Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2020 | Jul. 31, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2020 | |
Entity File Number | 001-35347 | |
Entity Registrant Name | Clovis Oncology, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 90-0475355 | |
Entity Address, Address Line One | 5500 Flatiron Parkway, Suite 100 | |
Entity Address, City or Town | Boulder | |
Entity Address, State or Province | CO | |
Entity Address, Postal Zip Code | 80301 | |
City Area Code | 303 | |
Local Phone Number | 625-5000 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | CLVS | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 88,203,011 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Entity Central Index Key | 0001466301 | |
Amendment Flag | false |
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, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenues: | ||||
Product revenue | $ 39,887 | $ 32,978 | $ 82,451 | $ 66,096 |
Product revenue - extensible list | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember | us-gaap:ProductMember |
Operating expenses: | ||||
Research and development | $ 69,878 | $ 70,746 | $ 138,099 | $ 132,777 |
Selling, general and administrative | 41,902 | 48,029 | 84,500 | 95,791 |
Other operating expenses | 355 | 3,805 | ||
Total expenses | 122,535 | 126,437 | 247,112 | 244,756 |
Operating loss | (82,648) | (93,459) | (164,661) | (178,660) |
Other income (expense): | ||||
Interest expense | (6,739) | (3,817) | (16,300) | (7,407) |
Foreign currency gain (loss) | 142 | (226) | (735) | (419) |
Loss on convertible senior notes conversion | (7,791) | |||
Loss on extinguishment of debt | (3,277) | (3,277) | ||
Legal settlement loss | (25,000) | (25,000) | ||
Other income | 239 | 1,899 | 1,081 | 4,300 |
Other income (expense), net | (9,635) | (27,144) | (27,022) | (28,526) |
Loss before income taxes | (92,283) | (120,603) | (191,683) | (207,186) |
Income tax benefit | 36 | 176 | 104 | 336 |
Net loss | (92,247) | (120,427) | (191,579) | (206,850) |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments, net of tax | 61 | (1) | (42) | (6) |
Net unrealized gain on available-for-sale securities, net of tax | (84) | 77 | (6) | 152 |
Other comprehensive (loss) income: | (23) | 76 | (48) | 146 |
Comprehensive loss | $ (92,270) | $ (120,351) | $ (191,627) | $ (206,704) |
Loss per basic and diluted common share: | ||||
Basic and diluted net loss per common share | $ (1.15) | $ (2.27) | $ (2.52) | $ (3.91) |
Basic and diluted weighted average common shares outstanding | 80,453 | 53,028 | 76,057 | 52,960 |
Product | ||||
Operating expenses: | ||||
Cost of sales | $ 9,120 | $ 6,445 | $ 18,216 | $ 13,851 |
Intangible assets amortization | ||||
Operating expenses: | ||||
Cost of sales | $ 1,280 | $ 1,217 | $ 2,492 | $ 2,337 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 261,436 | $ 161,833 |
Accounts receivable, net | 18,204 | 20,562 |
Inventories, net | 26,851 | 26,519 |
Available-for-sale securities | 134,826 | |
Prepaid research and development expenses | 1,832 | 3,881 |
Other current assets | 14,515 | 18,847 |
Total current assets | 322,838 | 366,468 |
Inventories | 106,337 | 98,053 |
Deposit on inventory | 12,350 | |
Property and equipment, net | 13,412 | 15,287 |
Right-of-use assets, net | 32,363 | 28,141 |
Intangible assets, net | 68,428 | 62,920 |
Goodwill | 63,074 | 63,074 |
Other assets | 21,757 | 23,311 |
Total assets | 628,209 | 669,604 |
Current liabilities: | ||
Accounts payable | 24,287 | 32,237 |
Accrued research and development expenses | 45,587 | 53,214 |
Lease liabilities | 5,028 | 5,405 |
Other accrued expenses | 37,682 | 42,228 |
Total current liabilities | 112,584 | 133,084 |
Long-term lease liabilities - less current portion | 33,786 | 29,479 |
Convertible senior notes | 504,680 | 644,751 |
Borrowings under financing agreement | 72,459 | 34,991 |
Other long-term liabilities | 2,075 | 1,556 |
Total liabilities | 725,584 | 843,861 |
Commitments and contingencies (Note 15) | ||
Stockholders' equity: | ||
Preferred stock, par value $0.001 per share; 10,000,000 shares authorized, no shares issued and outstanding at June 30, 2020 and December 31, 2019 | ||
Common stock, $0.001 par value per share, 200,000,000 shares authorized at June 30, 2020 and December 31, 2019, respectively; 88,196,705 and 54,956,341 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively | 88 | 55 |
Additional paid-in capital | 2,382,544 | 2,114,068 |
Accumulated other comprehensive loss | (44,913) | (44,865) |
Accumulated deficit | (2,435,094) | (2,243,515) |
Total stockholders' deficit | (97,375) | (174,257) |
Total liabilities and stockholders' equity (deficit) | $ 628,209 | $ 669,604 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2020 | Dec. 31, 2019 |
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 | 200,000,000 | 200,000,000 |
Common stock, shares issued | 88,196,705 | 54,956,341 |
Common stock, shares outstanding | 88,196,705 | 54,956,341 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Total |
Beginning Balance at Dec. 31, 2018 | $ 53 | $ 2,034,142 | $ (44,634) | $ (1,843,092) | $ 146,469 |
Beginning Balance (in shares) at Dec. 31, 2018 | 52,797,516 | ||||
Exercise of stock options | 1,093 | 1,093 | |||
Exercise of stock options (in shares) | 83,132 | ||||
Issuance of common stock from vesting of restricted stock units (in shares) | 113,402 | ||||
Share-based compensation expense | 13,639 | 13,639 | |||
Net unrealized gain (loss) on available-for-sale securities | 75 | 75 | |||
Foreign currency translation adjustments | (5) | (5) | |||
Net loss | (86,421) | (86,421) | |||
Ending Balance at Mar. 31, 2019 | $ 53 | 2,048,874 | (44,564) | (1,929,513) | 74,850 |
Ending Balance (in shares) at Mar. 31, 2019 | 52,994,050 | ||||
Beginning Balance at Dec. 31, 2018 | $ 53 | 2,034,142 | (44,634) | (1,843,092) | 146,469 |
Beginning Balance (in shares) at Dec. 31, 2018 | 52,797,516 | ||||
Net unrealized gain (loss) on available-for-sale securities | 152 | ||||
Foreign currency translation adjustments | (6) | ||||
Net loss | (206,850) | ||||
Ending Balance at Jun. 30, 2019 | $ 53 | 2,064,393 | (44,488) | (2,049,940) | (29,982) |
Ending Balance (in shares) at Jun. 30, 2019 | 53,170,479 | ||||
Beginning Balance at Mar. 31, 2019 | $ 53 | 2,048,874 | (44,564) | (1,929,513) | 74,850 |
Beginning Balance (in shares) at Mar. 31, 2019 | 52,994,050 | ||||
Exercise of stock options | 223 | 223 | |||
Exercise of stock options (in shares) | 20,741 | ||||
Issuance of common stock from vesting of restricted stock units (in shares) | 63,413 | ||||
Issuance of common stock under employee stock purchase plan | 1,166 | 1,166 | |||
Issuance of common stock under employee stock purchase plan (in shares) | 92,275 | ||||
Share-based compensation expense | 14,130 | 14,130 | |||
Net unrealized gain (loss) on available-for-sale securities | 77 | 77 | |||
Foreign currency translation adjustments | (1) | (1) | |||
Net loss | (120,427) | (120,427) | |||
Ending Balance at Jun. 30, 2019 | $ 53 | 2,064,393 | (44,488) | (2,049,940) | (29,982) |
Ending Balance (in shares) at Jun. 30, 2019 | 53,170,479 | ||||
Beginning Balance at Dec. 31, 2019 | $ 55 | 2,114,068 | (44,865) | (2,243,515) | $ (174,257) |
Beginning Balance (in shares) at Dec. 31, 2019 | 54,956,341 | 54,956,341 | |||
Exercise of stock options | 2 | $ 2 | |||
Exercise of stock options (in shares) | 759 | ||||
Issuance of common stock from vesting of restricted stock units (in shares) | 662,323 | ||||
Share-based compensation expense | 12,961 | 12,961 | |||
Net unrealized gain (loss) on available-for-sale securities | 78 | 78 | |||
Foreign currency translation adjustments | (103) | (103) | |||
Convertible senior notes conversion | $ 18 | 133,640 | 133,658 | ||
Convertible senior notes conversion (in shares) | 17,877,164 | ||||
Net loss | (99,332) | (99,332) | |||
Ending Balance at Mar. 31, 2020 | $ 73 | 2,260,671 | (44,890) | (2,342,847) | (126,993) |
Ending Balance (in shares) at Mar. 31, 2020 | 73,496,587 | ||||
Beginning Balance at Dec. 31, 2019 | $ 55 | 2,114,068 | (44,865) | (2,243,515) | $ (174,257) |
Beginning Balance (in shares) at Dec. 31, 2019 | 54,956,341 | 54,956,341 | |||
Exercise of stock options (in shares) | 24,153 | ||||
Net unrealized gain (loss) on available-for-sale securities | $ (6) | ||||
Foreign currency translation adjustments | (42) | ||||
Net loss | (191,579) | ||||
Ending Balance at Jun. 30, 2020 | $ 88 | 2,382,544 | (44,913) | (2,435,094) | $ (97,375) |
Ending Balance (in shares) at Jun. 30, 2020 | 88,196,705 | 88,196,705 | |||
Beginning Balance at Mar. 31, 2020 | $ 73 | 2,260,671 | (44,890) | (2,342,847) | $ (126,993) |
Beginning Balance (in shares) at Mar. 31, 2020 | 73,496,587 | ||||
Exercise of stock options | (41) | (41) | |||
Exercise of stock options (in shares) | 6,661 | ||||
Issuance of common stock from vesting of restricted stock units (in shares) | 113,461 | ||||
Issuance of common stock under employee stock purchase plan | 907 | 907 | |||
Issuance of common stock under employee stock purchase plan (in shares) | 158,126 | ||||
Share-based compensation expense | 13,313 | 13,313 | |||
Net unrealized gain (loss) on available-for-sale securities | (84) | (84) | |||
Foreign currency translation adjustments | 61 | 61 | |||
Convertible senior notes conversion | $ 4 | 24,278 | 24,282 | ||
Convertible senior notes conversion (in shares) | 3,331,870 | ||||
Net loss | (92,247) | (92,247) | |||
Ending Balance at Jun. 30, 2020 | $ 88 | 2,382,544 | $ (44,913) | $ (2,435,094) | $ (97,375) |
Ending Balance (in shares) at Jun. 30, 2020 | 88,196,705 | 88,196,705 | |||
Issuance of common stock, net of issuance costs | $ 11 | $ 83,416 | $ 83,427 | ||
Issuance of common stock, net of issuance costs (in shares) | 11,090,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Operating activities | ||
Net loss | $ (191,579) | $ (206,850) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Share-based compensation expense | 26,274 | 27,769 |
Depreciation and amortization | 4,128 | 3,632 |
Amortization of premiums and discounts on available-for-sale securities | (174) | (884) |
Amortization of debt issuance costs | 1,423 | 1,324 |
Write-off of debt issuance costs related to convertible senior notes transactions | 4,344 | |
Loss on convertible senior notes conversion | 7,791 | |
Loss on extinguishment of debt | 3,277 | |
Legal settlement loss | 21,000 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 2,359 | (2,491) |
Inventory | 4,357 | (35,351) |
Prepaid and accrued research and development expenses | (5,328) | 5,041 |
Other operating assets and liabilities | 5,895 | (5,587) |
Accounts payable | (7,804) | (1,393) |
Other accrued expenses | 2,686 | (2,698) |
Net cash used in operating activities | (142,351) | (196,488) |
Investing activities | ||
Purchases of property and equipment | (75) | (1,484) |
Purchases of available-for-sale securities | (9,962) | (205,779) |
Sales of available-for-sale securities | 144,644 | 296,845 |
Acquired in-process research and development - milestone payment | (8,000) | (15,750) |
Net cash provided by investing activities | 126,607 | 73,832 |
Financing activities | ||
Proceeds from the sale of common stock, net of issuance costs | 246,727 | |
Payment of convertible senior notes | (164,443) | |
Proceeds from borrowings under financing agreement | 33,322 | 6,862 |
Proceeds from the exercise of stock options and employee stock purchases | 868 | 2,482 |
Payments on finance leases | (720) | (505) |
Payments on other long-term liabilities | (103) | |
Net cash provided by financing activities | 115,651 | 9,344 |
Effect of exchange rate changes on cash and cash equivalents | (304) | 43 |
Increase (decrease) in cash and cash equivalents | 99,603 | (113,269) |
Cash and cash equivalents at beginning of period | 161,833 | 221,876 |
Cash and cash equivalents at end of period | 261,436 | 108,607 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 6,006 | 5,469 |
Non-cash investing and financing activities: | ||
Vesting of restricted stock units | $ 6,255 | $ 4,283 |
Nature of Business and Basis of
Nature of Business and Basis of Presentation | 6 Months Ended |
Jun. 30, 2020 | |
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 additional international markets. We target our development programs for the treatment of specific subsets of cancer populations, and simultaneously develop, with partners, for those indications that require them, diagnostic tools intended to direct a compound in development to the population that is most likely to benefit from its use. 