Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Jul. 28, 2017 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | CLVS | |
Entity Registrant Name | Clovis Oncology, Inc. | |
Entity Central Index Key | 1,466,301 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 48,879,354 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Revenues: | ||||
Product revenue, net | $ 14,620 | $ 21,665 | $ 0 | |
Operating expenses: | ||||
Cost of sales - product | 2,730 | 3,893 | 0 | |
Cost of sales - intangible asset amortization | 372 | 743 | 0 | |
Research and development | 33,108 | $ 67,729 | 65,555 | 142,337 |
Selling, general and administrative | 36,149 | 9,552 | 65,373 | 19,379 |
Acquired in-process research and development | 300 | 300 | ||
Impairment of intangible asset | 104,517 | 104,517 | ||
Change in fair value of contingent purchase consideration | (25,452) | 0 | (24,936) | |
Total expenses | 72,359 | 156,646 | 135,564 | 241,597 |
Operating loss | (57,739) | (156,646) | (113,899) | (241,597) |
Other income (expense): | ||||
Interest expense | (2,598) | (2,106) | (5,178) | (4,210) |
Foreign currency gain (loss) | 76 | 183 | (83) | (368) |
Legal settlement loss, net of insurance receivable | (117,000) | (117,000) | ||
Other income | 594 | 196 | 946 | 221 |
Other income (expense), net | (118,928) | (1,727) | (121,315) | (4,357) |
Loss before income taxes | (176,667) | (158,373) | (235,214) | (245,954) |
Income tax benefit | 1,281 | 29,059 | 1,365 | 33,240 |
Net loss | (175,386) | (129,314) | (233,849) | (212,714) |
Other comprehensive income | ||||
Foreign currency translation adjustments, net of tax | 2,812 | (1,381) | 3,279 | 2,132 |
Net unrealized gain (loss) on available-for-sale securities, net of tax | 48 | (5) | 278 | |
Other comprehensive income (loss) | 2,812 | (1,333) | 3,274 | 2,410 |
Comprehensive loss | $ (172,574) | $ (130,647) | $ (230,575) | $ (210,304) |
Loss per basic and diluted common share: | ||||
Basic and diluted net loss per common share | $ (3.88) | $ (3.37) | $ (5.24) | $ (5.54) |
Basic and diluted weighted average common shares outstanding | 45,176 | 38,389 | 44,610 | 38,375 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 491,786 | $ 216,186 |
Accounts receivable, net | 1,143 | 121 |
Insurance receivable | 25,000 | |
Inventories | 6,478 | 0 |
Available-for-sale securities | 179,744 | 49,997 |
Prepaid research and development expenses | 4,854 | 6,427 |
Other current assets | 6,766 | 6,679 |
Total current assets | 715,771 | 279,410 |
Property and equipment, net | 4,155 | 4,440 |
Intangible assets, net | 20,304 | 21,047 |
Goodwill | 62,018 | 57,192 |
Other assets | 47,648 | 2,468 |
Total assets | 849,896 | 364,557 |
Current liabilities: | ||
Accounts payable | 13,360 | 10,912 |
Accrued research and development expenses | 21,158 | 35,198 |
Milestone liability | 21,011 | 20,062 |
Accrued liability for legal settlement | 142,000 | |
Other accrued expenses | 21,848 | 19,487 |
Total current liabilities | 219,377 | 85,659 |
Deferred income taxes, net | 632 | 0 |
Convertible senior notes | 281,761 | 281,126 |
Deferred rent, long-term | 4,333 | 1,406 |
Total liabilities | 506,103 | 368,191 |
Commitments and contingencies (Note 14) | ||
Stockholders' equity (deficit): | ||
Preferred stock, par value $0.001 per share; 10,000,000 shares authorized, no shares issued and outstanding at June 30, 2017 and December 31, 2016 | ||
Common stock, $0.001 par value per share, 100,000,000 shares authorized at June 30, 2017 and December 31, 2016; 48,843,131 and 38,724,090 shares issued and outstanding at June 30, 2017 and December 31, 2016 respectively | 49 | 39 |
Additional paid-in capital | 1,752,943 | 1,174,950 |
Accumulated other comprehensive loss | (44,306) | (47,580) |
Accumulated deficit | (1,364,893) | (1,131,043) |
Total stockholders' equity (deficit) | 343,793 | (3,634) |
Total liabilities and stockholders' equity (deficit) | $ 849,896 | $ 364,557 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2017 | Dec. 31, 2016 |
Consolidated Balance Sheets | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 48,843,131 | 38,724,090 |
Common stock, shares outstanding | 48,843,131 | 38,724,090 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Operating activities | ||
Net Loss | $ (233,849) | $ (212,714) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Share-based compensation expense | 19,563 | 20,542 |
Depreciation and amortization | 1,281 | 550 |
Amortization of premiums and discounts on available-for-sale securities | 245 | 151 |
Amortization of debt issuance costs | 635 | 616 |
Legal settlement loss, net of insurance receivable | 117,000 | |
Impairment of intangible asset | 104,517 | |
Change in fair value of contingent purchase consideration | 0 | (24,661) |
Loss on disposal of property and equipment | 0 | 170 |
Deferred income taxes | (1,266) | (33,207) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (1,023) | 0 |
Inventory | (6,478) | 0 |
Prepaid and accrued research and development expenses | (15,162) | (12,772) |
Other operating assets | (36,855) | 1,260 |
Accounts payable | 3,202 | 3,608 |
Other accrued expenses | 3,166 | 270 |
Net cash used in operating activities | (149,541) | (151,670) |
Investing activities | ||
Purchases of property and equipment | (249) | (756) |
Deposits for purchases of property and equipment | (2,515) | 0 |
Purchases of available-for-sale securities | (180,000) | 0 |
Maturities of available-for-sale securities | 50,000 | 100,000 |
Acquired in-process research and development - milestone payment | (1,100) | 0 |
Net cash (used in) provided by investing activities | (133,864) | 99,244 |
Financing activities | ||
Proceeds from the sale of common stock, net of issuance costs | 546,170 | 0 |
Proceeds from the exercise of stock options and employee stock purchases | 12,270 | 1,943 |
Net cash provided by financing activities | 558,440 | 1,943 |
Effect of exchange rate changes on cash and cash equivalents | 565 | 106 |
Increase (decrease) in cash and cash equivalents | 275,600 | (50,377) |
Cash and cash equivalents at beginning of period | 216,186 | 278,756 |
Cash and cash equivalents at end of period | 491,786 | 228,379 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 3,594 | 3,594 |
Non-cash investing and financing activities: | ||
Vesting of restricted stock units | $ 2,627 | $ 34 |
Nature of Business and Basis of
Nature of Business and Basis of Presentation | 6 Months Ended |
Jun. 30, 2017 | |
Nature of Business and Basis of Presentation | |
Nature of Business and Basis of Presentation | 1. Nature of Business and Basis of Presentation Clovis Oncology, Inc. (together with its consolidated subsidiaries, the “Company”, “Clovis”, “we”, “our”, “us”) is a biopharmaceutical company focused on acquiring, developing and commercializing innovative anti-cancer agents in the United States, Europe and other international markets. We have and intend to continue to license or acquire rights to oncology compounds in all stages of development. In exchange for the right to develop and commercialize these compounds, we generally expect to provide the licensor with a combination of upfront payments, milestone payments and royalties on future sales. In addition, we generally expect to assume the responsibility for future drug development and commercialization costs. We currently operate in one segment. Since inception, our operations have consisted primarily of developing in-licensed compounds, evaluating new product acquisition candidates and general corporate activities. During the second quarter of 2016, we completed the submission of our New Drug Application (“NDA”) with the U.S. Food and Drug Administration (“FDA”) for approval of rucaparib in the U.S. On December 19, 2016, the FDA approved Rubraca® (rucaparib) tablets as monotherapy for the treatment of patients with deleterious BRCA mutation (germline and/or somatic) associated advanced ovarian cancer who have been treated with two or more chemotherapies, and selected for therapy based on an FDA-approved companion diagnostic for Rubraca. We began selling Rubraca in the U.S. in the fourth quarter of 2016. Our Marketing Authorization Application (MAA) for rucaparib that was submitted to the European Medicines Agency (“EMA”) for an ovarian cancer treatment indication comparable to what was approved by the FDA is currently under review. We anticipate an opinion from the Committee for Medicinal Products for Human Use (CHMP) in late 2017, and, pending a favorable opinion from the CHMP, a potential approval would follow during the first quarter of 2018. Following a potential approval for the treatment indication, we intend to submit a supplemental application for the second-line or later maintenance treatment indication, for which we anticipate a potential approval during the third quarter of 2018. Basis of Presentation All financial information presented includes the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The unaudited financial statements of Clovis Oncology, Inc. included herein reflect all adjustments, consisting only of normal recurring adjustments that, in the opinion of management, are necessary to fairly state our financial position, results of operations and cash flows for the periods presented herein. Interim results may not be indicative of the results that may be expected for the full year. Certain information and footnote disclosures normally included in audited financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto which are included in our Annual Report on Form 10-K for the year ended December 31, 2016 (“2016 Form 10-K”) for a broader discussion of our business and the opportunities and risks inherent in such business. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, expenses and revenue and related disclosures. On an ongoing basis, we evaluate our estimates, including estimates related to revenue deductions, intangible asset impairment, clinical trial accruals and share-based compensation expense. We base our estimates on historical experience and other market-specific or other relevant assumptions that we believe to be reasonable under the circumstances. Actual results may differ from those estimates or assumptions. Liquidity We have incurred significant net losses since inception and have relied on our ability to fund our operations through debt and equity financings. We expect operating losses and negative cash flows to continue for the foreseeable future. As we continue to incur losses, transition to profitability is dependent upon achieving a level of revenues from Rubraca adequate to support our cost structure. We may never achieve profitability, and unless or until we do, we will continue to need to raise additional cash. In January 2017, we sold 5,750,000 shares of our common stock in a public offering at $41.00 per share. The net proceeds from the offering were $221.2 million, after deducting underwriting discounts and commissions and offering expenses. In June 2017, we sold 3,920,454 shares of our common stock in a public offering at $88.00 per share. The net proceeds from the offering were $324.9 million, after deducting underwriting discounts and commissions and offering expenses. We intend to use the net proceeds of the offerings for general corporate purposes, including sales and marketing expenses associated with Rubraca in the United States and, if approved by the EMA, in Europe, funding of our development programs, selling, general and administrative expenses, acquisition or licensing of additional product candidates or businesses and working capital. Based on current estimates, we believe that our existing cash, cash equivalents and available-for-sale securities will allow us to fund our operating plan through at least the next 12 months. