Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | Apr. 29, 2019 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Strongbridge Biopharma plc | |
Entity Central Index Key | 0001634432 | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Common Stock, Shares Outstanding | 54,172,061 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 104,306 | $ 122,490 |
Accounts receivable | 3,916 | 1,626 |
Inventory | 4,202 | 3,946 |
Prepaid expenses and other current assets | 2,726 | 4,236 |
Total current assets | 115,150 | 132,298 |
Property and equipment, net | 292 | 294 |
Right to use assets, net | 1,046 | |
Intangible assets, net | 28,876 | 30,132 |
Goodwill | 7,256 | 7,256 |
Other assets | 862 | 305 |
Total assets | 153,482 | 170,285 |
Current liabilities: | ||
Accounts payable | 7,494 | 1,184 |
Accrued liabilities and other current liabilities | 14,854 | 16,065 |
Total current liabilities | 22,348 | 17,249 |
Warrant liability | 17,333 | 15,513 |
Supply agreement liability, noncurrent | 15,454 | 24,568 |
Other long-term liabilities | 1,364 | |
Total liabilities | 56,499 | 57,330 |
Commitments and contingencies (Note 7) | ||
Stockholders’ equity: | ||
Deferred shares, $1.098 par value, 40,000 shares authorized, issued and outstanding at March 31, 2019 and December 31, 2018 | 44 | 44 |
Ordinary shares, $0.01 par value, 600,000,000 shares authorized at March 31, 2019 and December 31, 2018; 54,167,948 and 54,122,074 shares issued and outstanding at March 31, 2019 and December 31, 2018 | 542 | 541 |
Additional paid-in capital | 325,863 | 323,402 |
Accumulated deficit | (229,466) | (211,032) |
Total stockholders’ equity | 96,983 | 112,955 |
Total liabilities and stockholders’ equity | $ 153,482 | $ 170,285 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2019 | Dec. 31, 2018 |
Consolidated Balance Sheets | ||
Deferred shares, par value (in dollars per share) | $ 1.098 | $ 1.098 |
Deferred shares, shares authorized | 40,000 | 40,000 |
Deferred shares, shares issued | 40,000 | 40,000 |
Deferred shares, shares outstanding | 40,000 | 40,000 |
Ordinary shares, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Ordinary shares, shares authorized | 600,000,000 | 600,000,000 |
Ordinary shares, shares issued | 54,167,948 | 54,122,074 |
Ordinary shares, shares outstanding | 54,167,948 | 54,122,074 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenues: | ||
Revenues | $ 4,343 | $ 3,870 |
Cost and expenses: | ||
Cost of sales (excluding amortization of intangible assets) | 813 | 667 |
Selling, general and administrative | 12,100 | 12,362 |
Research and development | 6,583 | 4,881 |
Amortization of intangible assets | 1,256 | 1,769 |
Total cost and expenses | 20,752 | 19,679 |
Operating loss | (16,409) | (15,809) |
Other expense, net: | ||
Income from field services agreement | 2,016 | |
Expense from field services agreement | (2,229) | |
Unrealized loss on fair value of warrants | (1,820) | (9,700) |
Interest expense | (2,874) | |
Loss on extinguishment of debt | (500) | |
Other income, net | 685 | 160 |
Total other expense, net | (1,348) | (12,914) |
Loss before income taxes | (17,757) | (28,723) |
Income tax expense | (677) | |
Net loss | (18,434) | (28,723) |
Net loss attributable to ordinary shareholders: | ||
Basic | (18,434) | (28,723) |
Diluted | $ (18,434) | $ (28,723) |
Net loss per share attributable to ordinary shareholders: | ||
Basic and diluted (in dollars per share) | $ (0.34) | $ (0.66) |
Weighted-average shares used in computing net loss per share attributable to ordinary shareholders: | ||
Basic and diluted | 54,155,034 | 43,620,746 |
Product | ||
Revenues: | ||
Revenues | $ 4,333 | $ 3,870 |
Royalty | ||
Revenues: | ||
Revenues | $ 10 |
Consolidated Statement of Share
Consolidated Statement of Shareholders' (Deficit) Equity - USD ($) $ in Thousands | Ordinary SharesMaximum | Ordinary Shares | Deferred Shares | Additional Paid-In Capital | Accumulated Deficit | Total |
Balance at beginning of period at Dec. 31, 2017 | $ 401 | $ 44 | $ 230,524 | $ (242,883) | $ (11,914) | |
Balance (in shares) at Dec. 31, 2017 | 40,149,812 | 40,000 | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net loss | (28,723) | (28,723) | ||||
Stock-based compensation | 1,688 | 1,688 | ||||
Issuance of shares, net of costs | $ 53 | 33,455 | 33,508 | |||
Issuance of shares, net of costs (in shares) | 5,255,683 | |||||
Exercise of stock options | 59 | 59 | ||||
Exercise of stock options (in shares) | 37,169 | |||||
Issuance of warrants related to the loan agreements | 7,663 | 7,663 | ||||
Shares issued, net of shares withheld for employee taxes | $ 1 | (429) | (428) | |||
Shares issued, net of shares withheld for employee taxes (in shares) | 89,163 | |||||
Balance at end of period at Mar. 31, 2018 | $ 455 | $ 44 | 272,960 | (271,606) | 1,853 | |
Balance (in shares) at Mar. 31, 2018 | 45,531,827 | 40,000 | ||||
Balance at beginning of period at Dec. 31, 2018 | $ 541 | $ 44 | 323,402 | (211,032) | 112,955 | |
Balance (in shares) at Dec. 31, 2018 | 54,122,074 | 40,000 | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net loss | (18,434) | (18,434) | ||||
Stock-based compensation | 2,323 | 2,323 | ||||
Exercise of stock options | $ 1 | $ 1 | 165 | 166 | ||
Exercise of stock options (in shares) | 39,728 | |||||
Shares issued, net of shares withheld for employee taxes | (27) | (27) | ||||
Shares issued, net of shares withheld for employee taxes (in shares) | 6,146 | |||||
Balance at end of period at Mar. 31, 2019 | $ 542 | $ 44 | $ 325,863 | $ (229,466) | $ 96,983 | |
Balance (in shares) at Mar. 31, 2019 | 54,167,948 | 40,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flow - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Cash flows from operating activities: | |||
Net loss | $ (18,434) | $ (28,723) | |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | |||
Change in fair value of warrant liability | 1,820 | 9,700 | |
Stock-based compensation | 2,323 | 1,688 | |
Amortization of intangible assets | 1,256 | 1,769 | $ 7,187 |
Interest and related guarantee fees paid in kind | 766 | ||
Amortization of debt discounts and debt issuance costs | 314 | ||
Loss on extinguishment of debt | 500 | ||
Depreciation | 18 | 3 | |
Changes in operating assets and liabilities: | |||
Accounts receivable | (2,290) | (432) | |
Inventory | (649) | (1,150) | |
Prepaid expenses and other current assets | 1,510 | (567) | |
Other assets | (1,210) | 325 | |
Accounts payable | 539 | 921 | |
Accrued liabilities and other liabilities | (3,191) | (3,133) | |
Net cash used in operating activities | (18,308) | (18,019) | |
Cash flows from investing activities: | |||
Payment for acquisitions | (24,655) | ||
Purchases of property and equipment | (15) | ||
Net cash provided by (used in) investing activities | (15) | (24,655) | |
Cash flows from financing activities: | |||
Proceeds from long-term debt, net | 44,930 | ||
Payment for loss on extinguishment of debt | (500) | ||
Proceeds from issuance of ordinary shares, net | 33,508 | ||
Proceeds from exercise of stock options | 166 | 59 | |
Payments related to tax withholding for net-share settled equity awards | (27) | (428) | |
Net cash provided by financing activities | 139 | 77,569 | |
Net (decrease) increase in cash and cash equivalents | (18,184) | 34,895 | |
Cash and cash equivalents—beginning of period | 122,490 | 57,510 | 57,510 |
Cash and cash equivalents—end of period | $ 104,306 | 92,405 | $ 122,490 |
Supplemental disclosures of cash flow information - Cash paid during the year for: | |||
Interest | $ 1,642 |
Organization
Organization | 3 Months Ended |
Mar. 31, 2019 | |
Organization | |