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 and since 2016 we have also marketed and sold products. Our marketed product Rubraca® (rucaparib), an oral small molecule inhibitor of poly ADP-ribose polymerase (“PARP”), is marketed in the United States for two indications specific to recurrent epithelial ovarian, fallopian tube or primary peritoneal cancer and also an indication specific to metastatic castration-resistant prostate cancer (“mCRPC”). The initial indication received approval from the United States Food and Drug Administration (“FDA”) in December 2016 and covers the treatment of adult patients with deleterious BRCA (human genes associated with the repair of damaged DNA) mutation (germline and/or somatic)-associated epithelial ovarian, fallopian tube, or primary peritoneal cancer who have been treated with two or more chemotherapies and selected for therapy based on an FDA-approved companion diagnostic for Rubraca. In April 2018, the FDA also approved Rubraca for the maintenance treatment of adult patients with recurrent epithelial ovarian, fallopian tube, or primary peritoneal cancer who are in a complete or partial response to platinum-based chemotherapy. The approval in this second, broader and earlier-line indication on a priority review timeline was based on positive data from the phase 3 ARIEL3 clinical trial. Diagnostic testing is not required for patients to be prescribed Rubraca in this maintenance treatment indication. In May 2018, the European Commission granted a conditional marketing authorization for Rubraca as monotherapy treatment of adult patients with platinum-sensitive, relapsed or progressive, BRCA mutated (germline and/or somatic), high-grade epithelial ovarian, fallopian tube, or primary peritoneal cancer, who have been treated with two or more prior lines of platinum-based chemotherapy, and who are unable to tolerate further platinum-based chemotherapy. In January 2019, the European Commission granted a variation to the marketing authorization to include the maintenance treatment of adult patients with recurrent epithelial ovarian, fallopian tube, or primary peritoneal cancer who are in a complete or partial response to platinum-based chemotherapy. With this approval, Rubraca is now authorized in the EU for certain patients in the recurrent ovarian cancer maintenance setting regardless of their BRCA mutation status. Following successful reimbursement negotiations, we have launched Rubraca in each of Germany, United Kingdom, Italy, France and Spain. In May 2020, the FDA approved Rubraca tablets for the treatment of adult patients with a deleterious BRCA mutation (germline and/or somatic)-associated mCRPC who have been treated with androgen receptor-directed therapy and a taxane-based chemotherapy. The FDA approved this indication under accelerated approval based on objective response rate and duration of response data from the multi-center, single arm TRITON2 clinical trial. We have launched Rubraca for prostate cancer in the U.S. Continued approval for this indication may be contingent upon verification and description of clinical benefit in confirmatory trials. The TRITON3 clinical trial is expected to serve as the confirmatory study for the Rubraca accelerated approval in mCRPC. Beyond our labeled indications, we have a clinical development program underway to further evaluate Rubraca in a variety of solid tumor types, either as monotherapy or in combination with other agents, including several studies as part of our ongoing clinical collaboration with Bristol-Myers Squibb Company (“BMS”) to evaluate its immunotherapy OPDIVO® (nivolumab) in combination with Rubraca. We initiated the Phase 2 LODESTAR study in December 2019 to evaluate Rubraca in homologous recombination repair genes across tumor types. The study is evaluating rucaparib as monotherapy treatment in patients with recurrent solid tumors associated with a deleterious mutation in homologous recombination repair genes. Based on our interactions with the FDA, we believe that this study may be registration- enabling for a targeted gene- and tumor-agnostic label, if data from the trial support the potential for an accelerated approval. We may potentially file a supplemental New Drug Application with the FDA for this indication in 2021. We hold worldwide rights to Rubraca. In addition to Rubraca, we have a second product candidate currently in clinical development. Lucitanib is an investigational, oral, potent inhibitor of the tyrosine kinase activity of vascular endothelial growth factor receptors 1 through 3 (“VEGFR1-3”), platelet-derived growth factor receptors alpha and beta (“PDGFR α/β”) and fibroblast growth factor receptors 1 through 3 (“FGFR1-3”). We believe that data for a drug similar to lucitanib that inhibits these same pathways – when combined with a PD-1 inhibitor – represent a scientific rationale for development of lucitanib in combination with a PD-1 inhibitor, and in February 2019, lucitanib was added to our clinical collaboration with BMS. Encouraging data of VEGF and PARP inhibitors in combination also supports the evaluation of lucitanib combined with Rubraca. Thus, we are currently enrolling Phase 1b/2 combination studies involving lucitanib consist of the Clovis-sponsored LIO-1 study of lucitanib in combination with nivolumab in advanced solid tumors and gynecologic cancers and an arm of the Clovis-sponsored SEASTAR study evaluating lucitanib in combination with Rubraca in advanced solid tumors and ovarian cancer. We hold the global (excluding China) development and commercialization rights for lucitanib. Following completion of preclinical work to support an investigational new drug application In September 2019, we entered into a license and collaboration agreement with 3B Pharmaceuticals GmbH (“ 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 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, 2019 (“2019 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 revenue 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. 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, 2020 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Recently Adopted Accounting Standards In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”. The guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. We adopted ASU 2016-13 as of January 1, 2020. Upon the adoption of ASU 2016-13 on January 1, 2020, we are required to determine whether a decline in the fair value below the amortized cost basis (i.e., impairment) of an available-for-sale debt is security is due to credit-related factors or noncredit-related factors. Any impairment that is not credit related is recognized in accumulated other comprehensive loss, net of applicable taxes. When evaluating an impairment, entities may not use the length of time a security has been in an unrealized loss position as a factor, either by itself or in combination with other factors, to conclude that a credit loss does not exist. We applied this impairment model for available-for-sale debt securities as of January 1, 2020 and no impairment was recognized upon adoption. In addition, no impairment was recognized for the three and six months ended June 30, 2020. We recognized a minimal allowance for credit losses related to our accounts receivable at June 30, 2020. The adoption of ASU 2016-13 did not materially impact our consolidated financial statements and disclosures. In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement”. The guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. We adopted ASU 2018-02 as of January 1, 2020 and there was no material impact on our consolidated financial statements and related disclosures. Revenue Recognition We are currently approved to sell Rubraca in the United States and Europe markets. We distribute our product principally through a limited number of specialty distributor and specialty pharmacy providers, collectively, our customers. Our customers subsequently sell our products to patients and health care providers. Separately, we have arrangements with certain payors and other third parties that provide for government-mandated and privately-negotiated rebates, chargebacks and discounts. Product Revenue Revenue from product sales are recognized when the performance obligation is satisfied, which is when customers obtain control of our product at a point in time, typically upon delivery. We expense incremental costs of obtaining a contract as and when incurred if the expected amortization period of the asset that we would have recognized is one year Reserves for Variable Consideration Revenues from product sales are recorded at the net sales price (transaction price), which includes estimates of variable consideration for which reserves are established and which result from price concessions that include rebates, chargebacks, discounts, co-pay assistance, estimated product returns and other allowances that are offered within contracts between us and our customers, health care providers, payors and other indirect customers relating to the sales of our product. These reserves are based on the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable (if the amount is payable to the customers) or a current liability (if the amount is payable to a party other than a customer). Where appropriate, these estimates take into consideration a range of possible outcomes which are probability-weighted for relevant factors such as our historical experience, current contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns. Overall, these reserves reflect our best estimates of the amount of consideration to which we are entitled based on the terms of the contract. The amount of variable consideration which is included in the transaction price may be constrained and is included in the net sales price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. Actual amounts of consideration ultimately received may differ from our estimates. If actual results in the future vary from our estimates, we adjust these estimates, which would affect product revenue and earnings in the period such variances become known. Government Rebates GPO and Payor Rebates. Chargebacks Discounts and Fees Co-pay assistance Returns 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. 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. Accounts Receivable As a result of the adoption of ASU 2016-13, we recognized a minimal allowance for credit losses related to our accounts receivable at June 30, 2020. We provide an allowance for doubtful accounts based on experience and specifically identified risks. Accounts receivable are charged off against the allowance for doubtful accounts when we determine that recovery is unlikely and we cease collection efforts. Inventory Inventories are stated at the lower of cost or estimated net realizable value, on a first-in, first-out (“FIFO”) basis. Inventories include active pharmaceutical ingredient (“API”), contract manufacturing costs and overhead allocations. 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 regularly analyze our inventory levels for excess quantities and obsolescence (expiration), taking into account factors such as historical and anticipated future sales compared to quantities on hand and the remaining shelf-life of Rubraca. Rubraca finished goods have a shelf-life of four years from the date of manufacture. We expect to sell the finished goods prior to expiration. The API currently has a shelf-life of four years from the date of manufacture but can be retested at an immaterial cost with no expected reduction in potency, thereby extending its shelf-life as needed. We expect to consume substantially all of the API over a period of approximately six years based on our long-range sales projections of Rubraca. We 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. Expired inventory would be disposed of and the related costs would be written off as cost of product revenue. Inventories that are not expected to be consumed within 12 months following the balance sheet date are classified as long-term inventories. Long-term inventories primarily consist of API. API is currently produced by Lonza. 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. In addition, we currently manufacture Rubraca finished goods with a single third-party manufacturer. The disruption or termination of the supply of API or the disruption or termination of the manufacturing of our commercial products could have a material adverse effect on our business, financial position and results of operations. API that is written off due to damage and certain costs related to our dedicated production train at Lonza are included in Other Operating Expenses in the Consolidated Statements of Operations and Comprehensive Loss. Inventory used in clinical trials is expensed as research and development expense when it has been identified for such use. Our other significant accounting policies are described in Note 2, Summary of Significant Accounting Policies |
Financial Instruments and Fair
Financial Instruments and Fair Value Measurements | 6 Months Ended |
Jun. 30, 2020 | |
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 and U.S. treasury securities. 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, 2020 Assets: Money market $ 147,902 $ 147,902 $ — $ — U.S. treasury securities — — — — Total assets at fair value $ 147,902 $ 147,902 $ — $ — December 31, 2019 Assets: Money market $ 61,882 $ 61,882 $ — $ — U.S. treasury securities 189,736 54,910 134,826 — Total assets at fair value $ 251,618 $ 116,792 $ 134,826 $ — There were no liabilities that were measured at fair value on a recurring basis as of June 30, 2020. There were no transfers between the Level 1 and Level 2 categories or into or out of the Level 3 category during three and six months ended June 30, 2020. Financial instruments not recorded at fair value include our convertible senior notes. At June 30, 2020, the carrying amount of the 2021 Notes was $64.0 million, which represents the aggregate principal amount net of remaining debt issuance costs, and the fair value was $58.2 million. At June 30, 2020, the carrying amount of the 2024 Notes was $147.0 million, which represents the aggregate principal amount net of remaining debt issuance costs, and the fair value was $152.8 million. At June 30, 2020, the carrying amount of the 2025 Notes was $293.6 million, which represents the aggregate principal amount net of remaining debt issuance costs, and the fair value was $180.8 million. The fair value was determined using Level 2 inputs based on the indicative pricing published by certain investment banks or trading levels of these notes, which are not listed on any securities exchange or quoted on an inter-dealer automated quotation system. See Note 10, Long-term Debt |
Available-for-Sale Securities
Available-for-Sale Securities | 6 Months Ended |
Jun. 30, 2020 | |
Available-for-Sale Securities | |
Available-for-Sale Securities | 4. Available-for-Sale Securities We did not have available-for-sale securities as of June 30, 2020. As of December 31, 2019, 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 $ 134,826 $ — $ — $ 134,826 |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2020 | |
Inventories | |
Inventories | 5. Inventories The following table presents current and long-term inventories as of June 30, 2020 and December 31, 2019: June 30, December 31, 2020 2019 Work-in-process $ 103,871 $ 104,139 Finished goods, net 29,317 20,433 Total inventories $ 133,188 $ 124,572 At June 30, 2020, we had $26.9 million of current inventory and $106.3 million of long-term inventory. |
Other Current Assets
Other Current Assets | 6 Months Ended |
Jun. 30, 2020 | |
Other Current Assets | |
Other Current Assets | 6. Other Current Assets Other current assets were comprised of the following (in thousands): June 30, December 31, 2020 2019 Prepaid insurance $ 1,913 $ 505 Prepaid IT 796 698 Prepaid expenses - other 4,235 3,371 Value-added tax ("VAT") receivable 6,364 11,920 Receivable - other 1,111 2,176 Other 96 177 Total $ 14,515 $ 18,847 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 6 Months Ended |
Jun. 30, 2020 | |
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, 2020 2019 Intangible asset - milestones $ 79,850 $ 71,850 Accumulated amortization (11,422) (8,930) Total intangible asset, net $ 68,428 $ 62,920 The increase in our intangible asset – milestones since December 31, 2019 is due to an $8.0 million milestone payment to Pfizer related to the May 2020 FDA approval. See Note 13, License Agreements for further discussion of this approval. The estimated useful lives of these intangible assets are based on the estimated remaining patent life of Rubraca and extend through 2031 in Europe and 2035 in the U.S. We recorded amortization expense of $1.3 million and $2.5 million related to capitalized milestone payments during the three and six months ended June 30, 2020, respectively. We recorded amortization expense of $1.2 million and $2.3 million related to capitalized milestone payments during the three and six months ended June 30, 2019, respectively. Amortization expense is included in cost of sales – intangible asset amortization on the Consolidated Statements of Operations and Comprehensive Loss. Estimated future amortization expense associated with intangibles is expected to be as follows (in thousands): 2020 (remaining six months) $ 2,686 2021 5,371 2022 5,371 2023 5,371 2024 5,371 Thereafter 44,258 $ 68,428 |
