Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 10, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2022 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | APVO | |
Entity Registrant Name | APTEVO THERAPEUTICS INC. | |
Entity Central Index Key | 0001671584 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Document Transition Report | false | |
Document Quarterly Report | true | |
Entity Interactive Data Current | Yes | |
Entity Common Stock, Shares Outstanding | 5,091,758 | |
Title of 12(b) Security | Common Stock, $0.001 par value per share | |
Security Exchange Name | NASDAQ | |
Entity Address, Address Line One | 2401 4th Avenue | |
Entity Address, Address Line Two | Suite 1050 | |
Entity Address, City or Town | Seattle | |
Entity Address, State or Province | WA | |
Entity Address, Postal Zip Code | 98121 | |
City Area Code | 206 | |
Local Phone Number | 838-0500 | |
Entity Incorporation, State or Country Code | DE | |
Entity Current Reporting Status | Yes | |
Entity Tax Identification Number | 81-1567056 | |
Entity File Number | 001-37746 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 22,150 | $ 45,044 |
Restricted cash | 427 | 1,259 |
Royalty receivable | 3,664 | |
Prepaid expenses | 1,383 | 1,823 |
Other current assets | 658 | 780 |
Total current assets | 24,618 | 52,570 |
Property and equipment, net | 1,669 | 2,379 |
Operating lease right-of-use asset | 5,408 | 1,584 |
Other assets | 68 | |
Total assets | 31,695 | 56,601 |
Current liabilities: | ||
Accounts payable and other accrued liabilities | 3,243 | 3,462 |
Accrued compensation | 1,372 | 2,077 |
Liability related to the sale of royalties, net - short-term | 15,465 | |
Current portion of long-term debt | 2,000 | 11,667 |
Other current liabilities | 1,171 | 2,086 |
Total current liabilities | 7,786 | 34,757 |
Liability related to the sale of royalties, net - long-term | 15,580 | |
Long-term debt | 1,910 | 3,707 |
Operating lease liability | 6,237 | 1,341 |
Total liabilities | 15,933 | 55,385 |
Stockholders' equity: | ||
Preferred stock: $0.001 par value; 15,000,000 shares authorized, zero shares issued or outstanding | ||
Common stock: $0.001 par value; 500,000,000 shares authorized; 5,090,644 and 4,898,143 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively | 47 | 47 |
Additional paid-in capital | 217,109 | 215,232 |
Accumulated deficit | (201,394) | (214,063) |
Total stockholders' equity | 15,762 | 1,216 |
Total liabilities and stockholders' equity | $ 31,695 | $ 56,601 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
Statement Of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 15,000,000 | 15,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 5,090,644 | 4,898,143 |
Common stock, shares outstanding | 5,090,644 | 4,898,143 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement [Abstract] | ||||
Royalty revenue | $ 3,096 | $ 3,114 | $ 8,627 | |
Revenue from Contract with Customer, Product and Service [Extensible Enumeration] | us-gaap:RoyaltyMember | us-gaap:RoyaltyMember | us-gaap:RoyaltyMember | |
Operating expenses: | ||||
Research and development | $ (4,477) | $ (4,367) | $ (13,208) | $ (14,451) |
General and administrative | (3,307) | (3,479) | (10,863) | (11,536) |
Loss from operations | (7,784) | (4,750) | (20,957) | (17,360) |
Other income (expense): | ||||
Other expense from continuing operations, net | (25) | (2,327) | (4,048) | (5,451) |
Gain on extinguishment of liability related to sale of royalties | 37,182 | |||
Net (loss) income from continuing operations | (7,809) | (7,077) | 12,177 | (22,811) |
Discontinued operations: | ||||
Income from discontinued operations | 165 | 80 | 492 | 626 |
Net (loss) income | $ (7,644) | $ (6,997) | $ 12,669 | $ (22,185) |
Net (loss) income per share: | ||||
Basic | $ (1.50) | $ (1.43) | $ 2.52 | $ (4.80) |
Diluted | $ (1.50) | $ (1.43) | $ 2.52 | $ (4.80) |
Shares used in calculation: | ||||
Basic | 5,090,592 | 4,891,881 | 5,017,684 | 4,617,357 |
Diluted | 5,090,592 | 4,891,881 | 5,019,552 | 4,617,357 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Operating Activities | ||
Net income (loss) | $ 12,669 | $ (22,185) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock-based compensation | 1,445 | 1,465 |
Depreciation and amortization | 740 | 888 |
Non-cash interest expense and other | 3,262 | 4,387 |
Gain on extinguishment of liability related to sale of royalties | (37,182) | |
Changes in operating assets and liabilities: | ||
Royalty receivable | 3,664 | (727) |
Prepaid expenses and other current assets | 630 | (39) |
Operating lease right-of-use asset | 548 | 857 |
Accounts payable, accrued compensation and other liabilities | (1,383) | (1,695) |
Long-term operating lease liability | 524 | (750) |
Net cash used in operating activities | (15,083) | (17,799) |
Investing Activities | ||
Purchases of property and equipment | (29) | (595) |
Net cash used in investing activities | (29) | (595) |
Financing Activities | ||
Payments of long-term debt, including fees | (11,767) | (10,550) |
Repayments under liability related to sale of royalties | (6,779) | (5,531) |
Proceeds from sale of royalties | 35,000 | |
Transaction costs from sale of royalties | (1,100) | |
Proceeds from exercise of stock options | 200 | |
Value of equity awards withheld for tax liability | (4) | |
Proceeds from exercise of warrants | 985 | |
Proceeds from milestones related to sale of royalties | 10,000 | |
Transaction costs for milestones related to sale of royalties | (500) | |
Proceeds from issuance of common stock | 436 | 10,233 |
Net cash (used in) provided by financing activities | (8,614) | 29,237 |
(Decrease) increase in cash, cash equivalents, and restricted cash | (23,726) | 10,843 |
Cash, cash equivalents, and restricted cash at beginning of period | 46,303 | 42,534 |
Cash, cash equivalents, and restricted cash at end of period | 22,577 | $ 53,377 |
Supplemental Cash Flow Information | ||
Change in ROU asset and lease liability from lease remeasurement | $ 4,372 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Common Stock Purchase Agreement Lincoln Park | Additional Paid-In Capital | Accumulated Deficit |
Balance at Dec. 31, 2020 | $ 16,594 | $ 46 | $ 202,154 | $ (185,606) | |
Balance (in shares) at Dec. 31, 2020 | 4,410,909 | ||||
Proceeds from exercise of stock options | 86 | 86 | |||
Proceeds from exercise of stock options (in shares) | 10,685 | ||||
Proceeds from exercise of warrants | 506 | 506 | |||
Proceeds from exercise of warrants (in shares) | 27,828 | ||||
Stock-based compensation | 574 | 574 | |||
Net income (loss) for the period | (7,256) | (7,256) | |||
Balance at Mar. 31, 2021 | 10,504 | $ 46 | 203,320 | (192,862) | |
Balance (in shares) at Mar. 31, 2021 | 4,449,422 | ||||
Balance at Dec. 31, 2020 | 16,594 | $ 46 | 202,154 | (185,606) | |
Balance (in shares) at Dec. 31, 2020 | 4,410,909 | ||||
Net income (loss) for the period | (22,185) | ||||
Balance at Sep. 30, 2021 | 7,292 | $ 47 | 215,036 | (207,791) | |
Balance (in shares) at Sep. 30, 2021 | 4,895,759 | ||||
Balance at Mar. 31, 2021 | 10,504 | $ 46 | 203,320 | (192,862) | |
Balance (in shares) at Mar. 31, 2021 | 4,449,422 | ||||
Proceeds from exercise of stock options | 25 | 25 | |||
Proceeds from exercise of stock options (in shares) | 1,769 | ||||
Proceeds from exercise of warrants | 478 | 478 | |||
Proceeds from exercise of warrants (in shares) | 26,277 | ||||
Commitment shares issued/ proceeds from issuance of common stock | 10,234 | $ 1 | 10,233 | ||
Commitment shares issued/ proceeds from issuance of common stock (in shares) | 407,047 | ||||
Stock-based compensation | 572 | 572 | |||
Net income (loss) for the period | (7,932) | (7,932) | |||
Balance at Jun. 30, 2021 | 13,881 | $ 47 | 214,628 | (200,794) | |
Balance (in shares) at Jun. 30, 2021 | 4,884,515 | ||||
Proceeds from exercise of stock options | 89 | 89 | |||
Proceeds from exercise of stock options (in shares) | 11,244 | ||||
Stock-based compensation | 319 | 319 | |||
Net income (loss) for the period | (6,997) | (6,997) | |||
Balance at Sep. 30, 2021 | 7,292 | $ 47 | 215,036 | (207,791) | |
Balance (in shares) at Sep. 30, 2021 | 4,895,759 | ||||
Balance at Dec. 31, 2021 | 1,216 | $ 47 | 215,232 | (214,063) | |
Balance (in shares) at Dec. 31, 2021 | 4,898,143 | ||||
Common stock issued upon vesting of restricted stock units | (4) | (4) | |||
Common stock issued upon vesting of restricted stock units (in shares) | 9,822 | ||||
Commitment shares issued/ proceeds from issuance of common stock (in shares) | 99,276 | ||||
Stock-based compensation | 601 | 601 | |||
Net income (loss) for the period | (7,697) | (7,697) | |||
Balance at Mar. 31, 2022 | (5,884) | $ 47 | 215,829 | (221,760) | |
Balance (in shares) at Mar. 31, 2022 | 5,007,241 | ||||
Balance at Dec. 31, 2021 | 1,216 | $ 47 | 215,232 | (214,063) | |
Balance (in shares) at Dec. 31, 2021 | 4,898,143 | ||||
Commitment shares issued/ proceeds from issuance of common stock (in shares) | 400,000 | ||||
Net income (loss) for the period | 12,669 | ||||
Balance at Sep. 30, 2022 | 15,762 | $ 47 | 217,109 | (201,394) | |
Balance (in shares) at Sep. 30, 2022 | 5,090,644 | ||||
Balance at Mar. 31, 2022 | (5,884) | $ 47 | 215,829 | (221,760) | |
Balance (in shares) at Mar. 31, 2022 | 5,007,241 | ||||
Common stock issued upon vesting of restricted stock units (in shares) | 4,326 | ||||
Commitment shares issued/ proceeds from issuance of common stock | 436 | 436 | |||
Commitment shares issued/ proceeds from issuance of common stock (in shares) | 78,285 | ||||
Stock-based compensation | 485 | 485 | |||
Net income (loss) for the period | 28,010 | 28,010 | |||
Balance at Jun. 30, 2022 | 23,047 | $ 47 | 216,750 | (193,750) | |
Balance (in shares) at Jun. 30, 2022 | 5,089,852 | ||||
Common stock issued upon vesting of restricted stock units (in shares) | 792 | ||||
Stock-based compensation | 359 | 359 | |||
Net income (loss) for the period | (7,644) | (7,644) | |||
Balance at Sep. 30, 2022 | $ 15,762 | $ 47 | $ 217,109 | $ (201,394) | |
Balance (in shares) at Sep. 30, 2022 | 5,090,644 |
Nature of Business and Signific