Organization | 1. Organization We are a global, commercial-stage biopharmaceutical company focused on the development and commercialization of therapies for rare diseases with significant unmet needs. Our first commercial product is Keveyis (dichlorphenamide), the first and only treatment approved by the U.S. Food and Drug Administration (the “FDA”) for hyperkalemic, hypokalemic, and related variants of primary periodic paralysis (“PPP”), a group of rare hereditary disorders that cause episodes of muscle weakness or paralysis. In January 2018, Strongbridge Ireland Ltd., one of our wholly-owned subsidiaries, acquired the U.S. and Canadian rights to Macrilen (macimorelin), the first and only oral drug approved by the FDA for the diagnosis of patients with adult growth hormone deficiency. We launched Macrilen in the United States in July 2018. In December 2018, we sold Strongbridge Ireland Ltd. to Novo Nordisk Healthcare AG (“Novo”) for $145 million plus the right to receive tiered royalties on net sales of Macrilen through 2027. In addition, Strongbridge U.S. Inc, another of our wholly-owned subsidiaries, entered into an agreement with Novo Nordisk Inc., subsidiary of Novo (“NNI”), pursuant to which NNI will fund the costs of 23 of our field-based employees to provide full-time ongoing services to NNI, including the promotion of Macrilen in the United States, for a period of three years. W e have two clinical-stage product candidates for rare endocrine diseases, Recorlev and veldoreotide. Recorlev (levoketoconazole) is a cortisol synthesis inhibitor currently being studied for the treatment of endogenous Cushing's syndrome. Veldoreotide is a next-generation somatostatin analog being investigated for potential applications in conditions amenable to somatostatin receptor activation, such as acromegaly. Both Recorlev and veldoreotide have received orphan designation from the FDA and the European Medicines Agency (“EMA”). Liquidity We believe that our cash resources of $104.3 million at March 31, 2019 will be sufficient to allow us to fund planned operations for at least 12 months beyond the issuance date of these financial statements. We may never achieve profitability, and unless and until we do, we will continue to need to raise additional capital. We plan to continue to fund our operations and capital funding needs through equity or debt financing along with revenues from Keveyis and royalty revenues from Macrilen . There can be no assurances, however, that additional funding will be available on terms acceptable to us. |
Summary of significant accounti
Summary of significant accounting policies and basis of presentation | 3 Months Ended |
Mar. 31, 2019 | |
Summary of significant accounting policies and basis of presentation | |
Summary of significant accounting policies and basis of presentation | 2. Summary of significant accounting policies and basis of presentation Basis of presentation These unaudited consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States (“U.S. GAAP”). The unaudited consolidated financial statements reflect all adjustments, which include only normal recurring adjustments that are, in the opinion of management, necessary to present a fair statement of the operating results and financial position for the periods presented. The preparation of the unaudited consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts and disclosures in the consolidated financial statements. Actual results could differ from those estimates. Results for the three months ended March 31, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. These unaudited consolidated financial statements should be read in conjunction with the accounting policies and notes to the audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018 filed with the U.S. Securities and Exchange Commission on February 27, 2019 (the “2018 Annual Report”). Our significant accounting policies are described in Note 2 of the notes to the audited consolidated financial statements included in our 2018 Annual Report. Since the date of those financial statements, there have been no changes to our significant accounting policies. Royalty Revenues Royalty revenues are from commercial sales of Macrilen by Novo Nordisk Healthcare AG, based on net sales. Leases We account for leases in accordance with Accounting Standards Codification Topic 842, Leases , (“ASC 842”). We determine if an arrangement is a lease at contract inception. A lease exists when a contract conveys to us the right to control the use of identified property, plant, or equipment for a period of time in exchange for consideration. The definition of a lease embodies two conditions: (1) there is an identified asset in the contract that is land or a depreciable asset (i.e., property, plant, and equipment), and (2) we have the right to control the use of the identified asset. Operating leases where we are the lessee are included in Right of use (“ROU”) assets and Other current liabilities and Other long-term liabilities on our Consolidated Balance Sheets. The lease liabilities are initially and subsequently measured at the present value of the unpaid lease payments at the lease commencement date. Key estimates and judgments include how we determined (1) the discount rate we use to discount the unpaid lease payments to present value, (2) lease term and (3) lease payments. ASC 842 requires a lessee to discount its unpaid lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, its incremental borrowing rate. Our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Our incremental borrowing rate for a lease is the rate of interest we would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. The lease term for all of our leases includes the noncancellable period of the lease. Lease payments included in the measurement of the lease asset or liability comprise of our fixed payments The ROU asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for lease payments made at or before the lease commencement date less any lease incentives received. For operating leases, the ROU asset is subsequently measured throughout the lease term at the carrying amount of the lease liability, plus (minus) any prepaid (accrued) lease payments, less the unamortized balance of lease incentives received. Lease expense for lease payments is recognized on a straight-line basis over the lease term. We monitor for events or changes in circumstances that require a reassessment of a lease. If a reassessment results in the remeasurement of a lease liability, a corresponding adjustment is made to the carrying amount of the corresponding ROU asset unless doing so would reduce the carrying amount of the ROU asset to an amount less than zero. In that case, the amount of the adjustment that would result in a negative ROU asset balance is recorded in profit or loss. We have elected not to recognize ROU assets and lease liabilities for all short-term leases that have a lease term of 12 months or less. We recognize the lease payments associated with our short-term leases as an expense on a straight-line basis over the lease term. Variable lease payments associated with these leases are recognized and presented in the same manner as for all our other leases. We adopted ASC 842 using a modified retrospective transition approach as of the effective date, as permitted by the amendments in ASU 2018-11, which provides an alternative modified retrospective transition method. As a result, we were not required to adjust our comparative period financial information for effects of the standard or make the new required lease disclosures for periods before the date of adoption ( i.e., January 1, 2019). We have elected to adopt the package of transition practical expedients and, therefore, have not reassessed (1) whether existing or expired contracts contain a lease, (2) lease classification for existing or expired leases or (3) the accounting for initial direct costs that were previously capitalized. We did not elect the practical expedient to use hindsight for leases existing at the adoption date. Further, we do not expect the amendments in ASU 2018-01: Land Easement Practical Expedient to have an effect on us because we do not enter into land easement arrangements. Income and Expense from Field Services Agreement For our field services agreement with NNI, our income and expense are being recorded as non-operating income and expense, respectively. Segment information Operating segments are identified as components of an enterprise for which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision making group, in making decisions on how to allocate resources and assess performance. We view our operations and manage our business in one operating segment. Net loss per share Basic net loss per share is calculated by dividing the net loss attributable to shareholders by the weighted average number of ordinary shares outstanding during the period. Diluted net loss per share is calculated by dividing the net loss attributable to shareholders by the weighted‑average number of ordinary shares outstanding for the period, including any dilutive effect from outstanding stock options or other equity-based awards. Shares used in the diluted net loss per share calculations exclude anti‑dilutive ordinary share equivalents, which currently consist of outstanding stock options, unvested restricted stock units (“RSUs”) and warrants. The following potentially dilutive securities have been excluded from the computations of diluted weighted average shares outstanding as of March 31, 2019 and 2018, as they would be anti-dilutive: Three Months Ended March 31, 2019 2018 Warrants 6,833,253 8,803,253 Stock options issued and outstanding 10,205,851 7,960,469 Unvested RSUs 758,850 173,400 Recent accounting pronouncements – not yet adopted In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other : Simplifying the Accounting for Goodwill Impairment . ASU 2017-04 removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. This standard, which will be effective for us beginning in the first quarter of fiscal year 2020, is required to be applied prospectively. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We are currently evaluating the impact this new accounting guidance will have on our consolidated financial statements. |