Other Accrued Expenses
Other Accrued Expenses | 6 Months Ended |
Jun. 30, 2020 | |
Other Accrued Expenses | |
Other Accrued Expenses | 8. Other Accrued Expenses Other accrued expenses were comprised of the following (in thousands): June 30, December 31, 2020 2019 Accrued personnel costs $ 12,101 $ 16,915 Accrued interest payable for convertible senior notes 3,900 5,903 Income tax payable 871 3,505 Accrued corporate legal fees and professional services 920 310 Accrued royalties 6,082 6,038 Accrued variable considerations 8,303 5,748 Purchase of API received not yet invoiced 79 — Accrued expenses - other 5,426 3,809 Total $ 37,682 $ 42,228 |
Lease
Lease | 6 Months Ended |
Jun. 30, 2020 | |
Lease | |
Lease | 9. Lease At the inception of an arrangement, we determine whether the arrangement is or contains a lease based on the unique facts and circumstances. Most leases with a term greater than one year are recognized on the balance sheet as right-of-use assets, lease liabilities and, if applicable, long-term lease liabilities. We elected not to recognize on the balance sheet leases with terms of one year or less. Lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected lease term. The interest rate implicit in lease contracts is typically not readily determinable. As such, we utilize the appropriate incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term at an amount equal to the lease payments in a similar economic environment. Certain adjustments to the right-of-use asset may be required for items such as initial direct costs paid or incentives received. The components of a lease should be split into three categories: lease components (e.g. land, building, etc.), non-lease components (e.g. common area maintenance, maintenance, consumables, etc.) and non-components (e.g. property taxes, insurance, etc.). Then the fixed and in-substance fixed contract consideration (including any related to non-components) must be allocated based on fair values assigned to the lease components and non-lease components. Our facilities operating leases have lease components, non-lease components and non-components, which we have separated because the non-lease components and non-components have variable lease payments and are excluded from the measurement of the lease liabilities. The lease component results in a right-of-use asset being recorded on the balance sheet and amortized as lease expense on a straight-line basis to the statements of operations. We lease all of our office facilities in the U.S. and Europe. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. Most leases include one or more options to renew. The exercise of lease renewal options is at our sole discretion. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. We have a finance lease for certain equipment at the dedicated production train at Lonza, our non-exclusive manufacturer of the Rubraca API. The components of lease expense and related cash flows were as follows (in thousands): Three months ended June 30, Three months ended June 30, 2020 2019 Lease cost Finance lease cost: Amortization of right-of-use assets $ 474 $ 356 Interest on lease liabilities 208 179 Operating lease cost 998 994 Short-term lease cost 116 48 Variable lease cost 472 645 Total lease cost $ 2,268 $ 2,222 Operating cash flows from finance leases $ 208 $ 179 Operating cash flows from operating leases $ 998 $ 994 Financing cash flows from finance leases $ 364 $ 255 Six months ended June 30, Six months ended June 30, 2020 2019 Lease cost Finance lease cost: Amortization of right-of-use assets $ 947 $ 712 Interest on lease liabilities 423 363 Operating lease cost 2,124 2,144 Short-term lease cost 222 97 Variable lease cost 1,070 1,369 Total lease cost $ 4,786 $ 4,685 Operating cash flows from finance leases $ 423 $ 363 Operating cash flows from operating leases $ 2,124 $ 2,144 Financing cash flows from finance leases $ 720 $ 505 The weighted-average remaining lease term and weighted-average discount rate were as follows: June 30, 2020 June 30, 2019 Weighted-average remaining lease term (years) Operating leases 7.0 6.8 Finance leases 5.5 6.5 Weighted-average discount rate Operating leases 8% 8% Finance leases 8% 8% Future minimum commitments due under these lease agreements as of June 30, 2020 are as follows (in thousands): Operating Leases Finance Leases Total 2020 (remaining six months) 2,814 1,143 3,957 2021 5,628 2,287 7,915 2022 5,177 2,287 7,464 2023 4,791 2,287 7,078 2024 4,798 2,287 7,085 Thereafter 14,619 2,287 16,906 Present value adjustment (9,162) (2,429) (11,591) Present value of lease payments $ 28,665 $ 10,149 $ 38,814 |
Long-term Debt
Long-term Debt | 6 Months Ended |
Jun. 30, 2020 | |
Long-term Debt | |
Long-term Debt | 10. Long-term Debt The following is a summary of our convertible senior notes at June 30, 2020: Principal Amount Interest Rate (in thousands) Due Date 2021 Notes 2.50% $ 64,418 September 15, 2021 2024 Notes 4.50% 150,624 August 1, 2024 2025 Notes 1.25% 300,000 May 1, 2025 Total $ 515,042 2021 Notes In September 2014, we completed a private placement of $287.5 million aggregate principal amount of 2.5% convertible senior notes due 2021 (the “2021 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 2021 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 2021 Notes are senior unsecured obligations and bear interest at a rate of 2.5% per year, payable semi-annually in arrears on March 15 September 15 Holders may convert all or any portion of the 2021 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 2021 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. 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 2021 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 2021 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 2021 Notes to be redeemed plus accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the 2021 Notes. If we undergo a fundamental change, as defined in the indenture, prior to the maturity date of the 2021 Notes, holders may require us to repurchase for cash all or any portion of the 2021 Notes at a fundamental change repurchase price equal to 100% of the principal amount of the 2021 Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. The 2021 Notes rank senior in right of payment to any of our indebtedness that is expressly subordinated in right of payment to the 2021 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 2021 Notes, we incurred $9.2 million of debt issuance costs, of which $2.0 million of unamortized debt issuance costs were derecognized in connection with the repurchase of the 2021 Notes. The remaining debt issuance costs are presented as a deduction from the convertible senior notes on the Consolidated Balance Sheets and are amortized as interest expense over the expected life of the 2021 Notes using the effective interest method. We determined the expected life of the debt was equal to the seven-year term of the 2021 Notes. In August 2019, we entered into privately negotiated transactions with a limited number of holders to repurchase $190.3 million aggregate principal amount of our outstanding 2021 Notes for an aggregate repurchase price of $171.8 million, including accrued interest. This repurchase resulted in the recognition of $18.5 million gain on extinguishment of debt. In April 2020, we entered into a privately negotiated exchange agreement with a holder (“Holder”) of our 2021 Notes, pursuant to which we issued to such Holder of the 2021 Notes approximately $36.1 million in aggregate principal amount (the “Additional 2024 Notes”) of our currently outstanding 2024 Notes in exchange for approximately $32.8 million in aggregate principal of 2021 Notes held by such Holder (the “Exchange Transaction”), which resulted in a $3.3 million loss on extinguishment of debt. We did not receive any cash proceeds from the Exchange Transaction. 2024 Notes In August 2019, we completed a private placement to qualified institutional buyers of $263.0 million aggregate principal amount of 4.50% convertible senior notes due 2024 (the “2024 Notes”) resulting in net proceeds of $254.9 million, after deducting underwriting discounts and commissions and 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 2024 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 2024 Notes are senior unsecured obligations and bear interest at a rate of 4.50% per year, payable semi-annually in arrears on February 1 August 1 Holders may convert all or any portion of the 2024 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 137.2213 shares per $1,000 in principal amount of 2024 Notes, equivalent to a conversion price of approximately $7.29 per share. The conversion rate is subject to adjustment upon the occurrence of certain events described in the indenture. 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 2024 Notes in connection with such a corporate event or during the related redemption period in certain circumstances. We will not have the right to redeem the 2024 Notes prior to their maturity. If we undergo a fundamental change, as defined in the indenture, prior to the maturity date of the 2024 Notes, holders may require us to repurchase for cash all or any portion of the 2024 Notes at a fundamental change repurchase price equal to 100% of the principal amount of the 2024 Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. No sinking fund is provided for the 2024 Notes. The 2024 Notes rank senior in right of payment to any of our indebtedness that is expressly subordinated in right of payment to the 2024 Notes; equal in right of payment to all of our liabilities that are not so subordinated, including the 2021 Notes and 2025 Notes; effectively junior in right of payment to any secured indebtedness to the extent of the value of the assets securing such indebtedness, including our borrowing under the TPG financing agreement; and structurally junior to all indebtedness and other liabilities (including trade payables) of our subsidiaries. In connection with the issuance of the 2024 Notes, we incurred $8.0 million of debt issuance costs. The debt issuance costs are presented as a deduction from the convertible senior notes on the Consolidated Balance Sheets and are amortized as interest expense over the expected life of the 2024 Notes using the effective interest method. We determined the expected life of the debt was equal to the five-year term of the 2024 Notes. In January 2020, we completed a registered direct offering of an aggregate 17,777,679 shares of our common stock at a price of $9.25 per share. We used the proceeds of the share offering to repurchase an aggregate of $123.4 million principal amount of 2024 Notes in privately negotiated transactions. In addition, we paid customary fees and expenses in connection with the transactions. As a result of this transaction, $3.6 million of unamortized debt issuance costs were derecognized and we recognized a $7.8 million loss on the transactions. In April 2020, we completed the Exchange Transaction discussed in the 2021 Notes section above. The Additional 2024 Notes issued in the Exchange Transaction were issued as Additional Notes under that certain Indenture, dated as of August 13, 2019 (the “Indenture”), by and between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee, and have substantially identical terms to our currently outstanding 2024 Notes, except that the Additional 2024 Notes will accrue interest from February 1, 2020 and the initial interest payment date on the Additional 2024 Notes will be August 1, 2020. The Holder paid to the Company accrued interest on the Additional 2024 Notes from February 1, 2020 to and including April 20, 2020. The Additional 2024 Notes will be treated as a single series of securities with the currently outstanding 2024 Notes. In April and May 2020, approximately $24.3 million in principal amount of 2024 Notes were converted into 3,331,870 shares of our common stock at the conversion rate of 137.2213 shares per $1,000 in principal amount of 2024 Notes. 2025 Notes In April 2018, we completed an underwritten public offering of $300.0 million aggregate principal amount of 1.25% convertible senior notes due 2025 (the “2025 Notes”) resulting in net proceeds of $290.9 million, after deducting underwriting discounts and commissions and 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 2025 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, as supplemented by the terms of that certain first supplemental indenture thereto. The 2025 Notes are senior unsecured obligations and bear interest at a rate of 1.25% per year, payable semi-annually in arrears on May 1 November 1 Holders may convert all or any portion of the 2025 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 13.1278 shares per $1,000 in principal amount of 2025 Notes, equivalent to a conversion price of approximately $76.17 per share. The conversion rate is subject to adjustment upon the occurrence of certain events described in the indenture. 