Nature of Business and Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Nature of Business and Significant Accounting Policies | Note 1. Nature of Business and Significant Accounting Policies Organization and Liquidity Aptevo Therapeutics Inc. (Aptevo, we, us, or the Company) is a clinical-stage, research and development biotechnology company focused on developing novel immunotherapeutic candidates for the treatment of different forms of cancer. We have developed two versatile and enabling platform technologies for rational design of precision immune stimulatory drugs. Our lead clinical candidate, APVO436, and preclinical candidates, ALG.APV-527 and APVO603, were developed using our ADAPTIR™ modular protein technology platform. Our preclinical candidate APVO442 was developed using our ADAPTIR-FLEX™ modular protein technology platform. We are currently trading on the Nasdaq Capital Market under the symbol “APVO.” The accompanying financial statements have been prepared on a basis that assumes we will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the normal course of business. For the three and nine months ended September 30, 2022, we had a net loss of $7.6 million and a net income of $12.7 million, respectively. We had an accumulated deficit of $201.4 million as of September 30, 2022. For the nine months ended September 30, 2022, net cash used in our operating activities was $15.1 million. We have suffered recurring losses from operations and negative cash flows from operating activities. We believe that our existing cash resources, milestone payments related to the Royalty Purchase Agreement with HealthCare Royalty Management, LLC (HCR), funds available under the Purchase Agreement with Lincoln Park Capital Fund, LLC (Lincoln Park) and the Equity Distribution Agreement with Piper Sandler & Co (Piper Sandler), cash to be generated from future deferred payments and milestones related to IXINITY sales and approvals by Medexus Pharmaceuticals Inc. (Medexus), and release of restricted cash securing letters of credit, will be sufficient to meet our projected operating requirements and debt service for at least twelve months from the date of issuance of these financial statements. We may choose to raise additional funds to support our operating and capital needs in the future. We continue to face significant challenges and uncertainties and, as a result, our available capital resources may be consumed more rapidly than currently expected due to: (a) changes we may make to the business that affect ongoing operating expenses; (b) changes we may make in our business strategy; (c) changes we may make in our research and development spending plans; (d) potential decreases in our expected milestone and deferred payments from Medexus with respect to IXINITY; (e) whether and to what extent future milestone payments are received under our Royalty Purchase Agreement; (f) macroeconomic conditions such as rising interest rates, inflation and costs; Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP). These unaudited condensed consolidated financial statements include all adjustments, which include normal recurring adjustments, necessary for the fair presentation of the Company’s financial position. These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of and for the year ended December 31, 2021, and the notes thereto, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates and changes in these estimates are recorded when known. The unaudited condensed consolidated financial statements include the accounts of the Company and our wholly owned subsidiar y, Aptevo Research and Development LLC . All intercompany balances and transactions have been eliminated . Use of Estimates The preparation of financial statements in conformity with GAAP requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent liabilities in the unaudited condensed consolidated financial statements and accompanying notes. Estimates are used for, but not limited to, forecasted royalties, effective interest rates, clinical accruals, useful lives of equipment, commitments and contingencies, and stock-based compensation. Given the continuing global economic and geopolitical climate and effects from the ongoing COVID-19 pandemic, these estimates are becoming more challenging, and actual results could differ materially from those estimates. Significant Accounting Policies Liability Related to Sale of Royalties and Non-Cash Interest Expense On March 30, 2021, we entered into and closed a Royalty Purchase Agreement (the Royalty Purchase Agreement) with an entity managed by HCR we are eligible to receive additional payments in the aggregate of up to an additional $32.5 million based on the achievement of sales milestones in 2021, 2022 and 2023 (collectively, the Milestone Amounts) On the date we entered into the transaction, we accounted for the Royalty Purchase Agreement with HCR as a debt-like instrument, amortized under the effective interest rate method over the life of the related expected royalty stream. The liabilities related to the sale of royalties and the debt amortization were based on our estimates of royalties expected to be paid over the life of the arrangement. On June 7, 2022, we entered into and closed an amendment to the Royalty Purchase Agreement (the Amendment to Royalty Purchase Agreement) (see Note 7) which removed all restrictions related to HCR’s rate of return, and it is no longer a sale of a specified percentage of royalty revenue. The Amendment to Royalty Purchase Agreement was accounted for under ASC 610-20 , Gains and Losses from Derecognition of Nonfinancial Assets Liabilities – Extinguishment of Liabilities As a result of the Amendment to Royalty Purchase Agreement, the Company recognized a gain of $37.2 million, which was the total balance of liability related to the sale of royalties on the closing date. The Amendment to Royalty Purchase Agreement allowed us to regain full compliance with Nasdaq Listing Rule 5550(b)(1) in a way that was non-dilutive for our shareholders. We will not recognize royalty revenue on net sales of RUXIENCE that are paid to HCR going forward. The royalty revenue included in the consolidated statements of operations relates to the quarter ended March 31, 2022. Future Milestone Amounts will be accounted for as variable consideration and recognized as other income when such milestones are earned using the most likely method in accordance with ASC 610-20 Other Income — Gains and Losses from the Derecognition of Nonfinancial Assets . Royalty Revenue We recognized revenue in accordance with ASC 606, Revenue from Contracts with Customers . Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. RUXIENCE Royalty Revenue Aptevo’s royalty revenue exclusively related to royalties on Pfizer’s net sales of RUXIENCE. Royalty revenue for the period covered by this report reflects revenue recorded only in the first quarter of 2022 due to our Amendment to Royalty Purchase Agreement with HCR (see Note 7). As a result of the amendment, we ceased reporting as royalty revenue, royalties paid by Pfizer to HCR related to Pfizer’s sales of RUXIENCE. We recognized royalty revenue under ASC 606, which provides revenue recognition constraints by requiring the recognition of revenue at the later of the following: 1) when the subsequent sale or usage occurs or 2) when the performance obligation to which some or all of the sales-based or usage-based royalty has been allocated has been satisfied (or partially satisfied). We satisfied our performance obligation prior to the period covered by this report, specifically in May 2011 when the original Collaboration and License Agreement between Trubion Pharmaceuticals and Wyeth was amended to remove the exclusivity/non-compete restrictions so that Pfizer could develop a CD20 biosimilar product in exchange for a one-time payment of $2.5 million and future royalties of 2.5% on any CD20 biosimilar product commercialized by Pfizer in the future. We do not have future performance obligations under this agreement. We applied the royalty recognition constraint required under the guidance for sales-based royalties, which requires a sales-based royalty to be recorded no sooner than the underlying sale. Therefore, royalties on sales of products commercialized by Pfizer were recognized in the quarter the product is sold Given royalty revenues were based on 2.5 % of global net sales of RUXIENCE, the considerations were considered variable. Pfizer generally report ed sales information to us within 60 days of quarter end. Unless we receive d finalized sales information for the respective quarter, we estimate d the expected royalty proceeds based on an analysis of historical experience, analyst expectations, interim data provided by Pfizer, including their publicly announced sales, and other publicly available information. Differences between actual and estimated royalty revenues were adjusted for in the period in which they bec a me known, typically the following quarter. Revenue recorded in the period covered by this report represents actual royalty revenue given the timing of RUXIENCE sales reports received from Pfizer . There was no significant financing component to the contract . Debt Modification On March 30, 2021, we amended The amended Credit Agreement was accounted for under ASC 470-50, Debt Modifications and Extinguishments as a , rather than an extinguishment, based on a comparison of the present value of the cash flows under the terms of the debt immediately before and after the amendment, which resulted in a change of less than 10%. Unamortized issuance costs as of the date of modification will be amortized to interest expense using the effective interest method over the repayment term. On June 7, 2022, we further amended the Credit Agreement with MidCap Financial (Limited Consent and Second Amendment to Credit Agreement) to obtain MidCap Financial’s limited consent to amend the Royalty Purchase Agreement with HCR. The Limited Consent and Second Amendment to Credit Agreement did not change future cash flows or other terms of the Credit Agreement. Additionally, on August 30, 2022, we amended our Credit Agreement with MidCap Financial (Third Amendment to Credit Agreement) to replace the London Interbank Offered Rate (“LIBOR”) benchmark with the Secured Overnight Financing Rate plus 0.10% (“SOFR”), which is regulated by the Federal Reserve Bank of New York. Aptevo amended our Credit Agreement due to United Kingdom’s Financial Conduct Authority’s (“FCA”) planned phase-out of one-month US Dollar LIBOR settings in 2023. Our Credit Agreement continues to bear base interest at a rate of 6.25% per annum plus SOFR, subject to a 1.50% SOFR floor and a 2.50% SOFR cap. Other Significant Accounting Policies Our other significant accounting policies were reported in our Annual Report on Form 10-K for the year ended December 31, 2021 that was filed with the SEC on March 24, 2022. Our other significant accounting policies have not changed materially from the policies previously reported. Recent Accounting Pronouncements In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) 2020-04, Reference Rate Reform We evaluated ASC 848, Reference Rate Reform |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Sep. 30, 2022 | |
Discontinued Operations And Disposal Groups [Abstract] | |
Discontinued Operations | Note 2. Discontinued Operations The accompanying unaudited condensed consolidated financial statements include discontinued operations from two separate transactions: the sale of our hyperimmune business to Saol International Limited in September 2017, from which we received a payment in March 2021 related to the collection of certain accounts receivable, and the sale of our Aptevo BioTherapeutics LLC business in February 2020. On February 28, 2020, we entered into an LLC Purchase Agreement with Medexus, pursuant to which we sold all of the issued and outstanding limited liability company interests of Aptevo BioTherapeutics LLC, a wholly owned subsidiary of Aptevo. As a result of the transaction, Medexus obtained all rights, title and interest to the IXINITY product and the related Hemophilia B business and intellectual property . The following table represents the components attributable to income from discontinued operations in the unaudited condensed consolidated statements of operations (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2022 2021 2022 2021 Deferred payment from Medexus 165 80 492 399 Gain on contingent consideration from Saol — — — 227 Income from discontinued operations $ 165 $ 80 $ 492 $ 626 The LLC Purchase Agreement with Medexus entitles us to future deferred payments and milestones. For the nine months ended September 30, 2022, we collected |
Collaboration Agreements