Revenue recognition
Revenue recognition | 3 Months Ended |
Mar. 31, 2019 | |
Revenue recognition | |
Revenue recognition | 3. Revenue recognition Product sales, net We sell Keveyis to one specialty pharmacy provider (the “Customer”), who is the exclusive distributor of Keveyis in the United States. The Customer subsequently resells Keveyis to patients, most of whom are covered by payors that may provide for government-mandated or privately negotiated rebates with respect to the purchase of Keveyis. Revenues from sales of Keveyis are recognized when we satisfy a performance obligation by transferring control of the product to our customers. Transfer of control occurs upon receipt of the product by the customer. We expense incremental costs related to the set-up of contracts with our customers when incurred, as these costs do not meet the criteria for capitalization. Reserves for variable consideration Revenues from sales of Keveyis are recorded at the net sales price (transaction price), which includes estimates of variable consideration for which reserves are established and that result from rebates, co-pay assistance and other allowances that are offered between us and the patients’ payors. There is no variable consideration reserve for returns as we do not accept returns of Keveyis. 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 Customer) or a current liability (if the amount is payable to a party other than the Customer). Where appropriate, these estimates may take into consideration a range of possible outcomes that 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 that 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. We reassess our estimates on an ongoing basis. If actual results in the future vary from our estimates, we will adjust our estimates. Any such adjustments would affect net product revenue and earnings in the period such variances become known. Trade Discount : We provide the Customer with a discount that is explicitly stated in our contract and is recorded as a reduction of revenue in the period the related product revenue is recognized. In addition, we receive sales order management, data and distribution services from the Customer. To the extent, the services received are distinct from our sale of Keveyis to the Customer, these payments are classified in selling, general and administrative expenses in our consolidated statement of operations and comprehensive loss. Funded Co-pay Assistance Program : We contract with a third-party to manage the co-pay assistance program intended to provide financial assistance to qualified insured patients. The calculation of the accrual for co-pay assistance is based on an estimate of claims and the cost per claim that we expect to receive associated with Keveyis that has been recognized as revenue, but remains in the distribution channel inventories at the end of each reporting period. These payments are consideration payable to the Customer and the related reserve is recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability which is included in accrued expenses on the consolidated balance sheet. Government Rebates : We are subject to discount obligations under state Medicaid programs and Medicare. We estimate our Medicaid and Medicare rebates based upon a range of possible outcomes that are probability-weighted for the estimated patient mix. These reserves are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability, which is included in accrued expenses on the consolidated balance sheet. For Medicaid, accruals are based on estimates of future Medicaid beneficiary utilization applied to the Medicaid unit rebate formula established by the Center for Medicaid and Medicare Services. Effective January 1, 2011, manufacturers of pharmaceutical products are responsible for 50% of the patient’s cost of branded prescription drugs related to the Medicare Part D Coverage Gap. In order to estimate the cost to us of this Medicare coverage gap responsibility, we estimate the number of patients in the prescription drug coverage gap for whom we will owe an additional liability under the Medicare Part D program. Our liability for these rebates consists of estimates of claims for the current quarter and estimated future claims that will be made for Keveyis that have been recognized as revenue, but remains in the distribution channel inventories at the end of each reporting period. Temporary Supply and Patient Assistance Programs : We provide free Keveyis to uninsured patients who satisfy pre-established criteria for either the Temporary Supply Program or the Patient Assistance Program. Patients who meet the Temporary Supply Program eligibility criteria may receive a temporary supply of free Keveyis for no more than sixty days while there is a determination of the patient’s third-party insurance, prescription drug benefit or other third-party coverage for Keveyis. The Patient Assistance Program provides free Keveyis for up to twelve months to uninsured patients who satisfy pre-established criteria for financial need. We do not recognize any revenue related to these free products and the associated costs are classified in selling, general and administrative expenses in our consolidated statements of operations and comprehensive loss. Royalty Revenues Royalty revenues are from commercial sales of Macrilen by Novo Nordisk Healthcare AG, based on net sales. |
Fair value measurement
Fair value measurement | 3 Months Ended |
Mar. 31, 2019 | |
Fair value measurement | |
Fair value measurement | 4. Fair value measurement We follow FASB accounting guidance on fair value measurements for financial assets and liabilities measured on a recurring basis. Because of their short-term nature, the amounts reported in the balance sheet for cash and accounts payable approximate fair value. The guidance requires fair value measurements to maximize the use of “observable inputs.” The three-level hierarchy of inputs to measure fair value are as follows: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Because of their short-term nature, the amounts reported in the balance sheet for cash and accounts payable approximate fair value. Level 2: Significant observable inputs other than Level 1 prices such as quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). The fair values of the outstanding warrants were measured using the Black-Scholes option-pricing model. Inputs used to determine estimated fair value of the warrant liabilities include the estimated fair value of the underlying stock at the valuation date, the estimated term of the warrants, risk-free interest rates, expected dividends and the expected volatility of the underlying stock. The significant unobservable inputs used in the fair value measurement of the warrant liabilities were the volatility rate and the estimated term of the warrants. Generally, increases (decreases) in the fair value of the underlying stock and estimated term would result in a directionally similar impact to the fair value measurement. We did not have any transfers between the different levels. The following table presents our assets and liabilities that are measured at fair value on a recurring basis for the periods presented (in thousands) : As of March 31, 2019 Level I Level II Level III Total Cash equivalents 103,939 — — 103,939 Total assets $ 103,939 $ — $ — $ 103,939 Warrant liability — — 17,333 17,333 Total liabilities $ — $ — $ 17,333 $ 17,333 As of December 31, 2018 Level I Level II Level III Total Cash equivalents 122,300 — — 122,300 Total assets $ 122,300 $ — $ — $ 122,300 Warrant liability — — 15,513 15,513 Total liabilities $ — $ — $ 15,513 $ 15,513 The following table presents a reconciliation of our level 3 Warrant liability (in thousands): March 31, 2019 Balance as of 12/31/2018 $ 15,513 Unrealized loss on fair value of warrants for the three months ended March 31, 2019 1,820 Balance as of 3/31/2019 $ 17,333 |