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 2025 Notes in connection with such a corporate event or during the related redemption period in certain circumstances. On or after May 2, 2022, we may redeem the 2025 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 2025 Notes to be redeemed plus accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the 2025 Notes. If we undergo a fundamental change, as defined in the indenture, prior to the maturity date of the 2025 Notes, holders may require us to repurchase for cash all or any portion of the 2025 Notes at a fundamental change repurchase price equal to 100% of the principal amount of the 2025 Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. The 2025 Notes rank senior in right of payment to any of our indebtedness that is expressly subordinated in right of payment to the 2025 Notes; equal in right of payment to all of our liabilities that are not so subordinated, including the 2021 Notes; 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 2025 Notes, we incurred $9.1 million of debt issuance costs. The debt issuance costs are presented as a deduction from the convertible senior notes on the Consolidated Balance Sheets and are amortized as interest expense over the expected life of the 2025 Notes using the effective interest method. We determined the expected life of the debt was equal to the seven-year term of the 2025 Notes. As of June 30, 2020 and December 31, 2019, the balance of unamortized debt issuance costs related to the 2021 Notes, 2024 Notes and 2025 Notes was $10.4 million and $15.4 million, respectively . TPG Financing Agreement On May 1, 2019, we entered into a financing agreement (the “Financing Agreement”) with certain affiliates of TPG Sixth Street Partners, LLC (“TPG”) in which we plan to borrow from TPG amounts required to reimburse our actual costs and expenses incurred during each fiscal quarter (limited to agreed budgeted amounts), as such expenses are incurred, related to the ATHENA clinical trial, in an aggregate amount of up to $175 million (the amount actually borrowed, the “Borrowed Amount”). ATHENA is our largest clinical trial, with a planned target enrollment of 1,000 patients across more than 270 sites in at least 25 countries. The Clovis-sponsored phase 3 ATHENA study in advanced ovarian cancer is the first-line maintenance treatment setting evaluating Rubraca plus nivolumab (PD-1 inhibitor), Rubraca, nivolumab and a placebo in newly-diagnosed patients who have completed platinum-based chemotherapy. This study initiated in the second quarter of 2018 and we completed target enrollment during the second quarter of 2020. We incur borrowings under the Financing Agreement on a quarterly basis, beginning with such expenses incurred during the quarter ended March 31, 2019 and ending generally on the earliest to occur of (i) the termination of the ATHENA Trial, (ii) the date of completion of all activities under the ATHENA Trial Clinical Study Protocol, (iii) the date on which we pay the Discharge Amount (as defined in the Financing Agreement), (iv) the date of the occurrence of a change of control of us (or a sale of all or substantially all of our assets related to Rubraca) or our receipt of notice of certain breaches by us of our obligations under material in-license agreements related to Rubraca and (v) September 30, 2022. We are obligated to repay on a quarterly basis, beginning on the earliest to occur of (i) the termination of the ATHENA Trial, (ii) the approval by the FDA of an update to the label portion of the Rubraca new drug application (“NDA”) to include in such label the treatment of an indication resulting from the ATHENA Trial, (iii) the date on which we determine that the results of the ATHENA Trial are insufficient to achieve such an expansion of the Rubraca label to cover an indication based on the ATHENA Trial and (iv) September 30, 2022 (the “Repayment Start Date”). ● 9.75% (which rate may be increased incrementally up to approximately 10.25% in the event the Borrowed Amount exceeds $166.5 million) of the direct Rubraca net sales recorded by us and our subsidiaries worldwide and our future out-licensees in the United States, if any, during such quarter; ● 19.5% of any royalty payments received by us and our subsidiaries during such quarter based on the sales of Rubraca by our future out-licensees outside the United States, if any; and ● 19.5% of any other amounts received by us and our subsidiaries in connection with any other commercialization arrangement for Rubraca, including any upfront and milestone payments and proceeds of infringement claims (which payments are not subject to the caps described below). Quarterly payments are capped at $8.5 million, unless the label portion of the Rubraca NDA is expanded by the FDA to include such label the treatment of an indication resulting from the ATHENA Trial, in which case the quarterly payment is capped at $13.5 million. In the event the aggregate Borrowed Amount exceeds $166.5 million, such quarterly limits will be incrementally increased to a maximum of approximately $8.94 million and $14.19 million, respectively. The maximum amount required to be repaid under the agreement is two times the aggregate Borrowed Amount, which may be $350 million in the event we borrow the full $175 million under the Financing Agreement. In the event we have not made payments on or before December 30, 2025 equal to at least the Borrowed Amount, we are required to make a lump sum payment in an amount equal to such Borrowed Amount less the aggregate of all prior quarterly payments described above. All other payments are contingent on the performance of Rubraca. There is no final maturity date on the Financing Agreement. Our obligations under the Financing Agreement are secured under a Pledge and Security agreement by a first priority security interest in all of our assets related to Rubraca, including intellectual property rights and a pledge of the equity of our wholly owned subsidiaries, Clovis Oncology UK Limited and Clovis Oncology Ireland Limited. In addition, the obligations are guaranteed by Clovis Oncology UK Limited and Clovis Oncology Ireland Limited, secured by a first priority security interest in all the assets of those subsidiaries. Pursuant to the Financing Agreement, we have agreed to certain limitations on our operations, including limitations on making certain restricted junior payments, including payment of dividends, limitation on liens and certain limitations on the ability of our non-guarantor subsidiaries to own certain assets related to Rubraca and to incur indebtedness. We may terminate the Financing Agreement at any time by paying the lenders an amount (the “Discharge Amount”) equal to the sum of (a) (A) the greater of (x) the Borrowed Amount plus (i) if such date is during calendar year 2019, $35 million or (ii) if such date is during calendar year 2020 or thereafter, $50 million and (y) (i) if such date is prior to the Repayment Start Date, 1.75 times the Borrowed Amount or (ii) if such date is after the Repayment Start Date, 2.00 times the Borrowed Amount minus (B) the aggregate amount of all quarterly payments previously paid to the lenders plus (b) all other obligations which have accrued but which have not been paid under the loan documents, including expense reimbursement. In the event of (i) a change of control of us, we must pay the Discharge Amount to the lenders and (ii) an event of default under the Financing Agreement (which includes, among other events, breaches or defaults under or terminations of our material in-license agreements related to Rubraca and defaults under our other material indebtedness), the lenders have the right to declare the Discharge Amount to be immediately due and payable. For the six months ended June 30, 2020, we recorded $72.5 million as a long-term liability on the Consolidated Balance Sheets and future quarterly draws will be recorded as a long-term liability on the Consolidated Balance Sheets. In connection with the transaction, we incurred $1.8 million of debt issuance costs. The debt issuance costs are presented as a deduction from the TPG financing liability on the Consolidated Balance Sheets and are amortized as interest expense over the expected life of the Financing Agreement using the straight-line method. As of June 30, 2020, the balance of unamortized debt issuance costs was $1.6 million. For the six months ended June 30, 2020, we used an effective interest rate of 14.5%. For subsequent periods, we will use the prospective method whereby a new effective interest rate is determined based on the revised estimate of remaining cash flows. The new rate is the discount rate that equates the present value of the revised estimate of remaining cash flows with the carrying amount of the debt, and it will be used to recognize interest expense for the remaining periods. Under this method, the effective interest rate is not constant, and any change in expected cash flows is recognized prospectively as an adjustment to the effective yield. The following table sets forth total interest expense recognized during the three and six months ended June 30, 2020 and 2019 (in thousands): Three months ended June 30, Six months ended June 30, 2020 2019 2020 2019 Interest on convertible notes $ 2,811 $ 2,734 $ 5,994 $ 5,469 Amortization of debt issuance costs 637 679 1,423 1,324 Debt issuance cost derecognized related to convertible debt transactions 789 — 4,344 — Interest on finance lease 208 179 423 363 Interest on borrowings under financing agreement 2,264 199 4,055 199 Other interest 30 26 61 52 Total interest expense $ 6,739 $ 3,817 $ 16,300 $ 7,407 |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2020 | |
Stockholders' Equity | |
Stockholders' Equity | 11. Stockholders’ Equity Common Stock In May 2020, we sold 11,090,000 shares of our common stock in a public offering at $8.05 per share. The net proceeds from the offering were $82.8 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, 2020 and 2019, as follows (in thousands): Foreign Currency Unrealized Total Accumulated Translation Adjustments (Losses) Gains Other Comprehensive Loss 2020 2019 2020 2019 2020 2019 Balance at April 1, $ (44,835) $ (44,465) $ (55) $ (99) $ (44,890) $ (44,564) Other comprehensive income (loss) 61 (1) (84) 77 (23) 76 Total before tax (44,774) (44,466) (139) (22) (44,913) (44,488) Tax effect — — — — — — Balance at June 30, $ (44,774) $ (44,466) $ (139) $ (22) $ (44,913) $ (44,488) The changes in accumulated balances related to each component of other comprehensive income (loss) are summarized for the six months ended June 30, 2020 and 2019, as follows (in thousands): Foreign Currency Unrealized Total Accumulated Translation Adjustments (Losses) Gains Other Comprehensive Loss 2020 2019 2020 2019 2020 2019 Balance at January 1, $ (44,732) $ (44,460) $ (133) $ (174) $ (44,865) $ (44,634) Other comprehensive (loss) income (42) (6) (6) 152 (48) 146 Total before tax (44,774) (44,466) (139) (22) (44,913) (44,488) Tax effect — — — — — — Balance at June 30, $ (44,774) $ (44,466) $ (139) $ (22) $ (44,913) $ (44,488) There were no reclassifications out of accumulated other comprehensive loss in each of the three and six months ended June 30, 2020 and 2019. |
Share-Based Compensation
Share-Based Compensation | 6 Months Ended |
Jun. 30, 2020 | |
Share-Based Compensation | |
Share-Based Compensation | 12. 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, 2020 and 2019 was recognized in the accompanying Consolidated Statements of Operations and Comprehensive Loss as follows (in thousands): Three months ended June 30, Six months ended June 30, 2020 2019 2020 2019 Research and development $ 6,636 $ 6,633 $ 13,561 $ 13,244 Selling, general and administrative 6,677 7,497 12,713 14,525 Total share-based compensation expense $ 13,313 $ 14,130 $ 26,274 $ 27,769 We did not recognize a tax benefit related to share-based compensation expense during the three and six months ended June 31, 2020 and 2019, as we maintain net operating loss carryforwards and have established a valuation allowance against the entire net deferred tax asset as of June 30, 2020. Stock Options The following table summarizes the activity relating to our options to purchase common stock for the six months ended June 30, 2020: Weighted Weighted Average Aggregate Average Remaining Intrinsic Number of Exercise Contractual Value Options Price Term (Years) (Thousands) Outstanding at December 31, 2019 6,287,025 $ 42.24 Granted 870,492 7.61 Exercised (24,153) 3.08 Forfeited (346,100) 48.18 Outstanding at June 30, 2020 6,787,264 $ 37.63 6.1 $ 851 Vested and expected to vest at June 30, 2020 6,606,555 $ 38.12 6.0 $ 806 Vested and exercisable at June 30, 2020 4,912,792 $ 44.14 5.0 $ 350 The aggregate intrinsic value in the table above represents the pretax intrinsic value, based on our closing stock price of $6.75 as of June 30, 2020, 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, 2020 and 2019 (in thousands, except per share amounts): Three months ended June 30, Six months ended June 30, 2020 2019 2020 2019 Weighted-average grant date fair value per share $ 5.06 $ 11.33 $ 5.87 $ 15.81 Intrinsic value of options exercised $ 87 $ 198 $ 91 $ 963 Cash received from stock option exercises $ 72 $ 222 $ 74 $ 1,316 As of June 30, 2020, the unrecognized share-based compensation expense related to unvested options, adjusted for expected forfeitures, was $28.2 million and the estimated weighted-average remaining vesting period was 1.8 years. Restricted Stock The following table summarizes the activity relating to our unvested restricted stock units (“RSUs”) for the six months ended June 30, 2020: Weighted Average Number of Grant Date Units Fair Value Unvested at December 31, 2019 2,171,347 $ 28.37 Granted 2,392,428 8.27 Vested (775,784) 28.10 Forfeited (276,398) 19.18 Unvested at June 30, 2020 3,511,593 $ 15.46 Expected to vest after June 30, 2020 (3,351,795) $ 14.97 As of June 30, 2020, the unrecognized share-based compensation expense related to unvested RSUs, adjusted for expected forfeitures, was $49.1 million and the estimated weighted-average remaining vesting period was 2.3 years. |
License Agreements
License Agreements | 6 Months Ended |
Jun. 30, 2020 | |
License Agreements | |