Collaboration Agreements | 9 Months Ended |
Sep. 30, 2022 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Collaboration Agreements | Note 3. Collaboration Agreements Alligator Bioscience AB On July 20, 2017, our wholly owned subsidiary Aptevo Research and Development LLC (Aptevo R&D), entered into a collaboration and option agreement (the Collaboration Agreement) with Alligator Bioscience AB (Alligator), pursuant to which Aptevo and Alligator will collaboratively develop ALG.APV-527, a lead bispecific antibody candidate simultaneously targeting 4-1BB (CD137), a member of the TNFR superfamily of a costimulatory receptor found on activated T-cells, and 5T4, a tumor antigen widely overexpressed in a number of different types of cancer. We assessed the arrangement in accordance with ASC 606 and concluded that the contract counterparty, Alligator, is not a customer. As such the arrangement is not in the scope of ASC 606 and is instead treated as a collaborative agreement under ASC 808 – Collaborative Arrangements For the three months ended September 30, 2022 and 2021, w e recorded approximately $0.6 million and $0.1 million in our research and development expense related to the Collaboration Agreement , respectively. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 4. Fair Value Measurements The Company’s estimates of fair value for financial assets and financial liabilities are based on the framework established in the fair value accounting guidance. The framework is based on the inputs used in valuation, it gives the highest priority to quoted prices in active markets and requires that observable inputs be used in the valuations when available. The disclosure of fair value estimates in the fair value accounting guidance hierarchy is based on whether the significant inputs into the valuation are observable. In determining the level of the hierarchy in which the estimate is disclosed, the highest priority is given to unadjusted quoted prices in active markets and the lowest priority to unobservable inputs that reflect the Company’s significant market assumptions. The level in the fair value hierarchy within which the fair value measurement is reported is based on the lowest level input that is significant to the measurement in its entirety. The three levels of the hierarchy are as follows: Level 1— Quoted prices in active markets for identical assets and liabilities; Level 2— Inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3— Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. At September 30, 2022 and December 31, 2021, we had $18.4 million and $41.2 million in Level 1 money market funds, respectively. The carrying amounts of our money market funds approximate their fair value. At September 30, 2022 and December 31, 2021, we did not have any Level 2 or Level 3 assets. |
Cash, Cash Equivalents, and Res
Cash, Cash Equivalents, and Restricted Cash | 9 Months Ended |
Sep. 30, 2022 | |
Cash And Cash Equivalents [Abstract] | |
Cash, Cash Equivalents, and Restricted Cash | Note 5. Cash, Cash Equivalents, and Restricted Cash The Company’s cash equivalents are highly liquid investments with a maturity of 90 days or less at the date of purchase and include time deposits and investments in money market funds. Restricted cash, which are time deposits, includes $0.4 million securing letters of credit. The following table shows our cash, cash equivalents and restricted cash as of September 30, 2022 and December 31, 2021: September 30, December 31, (in thousands) 2022 2021 Cash $ 3,731 $ 3,841 Cash equivalents 18,419 41,203 Restricted cash 427 1,259 Total cash, cash equivalents, and restricted cash $ 22,577 $ 46,303 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Note 6. Debt Credit Agreement On August 5, 2020, we entered into a Credit Agreement, with MidCap Financial. The Credit Agreement provided us with up to $25.0 million of available borrowing capacity under a term loan facility. The full $25.0 million was drawn on the closing date of the Credit Agreement The FCA, which regulates LIBOR, phased out one-week and two-month US Dollar LIBOR settings on December 31, 2021. All other US Dollar LIBOR settings, including the overnight, one-month, three-month, six-month and twelve-month, will be phased out on June 30, 2023. Our 2020 Credit Agreement with MidCap Financial referenced one-month LIBOR and also provided that we may amend the Credit Agreement to reflect an alternative rate of interest upon the phase out of LIBOR On November 6, 2020, Kevin Tang and his related entities filed a statement on Schedule 13D to report the purchase of 1,760,000 shares of the Company’s common stock, which at the time represented approximately 54% of the Company’s issued and outstanding shares of the Company’s common stock. This acquisition of voting stock triggered a change in control, resulting in an Event of Default under Section 10.1(a)(ii) of the Credit Agreement. On November 10, 2020, the Company obtained a waiver from MidCap Financial pursuant to which, among other things, MidCap Financial waived such Event of Default and MidCap Financial and the Company agreed that an immediate event of default under the Credit Agreement will be deemed to have occurred in the event that (a) a majority of the seats on the Company’s board of directors are occupied by persons who were neither (i) nominated by the Company’s board of directors nor (ii) appointed by the directors so nominated, and (b) Tang has appointed the majority of the Company’s board of directors. No other events of default have occurred with respect to the Credit Agreement. On March 30, 2021, we amended our Credit Agreement with MidCap Financial and used $10.0 million of the proceeds received from the Royalty Purchase Agreement to pay down the outstanding principal under the Credit Agreement from $25.0 million to $15.0 million. $10.0 million of the remaining $15.0 million principal balance was paid on March 29, 2022. Beginning March 1, 2022, monthly repayment of the remaining $5.0 million of principal commenced and will continue for the final 30 months of the loan term. The term loan facility includes additional payment provisions if milestones related to IXINITY under the LLC Purchase Agreement with Medexus are sold during the term of the loan. If the Company sells the IXINITY deferred payment stream and milestones prior to full repayment of this $5.0 million principal amount, under the agreement with MidCap Financial, we will be required to use the proceeds from the sale to pay down the outstanding loan principal balance. MidCap Financial also released its security interest in the RUXIENCE royalty payments. A fee of $0.6 million was paid by the Company to MidCap Financial in connection with the amendment in lieu of the formula-based fee previously required The amended Credit Agreement was accounted for as a debt modification On June 7, 2022, we further amended the Credit Agreement with MidCap Financial to obtain MidCap Financial’s limited consent to amend our Royalty Purchase Agreement with HCR. The Limited Consent and Second Amendment to Credit Agreement did not change future cash flows or other terms of the Credit Agreement. Additionally, on August 30, 2022, we amended our Credit Agreement with MidCap Financial to replace the LIBOR benchmark with SOFR, which is regulated by the Federal Reserve Bank of New York. We amended our Credit Agreement due to FCA’s planned phase-out of one-month US Dollar LIBOR settings in 2023. Our Credit Agreement continues to bear base interest at a rate of 6.25% per annum plus SOFR, subject to a 1.50% SOFR floor and a 2.50% SOFR cap. As of September 30, 2022, we classified $2.0 million of the remaining $3.9 million principal of the amended Credit Agreement to current portion of long-term debt on the unaudited condensed consolidated balance sheet. This facility is subject to a subjective acceleration clause that could be invoked by MidCap Financial upon the occurrence of any event MidCap Financial deems to have a material adverse effect on our ability to repay the lender. |
Liability Related to Sale of Ro
Liability Related to Sale of Royalties | 9 Months Ended |
Sep. 30, 2022 | |
Sale Of Royalties Liability Disclosure [Abstract] | |
Liability Related to Sale of Royalties | Note 7. Liability Related to Sale of Royalties In March 2021, we are eligible to receive additional payments in the aggregate of up to an additional $32.5 million based on the achievement of sales milestones in 2021, 2022 and 2023 Due to the nature of the transaction, which included a cap on HCR’s rate of return, constituting continuing involvement under the Collaboration and License Agreement originally between Trubion and Wyeth, we recorded a liability related to the proceeds received from HCR of $35.0 million, net of transaction costs of $1.1 million. Further, we received proceeds related to the 2021 milestone of $10.0 million, net of transaction costs of $0.5 million, and recorded additional liability related to sale of royalties. We recognized royalty revenue on net sales of RUXIENCE and recorded the royalty payments to HCR as a reduction of the liability when paid. On April 1, 2022, the Company received a letter from Nasdaq indicating that it was not in compliance with Nasdaq Listing Rule 5550(b)(1). On June 7, 2022, we entered into and closed an amendment to our Royalty Purchase Agreement, resulting in the Company recognizing $37.2 million gain, which was the total balance of liability related to the sale of royalties on the closing date. The Amendment to Royalty Purchase Agreement allowed us to regain full compliance with Nasdaq Listing Rule 5550(b)(1) in a way that was non-dilutive for our shareholders. Pursuant to the Amendment to Royalty Purchase Agreement, we agreed to forego our right to receive 50% of RUXIENCE royalty revenue if HCR received aggregate royalty payments totaling 190% of the Investment Amount plus Milestone Amounts to the extent paid by HCR. The Amendment to Royalty Purchase Agreement eliminated all of our continuing involvement with the cash generating activities related to the royalties and removed all restrictions related to the rate of return and was therefore accounted for under ASC 610-20, Gains and Losses from Derecognition of Nonfinancial Assets Liabilities – Extinguishment of Liabilities The Amendment to Royalty Purchase Agreement continues to include the opportunity to earn up to $22.5 million of additional milestone payments (up to $12.5 million and $10 million for 2022 and 2023, respectively). The royalty revenue included in the consolidated statements of operations relates to the quarter ended March 31, 2022. Future milestone payments will be accounted for as variable consideration and recognized using the most likely method in accordance with ASC 610-20 Other Income — Gains and Losses from the Derecognition of Nonfinancial Assets The following table presents the changes in the liability in the period related to the sale of royalties under the Royalty Purchase Agreement with HCR (in thousands): For the Nine Months Ended September 30, For the Nine Months Ended September 30, 2022 2021 Liability related to sale of royalties, beginning balance $ 31,045 $ — Proceeds from sale of royalties, net of transaction costs — 33,900 Proceeds from milestone payments, net of transaction costs 9,500 — Non-cash interest expense 3,416 3,709 RUXIENCE royalties paid by Pfizer to HCR (6,779 ) (5,529 ) Gain from extinguishment of liability related to sale of royalties (37,182 ) — Liability related to sale of royalties, ending balance — 32,080 Current portion of liability related to sale of royalties — (13,369 ) Liability related to sale of royalties, non-current $ — $ 18,711 We recorded non-cash interest expense through the date of the Amendment to Royalty Purchase Agreement. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Leases | Note 8. Leases Office Space Lease - Operating We have an operating lease related to our office and laboratory space in Seattle, Washington. This lease was amended in March 2019 to extend t On May 26, 2022, we amended our office and laboratory lease to remove the one-time termination option. In exchange for removing the termination option, we received six months of free rent. As a result, we recorded an additional $4.4 million of lease liability and right-of-use asset on the consolidated balance sheet on the date of the amendment. As of September 30, 2022, we are not reasonably certain to exercise the two options to extend the lease term. Therefore, pursuant to our May 26, 2022 amendment, we recorded our lease liability through April 30, 2030. For the three and nine months ended September 30, 2022 and 2021, we recorded $0.2 million and $0.6 million related to variable lease expense, respectively. Equipment Leases - Operating As of September 30, 2022, we had operating leases for four copiers in our Seattle, Washington headquarters. The future expense for these leases will be straight-line and will include any variable expenses that arise. Equipment Lease – Financing As of September 30, 2022, we did not have any lease classified as a financing lease. There were no financing lease payments in the three and nine months ended September 30, 2022. As of September 30, 2021, we had one equipment lease classified as a financing lease and the lease transferred ownership of the underlying asset to us at the end of the lease term in 2020. There were no financing lease payments in the three and nine months ended September 30, 2021. Components of lease expense: For the Three Months Ended September 30, For the Nine Months Ended September 30, For the Three Months Ended September 30, For the Nine Months Ended September 30, (in thousands) 2022 2022 2021 2021 Operating lease cost $ 299 $ 978 $ 395 $ 1,185 Finance lease cost: Amortization of right-of-use assets — 2 2 5 Total lease cost $ 299 $ 980 $ 397 $ 1,190 Right of use assets acquired under operating leases: As of September 30, As of December 31, (in thousands) 2022 2021 Operating leases, excluding Seattle office lease $ 2 $ 7 Seattle office lease, including amendment 5,406 1,577 Total operating leases $ 5,408 $ 1,584 Lease payments: For the Nine Months Ended September 30, For the Nine Months Ended September 30, (in thousands) 2022 2021 For operating leases $ 779 $ 1,053 The long-term portion of the lease liabilities is $6.2 million and the remainder of our lease liabilities are included in other current liabilities on our unaudited condensed consolidated balance sheets. As of September 30, 2022, the weighted average remaining lease term and weighted average discount rate for operating leases was 7.6 years and 12.03%. As of September 30, 2021, the weighted average remaining lease term and weighted average discount rate for operating leases was 1.6 years and 14.46%. |
Net Income (Loss) per Share
Net Income (Loss) per Share | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) per Share | Note 9. Net Income (Loss) per Share Basic net income (loss) per share is calculated by dividing the net income (loss) by the weighted average number of common shares outstanding for the period. Diluted net income (loss) per share is computed by dividing the net income (loss) by the weighted average number of common share equivalents outstanding for the period using the as-if converted method. For the purpose of this calculation, warrants, stock options and restricted stock units (RSUs) are only included in the calculation of diluted net income (loss) per share when their effect is dilutive. We utilize the control number concept in the computation of diluted earnings per share to determine whether potential common stock instruments are dilutive. The control number used is loss from continuing operations or income from discontinued operations. The control number concept requires that the same number of potentially dilutive securities applied in computing diluted earnings per share from continuing operations be applied to all other categories of income or loss, regardless of their anti-dilutive effect on such categories. Common stock equivalents include warrants, stock options and unvested RSUs. The following table presents the computation of basic and diluted net income (loss) per share (in thousands, except share and per share amounts): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2022 2021 2022 2021 Net (loss) income from continuing operations $ (7,809 ) $ (7,077 ) $ 12,177 $ (22,811 ) Income from discontinued operations 165 80 492 626 Net (loss) income $ (7,644 ) $ (6,997 ) $ 12,669 $ (22,185 ) Basic and diluted net (loss) income per share from continuing operations: Basic $ (1.53 ) $ (1.45 ) $ 2.42 $ (4.94 ) Diluted $ (1.53 ) $ (1.45 ) $ 2.42 $ (4.94 ) Basic and diluted net income per share from discontinued operations: Basic $ 0.03 $ 0.02 $ 0.10 $ 0.14 Diluted $ 0.03 $ 0.02 $ 0.10 $ 0.14 Shares used in calculation: Basic 5,090,592 4,891,881 5,017,684 4,617,357 Diluted 5,090,592 4,891,881 5,019,552 4,617,357 The following table represents all potentially dilutive shares: As of September 30, (in thousands) 2022 2021 Warrants 351 351 Outstanding options to purchase common stock 366 350 Unvested RSUs 227 64 We use the treasury stock method when determining dilutive shares. As of September 30, 2022, we determined that outstanding warrants and options are not dilutive as the exercise prices were higher than our average share price for the three and nine months ended September 30, 2022. Unvested RSUs are the only dilutive shares included in the calculation of diluted earnings per share. For the three and nine months ended September 30, 2021, the Company was in a net loss position, therefore the share number used to calculate diluted earnings per share is the same as the basic earnings per share calculation. |
Equity
Equity | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Equity | Note 10. Equity Equity Distribution Agreement On December 14, 2020, we entered into an Equity Distribution Agreement with Piper Sandler. The Equity Distribution Agreement provides that, upon the terms and subject to the conditions set forth therein, we may issue and sell through Piper Sandler, acting as sales agent, shares of our common stock, $0.001 par value per share having an aggregate offering price of up to $50.0 million. This offering supersedes and replaces the program we commenced in December 2017. Lincoln Park Purchase Agreement On February 16, 2022, we entered into a Purchase Agreement (2022 Purchase Agreement) and a Registration Rights Agreement with Lincoln Park. The 2022 Purchase Agreement and Registration Rights Agreement replaced our 2018 Purchase Agreement and Registration Rights Agreement with Lincoln Park. Under the 2022 Purchase Agreement, Lincoln Park committed to purchase up to $35.0 million of our common stock over a 36-month period commencing after the satisfaction of certain conditions, which are within our control, as set forth in the Purchase Agreement. The purchase price per share will be based on prevailing market prices; provided, however, that the prevailing market price is not below $1.00. We agreed to and issued 99,276 shares of our common stock to Lincoln Park for no cash consideration as an initial fee for its commitment to purchase shares of our common stock under the Purchase Agreement. We did not issue any shares of common stock for cash consideration to Lincoln Park under the Purchase Agreement in the nine months ended September 30, 2022. In the nine months ended September 30, 2021, we issued approximately 0.4 million shares of common stock to Lincoln Park under the 2018 Purchase Agreement and received $10.2 million in proceeds from issuance of these shares. Rights Plan On November 8, 2020, our Board of Directors (Board) approved and adopted a Rights Agreement, dated as of November 8, 2020, by and between the Company and Broadridge Corporate Issuer Solutions, Inc., as rights agent, pursuant to which the Board declared a dividend of one preferred share purchase right (each, a Right) for each outstanding share of the Company’s common stock held by stockholders as of the close of business on November 23, 2020. When exercisable, each Right initially would represent the right to purchase from the Company one one-thousandth of a share of a newly-designated series of preferred stock, Series A Junior Participating Preferred Stock, par value $0.001 per share, of the Company, at an exercise price of $400.00 per one one-thousandth of a Series A Junior Participating Preferred Share, subject to adjustment. Subject to various exceptions, the Rights become exercisable in the event any person (excluding certain exempted or grandfathered persons) becomes the beneficial owner of ten percent (10%) or more of the Company’s common stock without the approval of the Board. The Rights Agreement was amended on November 4, 2021 to extend the expiration date of such agreement from November 8, 2021 to November 5, 2022 and further amended on November 4, 2022 to extend the expiration of such agreement to November 4, 2023. 2016 Stock Incentive Plan On August 1, 2016, the Company adopted the 2016 Stock Incentive Plan (2016 SIP). A total of 0.2 million shares of Aptevo common stock have been authorized for issuance under the 2016 SIP in the form of equity stock options. On May 31, 2017, at the 2017 Annual Meeting of Stockholders, the Company’s stockholders approved the amendment and restatement of the Company’s 2016 SIP (Restated 2016 Plan) to, among other things, increase the number of authorized shares issuable by 0.1 million shares of Aptevo common stock. The Restated 2016 Plan was previously approved, subject to stockholder approval, by our Board. 