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2017 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Revenue Recognition Product revenue is derived from sales of our product, Rubraca, in the United States. We distribute our product in the U.S. principally through a limited number of specialty distributor and specialty pharmacy providers, collectively, our customers. Our customers subsequently resell our products to patients and healthcare providers. Separately, we have arrangements with certain payors and other third parties that provide for government-mandated and privately-negotiated rebates, chargebacks and other discounts. Revenues from product sales are recognized when persuasive evidence of an arrangement exists, delivery has occurred and title of the product and associated risk of loss has passed to the customer, the price is fixed or determinable, collection from the customer has been reasonably assured and all performance obligations have been met and returns and allowances can be reasonably estimated. Revenue is recorded net of estimated rebates, chargebacks, discounts and other deductions as well as estimated product returns (collectively, “sales deductions”). We only recognize revenue on product sales once the product is resold to the patient or healthcare provider by the specialty distributor or specialty pharmacy provider, therefore reducing the significance of estimates made for product returns. To date, we have not had any product returns and, we currently do not have an accrual for product returns. We will continue to assess our estimate for product returns as we gain additional historical experience. Cost of Sales – Product Product cost of sales consists primarily of materials, third-party manufacturing costs as well as freight and royalties owed to our licensing partners for Rubraca sales. Based on our policy to expense costs associated with the manufacture of our products prior to regulatory approval, certain of the manufacturing costs of Rubraca units recognized as revenue during the three and six months ended June 30, 2017 were expensed prior to the December 19, 2016 FDA approval, and therefore are not included in costs of sales during the current period. We expect cost of sales to increase in relation to product revenues as we deplete these inventories and we expect to use the remaining pre-commercialization inventory for product sales through the third quarter of 2017. Cost of Sales – Intangible Asset Amortization Cost of sales for intangible asset amortization consists of the amortization of capitalized milestone payments made to our licensing partners upon FDA approval of Rubraca. Milestone payments are amortized on a straight-line basis over the estimated remaining patent life of Rubraca. Inventory Inventories are stated at the lower of cost or estimated net realizable value, on a first-in, first-out, or FIFO, basis. We began capitalizing incurred inventory related costs upon the regulatory approval of Rubraca. Prior to the regulatory approval of Rubraca, we incurred costs for the manufacture of the drug that could potentially be available to support the commercial launch of Rubraca and all such costs were recognized as research and development expense. We periodically analyze our inventory levels, and write down inventory that has become obsolete, inventory that has a cost basis in excess of its estimated realizable value and/or inventory in excess of expected sales requirements as cost of product revenues. Expired inventory would be disposed of and the related costs would be written off as cost of product revenues. The active pharmaceutical ingredient (“API”) in Rubraca is currently produced by a single supplier. As the API has undergone significant manufacturing specific to its intended purpose at the point it is purchased by us, we classify the API as work-in-process inventory. Our other significant accounting policies are described in Note 2, Summary of Significant Accounting Policies of the Notes to the Consolidated Financial Statements included in our 2016 Form 10-K. From time to time, the Financial Accounting Standards Board (“FASB”) or other standards setting bodies issue new accounting pronouncements. Updates to the FASB Accounting Standards Codification (“ASC”) are communicated through issuance of an Accounting Standards Update (“ASU”). Recently Issued Accounting Standards In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers” and has subsequently issued several supplemental and/or clarifying ASUs (collectively, “ASC 606”). ASC 606 prescribes a single common revenue standard that replaces most existing U.S. GAAP revenue recognition guidance. ASC 606 is intended to provide a more consistent interpretation and application of the principles outlined in the standard across filers in multiple industries and within the same industries compared to current practices, which should improve comparability. Adoption of ASC 606 is required for annual and interim periods beginning after December 15, 2017. Upon adoption, we must elect to adopt either retrospectively to each prior reporting period presented or use the modified retrospective transition method with the cumulative effect of initial adoption recognized at the date of initial application. We expect to apply the new standard using the modified retrospective method upon its adoption date on January 1, 2018. We have begun a comprehensive scoping process to identify and disaggregate all revenue streams that may be impacted by the adoption of ASC 606. To date, we have examined our revenue recognition policy specific to revenue streams from representative contracts governing product sales from Rubraca and have come to preliminary conclusions on the impact of the new standard using the 5-step process prescribed by ASC 606. However, a detailed analysis of individual contracts representative of each of the revenue streams planned for the assessment phase of our implementation plan may impact these preliminary conclusions. We are continuing to assess ASC 606’s impact on our financial statements. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842),” which requires lessees to recognize assets and liabilities for the rights and obligations created by most leases on their balance sheet. The guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted. ASU 2016-02 requires modified retrospective adoption for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. We are currently evaluating the impact the standard may have on our consolidated financial statements and related disclosures. In January 2017, the FASB issued ASU No. 2017-01, “Clarifying the Definition of a Business,” which clarifies the definition of a business in ASC 805. The guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early application is permitted. Currently, there is no impact to our consolidated financial statements and related disclosures, but we will adopt on January 1, 2018 for any business combinations and will consider adopting early for any acquisitions prior to January 1, 2018. In May 2017, the FASB issued ASU 2017-09, “Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting”, which amends the scope of modification accounting for share-based payment arrangements. The ASU provides guidance on the types of changes to the terms or conditions of share-based payment awards to which we would be required to apply modification accounting under ASC 718. Specifically, we would not apply modification accounting if the fair value, vesting conditions, and classification of the awards are the same immediately before and after the modification. The guidance is effective for annual reporting periods, including interim period within those annual periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period. We are currently evaluating the impact the standard may have on our consolidated financial statements and related disclosures should we have a modification to our share-based payment awards in the future. |
Financial Instruments and Fair
Financial Instruments and Fair Value Measurements | 6 Months Ended |
Jun. 30, 2017 | |
Financial Instruments and Fair Value Measurements | |
Financial Instruments and Fair Value Measurements | 3. Financial Instruments and Fair Value Measurements Fair value is defined as the exchange price that would be received to sell an asset or paid to transfer a liability (at exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The three levels of inputs that may be used to measure fair value include: Level 1: Quoted prices in active markets for identical assets or liabilities. Our Level 1 assets consist of money market investments. We do not have Level 1 liabilities. Level 2: Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities in active markets or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Our Level 2 assets consist of U.S. treasury securities. We do not have Level 2 liabilities. Level 3: Unobservable inputs that are supported by little or no market activity. We do not have Level 3 assets or liabilities that are measured at fair value on a recurring basis. The following table identifies our assets and liabilities that were measured at fair value on a recurring basis (in thousands): Balance Level 1 Level 2 Level 3 June 30, 2017 Assets: Money market $ 450,588 $ 450,588 $ — $ — U.S. treasury securities 179,744 — 179,744 — Total assets at fair value $ 630,332 $ 450,588 $ 179,744 $ — December 31, 2016 Assets: Money market $ 202,361 $ 202,361 $ — $ — U.S. treasury securities 49,997 — 49,997 — Total assets at fair value $ 252,358 $ 202,361 $ 49,997 $ — There were no transfers between the Level 1 and Level 2 categories or into or out of the Level 3 category during the three and six months ended June 30, 2017. Financial instruments not recorded at fair value include our convertible senior notes. At June 30, 2017, the carrying amount of the convertible senior notes was $281.8 million, which represents the aggregate principal amount net of remaining debt issuance costs, and the fair value was $487.0 million. The fair value was determined using Level 2 inputs based on the indicative pricing published by certain investment banks or trading levels of the Notes, which are not listed on any securities exchange or quoted on an inter-dealer automated quotation system. See Note 9, Convertible Senior Notes for discussion of the convertible senior notes. |
Available-for-Sale Securities
Available-for-Sale Securities | 6 Months Ended |
Jun. 30, 2017 | |
Available-for-Sale Securities | |
Available-for-Sale Securities | 4. Available-for-Sale Securities As of June 30, 2017, available-for-sale securities consisted of the following (in thousands): Gross Gross Aggregate Amortized Unrealized Unrealized Fair Cost Gains Losses Value U.S. treasury securities $ 179,758 $ — $ (14) $ 179,744 As of December 31, 2016, available-for-sale securities consisted of the following (in thousands): Gross Gross Aggregate Amortized Unrealized Unrealized Fair Cost Gains Losses Value U.S. treasury securities $ 50,004 $ — $ (7) $ 49,997 As of June 30, 2017, the fair value and gross unrealized losses of available-for-sale securities that have been in a continuous unrealized loss position for less than 12 months were as follows (in thousands): Aggregate Gross Fair Unrealized Value Losses U.S. treasury securities $ 179,744 $ (14) We have concluded that decline in the market value of the available-for-sales securities is temporary. A decline in the market value of a security below its cost that is deemed to be other than temporary is charged to earnings and results in the establishment of a new cost basis for the security. Factors evaluated to determine if an investment is other-than-temporarily impaired include significant deterioration in earnings performance, credit rating, asset quality or business prospects of the issuer; adverse changes in the general market conditions in which the issuer operates; and our intent and ability to hold the security until an anticipated recovery in value occurs. As of June 30, 2017, the amortized cost and fair value of available-for-sale securities by contractual maturity were (in thousands): Amortized Fair Cost Value Due in one year or less $ 179,758 $ 179,744 Due in one year to two years — — Total $ 179,758 $ 179,744 |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2017 | |
Inventories | |
Inventories | 5. Inventories We generally have two categories of inventory: work-in-process and finished goods. As of June 30, 2017, the carrying value of all of our product inventory, which consisted only of the Rubraca API, was categorized as work-in-process. The costs related to our finished goods on-hand as of June 30, 2017 were expensed as incurred prior to the commercialization of Rubraca on December 19, 2016. The carrying value of our inventory as of December 31, 2016 was zero. At June 30, 2017, other assets on the Consolidated Balance Sheets includes a cash deposit of $31.8 million made to a manufacturer for the purchase of inventory which we do not expect to be commercially consumed within the next twelve months. |
Other Current Assets
Other Current Assets | 6 Months Ended |
Jun. 30, 2017 | |
Other Current Assets [Abstract] | |