License Agreements | 13. License Agreements Rucaparib In June 2011, we entered into a license agreement with Pfizer, Inc. (“Pfizer”) to obtain the exclusive global rights to develop and commercialize Rubraca. 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 Rubraca, 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 the EU, to a date that is 18 months after the date of achievement of such milestones. On December 19, 2016, Rubraca received its initial FDA approval. This approval resulted in a $0.75 million milestone payment to Pfizer as required by the license agreement, which was paid in the first quarter of 2017 . This FDA approval also resulted in an obligation to pay a $20.0 million milestone payment, for which we exercised the option to defer payment by agreeing to pay $23.0 million within 18 months after the date of the FDA approval. We paid the $23.0 million milestone payment in June 2018. In April, 2018, Rubraca received a second FDA approval. This approval resulted in an obligation to pay a $15.0 million milestone payment, which we paid in April 2018. In May 2018, Rubraca received its initial European Commission marketing authorization. This approval resulted in an obligation to pay a $20.0 million milestone payment, which we paid in June 2018. In January 2019, Rubraca received a second European Commission approval. This approval resulted in an obligation to pay a $15.0 million milestone payment, which we paid in February 2019. In June 2019, we paid a $0.75 million milestone payment due to the launch of Rubraca as maintenance therapy in Germany in March 2019. In May 2020, Rubraca received a third FDA approval for Rubraca as a monotherapy treatment of adult patients with BRCA1/2 June 2020 These milestone payments were recognized as intangible assets and are 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 Rubraca and we are responsible for all ongoing development and commercialization costs for Rubraca. We are required to make regulatory milestone payments to Pfizer of up to an additional $8.0 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 Rubraca are met, which relate to annual sales targets of $250.0 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 net sales, with standard provisions for royalty offsets to the extent we need to obtain any rights from third parties to commercialize Rubraca. The license agreement with Pfizer will remain in effect until the expiration of all of our royalty and sublicense revenue obligations to Pfizer, determined on a product-by-product and country-by-country basis, unless we elect to terminate the license agreement earlier. If we fail to meet our obligations under the agreement and are unable to cure such failure within specified time periods, Pfizer can terminate the agreement, resulting in a loss of our rights to Rubraca and an obligation to assign or license to Pfizer any intellectual property rights or other rights we may have in Rubraca, including our regulatory filings, regulatory approvals, patents and trademarks for Rubraca. In April 2012, we entered into a license agreement with AstraZeneca to acquire exclusive rights associated with Rubraca 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 Rubraca for the uses claimed by these patents. AstraZeneca also receives royalties on net sales of Rubraca. Lucitanib On November 19, 2013, we acquired all of the issued and outstanding capital stock of EOS pursuant to the terms set forth in that certain Stock Purchase Agreement, dated as of November 19, 2013 (the “Stock Purchase Agreement”), by and among the Company, EOS, its shareholders (the “Sellers”) and Sofinnova Capital V FCPR, acting in its capacity as the Sellers’ representative. Following the acquisition, EOS became a wholly-owned subsidiary of the Company. Under the terms of the Stock Purchase Agreement, in addition to the initial purchase price paid at the time of the closing of the acquisition and other license fees due to Advenchen described below, we will also be obligated to pay to the Sellers a milestone payment of $65.0 million upon obtaining the first NDA approval from the FDA with respect to lucitanib. In October 2008, Ethical Oncology Science, S.p.A. (“EOS”) (now known as Clovis Oncology Italy S.r.l.) entered into an exclusive license agreement with Advenchen Laboratories LLC (“Advenchen”) to develop and commercialize lucitanib on a global basis, excluding China. We are obligated to pay Advenchen tiered royalties at percentage rates in the mid-single digits on net sales of lucitanib, based on the volume of annual net sales achieved. In addition, after giving effect to the first and second amendments to the license agreement, we are required to pay to Advenchen 25% of any consideration, excluding royalties, we receive from sublicensees, in lieu of the milestone obligations set forth in the agreement. We are obligated under the agreement to use commercially reasonable efforts to develop and commercialize at least one product containing lucitanib, and we are also responsible for all remaining development and commercialization costs for lucitanib. The license agreement with Advenchen will remain in effect until the expiration of all of our royalty obligations to Advenchen, determined on a product-by-product and country-by-country basis, unless we elect to terminate the agreement earlier. If we fail to meet our obligations under the agreement and are unable to cure such failure within specified time periods, Advenchen can terminate the agreement, resulting in a loss of our rights to lucitanib. FAP Program In September 2019, we entered into a global license and collaboration agreement with 3BP to develop and commercialize a PTRT and imaging agent targeting FAP. The lead candidate, designated internally as FAP-2286, is being developed pursuant to a global development plan agreed to by the parties. We are responsible for the costs of all preclinical and clinical development activities described in the plan, including the costs for a limited number of 3BP full-time equivalents and external costs incurred during the preclinical development phase of the collaboration. Upon the signing of the license and collaboration agreement in September 2019, we made a $9.4 million upfront payment to 3BP, which we recognized as acquired in-process research and development expense. Pursuant to the terms of the FAP agreement, we are required to make additional payments to 3BP for annual technology access fees and upon the achievement of certain development and regulatory milestone events (or on certain dates, whichever occur earlier). We are also obligated to pay 3BP single- to low-double-digit royalties on net sales of the FAP-targeted therapeutic product and imaging agent, based on the volume of annual net sales achieved. In addition, 3BP is entitled to receive 34% of any consideration, excluding royalties on the therapeutic product, pursuant to any sublicenses we may grant. We are obligated under the license and collaboration agreement to use diligent efforts to develop FAP-2286 and commercialize a FAP-targeted therapeutic product and imaging agent, and we are responsible for all commercialization costs in our territory. The agreement with 3BP will remain in effect until the expiration of our royalty obligations to 3BP, determined on a product-by-product and country-by-country basis, unless we elect to terminate the agreement earlier. If we fail to meet our obligations under the agreement and are unable to cure such failure within specified time periods, 3BP can terminate the agreement, resulting in a loss of our rights. 3BP also has the right to terminate the agreement under certain circumstances in connection with our change of control in which the acquiring party retains a product competitive with the FAP-targeted therapeutic product or, in the event marketing authorization has not yet been obtained, does not agree to the then-current global development plan. In February 2020, we finalized the terms of a drug discovery collaboration agreement with 3BP to identify up to three additional, undisclosed targets for peptide-targeted radionuclide therapy, to which we will obtain global rights for any resulting product candidates. We are responsible for the costs of all preclinical and clinical development activities conducted under the discovery program, including the costs for a limited number of 3BP full-time equivalents and external costs incurred during the discovery and preclinical development phase for each collaboration target. The discovery collaboration agreement was effective December 31, 2019, for which we incurred a $2.1 million technology access fee, which we accrued and recognized as a research and development expense. Pursuant to the terms of the discovery collaboration agreement, we are required to make additional payments to 3BP for annual technology access fees and upon the achievement of certain development and regulatory milestone events (or on certain dates, whichever occur earlier). We are also obligated to pay 3BP a 6% royalty on net sales of License Products (as defined in the agreement), based on the volume of quarterly net sales achieved. We are obligated under the discovery collaboration agreement to use diligent efforts to develop and commercialize the product candidates, if any, that result from the discovery program, and we are responsible for all clinical development and commercialization costs. The agreement with 3BP will remain in effect until the expiration of our royalty obligations to 3BP, determined on a product-by-product and country-by-country basis, unless we elect to terminate the agreement earlier. If we fail to meet our obligations under the agreement and are unable to cure such failure within specified time periods, 3BP can terminate the agreement, resulting in a loss of our rights. Pursuant to terms of each of our product license agreements, we will pay royalties to our licensors on sales, if any, of the respective products. |
Net Loss Per Common Share
Net Loss Per Common Share | 6 Months Ended |
Jun. 30, 2020 | |
Net Loss Per Common Share | |
Net Loss Per Common Share | 14. 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 2021 Notes, 2025 Notes and 2024 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, 2020 2019 Common shares under option plans 4,156 3,133 Convertible senior notes 25,648 8,584 Total potential dilutive shares 29,804 11,717 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies | |
Commitments and Contingencies | 15. Commitments and Contingencies Royalty and License Fee Commitments We have entered into certain license agreements, as identified in Note 13, License Agreements 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 a 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, 2020, $74.5 million of purchase commitments exist under the Agreement. At the time we entered into the Agreement, we evaluated the Agreement as a whole and bifurcated into lease and non-lease components, which consisted of an operating lease of warehouse space, capital lease of equipment, purchase of leasehold improvements and manufacturing costs based upon the relative fair values of each of the deliverables. During October 2018, the production train was placed into service and we recorded the various components of 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. Rociletinib-Related Litigation Following Clovis’ regulatory announcement in November 2015 of adverse developments in its ongoing clinical trials for rociletinib, Clovis and certain of its current and former executives were named in various securities lawsuits, the largest of which was a putative class action lawsuit in the District of Colorado (the “Medina Action”) which was settled on October 26, 2017 (the “Medina Settlement”). The remaining actions are discussed below. In March 2017, two putative shareholders of the Company, 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 a 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 sought, among other things, an award of money damages. On July 31, 2017, the defendants filed a motion to dismiss the Consolidated Derivative Complaint. Plaintiffs filed an opposition to the motion to dismiss on August 31, 2017, and the defendants filed a reply in further support of the motion to dismiss on September 26, 2017. While the motion to dismiss remained pending, on November 19, 2018, Plaintiffs filed a motion for leave to file a supplemental consolidated complaint, and on November 20, 2018, the Court granted that motion. On November 27, 2018, Plaintiffs filed their supplemental complaint (the “Supplemental Derivative Complaint”), which adds allegations concerning the Company’s, Mr. Mahaffy’s and Mr. Mast’s settlements with the United States Securities and Exchange Commission. Pursuant to a briefing schedule entered by the Court, the defendants filed a supplemental motion to dismiss the Supplemental Derivative Complaint on February 6, 2019; plaintiffs filed an opposition brief on February 22, 2019; and the defendants filed a reply brief on March 5, 2019. The Court held oral arguments on the defendants’ motions to dismiss on June 19, 2019. At the oral arguments, the Court ordered the parties to submit supplemental letter briefs on the motion to dismiss. On October 1, 2019, Vice Chancellor Joseph R. Slights III of the Delaware Chancery Court, issued a Memorandum Opinion granting in part and denying in part defendants’ motions to dismiss. The Supplemental Derivative Complaint was dismissed as to Plaintiffs’ derivative claims for unjust enrichment and insider trading. The Court allowed Plaintiffs’ remaining derivative claim for breach of fiduciary duty to proceed. Defendants filed an answer to the Supplemental Derivative Complaint on December 27, 2019. On December 17, 2019, the parties participated in a mediation, which did not result in a settlement. On December 22, 2019, the Company’s board of directors formed a Special Litigation Committee (the “SLC”) to conduct an investigation of the claims asserted in the Supplemental Derivative Complaint. On February 18, 2020, the SLC moved to stay all proceedings in the Consolidated Derivative Action pending completion of its investigation. Plaintiffs filed their opposition to the motion to stay on March 3, 2020 and the SLC filed its reply on March 13, 2020. On May 12, 2020, after hearing oral argument, Vice Chancellor Slights granted the SLC’s motion to stay proceedings until September 18, 2020 so that the SLC may complete its investigation. While the SLC’s investigation remains ongoing, the Company does not believe this litigation will have a material impact on its financial position or results of operations. 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. Based on the October 1, 2019 ruling in the Consolidated Derivative Action, on October 22, 2019, the court lifted the stay. The parties participated in a scheduling conference on December 9, 2019, following which the court set the dates for pre-trial conference and trial for March 2, 2021 and March 29, 2021, respectively. On December 23, 2019, the plaintiff filed an amended complaint, and on February 7, 2020, the plaintiff filed a second amended complaint. On February 28, 2020, the defendants moved to dismiss the second amended Guo complaint. The plaintiff filed an opposition to the motion to dismiss on March 20, 2020 and the defendants filed their reply on April 3, 2020. The Company intends to vigorously defend against the allegations in the second amended Guo complaint, but there can be no assurance that the defense will be successful. European Patent Opposition Oppositions were filed in the granted European counterparts of two patents in the rucaparib camsylate salt/polymorph patent family. An opposition of European patent 2534153 was filed by two opponents on June 20, 2017. The European Patent Office’s Opposition Division held an oral hearing on December 4, 2018, during which it upheld claims, narrowed from the originally granted patent, to certain crystalline forms of rucaparib camsylate, including, but not limited to, rucaparib S-camsylate Form A, the crystalline form in Rubraca. Clovis and one opponent, Hexal, appealed the written decision of the European Opposition Division and filed reply appeal briefs in early November 2019. An opposition of European patent 3150610, a divisional patent of European patent 2534153, was filed on April 30, 2020. The divisional patent includes claims directed to use of rucaparib in a method of inhibiting PARP activity or treating cancer. The grounds of opposition for the divisional patent were lack of novelty, lack of inventive step, added subject matter, and insufficient disclosure – similar grounds on which the parent patent was opposed. It is common for an opponent to raise these grounds in an opposition. During examination, the European Patent Office considers all of these grounds and considered the application to comply with the applicable law when granting the patent. In particular, the novelty and inventive step challenges to the divisional patent are based on prior art references (or closely related disclosures) that were cited by the European patent examiner during prosecution of the application. As part of the proceeding, we have the opportunity to submit further arguments and pursue alternative claims in the form of auxiliary requests. While the ultimate results of patent challenges can be difficult to predict, we believe a number of factors support the patentability of this rucaparib use patent. We believe a successful challenge of all claims would be difficult. Clovis’ response is due on October 28, 2020. In Europe, regulatory exclusivity is available for ten years , plus one year for a new indication, therefore, we have regulatory exclusivity for Rubraca in Europe until 2028, and if an additional indication is approved, until 2029. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