2018 Stock Incentive Plan On June 1, 2018, at the 2018 Annual Meeting of the Stockholders, the Company’s stockholders approved a new 2018 Stock Incentive Plan (2018 SIP), which replaced the Restated 2016 Plan on a go-forward basis. All stock options, RSUs or other equity awards granted subsequent to June 1, 2018 have been and will be issued out of the 2018 SIP, which has 0.3 million shares of Aptevo common stock authorized for issuance. The 2018 Plan became effective immediately upon stockholder approval at the 2018 Annual Meeting of the Stockholders. Any shares subject to outstanding stock awards granted under the 2016 SIP that (a) expire or terminate for any reason prior to exercise or settlement; (b) are forfeited because of the failure to meet a contingency or condition required to vest such shares or otherwise return to the Company; or (c) otherwise would have returned to the 2016 SIP for future grant pursuant to the terms of the 2016 Plan (such shares, the “Returning Shares”) will immediately be added to the share reserve under the 2018 SIP as and when such shares become Returning Shares, up to a maximum of 0.3 million shares. On June 7, 2022, at the 2022 Annual Meeting of Stockholders, our stockholders approved the Amended and Restated 2018 SIP to increase the number of shares authorized for issuance under the 2018 SIP by 500,000 shares of common stock. As of September 30, 2022, there are approximately 0.4 million shares available to be granted under the 2018 SIP. Stock options and RSUs under the Amended and Restated 2018 SIP generally vest pro rata over a one-year three-year one-year Stock-Based Compensation Expense Stock-based compensation expense includes amortization of stock options and RSUs granted to employees and non-employees and has been reported in our unaudited condensed consolidated statements of operations as follows: For the Three Months Ended September 30, For the Nine Months Ended September 30, (in thousands) 2022 2021 2022 2021 Research and development $ 51 $ 80 $ 128 $ 491 General and administrative 308 239 1,316 973 Total stock-based compensation expense $ 359 $ 319 $ 1,444 $ 1,464 The Company accounts for stock-based compensation by measuring the cost of employee services received in exchange for all equity awards granted based on the fair value of the award as of the grant date. The Company recognizes the compensation expense over the vesting period. All assumptions used to calculate the grant date fair value of non-employee equity awards are generally consistent with the assumptions used for equity awards granted to employees. In the event the Company terminates any of its consulting agreements, the unvested equity underlying the agreements would also be cancelled. Stock Options Aptevo utilizes the Black-Scholes valuation model for estimating the fair value of all stock options granted. Set forth below are the assumptions used in valuing the stock options granted: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2022 2021 2022 2021 Expected dividend yield — — — — Expected volatility 105.56% 97.59% 106.24% 99.30% Risk-free interest rate 2.96% 0.96% 1.71% 2.73% Expected average life of options 5 years 6 years 5 years 5 years Management has applied an estimated forfeiture rate of 30% for the three and nine months ended September 30, 2022, and 20% and 22% for the three months and nine months ended September 30, 2021, respectively. Expected volatility increased as our stock price fluctuated from a low of $2.95 to a high of $4.59 for the three months ended September 30, 2022, compared to a low of $15.01 to a high of $22.16 for the three months ended September 30, 2021. The following is a summary of option activity for the nine months ended September 30, 2022: Number of Shares Weighted- Average Exercise Price Weighted- Average Remaining Term Aggregate Intrinsic Value (in thousands) Balance at December 31, 2021 334,412 $ 19.17 8.70 $ 43 Granted 69,588 5.61 — — Exercised (85 ) 6.97 — 21 Forfeited (37,945 ) 25.82 — — Outstanding at September 30, 2022 365,970 15.83 7.63 — Exercisable at September 30, 2022 185,256 13.74 6.52 — Vested and expected to vest at September 30, 2022 311,028 15.72 7.40 — As of September 30, 2022, we had $2.1 million of unrecognized compensation expense related to options expected to vest over a weighted average remaining vesting period of 1.6 years. The weighted-average grant date fair value per share of options granted during the nine months ended September 30, 2022 and 2021 was $4.35 and $23.60, respectively. The aggregate intrinsic value of options exercised for the nine months ended September 30, 2022 and 2021 was $0 and $0.4 million, respectively. The total fair value of stock options vested for the nine months ended September 30, 2022 and 2021 was $1.3 million and $1.6 million, respectively. The aggregate intrinsic value in the table above represents the total pretax intrinsic value (the difference between the closing stock price of Aptevo’s common stock on the last trading day of September 2022 and the exercise price, multiplied by the number of in the money options) that would have been received by the option holders had all the option holders exercised their options on the last trading day of the quarter. Restricted Stock Units The following is a summary of RSU activity for the nine months ended September 30, 2022: Number of Units Weighted Average Fair Value per Unit Balance at December 31, 2021 56,810 $ 30.66 Granted 199,604 5.05 Vested (15,699 ) 30.88 Forfeited (13,276 ) 22.37 Outstanding and expected to vest at September 30, 2022 227,439 $ 8.65 As of September 30, 2022, there was $1.7 million unrecognized stock-based compensation expense related to unvested RSUs expected to vest over the weighted average period of 1.8 years. As of September 30, 2021, there was $1.7 million unrecognized stock-based compensation expense related to unvested RSUs expected to vest over the weighted average period of 2.4 years. The fair value of each RSU has been determined to be the closing trading price of the Company’s common stock on the date of grant as quoted on the Nasdaq Capital Market. Warrants In March 2019, as part of a public offering, we issued warrants to purchase up to 1,725,000 shares of our common stock, 1,571,429 of which have an exercise price of $18.20 per share and have a five-year ten-year Distinguishing Liabilities from Equity |
Nature of Business and Signif_2
Nature of Business and Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP). These unaudited condensed consolidated financial statements include all adjustments, which include normal recurring adjustments, necessary for the fair presentation of the Company’s financial position. These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of and for the year ended December 31, 2021, and the notes thereto, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates and changes in these estimates are recorded when known. The unaudited condensed consolidated financial statements include the accounts of the Company and our wholly owned subsidiar y, Aptevo Research and Development LLC . All intercompany balances and transactions have been eliminated . |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent liabilities in the unaudited condensed consolidated financial statements and accompanying notes. Estimates are used for, but not limited to, forecasted royalties, effective interest rates, clinical accruals, useful lives of equipment, commitments and contingencies, and stock-based compensation. Given the continuing global economic and geopolitical climate and effects from the ongoing COVID-19 pandemic, these estimates are becoming more challenging, and actual results could differ materially from those estimates. |
Liability Related to Sale of Future Royalties and Non-Cash Interest Expense | Liability Related to Sale of Royalties and Non-Cash Interest Expense On March 30, 2021, we entered into and closed a Royalty Purchase Agreement (the Royalty Purchase Agreement) with an entity managed by HCR we are eligible to receive additional payments in the aggregate of up to an additional $32.5 million based on the achievement of sales milestones in 2021, 2022 and 2023 (collectively, the Milestone Amounts) On the date we entered into the transaction, we accounted for the Royalty Purchase Agreement with HCR as a debt-like instrument, amortized under the effective interest rate method over the life of the related expected royalty stream. The liabilities related to the sale of royalties and the debt amortization were based on our estimates of royalties expected to be paid over the life of the arrangement. On June 7, 2022, we entered into and closed an amendment to the Royalty Purchase Agreement (the Amendment to Royalty Purchase Agreement) (see Note 7) which removed all restrictions related to HCR’s rate of return, and it is no longer a sale of a specified percentage of royalty revenue. The Amendment to Royalty Purchase Agreement was accounted for under ASC 610-20 , Gains and Losses from Derecognition of Nonfinancial Assets Liabilities – Extinguishment of Liabilities As a result of the Amendment to Royalty Purchase Agreement, the Company recognized a gain of $37.2 million, which was the total balance of liability related to the sale of royalties on the closing date. The Amendment to Royalty Purchase Agreement allowed us to regain full compliance with Nasdaq Listing Rule 5550(b)(1) in a way that was non-dilutive for our shareholders. We will not recognize royalty revenue on net sales of RUXIENCE that are paid to HCR going forward. The royalty revenue included in the consolidated statements of operations relates to the quarter ended March 31, 2022. Future Milestone Amounts will be accounted for as variable consideration and recognized as other income when such milestones are earned using the most likely method in accordance with ASC 610-20 Other Income — Gains and Losses from the Derecognition of Nonfinancial Assets . |
Royalty Revenue | Royalty Revenue We recognized revenue in accordance with ASC 606, Revenue from Contracts with Customers . Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. RUXIENCE Royalty Revenue Aptevo’s royalty revenue exclusively related to royalties on Pfizer’s net sales of RUXIENCE. Royalty revenue for the period covered by this report reflects revenue recorded only in the first quarter of 2022 due to our Amendment to Royalty Purchase Agreement with HCR (see Note 7). As a result of the amendment, we ceased reporting as royalty revenue, royalties paid by Pfizer to HCR related to Pfizer’s sales of RUXIENCE. We recognized royalty revenue under ASC 606, which provides revenue recognition constraints by requiring the recognition of revenue at the later of the following: 1) when the subsequent sale or usage occurs or 2) when the performance obligation to which some or all of the sales-based or usage-based royalty has been allocated has been satisfied (or partially satisfied). We satisfied our performance obligation prior to the period covered by this report, specifically in May 2011 when the original Collaboration and License Agreement between Trubion Pharmaceuticals and Wyeth was amended to remove the exclusivity/non-compete restrictions so that Pfizer could develop a CD20 biosimilar product in exchange for a one-time payment of $2.5 million and future royalties of 2.5% on any CD20 biosimilar product commercialized by Pfizer in the future. We do not have future performance obligations under this agreement. We applied the royalty recognition constraint required under the guidance for sales-based royalties, which requires a sales-based royalty to be recorded no sooner than the underlying sale. Therefore, royalties on sales of products commercialized by Pfizer were recognized in the quarter the product is sold Given royalty revenues were based on 2.5 % of global net sales of RUXIENCE, the considerations were considered variable. Pfizer generally report ed sales information to us within 60 days of quarter end. Unless we receive d finalized sales information for the respective quarter, we estimate d the expected royalty proceeds based on an analysis of historical experience, analyst expectations, interim data provided by Pfizer, including their publicly announced sales, and other publicly available information. Differences between actual and estimated royalty revenues were adjusted for in the period in which they bec a me known, typically the following quarter. Revenue recorded in the period covered by this report represents actual royalty revenue given the timing of RUXIENCE sales reports received from Pfizer . There was no significant financing component to the contract . |