Other Current Assets | 6. Other Current Assets Other current assets were comprised of the following (in thousands): June 30, December 31, 2017 2016 Receivable from partners $ 52 $ 2,882 Prepaid insurance 817 1,234 Prepaid expenses - other 3,012 2,109 Receivable - other 2,750 364 Other 135 90 Total $ 6,766 $ 6,679 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 6 Months Ended |
Jun. 30, 2017 | |
Intangible Assets and Goodwill | |
Intangible Assets and Goodwill | 7. Intangible Assets and Goodwill Intangible assets related to capitalized milestones under license agreements consisted of the following (in thousands): June 30, December 31, 2017 2016 Intangible asset - milestones $ 21,100 $ 21,100 Accumulated amortization (796) (53) Total intangible asset, net $ 20,304 $ 21,047 The estimated useful lives of these intangible assets are based on the estimated remaining patent life of Rubraca and extend through 2031. We recorded amortization expense of $0.4 million and $0.8 million related to capitalized milestone payments during the three and six months ended June 30, 2017, respectively, included in cost of sales – intangible asset amortization at the Consolidated Statements of Operations and Comprehensive Loss. There was no amortization expense during the three and six months ended June 30, 2016. Estimated future amortization expense associated with intangibles is expected to be as follows (in thousands): 2017 (remaining) $ 743 2018 1,486 2019 1,486 2020 1,486 2021 1,486 Thereafter 13,617 $ 20,304 The change in goodwill established as part of the purchase accounting of EOS in November 2013 consisted of the following (in thousands): Balance at December 31, 2016 $ 57,192 Change in foreign currency gains and losses 4,826 Balance at June 30, 2017 $ 62,018 |
Other Accrued Expenses
Other Accrued Expenses | 6 Months Ended |
Jun. 30, 2017 | |
Payables And Accruals [Abstract] | |
Other Accrued Expenses | 8. Other Accrued Expenses Other accrued expenses were comprised of the following (in thousands): June 30, December 31, 2017 2016 Accrued personnel costs $ 11,928 $ 15,850 Accrued interest payable 2,097 2,096 Income tax payable 662 556 Accrued corporate legal fees and professional services 1,072 589 Accrued royalties 2,551 — Accrued sales deductions 1,003 — Accrued expenses - other 2,535 396 Total $ 21,848 $ 19,487 |
Convertible Senior Notes
Convertible Senior Notes | 6 Months Ended |
Jun. 30, 2017 | |
Convertible Senior Notes, | |
Convertible Senior Notes | 9. Convertible Senior Notes On September 9, 2014, we completed a private placement of $287.5 million aggregate principal amount of 2.5% convertible senior notes due 2021 (the “Notes”) resulting in net proceeds of $278.3 million after deducting offering expenses. In accordance with the accounting guidance, the conversion feature did not meet the criteria for bifurcation, and the entire principal amount was recorded as a long-term liability on the Consolidated Balance Sheets. The Notes are governed by the terms of the indenture between the Company, as issuer, and The Bank of New York Mellon Trust Company, N.A., as trustee. The Notes are senior unsecured obligations and bear interest at a rate of 2.5% per year, payable semi-annually in arrears on March 15 and September 15 of each year. The Notes will mature on September 15, 2021, unless earlier converted, redeemed or repurchased. Holders may convert all or any portion of the Notes at any time prior to the close of business on the business day immediately preceding the maturity date. Upon conversion, the holders will receive shares of our common stock at an initial conversion rate of 16.1616 shares per $1,000 in principal amount of Notes, equivalent to a conversion price of approximately $61.88 per share. The conversion rate is subject to adjustment upon the occurrence of certain events described in the indenture, but will not be adjusted for any accrued and unpaid interest. In addition, following certain corporate events that occur prior to the maturity date or upon our issuance of a notice of redemption, we will increase the conversion rate for holders who elect to convert the Notes in connection with such a corporate event or during the related redemption period in certain circumstances. On or after September 15, 2018, we may redeem the Notes, at our option, in whole or in part, if the last reported sale price of our common stock has been at least 150% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period ending not more than two trading days preceding the date on which we provide written notice of redemption at a redemption price equal to 100% of the principal amount of the Notes to be redeemed plus accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the Notes. If we undergo a fundamental change, as defined in the indenture, prior to the maturity date of the Notes, holders may require us to repurchase for cash all or any portion of the Notes at a fundamental change repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. The Notes rank senior in right of payment to any of our indebtedness that is expressly subordinated in right of payment to the Notes; equal in right of payment to all of our liabilities that are not so subordinated; effectively junior in right of payment to any secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities (including trade payables) of our subsidiaries. In connection with the issuance of the Notes, we incurred $9.2 million of debt issuance costs. The debt issuance costs are presented as a deduction from convertible senior notes on the Consolidated Balance Sheets and are amortized as interest expense over the expected life of the Notes using the effective interest method. We determined the expected life of the debt was equal to the seven-year term of the Notes. As of June 30, 2017 and December 31, 2016, the balance of unamortized debt issuance costs was $5.7 million and $6.4 million, respectively . The following table sets forth total interest expense recognized during the three and six months ended June 30, 2017 and 2016 (in thousands): Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 Contractual interest expense $ 1,797 $ 1,797 $ 3,594 $ 3,594 Accretion of interest on milestone liability 483 — 949 — Amortization of debt issuance costs 318 309 635 616 Total interest expense $ 2,598 $ 2,106 $ 5,178 $ 4,210 |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2017 | |
Stockholders’ Equity | |
Stockholders' Equity | 10. Stockholders’ Equity Common Stock In January 2017, we sold 5,750,000 shares of our common stock in a public offering at $41.00 per share. The net proceeds from the offering were $221.2 million, after deducting underwriting discounts and commissions and offering expenses. In June 2017, we sold 3,920,454 shares of our common stock in a public offering at $88.00 per share. The net proceeds from the offering were $324.9 million, after deducting underwriting discounts and commissions and offering expenses. The holders of common stock are entitled to one vote per share on all matters to be voted upon by our stockholders. Subject to the preferences that may be applicable to any outstanding shares of preferred stock, the holders of common stock are entitled to receive ratably such dividends, if any, as may be declared by our Board of Directors. Accumulated Other Comprehensive Loss Accumulated other comprehensive loss consists of changes in foreign currency translation adjustments, which includes changes in a subsidiary’s functional currency, and unrealized gains and losses on available-for-sale securities. The changes in accumulated balances related to each component of other comprehensive income (loss) are summarized for the three months ended June 30, 2017 and 2016 as follows (in thousands): Foreign Currency Unrealized Total Accumulated Translation Adjustments (Losses) Gains Other Comprehensive Loss 2017 2016 2017 2016 2017 2016 Balance at April 1, $ (46,967) $ (43,564) $ (151) $ (153) $ (47,118) $ (43,717) Other comprehensive income (loss) 4,451 (2,170) (3) 76 4,448 (2,094) Total before tax (42,516) (45,734) (154) (77) (42,670) (45,811) Tax effect (1,639) 789 3 (28) (1,636) 761 Balance at June 30, $ (44,155) $ (44,945) $ (151) $ (105) $ (44,306) $ (45,050) The changes in accumulated balances related to each component of other comprehensive income (loss) are summarized for the six months ended June 30, 2017 and 2016 as follows (in thousands): Foreign Currency Unrealized Total Accumulated Translation Adjustments (Losses) Gains Other Comprehensive Loss 2017 2016 2017 2016 2017 2016 Balance at December 31, $ (47,434) $ (47,077) $ (146) $ (383) $ (47,580) $ (47,460) Other comprehensive income (loss) 5,186 3,410 (8) 441 5,178 3,851 Total before tax (42,248) (43,667) (154) 58 (42,402) (43,609) Tax effect (1,907) (1,278) 3 (163) (1,904) (1,441) Balance at June 30, $ (44,155) $ (44,945) $ (151) $ (105) $ (44,306) $ (45,050) The period change in each of the periods presented was primarily due to the currency translation of the goodwill and deferred income taxes associated with the acquisition of EOS in November 2013. There were no reclassifications out of accumulated other comprehensive loss in each of the three and six months ended June 30, 2017 and 2016. |
Share-Based Compensation
Share-Based Compensation | 6 Months Ended |
Jun. 30, 2017 | |
Share-Based Compensation | |
Share-Based Compensation | 11. Share-Based Compensation Share-based compensation expense for all equity based programs, including stock options, restricted stock units and the employee stock purchase plan, for the three and six months ended June 30, 2017 and 2016 was recognized in the accompanying Consolidated Statements of Operations as follows (in thousands): Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 Research and development $ 4,825 $ 6,615 $ 8,991 $ 13,924 Selling, general and administrative 5,792 2,962 10,572 6,618 Total share-based compensation expense $ 10,617 $ 9,577 $ 19,563 $ 20,542 We did not recognize a tax benefit related to share-based compensation expense during the three and six months ended June 30, 2017 and 2016, respectively, as we maintain net operating loss carryforwards and have established a valuation allowance against the entire net deferred tax asset as of June 30, 2017. Stock Options The following table summarizes the activity relating to our options to purchase common stock for the six months ended June 30, 2017: Weighted Weighted Average Aggregate Average Remaining Intrinsic Number of Exercise Contractual Value Options Price Term (Years) (Thousands) Outstanding at December 31, 2016 5,520,482 $ 42.00 Granted 778,700 Exercised (372,464) Forfeited (199,985) Outstanding at June 30, 2017 5,726,733 $ 45.43 7.6 $ 276,451 Vested and expected to vest at June 30, 2017 5,364,276 $ 45.30 7.4 $ 259,650 Vested and exercisable at June 30, 2017 2,935,211 $ 44.63 6.2 $ 143,983 The aggregate intrinsic value in the table above represents the pretax intrinsic value, based on our closing stock price of $93.63 as of June 30, 2017, which would have been received by the option holders had all option holders with in-the-money options exercised their options as of that date. The following table summarizes information about our stock options as of and for the three and six months ended June 30, 2017 and 2016 (in thousands): Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 Weighted-average grant date fair value per share $ 44.94 $ 11.01 $ 46.53 $ 14.65 Intrinsic value of options exercised $ 4,759 $ 578,525 $ 14,284 $ 624,925 Cash received from stock option exercises $ 5,439 $ 352,423 $ 11,113 $ 407,523 As of June 30, 2017, the unrecognized share-based compensation expense related to unvested options, adjusted for expected forfeitures, was $83.4 million and the estimated weighted-average remaining vesting period was 2.6 years. Restricted Stock During 2016, we issued restricted stock units (“RSUs”) to certain employees under the 2011 Stock Incentive Plan. The RSUs vest either (i) over two years, with 50% vesting one year from the date of grant and the remaining 50% vesting two years from the date of grant or (ii) 25% vest one year from the date of grant with the remaining RSUs vesting ratably each subsequent quarter over the following three years, as defined in the grant agreement. Vested RSUs are payable in shares of our common stock at the end of the vesting period. RSUs are measured based on the fair value of the underlying stock on the grant date. The minimum statutory tax on the value of common stock shares issued to employees upon vesting are paid by us through the sale of registered shares of our common stock. The following table summarizes the activity relating to our unvested RSUs for the six months ended June 30, 2017: Weighted Average Number of Grant Date Units Fair Value Unvested at December 31, 2016 562,458 $ 24.70 Granted 214,984 61.67 Vested (44,443) 19.37 Forfeited (27,177) 24.08 Unvested as of June 30, 2017 705,822 $ 36.32 Expected to vest after June 30, 2017 604,394 $ 35.81 As of June 30, 2017, the unrecognized share-based compensation expense related to unvested RSUs, adjusted for expected forfeitures, was $18.5 million and the estimated weighted-average remaining vesting period was 3.4 years. |