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 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, 2019 (“2019 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. |
Liquidity | 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 revenue 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. 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. |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”. The guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. We adopted ASU 2016-13 as of January 1, 2020. Upon the adoption of ASU 2016-13 on January 1, 2020, we are required to determine whether a decline in the fair value below the amortized cost basis (i.e., impairment) of an available-for-sale debt is security is due to credit-related factors or noncredit-related factors. Any impairment that is not credit related is recognized in accumulated other comprehensive loss, net of applicable taxes. When evaluating an impairment, entities may not use the length of time a security has been in an unrealized loss position as a factor, either by itself or in combination with other factors, to conclude that a credit loss does not exist. We applied this impairment model for available-for-sale debt securities as of January 1, 2020 and no impairment was recognized upon adoption. In addition, no impairment was recognized for the three and six months ended June 30, 2020. We recognized a minimal allowance for credit losses related to our accounts receivable at June 30, 2020. The adoption of ASU 2016-13 did not materially impact our consolidated financial statements and disclosures. In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement”. The guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. We adopted ASU 2018-02 as of January 1, 2020 and there was no material impact on our consolidated financial statements and related disclosures. |
Revenue Recognition | Revenue Recognition We are currently approved to sell Rubraca in the United States and Europe markets. We distribute our product principally through a limited number of specialty distributor and specialty pharmacy providers, collectively, our customers. Our customers subsequently sell our products to patients and health care providers. Separately, we have arrangements with certain payors and other third parties that provide for government-mandated and privately-negotiated rebates, chargebacks and discounts. Product Revenue Revenue from product sales are recognized when the performance obligation is satisfied, which is when customers obtain control of our product at a point in time, typically upon delivery. We expense incremental costs of obtaining a contract as and when incurred if the expected amortization period of the asset that we would have recognized is one year Reserves for Variable Consideration Revenues from product sales are recorded at the net sales price (transaction price), which includes estimates of variable consideration for which reserves are established and which result from price concessions that include rebates, chargebacks, discounts, co-pay assistance, estimated product returns and other allowances that are offered within contracts between us and our customers, health care providers, payors and other indirect customers relating to the sales of our product. These reserves are based on the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable (if the amount is payable to the customers) or a current liability (if the amount is payable to a party other than a customer). Where appropriate, these estimates take into consideration a range of possible outcomes which are probability-weighted for relevant factors such as our historical experience, current contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns. Overall, these reserves reflect our best estimates of the amount of consideration to which we are entitled based on the terms of the contract. The amount of variable consideration which is included in the transaction price may be constrained and is included in the net sales price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. Actual amounts of consideration ultimately received may differ from our estimates. If actual results in the future vary from our estimates, we adjust these estimates, which would affect product revenue and earnings in the period such variances become known. Government Rebates GPO and Payor Rebates. Chargebacks Discounts and Fees Co-pay assistance Returns |
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. 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. |
Accounts Receivable | Accounts Receivable As a result of the adoption of ASU 2016-13, we recognized a minimal allowance for credit losses related to our accounts receivable at June 30, 2020. We provide an allowance for doubtful accounts based on experience and specifically identified risks. Accounts receivable are charged off against the allowance for doubtful accounts when we determine that recovery is unlikely and we cease collection efforts. |
Inventory | Inventory Inventories are stated at the lower of cost or estimated net realizable value, on a first-in, first-out (“FIFO”) basis. Inventories include active pharmaceutical ingredient (“API”), contract manufacturing costs and overhead allocations. 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 regularly analyze our inventory levels for excess quantities and obsolescence (expiration), taking into account factors such as historical and anticipated future sales compared to quantities on hand and the remaining shelf-life of Rubraca. Rubraca finished goods have a shelf-life of four years from the date of manufacture. We expect to sell the finished goods prior to expiration. The API currently has a shelf-life of four years from the date of manufacture but can be retested at an immaterial cost with no expected reduction in potency, thereby extending its shelf-life as needed. We expect to consume substantially all of the API over a period of approximately six years based on our long-range sales projections of Rubraca. We 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. Expired inventory would be disposed of and the related costs would be written off as cost of product revenue. Inventories that are not expected to be consumed within 12 months following the balance sheet date are classified as long-term inventories. Long-term inventories primarily consist of API. API is currently produced by Lonza. 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. In addition, we currently manufacture Rubraca finished goods with a single third-party manufacturer. The disruption or termination of the supply of API or the disruption or termination of the manufacturing of our commercial products could have a material adverse effect on our business, financial position and results of operations. API that is written off due to damage and certain costs related to our dedicated production train at Lonza are included in Other Operating Expenses in the Consolidated Statements of Operations and Comprehensive Loss. Inventory used in clinical trials is expensed as research and development expense when it has been identified for such use. |
Convertible Senior Notes | The remaining debt issuance costs are presented as a deduction from the convertible senior notes on the Consolidated Balance Sheets and are amortized as interest expense over the expected life of the 2021 Notes using the effective interest method. We determined the expected life of the debt was equal to the seven-year term of the 2021 Notes. |
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 2021 Notes, 2025 Notes and 2024 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 Fai_2
Financial Instruments and Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Measurements | |
Assets 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, 2020 Assets: Money market $ 147,902 $ 147,902 $ — $ — U.S. treasury securities — — — — Total assets at fair value $ 147,902 $ 147,902 $ — $ — December 31, 2019 Assets: Money market $ 61,882 $ 61,882 $ — $ — U.S. treasury securities 189,736 54,910 134,826 — Total assets at fair value $ 251,618 $ 116,792 $ 134,826 $ — |
Available-for-Sale Securities (
Available-for-Sale Securities (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Available-for-Sale Securities | |
Summary of Available-for-Sale Securities | We did not have available-for-sale securities as of June 30, 2020. As of December 31, 2019, 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 $ 134,826 $ — $ — $ 134,826 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Inventories | |
Schedule of Inventories | June 30, December 31, 2020 2019 Work-in-process $ 103,871 $ 104,139 Finished goods, net 29,317 20,433 Total inventories $ 133,188 $ 124,572 |
Other Current Assets (Tables)
Other Current Assets (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Other Current Assets | |
Schedule Of other current assets | Other current assets were comprised of the following (in thousands): June 30, December 31, 2020 2019 Prepaid insurance $ 1,913 $ 505 Prepaid IT 796 698 Prepaid expenses - other 4,235 3,371 Value-added tax ("VAT") receivable 6,364 11,920 Receivable - other 1,111 2,176 Other 96 177 Total $ 14,515 $ 18,847 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
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, 2020 2019 Intangible asset - milestones $ 79,850 $ 71,850 Accumulated amortization (11,422) (8,930) Total intangible asset, net $ 68,428 $ 62,920 |
Estimated future amortization expense for intangible assets | Estimated future amortization expense associated with intangibles is expected to be as follows (in thousands): 2020 (remaining six months) $ 2,686 2021 5,371 2022 5,371 2023 5,371 2024 5,371 Thereafter 44,258 $ 68,428 |
Other Accrued Expenses (Tables)
Other Accrued Expenses (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Other Accrued Expenses | |
Schedule of other accrued expenses | Other accrued expenses were comprised of the following (in thousands): June 30, December 31, 2020 2019 Accrued personnel costs $ 12,101 $ 16,915 Accrued interest payable for convertible senior notes 3,900 5,903 Income tax payable 871 3,505 Accrued corporate legal fees and professional services 920 310 Accrued royalties 6,082 6,038 Accrued variable considerations 8,303 5,748 Purchase of API received not yet invoiced 79 — Accrued expenses - other 5,426 3,809 Total $ 37,682 $ 42,228 |
Lease (Tables)
Lease (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Lease | |
Schedule of components of lease expense and related cash flows | The components of lease expense and related cash flows were as follows (in thousands): Three months ended June 30, Three months ended June 30, 2020 2019 Lease cost Finance lease cost: Amortization of right-of-use assets $ 474 $ 356 Interest on lease liabilities 208 179 Operating lease cost 998 994 Short-term lease cost 116 48 Variable lease cost 472 645 Total lease cost $ 2,268 $ 2,222 Operating cash flows from finance leases $ 208 $ 179 Operating cash flows from operating leases $ 998 $ 994 Financing cash flows from finance leases $ 364 $ 255 Six months ended June 30, Six months ended June 30, 2020 2019 Lease cost Finance lease cost: Amortization of right-of-use assets $ 947 $ 712 Interest on lease liabilities 423 363 Operating lease cost 2,124 2,144 Short-term lease cost 222 97 Variable lease cost 1,070 1,369 Total lease cost $ 4,786 $ 4,685 Operating cash flows from finance leases $ 423 $ 363 Operating cash flows from operating leases $ 2,124 $ 2,144 Financing cash flows from finance leases $ 720 $ 505 |
Schedule of weighted-average remaining lease term and weighted-average discount rate | June 30, 2020 June 30, 2019 Weighted-average remaining lease term (years) Operating leases 7.0 6.8 Finance leases 5.5 6.5 Weighted-average discount rate Operating leases 8% 8% Finance leases 8% 8% |
Schedule of future minimum commitments due under lease agreements | Operating Leases Finance Leases Total 2020 (remaining six months) 2,814 1,143 3,957 2021 5,628 2,287 7,915 2022 5,177 2,287 7,464 2023 4,791 2,287 7,078 2024 4,798 2,287 7,085 Thereafter 14,619 2,287 16,906 Present value adjustment (9,162) (2,429) (11,591) Present value of lease payments $ 28,665 $ 10,149 $ 38,814 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Long-term Debt | |
Schedule of Future Annual Principal Payments on Convertible Senior Notes | The following is a summary of our convertible senior notes at June 30, 2020: Principal Amount Interest Rate (in thousands) Due Date 2021 Notes 2.50% $ 64,418 September 15, 2021 2024 Notes 4.50% 150,624 August 1, 2024 2025 Notes 1.25% 300,000 May 1, 2025 Total $ 515,042 |
Schedule of Total Interest Expense Recognized Related to Notes | Three months ended June 30, Six months ended June 30, 2020 2019 2020 2019 Interest on convertible notes $ 2,811 $ 2,734 $ 5,994 $ 5,469 Amortization of debt issuance costs 637 679 1,423 1,324 Debt issuance cost derecognized related to convertible debt transactions 789 — 4,344 — Interest on finance lease 208 179 423 363 Interest on borrowings under financing agreement 2,264 199 4,055 199 Other interest 30 26 61 52 Total interest expense $ 6,739 $ 3,817 $ 16,300 $ 7,407 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
