86,531 (198 ) 86,333 Securities of government-sponsored entities 30,132 (90 ) 30,042 Total maturity less than 1 year 123,574 (302 ) 123,272 Corporate debt securities 1 to 2 78,388 (424 ) 77,964 Total maturity 1 to 2 years 78,388 (424 ) 77,964 Total available-for-sale securities $ 201,962 $ (726 ) $ 201,236 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of fair value of warrants | The composition of the Company’s 2025 Notes are as follows ( in thousands ): December 31, 2018 December 31, 2017 2.50% convertible senior notes due 2025 $ 276,000 $ — Unamortized debt discount (74,836 ) — Unamortized debt issuance costs (6,073 ) — Total 2025 Notes, net of unamortized debt discount and debt issuance costs $ 195,091 $ — The effective interest rate on the liability components of the 2025 Notes for the period from the date of issuance through December 31, 2018 was 7.7% . The following table sets forth total interest expense recognized related to the 2025 Notes ( in thousands ): Twelve Months Ended December 31, 2018 2017 Contractual interest expense $ 2,108 $ — Amortization of debt discount 2,582 — Amortization of debt issuance costs 273 — Total interest expense for the 2025 Notes $ 4,963 $ — |
Schedule of net carrying amount of debt | The net carrying amount of the Notes consists of the following ( in thousands ): December 31, 2018 2017 Aggregate principle amount of Notes $ 22,590 $ 46,000 Unamortized debt discount and debt issuance costs (133 ) (923 ) $ 22,457 $ 45,077 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value on a recurring basis | The following table presents the Company’s asset and liabilities that are measured and recognized at fair value on a recurring basis, classified under the appropriate level of the fair value hierarchy as of December 31, 2018 (in thousands): As of December, 2018 Fair Value Hierarchy at December 31, 2018 Total carrying and estimated fair value Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Asset: Cash and Cash Equivalents $ 102,873 $ 62,978 $ 39,895 $ — Marketable securities, available-for-sale 368,668 — 368,668 — Total $ 471,541 $ 62,978 $ 408,563 $ — Liabilities: Business combination-related contingent consideration 93,000 — — 93,000 Total $ 93,000 $ — $ — $ 93,000 The following table presents the Company’s assets and liabilities that are measured and recognized at fair value on a recurring basis, classified under the appropriate level of the fair value hierarchy as of December 31, 2017 (in thousands): As of December, 2017 Fair Value Hierarchy at December 31, 2017 Total carrying and Quoted prices in Significant other Significant Asset: Cash and Cash Equivalents $ 99,394 $ 92,726 $ 6,668 $ — Marketable securities, available-for-sale 201,236 — 201,236 — Total $ 300,630 $ 92,726 $ 207,904 $ — Liabilities: Derivative liability related to warrants $ 15,710 $ — $ — $ 15,710 Business combination-related contingent consideration 90,000 — — 90,000 Total $ 105,710 $ — $ — $ 105,710 |
Schedule of fair value measurements of common stock warrants using significant unobservable inputs (Level 3) | The following table sets forth a summary of changes in the estimated fair value of the Company’s Level 3 derivative liability for the year ended December 31, 2017 (in thousands) : Fair Value Measurements of Common Stock Warrants (Level 3) 2017 Balance at January 1, $ 22,440 Reclassification of derivative liability to equity upon exercise of warrants (11,221 ) Change in estimated fair value of liability classified warrants 4,491 Balance at December 31, $ 15,710 |
Schedule of fair value measurements of acquisition-related contingent consideration | The following table sets forth a summary of changes in the estimated fair value of the Company's Level 3 business combination-related contingent consideration for the years ended December 31, 2018 and 2017 (in thousands) : Fair Value Measurements of Acquisition-Related Contingent Consideration (Level 3) 2018 2017 Balance at January 1, $ 90,000 $ 87,478 Increase from revaluation of contingent consideration 11,590 19,389 Contractual Payments (6,373 ) (6,006 ) Contractual Payments accrued at December 31 (2,171 ) (11,012 ) Foreign currency impact (46 ) 151 Balance at December 31, $ 93,000 $ 90,000 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of amortizable intangible assets | Amortizable intangible assets as of December 31, 2018 ( in thousands ): Useful Life Gross Carrying Accumulated Net Book Value Chenodal Product Rights 16 $ 67,849 $ (20,213 ) $ 47,636 Thiola License 15 70,009 (14,523 ) 55,486 Economic Interest - U.S. revenue Cholbam 10 75,900 (28,487 ) 47,413 Economic Interest - International revenue Cholbam 10 7,700 (2,890 ) 4,810 Economic Interest - L-UDCA (acquired IPR&D) Indefinite 25,500 — 25,500 Ligand License 11 7,900 (2,397 ) 5,503 Manchester Customer Relationships 10 403 (192 ) 211 Manchester Trade Name 1 175 (175 ) — Internal use software 5 207 (75 ) 132 Total $ 255,643 $ (68,952 ) $ 186,691 Amortizable intangible assets as of December 31, 2017 ( in thousands ): Useful Life Gross Carrying Accumulated Net Book Value Chenodal Product Rights 16 $ 67,849 $ (15,976 ) $ 51,873 Thiola License 10 54,471 (10,168 ) 44,303 Economic Interest - U.S. revenue Cholbam 10 75,900 (20,903 ) 54,997 Economic Interest - International revenue Cholbam 10 8,058 (2,219 ) 5,839 Economic Interest - L-UDCA (acquired IPR&D) Indefinite 25,500 — 25,500 Ligand License 11 3,300 (1,420 ) 1,880 Manchester Customer Relationships 10 403 (152 ) 251 Manchester Trade Name 1 175 (175 ) — Internal use software 5 207 (33 ) 174 Total $ 235,863 $ (51,046 ) $ 184,817 |
Schedule of amortization expense for the next 5 years | The following table summarizes amortization expense for the twelve months ended December 31, 2018 , 2017 and 2016 ( in thousands ): 2018 2017 2016 Research and development $ 976 $ 327 $ 328 Selling, general and administrative 17,052 17,004 15,665 Total amortization expense $ 18,028 $ 17,331 $ 15,993 As of December 31, 2018 , amortization expense (excluding infinite lived IPR&D) for the next five years is expected to be as follows ( in thousands ): 2019 $ 19,166 2020 19,210 2021 19,158 2022 19,125 2023 18,825 Thereafter 65,707 Total $ 161,191 |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of accrued expenses | Accrued expenses consist of the following at December 31, 2018 and 2017 ( in thousands ): 2018 2017 Compensation related costs $ 10,446 $ 7,749 Research and development 16,515 6,989 Government rebate reserves 8,464 5,883 Selling, general and administrative 2,990 3,896 Royalty/contingent consideration 6,805 6,429 Restructuring expenses — 3,549 Miscellaneous accrued expenses 4,475 1,523 Total accrued expenses $ 49,695 $ 36,018 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Lease and Sublease Agreements | Leases Facilities Base Rent Lease Expiration Corporate Headquarters San Diego, CA $2.3 million July 2024 |
Schedule of principal contractual commitments, excluding open orders | Following is a schedule of the future minimum rental commitments for our operating lease as of December 31, 2018 ( in thousands ): Rental Payments 2019 $ 2,343 2020 2,414 2021 2,486 2022 2,560 2023 2,637 Thereafter 1,585 $ 14,025 |
STOCKHOLDERS_ EQUITY _ DEFICIT
STOCKHOLDERS’ EQUITY / DEFICIT (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Assumptions used in Black-Scholes options pricing model | The following weighted average assumptions were used in the Black-Scholes options pricing model to estimate the fair value of stock options for the specified reporting periods: Twelve Months Ended December 31, 2018 2017 2016 Risk free rate 2.80 % 2.10 % 1.20 % Expected volatility 68 % 70 % 68 % Expected life (in years) 6.2 6.1 5.8 Expected dividend yield — — — |
Share-based Compensation, Stock Options, Activity | The following table summarizes our stock option activity and related information for the years ended December 31, 2018 : Weighted Average Shares Underlying Options Exercise Price Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2017 7,153,668 $ 17.16 6.95 $ 39,010 Granted 1,349,250 25.56 — — Forfeited and expired (476,369 ) 24.50 — — Exercised (749,212 ) 14.13 — 9,325 Outstanding at December 31, 2018 7,277,337 $ 18.55 6.94 $ 40,650 The following table summarizes our stock options exercisable at December 31, 2018 , 2017 and 2016 : Weighted Average Shares Underlying Options Exercise Price Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) 2016 3,793,017 $ 14.94 6.82 $ 23,358 2017 4,610,233 $ 15.97 5.85 $ 31,991 2018 4,834,781 $ 16.81 5.98 $ 35,387 |