License Agreements
License Agreements | 6 Months Ended |
Jun. 30, 2017 | |
License Agreements | |
License Agreements | 12. License Agreements In June 2011, we entered into a worldwide license agreement with Pfizer, Inc. to obtain exclusive global rights to develop and commercialize rucaparib, a small molecule inhibitor of poly (ADP-ribose) polymerase (“PARP”), used for the treatment of selected solid tumors. The exclusive rights are exclusive even as to Pfizer and include the right to grant sublicenses. Pursuant to the terms of the license agreement, we made a $7.0 million upfront payment to Pfizer and are required to make additional payments to Pfizer for the achievement of certain development and regulatory and sales milestones and royalties on sales as required by the license agreement. Prior to the FDA approval of rucaparib, discussed below, we made milestone payments of $1.4 million, which were recognized as acquired in-process research and development expense. On August 30, 2016, we entered into a first amendment to the worldwide license agreement with Pfizer, which amends the June 2011 existing worldwide license agreement to permit us to defer payment of the milestone payments payable upon (i) FDA approval of an NDA for 1 st Indication in US and (ii) EMA approval of an MAA for 1 st Indication in EU, to a date that is 18 months after the date of achievement of such milestones. In the event that we defer such milestone payments, we have agreed to certain higher payments related to the achievement of such milestones. On December 19, 2016, the FDA approved Rubraca (rucaparib) tablets as monotherapy for the treatment of patients with deleterious BRCA mutation (germline and/or somatic) associated advanced ovarian cancer who have been treated with two or more chemotherapies, and selected for therapy based on an FDA-approved companion diagnostic for Rubraca. The FDA approval resulted in a $0.75 million milestone payment to Pfizer as required by the license agreement, which was made in the first quarter of 2017. The FDA approval also resulted in the obligation to pay a $20.0 million milestone payment, for which we have exercised the option to defer payment by agreeing to pay $23.0 million within 18 months after the date of the FDA approval. These payments were recognized as intangible assets and will be amortized over the estimated remaining useful life of Rubraca. We are obligated under the license agreement to use commercially reasonable efforts to develop and commercialize rucaparib and we are responsible for all remaining development and commercialization costs for rucaparib. We are required to make regulatory milestone payments to Pfizer of up to an additional $69.75 million in aggregate if specified clinical study objectives and regulatory filings, acceptances and approvals are achieved. In addition, we are obligated to make sales milestone payments to Pfizer if specified annual sales targets for rucaparib are met, the majority of which relate to annual sales targets of $500.0 million and above, which, in the aggregate, could amount to total milestone payments of $170.0 million, and tiered royalty payments at a mid-teen percentage rate on our net sales, with standard provisions for royalty offsets to the extent we need to obtain any rights from third parties to commercialize rucaparib. In April 2012, we entered into a license agreement with AstraZeneca UK Limited to acquire exclusive rights associated with rucaparib under a family of patents and patent applications that claim methods of treating patients with PARP inhibitors in certain indications. The license enables the development and commercialization of rucaparib for the uses claimed by these patents. The FDA approval of rucaparib on December 19, 2016 resulted in a $0.35 million milestone obligation to AstraZeneca as required by the license agreement, which was paid in the first quarter of 2017. This payment was recognized in intangible assets and will be amortized over the estimated remaining useful life of rucaparib. AstraZeneca will also receive royalties on any net sales of rucaparib. We are party to other product license agreements for our other drug candidates, lucitanib and rociletinib (see our 2016 Form 10-K for additional details). We and Les Laboratories Servier (“Servier”) are developing lucitanib pursuant to a global development plan agreed to between the parties. Servier is responsible for all of the global development costs for lucitanib up to €80.0 million. Cumulative global development costs in excess of €80.0 million, if any, will be shared equally between us and Servier. We recorded a $0.1 million and $1.3 million receivable at June 30, 2017 and December 31, 2016, respectively, for the reimbursable development costs incurred under the global development plan, which is included in other current assets on the Consolidated Balance Sheets. For the three months ending June 30, 2017 and 2016, we incurred $0.0 million and $2.6 million, respectively, in research and development costs and recorded reductions in research and development expense of $0.1 million and $2.8 million, respectively, for reimbursable development costs due from Servier. For the six months ending June 30, 2017 and 2016, we incurred $0.9 million and $6.2 million, respectively, in research and development costs and recorded reductions in research and development expense of $1.0 million and $6.4 million, respectively, for reimbursable development costs due from Servier. During the second quarter of 2016, we and Servier agreed to discontinue the development of lucitanib for breast cancer and lung cancer and are continuing to evaluate, what, if any, further development of lucitanib will be pursued. Based on current estimates, we expect to complete the committed on-going development activities in 2017 and expect full reimbursement of our development costs from Servier. Reimbursements are recorded as a reduction to research and development expense on the Consolidated Statements of Operations. |
Net Loss Per Common Share
Net Loss Per Common Share | 6 Months Ended |
Jun. 30, 2017 | |
Loss per basic and diluted common share: | |
Net Loss Per Common Share | 13. Net Loss Per Common Share Basic net loss per share is calculated by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted-average number of common share equivalents outstanding using the treasury-stock method for the stock options and RSUs and the if-converted method for the Notes. As a result of our net losses for the periods presented, all potentially dilutive common share equivalents were considered anti-dilutive and were excluded from the computation of diluted net loss per share. The shares outstanding at the end of the respective periods presented in the table below were excluded from the calculation of diluted net loss per share due to their anti-dilutive effect (in thousands): Three and Six months ended June 30, 2017 2016 Common shares under option 6,373 455 Convertible senior notes 4,646 4,646 Total potential dilutive shares 11,019 5,101 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2017 | |
Commitments and Contingencies. | |
Commitments and Contingencies | 14. Commitments and Contingencies Royalty and License Fee Commitments We have entered into certain license agreements, as identified in Note 12, License Agreements , with third parties that include the payment of development and regulatory milestones, as well as royalty payments, upon the achievement of pre-established development, regulatory and commercial targets. Our payment obligation related to these license agreements is contingent upon the successful development, regulatory approval and commercialization of the licensed products. Due to the nature of these arrangements, the future potential payments are inherently uncertain, and accordingly, we only recognize payment obligations which are probable and estimable as of the balance sheet date. Milestone liabilities of $21.0 million and $20.1 million are recorded on our Consolidated Balance Sheets at June 30, 2017 and December 31, 2016, respectively, and relate to milestone payments for the licensing of our rucaparib product, which was approved by the FDA on December 19, 2016. Manufacture and Services Agreement Commitments On October 3, 2016, we entered into a Manufacturing and Services Agreement (the “Agreement”) with a non-exclusive third-party supplier for the production of the active ingredient for Rubraca. Under the terms of the Agreement, we will provide the third-party supplier a rolling forecast for the supply of the active ingredient in Rubraca that will be updated by us on a quarterly basis. We are obligated to order material sufficient to satisfy an initial quantity specified in any forecast. In addition, the third-party supplier will construct, in its existing facility, a production train that will be exclusively dedicated to the manufacture of the Rubraca active ingredient. We are obligated to make scheduled capital program fee payments toward capital equipment and other costs associated with the construction of the dedicated production train. Further, once the facility is operational, we are obligated to pay a fixed facility fee each quarter for the duration of the Agreement, which expires on December 31, 2025, unless extended by mutual consent of the parties. As of June 30, 2017, $183.6 million of purchase commitments exist under the Agreement. Legal Proceedings We and certain of our officers were named as defendants in several lawsuits, as described below. We cannot reasonably predict the outcome of these legal proceedings, nor can we estimate the amount of loss or range of loss, if any, that may result. An adverse outcome in these proceedings could have a material adverse effect on our results of operations, cash flows or financial condition. On November 19, 2015, Sonny P. Medina, a purported Clovis shareholder, filed a purported shareholder class action complaint in the United States District Court for the District of Colorado (the “Medina Complaint”). The Medina Complaint purported to be asserted on behalf of a class of persons who purchased Clovis stock between May 20, 2014 and November 13, 2015, and it generally alleged that Clovis and certain of its officers violated federal securities laws by making allegedly false and misleading statements regarding the progress toward FDA approval and the potential for market success of rociletinib. Throughout November and December 2015, three other purported shareholders filed similar purported class actions concerning alleged misstatements about rociletinib. On January 19, 2016, a number of motions were filed seeking to consolidate the shareholder class actions into one matter and for appointment of a lead plaintiff. On February 18, 2016, the Medina Court consolidated the various actions into a single proceeding and appointed M. Arkin (1999) LTD and Arkin Communications LTD (the “Arkin Plaintiffs”) as the lead plaintiffs and Bernstein Litowitz Berger & Grossmann LLP as lead counsel for the putative class. The Arkin Plaintiffs filed a consolidated complaint on May 6, 2016 (the “Consolidated Complaint”). The Consolidated Complaint named as defendants the Company and certain of its current and former officers (the “Clovis Defendants”), certain underwriters (the “Underwriter Defendants”) for a Company follow-on offering conducted in July 2015 (the “July 2015 Offering”), and certain Company venture capital investors (the “Venture Capital Defendants”). The Consolidated Complaint alleged that defendants violated particular sections of the Securities Exchange Act of 1934 (the “Exchange Act”) and the Securities Act of 1933 (the “Securities Act”). The purported misrepresentations and omissions concerned allegedly misleading statements about rociletinib. The consolidated action was purportedly brought on behalf of investors who purchased the Company’s securities between May 31, 2014 and April 7, 2016 (with respect to the Exchange Act claims) and investors who