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, 2020 and 2019, as follows (in thousands): Foreign Currency Unrealized Total Accumulated Translation Adjustments (Losses) Gains Other Comprehensive Loss 2020 2019 2020 2019 2020 2019 Balance at April 1, $ (44,835) $ (44,465) $ (55) $ (99) $ (44,890) $ (44,564) Other comprehensive income (loss) 61 (1) (84) 77 (23) 76 Total before tax (44,774) (44,466) (139) (22) (44,913) (44,488) Tax effect — — — — — — Balance at June 30, $ (44,774) $ (44,466) $ (139) $ (22) $ (44,913) $ (44,488) The changes in accumulated balances related to each component of other comprehensive income (loss) are summarized for the six months ended June 30, 2020 and 2019, as follows (in thousands): Foreign Currency Unrealized Total Accumulated Translation Adjustments (Losses) Gains Other Comprehensive Loss 2020 2019 2020 2019 2020 2019 Balance at January 1, $ (44,732) $ (44,460) $ (133) $ (174) $ (44,865) $ (44,634) Other comprehensive (loss) income (42) (6) (6) 152 (48) 146 Total before tax (44,774) (44,466) (139) (22) (44,913) (44,488) Tax effect — — — — — — Balance at June 30, $ (44,774) $ (44,466) $ (139) $ (22) $ (44,913) $ (44,488) |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
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, 2020 and 2019 was recognized in the accompanying Consolidated Statements of Operations and Comprehensive Loss as follows (in thousands): Three months ended June 30, Six months ended June 30, 2020 2019 2020 2019 Research and development $ 6,636 $ 6,633 $ 13,561 $ 13,244 Selling, general and administrative 6,677 7,497 12,713 14,525 Total share-based compensation expense $ 13,313 $ 14,130 $ 26,274 $ 27,769 |
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, 2019 6,287,025 $ 42.24 Granted 870,492 7.61 Exercised (24,153) 3.08 Forfeited (346,100) 48.18 Outstanding at June 30, 2020 6,787,264 $ 37.63 6.1 $ 851 Vested and expected to vest at June 30, 2020 6,606,555 $ 38.12 6.0 $ 806 Vested and exercisable at June 30, 2020 4,912,792 $ 44.14 5.0 $ 350 |
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, 2020 and 2019 (in thousands, except per share amounts): Three months ended June 30, Six months ended June 30, 2020 2019 2020 2019 Weighted-average grant date fair value per share $ 5.06 $ 11.33 $ 5.87 $ 15.81 Intrinsic value of options exercised $ 87 $ 198 $ 91 $ 963 Cash received from stock option exercises $ 72 $ 222 $ 74 $ 1,316 |
Summary of activity related to our unvested RSUs | Weighted Average Number of Grant Date Units Fair Value Unvested at December 31, 2019 2,171,347 $ 28.37 Granted 2,392,428 8.27 Vested (775,784) 28.10 Forfeited (276,398) 19.18 Unvested at June 30, 2020 3,511,593 $ 15.46 Expected to vest after June 30, 2020 (3,351,795) $ 14.97 |
Net Loss Per Common Share (Tabl
Net Loss Per Common Share (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Net Loss Per 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, 2020 2019 Common shares under option plans 4,156 3,133 Convertible senior notes 25,648 8,584 Total potential dilutive shares 29,804 11,717 |
Nature of Business and Basis _2
Nature of Business and Basis of Presentation (Details) | 6 Months Ended |
Jun. 30, 2020segmentitemproduct | |
Number of operating segments | segment | 1 |
Number of other product candidates | product | 2 |
Minimum estimated number of months operating plan funded | 12 months |
Minimum | |
Number of chemotherapies received by an adult patient | 2 |
Number of prior lines of platinum based chemotherapy received by patient | 2 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | Jan. 01, 2020 | Jun. 30, 2020 |
Summary of Significant Accounting Policies | ||
Amortization period of the asset | true | |
Payment terms number of days | 30 days | |
Shelf life of inventory | 4 years | |
Consumption period of API | 6 years | |
Shelf-life of API | 4 years | |
Cash, Cash Equivalents and Available-for-Sale Securities | ||
Impairment for available for debt securities | $ 0 | $ 0 |
Rucaparib | ||
Summary of Significant Accounting Policies | ||
Shelf life of inventory | 4 years |
Financial Instruments and Fai_3
Financial Instruments and Fair Value Measurements (Details) - Recurring - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Fair Value Measurements | ||
Assets at fair value | $ 147,902 | $ 251,618 |
Money market | ||
Fair Value Measurements | ||
Assets at fair value | 147,902 | 61,882 |
U.S. treasury securities | ||
Fair Value Measurements | ||
Assets at fair value | 189,736 | |
Fair Value, Inputs, Level 1 | ||
Fair Value Measurements | ||
Assets at fair value | 147,902 | 116,792 |
Fair Value, Inputs, Level 1 | Money market | ||
Fair Value Measurements | ||
Assets at fair value | 147,902 | 61,882 |
Fair Value, Inputs, Level 1 | U.S. treasury securities | ||
Fair Value Measurements | ||
Assets at fair value | 54,910 | |
Fair Value, Inputs, Level 2 | ||
Fair Value Measurements | ||
Assets at fair value | 134,826 | |
Fair Value, Inputs, Level 2 | Money market | ||
Fair Value Measurements | ||
Assets at fair value | 0 | 0 |
Fair Value, Inputs, Level 2 | U.S. treasury securities | ||
Fair Value Measurements | ||
Assets at fair value | 134,826 | |
Fair Value, Inputs, Level 3 | ||
Fair Value Measurements | ||
Assets at fair value | 0 | 0 |
Fair Value, Inputs, Level 3 | Money market | ||
Fair Value Measurements | ||
Assets at fair value | 0 | 0 |
Fair Value, Inputs, Level 3 | U.S. treasury securities | ||
Fair Value Measurements | ||
Assets at fair value | $ 0 | $ 0 |
Financial Instruments and Fai_4
Financial Instruments and Fair Value Measurements - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | |
Fair Value Measurements | |||
Liabilities at fair value | $ 0 | $ 0 | |
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 | 504,680 | 504,680 | $ 644,751 |
Convertible Senior Unsecured Notes 2021 Notes | |||
Fair Value Measurements | |||
Convertible senior notes | 64,000 | 64,000 | |
Convertible Senior Unsecured Notes 2021 Notes | Fair Value, Inputs, Level 2 | |||
Fair Value Measurements | |||
Convertible senior notes, fair value | 58,200 | 58,200 | |
Convertible Senior Unsecured Notes 2024 Notes | |||
Fair Value Measurements | |||
Convertible senior notes | 147,000 | 147,000 | |
Convertible senior notes, fair value | 152,800 | 152,800 | |
Convertible Senior Unsecured Notes 2025 Notes | |||
Fair Value Measurements | |||
Convertible senior notes | 293,600 | 293,600 | |
Convertible senior notes, fair value | $ 180,800 | $ 180,800 |
Available-for-Sale Securities_2
Available-for-Sale Securities (Details) - U.S. treasury securities $ in Thousands | Dec. 31, 2019USD ($) |
Available-for-Sale Securities | |
Amortized Cost | $ 134,826 |
Gross Unrealized Gains | 0 |
Aggregate Fair Value | $ 134,826 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Inventories | ||
Work-in-process | $ 103,871 | $ 104,139 |
Finished goods, net | 29,317 | 20,433 |
Total inventories | 133,188 | 124,572 |
Inventories, net | 26,851 | 26,519 |
Long-term inventory | $ 106,337 | $ 98,053 |
Other Current Assets (Details)
Other Current Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Other Current Assets | ||
Prepaid insurance | $ 1,913 | $ 505 |
Prepaid IT | 796 | 698 |
Prepaid expenses - other | 4,235 | 3,371 |
Value-added tax ("VAT") receivable | 6,364 | 11,920 |
Receivable - other | 1,111 | 2,176 |
Other | 96 | 177 |
Total | $ 14,515 | $ 18,847 |
Intangible Assets and Goodwil_2
Intangible Assets and Goodwill (Details) - Licensing Agreements - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Finite Lived Intangible Assets [Line Items] | ||
Intangible asset - milestones | $ 79,850 | $ 71,850 |
Accumulated amortization | (11,422) | (8,930) |
Total intangible asset, net | $ 68,428 | $ 62,920 |
Intangible Assets and Goodwil_3
Intangible Assets and Goodwill - Additional Information (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
May 31, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Finite Lived Intangible Assets | |||||
Amortization of Intangible Assets | $ 1.2 | $ 2.3 | |||
Licensing Agreements | |||||
Finite Lived Intangible Assets | |||||
Milestone payment related to FDA approval | $ 8 | ||||
Amortization of Intangible Assets | $ 1.3 | $ 2.5 |
Intangible Assets - Estimated F
Intangible Assets - Estimated Future Amortization (Details) - Licensing Agreements - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Finite Lived Intangible Assets | ||
2020 (remaining six months) | $ 2,686 | |
2021 | 5,371 | |
2022 | 5,371 | |
2023 | 5,371 | |
2024 | 5,371 | |
Thereafter | 44,258 | |
Total intangible asset, net | $ 68,428 | $ 62,920 |
Other Accrued Expenses (Details
Other Accrued Expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Other Accrued Expenses | ||
Accrued personnel costs | $ 12,101 | $ 16,915 |
Accrued interest payable for convertible senior notes | 3,900 | 5,903 |
Income tax payable | 871 | 3,505 |
Accrued corporate legal fees and professional services | 920 | 310 |
Accrued royalties | 6,082 | 6,038 |
Accrued variable considerations | 8,303 | 5,748 |
Purchase of API received not yet invoiced | 79 | |
Accrued expenses - other | 5,426 | 3,809 |
Total | $ 37,682 | $ 42,228 |
Lease (Details)
Lease (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Lessee Disclosure [Abstract] | ||||
Amortization of right-of-use assets | $ 474 | $ 356 | $ 947 | $ 712 |
Interest on lease liabilities | 208 | 179 | 423 | 363 |
Operating lease cost | 998 | 994 | 2,124 | 2,144 |
Short-term lease cost | 116 | 48 | 222 | 97 |
Variable lease cost | 472 | 645 | 1,070 | 1,369 |
Total lease cost | 2,268 | 2,222 | 4,786 | 4,685 |
Cash flows from leases | ||||
Operating cash flows from finance leases | 208 | 179 | 423 | 363 |
Operating cash flows from operating leases | 998 | 994 | 2,124 | 2,144 |
Financing cash flows from finance leases | $ 364 | $ 255 | $ 720 | $ 505 |
Lease - Weighted Average (Detai
Lease - Weighted Average (Details) | Jun. 30, 2020 | Jun. 30, 2019 |
Weighted-average remaining lease term (years) | ||
Operating leases | 7 years | 6 years 9 months 18 days |
Finance leases | 5 years 6 months | 6 years 6 months |
Weighted-average discount rate | ||
Operating leases | 8.00% | 8.00% |
Finance leases | 8.00% | 8.00% |
Lease - Future minimum commitme
Lease - Future minimum commitments (Details) $ in Thousands | Jun. 30, 2020USD ($) |
Operating Leases | |
2020 (remaining six months) | $ 2,814 |
2021 | 5,628 |
2022 | 5,177 |
2023 | 4,791 |
2024 | 4,798 |
Thereafter | 14,619 |
Present value adjustment | (9,162) |
Present value of lease payments | $ 28,665 |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | us-gaap:OtherLiabilitiesCurrent us-gaap:OtherLiabilitiesNoncurrent |
Finance Leases | |
2020 (remaining six months) | $ 1,143 |
2021 | 2,287 |
2022 | 2,287 |
2023 | 2,287 |
2024 | 2,287 |
Thereafter | 2,287 |
Present value of adjustment | (2,429) |
Present value of lease payments | 10,149 |
Total | |
2020 (remaining six months) | 3,957 |
2021 | 7,915 |
2022 | 7,464 |
2023 | 7,078 |
2024 | 7,085 |
Thereafter | 16,906 |
Present value adjustment | (11,591) |
Present value of lease payments | $ 38,814 |
Long-term Debt (Details)
Long-term Debt (Details) $ / shares in Units, $ in Thousands | May 02, 2022D | Aug. 13, 2019USD ($)$ / shares | May 01, 2019USD ($)countrysiteitem | Apr. 16, 2018USD ($)$ / shares | Sep. 09, 2014USD ($)Ditem$ / shares | Apr. 30, 2020USD ($) | May 31, 2020USD ($)shares | Jun. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Dec. 31, 2019USD ($) |
Debt Instrument | ||||||||||
Aggregate principal amount | $ 515,042 | $ 515,042 | ||||||||
Gain (loss) on extinguishment of debt | (3,277) | (3,277) | ||||||||
2019 | ||||||||||
Debt Instrument | ||||||||||
Repayments of Debt | 35,000 | |||||||||
2020 | ||||||||||
Debt Instrument | ||||||||||
Repayments of Debt | $ 50,000 | |||||||||
Date is prior to Repayment Start Date | ||||||||||
Debt Instrument | ||||||||||
Debt Instrument Ratio of borrowed amount | 1.75% | |||||||||
Date is after Repayment Start Date | ||||||||||
Debt Instrument | ||||||||||
Debt Instrument Ratio of borrowed amount | 2.00% | |||||||||
TPG Sixth Street Partners, LLC | ||||||||||
Debt Instrument | ||||||||||
Principal amount outstanding | 72,500 | $ 72,500 | ||||||||
Debt issuance costs | 1,800 | 1,800 | ||||||||
Unamortized debt issuance costs | $ 1,600 | $ 1,600 | ||||||||
Number of patients | item | 1,000 | |||||||||
Number of countries | country | 25 | |||||||||
Effective interest rate | 14.50% | 14.50% | ||||||||
Debt, Weighted Average Interest Rate | 9.75% | 10.25% | 10.25% | |||||||
Maximum Amount to be Repaid Under Borrowing Agreement | $ 166,500 | |||||||||
Percentage of royalty payment received | 19.50% | |||||||||
Percentage of other amounts received | 19.50% | |||||||||
Quarterly payments based on a certain percentage of revenues | $ 8,500 | |||||||||
Quarterly payments with label portion expanded by FDA | 13,500 | |||||||||
Aggregate borrowed amount | $ 166,500 | |||||||||
Ratio of repayment amount | 2 | |||||||||
TPG Sixth Street Partners, LLC | Minimum | ||||||||||
Debt Instrument | ||||||||||
Number of sites | site | 270 | |||||||||
TPG Sixth Street Partners, LLC | Maximum | ||||||||||
Debt Instrument | ||||||||||
Aggregate principal amount | $ 175,000 | |||||||||
Maximum Amount to be Repaid Under Borrowing Agreement | 350,000 | |||||||||
Aggregate borrowed amount | $ 350,000 | |||||||||
Convertible Senior Unsecured Notes | ||||||||||
Debt Instrument | ||||||||||
Unamortized debt issuance costs | $ 10,400 | $ 10,400 | $ 15,400 | |||||||
2021 Notes | ||||||||||
Debt Instrument | ||||||||||
Convertible senior notes, interest rate | 2.50% | 2.50% | 2.50% | |||||||
Aggregate principal amount | $ 287,500 | $ 32,800 | $ 64,418 | $ 64,418 | ||||||
Convertible senior notes, maturity date | Sep. 15, 2021 | Sep. 15, 2021 | ||||||||
Net proceeds from convertible senior notes | $ 278,300 | |||||||||
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 as a percent of conversion price | 150.00% | |||||||||
Debt instrument, conversion in effect for number of trading days | D | 20 | |||||||||
Debt instrument conversion, consecutive trading day period | D | 30 | |||||||||
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% | |||||||||
Principal amount outstanding | $ 190,300 | |||||||||
Aggregate repurchase price including accrued interest | 171,800 | |||||||||
Gain (loss) on extinguishment of debt | 18,500 | (3,300) | ||||||||
Debt issuance costs | $ 9,200 | |||||||||
Unamortized debt issuance costs derecognized | $ 2,000 | |||||||||
Debt instrument term | 7 years | |||||||||
2021 Notes | Semi Annual Payment, First payment date | ||||||||||