Schedule of unvested restricted shares | The following table summarizes our restricted stock unit activity for the year ended December 31, 2018 : Number of RSUs Weighted Average Grant Date Fair Value Unvested December 31, 2017 94,832 $ 20.19 Granted 395,311 25.40 Vested (58,251 ) 20.08 Forfeited/cancelled (31,466 ) 25.20 Unvested December 31, 2018 400,426 $ 24.95 |
Share-based Compensation, Performance Shares Award Nonvested Activity | The following table summarizes our performance-based stock unit activity for the year ended December 31, 2018 : Number of PSUs Weighted Average Grant Date Fair Value Unvested December 31, 2017 250,500 $ 20.63 Granted 66,500 25.75 Vested (85,250 ) 22.33 Forfeited/cancelled (5,000 ) 18.46 Unvested December 31, 2018 226,750 $ 21.54 |
Schedule of share based compensation expenses | Total non-cash stock-based compensation expense consisted of the following for the years ended December 31, 2018 , 2017 and 2016 ( in thousands ): Twelve Months Ended December 31, 2018 2017 2016 Selling, general and administrative expenses $ 13,550 $ 17,924 $ 18,614 Research and development expenses 6,224 8,950 10,488 Total $ 19,774 $ 26,874 $ 29,102 |
Schedule of stock option activity | During the twelve months ended December 31, 2018 , 2017 and 2016 , the Company issued the following shares of common stock upon the exercise of warrants for cash received by the Company: ( in thousands except share amounts ) Shares Issued Cash Received Derivative Liability Reclassified as Equity Change in Fair Value Expense 2016 898,633 $ 6,005 $ 14,715 $ 2,909 2017 607,481 $ 3,645 $ 11,221 $ 3,033 2018 1,036,054 $ 5,305 n/a n/a |
EARNINGS (LOSS) PER SHARE (Tabl
EARNINGS (LOSS) PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of basic and diluted net loss per share | Basic and diluted EPS is calculated as follows (net income amounts are stated in thousands) : For the year ended December 31, 2018 2017 2016 Shares Net loss EPS Shares Net loss EPS Shares Net Income EPS Basic Earnings per Share 40,433,171 $ (102,678 ) $ (2.54 ) 38,769,816 $ (59,731 ) $ (1.54 ) 36,997,865 $ (47,903 ) $ (1.29 ) Dilutive shares related to warrants — — — — 1,290,147 — Change in fair value of derivative instruments — — — — — (1,655 ) Dilutive Earnings per Share 40,433,171 $ (102,678 ) $ (2.54 ) 38,769,816 $ (59,731 ) $ (1.54 ) 38,288,012 $ (49,558 ) $ (1.29 ) |
Schedule of common stock options, convertible debt and restricted stock units anti-dilutive | For the years ended December 31, 2018 , 2017 and 2016 , the following shares were excluded because they were anti-dilutive: For the year ended December 31, 2018 2017 2016 Convertible Debt 8,410,932 2,642,160 2,642,160 Restricted Stock 395,034 157,319 444,942 Options 7,210,576 7,080,998 6,286,584 Warrants 282,807 1,159,424 — Total Anti-Dilutive Shares 16,299,349 11,039,901 9,373,686 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of net income before incomes taxes | For financial reporting purposes, net income (loss) before income taxes includes the following components ( in thousands ): Year Ended December 31, 2018 2017 2016 United States $ (87,573 ) $ (55,611 ) $ (52,750 ) Foreign (14,294 ) (2,752 ) (4,832 ) Total $ (101,867 ) $ (58,363 ) $ (57,582 ) |
Schedule of income tax provision | The components of the provision (benefit) for income taxes, in the Consolidated Statement of Operations are as follows ( in thousands ): 2018 2017 2016 Current Federal $ 698 $ 6,991 $ 13,137 State 113 802 (155 ) 811 7,793 12,982 Deferred Federal — (7,965 ) (18,814 ) State — 1,540 (3,847 ) — (6,425 ) (22,661 ) Total tax provision (benefit) $ 811 $ 1,368 $ (9,679 ) |
Schedule of reconciliation of the statutory federal income tax expense (benefit) | The following is a reconciliation of the statutory federal income tax rate to the Company’s effective tax rate expressed as a percentage of income (loss) before income taxes: 2018 2017 2016 Statutory rate - federal (21.00 )% (35.00 )% (35.00 )% State taxes, net of federal benefit (4.44 )% (3.30 )% (3.16 )% Change in FV of derivative liability (warrants) — % 2.82 % 1.10 % Change in federal tax rate — % 23.29 % — % Convertible Debt 21.77 % — % — % Loss on extinguishment of debt 4.09 % — % — % Other permanent differences 0.10 % 1.04 % 2.05 % Tax credits (11.86 )% (5.79 )% (1.58 )% Return to provision adjustments and other true-ups 1.42 % (3.48 )% (1.15 )% Other 1.06 % 1.25 % 3.09 % Change in valuation allowance 9.79 % 21.62 % 16.30 % Income tax provision (benefit) 0.93 % 2.45 % (18.35 )% |
Schedule of deferred tax assets and liabilities | The significant components of the Company’s deferred tax assets and liabilities as of December 31, 2018 and 2017 are as follows ( in thousands ): 2018 2017 Deferred Tax Assets: Net operating loss $ 9,700 $ 1,099 Research and development and other tax credits 14,715 1,599 Contingent consideration 23,459 23,080 Other accrued expenses 3,710 2,603 Stock based compensation 16,761 15,695 Other 555 358 68,900 44,434 Deferred Tax Liabilities: Intangible assets (14,288 ) (16,810 ) Convertible Debt (18,419 ) — Tax basis depreciation less than book depreciation — — (32,707 ) (16,810 ) Net deferred tax assets (liabilities) before valuation allowance 36,194 27,624 Valuation allowance (36,194 ) (27,624 ) Total deferred tax liability $ — $ — |
Schedule of unrecognized tax benefits | A reconciliation of the Company's unrecognized tax benefits for the years 2018 and 2017 is provided in the following table ( in thousands ): 2018 2017 Balance as of January 1: $ — $ 1,500 Increase in current period positions — — Decrease in prior period positions — (1,500 ) Increase in prior period positions — — Balance as of December 31: $ — $ — |
DERIVATIVE FINANCIAL INSTRUME_2
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of derivative warrant issuances and balances outstanding | The following table presents the Company’s derivative warrant issuances and balances outstanding during the years ended December 31, 2018 and 2017 : Weighted Average Warrants Exercise Price Grant Date Fair Value Outstanding at December 31, 2016 1,766,905 $ 7.23 $ 3.87 Issued — — — Canceled — — — Exercised 607,481 6.00 3.33 Outstanding at December 31, 2017 1,159,424 $ 7.86 $ 4.15 Issued — — — Canceled 554 5.99 3.33 Exercised 1,158,870 7.88 4.15 Outstanding at December 31, 2018 — — — |
RESTRUCTURING (Tables)
RESTRUCTURING (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Reserve by Type of Cost | The following table presents a reconciliation of the restructuring liability recorded within accrued expenses on the Company's Condensed Consolidated Balance Sheets ( in thousands ): Twelve Months Ended December 31, 2018 2017 Liability, beginning of period $ 3,549 $ 893 Restructuring expenses — 3,608 Cash settlements (3,307 ) (897 ) Adjustments to previous estimates (242 ) (55 ) Liability, end of period $ — $ 3,549 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property, Plant, and Equipment | The major classifications of property and equipment, including their respective expected useful lives, consists of the following: Computers and equipment 3 years Furniture and fixtures 7 years Leasehold improvements Shorter of length of lease or life of the asset Property, plant and equipment, net consisted of the following (in thousands ): December 31, 2018 2017 Computers and equipment $ 506 $ 436 Furniture and fixtures 1,150 945 Leasehold improvements 2,628 2,071 Construction-in-progress — 363 4,284 3,815 Less: Accumulated depreciation (1,138 ) (585 ) Total property and equipment, net $ 3,146 $ 3,230 |
QUARTERLY FINANCIAL INFORMATI_2
QUARTERLY FINANCIAL INFORMATION (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Consolidated Statements of Operations data for each quarter | The following table presents selected consolidated statements of operations data for each quarter for the fiscal years ended December 31, 2018 and 2017 (unaudited, in thousands, except for per share data) : Fourth Quarter Third Quarter Second Quarter First Quarter For the year ended December 31, 2018: Net product sales $ 43,771 $ 40,706 $ 41,337 $ 38,432 Total operating expenses 48,756 76,289 62,897 56,344 Operating loss (4,985 ) (35,583 ) (21,560 ) (17,912 ) Total other income (expense), net (2,470 ) (18,518 ) 1 (602 ) (237 ) Loss before provision for income taxes (7,455 ) (54,101 ) (22,162 ) (18,149 ) Income tax benefit (provision) — (415 ) (167 ) (229 ) Net income (loss) $ (7,455 ) $ (54,516 ) $ (22,329 ) $ (18,378 ) Net Loss per common share Basic $ (0.18 ) $ (1.34 ) $ (0.56 ) $ (0.46 ) Diluted $ (0.18 ) $ (1.34 ) $ (0.56 ) $ (0.46 ) For the year ended December 31, 2017: Net product sales $ 42,177 $ 40,340 $ 38,800 $ 33,620 Total operating expenses 57,354 50,948 52,398 48,028 Operating loss (15,177 ) (10,608 ) (13,598 ) (14,408 ) Total other income (expense), net 4,139 (8,409 ) (1,556 ) 1,254 Income (loss) before provision for income taxes (11,038 ) (19,017 ) (15,154 ) (13,154 ) Income tax benefit (provision) (6,580 ) 1,223 1,925 2,064 Net income (loss) $ (17,618 ) $ (17,794 ) $ (13,229 ) $ (11,090 ) Net income (loss) per common share Basic $ (0.45 ) $ (0.46 ) $ (0.34 ) $ (0.29 ) Diluted $ (0.55 ) $ (0.46 ) $ (0.34 ) $ (0.32 ) 1 In September 2018, the Company executed a partial repurchase of the 2019 Notes that resulted in a $17.0 million loss on early extinguishment of debt. See Note 7 for further discussion. |