Debt Modification | Debt Modification On March 30, 2021, we amended The amended Credit Agreement was accounted for under ASC 470-50, Debt Modifications and Extinguishments as a , rather than an extinguishment, based on a comparison of the present value of the cash flows under the terms of the debt immediately before and after the amendment, which resulted in a change of less than 10%. Unamortized issuance costs as of the date of modification will be amortized to interest expense using the effective interest method over the repayment term. On June 7, 2022, we further amended the Credit Agreement with MidCap Financial (Limited Consent and Second Amendment to Credit Agreement) to obtain MidCap Financial’s limited consent to amend the Royalty Purchase Agreement with HCR. The Limited Consent and Second Amendment to Credit Agreement did not change future cash flows or other terms of the Credit Agreement. Additionally, on August 30, 2022, we amended our Credit Agreement with MidCap Financial (Third Amendment to Credit Agreement) to replace the London Interbank Offered Rate (“LIBOR”) benchmark with the Secured Overnight Financing Rate plus 0.10% (“SOFR”), which is regulated by the Federal Reserve Bank of New York. Aptevo amended our Credit Agreement due to United Kingdom’s Financial Conduct Authority’s (“FCA”) planned phase-out of one-month US Dollar LIBOR settings in 2023. Our Credit Agreement continues to bear base interest at a rate of 6.25% per annum plus SOFR, subject to a 1.50% SOFR floor and a 2.50% SOFR cap. |
Other Significant Accounting Policies | Other Significant Accounting Policies Our other significant accounting policies were reported in our Annual Report on Form 10-K for the year ended December 31, 2021 that was filed with the SEC on March 24, 2022. Our other significant accounting policies have not changed materially from the policies previously reported. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) 2020-04, Reference Rate Reform Reference Rate Reform |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Discontinued Operations And Disposal Groups [Abstract] | |
Summary of Reconciliation of Carrying Amounts of Assets and Liabilities and Income (Loss) from Discontinued Operation | The following table represents the components attributable to income from discontinued operations in the unaudited condensed consolidated statements of operations (in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2022 2021 2022 2021 Deferred payment from Medexus 165 80 492 399 Gain on contingent consideration from Saol — — — 227 Income from discontinued operations $ 165 $ 80 $ 492 $ 626 |
Cash, Cash Equivalents, and R_2
Cash, Cash Equivalents, and Restricted Cash (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Cash And Cash Equivalents [Abstract] | |
Schedule of Cash, Cash Equivalents and Restricted Cash, Both Current and Long-term Portion | The following table shows our cash, cash equivalents and restricted cash as of September 30, 2022 and December 31, 2021: September 30, December 31, (in thousands) 2022 2021 Cash $ 3,731 $ 3,841 Cash equivalents 18,419 41,203 Restricted cash 427 1,259 Total cash, cash equivalents, and restricted cash $ 22,577 $ 46,303 |
Liability Related to Sale of _2
Liability Related to Sale of Royalties (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Sale Of Royalties Liability Disclosure [Abstract] | |
Schedule of Changes in the Liability Related to the Sale of Royalties | The following table presents the changes in the liability in the period related to the sale of royalties under the Royalty Purchase Agreement with HCR (in thousands): For the Nine Months Ended September 30, For the Nine Months Ended September 30, 2022 2021 Liability related to sale of royalties, beginning balance $ 31,045 $ — Proceeds from sale of royalties, net of transaction costs — 33,900 Proceeds from milestone payments, net of transaction costs 9,500 — Non-cash interest expense 3,416 3,709 RUXIENCE royalties paid by Pfizer to HCR (6,779 ) (5,529 ) Gain from extinguishment of liability related to sale of royalties (37,182 ) — Liability related to sale of royalties, ending balance — 32,080 Current portion of liability related to sale of royalties — (13,369 ) Liability related to sale of royalties, non-current $ — $ 18,711 We recorded non-cash interest expense through the date of the Amendment to Royalty Purchase Agreement. |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Components of Lease Expense | Components of lease expense: For the Three Months Ended September 30, For the Nine Months Ended September 30, For the Three Months Ended September 30, For the Nine Months Ended September 30, (in thousands) 2022 2022 2021 2021 Operating lease cost $ 299 $ 978 $ 395 $ 1,185 Finance lease cost: Amortization of right-of-use assets — 2 2 5 Total lease cost $ 299 $ 980 $ 397 $ 1,190 |
Summary of Right of Use Assets Acquired Under Operating Leases | Right of use assets acquired under operating leases: As of September 30, As of December 31, (in thousands) 2022 2021 Operating leases, excluding Seattle office lease $ 2 $ 7 Seattle office lease, including amendment 5,406 1,577 Total operating leases $ 5,408 $ 1,584 Lease payments: For the Nine Months Ended September 30, For the Nine Months Ended September 30, (in thousands) 2022 2021 For operating leases $ 779 $ 1,053 |
Net Income (Loss) per Share (Ta
Net Income (Loss) per Share (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Net Income (Loss) per Share | The following table presents the computation of basic and diluted net income (loss) per share (in thousands, except share and per share amounts): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2022 2021 2022 2021 Net (loss) income from continuing operations $ (7,809 ) $ (7,077 ) $ 12,177 $ (22,811 ) Income from discontinued operations 165 80 492 626 Net (loss) income $ (7,644 ) $ (6,997 ) $ 12,669 $ (22,185 ) Basic and diluted net (loss) income per share from continuing operations: Basic $ (1.53 ) $ (1.45 ) $ 2.42 $ (4.94 ) Diluted $ (1.53 ) $ (1.45 ) $ 2.42 $ (4.94 ) Basic and diluted net income per share from discontinued operations: Basic $ 0.03 $ 0.02 $ 0.10 $ 0.14 Diluted $ 0.03 $ 0.02 $ 0.10 $ 0.14 Shares used in calculation: Basic 5,090,592 4,891,881 5,017,684 4,617,357 Diluted 5,090,592 4,891,881 5,019,552 4,617,357 |
Summary of Potentially Dilutive Shares Excluded from Calculation of Net Loss Per Share | The following table represents all potentially dilutive shares: As of September 30, (in thousands) 2022 2021 Warrants 351 351 Outstanding options to purchase common stock 366 350 Unvested RSUs 227 64 |
Equity (Tables)
Equity (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Summary of Stock-based Compensation Expense Includes Amortization of Stock Options and Restricted Stock Units Granted | Stock-Based Compensation Expense Stock-based compensation expense includes amortization of stock options and RSUs granted to employees and non-employees and has been reported in our unaudited condensed consolidated statements of operations as follows: For the Three Months Ended September 30, For the Nine Months Ended September 30, (in thousands) 2022 2021 2022 2021 Research and development $ 51 $ 80 $ 128 $ 491 General and administrative 308 239 1,316 973 Total stock-based compensation expense $ 359 $ 319 $ 1,444 $ 1,464 |
Assumptions used in Valuing the Stock Options Granted under Black-Scholes Valuation Model | Aptevo utilizes the Black-Scholes valuation model for estimating the fair value of all stock options granted. Set forth below are the assumptions used in valuing the stock options granted: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2022 2021 2022 2021 Expected dividend yield — — — — Expected volatility 105.56% 97.59% 106.24% 99.30% Risk-free interest rate 2.96% 0.96% 1.71% 2.73% Expected average life of options 5 years 6 years 5 years 5 years |
Summary of Stock Option Activity | The following is a summary of option activity for the nine months ended September 30, 2022: Number of Shares Weighted- Average Exercise Price Weighted- Average Remaining Term Aggregate Intrinsic Value (in thousands) Balance at December 31, 2021 334,412 $ 19.17 8.70 $ 43 Granted 69,588 5.61 — — Exercised (85 ) 6.97 — 21 Forfeited (37,945 ) 25.82 — — Outstanding at September 30, 2022 365,970 15.83 7.63 — Exercisable at September 30, 2022 185,256 13.74 6.52 — Vested and expected to vest at September 30, 2022 311,028 15.72 7.40 — |
Summary of RSU Activity | The following is a summary of RSU activity for the nine months ended September 30, 2022: Number of Units Weighted Average Fair Value per Unit Balance at December 31, 2021 56,810 $ 30.66 Granted 199,604 5.05 Vested (15,699 ) 30.88 Forfeited (13,276 ) 22.37 Outstanding and expected to vest at September 30, 2022 227,439 $ 8.65 |
Nature of Business and Signif_3
Nature of Business and Significant Accounting Policies - Additional Information (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||||||
Jun. 07, 2022 USD ($) | Mar. 08, 2022 USD ($) | Mar. 31, 2022 USD ($) | Mar. 31, 2021 USD ($) | Mar. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) platform | Jun. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Sep. 30, 2021 USD ($) | Jun. 30, 2021 USD ($) | Mar. 31, 2021 USD ($) | Sep. 30, 2022 USD ($) platform | Sep. 30, 2021 USD ($) | Aug. 30, 2022 | Dec. 31, 2021 USD ($) | |
Nature Of Business [Line Items] | |||||||||||||||
Number of technology platforms | platform | 2 | 2 | |||||||||||||
Net income (loss) | $ (7,644) | $ 28,010 | $ (7,697) | $ (6,997) | $ (7,932) | $ (7,256) | $ 12,669 | $ (22,185) | |||||||
Accumulated deficit | 201,394 | 201,394 | $ 214,063 | ||||||||||||
Net cash used in operating activities | (15,083) | (17,799) | |||||||||||||
Proceeds from Sale of Investments | $ 35,000 | $ 35,000 | |||||||||||||
Milestone Payment | $ 10,000 | ||||||||||||||
Gain from extinguishment of liability related to sale of royalties | $ 37,200 | 37,182 | |||||||||||||
One time payment of royalties | 6,779 | $ 5,529 | |||||||||||||
Payment of royalty revenue, percentage | 50% | ||||||||||||||
Payment Of Amount Outstanding | 10,000 | ||||||||||||||
Mid Cap Financial | |||||||||||||||
Nature Of Business [Line Items] | |||||||||||||||
Proceeds from sale of investments used | 10,000 | ||||||||||||||
Credit Agreement | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | |||||||||||||||
Nature Of Business [Line Items] | |||||||||||||||
Base interest rate | 6.25% | ||||||||||||||
Floor interest rate | 1.50% | ||||||||||||||
Cap interest rate | 2.50% | ||||||||||||||
RUXIENCE | |||||||||||||||
Nature Of Business [Line Items] | |||||||||||||||
One time payment of royalties | $ 2,500 | ||||||||||||||
Payment of royalty revenue, percentage | 2.50% | ||||||||||||||
Royalty revenue | 2.50% | ||||||||||||||
Maximum | |||||||||||||||
Nature Of Business [Line Items] | |||||||||||||||
Revenue from related Parties | 22,500 | 22,500 | 22,500 | ||||||||||||
Maximum | Mid Cap Financial | |||||||||||||||
Nature Of Business [Line Items] | |||||||||||||||
Payment Of Amount Outstanding | 25,000 | ||||||||||||||
Maximum | RUXIENCE | |||||||||||||||
Nature Of Business [Line Items] | |||||||||||||||
Revenue from related Parties | $ 32,500 | 32,500 | |||||||||||||
Minimum | Mid Cap Financial | |||||||||||||||
Nature Of Business [Line Items] | |||||||||||||||
Payment Of Amount Outstanding | $ 15,000 | ||||||||||||||