Debt Instrument | ||||||||||
Interest payment date on senior notes | --03-15 | |||||||||
2021 Notes | Semi Annual Payment, Second payment date | ||||||||||
Debt Instrument | ||||||||||
Interest payment date on senior notes | --09-15 | |||||||||
2024 Notes | ||||||||||
Debt Instrument | ||||||||||
Convertible senior notes, interest rate | 4.50% | 4.50% | 4.50% | |||||||
Aggregate principal amount | $ 263,000 | $ 36,100 | $ 24,300 | $ 150,624 | $ 150,624 | |||||
Convertible senior notes, maturity date | Aug. 1, 2024 | |||||||||
Net proceeds from convertible senior notes | $ 254,900 | |||||||||
Common stock initial conversion rate per $1,000 in principal amount | 137.2213 | 137.2213 | ||||||||
Convertible senior notes, initial conversion price per share | $ / shares | $ 7.29 | |||||||||
Debt instrument repurchase percentage | 100.00% | |||||||||
Debt issuance costs | $ 8,000 | |||||||||
Debt instrument term | 5 years | |||||||||
Debt conversion to number of shares of common stock | shares | 3,331,870 | |||||||||
2024 Notes | Semi Annual Payment, First payment date | ||||||||||
Debt Instrument | ||||||||||
Interest payment date on senior notes | --02-01 | |||||||||
2024 Notes | Semi Annual Payment, Second payment date | ||||||||||
Debt Instrument | ||||||||||
Interest payment date on senior notes | --08-01 | |||||||||
2025 Notes | ||||||||||
Debt Instrument | ||||||||||
Convertible senior notes, interest rate | 1.25% | 1.25% | 1.25% | |||||||
Aggregate principal amount | $ 300,000 | $ 300,000 | $ 300,000 | |||||||
Convertible senior notes, maturity date | May 1, 2025 | |||||||||
Net proceeds from convertible senior notes | $ 290,900 | |||||||||
Common stock initial conversion rate per $1,000 in principal amount | 13.1278 | |||||||||
Convertible senior notes, initial conversion price per share | $ / shares | $ 76.17 | |||||||||
Debt instrument repurchase percentage | 100.00% | |||||||||
Debt issuance costs | $ 9,100 | |||||||||
Debt instrument term | 7 years | |||||||||
2025 Notes | Semi Annual Payment, First payment date | ||||||||||
Debt Instrument | ||||||||||
Interest payment date on senior notes | --05-01 | |||||||||
2025 Notes | Semi Annual Payment, Second payment date | ||||||||||
Debt Instrument | ||||||||||
Interest payment date on senior notes | --11-01 | |||||||||
Borrowing Exceeds $166.5 million | TPG Sixth Street Partners, LLC | Minimum | ||||||||||
Debt Instrument | ||||||||||
Quarterly payments based on a certain percentage of revenues | $ 8,940 | |||||||||
Borrowing Exceeds $166.5 million | TPG Sixth Street Partners, LLC | Maximum | ||||||||||
Debt Instrument | ||||||||||
Quarterly payments with label portion expanded by FDA | $ 14,190 | |||||||||
Scenario, Actual | 2025 Notes | ||||||||||
Debt Instrument | ||||||||||
Last reported sale price of common stock as a percent of conversion price | 150.00% | |||||||||
Debt instrument, conversion in effect for number of trading days | D | 20 | |||||||||
Debt instrument conversion, consecutive trading day period | D | 30 | |||||||||
Debt instrument, trading days preceding redemption notice, maximum | D | 2 | |||||||||
Debt instrument redemption price percentage to principal amount | 100.00% |
Long-term Debt - Convertible se
Long-term Debt - Convertible senior notes (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |
Jan. 31, 2020 | Jun. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | ||||
Loss on extinguishment of debt | $ 3,277 | $ 3,277 | ||
Convertible Senior Unsecured Notes | ||||
Debt Instrument [Line Items] | ||||
Unamortized debt issuance costs | $ 10,400 | $ 10,400 | $ 15,400 | |
2024 Notes | Direct registered offering | ||||
Debt Instrument [Line Items] | ||||
Shares issued | 17,777,679 | |||
Share Price | $ 9.25 | |||
Principal amount of debt repurchase | $ 123,400 | |||
Unamortized debt issuance costs | 3,600 | |||
Loss on extinguishment of debt | $ 7,800 |
Long-term Debt - Interest expen
Long-term Debt - Interest expense recognized (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Long-term Debt | ||||
Interest on convertible notes | $ 2,811 | $ 2,734 | $ 5,994 | $ 5,469 |
Amortization of debt issuance costs | 637 | 679 | 1,423 | 1,324 |
Debt issuance cost derecognized related to convertible debt transactions | 789 | 4,344 | ||
Interest on finance lease | 208 | 179 | 423 | 363 |
Interest on borrowings under financing agreement | 2,264 | 199 | 4,055 | 199 |
Other interest | 30 | 26 | 61 | 52 |
Total interest expense | $ 6,739 | $ 3,817 | $ 16,300 | $ 7,407 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 6 Months Ended | |
May 31, 2020USD ($)$ / sharesshares | Jun. 30, 2020USD ($)Voteshares | Dec. 31, 2019shares | |
Stockholders' Equity | |||
Common shares issued in a public offering | shares | 11,090,000 | 88,196,705 | 54,956,341 |
Price per share in a public offering | $ / shares | $ 8.05 | ||
Proceeds from offering | $ | $ 82,800 | $ 246,727 | |
Number Of Vote Per Common Stock | Vote | 1 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Accumulated Other Comprehensive Loss | ||||
Beginning balance | $ (44,890) | $ (44,564) | $ (44,865) | $ (44,634) |
Other comprehensive (loss) income | (23) | 76 | (48) | 146 |
Total before tax | (44,913) | (44,488) | (44,913) | (44,488) |
Tax effect | 0 | 0 | ||
Ending balance | (44,913) | (44,488) | (44,913) | (44,488) |
Reclassifications out of accumulated other comprehensive loss | 0 | 0 | 0 | 0 |
Foreign Currency Translation Adjustments | ||||
Accumulated Other Comprehensive Loss | ||||
Beginning balance | (44,835) | (44,465) | (44,732) | (44,460) |
Other comprehensive (loss) income | 61 | (1) | (42) | (6) |
Total before tax | (44,774) | (44,466) | (44,774) | (44,466) |
Tax effect | 0 | 0 | ||
Ending balance | (44,774) | (44,466) | (44,774) | (44,466) |
Unrealized (Losses) Gains | ||||
Accumulated Other Comprehensive Loss | ||||
Beginning balance | (55) | (99) | (133) | (174) |
Other comprehensive (loss) income | (84) | 77 | (6) | 152 |
Total before tax | (139) | (22) | (139) | (22) |
Tax effect | 0 | 0 | ||
Ending balance | $ (139) | $ (22) | $ (139) | $ (22) |
Share-Based Compensation - Shar
Share-Based Compensation - Share-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Share-Based Compensation Expense Recognized in Accompanying Statements of Operations | ||||
Total Share-based compensation expense | $ 13,313 | $ 14,130 | $ 26,274 | $ 27,769 |
Research and development | ||||
Share-Based Compensation Expense Recognized in Accompanying Statements of Operations | ||||
Total Share-based compensation expense | 6,636 | 6,633 | 13,561 | 13,244 |
Selling, general and administrative | ||||
Share-Based Compensation Expense Recognized in Accompanying Statements of Operations | ||||
Total Share-based compensation expense | $ 6,677 | $ 7,497 | $ 12,713 | $ 14,525 |
Share-Based Compensation (Detai
Share-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award | ||||
Share-based compensation expense, tax benefit recognized | $ 0 | $ 0 | $ 0 | $ 0 |
Closing Stock Price | $ 6.75 | $ 6.75 | ||
Common shares under option plans | ||||
Share Based Compensation Arrangement By Share Based Payment Award | ||||
Unrecognized stock-based compensation expense related to unvested stock options | $ 28.2 | $ 28.2 | ||
Unrecognized stock-based compensation expense related to non-vested options and/or RSUs, weighted-average remaining vesting period | 1 year 9 months 18 days | |||
Restricted Stock Units (RSUs) | ||||
Share Based Compensation Arrangement By Share Based Payment Award | ||||
Unrecognized stock-based compensation expense related to unvested RSUs | $ 49.1 | $ 49.1 | ||
Unrecognized stock-based compensation expense related to non-vested options and/or RSUs, weighted-average remaining vesting period | 2 years 3 months 18 days |
Share-Based Compensation - Summ
Share-Based Compensation - Summary of Stock Options Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended |
Jun. 30, 2020 | |
Share-Based Compensation | |
Beginning Balance, Number of Options Outstanding | 6,287,025 |
Number of Options, Granted | 870,492 |
Number of Options, Exercised | (24,153) |
Number of Options, Forfeited | (346,100) |
Ending Balance, Number of Options Outstanding | 6,787,264 |
Vested and expected to vest at June 30, 2020 | 6,606,555 |
Vested and exercisable at June 30, 2020 | 4,912,792 |
Beginning Balance, Weighted Average Exercise Price | $ 42.24 |
Granted, Weighted Average Exercise Price | 7.61 |
Exercised, Weighted Average Exercise Price | 3.08 |
Forfeited, Weighted Average Exercise Price | 48.18 |
Ending Balance, Weighted Average Exercise Price | 37.63 |
Vested and expected to vest, Weighted Average Exercise Price | 38.12 |
Vested and exercisable, Weighted Average Exercise Price | $ 44.14 |
Outstanding, Weighted Average Remaining Contractual Term (Years) | 6 years 1 month 6 days |
Vested and expected to vest, Weighted Average Remaining Contractual Term (Years) | 6 years |
Exercisable, Weighted Average Remaining Contractual Term (Years) | 5 years |
Outstanding, Aggregate Intrinsic Value | $ 851 |
Vested and expected to vest, Aggregate Intrinsic Value | 806 |
Vested and exercisable, Aggregate Intrinsic Value | $ 350 |
Share-Based Compensation - Sche
Share-Based Compensation - Schedule of Share-Based Compensation Arrangements by Share-Based Payment Award (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Share-Based Compensation | ||||
Weighted-average grant date fair value per share | $ 5.06 | $ 11.33 | $ 5.87 | $ 15.81 |
Intrinsic value of options exercised | $ 87 | $ 198 | $ 91 | $ 963 |
Cash received from stock option exercises | $ 72 | $ 222 | $ 74 | $ 1,316 |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Details) - Restricted Stock Units (RSUs) | 6 Months Ended |
Jun. 30, 2020$ / sharesshares | |
Share Based Compensation Arrangement By Share Based Payment Award | |
Unvested as of Beginning Balance | shares | 2,171,347 |
Number of Units, Granted | shares | 2,392,428 |
Number of Units, Vested | shares | (775,784) |
Number of Units, Forfeited | shares | (276,398) |
Outstanding as of Ending Balance | shares | 3,511,593 |
Expected to vest after June 30, 2020 | shares | (3,351,795) |
Weighted Average Grant Date Fair Value, Beginning Balance | $ / shares | $ 28.37 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | 8.27 |
Weighted Average Grant Date Fair Value, Vested | $ / shares | 28.10 |
Weighted Average Grant Date Fair Value, Forfeited | $ / shares | 19.18 |
Weighted Average Grant Date Fair Value, Ending Balance | $ / shares | 15.46 |
Weighted Average Grant Date Fair Value, Expected to vest after March 31, 2020 | $ / shares | $ 14.97 |
License Agreements (Details)
License Agreements (Details) $ in Thousands | Dec. 19, 2016USD ($) | Aug. 30, 2016 | Nov. 19, 2013USD ($) | Jun. 30, 2020USD ($) | May 31, 2020USD ($) | Feb. 29, 2020item | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Feb. 28, 2019USD ($) | Jun. 30, 2018USD ($) | Apr. 30, 2018USD ($) | Jun. 30, 2011USD ($) | Oct. 31, 2008 | Mar. 31, 2017USD ($) | Jun. 30, 2020USD ($) | Dec. 31, 2019USD ($) |
Rucaparib | ||||||||||||||||
License Agreements | ||||||||||||||||
Milestone payments | $ 750 | |||||||||||||||
Rucaparib | EMA [Member] | ||||||||||||||||
License Agreements | ||||||||||||||||
Milestone payment obligation | $ 15,000 | $ 20,000 | ||||||||||||||
Rucaparib | First approval of NDA by FDA | ||||||||||||||||
License Agreements | ||||||||||||||||
Milestone payment obligation | $ 15,000 | |||||||||||||||
Rucaparib | Third approval of Rubraca as monotherapy treatment | ||||||||||||||||
License Agreements | ||||||||||||||||
Milestone payments | $ 8,000 | |||||||||||||||
Milestone payment obligation | $ 8,000 | |||||||||||||||
3B Pharmaceuticals | ||||||||||||||||
License Agreements | ||||||||||||||||
Percentage of Non-Royalty Consideration Payable on Sublicense Agreements | 34.00% | |||||||||||||||
License Agreements Licensor Pfizer | Rucaparib | ||||||||||||||||
License Agreements | ||||||||||||||||
Milestone payments | $ 23,000 | $ 750 | ||||||||||||||
Milestone payment obligation | $ 750 | |||||||||||||||
Milestone payment incurred as a result of government approval | 20,000 | |||||||||||||||
Deferred milestone payment | $ 23,000 | |||||||||||||||
Maximum number of months after FDA approval | 18 months | 18 months | ||||||||||||||
License Agreements Licensor Pfizer | Rucaparib | Minimum | ||||||||||||||||
License Agreements | ||||||||||||||||
Annual sales target for sales milestone payments | $ 250,000 | |||||||||||||||
License Agreements Licensor Pfizer | Rucaparib | Maximum | ||||||||||||||||
License Agreements | ||||||||||||||||
Maximum potential future development, regulatory milestone payments | 8,000 | |||||||||||||||
Additional maximum payments payable on attaining the sales target | $ 170,000 | $ 170,000 | ||||||||||||||
License Agreement Terms | 3B Pharmaceuticals | ||||||||||||||||
License Agreements | ||||||||||||||||
Acquired in-process research and development | $ 9,400 | |||||||||||||||
Number of additional undisclosed targets | item | 3 | |||||||||||||||
Research and development expense | $ 2,100 | |||||||||||||||
Percentage Of Royalty On Net Sales | 6.00% | |||||||||||||||
License Agreement Terms | License Agreements Licensor Pfizer | Rucaparib | ||||||||||||||||
License Agreements | ||||||||||||||||
Upfront payment | $ 7,000 | |||||||||||||||
Milestones paid to Pfizer prior to FDA approval | $ 1,400 | |||||||||||||||
License Agreement Terms | Advenchen Laboratories LLC | License Agreements Lucitanib | ||||||||||||||||
License Agreements | ||||||||||||||||
Milestone payment obligation | $ 65,000 | |||||||||||||||
Percentage of Non-Royalty Consideration Payable on Sublicense Agreements | 25.00% |
Net Loss Per Common Share (Deta
Net Loss Per Common Share (Details) - shares shares in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share | ||
Total potential dilutive shares | 29,804 | 11,717 |
Common shares under option plans | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share | ||
Total potential dilutive shares | 4,156 | 3,133 |
Convertible senior notes | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share | ||
Total potential dilutive shares | 25,648 | 8,584 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Nov. 10, 2019plaintiff | Jun. 20, 2017plaintiffpatent | Mar. 31, 2017shareholder | Jun. 30, 2020USD ($) |
Commitments and Contingencies | ||||
Purchase commitments | $ | $ 74.5 | |||
Number of putative shareholders | shareholder | 2 | |||
Number of patents in salt and polymorph patent family | patent | 2 | |||
Number of opponents | plaintiff | 1 | 2 | ||
Number of years regulatory exclusivity in Europe | 10 years | |||
Number of years possible additional regulatory exclusivity | 1 year |