DESCRIPTION OF BUSINESS - Narra
DESCRIPTION OF BUSINESS - Narrative (Details) | Dec. 31, 2018product |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of products sold | 3 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Vesting Awards (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Stock Options | Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Award vesting period (in years) | 3 years |
Stock Options | Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Award vesting period (in years) | 4 years |
Restricted Stock Units | Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Award vesting period (in years) | 2 years |
Restricted Stock Units | Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Award vesting period (in years) | 3 years |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) | Jul. 02, 2015USD ($) | Dec. 31, 2018USD ($)tranchesegmentreporting_unit | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Jan. 01, 2018USD ($) | Jan. 01, 2017USD ($) |
Summary Of Significant Accounting Policies [Line Items] | ||||||
Marketable securities | $ 368,668,000 | $ 201,236,000 | ||||
Allowance for doubtful accounts | 0 | 200,000 | ||||
Bad debt expense | 0 | 200,000 | $ 200,000 | |||
Inventory reserve | $ 1,800,000 | 700,000 | ||||
Number of segments | segment | 1 | |||||
Number of reporting units | reporting_unit | 1 | |||||
Goodwill, impairment | $ 0 | 0 | 0 | |||
Impairment of intangible assets | $ 0 | 0 | 0 | |||
Number of tranches | tranche | 5 | |||||
Cumulative effect of new accounting principle | $ 15,710,000 | $ (4,868,000) | ||||
Marketable securities | $ 208,475,000 | 123,272,000 | ||||
Asklepion Pharmaceuticals LLC | Asset Purchase Agreement | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Proceeds from sale of assets | $ 245,000,000 | |||||
Discount rate of receivables | 2.80% | |||||
Interest Expense | Asklepion Pharmaceuticals LLC | Asset Purchase Agreement | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Accretion on the notes receivable | $ 700,000 | $ 1,900,000 | ||||
Accounting Standards Update 2016-16 | ||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||
Cumulative effect of new accounting principle | $ 4,900,000 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Inventory, Net of Reserve (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Accounting Policies [Abstract] | ||
Raw material | $ 4,689 | $ 3,435 |
Finished goods | 930 | 1,916 |
Total inventory | $ 5,619 | $ 5,351 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Computers and equipment | |
Property, Plant and Equipment [Line Items] | |
Use life (in years) | 3 years |
Furniture and fixtures | |
Property, Plant and Equipment [Line Items] | |
Use life (in years) | 7 years |
REVENUE RECOGNITION (Details)
REVENUE RECOGNITION (Details) - USD ($) $ 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 | |
Disaggregation of Revenue [Line Items] | |||||||||||
Net product sales | $ 43,771 | $ 40,706 | $ 41,337 | $ 38,432 | $ 42,177 | $ 40,340 | $ 38,800 | $ 33,620 | $ 164,246 | $ 154,937 | $ 133,591 |
Thiola License | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net product sales | 89,176 | 82,311 | 71,199 | ||||||||
Bile acid products | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Net product sales | $ 75,070 | $ 72,626 | $ 62,392 | ||||||||
Geographic Concentration Risk | Revenue from Contract with Customer | United States | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Concentration risk, percentage | 95.00% |
FUTURE ACQUISITION RIGHT AND _2
FUTURE ACQUISITION RIGHT AND JOINT DEVELOPMENT AGREEMENT - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Jan. 31, 2018 | Jan. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 |
Business Acquisition [Line Items] | ||||
Business combination, option agreement, purchase price | $ 65,000 | |||
Business combination, option agreement, purchase price, percent transferred in cash | 20.00% | |||
Business combination, option agreement, purchase price, percent transferred by issuance of equity | 80.00% | |||
Business combination, option agreement, share price | $ 21.40 | |||
Business combination, option agreement, percent of consideration paid in cash if share price falls below share price threshold | 100.00% | |||
Business combination, option agreement, weighted average ten day share price, which requires all cash payment | $ 19.26 | |||
Business combination, option agreement, contingent consideration | $ 25,000 | $ 25,000 | ||
Investment-equity | $ 15,000 | $ 0 | ||
Purchase Provision Terms | CNSA-001 Program | Censa Pharmaceuticals Inc. | ||||
Business Acquisition [Line Items] | ||||
Research and development arrangement, contract to perform for others, compensation earned | 17,000 | |||
Censa Pharmaceuticals Inc. | ||||
Business Acquisition [Line Items] | ||||
Payments for the option to acquire business | 10,000 | 10,000 | ||
Censa Pharmaceuticals, Inc, Equity Holders | ||||
Business Acquisition [Line Items] | ||||
Additional required payments for the option to acquire business, successful development milestones | $ 5,000 | $ 5,000 | 5,000 | |
Additional required payments for the option to acquire business, successful development funding | $ 16,800 |
BUSINESS COMBINATION AND ASSE_3
BUSINESS COMBINATION AND ASSET TRANSACTIONS - Amendment to Trademark License and Supply Agreement (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Nov. 30, 2018 | Nov. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Amortization expense | $ 18,028 | $ 17,331 | $ 15,993 | ||
Thiola License | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Licensing agreement, extension term | 5 years | ||||
Gross Carrying Amount | $ 5,900 | $ 70,009 | $ 54,471 | ||
Payments for the option to acquire business | $ 300 | ||||
Payment of guaranteed minimum royalty | $ (100) | ||||
Minimum royalty, percentage | 20.00% | ||||
Amortization expense | $ 1,000 | ||||
Guaranteed minimum liability | $ 700 |
BUSINESS COMBINATION AND ASSE_4
BUSINESS COMBINATION AND ASSET TRANSACTIONS - Acquisition of Liquid Ursodeoxycholic Acid (L-UDCA) Narrative (Details) $ in Thousands | Jun. 20, 2016USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Jun. 16, 2016USD ($) |
Business Acquisition [Line Items] | ||||
Acquisition related contingent consideration | $ 73,650 | $ 80,900 | ||
Economic Interest - L-UDCA (acquired IPR&D) | ||||
Business Acquisition [Line Items] | ||||
Intangible assets acquired with definite lives | $ 25,500 | |||
Assets useful life (in years) | 17 years | |||
Present value of contingent consideration | $ 25,000 | $ 25,000 | ||
Acquisition related contingent consideration | 70,300 | |||
Total purchase price | $ 25,500 | $ 25,500 | ||
Measurement Input, Discount Rate | Economic Interest - L-UDCA (acquired IPR&D) | ||||
Business Acquisition [Line Items] | ||||
Business combination, contingent consideration, liability, measurement input (in percent) | 0.120 |
BUSINESS COMBINATION AND ASSE_5
BUSINESS COMBINATION AND ASSET TRANSACTIONS - Acquisition of Liquid Ursodeoxycholic Acid (L-UDCA) Assets Acquired (Details) - USD ($) $ in Thousands | Jun. 16, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 20, 2016 |
Business Acquisition [Line Items] | |||||
Cash paid upon consummation | $ 0 | $ 0 | $ 615 | ||
Economic Interest - L-UDCA (acquired IPR&D) | |||||
Business Acquisition [Line Items] | |||||
Cash paid upon consummation | $ 500 | ||||
Present value of contingent consideration | 25,000 | $ 25,000 | |||
Total purchase price | 25,500 | $ 25,500 | |||
Intangible assets acquired | 25,500 | ||||
Total purchase price | $ 25,500 |
BUSINESS COMBINATION AND ASSE_6