Intangible assets and goodwill
Intangible assets and goodwill | 3 Months Ended |
Mar. 31, 2019 | |
Intangible assets and goodwill | |
Intangible assets and goodwill | 5. Intangible assets and goodwill The following represents the balance of our intangible assets as follows (in thousands): As of March 31, 2019 Beginning of Period Additions Sold Amortization End of Period Keveyis $ 30,132 $ — $ — $ (1,256) $ 28,876 Goodwill 7,256 — — — 7,256 Total $ 37,388 $ — $ — $ (1,256) $ 36,132 As of December 31, 2018 Beginning of Period Additions Sold Amortization End of Period Keveyis $ 35,155 $ — $ — $ (5,023) $ 30,132 Macrilen — 24,834 (22,670) (2,164) — Goodwill 7,256 — — — 7,256 Total $ 42,411 $ 24,834 $ (22,670) $ (7,187) $ 37,388 Our finite lived intangible assets consist of acquired developed product rights obtained from our acquisition of Keveyis (dichlorphenamide) from a subsidiary of Taro Pharmaceutical Industries Ltd. (“Taro”) . Pursuant to the terms of the Asset Purchase Agreement and Supply Agreement that we entered into with Taro, we paid Taro an upfront payment in two installments of $1 million in December 2016 and $7.5 million in March 2017. We concluded that the supply price payable by us exceeds fair value and, therefore, used a discounted cash flow method with a probability assumption to value the payments in excess of fair value at $29.3 million, for which we have recorded an intangible asset and corresponding liability. This liability will be reduced as we purchase inventory over the term of the Supply Agreement. In addition, we incurred transaction costs of $2.4 million. The overall recording of the transaction resulted in the recording of an intangible asset of $40.2 million. This asset is being amortized over an eight-year period using the straight-line method. We recorded amortization expense of $1.3 million and $1.8 for the three months ended March 31, 2019 and 2018, respectively |
Accrued liabilities and other c
Accrued liabilities and other current liabilities | 3 Months Ended |
Mar. 31, 2019 | |
Accrued liabilities and other current liabilities | |
Accrued liabilities and other current liabilities | 6. Accrued liabilities and other current liabilities Accrued liabilities and other current liabilities consist of the following (in thousands): March 31, December 31, 2019 2018 Supply agreement - current portion $ 5,375 $ 1,638 Consulting and professional fees 2,659 4,145 Employee compensation 1,711 5,717 Accrued sales allowances 1,815 2,233 Accrued royalties 1,367 802 Accrued Taxes 1,193 535 Lease liability - current portion 326 — Other 408 995 Total accrued liabilities $ 14,854 $ 16,065 |
Commitments and contingencies
Commitments and contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and contingencies | |
Commitments and contingencies | 7. Commitments and contingencies (a) Commitments to Taro Pharmaceuticals Industries Ltd. In December 2016, we acquired the U.S. marketing rights to Keveyis (dichlorphenamide) from Taro. Under the terms of an asset purchase agreement, we paid Taro an upfront payment in two installments of $1 million in December 2016 and $7.5 million in March 2017, and will pay an aggregate of $7.5 million in potential milestones upon the achievement of certain product sales targets. Taro has agreed to continue to manufacture Keveyis for us under an exclusive supply agreement through the orphan exclusivity period. We are obligated to purchase certain annual minimum amounts of product totaling approximately $29 million over a six-year period. As of March 31, 2019, our remaining obligation was $22.1 million. The supply agreement may extend beyond the orphan exclusivity period unless terminated by either party pursuant to the terms of the agreement. If terminated by Taro at the conclusion of the orphan exclusivity period, we have the right to manufacture the product on our own or have the product manufactured by a third party on our behalf. We are required to reimburse Taro for their royalty obligation resulting from their sale of Keveyis to us. (b) Indemnifications In the ordinary course of business and in connection with the sale of assets and businesses and other transactions, we often indemnify our counterparties against certain liabilities that may arise in connection with the transaction or that are related to events and activities prior to or following a transaction, such as breaches of contracts, unfavorable tax consequences and employee liabilities. If the indemnified party were to make a successful claim pursuant to the terms of the indemnification, we may be required to reimburse the loss and such amount could be material to our financial statements. Where appropriate, the obligation for such indemnifications is recorded as a liability. Because the amount of these types of indemnifications generally is not specifically stated, the overall maximum amount of the obligation under such indemnifications cannot be reasonably estimated. However, we believe that the likelihood of a material liability being triggered under these indemnification obligations is not probable at this time. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2019 | |
Leases | |
Leases | 8. Leases We lease office space under operating leases. Our leases have initial lease terms ranging from one to five years. Our lease agreements contain provisions for future rent increases. As of March 31, 2019, future minimum commitments under facility operating leases were as follows (in thousands): Operating leases 2019 326 2020 470 2021 481 2022 492 2023 207 Total minimum lease payments $ 1,976 The components of lease cost for the quarter ended March 31, 2019 are as follows (in thousands): Three Months Ended March 31, 2019 Lease costs Amortization of right of use assets $ 110 Interest on lease liabilities 33 Total lease cost $ 143 Amounts reported in the Consolidated Balance Sheets for leases where we are the lessee as of the quarter ended March 31, 2019 were as follows (in thousands): March 31, 2019 Operating Leases Right of use asset $ 1,046 Lease liability $ 1,690 Remaining lease term Operating leases 4 years Discount rate Operating leases |
Income taxes
Income taxes | 3 Months Ended |
Mar. 31, 2019 | |
Income taxes | |
Income taxes | 9. Income taxes Deferred tax assets and liabilities are recognized for the future tax consequences of differences between the carrying amounts and tax bases of assets and liabilities and operating loss carryforwards and other attributes using enacted rates expected to be in effect when those differences reverse. Valuation allowances are provided against deferred tax assets that are not more likely than not to be realized. We assess our ability to realize deferred tax assets. Changes in future earnings projections, among other factors, may cause us to adjust our valuation allowance on deferred tax assets. Any such adjustments would impact our income tax expense in the period in which it is determined that these factors have changed. We recorded income tax expense of $0.7 million for the three months ended March 31, 2019, as a result of tax liability expected in connection with the intercompany transfer of intellectual property. The global intangible low-taxed income tax and base erosion provisions are effective for taxable years beginning after December 31, 2017. We do not currently expect these provisions to have a material impact on our tax rate as we do not own any controlled foreign corporations and they are currently below the gross receipts threshold for purposes of the base erosion provisions. |
Warrants
Warrants | 3 Months Ended |
Mar. 31, 2019 | |
Warrants and Rights Note Disclosure [Abstract] | |
Warrants | 10. Warrants Warrants Our outstanding warrants as of March 31, 2019 are as follows: Warrants Outstanding Exercise Expiration Warrants Warrants March 31, Classification Price Date Issued Exercised 2019 Warrants in connection with private equity placement Liability $ 2.50 6/28/2022 7,000,000 (1,970,000) 5,030,000 Warrants in connection with Horizon and Oxford loan agreement Equity $ 2.45 12/28/2026 428,571 (267,857) 160,714 Warrants in connection with CRG loan agreement Equity $ 7.37 7/14/2024 394,289 — 394,289 Warrants in connection with CRG loan amendment in January 2018 Equity $ 10.00 1/16/2025 1,248,250 — 1,248,250 9,071,110 6,833,253 |
Stock-based compensation
Stock-based compensation | 3 Months Ended |
Mar. 31, 2019 | |
Stock-based compensation | |