Nasdaq Capital Market | |||||||||||||||
Nature Of Business [Line Items] | |||||||||||||||
Net income (loss) | (7,600) | 12,700 | |||||||||||||
Accumulated deficit | $ 201,400 | 201,400 | |||||||||||||
Net cash used in operating activities | $ 15,100 |
Discontinued Operations - Summa
Discontinued Operations - Summary of Reconciliation of Carrying Amounts of Assets and Liabilities and Income (Loss) from Discontinued Operation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Discontinued Operations And Disposal Groups [Abstract] | ||||
Deferred payment from Medexus | $ 165 | $ 80 | $ 492 | $ 399 |
Gain on contingent consideration from Saol | 227 | |||
Income from discontinued operations | $ 165 | $ 80 | $ 492 | $ 626 |
Discontinued Operations - Addit
Discontinued Operations - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2022 | Jun. 29, 2022 | |
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | ||||||
Deferred payment from Medexus | $ 165 | $ 80 | $ 492 | $ 399 | ||
Deferred payments increase percentage | 5% | 2% | ||||
IXINITY | ||||||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | ||||||
Deferred payment from Medexus | $ 500 | |||||
Accounts receivable and deferred payments from Medexus | 400 | |||||
Hyperimmune Business | ||||||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | ||||||
Deferred payment from Medexus | $ 200 |
Collaboration Agreements - Addi
Collaboration Agreements - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ||
Research and development expense | $ 0.6 | $ 0.1 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Money market funds | $ 18,400,000 | $ 41,200,000 |
Level Two | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fair value assets | 0 | 0 |
Level Three | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fair value assets | $ 0 | $ 0 |
Cash, Cash Equivalents and Rest
Cash, Cash Equivalents and Restricted Cash - Additional Information (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Restricted Cash And Cash Equivalents Items [Line Items] | ||
Cash equivalents, maturity period | 90 days | |
Current restricted cash | $ 427 | $ 1,259 |
Letter of Credit | ||
Restricted Cash And Cash Equivalents Items [Line Items] | ||
Current restricted cash | $ 400 |
Cash, Cash Equivalents, and R_3
Cash, Cash Equivalents, and Restricted Cash - Schedule of Cash, Cash Equivalents and Restricted Cash, Both Current and Long-term Portion (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Cash And Cash Equivalents [Abstract] | ||
Cash | $ 3,731 | $ 3,841 |
Cash equivalents | 18,419 | 41,203 |
Restricted cash | 427 | 1,259 |
Total cash, cash equivalents, and restricted cash | $ 22,577 | $ 46,303 |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | |||||
Nov. 06, 2020 | Aug. 05, 2020 | Mar. 31, 2021 | Mar. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Aug. 30, 2022 | |
Line Of Credit Facility [Line Items] | |||||||
Maximum borrowing capacity | $ 25,000 | ||||||
Payment Of Amount Outstanding | $ 10,000 | ||||||
Repayments of subordinated debt | 5,000 | $ 11,767 | $ 10,550 | ||||
Amendment in lieu of the formula-based fee | 600 | ||||||
HCR | |||||||
Line Of Credit Facility [Line Items] | |||||||
Proceeds from sale of investments used | 10,000 | ||||||
Payment Of Amount Outstanding | $ 15,000 | ||||||
Principal balance payable date | Mar. 01, 2022 | ||||||
Mid Cap Financial | |||||||
Line Of Credit Facility [Line Items] | |||||||
Proceeds from sale of investments used | $ 10,000 | ||||||
Mid Cap Financial | Maximum | |||||||
Line Of Credit Facility [Line Items] | |||||||
Payment Of Amount Outstanding | 25,000 | ||||||
Mid Cap Financial | Minimum | |||||||
Line Of Credit Facility [Line Items] | |||||||
Payment Of Amount Outstanding | $ 15,000 | ||||||
Mid Cap Financial | HCR | Maximum | |||||||
Line Of Credit Facility [Line Items] | |||||||
Payment Of Amount Outstanding | $ 25,000 | ||||||
Mid Cap Financial | HCR | Minimum | |||||||
Line Of Credit Facility [Line Items] | |||||||
Payment Of Amount Outstanding | $ 15,000 | ||||||
Tang | |||||||
Line Of Credit Facility [Line Items] | |||||||
Purchase of shares of common stock | 1,760,000 | ||||||
Percentage of common stock shares issued and outstanding | 54% | ||||||
Business acquisition, description | Kevin Tang and his related entities filed a statement on Schedule 13D to report the purchase of 1,760,000 shares of the Company’s common stock, which at the time represented approximately 54% of the Company’s issued and outstanding shares of the Company’s common stock. This acquisition of voting stock triggered a change in control, resulting in an Event of Default under Section 10.1(a)(ii) of the Credit Agreement. On November 10, 2020, the Company obtained a waiver from MidCap Financial pursuant to which, among other things, MidCap Financial waived such Event of Default and MidCap Financial and the Company agreed that an immediate event of default under the Credit Agreement will be deemed to have occurred in the event that (a) a majority of the seats on the Company’s board of directors are occupied by persons who were neither (i) nominated by the Company’s board of directors nor (ii) appointed by the directors so nominated, and (b) Tang has appointed the majority of the Company’s board of directors. No other events of default have occurred with respect to the Credit Agreement. | ||||||
Credit Agreement | |||||||
Line Of Credit Facility [Line Items] | |||||||
Line of credit facility, used borrowing capacity | $ 25,000 | ||||||
Payment Of Amount Outstanding | 2,000 | ||||||
Remaining Principal Balance Payable | $ 3,900 | ||||||
Credit Agreement | London Interbank Offered Rate LIBOR [Member] | |||||||
Line Of Credit Facility [Line Items] | |||||||
Line of credit facility, borrowing capacity, description | The term loan facility has a 48 month term, is interest-only for the first 18 months, with straight-line amortization for the remaining 30 months and bears interest at a rate of one month LIBOR plus 6.25% per annum, subject to a 1.50% LIBOR floor and a 2.50% LIBOR cap. | ||||||
Base interest rate | 6.25% | ||||||
Floor interest rate | 1.50% | ||||||
Cap interest rate | 2.50% | ||||||
Credit Agreement | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | |||||||
Line Of Credit Facility [Line Items] | |||||||
Base interest rate | 6.25% | ||||||
Floor interest rate | 1.50% | ||||||
Cap interest rate | 2.50% |
Liability Related to Sale of _3
Liability Related to Sale of Royalties - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Jun. 07, 2022 | Mar. 08, 2022 | Mar. 31, 2022 | Mar. 31, 2021 | Mar. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | |
Debt Instrument [Line Items] | |||||||||
Proceeds from Sale of Investments | $ 35,000 | $ 35,000 | |||||||
Milestone Payment | $ 10,000 | ||||||||
Proceeds from royalties received | $ 33,900 | ||||||||
Transaction costs | $ 500 | ||||||||
Proceeds from milestones related to sale of royalties | 10,000 | ||||||||
Payment of royalty purchase agreement | 190% | ||||||||
Payment of royalty revenue | 50% | ||||||||
Gain from extinguishment of liability related to sale of royalties | $ 37,200 | 37,182 | |||||||
Forecast | |||||||||
Debt Instrument [Line Items] | |||||||||
Revenue from related Parties | $ 10,000 | ||||||||
Maximum | |||||||||
Debt Instrument [Line Items] | |||||||||
Revenue from related Parties | 22,500 | 22,500 | 22,500 | ||||||
Maximum | Forecast | |||||||||
Debt Instrument [Line Items] | |||||||||
Revenue from related Parties | $ 12,500 | ||||||||
RUXIENCE | |||||||||
Debt Instrument [Line Items] | |||||||||
Payment of royalty revenue | 2.50% | ||||||||
RUXIENCE | Maximum | |||||||||
Debt Instrument [Line Items] | |||||||||
Revenue from related Parties | $ 32,500 | $ 32,500 | |||||||
HCR | |||||||||
Debt Instrument [Line Items] | |||||||||
Transaction costs | 1,100 | ||||||||
Transaction costs | 500 | ||||||||
Proceeds from milestones related to sale of royalties | 10,000 | ||||||||
HCR | Liability | |||||||||
Debt Instrument [Line Items] | |||||||||
Proceeds from royalties received | $ 35,000 |
Liability Related to Sale of _4
Liability Related to Sale of Royalties - Schedule of Changes in the Liability Related to the Sale of Royalties (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Jun. 07, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |||
Liability related to sale of royalties, beginning balance | $ 31,045 | ||
Proceeds from royalties received | $ 33,900 | ||
Proceeds from milestone payments, net of transaction costs | 9,500 | ||
Non-cash interest expense | 3,416 | 3,709 | |
RUXIENCE royalties paid by Pfizer to HCR | (6,779) | (5,529) | |
Gain on extinguishment of liability related to sale of royalties | $ (37,200) | $ (37,182) | |
Liability related to sale of royalties, ending balance | 32,080 | ||
Current portion of liability related to sale of royalties | (13,369) | ||
Liability related to sale of royalties, non-current | $ 18,711 |
Leases - Additional Information
Leases - Additional Information (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Mar. 31, 2019 RenewalOption | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) Copier Equipment | Sep. 30, 2021 USD ($) Equipment | May 26, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Lessee Lease Description [Line Items] | |||||||
Operating lease liability | $ 4,400,000 | ||||||
Operating lease right-of-use asset | $ 5,408,000 | $ 5,408,000 | $ 4,400,000 | $ 1,584,000 | |||
Operating lease number of copiers | Copier | 4 | ||||||
Financing lease number of equipment | Equipment | 0 | 1 | |||||
Financing lease payments | 0 | $ 0 | $ 0 | $ 0 | |||
Long term portion of operating lease liabilities | $ 6,237,000 | $ 6,237,000 | $ 1,341,000 | ||||
Weighted average remaining lease term for operating leases | 7 years 7 months 6 days | 1 year 7 months 6 days | 7 years 7 months 6 days | 1 year 7 months 6 days | |||
Weighted discount rate for operating leases | 12.03% | 14.46% | 12.03% | 14.46% | |||
Office Space Lease | |||||||
Lessee Lease Description [Line Items] | |||||||
Initial operating lease term date | 2030-04 | ||||||
Operating lease renewal option description | the term through April 2030 and provide two options to extend the lease term, each by five years, as well as a one-time option to terminate the lease in April 2023, | ||||||
Operating lease renewal option term | 5 years | ||||||
Number of operating lease renewal option | RenewalOption | 2 | ||||||
Operating lease option to extend | true | ||||||
Variable expense | $ 200,000 | $ 200,000 | $ 600,000 | $ 600,000 |
Leases - Components of Lease Ex
Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Leases [Abstract] | ||||
Operating lease cost | $ 299 | $ 395 | $ 978 | $ 1,185 |
Finance lease cost: | ||||
Amortization of right-of-use assets | 2 | 2 | 5 | |
Total lease cost | $ 299 | $ 397 | $ 980 | $ 1,190 |
Leases - Summary of Right of Us
Leases - Summary of Right of Use Assets Acquired Under Operating Leases (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Lessee Lease Description [Line Items] | |||
Total operating leases | $ 5,408 | $ 1,584 | |
For operating leases | 779 | $ 1,053 | |
Operating Leases, Excluding Seattle Office Lease | |||
Lessee Lease Description [Line Items] | |||
Total operating leases | 2 | 7 | |
Seattle Office Lease, Including Amendment | |||
Lessee Lease Description [Line Items] | |||
Total operating leases | $ 5,406 | $ 1,577 |
Net Income (Loss) Per Share - C