BUSINESS COMBINATION AND ASSET TRANSACTIONS - Divestiture of Assets (Details) - Asset Purchase Agreement $ in Millions | Jul. 02, 2015USD ($) |
Asklepion Pharmaceuticals LLC | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Proceeds from sale of assets | $ 245 |
Discount rate of receivables | 2.80% |
Gain on sale of intangible assets | $ 140 |
Disposal fees | 4.9 |
At Time Of Closing | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
PV of short term and long term receivables | 46.2 |
At Time Of Closing | Asklepion Pharmaceuticals LLC | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Proceeds from sale of assets | 150 |
Due On First And Second Anniversaries Of Closing | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Proceeds from sale of assets | 47.5 |
PV of short term and long term receivables | 44.9 |
Due On First And Second Anniversaries Of Closing | Asklepion Pharmaceuticals LLC | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Proceeds from sale of assets | $ 47.5 |
MARKETABLE SECURITIES (Details)
MARKETABLE SECURITIES (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Debt Securities, Available-for-sale [Line Items] | |||
Debt securities, realized gain (loss) | $ 0 | $ 0 | |
Marketable securities | 368,668,000 | 201,236,000 | |
Debt securities, available-for-sale, realized gain | $ 100,000 | ||
Proceeds from the sale/maturity of marketable securities | 162,755,000 | 114,526,000 | $ 159,520,000 |
Commercial paper | |||
Debt Securities, Available-for-sale [Line Items] | |||
Marketable securities | 59,255,000 | 6,897,000 | |
Corporate debt securities | |||
Debt Securities, Available-for-sale [Line Items] | |||
Marketable securities | 299,413,000 | 164,297,000 | |
Securities of government sponsored entities | |||
Debt Securities, Available-for-sale [Line Items] | |||
Marketable securities | $ 10,000,000 | $ 30,042,000 |
MARKETABLE SECURITIES - Availab
MARKETABLE SECURITIES - Available for Sale Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Securities, Available-for-sale [Line Items] | ||
Debt securities, available-for-sale, amortized cost basis, current | $ 209,137 | $ 123,574 |
Debt securities available for sale, unrealized gain, current | 0 | |
Debt securities available for sale unrealized loss, current | (662) | (302) |
Marketable securities | 208,475 | 123,272 |
Debt securities, available-for-sale, amortized cost basis, noncurrent | 160,810 | 78,388 |
Debt securities, available for sale unrealized gain, noncurrent | 22 | |
Debt securities available for sale unrealized loss, noncurrent | (639) | (424) |
Debt securities, available-for-sale, noncurrent | 160,193 | 77,964 |
Debt securities, available-for-sale, amortized cost | 369,947 | 201,962 |
Debt securities, available-for-sale, accumulated gross unrealized gain, before tax | 22 | |
Debt securities, available-for-sale, accumulated gross unrealized loss, before tax | (1,301) | (726) |
Debt securities, available-for-sale | 368,668 | 201,236 |
Commercial paper | ||
Debt Securities, Available-for-sale [Line Items] | ||
Debt securities, available-for-sale, amortized cost basis, current | 59,313 | 6,911 |
Debt securities available for sale, unrealized gain, current | 0 | |
Debt securities available for sale unrealized loss, current | (58) | (14) |
Marketable securities | 59,255 | 6,897 |
Corporate debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Debt securities, available-for-sale, amortized cost basis, current | 149,824 | 86,531 |
Debt securities available for sale, unrealized gain, current | 0 | |
Debt securities available for sale unrealized loss, current | (604) | (198) |
Marketable securities | 149,220 | 86,333 |
Debt securities, available-for-sale, amortized cost basis, noncurrent | 150,813 | 78,388 |
Debt securities, available for sale unrealized gain, noncurrent | 18 | |
Debt securities available for sale unrealized loss, noncurrent | (638) | (424) |
Debt securities, available-for-sale, noncurrent | 150,193 | 77,964 |
Securities of government sponsored entities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Debt securities, available-for-sale, amortized cost basis, current | 30,132 | |
Debt securities available for sale unrealized loss, current | (90) | |
Marketable securities | $ 30,042 | |
Debt securities, available-for-sale, amortized cost basis, noncurrent | 9,997 | |
Debt securities, available for sale unrealized gain, noncurrent | 4 | |
Debt securities available for sale unrealized loss, noncurrent | (1) | |
Debt securities, available-for-sale, noncurrent | $ 10,000 |
NOTES PAYABLE Narrative (Detail
NOTES PAYABLE Narrative (Details) | Sep. 10, 2018USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($)day$ / sharesshares | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | May 29, 2014USD ($)$ / shares |
Debt Instrument [Line Items] | |||||||
Debt instrument, repurchase amount | $ 23,400,000 | $ 23,400,000 | $ 23,400,000 | ||||
Debt instrument, convertible, threshold percentage of stock price trigger | 130.00% | ||||||
Debt instrument, convertible note, market price, per $1,000 | $ 897 | ||||||
Debt conversion, liability | 198,600,000 | 198,600,000 | |||||
Debt conversion, equity | 77,400,000 | ||||||
Debt issuance costs, net | $ 8,800,000 | $ 8,800,000 | |||||
Debt instrument, interest rate, effective percentage | 7.70% | 7.70% | |||||
Loss on extinguishment of debt | (17,042,000) | $ 0 | $ 0 | ||||
Interest expense | $ 9,810,000 | 4,422,000 | $ 4,734,000 | ||||
Senior Notes | Senior Notes Due 2025 | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate percentage | 2.50% | ||||||
Proceeds from issuance of debt | $ 267,200,000 | ||||||
Debt instrument, convertible, conversion price (in USD per share) | $ / shares | $ 38.80 | ||||||
Long-term debt, excluding current maturities | $ 276,000,000 | ||||||
Long-term debt, excluding current maturities, repaid if converted | $ 276,000,000 | ||||||
Debt instrument, convertible, conversion ratio | 0.0258 | ||||||
Long-term debt, term | 7 years | 7 years | |||||
Debt issuance costs, net | 6,073,000 | 0 | |||||
Credit agreement amount | 247,700,000 | ||||||
Aggregate carrying value | 276,000,000 | 0 | |||||
Unamortized debt discount | $ 74,836,000 | $ 0 | |||||
Senior Notes | Convertible Notes Due 2019 | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate percentage | 4.50% | ||||||
Debt instrument, repurchase amount | $ 40,200,000 | $ 40,200,000 | |||||
Debt instrument, convertible, threshold trading days | day | 20 | ||||||
Debt instrument, convertible, threshold consecutive trading days | day | 30 | ||||||
Debt instrument, convertible, threshold percentage of stock price trigger | 130.00% | ||||||
Debt instrument, convertible, threshold consecutive days measuring period | day | 10 | ||||||
Trading price per principal, percentage | 98.00% | ||||||
Loss on extinguishment of debt | $ (17,000,000) | ||||||
Note Purchase Agreement | Convertible Debt | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate percentage | 4.50% | ||||||
Debt instrument, convertible, conversion price (in USD per share) | $ / shares | $ 17.41 | ||||||
Credit agreement amount | $ 46,000,000 | ||||||
Aggregate carrying value | 43,000,000 | ||||||
Unamortized debt discount | $ 3,000,000 | ||||||
Common stock, fair value | $ / shares | $ 22.63 | ||||||
Incremental common shares attributable to dilutive effect of conversion of debt securities | shares | 1,297,530 | ||||||
Debt instrument, convertible, if-converted value in excess of principal | $ 6,800,000 | ||||||
Convertible debt, fair value disclosures | $ 30,000,000 |
NOTES PAYABLE - Schedule of Car
NOTES PAYABLE - Schedule of Carrying Amount of Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Sep. 30, 2018 | Sep. 10, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||||
Debt issuance costs, net | $ (8,800) | |||
Senior Notes Due 2025 | Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Interest rate percentage | 2.50% | |||
Aggregate principle amount of Notes | $ 276,000 | $ 0 | ||
Unamortized debt discount and debt issuance costs | (74,836) | 0 | ||
Debt issuance costs, net | (6,073) | 0 | ||
Net carrying amount | $ 195,091 | $ 0 |
NOTES PAYABLE - Convertible Not
NOTES PAYABLE - Convertible Notes Payable (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Debt Instrument [Line Items] | ||||
Amortization of premiums on investments | $ 382 | $ 1,338 | $ 1,097 | |
Senior Notes Due 2025 | ||||
Debt Instrument [Line Items] | ||||
Interest expense, debt | 4,963 | $ 0 | ||
Senior Notes | Senior Notes Due 2025 | ||||