Stock based compensation | 11. Stock‑based compensation Our board of directors has adopted the 2017 Inducement Plan (the “Inducement Plan”). The Inducement Plan provides for the grant of equity-based awards to new employees. The purpose of the Inducement Plan is to attract valued employees by offering them a greater stake in our success and a closer identity with us, and to encourage ownership of our ordinary shares by such employees. The Inducement Plan became effective on February 23, 2017. As of March 31, 2019, 738,953 shares are available for issuance pursuant to the Inducement Plan. Our board of directors has adopted, and our shareholders have approved, the 2015 Equity Compensation Plan (the “2015 Plan”). The 2015 Plan provides for the grant of incentive stock options to our employees and any parent or subsidiary corporation’s employees, and for the grant of nonstatutory stock options, stock awards, and RSUs to our employees, directors and consultants and our parent or subsidiary corporations’ employees and consultants. The 2015 Plan became effective on September 3, 2015. As of March 31, 2019, 262,168 shares are available for issuance pursuant to the 2015 Plan. Our board of directors has adopted, and our shareholders have approved, the Non‑Employee Director Equity Compensation Plan (the “Non‑Employee Director Plan”). The Non‑Employee Director Plan provides for the grant of nonstatutory stock options, stock awards, and RSUs to our non‑employee directors. The Non‑Employee Director Plan became effective on September 3, 2015. As of March 31, 2019, 272,151 shares are available for issuance pursuant to the Non‑Employee Director Plan. A summary of our outstanding stock options as of March 31, 2019 is as follows: Options Outstanding Weighted- Average Weighted- Remaining Average Contractual Number of Exercise Term Aggregate Shares Price (Years) Intrinsic Value (in thousands) Outstanding—January 1, 2019 8,579,511 $ 7.35 7.57 $ 3,281 Granted 1,767,400 $ 4.70 Forfeited and cancelled (101,332) $ 6.31 Exercised (39,728) $ 4.19 Outstanding—March 31, 2019 10,205,851 $ 6.91 7.77 $ 5,385 Vested and exercisable—March 31, 2019 4,224,745 $ 8.63 6.25 $ 2,506 Included in the stock options outstanding at March 31, 2019 are unvested stock options to purchase 88,908 shares at a weighted average exercise price of $18.80 per share for which the vesting of certain tranches will accelerate if the fair value per share of our stock reaches $31.46. In addition, the options outstanding as of March 31, 2019 include 97,652 shares that vest upon a market appreciation event, so long as it occurs prior to the date specified in the applicable award agreement and 97,652 shares that will vest upon the one year anniversary of the market appreciation event. The market appreciation event, which had not yet occurred as of March 31, 2019, is defined as the last trading day in the period in which our closing stock price on each of 20 consecutive trading days reported on Nasdaq has been at least $30.14 or $33.66 for the respective grantee. Stock‑based compensation expense We recognized stock‑based compensation expense for employees and directors for stock options and RSUs as follows (in thousands): Three Months Ended March 31, 2019 2018 Selling, general and administrative $ 1,811 $ 1,280 Research and development 512 408 Total stock-based compensation $ 2,323 $ 1,688 As of March 31, 2019, the total unrecognized compensation expense related to unvested stock options, net of estimated forfeitures, is $19.0 million, which we expect to recognize over an estimated weighted‑average period of 2.95 years. In determining the estimated fair value of our service-based awards, we use the Black‑Scholes option‑pricing model and assumptions discussed below. Each of these inputs is subjective and generally requires significant judgment. The fair value of our service-based awards that were granted during the years was estimated with the following assumptions: Three Months Ended March 31, 2019 2018 Expected term (in years) 6.09 6.08 Risk-free interest rate 2.47% - 2.61% 2.25% - 2.71% Expected volatility 80.00% - 80.85% 85.00% Dividend rate —% —% Restricted stock units Our board of directors have approved grants of RSUs to employees. These RSUs vest two years from the date of issuance, provided that the employee is employed by us on such vesting date. All RSUs will fully vest upon a change of control of our company. If and when the RSUs vest, we will issue one ordinary share for each whole RSU that has vested, subject to satisfaction of the executive’s tax withholding obligations. The RSUs will cease to be outstanding upon such issuance of ordinary shares. We recorded expense, which is included in the stock-based compensation table above, of $239,000 and $149,000 for the three months ended March 31, 2019 and 2018, respectively. As of March 31, 2019, the total unrecognized compensation expense related to unvested RSUs is $3.1 million, which we expect to recognize over an estimated weighted‑average period of 1.8 years. A summary of our unvested RSUs as of March 31, 2019 is as follows: Number of Shares Outstanding—January 1, 2019 143,100 Granted 634,000 Forfeited (6,250) Vested (12,000) Unvested—March 31, 2019 758,850 |
Summary of significant accoun_2
Summary of significant accounting policies and basis of presentation (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Summary of significant accounting policies and basis of presentation | |
Basis of presentation | Basis of presentation These unaudited consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States (“U.S. GAAP”). The unaudited consolidated financial statements reflect all adjustments, which include only normal recurring adjustments that are, in the opinion of management, necessary to present a fair statement of the operating results and financial position for the periods presented. The preparation of the unaudited consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts and disclosures in the consolidated financial statements. Actual results could differ from those estimates. Results for the three months ended March 31, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. These unaudited consolidated financial statements should be read in conjunction with the accounting policies and notes to the audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018 filed with the U.S. Securities and Exchange Commission on February 27, 2019 (the “2018 Annual Report”). Our significant accounting policies are described in Note 2 of the notes to the audited consolidated financial statements included in our 2018 Annual Report. Since the date of those financial statements, there have been no changes to our significant accounting policies. |
Revenues | Royalty Revenues Royalty revenues are from commercial sales of Macrilen by Novo Nordisk Healthcare AG, based on net sales. |
Leases | Leases We account for leases in accordance with Accounting Standards Codification Topic 842, Leases , (“ASC 842”). We determine if an arrangement is a lease at contract inception. A lease exists when a contract conveys to us the right to control the use of identified property, plant, or equipment for a period of time in exchange for consideration. The definition of a lease embodies two conditions: (1) there is an identified asset in the contract that is land or a depreciable asset (i.e., property, plant, and equipment), and (2) we have the right to control the use of the identified asset. Operating leases where we are the lessee are included in Right of use (“ROU”) assets and Other current liabilities and Other long-term liabilities on our Consolidated Balance Sheets. The lease liabilities are initially and subsequently measured at the present value of the unpaid lease payments at the lease commencement date. Key estimates and judgments include how we determined (1) the discount rate we use to discount the unpaid lease payments to present value, (2) lease term and (3) lease payments. ASC 842 requires a lessee to discount its unpaid lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, its incremental borrowing rate. Our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Our incremental borrowing rate for a lease is the rate of interest we would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. The lease term for all of our leases includes the noncancellable period of the lease. Lease payments included in the measurement of the lease asset or liability comprise of our fixed payments The ROU asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for lease