Net Income (Loss) Per Share - Computation of Basic and Diluted Net Income (Loss) per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Earnings Per Share [Abstract] | ||||||||
Net (loss) income from continuing operations | $ (7,809) | $ (7,077) | $ 12,177 | $ (22,811) | ||||
Income from discontinued operations | 165 | 80 | 492 | 626 | ||||
Net (loss) income | $ (7,644) | $ 28,010 | $ (7,697) | $ (6,997) | $ (7,932) | $ (7,256) | $ 12,669 | $ (22,185) |
Basic net (loss) income per share from continuing operations: | ||||||||
Basic | $ (1.53) | $ (1.45) | $ 2.42 | $ (4.94) | ||||
Diluted net (loss) income per share from continuing operations: | ||||||||
Diluted | (1.53) | (1.45) | 2.42 | (4.94) | ||||
Basic net income per share from discontinued operations: | ||||||||
Basic | 0.03 | 0.02 | 0.10 | 0.14 | ||||
Diluted net income per share from discontinued operations: | ||||||||
Diluted | $ 0.03 | $ 0.02 | $ 0.10 | $ 0.14 | ||||
Basic shares used in calculation: | ||||||||
Basic | 5,090,592 | 4,891,881 | 5,017,684 | 4,617,357 | ||||
Diluted shares used in calculation: | ||||||||
Diluted | 5,090,592 | 4,891,881 | 5,019,552 | 4,617,357 |
Net Income (Loss) Per Share - S
Net Income (Loss) Per Share - Summary of Potentially Dilutive Shares Excluded from Calculation of Net Loss Per Share (Details) - shares shares in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Warrants | ||
Schedule Of Earnings Per Share Basic And Diluted [Line Items] | ||
Anti-dilutive shares excluded from calculation of diluted net loss per share | 351 | 351 |
Outstanding Options to Purchase Common Stock | ||
Schedule Of Earnings Per Share Basic And Diluted [Line Items] | ||
Anti-dilutive shares excluded from calculation of diluted net loss per share | 366 | 350 |
Unvested RSUs | ||
Schedule Of Earnings Per Share Basic And Diluted [Line Items] | ||
Anti-dilutive shares excluded from calculation of diluted net loss per share | 227 | 64 |
Equity - Additional Information
Equity - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||||
Feb. 16, 2022 | Dec. 14, 2020 | Nov. 08, 2020 | Jun. 01, 2018 | Mar. 31, 2019 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2018 | Jun. 07, 2022 | Dec. 31, 2021 | May 31, 2017 | Aug. 01, 2016 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||||||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||||
Proceeds from issuance of common stock | $ 436,000 | $ 10,233,000 | |||||||||||||||
Issuance of common stock, net | $ 436,000 | $ 10,234,000 | |||||||||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||||
Weighted-average grant date fair value per share of options granted | $ 4.35 | $ 23.60 | |||||||||||||||
Aggregate intrinsic value of options exercised | $ 0 | $ 400,000 | $ 0 | $ 400,000 | |||||||||||||
Total fair value of stock option vested | 1,300,000 | 1,600,000 | |||||||||||||||
Pre funded warrants outstanding, term | 10 years | ||||||||||||||||
Pre funded warrants expire date | Mar. 11, 2029 | ||||||||||||||||
Proceeds from exercise of warrants | 985,000 | ||||||||||||||||
Tranche Two | |||||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||||||
Number of common stock to be issued exercise of prefunded warrants | 153,571 | ||||||||||||||||
Pre funded warrants exercise price, per share | $ 0.14 | ||||||||||||||||
Unvested RSUs | |||||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||||||
Unrecognized compensation expense | $ 1,700,000 | $ 1,700,000 | $ 1,700,000 | $ 1,700,000 | |||||||||||||
Options expected to vest, weighted average period | 1 year 9 months 18 days | 2 years 4 months 24 days | |||||||||||||||
Stock Option | |||||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||||||
Estimated forfeiture rate | 30% | 20% | 30% | 22% | |||||||||||||
Unrecognized compensation expense | $ 2,100,000 | $ 2,100,000 | |||||||||||||||
Options expected to vest, weighted average remaining vesting term | 1 year 7 months 6 days | ||||||||||||||||
2016 Stock Incentive Plan | |||||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||||||
Stock authorized for issuance under Stock Plan | 200,000 | ||||||||||||||||
2016 Stock Incentive Plan | Unvested RSUs | |||||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||||||
Increase of authorized shares issuable | 100,000 | ||||||||||||||||
2018 Stock Incentive Plan | Unvested RSUs | |||||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||||||
Stock authorized for issuance under Stock Plan | 300,000 | 500,000 | |||||||||||||||
Maximum number of returning shares from old plan to be add to shares reserve | 300,000 | ||||||||||||||||
Number of shares available for grant | 400,000 | 400,000 | |||||||||||||||
Stock plan termination period | 10 years | ||||||||||||||||
2018 Stock Incentive Plan | Unvested RSUs | Non-employee Directors | |||||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||||||
Stock plan vesting period | 1 year | ||||||||||||||||
Broadridge Corporate Issuer Solutions | |||||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||||||
Preferred share purchase right | 1 | ||||||||||||||||
Broadridge Corporate Issuer Solutions | Series A Junior Participating Preferred Stock [Member] | |||||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||||||
Preferred stock, par value | $ 0.001 | ||||||||||||||||
Share portion entitled to purchase by rights. | When exercisable, each Right initially would represent the right to purchase from the Company one one-thousandth of a share of a newly-designated series of preferred stock | ||||||||||||||||
Warrants exercise price, per share | $ 400 | ||||||||||||||||
Percentage of beneficial ownership | 10% | ||||||||||||||||
Minimum | Stock Option | |||||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||||||
Expected volatility | $ 2.95 | $ 15.01 | |||||||||||||||
Minimum | 2018 Stock Incentive Plan | Unvested RSUs | |||||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||||||
Stock plan vesting period | 1 year | ||||||||||||||||
Maximum | Stock Option | |||||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||||||
Expected volatility | $ 4.59 | $ 22.16 | |||||||||||||||
Maximum | 2018 Stock Incentive Plan | Unvested RSUs | |||||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||||||
Stock plan vesting period | 3 years | ||||||||||||||||
Common Stock | |||||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||||||
Issuance of common stock shares | 78,285 | 407,047 | |||||||||||||||
Issuance of common stock, net | $ 1,000 | ||||||||||||||||
Warrants | |||||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||||||
Warrants outstanding, term | 5 years | ||||||||||||||||
Warrants outstanding | 350,589 | 350,589 | 350,589 | 350,589 | |||||||||||||
Warrants | Tranche One | |||||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||||||
Warrants exercise price, per share | $ 18.20 | ||||||||||||||||
Number of warrants issued | 1,571,429 | ||||||||||||||||
Warrants | Maximum | |||||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||||||
Number of common stock to be issued up conversion of warrants | 1,725,000 | ||||||||||||||||
Equity Distribution Agreement | |||||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||||||
Common stock, par value | $ 0.001 | ||||||||||||||||
Issuance of common stock shares | 78,285 | 0 | |||||||||||||||
Proceeds from issuance of common stock | $ 400,000 | ||||||||||||||||
Equity Distribution Agreement | Common Stock | Maximum | |||||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||||||
Aggregate offering price | $ 50,000,000 | ||||||||||||||||
Purchase Agreement | Common Stock | Lincoln Park | |||||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||||||
Issuance of common stock shares | 99,276 | 99,276 | 400,000 | ||||||||||||||
Proceeds from issuance of common stock | $ 10,200,000 | ||||||||||||||||
Cash consideration as an initial fee for commitment to purchase shares of common stock | $ 0 | ||||||||||||||||
Shares of common stock issued for cash consideration | 0 | ||||||||||||||||
Purchase Agreement | Common Stock | Minimum | Lincoln Park | |||||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||||||
Minimum prevailing market price to direct purchase | $ 1 | ||||||||||||||||
Purchase Agreement | Common Stock | Maximum | Lincoln Park | |||||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||||||||||||
Issuance of common stock, net | $ 35,000,000 |
Equity - Summary of Stock-based
Equity - Summary of Stock-based Compensation Expense Includes Amortization of Stock Options and Restricted Stock Units Granted (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 359 | $ 319 | $ 1,444 | $ 1,464 |
Research and Development | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock-based compensation expense | 51 | 80 | 128 | 491 |
General and Administrative | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 308 | $ 239 | $ 1,316 | $ 973 |
Equity - Assumptions used in Va
Equity - Assumptions used in Valuing the Stock Options Granted under Black-Scholes Valuation Model (Details) - Stock Option | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Expected volatility | 105.56% | 97.59% | 106.24% | 99.30% |
Risk-free interest rate | 2.96% | 0.96% | 1.71% | 2.73% |
Expected average life of options | 5 years | 6 years | 5 years | 5 years |
Equity - Summary of Stock Optio
Equity - Summary of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Aggregate Intrinsic Value, Exercisable | $ 0 | $ 400 | |
Stock Option | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of Shares, Outstanding, Beginning balance | 334,412 | ||
Number of Shares, Granted | 69,588 | ||
Number of Shares, Exercised | (85) | ||
Number of Shares, Forfeited | (37,945) | ||
Number of Shares, Outstanding, Ending balance | 365,970 | 334,412 | |
Number of Shares, Exercisable | 185,256 | ||
Number of Shares, Vest and expected to Vest | 311,028 | ||
Weighted-Average Exercise Price, Outstanding, Beginning balance | $ 19.17 | ||
Weighted-Average Exercise Price, Granted | 5.61 | ||
Weighted-Average Exercise Price, Exercised | 6.97 | ||
Weighted-Average Exercise Price, Forfeited | 25.82 | ||
Weighted-Average Exercise Price, Outstanding, Ending balance | 15.83 | $ 19.17 | |
Weighted-Average Exercise Price, Exercisable | 13.74 | ||
Weighted-Average Exercise Price, vest and expected to vest | $ 15.72 | ||
Weighted-Average Remaining Term, Outstanding | 7 years 7 months 17 days | 8 years 8 months 12 days | |
Weighted-Average Remaining Term, Exercisable | 6 years 6 months 7 days | ||
Weighted-Average Remaining Term, Vested and expected to vest | 7 years 4 months 24 days | ||
Aggregate Intrinsic Value, Outstanding, Beginning balance | $ 43 | ||
Aggregate Intrinsic Value, Exercised | $ 21 | ||
Aggregate Intrinsic Value, Outstanding, Ending balance | $ 43 |
Equity - Summary of RSU Activit
Equity - Summary of RSU Activity (Details) - Unvested RSUs - $ / shares | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of Units, Outstanding | 56,810 | |
Number of Units, Granted | 199,604 | |
Number of Units, Vested | (15,699) | |
Number of Units, Forfeited | (13,276) | |
Number of Units, Outstanding and expected to vest | 227,439 | |
Weighted Average Fair Value per Unit, Outstanding | $ 30.66 | |
Weighted Average Fair Value per Unit, Granted | $ 5.05 | |
Weighted Average Fair Value per Unit, Vested | 30.88 | |
Weighted Average Fair Value per Unit, Forfeited | 22.37 | |
Weighted Average Fair Value per Unit, Outstanding and expected to vest | $ 8.65 |