Debt Instrument [Line Items] | ||||
Interest expense, debt | $ 0 | 2,108 | ||
Amortization of premiums on investments | 0 | 2,582 | ||
Amortization of debt discount | $ 0 | $ 273 |
NOTES PAYABLE - Convertible Sen
NOTES PAYABLE - Convertible Senior Notes Due 2019 (Details) - Convertible Debt - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Aggregate principle amount of Notes | $ 22,590 | $ 46,000 |
Unamortized debt discount and debt issuance costs | (133) | (923) |
Net carrying amount | $ 22,457 | $ 45,077 |
FAIR VALUE MEASUREMENTS - Asset
FAIR VALUE MEASUREMENTS - Assets and Liabilities Measured at Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Asset: | |||
Marketable securities, available-for-sale | $ 368,668 | $ 201,236 | |
Liabilities: | |||
Derivative liability related to warrants | 0 | 15,710 | |
Recurring basis | |||
Asset: | |||
Cash and Cash Equivalents | 102,873 | 99,394 | |
Marketable securities, available-for-sale | 368,668 | 201,236 | |
Total | 471,541 | 300,630 | |
Liabilities: | |||
Derivative liability related to warrants | 15,710 | ||
Business combination-related contingent consideration | 93,000 | 90,000 | |
Total | 93,000 | 105,710 | |
Recurring basis | Quoted prices in active markets (Level 1) | |||
Asset: | |||
Cash and Cash Equivalents | 62,978 | 92,726 | |
Marketable securities, available-for-sale | 0 | 0 | |
Total | 62,978 | 92,726 | |
Liabilities: | |||
Derivative liability related to warrants | 0 | ||
Business combination-related contingent consideration | 0 | 0 | |
Total | 0 | 0 | |
Recurring basis | Significant other observable inputs (Level 2) | |||
Asset: | |||
Cash and Cash Equivalents | 39,895 | 6,668 | |
Marketable securities, available-for-sale | 368,668 | 201,236 | |
Total | 408,563 | 207,904 | |
Liabilities: | |||
Derivative liability related to warrants | 0 | ||
Business combination-related contingent consideration | 0 | 0 | |
Total | 0 | 0 | |
Recurring basis | Significant unobservable inputs (Level 3) | |||
Asset: | |||
Cash and Cash Equivalents | 0 | 0 | |
Marketable securities, available-for-sale | 0 | 0 | |
Total | 0 | 0 | |
Liabilities: | |||
Derivative liability related to warrants | 15,710 | $ 22,440 | |
Business combination-related contingent consideration | 93,000 | 90,000 | $ 87,478 |
Total | $ 93,000 | $ 105,710 |
FAIR VALUE MEASUREMENTS - Chang
FAIR VALUE MEASUREMENTS - Changes in Level 3 (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Balance, beginning | $ 15,710 | ||
Reclassification of derivative liability to equity upon exercise of warrants | 0 | $ (11,221) | $ (14,715) |
Change in estimated fair value of liability classified warrants | 0 | 4,491 | (1,655) |
Balance, ending | 0 | 15,710 | |
Recurring basis | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Balance, beginning | 15,710 | ||
Balance, ending | 15,710 | ||
Recurring basis | Significant unobservable inputs (Level 3) | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Balance, beginning | $ 15,710 | 22,440 | |
Reclassification of derivative liability to equity upon exercise of warrants | (11,221) | ||
Change in estimated fair value of liability classified warrants | 4,491 | ||
Balance, ending | $ 15,710 | $ 22,440 |
FAIR VALUE MEASUREMENTS - Fair
FAIR VALUE MEASUREMENTS - Fair Value of Level 3 (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Change in estimated fair value of contingent consideration | $ (11,590) | $ (19,389) | $ (18,383) |
Recurring basis | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Balance at January 1 | 90,000 | ||
Balance at December 31 | 93,000 | 90,000 | |
Recurring basis | Significant unobservable inputs (Level 3) | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Balance at January 1 | 90,000 | 87,478 | |
Change in estimated fair value of contingent consideration | 11,590 | 19,389 | |
Contractual Payments | (6,373) | (6,006) | |
Contractual Payments accrued at December 31 | (2,171) | (11,012) | |
Foreign currency impact | (46) | 151 | |
Balance at December 31 | $ 93,000 | $ 90,000 | $ 87,478 |
INTANGIBLE ASSETS - Additional
INTANGIBLE ASSETS - Additional Information (Details) - USD ($) $ in Thousands | Jun. 20, 2016 | Nov. 30, 2018 | Mar. 31, 2018 | Nov. 30, 2017 | Sep. 30, 2015 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2014 | Dec. 31, 2013 | Jun. 16, 2016 | Mar. 31, 2015 |
Finite-Lived Intangible Assets [Line Items] | ||||||||||||
Intangible assets finite-lived, net | $ 161,191 | |||||||||||
Payments to date under terms of licensing agreement | 18,974 | $ 13,122 | $ 10,496 | |||||||||
Amortization expense | 18,028 | 17,331 | $ 15,993 | |||||||||
Economic Interest - L-UDCA (acquired IPR&D) | ||||||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||||||
Intangible assets with definite lives | $ 25,500 | |||||||||||
Assets useful life (in years) | 17 years | |||||||||||
Total purchase price | $ 25,500 | $ 25,500 | ||||||||||
Ligand License Agreement | ||||||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||||||
Intangible assets finite-lived, net | $ 2,500 | |||||||||||
Require to make substantial payments payable upon achievement of milestones | $ 114,100 | |||||||||||
Payments to date under terms of licensing agreement | 7,200 | |||||||||||
Payment of amendment consideration | $ 1,000 | |||||||||||
Ligand License Agreement | Minimum | ||||||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||||||
Annual royalty percentage | 15.00% | |||||||||||
Ligand License Agreement | Maximum | ||||||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||||||
Annual royalty percentage | 17.00% | |||||||||||
Licensing Agreements | ||||||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||||||
Finite-lived intangible assets acquired | $ 4,600 | |||||||||||
Product rights | ||||||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||||||
Intangible assets finite-lived, net | $ 47,636 | $ 51,873 | ||||||||||
Assets useful life (in years) | 16 years | 16 years | ||||||||||
Finite-lived intangible asset | $ 67,849 | $ 67,849 | ||||||||||
Product rights | Manchester Pharmaceuticals LLC | ||||||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||||||
Intangible assets with definite lives | $ 67,800 | |||||||||||
Assets useful life (in years) | 16 years | |||||||||||
Trade Name | ||||||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||||||
Intangible assets finite-lived, net | $ 0 | $ 0 | ||||||||||
Assets useful life (in years) | 1 year | 1 year | ||||||||||
Finite-lived intangible asset | $ 175 | $ 175 | ||||||||||
Trade Name | Manchester Pharmaceuticals LLC | ||||||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||||||
Intangible assets with definite lives | $ 200 | |||||||||||
Assets useful life (in years) | 1 year | |||||||||||
Customer relationships | ||||||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||||||
Intangible assets finite-lived, net | $ 211 | $ 251 | ||||||||||
Assets useful life (in years) | 10 years | 10 years | ||||||||||
Finite-lived intangible asset | $ 403 | $ 403 | ||||||||||
Customer relationships | Manchester Pharmaceuticals LLC | ||||||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||||||
Intangible assets with definite lives | $ 400 | |||||||||||
Assets useful life (in years) | 10 years | |||||||||||
Thiola License Agreement | ||||||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||||||
Assets useful life (in years) | 10 years | |||||||||||
Automatic renewal periods | 1 year | |||||||||||
Remaining weighed average period of amortization (in years) | 10 years 4 months 28 days | |||||||||||
Thiola License Agreement | Mission Pharmacal Company | ||||||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||||||
Annual royalty percentage | 20.00% | |||||||||||
Mission an up-front license fee | $ 3,000 | |||||||||||
Guaranteed minimum royalties | 2,000 | |||||||||||
Present value of guaranteed minimum royalties payable | 15,200 | 15,100 | ||||||||||
Thiola License Agreement | Mission Pharmacal Company | Other Current Liabilities | ||||||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||||||
Guaranteed minimum royalties | 2,100 | 2,000 | ||||||||||
Thiola License Agreement | Mission Pharmacal Company | Other Noncurrent Liabilities | ||||||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||||||
Guaranteed minimum royalties | $ 13,100 | $ 13,100 | ||||||||||
Thiola License Agreement | Mission Pharmacal Company | Minimum | ||||||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||||||
Discount rate | 7.00% | 7.00% | ||||||||||