purchased the Company’s securities pursuant or traceable to the July 2015 Offering (with respect to the Securities Act claims). The Consolidated Complaint sought unspecified compensatory and recessionary damages. The Clovis Defendants, the Underwriter Defendants and the Venture Capital Defendants filed motions to dismiss on July 27, 2016. On February 9, 2017, the Medina Court issued an opinion and order granting in part and denying in part the Clovis Defendants’ motion to dismiss, granting in part and denying in part the Underwriter Defendants’ motion to dismiss, and granting the Venture Capital Defendants’ motion to dismiss. On February 22, 2017, the Arkin Plaintiffs filed an amended consolidated class action complaint, directed solely at repleading its Section 12(a) claims against the Underwriter Defendants. On March 14, 2017, the Clovis Defendants and the Arkin Plaintiffs participated in a mediation, which did not result in a settlement. On June 18, 2017, the Clovis Defendants entered into a stipulation and agreement of settlement with the Arkin Plaintiffs whereby Clovis will issue to the plaintiffs and participating class members a total consideration comprised of $25.0 million in cash and the issuance of a to be determined number of shares of Clovis common stock (the “Settlement Shares”) equal to $117.0 million divided by the volume weighted average price of Clovis common stock over the 10 trading days immediately preceding the date of the hearing set by the Medina Court to consider the final approval of the settlement. The cash portion of the consideration is expected to be funded by Clovis’ insurance carriers. At June 30, 2017, the liability for the issuance of the shares and cash, including the amount to be reimbursed through insurance proceeds, was recorded to accrued liability for legal settlement on the Consolidated Balance Sheets in the amount of approximately $142.0 million and a receivable of approximately $25.0 million from the insurance carriers on the Consolidated Balance Sheets. Clovis will issue the Settlement Shares no later than 5 business days after the date the judgment is entered by the Medina Court approving the settlement whereby the issuance of the shares will be recorded in common stock and additional paid-in capital and the accrued liability for legal settlement will be cleared. As the settlement agreement is in response to the alleged violation of securities laws by certain of our officers, we have determined that the resulting loss does not relate to activities that are in the normal course of our operations and therefore, should not be recognized in operating losses for the period. Accordingly, we have recognized the entire expense associated to the settlement agreement in legal settlement loss within the other income (expense), net of insurance receivable on the Consolidated Statements of Operations and Comprehensive Loss. On July 14, 2017, the Medina Court issued an order preliminarily approving the settlement. A final hearing to determine whether the settlement should be approved is scheduled for October 26, 2017. On January 22, 2016, the Electrical Workers Local #357 Pension and Health & Welfare Trusts, a purported shareholder of Clovis, filed a purported class action complaint (the “Electrical Workers Complaint”) against Clovis and certain of its officers, directors, investors and underwriters in the Superior Court of the State of California, County of San Mateo. The Electrical Workers Complaint purports to be asserted on behalf of a class of persons who purchased stock in the July 2015 Offering. The Electrical Workers Complaint generally alleges that the defendants violated the Securities Act because the offering documents for the July 2015 Offering contained allegedly false and misleading statements regarding the progress toward FDA approval and the potential for market success of rociletinib. The Electrical Workers Complaint seeks unspecified damages. On June 30, 2016, the Electrical Workers Plaintiffs filed an amended complaint asserting substantially similar claims (the “Electrical Workers Amended Complaint”). On September 23, 2016, following briefing and after hearing oral argument, the Electrical Workers Court granted defendants’ motion to stay proceedings pending resolution of the Medina action. Per the order to stay proceedings, the parties’ first status report as to the progress of the Medina action was filed on March 23, 2017. The parties’ second status report is due on September 21, 2017. The Company intends to vigorously defend against the allegations in the Electrical Workers Amended Complaint, but there can be no assurance that the defense will be successful. On November 10, 2016, Antipodean Domestic Partners (“Antipodean”) filed a complaint (the “Antipodean Complaint”) against Clovis and certain of its officers, directors and underwriters in New York Supreme Court, County of New York. The Antipodean Complaint alleges that the defendants violated certain sections of the Securities Act by making allegedly false statements to Antipodean and in the Offering Materials for the July 2015 Offering relating to the efficacy of rociletinib, its safety profile, and its prospects for market success. In addition to the Securities Act claims, the Antipodean Complaint also asserts Colorado state law claims and common law claims. Both the state law and common law claims are based on allegedly false and misleading statements regarding rociletinib’s progress toward FDA approval. The Antipodean Complaint seeks compensatory, recessionary, and punitive damages. On December 15, 2016, the Antipodean Plaintiffs filed an amended complaint (the “Antipodean Amended Complaint”) asserting substantially the same claims against the same defendants and purporting to correct certain details in the original Antipodean Complaint. On January 31, 2017, Defendants filed a motion to stay the Antipodean action pending resolution of the Medina action in the District of Colorado. Defendants also filed a motion to dismiss the Antipodean Amended Complaint on March 29, 2017. A hearing on both motions is scheduled for August 8, 2017. On March 14, 2017, the Clovis Defendants and Antipodean participated in a mediation, which did not result in a settlement. The Company intends to vigorously defend against the allegations in the Antipodean Amended Complaint. However, there can be no assurance that the defense will be successful. Clovis received a letter dated May 31, 2016 from an alleged owner of its common stock, which purports to set forth a demand for inspection of certain of our books and records pursuant to 8 Del. C. § 220 (the “Macalinao Demand Letter”). Clovis also received a letter dated December 15, 2016 from a second alleged owner of Clovis common stock, which purports to set forth a similar demand for inspection of the Company’s books and records pursuant to 8 Del. C. § 220 (the “McKenry Demand Letter”). Both the Macalinao and McKenry Demand Letters were purportedly made for the purposes of investigating alleged misconduct at the Company relating to rociletinib. Clovis submitted a response to the Macalinao Demand Letter on June 24, 2016, and likewise submitted a response to the McKenry Demand Letter on January 4, 2017. The Company produced certain books and records in response to the Macalinao and McKenry Demand Letters in January and February 2017, respectively. In March 2017, Macalinao and McKenry (the “Derivative Plaintiffs”) filed shareholder derivative complaints against certain directors and officers of the Company in the Court of Chancery of the State of Delaware. On May 4, 2017, the Macalinao and McKenry actions were consolidated for all purposes in a single proceeding under the caption In re Clovis Oncology, Inc. Derivative Litigation , Case No, 2017-0222 (the “Consolidated Derivative Action”). On May 18, 2017, the Derivative Plaintiffs filed the Consolidated Verified Shareholder Derivative Complaint (the “Consolidated Derivative Complaint”). The Consolidated Derivative Complaint generally alleged that the defendants breached their fiduciary duties owed to the Company by allegedly causing or allowing misrepresentations of the Company’s business operations and prospects, failing to ensure that the TIGER-X clinical trial was being conducted in accordance with applicable rules, regulations and protocols, and engaging in insider trading. The Consolidated Derivative Complaint purported to rely on documents produced by the Company in response to the Macalinao and McKenry Demand Letters. The Consolidated Derivative Complaint sought, among other things, an award of money damages. On July 13, 2017, the court ordered the following briefing schedule with respect to the defendants’ forthcoming motion to dismiss the Consolidated Derivative Complaint: Defendants’ motion to dismiss was due, and was filed, on July 31, 2017; Plaintiffs’ opposition is due on August 30, 2017; and Defendants’ reply is due on September 14, 2017. The Company intends to vigorously defend against the allegations in the Consolidated Derivative Complaint, but there can be no assurance that the defense will be successful. On May 10, 2017, John Solak, a purported shareholder of the Company, filed a shareholder derivative complaint in the Court of Chancery of the State of Delaware (the “Solak Complaint”) against certain directors and an officer of the Company. The Solak Complaint generally alleged that the defendants breached their fiduciary duties owed to the Company by adopting a compensation plan that overcompensated the non-employee director defendants, in relation to companies of comparable market capitalization and size. The Solak Complaint also alleged claims of waste of corporate assets and unjust enrichment due to this allegedly wrongful compensation plan. The Solak Complaint sought, among other things, an award of money damages and the imposition of corporate governance reforms. On June 12, 2017, the parties in the Solak action entered into a stipulation extending the defendants’ time to respond to the Solak Complaint until August 11, 2017, which was entered by the Court on June 20, 2017. The Company intends to vigorously defend against the allegations in the Solak Complaint, but there can be no assurance that the defense will be successful. On March 20, 2017, a purported shareholder of the Company, filed a shareholder derivative complaint (the “Guo Complaint”) against certain officers and directors of the Company in the United States District Court for the District of Colorado. The Guo Complaint generally alleged that the defendants breached their fiduciary duties owed to the Company by either recklessly or with gross negligence approving or permitting misrepresentations of the Company’s business operations and prospects. The Guo Complaint also alleged claims for waste of corporate assets and unjust enrichment. Finally, the Guo Complaint alleged that certain of the individual defendants violated Section 14(a) of the Securities Exchange Act, by allegedly negligently issuing, causing to be issued, and participating in the issuance of materially misleading statements to stockholders in the Company’s Proxy Statement on Schedule DEF 14A in connection with the 2015 Annual Meeting of Stockholders, held on June 11, 2015. The Guo Complaint sought, among other things, an award of money damages. On June 19, 2017, the parties filed a joint motion to stay the Guo action pending resolution of the motion to dismiss the Consolidated Derivative Complaint. On June 20, 2017, the court granted the motion to stay. The Company intends to vigorously defend against the allegations in the Guo Complaint, but there can be no assurance that the defense will be successful. In addition, the Company has received inquiries and requests for information from governmental agencies, including the U.S. Securities and Exchange Commission and the U.S. Department of Justice, relating to the Company’s regulatory update announcement in November 2015 that the FDA requested additional clinical data on the efficacy and safety of rociletinib. The Company is continuing to cooperate with these agencies with respect to their investigations. The proposed settlement of the Medina action does not resolve these inquiries and the Company cannot predict their timing or outcome. |
Nature of Business and Basis 20