payments made at or before the lease commencement date less any lease incentives received. For operating leases, the ROU asset is subsequently measured throughout the lease term at the carrying amount of the lease liability, plus (minus) any prepaid (accrued) lease payments, less the unamortized balance of lease incentives received. Lease expense for lease payments is recognized on a straight-line basis over the lease term. We monitor for events or changes in circumstances that require a reassessment of a lease. If a reassessment results in the remeasurement of a lease liability, a corresponding adjustment is made to the carrying amount of the corresponding ROU asset unless doing so would reduce the carrying amount of the ROU asset to an amount less than zero. In that case, the amount of the adjustment that would result in a negative ROU asset balance is recorded in profit or loss. We have elected not to recognize ROU assets and lease liabilities for all short-term leases that have a lease term of 12 months or less. We recognize the lease payments associated with our short-term leases as an expense on a straight-line basis over the lease term. Variable lease payments associated with these leases are recognized and presented in the same manner as for all our other leases. We adopted ASC 842 using a modified retrospective transition approach as of the effective date, as permitted by the amendments in ASU 2018-11, which provides an alternative modified retrospective transition method. As a result, we were not required to adjust our comparative period financial information for effects of the standard or make the new required lease disclosures for periods before the date of adoption ( i.e., January 1, 2019). We have elected to adopt the package of transition practical expedients and, therefore, have not reassessed (1) whether existing or expired contracts contain a lease, (2) lease classification for existing or expired leases or (3) the accounting for initial direct costs that were previously capitalized. We did not elect the practical expedient to use hindsight for leases existing at the adoption date. Further, we do not expect the amendments in ASU 2018-01: Land Easement Practical Expedient to have an effect on us because we do not enter into land easement arrangements. |
Income and expense from Field Services Agreement | Income and Expense from Field Services Agreement For our field services agreement with NNI, our income and expense are being recorded as non-operating income and expense, respectively. |
Segment information | Segment information Operating segments are identified as components of an enterprise for which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision making group, in making decisions on how to allocate resources and assess performance. We view our operations and manage our business in one operating segment. |
Net loss per share | Net loss per share Basic net loss per share is calculated by dividing the net loss attributable to shareholders by the weighted average number of ordinary shares outstanding during the period. Diluted net loss per share is calculated by dividing the net loss attributable to shareholders by the weighted‑average number of ordinary shares outstanding for the period, including any dilutive effect from outstanding stock options or other equity-based awards. Shares used in the diluted net loss per share calculations exclude anti‑dilutive ordinary share equivalents, which currently consist of outstanding stock options, unvested restricted stock units (“RSUs”) and warrants. The following potentially dilutive securities have been excluded from the computations of diluted weighted average shares outstanding as of March 31, 2019 and 2018, as they would be anti-dilutive: Three Months Ended March 31, 2019 2018 Warrants 6,833,253 8,803,253 Stock options issued and outstanding 10,205,851 7,960,469 Unvested RSUs 758,850 173,400 |
Recent accounting pronouncements - not yet adopted | Recent accounting pronouncements – not yet adopted In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other : Simplifying the Accounting for Goodwill Impairment . ASU 2017-04 removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. This standard, which will be effective for us beginning in the first quarter of fiscal year 2020, is required to be applied prospectively. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We are currently evaluating the impact this new accounting guidance will have on our consolidated financial statements. |
Summary of significant accoun_3
Summary of significant accounting policies and basis of presentation (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Summary of significant accounting policies and basis of presentation | |
Schedule of potentially dilutive securities excluded from computations of diluted weighted average shares outstanding | Three Months Ended March 31, 2019 2018 Warrants 6,833,253 8,803,253 Stock options issued and outstanding 10,205,851 7,960,469 Unvested RSUs 758,850 173,400 |
Fair value measurement (Tables)
Fair value measurement (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Fair value measurement | |
Schedule of fair value of financial assets by level | The following table presents our assets and liabilities that are measured at fair value on a recurring basis for the periods presented (in thousands) : As of March 31, 2019 Level I Level II Level III Total Cash equivalents 103,939 — — 103,939 Total assets $ 103,939 $ — $ — $ 103,939 Warrant liability — — 17,333 17,333 Total liabilities $ — $ — $ 17,333 $ 17,333 As of December 31, 2018 Level I Level II Level III Total Cash equivalents 122,300 — — 122,300 Total assets $ 122,300 $ — $ — $ 122,300 Warrant liability — — 15,513 15,513 Total liabilities $ — $ — $ 15,513 $ 15,513 |
Schedule of reconciliation of level 3 Warrant liability | The following table presents a reconciliation of our level 3 Warrant liability (in thousands): March 31, 2019 Balance as of 12/31/2018 $ 15,513 Unrealized loss on fair value of warrants for the three months ended March 31, 2019 1,820 Balance as of 3/31/2019 $ 17,333 |
Intangible assets and goodwill
Intangible assets and goodwill (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Intangible assets and goodwill | |
Schedule of gross carrying amount of in process research and development and goodwill | The following represents the balance of our intangible assets as follows (in thousands): As of March 31, 2019 Beginning of Period Additions Sold Amortization End of Period Keveyis $ 30,132 $ — $ — $ (1,256) $ 28,876 Goodwill 7,256 — — — 7,256 Total $ 37,388 $ — $ — $ (1,256) $ 36,132 As of December 31, 2018 Beginning of Period Additions Sold Amortization End of Period Keveyis $ 35,155 $ — $ — $ (5,023) $ 30,132 Macrilen — 24,834 (22,670) (2,164) — Goodwill 7,256 — — — 7,256 Total $ 42,411 $ 24,834 $ (22,670) $ (7,187) $ 37,388 |
Accrued liabilities and other_2
Accrued liabilities and other current liabilities (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accrued liabilities and other current liabilities | |
Schedule of accrued liabilities and other current liabilities | Accrued liabilities and other current liabilities consist of the following (in thousands): March 31, December 31, 2019 2018 Supply agreement - current portion $ 5,375 $ 1,638 Consulting and professional fees 2,659 4,145 Employee compensation 1,711 5,717 Accrued sales allowances 1,815 2,233 Accrued royalties 1,367 802 Accrued Taxes 1,193 535 Lease liability - current portion 326 — Other 408 995 Total accrued liabilities $ 14,854 $ 16,065 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases | |
Schedule of future minimum commitments under facility operating leases | As of March 31, 2019, future minimum commitments under facility operating leases were as follows (in thousands): Operating leases 2019 326 2020 470 2021 481 2022 492 2023 207 Total minimum lease payments $ 1,976 |
Schedule of components of lease cost | The components of lease cost for the quarter ended March 31, 2019 are as follows (in thousands): Three Months Ended March 31, 2019 Lease costs Amortization of right of use assets $ 110 Interest on lease liabilities 33 Total lease cost $ 143 |
Schedule of amounts reported for leases in consolidated balance sheets | Amounts reported in the Consolidated Balance Sheets for leases where we are the lessee as of the quarter ended March 31, 2019 were as follows (in thousands): March 31, 2019 Operating Leases Right of use asset $ 1,046 Lease liability $ 1,690 Remaining lease term Operating leases 4 years Discount rate Operating leases |