Thiola License Agreement | Mission Pharmacal Company | Maximum | ||||||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||||||
Discount rate | 11.00% | 11.00% | ||||||||||
Thiola | ||||||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||||||
Intangible assets finite-lived, net | $ 55,486 | $ 44,303 | ||||||||||
Assets useful life (in years) | 10 years | |||||||||||
Licensing agreement, extension term | 5 years | |||||||||||
Finite-lived intangible asset | $ 5,900 | $ 70,009 | $ 54,471 | |||||||||
Payments for the option to acquire business | $ 300 | |||||||||||
Payment of guaranteed minimum royalty | $ 100 | |||||||||||
Minimum royalty, percentage | 20.00% | |||||||||||
Amortization expense | $ 1,000 | |||||||||||
Guaranteed minimum liability | $ 700 | |||||||||||
United States | Asklepion Pharmaceuticals LLC | ||||||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||||||
Capitalized economic interest | $ 75,900 | |||||||||||
International | Asklepion Pharmaceuticals LLC | ||||||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||||||
Capitalized economic interest | $ 7,300 |
INTANGIBLE ASSETS - Amortizatio
INTANGIBLE ASSETS - Amortization of Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Nov. 30, 2017 | |
Finite-Lived Intangible Assets [Line Items] | |||
Accumulated Amortization | $ (68,952) | $ (51,046) | |
Intangible assets finite-lived, net | 161,191 | ||
Intangible assets, gross (excluding goodwill) | 255,643 | 235,863 | |
Intangible Assets, Net (Excluding Goodwill) | $ 186,691 | $ 184,817 | |
Chenodal Product Rights | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful Life | 16 years | 16 years | |
Gross Carrying Amount | $ 67,849 | $ 67,849 | |
Accumulated Amortization | (20,213) | (15,976) | |
Intangible assets finite-lived, net | 47,636 | $ 51,873 | |
Thiola License | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful Life | 10 years | ||
Gross Carrying Amount | 70,009 | $ 54,471 | $ 5,900 |
Accumulated Amortization | (14,523) | (10,168) | |
Intangible assets finite-lived, net | $ 55,486 | $ 44,303 | |
Economic Interest - U.S. revenue Cholbam | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful Life | 10 years | 10 years | |
Gross Carrying Amount | $ 75,900 | $ 75,900 | |
Accumulated Amortization | (28,487) | (20,903) | |
Intangible assets finite-lived, net | $ 47,413 | $ 54,997 | |
Economic Interest - Int'l revenue Cholbam | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful Life | 10 years | 10 years | |
Gross Carrying Amount | $ 7,700 | $ 8,058 | |
Accumulated Amortization | (2,890) | (2,219) | |
Intangible assets finite-lived, net | 4,810 | 5,839 | |
Economic Interest - L-UDCA (acquired IPR&D) | |||
Finite-Lived Intangible Assets [Line Items] | |||
Indefinite-lived intangible assets | $ 25,500 | $ 25,500 | |
Ligand License | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful Life | 11 years | 11 years | |
Gross Carrying Amount | $ 7,900 | $ 3,300 | |
Accumulated Amortization | (2,397) | (1,420) | |
Intangible assets finite-lived, net | $ 5,503 | $ 1,880 | |
Manchester Customer Relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful Life | 10 years | 10 years | |
Gross Carrying Amount | $ 403 | $ 403 | |
Accumulated Amortization | (192) | (152) | |
Intangible assets finite-lived, net | $ 211 | $ 251 | |
Manchester Trade Name | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful Life | 1 year | 1 year | |
Gross Carrying Amount | $ 175 | $ 175 | |
Accumulated Amortization | (175) | (175) | |
Intangible assets finite-lived, net | $ 0 | $ 0 | |
Internal Use Software | |||
Finite-Lived Intangible Assets [Line Items] | |||
Useful Life | 5 years | 5 years | |
Gross Carrying Amount | $ 207 | $ 207 | |
Accumulated Amortization | (75) | (33) | |
Intangible assets finite-lived, net | $ 132 | $ 174 |
INTANGIBLE ASSETS - Amortizat_2
INTANGIBLE ASSETS - Amortization Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | $ 18,028 | $ 17,331 | $ 15,993 |
Research and development | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | 976 | 327 | 328 |
Selling, general and administrative | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | $ 17,052 | $ 17,004 | $ 15,665 |
INTANGIBLE ASSETS - Amortizat_3
INTANGIBLE ASSETS - Amortization Expense Next Five Years (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2,019 | $ 19,166 |
2,020 | 19,210 |
2,021 | 19,158 |
2,022 | 19,125 |
2,023 | 18,825 |
Thereafter | 65,707 |
Intangible assets finite-lived, net | $ 161,191 |
ACCRUED EXPENSES (Details)
ACCRUED EXPENSES (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Payables and Accruals [Abstract] | |||
Compensation related costs | $ 10,446 | $ 7,749 | |
Research and development | 16,515 | 6,989 | |
Government rebate reserves | 8,464 | 5,883 | |
Selling, general and administrative | 2,990 | 3,896 | |
Royalty/contingent consideration | 6,805 | 6,429 | |
Restructuring expenses | 0 | 3,549 | $ 893 |
Miscellaneous accrued expenses | 4,475 | 1,523 | |
Total accrued expenses | $ 49,695 | $ 36,018 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Leases and Sublease Agreements (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Leases and Sublease Agreements | Corporate Headquarters San Diego, CA | |
Other Commitments [Line Items] | |
Annual base rent | $ 2.3 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Schedule of Future Minimum Lease Payments (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,019 | $ 2,343 |
2,020 | 2,414 |
2,021 | 2,486 |
2,022 | 2,560 |
2,023 | 2,637 |
Thereafter | 1,585 |
Operating lease future minimum payments due, total | $ 14,025 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES - Additional Information (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | 17 Months Ended | ||||
Aug. 31, 2017USD ($) | Jul. 31, 2017ft² | Jul. 31, 2016USD ($)ft² | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2018USD ($) | |
Other Commitments [Line Items] | |||||||
Legal fee settlement | $ 0 | $ 2,625 | $ 5,212 | ||||
Martin Shkreli | |||||||
Other Commitments [Line Items] | |||||||
Contingent future legal fee advance payment | $ 5,400 | ||||||
Legal fees reimbursed from director and officer insurance carriers | $ 3,800 | 0 | 2,600 | ||||
Legal fees paid | $ 0 | $ 3,600 | |||||
Operating lease for office space | |||||||
Other Commitments [Line Items] | |||||||
Square feet of leased office space | ft² | 22,339 | 23,107 | |||||
Lessee, operating lease, term of contract | 7 years 7 months | ||||||
Lease incentive, tenant improvements | $ 1,500 | ||||||
Rent abatement, months | 7 months | ||||||
Right to extend lease | 5 years |
STOCKHOLDERS_ EQUITY _ DEFICI_2
STOCKHOLDERS’ EQUITY / DEFICIT - Common Stock and Preferred Stock (Details) | 12 Months Ended | |
Dec. 31, 2018vote$ / sharesshares | Dec. 31, 2017$ / sharesshares | |
Class of Stock [Line Items] | ||
Common stock, shares authorized (in shares) | shares | 100,000,000 | 100,000,000 |
Common stock, par value (in USD per share) | $ / shares | $ 0.0001 | $ 0.0001 |
Number of votes per common share owned | vote | 1 | |
Preferred Stock, shares authorized (in shares) | shares | 20,000,000 | 20,000,000 |
Preferred stock, par value (in USD per share) | $ / shares | $ 0.0001 | $ 0.0001 |
Series A Preferred Stock | ||
Class of Stock [Line Items] | ||
Preferred Stock, shares authorized (in shares) | shares | 1,000 | |
Preferred stock, par value (in USD per share) | $ / shares | $ 0.001 |
STOCKHOLDERS_ EQUITY _ DEFICI_3
STOCKHOLDERS’ EQUITY / DEFICIT - 2015 Equity Incentive Plan (Details) - shares | May 18, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | May 17, 2017 | Jun. 08, 2015 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 | |||
2015 Equity Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock, shares authorized (in shares) | 1,400,000 | ||||
Shares remaining available for issuance under the plan (in shares) | 600,000 | ||||
2015 Equity Incentive Plan Amended | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock, shares authorized (in shares) | 1,600,000 | 1,800,000 | |||
Shares remaining available for issuance under the plan (in shares) | 700,000 | ||||
Options | 2015 Equity Incentive Plan Amended | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation arrangement by share-based payment award, reduction in number of shares available for grant | 100.00% | ||||
Restricted Stock | 2015 Equity Incentive Plan Amended | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation arrangement by share-based payment award, reduction in number of shares available for grant | 200.00% |