Nature of Business and Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation All financial information presented includes the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The unaudited financial statements of Clovis Oncology, Inc. included herein reflect all adjustments, consisting only of normal recurring adjustments that, in the opinion of management, are necessary to fairly state our financial position, results of operations and cash flows for the periods presented herein. Interim results may not be indicative of the results that may be expected for the full year. Certain information and footnote disclosures normally included in audited financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto which are included in our Annual Report on Form 10-K for the year ended December 31, 2016 (“2016 Form 10-K”) for a broader discussion of our business and the opportunities and risks inherent in such business. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, expenses and revenue and related disclosures. On an ongoing basis, we evaluate our estimates, including estimates related to revenue deductions, intangible asset impairment, clinical trial accruals and share-based compensation expense. We base our estimates on historical experience and other market-specific or other relevant assumptions that we believe to be reasonable under the circumstances. Actual results may differ from those estimates or assumptions. |
Revenue Recognition | Revenue Recognition Product revenue is derived from sales of our product, Rubraca, in the United States. We distribute our product in the U.S. principally through a limited number of specialty distributor and specialty pharmacy providers, collectively, our customers. Our customers subsequently resell our products to patients and healthcare providers. Separately, we have arrangements with certain payors and other third parties that provide for government-mandated and privately-negotiated rebates, chargebacks and other discounts. Revenues from product sales are recognized when persuasive evidence of an arrangement exists, delivery has occurred and title of the product and associated risk of loss has passed to the customer, the price is fixed or determinable, collection from the customer has been reasonably assured and all performance obligations have been met and returns and allowances can be reasonably estimated. Revenue is recorded net of estimated rebates, chargebacks, discounts and other deductions as well as estimated product returns (collectively, “sales deductions”). We only recognize revenue on product sales once the product is resold to the patient or healthcare provider by the specialty distributor or specialty pharmacy provider, therefore reducing the significance of estimates made for product returns. To date, we have not had any product returns and, we currently do not have an accrual for product returns. We will continue to assess our estimate for product returns as we gain additional historical experience. |
Cost of Sales | Cost of Sales – Product Product cost of sales consists primarily of materials, third-party manufacturing costs as well as freight and royalties owed to our licensing partners for Rubraca sales. Based on our policy to expense costs associated with the manufacture of our products prior to regulatory approval, certain of the manufacturing costs of Rubraca units recognized as revenue during the three and six months ended June 30, 2017 were expensed prior to the December 19, 2016 FDA approval, and therefore are not included in costs of sales during the current period. We expect cost of sales to increase in relation to product revenues as we deplete these inventories and we expect to use the remaining pre-commercialization inventory for product sales through the third quarter of 2017. Cost of Sales – Intangible Asset Amortization Cost of sales for intangible asset amortization consists of the amortization of capitalized milestone payments made to our licensing partners upon FDA approval of Rubraca. Milestone payments are amortized on a straight-line basis over the estimated remaining patent life of Rubraca. |
Inventory | Inventory Inventories are stated at the lower of cost or estimated net realizable value, on a first-in, first-out, or FIFO, basis. We began capitalizing incurred inventory related costs upon the regulatory approval of Rubraca. Prior to the regulatory approval of Rubraca, we incurred costs for the manufacture of the drug that could potentially be available to support the commercial launch of Rubraca and all such costs were recognized as research and development expense. We periodically analyze our inventory levels, and write down inventory that has become obsolete, inventory that has a cost basis in excess of its estimated realizable value and/or inventory in excess of expected sales requirements as cost of product revenues. Expired inventory would be disposed of and the related costs would be written off as cost of product revenues. The active pharmaceutical ingredient (“API”) in Rubraca is currently produced by a single supplier. As the API has undergone significant manufacturing specific to its intended purpose at the point it is purchased by us, we classify the API as work-in-process inventory. Our other significant accounting policies are described in Note 2, Summary of Significant Accounting Policies of the Notes to the Consolidated Financial Statements included in our 2016 Form 10-K. From time to time, the Financial Accounting Standards Board (“FASB”) or other standards setting bodies issue new accounting pronouncements. Updates to the FASB Accounting Standards Codification (“ASC”) are communicated through issuance of an Accounting Standards Update (“ASU”). |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers” and has subsequently issued several supplemental and/or clarifying ASUs (collectively, “ASC 606”). ASC 606 prescribes a single common revenue standard that replaces most existing U.S. GAAP revenue recognition guidance. ASC 606 is intended to provide a more consistent interpretation and application of the principles outlined in the standard across filers in multiple industries and within the same industries compared to current practices, which should improve comparability. Adoption of ASC 606 is required for annual and interim periods beginning after December 15, 2017. Upon adoption, we must elect to adopt either retrospectively to each prior reporting period presented or use the modified retrospective transition method with the cumulative effect of initial adoption recognized at the date of initial application. We expect to apply the new standard using the modified retrospective method upon its adoption date on January 1, 2018. We have begun a comprehensive scoping process to identify and disaggregate all revenue streams that may be impacted by the adoption of ASC 606. To date, we have examined our revenue recognition policy specific to revenue streams from representative contracts governing product sales from Rubraca and have come to preliminary conclusions on the impact of the new standard using the 5-step process prescribed by ASC 606. However, a detailed analysis of individual contracts representative of each of the revenue streams planned for the assessment phase of our implementation plan may impact these preliminary conclusions. We are continuing to assess ASC 606’s impact on our financial statements. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842),” which requires lessees to recognize assets and liabilities for the rights and obligations created by most leases on their balance sheet. The guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted. ASU 2016-02 requires modified retrospective adoption for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. We are currently evaluating the impact the standard may have on our consolidated financial statements and related disclosures. In January 2017, the FASB issued ASU No. 2017-01, “Clarifying the Definition of a Business,” which clarifies the definition of a business in ASC 805. The guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early application is permitted. Currently, there is no impact to our consolidated financial statements and related disclosures, but we will adopt on January 1, 2018 for any business combinations and will consider adopting early for any acquisitions prior to January 1, 2018. In May 2017, the FASB issued ASU 2017-09, “Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting”, which amends the scope of modification accounting for share-based payment arrangements. The ASU provides guidance on the types of changes to the terms or conditions of share-based payment awards to which we would be required to apply modification accounting under ASC 718. Specifically, we would not apply modification accounting if the fair value, vesting conditions, and classification of the awards are the same immediately before and after the modification. The guidance is effective for annual reporting periods, including interim period within those annual periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period. We are currently evaluating the impact the standard may have on our consolidated financial statements and related disclosures should we have a modification to our share-based payment awards in the future. |
Convertible Senior Notes | The debt issuance costs are presented as a deduction from convertible senior notes on the Consolidated Balance Sheets and are amortized as interest expense over the expected life of the Notes using the effective interest method. We determined the expected life of the debt was equal to the seven-year term of the Notes. |
Lucitanib | Reimbursements are recorded as a reduction to research and development expense on the Consolidated Statements of Operations. |
Net Loss Per Common Share | Basic net loss per share is calculated by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted-average number of common share equivalents outstanding using the treasury-stock method for the stock options and RSUs and the if-converted method for the Notes. As a result of our net losses for the periods presented, all potentially dilutive common share equivalents were considered anti-dilutive and were excluded from the computation of diluted net loss per share. |
Financial Instruments and Fai21
Financial Instruments and Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Financial Instruments and Fair Value Measurements | |
Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table identifies our assets and liabilities that were measured at fair value on a recurring basis (in thousands): Balance Level 1 Level 2 Level 3 June 30, 2017 Assets: Money market $ 450,588 $ 450,588 $ — $ — U.S. treasury securities 179,744 — 179,744 — Total assets at fair value $ 630,332 $ 450,588 $ 179,744 $ — December 31, 2016 Assets: Money market $ 202,361 $ 202,361 $ — $ — U.S. treasury securities 49,997 — 49,997 — Total assets at fair value $ 252,358 $ 202,361 $ 49,997 $ — |
Available-for-Sale Securities (
Available-for-Sale Securities (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Available-for-Sale Securities | |
Summary of Available-for-Sale Securities | As of June 30, 2017, available-for-sale securities consisted of the following (in thousands): Gross Gross Aggregate Amortized Unrealized Unrealized Fair Cost Gains Losses Value U.S. treasury securities $ 179,758 $ — $ (14) $ 179,744 As of December 31, 2016, available-for-sale securities consisted of the following (in thousands): Gross Gross Aggregate Amortized Unrealized Unrealized Fair Cost Gains Losses Value U.S. treasury securities $ 50,004 $ — $ (7) $ 49,997 |
Summary of Fair Value and Gross Unrealized Losses of Available-for-Sale Securities in a Continuous Unrealized Loss Position | As of June 30, 2017, the fair value and gross unrealized losses of available-for-sale securities that have been in a continuous unrealized loss position for less than 12 months were as follows (in thousands): Aggregate Gross Fair Unrealized Value Losses U.S. treasury securities $ 179,744 $ (14) |
Summary of Amortized Cost and Fair Value of Available-for-Sale Securities by Contractual Maturity | As of June 30, 2017, the amortized cost and fair value of available-for-sale securities by contractual maturity were (in thousands): Amortized Fair Cost Value Due in one year or less $ 179,758 $ 179,744 Due in one year to two years — — Total $ 179,758 $ 179,744 |
Other Current Assets (Tables)
Other Current Assets (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Other Current Assets [Abstract] | |