Warrants (Tables)
Warrants (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Warrants and Rights Note Disclosure [Abstract] | |
Schedule of warrants | Warrants Outstanding Exercise Expiration Warrants Warrants March 31, Classification Price Date Issued Exercised 2019 Warrants in connection with private equity placement Liability $ 2.50 6/28/2022 7,000,000 (1,970,000) 5,030,000 Warrants in connection with Horizon and Oxford loan agreement Equity $ 2.45 12/28/2026 428,571 (267,857) 160,714 Warrants in connection with CRG loan agreement Equity $ 7.37 7/14/2024 394,289 — 394,289 Warrants in connection with CRG loan amendment in January 2018 Equity $ 10.00 1/16/2025 1,248,250 — 1,248,250 9,071,110 6,833,253 |
Stock-based compensation (Table
Stock-based compensation (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Stock-based compensation | |
Schedule of summary of outstanding stock options activity | Options Outstanding Weighted- Average Weighted- Remaining Average Contractual Number of Exercise Term Aggregate Shares Price (Years) Intrinsic Value (in thousands) Outstanding—January 1, 2019 8,579,511 $ 7.35 7.57 $ 3,281 Granted 1,767,400 $ 4.70 Forfeited and cancelled (101,332) $ 6.31 Exercised (39,728) $ 4.19 Outstanding—March 31, 2019 10,205,851 $ 6.91 7.77 $ 5,385 Vested and exercisable—March 31, 2019 4,224,745 $ 8.63 6.25 $ 2,506 |
Schedule of stock-based compensation | We recognized stock‑based compensation expense for employees and directors for stock options and RSUs as follows (in thousands): Three Months Ended March 31, 2019 2018 Selling, general and administrative $ 1,811 $ 1,280 Research and development 512 408 Total stock-based compensation $ 2,323 $ 1,688 |
Schedule of assumptions for estimating fair value of stock option awards | Three Months Ended March 31, 2019 2018 Expected term (in years) 6.09 6.08 Risk-free interest rate 2.47% - 2.61% 2.25% - 2.71% Expected volatility 80.00% - 80.85% 85.00% Dividend rate —% —% |
Schedule of summary of unvested RSUs | Number of Shares Outstanding—January 1, 2019 143,100 Granted 634,000 Forfeited (6,250) Vested (12,000) Unvested—March 31, 2019 758,850 |
Organization - Sale of subsidia
Organization - Sale of subsidiary (Details) $ in Millions | 1 Months Ended | 3 Months Ended |
Dec. 31, 2018USD ($)employee | Mar. 31, 2018shares | |
Ordinary Shares | ||
Agreements | ||
Issuance of shares, net of costs (in shares) | shares | 5,255,683 | |
Macrilen Acquisition Agreement | Novo | ||
Agreements | ||
Consideration for sale of subsidiary | $ | $ 145 | |
Services Agreement | NNI | ||
Agreements | ||
Number of employees funded by counterparty | employee | 23 | |
Term of agreement | 3 years |
Organization - Products (Detail
Organization - Products (Detail) | Mar. 31, 2019product |
Organization | |
Number of clinical-stage product candidates | 2 |
Organization - Liquidity (Detai
Organization - Liquidity (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Liquidity | ||
Cash and cash equivalents | $ 104,306 | $ 122,490 |
Substantial doubt about going concern, within one year | false |
Summary of significant accoun_4
Summary of significant accounting policies and basis of presentation - Leases (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Summary of significant accounting policies and basis of presentation | |
Operating Lease, Right-of-Use Asset, Statement of Financial Position | us-gaap:OperatingLeaseRightOfUseAsset |
Operating Lease, Liability, Statement of Financial Position | us-gaap:OtherLiabilitiesCurrent us-gaap:OtherLiabilitiesNoncurrent |
Lease, Practical Expedients, Package | true |
Lease, Practical Expedient, Use of Hindsight | false |
Right to use assets, net | $ 1,046 |
Lease liability | $ 1,690 |
Summary of significant accoun_5
Summary of significant accounting policies and basis of presentation - Segment information (Details) | 3 Months Ended |
Mar. 31, 2019segment | |
Segment information | |
Number of operating segments | 1 |
Summary of significant accoun_6
Summary of significant accounting policies and basis of presentation - Net loss per share (Details) - shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Warrant liability | ||
Net income (loss) per share | ||
Anti-dilutive shares of common stock (in shares) | 6,833,253 | 8,803,253 |
Stock options | ||
Net income (loss) per share | ||
Anti-dilutive shares of common stock (in shares) | 10,205,851 | 7,960,469 |
RSUs | ||
Net income (loss) per share | ||
Anti-dilutive shares of common stock (in shares) | 758,850 | 173,400 |
Revenue recognition - Reserves
Revenue recognition - Reserves (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Reserve for returns | $ 0 |
Percentage of patient’s cost of branded prescription drugs related to the Medicare Part D Coverage Gap for which manufacturers of pharmaceutical products are responsible | 50.00% |
Maximum | |
Temporary supply period | 60 days |
Financial need period | 12 months |
Fair value measurement (Details
Fair value measurement (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Liabilities | ||
Warrant liabilities | $ 17,333 | $ 15,513 |
Recurring | ||
Assets | ||
Cash equivalents | 103,939 | 122,300 |
Total Assets | 103,939 | 122,300 |
Liabilities | ||
Warrant liabilities | 17,333 | 15,513 |
Total liabilities | 17,333 | 15,513 |
Recurring | Level I | ||
Assets | ||
Cash equivalents | 103,939 | 122,300 |
Total Assets | 103,939 | 122,300 |
Recurring | Level III | ||
Liabilities | ||
Warrant liabilities | 17,333 | 15,513 |
Total liabilities | $ 17,333 | $ 15,513 |
Fair value measurement - Level
Fair value measurement - Level 3 (Details) - Warrant liability $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Reconciliation of level 3: | |
Balance at beginning of period | $ 15,513 |
Unrealized loss on fair value of warrants | 1,820 |
Balance at end of period | $ 17,333 |
Intangible assets and goodwil_2
Intangible assets and goodwill - Components (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Mar. 31, 2019 | |
Intangible assets and goodwill | ||||
Finite-lived intangible assets, Amortization | $ (1,256) | $ (1,769) | $ (7,187) | |
Goodwill, Beginning of Period | 7,256 | 7,256 | 7,256 | |
Goodwill, End of Period | 7,256 | 7,256 | ||
Total, Beginning of Period | 37,388 | 42,411 | 42,411 | |
Total, Additions | 24,834 | |||
Sold | (22,670) | |||
Amortization | (1,256) | (1,769) | (7,187) | |
Total | 37,388 | 42,411 | 42,411 | $ 36,132 |
Keveyis | ||||
Intangible assets and goodwill | ||||
Finite-lived intangible assets, Beginning of Period | 30,132 | $ 35,155 | 35,155 | |
Finite-lived intangible assets, Amortization | (1,256) | (5,023) | ||
Finite-lived intangible assets, End of Period | 28,876 | 30,132 | ||
Amortization | $ (1,256) | (5,023) | ||
Macrilen | ||||
Intangible assets and goodwill | ||||
Finite-lived intangible assets, Additions | 24,834 | |||
Finite-lived intangible assets, Amortization | (2,164) | |||
Sold | (22,670) | |||
Amortization | $ (2,164) |
Intangible assets and goodwil_3
Intangible assets and goodwill - Asset purchase (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||
Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($)item | Mar. 31, 2019USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016installment | Dec. 31, 2016USD ($) | |
In-process research and development and Goodwill | ||||||||
Amortization of intangible assets | $ 1,256 | $ 1,769 | $ 7,187 | |||||
Keveyis | ||||||||
In-process research and development and Goodwill | ||||||||
Acquired product rights | 28,876 | 30,132 | $ 35,155 | |||||
Amortization of intangible assets | $ 1,256 | 5,023 | ||||||
Keveyis | Taro | Acquired product rights | ||||||||
In-process research and development and Goodwill | ||||||||
Acquired product rights | $ 40,200 | |||||||
Transaction costs | 2,400 | |||||||
Estimated life | 8 years | |||||||
Macrilen | ||||||||
In-process research and development and Goodwill | ||||||||
Amortization of intangible assets | $ 2,164 | |||||||
Asset Purchase Agreement | Keveyis | Taro | Acquired product rights | ||||||||
In-process research and development and Goodwill | ||||||||
Number of installment payments | 2 | 2 | ||||||
Installment payment | $ 7,500 | $ 1,000 | ||||||
Supply Agreement | Keveyis | Taro | Acquired product rights | ||||||||
In-process research and development and Goodwill | ||||||||
Acquired product rights | $ 29,300 |
Accrued liabilities and other_3
Accrued liabilities and other current liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Accrued liabilities and other current liabilities | ||