STOCKHOLDERS_ EQUITY _ DEFICI_4
STOCKHOLDERS’ EQUITY / DEFICIT - 2017 Employee Stock Purchase Plan (Details) - 2017 ESPP - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Jan. 01, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares remaining available for issuance under the plan (in shares) | 680,000 | 380,000 |
Potential increase in shares available for issuance, as a percent of total outstanding common stock | 1.00% | |
Maximum number of additional shares authorized for issuance (in shares) | 300,000 | |
Purchase price of common stock, percent of fair market value | 85.00% | |
Stock purchase offering period | 6 months | |
Employee stock purchase plan, maximum compensation | 15.00% | |
Employee stock purchase plan annual limit | $ 25,000 | |
Shares reserved for future issuance (in shares) | $ 552,966 |
STOCKHOLDERS_ EQUITY _ DEFICI_5
STOCKHOLDERS’ EQUITY / DEFICIT - Black Scholes Assumptions (Details) - Stock Options - shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Issued (in shares) | 1,349,250 | ||
Risk free rate | 2.80% | 2.10% | 1.20% |
Expected volatility | 68.00% | 70.00% | 68.00% |
Expected life (in years) | 6 years 2 months 12 days | 6 years 1 month 6 days | 5 years 9 months 22 days |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
STOCKHOLDERS_ EQUITY _ DEFICI_6
STOCKHOLDERS’ EQUITY / DEFICIT - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |||
Shares underlying options (in shares) | 4,834,781 | 4,610,233 | 3,793,017 |
Exercise Price (in USD per share) | $ 16.81 | $ 15.97 | $ 14.94 |
Remaining contractual term, exercisable (in years) | 5 years 11 months 23 days | 5 years 10 months 6 days | 6 years 9 months 26 days |
Exercisable, aggregate intrinsic value | $ 35,387 | $ 31,991 | $ 23,358 |
Closing stock price of stock options outstanding and exercisable (in USD per share) | $ 22.63 | $ 21.07 | $ 18.93 |
Stock Options | |||
Shares | |||
Outstanding, beginning balance (in shares) | 7,153,668 | ||
Granted (in shares) | 1,349,250 | ||
Forfeited and expired (in shares) | (476,369) | ||
Exercised (in shares) | (749,212) | ||
Outstanding, ending balance (in shares) | 7,277,337 | 7,153,668 | |
Weighted Average Exercise Price | |||
Outstanding, beginning balance (in USD per share) | $ 17.16 | ||
Granted (in USD per share) | 25.56 | ||
Forfeited and expired (in dollars per share) | 24.50 | ||
Exercised (in USD per share) | 14.13 | ||
Outstanding, ending balance (in USD per share) | $ 18.55 | $ 17.16 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |||
Remaining contractual term, outstanding (in years) | 6 years 11 months 9 days | 6 years 11 months 12 days | |
Exercised, Aggregate Intrinsic Value | $ 9,325 | ||
Outstanding, aggregate intrinsic value | $ 40,650 | $ 39,010 | |
Weighted average grant date fair value of options (in USD per share) | $ 16.21 | $ 11.77 | $ 10.09 |
Compensation expense not yet recognized, stock options | $ 30,000 | ||
Weighted average period for unrecognized costs (in years) | 2 years 8 months 12 days |
STOCKHOLDERS_ EQUITY _ DEFICI_7
STOCKHOLDERS’ EQUITY / DEFICIT - Unvested Restricted Stock (Details) - Restricted shares $ / shares in Units, $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation cost related to restricted shares granted | $ | $ 7.9 |
Weighted average period for unrecognized costs (in years) | 2 years 10 months 24 days |
Number of shares | |
Unvested beginning balance (in shares) | shares | 94,832 |
Granted (in shares) | shares | 395,311 |
Vested (in shares) | shares | (58,251) |
Forfeited/cancelled (in shares) | shares | (31,466) |
Unvested ending balance (in shares) | shares | 400,426 |
Weighted Average Grant Date Fair Value | |
Unvested beginning balance (in USD per share) | $ / shares | $ 20.19 |
Granted (in USD per share) | $ / shares | 25.40 |
Vested (in USD per share) | $ / shares | 20.08 |
Forfeited/cancelled (in USD per share) | $ / shares | 25.20 |
Unvested ending balance (in USD per share) | $ / shares | $ 24.95 |
STOCKHOLDERS_ EQUITY _ DEFICI_8
STOCKHOLDERS’ EQUITY / DEFICIT - Performance-based Stock Options (Details) - Performance Shares $ / shares in Units, $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation cost related to restricted shares granted | $ | $ 1.6 |
Weighted average period for unrecognized costs (in years) | 1 year 3 months 18 days |
Number of shares | |
Unvested beginning balance (in shares) | shares | 250,500 |
Granted (in shares) | shares | 66,500 |
Vested (in shares) | shares | (85,250) |
Forfeited/cancelled (in shares) | shares | (5,000) |
Unvested ending balance (in shares) | shares | 226,750 |
Weighted Average Grant Date Fair Value | |
Unvested beginning balance (in USD per share) | $ / shares | $ 20.63 |
Granted (in USD per share) | $ / shares | 25.75 |
Vested (in USD per share) | $ / shares | 22.33 |
Forfeited/cancelled (in USD per share) | $ / shares | 18.46 |
Unvested ending balance (in USD per share) | $ / shares | $ 21.54 |
STOCKHOLDERS_ EQUITY _ DEFICI_9
STOCKHOLDERS’ EQUITY / DEFICIT - Share Based Compensation (Details) - 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] | |||
Total | $ 19,774 | $ 26,874 | $ 29,102 |
Selling, general and administrative | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total | 13,550 | 17,924 | 18,614 |
Research and development expenses | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total | $ 6,224 | $ 8,950 | $ 10,488 |
STOCKHOLDERS_ EQUITY _ DEFIC_10
STOCKHOLDERS’ EQUITY / DEFICIT - Exercise of Warrants (Details) - 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] | |||
Proceeds exercise of warrants | $ 5,305 | $ 3,645 | $ 6,005 |
Class of warrant or right, title of security warrants or rights outstanding (in shares) | 0 | ||
Warrants | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of common stock called by warrants (in shares) | 1,036,054 | 607,481 | 898,633 |
Proceeds exercise of warrants | $ 5,305 | $ 3,645 | $ 6,005 |
Reclassification of derivative liability as equity | 11,221 | 14,715 | |
Change in fair value of warrants | $ 3,033 | $ 2,909 |
EARNINGS (LOSS) PER SHARE (Deta
EARNINGS (LOSS) PER SHARE (Details) - USD ($) $ / shares in Units, $ 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 | |
Shares | |||||||||||
Basic Earnings per Share (in shares) | 40,433,171 | 38,769,816 | 36,997,865 | ||||||||
Dilutive Earnings per Share (in shares) | 40,433,171 | 38,769,816 | 38,288,012 | ||||||||
Change in fair value of derivative instruments (in shares) | 0 | 0 | 0 | ||||||||
Net loss | |||||||||||
Net loss | $ (7,455) | $ (54,516) | $ (22,329) | $ (18,378) | $ (17,618) | $ (17,794) | $ (13,229) | $ (11,090) | $ (102,678) | $ (59,731) | $ (47,903) |
Change in fair value of derivative instruments | 0 | 0 | (1,655) | ||||||||
Dilutive Earnings per Share | $ (102,678) | $ (59,731) | $ (49,558) | ||||||||
Net income (loss) per common share, basic (in USD per shares) | $ (0.18) | $ (1.34) | $ (0.56) | $ (0.46) | $ (0.45) | $ (0.46) | $ (0.34) | $ (0.29) | $ (2.54) | $ (1.54) | $ (1.29) |
Net income (loss) per common share, diluted (in USD per shares) | $ (0.18) | $ (1.34) | $ (0.56) | $ (0.46) | $ (0.55) | $ (0.46) | $ (0.34) | $ (0.32) | $ (2.54) | $ (1.54) | $ (1.29) |
Warrants | |||||||||||
Shares | |||||||||||
Dilutive Earnings per Share (in shares) | 0 | 0 | 1,290,147 |
EARNINGS (LOSS) PER SHARE - Ant
EARNINGS (LOSS) PER SHARE - Antidilutive Securities (Details) - shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive shares excluded from the calculation (in shares) | 16,299,349 | 11,039,901 | 9,373,686 |
Convertible Debt | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive shares excluded from the calculation (in shares) | 8,410,932 | 2,642,160 | 2,642,160 |
Restricted Stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive shares excluded from the calculation (in shares) | 395,034 | 157,319 | 444,942 |
Options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive shares excluded from the calculation (in shares) | 7,210,576 | 7,080,998 | 6,286,584 |
Warrants | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive shares excluded from the calculation (in shares) | 282,807 | 1,159,424 | 0 |
INCOME TAXES - Components of Ne
INCOME TAXES - Components of Net Income Before Taxes (Details) - USD ($) $ 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 | |
Operating Loss Carryforwards [Line Items] | |||||||||||
Loss before provision for income taxes | $ (7,455) | $ (54,101) | $ (22,162) | $ (18,149) | $ (11,038) | $ (19,017) | $ (15,154) | $ (13,154) | $ (101,867) | $ (58,363) | $ (57,582) |