Other Current Assets | Other current assets were comprised of the following (in thousands): June 30, December 31, 2017 2016 Receivable from partners $ 52 $ 2,882 Prepaid insurance 817 1,234 Prepaid expenses - other 3,012 2,109 Receivable - other 2,750 364 Other 135 90 Total $ 6,766 $ 6,679 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Intangible Assets and Goodwill | |
Intangible assets related to capitalized milestones under license agreements | Intangible assets related to capitalized milestones under license agreements consisted of the following (in thousands): June 30, December 31, 2017 2016 Intangible asset - milestones $ 21,100 $ 21,100 Accumulated amortization (796) (53) Total intangible asset, net $ 20,304 $ 21,047 |
Estimated future amortization expense for intangible assets | Estimated future amortization expense associated with intangibles is expected to be as follows (in thousands): 2017 (remaining) $ 743 2018 1,486 2019 1,486 2020 1,486 2021 1,486 Thereafter 13,617 $ 20,304 |
Summary of Goodwill | The change in goodwill established as part of the purchase accounting of EOS in November 2013 consisted of the following (in thousands): Balance at December 31, 2016 $ 57,192 Change in foreign currency gains and losses 4,826 Balance at June 30, 2017 $ 62,018 |
Other Accrued Expenses (Tables)
Other Accrued Expenses (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Payables And Accruals [Abstract] | |
Other Accrued Expenses | Other accrued expenses were comprised of the following (in thousands): June 30, December 31, 2017 2016 Accrued personnel costs $ 11,928 $ 15,850 Accrued interest payable 2,097 2,096 Income tax payable 662 556 Accrued corporate legal fees and professional services 1,072 589 Accrued royalties 2,551 — Accrued sales deductions 1,003 — Accrued expenses - other 2,535 396 Total $ 21,848 $ 19,487 |
Convertible Senior Notes (Table
Convertible Senior Notes (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Convertible Senior Notes, | |
Schedule of Total Interest Expense Recognized Related to Notes | The following table sets forth total interest expense recognized during the three and six months ended June 30, 2017 and 2016 (in thousands): Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 Contractual interest expense $ 1,797 $ 1,797 $ 3,594 $ 3,594 Accretion of interest on milestone liability 483 — 949 — Amortization of debt issuance costs 318 309 635 616 Total interest expense $ 2,598 $ 2,106 $ 5,178 $ 4,210 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Stockholders’ Equity | |
Component of Other Comprehensive Income (Loss) | The changes in accumulated balances related to each component of other comprehensive income (loss) are summarized for the three months ended June 30, 2017 and 2016 as follows (in thousands): Foreign Currency Unrealized Total Accumulated Translation Adjustments (Losses) Gains Other Comprehensive Loss 2017 2016 2017 2016 2017 2016 Balance at April 1, $ (46,967) $ (43,564) $ (151) $ (153) $ (47,118) $ (43,717) Other comprehensive income (loss) 4,451 (2,170) (3) 76 4,448 (2,094) Total before tax (42,516) (45,734) (154) (77) (42,670) (45,811) Tax effect (1,639) 789 3 (28) (1,636) 761 Balance at June 30, $ (44,155) $ (44,945) $ (151) $ (105) $ (44,306) $ (45,050) The changes in accumulated balances related to each component of other comprehensive income (loss) are summarized for the six months ended June 30, 2017 and 2016 as follows (in thousands): Foreign Currency Unrealized Total Accumulated Translation Adjustments (Losses) Gains Other Comprehensive Loss 2017 2016 2017 2016 2017 2016 Balance at December 31, $ (47,434) $ (47,077) $ (146) $ (383) $ (47,580) $ (47,460) Other comprehensive income (loss) 5,186 3,410 (8) 441 5,178 3,851 Total before tax (42,248) (43,667) (154) 58 (42,402) (43,609) Tax effect (1,907) (1,278) 3 (163) (1,904) (1,441) Balance at June 30, $ (44,155) $ (44,945) $ (151) $ (105) $ (44,306) $ (45,050) |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Share-Based Compensation | |
Share-Based Compensation Expense Recognized in Accompanying Statements of Operations | Share-based compensation expense for all equity based programs, including stock options, restricted stock units and the employee stock purchase plan, for the three and six months ended June 30, 2017 and 2016 was recognized in the accompanying Consolidated Statements of Operations as follows (in thousands): Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 Research and development $ 4,825 $ 6,615 $ 8,991 $ 13,924 Selling, general and administrative 5,792 2,962 10,572 6,618 Total share-based compensation expense $ 10,617 $ 9,577 $ 19,563 $ 20,542 |
Summary of Stock Options Activity | Weighted Weighted Average Aggregate Average Remaining Intrinsic Number of Exercise Contractual Value Options Price Term (Years) (Thousands) Outstanding at December 31, 2016 5,520,482 $ 42.00 Granted 778,700 Exercised (372,464) Forfeited (199,985) Outstanding at June 30, 2017 5,726,733 $ 45.43 7.6 $ 276,451 Vested and expected to vest at June 30, 2017 5,364,276 $ 45.30 7.4 $ 259,650 Vested and exercisable at June 30, 2017 2,935,211 $ 44.63 6.2 $ 143,983 |
Schedule of Share-Based Compensation Arrangements by Share-Based Payment Award | The following table summarizes information about our stock options as of and for the three and six months ended June 30, 2017 and 2016 (in thousands): Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 Weighted-average grant date fair value per share $ 44.94 $ 11.01 $ 46.53 $ 14.65 Intrinsic value of options exercised $ 4,759 $ 578,525 $ 14,284 $ 624,925 Cash received from stock option exercises $ 5,439 $ 352,423 $ 11,113 $ 407,523 |
Summary of activity related to our unvested RSUs | Weighted Average Number of Grant Date Units Fair Value Unvested at December 31, 2016 562,458 $ 24.70 Granted 214,984 61.67 Vested (44,443) 19.37 Forfeited (27,177) 24.08 Unvested as of June 30, 2017 705,822 $ 36.32 Expected to vest after June 30, 2017 604,394 $ 35.81 |
Net Loss Per Common Share (Tabl
Net Loss Per Common Share (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Loss per basic and diluted common share: | |
Shares Outstanding Excluded from Calculation of Diluted Net Loss Per Share | The shares outstanding at the end of the respective periods presented in the table below were excluded from the calculation of diluted net loss per share due to their anti-dilutive effect (in thousands): Three and Six months ended June 30, 2017 2016 Common shares under option 6,373 455 Convertible senior notes 4,646 4,646 Total potential dilutive shares 11,019 5,101 |
Nature of Business - Additional
Nature of Business - Additional Information (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 6 Months Ended | ||
Jun. 30, 2017USD ($)$ / sharesshares | Jan. 31, 2017USD ($)$ / sharesshares | Jun. 30, 2017USD ($)segment$ / sharesshares | Jun. 30, 2016USD ($) | |
Nature of Business and Basis of Presentation | ||||
Number of operating segments | segment | 1 | |||
Issuance of stock (in shares) | shares | 3,920,454 | 5,750,000 | 3,920,454 | |
Sale of stock, price per share | $ / shares | $ 88 | $ 41 | $ 88 | |
Proceeds from offering | $ | $ 324,900 | $ 221,200 | $ 546,170 | $ 0 |
Financial Instruments and Fai31
Financial Instruments and Fair Value Measurements - Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets at fair value | $ 630,332 | $ 252,358 |
Money Market | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets at fair value | 450,588 | 202,361 |
U.S. Treasury Securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets at fair value | 179,744 | 49,997 |
Fair Value, Inputs, Level 1 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets at fair value | 450,588 | 202,361 |
Fair Value, Inputs, Level 1 | Money Market | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets at fair value | 450,588 | 202,361 |
Fair Value, Inputs, Level 1 | U.S. Treasury Securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets at fair value | 0 | 0 |
Fair Value, Inputs, Level 2 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets at fair value | 179,744 | 49,997 |
Fair Value, Inputs, Level 2 | Money Market | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets at fair value | 0 | 0 |
Fair Value, Inputs, Level 2 | U.S. Treasury Securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets at fair value | 179,744 | 49,997 |
Fair Value, Inputs, Level 3 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets at fair value | 0 | 0 |
Fair Value, Inputs, Level 3 | Money Market | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets at fair value | 0 | 0 |
Fair Value, Inputs, Level 3 | U.S. Treasury Securities | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets at fair value | $ 0 | $ 0 |
Financial Instruments and Fai32
Financial Instruments and Fair Value Measurements - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2017 | Dec. 31, 2016 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Transfers between level 1 and level 2, assets | $ 0 | $ 0 | |
Transfers between level 2 and level 1, assets | 0 | 0 | |
Transfers between level 1 and level 2, liabilities | 0 | 0 | |
Transfers between level 2 and level 1, liabilities | 0 | 0 | |
Transfer of assets into level 3 | 0 | 0 | |
Transfer of assets out of level 3 | 0 | 0 | |
Transfer of liabilities into level 3 | 0 | 0 | |
Transfer of liabilities out of level 3 | 0 | 0 | |
Convertible senior notes | 281,761 | 281,761 | $ 281,126 |
Convertible Senior Notes. | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Convertible senior notes | 281,800 | 281,800 | |
Convertible Senior Notes. | Fair Value, Inputs, Level 2 | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Convertible senior notes, fair value | $ 487,000 | $ 487,000 |
Available-for-Sale Securities -
Available-for-Sale Securities - Summary of Available-for-Sale Securities (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | $ 179,758 | |
Aggregate Fair Value | 179,744 | |
U.S. Treasury Securities | ||
Schedule Of Available For Sale Securities [Line Items] | ||
Amortized Cost | 179,758 | $ 50,004 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (14) | (7) |
Aggregate Fair Value | $ 179,744 | $ 49,997 |
Available-for-Sale Securities34
Available-for-Sale Securities - Summary of Fair Value and Gross Unrealized Losses of Available-for-Sale Securities in a Continuous Unrealized Loss Position (Details) - U.S. Treasury Securities $ in Thousands | 6 Months Ended |
Jun. 30, 2017USD ($) | |
Schedule Of Available For Sale Securities [Line Items] | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Fair Value | $ 179,744 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Gross Unrealized Losses | $ (14) |
Available-for-Sale Securities35
Available-for-Sale Securities - Summary of Amortized Cost and Fair Value of Available-for-Sale Securities by Contractual Maturity (Details) $ in Thousands | Jun. 30, 2017USD ($) |
Available-for-Sale Securities | |
Amortized Cost, Due in one year or less | $ 179,758 |
Amortized Cost, Due in one year to two years | 0 |
Amortized Cost | 179,758 |
Fair Value, Due in one year or less | 179,744 |
Fair Value, Due in one year to two years | 0 |
Aggregate Fair Value | $ 179,744 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Inventories | ||
Inventory, Net | $ 6,478 | $ 0 |
Cash deposit for inventory | $ 31,800 |
Other Current Assets (Details)
Other Current Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Other Current Assets [Abstract] | ||
Receivable from partners | $ 52 | $ 2,882 |
Prepaid Insurance | 817 | 1,234 |
Prepaid expenses - other | 3,012 | 2,109 |
Receivable - other | 2,750 | 364 |
Other | 135 | 90 |
Total | $ 6,766 | $ 6,679 |
Intangible Assets and Goodwil38
Intangible Assets and Goodwill - Capitalized Milestones - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Intangible Assets and Goodwill | ||
Intangible asset - milestones | $ 21,100 | $ 21,100 |
Accumulated amortization | (796) | (53) |
Total intangible asset, net | $ 20,304 | $ 21,047 |
Intangible Assets and Goodwil39
Intangible Assets and Goodwill - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Intangible Assets and Goodwill | ||||
Amortization of Intangible Assets | $ 400 | $ 0 | $ 800 | $ 0 |
Intangible Assets and Goodwil40
Intangible Assets and Goodwill - Estimated Future Amortization (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Intangible Assets and Goodwill | ||
2017 (remaining) | $ 743 | |
2,018 | 1,486 | |
2,019 | 1,486 | |
2,020 | 1,486 | |
2,021 | 1,486 | |
Thereafter | 13,617 | |
Total intangible asset, net | $ 20,304 | $ 21,047 |
Intangible Assets and Goodwil41
Intangible Assets and Goodwill - Summary of Goodwill (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2017USD ($) | |