Supply agreement - current portion | $ 5,375 | $ 1,638 |
Consulting and professional fees | 2,659 | 4,145 |
Employee compensation | 1,711 | 5,717 |
Accrued sales allowances | 1,815 | 2,233 |
Accrued royalties | 1,367 | 802 |
Accrued taxes | 1,193 | 535 |
Lease liability - current portion | 326 | |
Other | 408 | 995 |
Accrued liabilities and other current liabilities | $ 14,854 | $ 16,065 |
Commitments and contingencies -
Commitments and contingencies - Commitments to Taro (Details) - Acquired product rights - Taro - Keveyis $ in Millions | 1 Months Ended | ||||
Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($)item | Mar. 31, 2019USD ($) | Dec. 31, 2016installment | Dec. 31, 2016USD ($) | |
Asset Purchase Agreement | |||||
Other Commitments | |||||
Number of installment payments | 2 | 2 | |||
Installment payment | $ 7.5 | $ 1 | |||
Potential milestone payments | $ 7.5 | ||||
Supply Agreement | |||||
Other Commitments | |||||
Minimum amount of purchases obligated | $ 29 | ||||
Purchase obligation period | 6 years | ||||
Remaining obligation | $ 22.1 |
Leases - Future minimum commitm
Leases - Future minimum commitments (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Future minimum commitments under facility operating leases: | |
2019 | $ 326 |
2020 | 470 |
2021 | 481 |
2022 | 492 |
2023 | 207 |
Total minimum lease payments | $ 1,976 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Initial lease term | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Initial lease term | 5 years |
Leases - Components of lease co
Leases - Components of lease cost (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Lease costs | |
Amortization of right of use assets | $ 110 |
Interest on lease liabilities | 33 |
Total lease cost | $ 143 |
Leases - Balance sheet location
Leases - Balance sheet location (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Leases | |
Right to use assets | $ 1,046 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position | us-gaap:OperatingLeaseRightOfUseAsset |
Lease liability | $ 1,690 |
Operating Lease, Liability, Statement of Financial Position | us-gaap:OtherLiabilitiesCurrent us-gaap:OtherLiabilitiesNoncurrent |
Remaining lease term - Operating leases | 4 years |
Discount rate - Operating leases | 7.69% |
Income taxes (Details)
Income taxes (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Components of income tax expense (benefit) | |
Income tax expense | $ 677 |
Warrants (Details)
Warrants (Details) | 3 Months Ended |
Mar. 31, 2019$ / sharesshares | |
Warrants | |
Warrants Issued (in shares) | 9,071,110 |
Warrants Outstanding (in shares) | 6,833,253 |
Warrants in connection with private equity placement | |
Warrants | |
Exercise Price (in dollars per share) | $ / shares | $ 2.50 |
Warrants Issued (in shares) | 7,000,000 |
Warrants Exercised (in shares) | (1,970,000) |
Warrants Outstanding (in shares) | 5,030,000 |
Warrants in connection with Horizon and Oxford loan agreement | |
Warrants | |
Exercise Price (in dollars per share) | $ / shares | $ 2.45 |
Warrants Issued (in shares) | 428,571 |
Warrants Exercised (in shares) | (267,857) |
Warrants Outstanding (in shares) | 160,714 |
Warrants in connection with CRG loan agreement | |
Warrants | |
Exercise Price (in dollars per share) | $ / shares | $ 7.37 |
Warrants Issued (in shares) | 394,289 |
Warrants Outstanding (in shares) | 394,289 |
Warrants in connection with CRG loan amendment in January 2018 | |
Warrants | |
Exercise Price (in dollars per share) | $ / shares | $ 10 |
Warrants Issued (in shares) | 1,248,250 |
Warrants Outstanding (in shares) | 1,248,250 |
Stock-based compensation - Gene
Stock-based compensation - General (Details) | Mar. 31, 2019shares |
Inducement Plan | |
Stock-based compensation | |
Number of shares available for issuance | 738,953 |
2015 Plan | |
Stock-based compensation | |
Number of shares available for issuance | 262,168 |
Non-Employee Director Plan | |
Stock-based compensation | |
Number of shares available for issuance | 272,151 |
Stock-based compensation - Stoc
Stock-based compensation - Stock options activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Summary of outstanding stock options | ||
Outstanding at beginning of period (in shares) | 8,579,511 | |
Granted (in shares) | 1,767,400 | |
Forfeited and cancelled (in shares) | (101,332) | |
Exercised (in shares) | (39,728) | |
Outstanding at end of period (in shares) | 10,205,851 | 8,579,511 |
Vested and exercisable at end of period (in shares) | 4,224,745 | |
Weighted-Average Exercise Price | ||
Granted (in dollars per share) | $ 4.70 | |
Forfeited and cancelled (in dollars per share) | 6.31 | |
Exercised (in dollars per share) | 4.19 | |
Outstanding (in dollars per share) | 6.91 | $ 7.35 |
Vested and exercisable at end of period (in dollars per share) | $ 8.63 | |
Additional Disclosures - Options | ||
Weighted Average Remaining Contractual Term, Outstanding | 7 years 9 months 7 days | 7 years 6 months 26 days |
Weighted Average Remaining Contractual Term, Vested and exercisable | 6 years 3 months | |
Aggregate Intrinsic Value, Outstanding (in dollars) | $ 5,385 | $ 3,281 |
Aggregate Intrinsic Value, Vested and exercisable at end of the period (in dollars) | $ 2,506 |
Stock-based compensation - Opti
Stock-based compensation - Options outstanding (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Stock options | ||
Options outstanding (in shares) | 10,205,851 | 8,579,511 |
Options outstanding, weighted-average exercise price (in dollars per share) | $ 6.91 | $ 7.35 |
Vesting subject to acceleration | ||
Stock options | ||
Options outstanding (in shares) | 88,908 | |
Options outstanding, weighted-average exercise price (in dollars per share) | $ 18.80 | |
Share price vesting threshold (in dollars per share) | 31.46 | |
Vesting based on market appreciation event | Grantee, One | ||
Stock options | ||
Share price vesting threshold (in dollars per share) | 30.14 | |
Vesting based on market appreciation event | Grantee, Two | ||
Stock options | ||
Share price vesting threshold (in dollars per share) | $ 33.66 | |
Vesting based on market appreciation event | Vesting at market appreciation event | ||
Stock options | ||
Options outstanding (in shares) | 97,652 | |
Consecutive trading days threshold | 20 days | |
Vesting based on market appreciation event | Vesting at one year anniversary of market appreciation event | ||
Stock options | ||
Options outstanding (in shares) | 97,652 | |
Vesting period following event | 1 year | |
Consecutive trading days threshold | 20 days |
Stock-based compensation - St_2
Stock-based compensation - Stock-based compensation expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Stock-based compensation expense | ||
Total stock-based compensation | $ 2,323 | $ 1,688 |
Stock options | ||
Stock-based compensation expense | ||
Total unrecognized compensation expense | $ 19,000 | |
Estimated weighted average period over which expense is expected to be recognized | 2 years 11 months 12 days | |
Selling, general and administrative | ||
Stock-based compensation expense | ||
Total stock-based compensation | $ 1,811 | 1,280 |
Research and development | ||
Stock-based compensation expense | ||
Total stock-based compensation | $ 512 | $ 408 |
Stock-based compensation - Fair
Stock-based compensation - Fair value assumptions (Details) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Fair value assumptions | ||
Expected term (in years) | 6 years 1 month 2 days | 6 years 29 days |
Minimum Risk-free interest rate (as a percent) | 2.47% | 2.25% |
Maximum Risk-free interest rate (as a percent) | 2.61% | 2.71% |
Minimum Expected volatility (as a percent) | 80.00% | 85.00% |
Maximum Expected volatility (as a percent) | 80.85% | |
Expected volatility (as a percent) | 85.00% |
Stock-based compensation - Rest
Stock-based compensation - Restricted stock units (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Stock-based compensation | ||
Stock-based compensation | $ 2,323,000 | $ 1,688,000 |
RSUs | ||
Stock-based compensation | ||
Vesting period | 2 years | |
Number of shares issued for each stock award vested | 1 | |
Stock-based compensation | $ 239,000 | $ 149,000 |
Total unrecognized compensation expense | $ 3,100,000 | |
Estimated weighted average period over which expense is expected to be recognized | 1 year 9 months 18 days | |
Summary of unvested RSUs | ||
Unvested - Beginning of period (in shares) | 143,100 | |
Granted (in shares) | 634,000 | |
Forfeited (in shares) | (6,250) | |
Vested (in shares) | (12,000) | |
Unvested - End of period (in shares) | 758,850 |