United States | |||||||||||
Operating Loss Carryforwards [Line Items] | |||||||||||
Loss before provision for income taxes | (87,573) | (55,611) | (52,750) | ||||||||
Foreign | |||||||||||
Operating Loss Carryforwards [Line Items] | |||||||||||
Loss before provision for income taxes | $ (14,294) | $ (2,752) | $ (4,832) |
INCOME TAXES - Components of In
INCOME TAXES - Components of Income Tax Expense(Benefit) (Details) - USD ($) $ 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 | |
Current | |||||||||||
Federal | $ 698 | $ 6,991 | $ 13,137 | ||||||||
State | 113 | 802 | (155) | ||||||||
Total | 811 | 7,793 | 12,982 | ||||||||
Deferred | |||||||||||
Federal | 0 | (7,965) | (18,814) | ||||||||
State | 0 | 1,540 | (3,847) | ||||||||
Total | 0 | (6,425) | (22,661) | ||||||||
Total tax provision (benefit) | $ 0 | $ 415 | $ 167 | $ 229 | $ 6,580 | $ (1,223) | $ (1,925) | $ (2,064) | $ 811 | $ 1,368 | $ (9,679) |
INCOME TAXES - Reconciliation o
INCOME TAXES - Reconciliation of Federal Income Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Statutory rate - federal | (21.00%) | (35.00%) | (35.00%) |
State taxes, net of federal benefit | (4.44%) | (3.30%) | (3.16%) |
Change in FV of derivative liability (warrants) | (0.00%) | 2.82% | 1.10% |
Change in federal tax rate | (0.00%) | 23.29% | (0.00%) |
Convertible Debt | 21.77% | (0.00%) | (0.00%) |
Loss on extinguishment of debt | 4.09% | 0.00% | 0.00% |
Other permanent differences | 0.10% | 1.04% | 2.05% |
Tax credits | (11.86%) | (5.79%) | (1.58%) |
Return to provision adjustments and other true-ups | 1.42% | (3.48%) | (1.15%) |
Other | 1.06% | 1.25% | 3.09% |
Change in valuation allowance | 9.79% | 21.62% | 16.30% |
Income tax provision (benefit) | 0.93% | 2.45% | (18.35%) |
INCOME TAXES - Deferred Tax Ass
INCOME TAXES - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred Tax Assets: | ||
Net operating loss | $ 9,700 | $ 1,099 |
Research and development and other tax credits | 14,715 | 1,599 |
Contingent consideration | 23,459 | 23,080 |
Other accrued expenses | 3,710 | 2,603 |
Stock based compensation | 16,761 | 15,695 |
Other | 555 | 358 |
Deferred tax assets | 68,900 | 44,434 |
Deferred Tax Liabilities: | ||
Intangible assets | (14,288) | (16,810) |
Convertible Debt | (18,419) | 0 |
Tax basis depreciation less than book depreciation | 0 | 0 |
Deferred tax liabilities | (32,707) | (16,810) |
Net deferred tax assets (liabilities) before valuation allowance | 36,194 | 27,624 |
Valuation allowance | (36,194) | (27,624) |
Total deferred tax liability | $ 0 | $ 0 |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating Loss Carryforwards [Line Items] | |||
Valuation allowance | $ 36,194,000 | $ 27,624,000 | |
Increase in valuation allowance primarily attributable to Tax and Jobs Act of 2017 | 8,600,000 | 12,000,000 | |
Income tax examination, penalties and interest expense | 0 | 0 | $ 0 |
Income tax examination, penalties and interest accrued | 0 | 0 | |
Tax Cuts and Jobs Act of 2017, income tax expense | $ 13,000,000 | ||
U.S. federal | |||
Operating Loss Carryforwards [Line Items] | |||
Available unused NOL carryforwards | 36,500,000 | ||
State and Local Jurisdiction | |||
Operating Loss Carryforwards [Line Items] | |||
Available unused NOL carryforwards | 33,100,000 | ||
Federal Orphan Drug Tax Credit | |||
Operating Loss Carryforwards [Line Items] | |||
Research and development tax credits | 12,800,000 | ||
Research Tax Credit Carryforward | |||
Operating Loss Carryforwards [Line Items] | |||
Research and development tax credits | 500,000 | ||
Tax Competes Tax Credit Carryforward | |||
Operating Loss Carryforwards [Line Items] | |||
Research and development tax credits | $ 2,000,000 |
INCOME TAXES - Unrecognized Tax
INCOME TAXES - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Balance as of January 1: | $ 0 | $ 1,500 |
Increase in current period positions | 0 | 0 |
Decrease in prior period positions | 0 | (1,500) |
Increase in prior period positions | 0 | 0 |
Balance as of December 31: | $ 0 | $ 0 |
DERIVATIVE FINANCIAL INSTRUME_3
DERIVATIVE FINANCIAL INSTRUMENTS - Additional Information (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Derivative liability related to warrants | $ 0 | $ 15,710 |
Class of warrant or right, title of security warrants or rights outstanding (in shares) | 0 |
DERIVATIVE FINANCIAL INSTRUME_4
DERIVATIVE FINANCIAL INSTRUMENTS - Derivative Warrant Issuances (Details) - Warrants - Derivative - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Shares | ||
Outstanding, beginning balance (in shares) | 1,159,424 | 1,766,905 |
Issued (in shares) | 0 | 0 |
Canceled (in shares) | 554 | 0 |
Exercised (in shares) | 1,158,870 | 607,481 |
Outstanding, ending balance (in shares) | 0 | 1,159,424 |
Weighted Average Exercise Price | ||
Outstanding, beginning balance (in USD per share) | $ 7.86 | $ 7.23 |
Issued (in USD per share) | 0 | 0 |
Cancelled (in USD per share) | 5.99 | 0 |
Exercised (in USD per share) | 7.88 | 6 |
Outstanding, ending balance (in USD per share) | 0 | 7.86 |
Weighted Average Grant Date Fair Value | ||
Outstanding, Beginning Balance (in USD per share) | 4.15 | 3.87 |
Issued (in USD per share) | 0 | 0 |
Cancelled (in USD per share) | 3.33 | 0 |
Exercised (in USD per share) | 4.15 | 3.33 |
Outstanding, Ending Balance (in USD per share) | $ 0 | $ 4.15 |
RETIREMENT PLAN (Details)
RETIREMENT PLAN (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Retirement Benefits [Abstract] | |||
Defined contribution plan, employer contributions | $ 0.9 | $ 0.6 | $ 0.5 |
RESTRUCTURING - Narrative (Deta
RESTRUCTURING - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Restructuring and Related Activities [Abstract] | ||
Restructuring adjustment | $ 242 | $ 55 |
RESTRUCTURING - Schedule of Res
RESTRUCTURING - Schedule of Restructuring Reserve (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Restructuring Reserve [Roll Forward] | ||
Liability, beginning of period | $ 3,549 | $ 893 |
Restructuring expenses | 0 | 3,608 |
Cash settlements | (3,307) | (897) |
Adjustments to previous estimates | (242) | (55) |
Liability, end of period | $ 0 | $ 3,549 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 4,284 | $ 3,815 | |
Less: Accumulated depreciation | (1,138) | (585) | |
Total property and equipment, net | 3,146 | 3,230 | |
Depreciation | 600 | 500 | $ 100 |
Computers and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 506 | 436 | |
Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 1,150 | 945 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 2,628 | 2,071 | |
Construction-in-progress | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 0 | $ 363 |
QUARTERLY FINANCIAL INFORMATI_3
QUARTERLY FINANCIAL INFORMATION (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ 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] | |||||||||||
Net product sales | $ 43,771 | $ 40,706 | $ 41,337 | $ 38,432 | $ 42,177 | $ 40,340 | $ 38,800 | $ 33,620 | $ 164,246 | $ 154,937 | $ 133,591 |
Total operating expenses | 48,756 | 76,289 | 62,897 | 56,344 | 57,354 | 50,948 | 52,398 | 48,028 | 244,286 | 208,728 | 191,805 |
Operating loss | (4,985) | (35,583) | (21,560) | (17,912) | (15,177) | (10,608) | (13,598) | (14,408) | (80,040) | (53,791) | (58,214) |
Total other income (expense), net | (2,470) | (18,518) | (602) | (237) | 4,139 | (8,409) | (1,556) | 1,254 | (21,827) | (4,572) | 632 |
Loss before benefit (provision) for income taxes | (7,455) | (54,101) | (22,162) | (18,149) | (11,038) | (19,017) | (15,154) | (13,154) | (101,867) | (58,363) | (57,582) |
Income tax benefit (provision) | 0 | (415) | (167) | (229) | (6,580) | 1,223 | 1,925 | 2,064 | (811) | (1,368) | 9,679 |
Net loss | $ (7,455) | $ (54,516) | $ (22,329) | $ (18,378) | $ (17,618) | $ (17,794) | $ (13,229) | $ (11,090) | $ (102,678) | $ (59,731) | $ (47,903) |
Net Loss per common share | |||||||||||
Basic (in USD per shares) | $ (0.18) | $ (1.34) | $ (0.56) | $ (0.46) | $ (0.45) | $ (0.46) | $ (0.34) | $ (0.29) | $ (2.54) | $ (1.54) | $ (1.29) |
Diluted (in USD per shares) | $ (0.18) | $ (1.34) | $ (0.56) | $ (0.46) | $ (0.55) | $ (0.46) | $ (0.34) | $ (0.32) | $ (2.54) | $ (1.54) | $ (1.29) |
Loss on extinguishment of debt | $ 17,042 | $ 0 | $ 0 |
Uncategorized Items - rtrx-2018
Label | Element | Value |
Additional Paid-in Capital [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 5,394,000 |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (4,868,000) |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 10,316,000 |