Goodwill: | |
Balance at beginning of period | $ 57,192 |
Change in foreign currency gains and losses | 4,826 |
Balance at end of period | $ 62,018 |
Other Accrued Expenses (Details
Other Accrued Expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Payables And Accruals [Abstract] | ||
Accrued personnel costs | $ 11,928 | $ 15,850 |
Accrued interest payable | 2,097 | 2,096 |
Income tax payable | 662 | 556 |
Accrued corporate legal fees and professional services | 1,072 | 589 |
Accrued royalties | 2,551 | |
Accrued sales deductions | 1,003 | |
Accrued expenses - other | 2,535 | 396 |
Other accrued expenses | $ 21,848 | $ 19,487 |
Convertible Senior Notes - Addi
Convertible Senior Notes - Additional Information (Details) - Convertible Senior Notes. $ / shares in Units, $ in Millions | Sep. 09, 2014USD ($)item$ / shares | Jun. 30, 2017USD ($)item | Dec. 31, 2016USD ($) |
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 287.5 | ||
Convertible senior notes, interest rate | 2.50% | ||
Net proceeds from convertible senior notes | $ 278.3 | ||
Convertible senior notes, maturity date | Sep. 15, 2021 | ||
Common stock initial conversion rate per $1,000 in principal amount | 16.1616 | ||
Convertible senior notes, initial conversion price per share | $ / shares | $ 61.88 | ||
Debt instrument, redemption period start date | Sep. 15, 2018 | ||
Last reported sale price of common stock | 150.00% | ||
Debt instrument, conversion in effect for number of trading days | item | 20 | ||
Debt instrument conversion, consecutive trading day period | 30 days | ||
Debt instrument, trading days preceding redemption notice, maximum | item | 2 | ||
Debt instrument redemption price percentage to principal amount | 100.00% | ||
Debt instrument repurchase percentage | 100.00% | ||
Debt issuance costs | $ 9.2 | ||
Debt instrument term | 7 years | ||
Unamortized debt issuance costs | $ 5.7 | $ 6.4 | |
Semi Annual Payment, First payment date | |||
Debt Instrument [Line Items] | |||
Interest payment date on senior notes | --03-15 | ||
Semi Annual Payment, Second payment date | |||
Debt Instrument [Line Items] | |||
Interest payment date on senior notes | --09-15 |
Convertible Senior Notes - Sche
Convertible Senior Notes - Schedule of Total Interest Expense Recognized Related to Notes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Convertible Senior Notes, | ||||
Contractual interest expense | $ 1,797 | $ 1,797 | $ 3,594 | $ 3,594 |
Accretion of interest on milestone liability | 483 | 949 | 0 | |
Amortization of debt issuance costs | 318 | 309 | 635 | 616 |
Total interest expense | $ 2,598 | $ 2,106 | $ 5,178 | $ 4,210 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 6 Months Ended | ||
Jun. 30, 2017USD ($)$ / sharesshares | Jan. 31, 2017USD ($)$ / sharesshares | Jun. 30, 2017USD ($)Vote$ / sharesshares | Jun. 30, 2016USD ($) | |
Stockholders’ Equity | ||||
Common stock, shares issued | shares | 3,920,454 | 5,750,000 | 3,920,454 | |
Sale of stock, price per share | $ / shares | $ 88 | $ 41 | $ 88 | |
Proceeds from the sale of common stock, net of issuance costs | $ | $ 324,900 | $ 221,200 | $ 546,170 | $ 0 |
Number Of Vote Per Common Stock | Vote | 1 |
Stockholders' Equity - Componen
Stockholders' Equity - Component of Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Beginning balance | $ (47,118) | $ (43,717) | $ (47,580) | $ (47,460) |
Other comprehensive income (loss) | 4,448 | (2,094) | 5,178 | 3,851 |
Total before tax | (42,670) | (45,811) | (42,402) | (43,609) |
Tax effect | (1,636) | 761 | (1,904) | (1,441) |
Ending balance | (44,306) | (45,050) | (44,306) | (45,050) |
Reclassifications out of accumulated other comprehensive loss | 0 | 0 | 0 | 0 |
Foreign Currency Translation Adjustments | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Beginning balance | (46,967) | (43,564) | (47,434) | (47,077) |
Other comprehensive income (loss) | 4,451 | (2,170) | 5,186 | 3,410 |
Total before tax | (42,516) | (45,734) | (42,248) | (43,667) |
Tax effect | (1,639) | 789 | (1,907) | (1,278) |
Ending balance | (44,155) | (44,945) | (44,155) | (44,945) |
Unrealized (Losses) Gains | ||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||
Beginning balance | (151) | (153) | (146) | (383) |
Other comprehensive income (loss) | (3) | 76 | (8) | 441 |
Total before tax | (154) | (77) | (154) | 58 |
Tax effect | 3 | (28) | 3 | (163) |
Ending balance | $ (151) | $ (105) | $ (151) | $ (105) |
Share-Based Compensation - Shar
Share-Based Compensation - Share-Based Compensation Expense Recognized in Accompanying Statements of Operations (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 10,617 | $ 9,577 | $ 19,563 | $ 20,542 |
Employee Service Share Based Compensation Tax Benefit From Compensation Expense | $ 0 | 0 | $ 0 | 0 |
Closing Stock Price | $ 93.63 | $ 93.63 | ||
Research and development | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 4,825 | 6,615 | $ 8,991 | 13,924 |
Selling, general and administrative | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Share-based compensation expense | 5,792 | $ 2,962 | 10,572 | $ 6,618 |
Common shares under option | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Unrecognized stock-based compensation expense related to non-vested options | 83,400 | $ 83,400 | ||
Unrecognized stock-based compensation expense related to non-vested options and RSUs, weighted-average remaining vesting period | 2 years 7 months 6 days | |||
Restricted Stock Units (RSUs) | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Unrecognized stock-based compensation expense related to unvested RSUs | $ 18,500 | $ 18,500 | ||
Unrecognized stock-based compensation expense related to non-vested options and RSUs, weighted-average remaining vesting period | 3 years 4 months 24 days | |||
2011 Stock Incentive Plan | Vesting after year one | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock options vesting period | 1 year | |||
Stock options vesting percentage | 50.00% | |||
2011 Stock Incentive Plan | Vesting after year two | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock options vesting period | 2 years | |||
Stock options vesting percentage | 50.00% | |||
2011 Stock Incentive Plan | One year from date of grant | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock options vesting period | 1 year | |||
Stock options vesting percentage | 25.00% | |||
2011 Stock Incentive Plan | End of the vesting period | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock options vesting period | 3 years |
Share-Based Compensation - Summ
Share-Based Compensation - Summary of Stock Options Activity (Details) $ / shares in Units, $ in Thousands | 6 Months Ended |
Jun. 30, 2017USD ($)$ / sharesshares | |
Share-Based Compensation | |
Beginning Balance, Number of Options Outstanding | 5,520,482 |
Number of Options, Granted | 778,700 |
Number of Options, Exercised | (372,464) |
Number of Options, Forfeited | (199,985) |
Ending Balance, Number of Options Outstanding | 5,726,733 |
Number of Options, Vested and expected to vest at June 30, 2017 | 5,364,276 |
Number of Options, Vested and exercisable at June 30, 2017 | 2,935,211 |
Beginning Balance, Weighted Average Exercise Price | $ / shares | $ 42 |
Ending Balance, Weighted Average Exercise Price | $ / shares | 45.43 |
Vested and expected to vest, Weighted Average Exercise Price | $ / shares | 45.30 |
Vested and exercisable, Weighted Average Exercise Price | $ / shares | $ 44.63 |
Outstanding, Weighted Average Remaining Contractual Term (Years) | 7 years 7 months 6 days |
Vested and expected to vest, Weighted Average Remaining Contractual Term (Years) | 7 years 4 months 24 days |
Exercisable, Weighted Average Remaining Contractual Term (Years) | 6 years 2 months 12 days |
Outstanding, Aggregate Intrinsic Value | $ | $ 276,451 |
Vested and expected to vest, Aggregate Intrinsic Value | $ | 259,650 |
Vested and exercisable, Aggregate Intrinsic Value | $ | $ 143,983 |
Share-Based Compensation - Sche
Share-Based Compensation - Schedule of Share-Based Compensation Arrangements by Share-Based Payment Award (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Share-Based Compensation | ||||
Weighted-average grant date fair value per share | $ 44.94 | $ 11.01 | $ 46.53 | $ 14.65 |
Intrinsic value of options exercised | $ 4,759 | $ 578,525 | $ 14,284 | $ 624,925 |
Cash received from stock option exercises | $ 5,439 | $ 352,423 | $ 11,113 | $ 407,523 |
Share-Based Compensation - Su50
Share-Based Compensation - Summary of Activity Relating to Company's Unvested Restricted Stock Units (Detail) - Restricted Stock Units (RSUs) | 6 Months Ended |
Jun. 30, 2017$ / sharesshares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Unvested at the beginning of the period | shares | 562,458 |
Number of Units, Granted | shares | 214,984 |
Number of Units, Vested | shares | (44,443) |
Number of Units, Forfeited | shares | (27,177) |
Unvested at the end of the period | shares | 705,822 |
Number of Units, Expected to vest after June 30,2017 | shares | 604,394 |
Weighted Average Grant Date Fair Value, Beginning Balance | $ / shares | $ 24.70 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | 61.67 |
weighted-average estimated grant date fair value of purchase awards under Purchase Plan | $ / shares | 19.37 |
Weighted Average Grant Date Fair Value, Forfeited | $ / shares | 24.08 |
Weighted Average Grant Date Fair Value, Ending Balance | $ / shares | 36.32 |
Weighted Average Grant Date Fair Value, Expected To Vest After June 30, 2017 | $ / shares | $ 35.81 |
License Agreements - Additional
License Agreements - Additional Information (Details) $ in Thousands, € in Millions | Dec. 19, 2016USD ($) | Sep. 30, 2012EUR (€) | Jun. 30, 2011USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Dec. 31, 2016USD ($) |
Research And Development Arrangement Contract To Perform For Others [Line Items] | ||||||||
Research and development | $ 33,108 | $ 67,729 | $ 65,555 | $ 142,337 | ||||
License Agreements Lucitanib | ||||||||
Research And Development Arrangement Contract To Perform For Others [Line Items] | ||||||||
Initial global development costs reimbursable | € | € 80 | |||||||
Development cost receivable | 100 | 100 | $ 1,300 | |||||
Research and development | 0 | 2,600 | 900 | 6,200 | ||||
Reduction in research and development expense for reimbursable development costs due from Servier | 100 | $ 2,800 | 1,000 | $ 6,400 | ||||
License Agreements Licensor Pfizer | Rucaparib | ||||||||
Research And Development Arrangement Contract To Perform For Others [Line Items] | ||||||||
Milestone payments | $ 750 | |||||||
Milestone payment due prior to deferment of milestone payment | 20,000 | |||||||
Deferred milestone payment | 23,000 | |||||||
Maximum potential future development, regulatory milestone payments | 69,750 | |||||||
Additional maximum payments payable on attaining the sales target | $ 170,000 | 170,000 | ||||||
License Agreements Licensor Pfizer | Rucaparib | Minimum | ||||||||
Research And Development Arrangement Contract To Perform For Others [Line Items] | ||||||||
Annual sales target for sales milestone payments | 500,000 | |||||||
License Agreements Licensor Astra Zeneca U K Ltd | Rucaparib | ||||||||
Research And Development Arrangement Contract To Perform For Others [Line Items] | ||||||||
Milestone payments | $ 350 | |||||||
License Agreement Terms | License Agreements Licensor Pfizer | Rucaparib | ||||||||
Research And Development Arrangement Contract To Perform For Others [Line Items] | ||||||||
Upfront payment | $ 7,000 | |||||||
Milestones paid to Pfizer prior to FDA approval | $ 1,400 |
Net Loss Per Common Share (Deta
Net Loss Per Common Share (Details) - shares shares in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Total potential dilutive shares | 11,019 | 5,101 |
Common shares under option | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Total potential dilutive shares | 6,373 | 455 |
Convertible senior notes | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Total potential dilutive shares | 4,646 | 4,646 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) $ in Thousands | Jun. 18, 2017USD ($) | Dec. 31, 2015shareholder | Jun. 30, 2017USD ($) | Dec. 31, 2016USD ($) |
Commitments and Contingencies. | ||||
Milestone liability | $ 21,011 | $ 20,062 | ||
Purchase commitment | $ 183,600 | |||
Cash paid | $ 25,000 | |||
Amount of common stock issued | $ 117,000 | |||
Number of trading days | 10 days | |||
Number of business days | 5 days | |||
Number of purported shareholders | shareholder | 3 |