Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2023 | Jul. 25, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-12400 | |
Entity Registrant Name | INCYTE CORPORATION | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 94-3136539 | |
Entity Address, Address Line One | 1801 Augustine Cut-Off | |
Entity Address, City or Town | Wilmington | |
Entity Address, State or Province | DE | |
Entity Address, Postal Zip Code | 19803 | |
City Area Code | 302 | |
Local Phone Number | 498-6700 | |
Title of 12(b) Security | Common Stock, $.001 par value per share | |
Trading Symbol | INCY | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 224,087,695 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Entity Central Index Key | 0000879169 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 | [1] |
Current assets: | |||
Cash and cash equivalents | $ 3,131,123 | $ 2,951,422 | |
Marketable securities—available-for-sale (amortized cost $294,371 and $292,580 as of June 30, 2023 and December 31, 2022, respectively; allowance for credit losses $0 as of June 30, 2023 and December 31, 2022) | 292,243 | 287,543 | |
Accounts receivable | 637,994 | 644,879 | |
Inventory | 35,937 | 41,995 | |
Prepaid expenses and other current assets | 167,136 | 167,011 | |
Total current assets | 4,264,433 | 4,092,850 | |
Restricted cash | 1,719 | 1,698 | |
Long term investments | 170,316 | 133,676 | |
Inventory | 142,048 | 78,964 | |
Property and equipment, net | 749,352 | 739,310 | |
Finance lease right-of-use assets, net | 25,631 | 26,298 | |
Other intangible assets, net | 134,954 | 129,219 | |
Goodwill | 155,593 | 155,593 | |
Deferred income tax asset | 532,507 | 457,941 | |
Other assets, net | 31,706 | 25,435 | |
Total assets | 6,208,259 | 5,840,984 | |
Current liabilities: | |||
Accounts payable | 155,538 | 277,546 | |
Accrued compensation | 111,708 | 138,761 | |
Accrued and other current liabilities | 810,852 | 701,053 | |
Finance lease liabilities | 3,166 | 3,179 | |
Acquisition-related contingent consideration | 37,509 | 36,538 | |
Total current liabilities | 1,118,773 | 1,157,077 | |
Acquisition-related contingent consideration | 179,491 | 184,462 | |
Finance lease liabilities | 29,491 | 30,083 | |
Other liabilities | 139,812 | 99,243 | |
Total liabilities | 1,467,567 | 1,470,865 | |
Commitments and contingencies | |||
Stockholders’ equity: | |||
Preferred stock, $0.001 par value; 5,000,000 shares authorized; none issued or outstanding | 0 | 0 | |
Common stock, $0.001 par value; 400,000,000 shares authorized; 223,338,330 and 222,746,719 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively | 223 | 223 | |
Additional paid-in capital | 4,925,626 | 4,792,041 | |
Accumulated other comprehensive income | 26,806 | 15,069 | |
Accumulated deficit | (211,963) | (437,214) | |
Total stockholders’ equity | 4,740,692 | 4,370,119 | |
Total liabilities and stockholders’ equity | $ 6,208,259 | $ 5,840,984 | |
[1]The condensed consolidated balance sheet at December 31, 2022 has been derived from the audited consolidated financial statements at that date. |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Marketable securities-amortized cost | $ 294,371 | $ 292,580 |
Marketable securities-allowance for credit losses | $ 0 | $ 0 |
Preferred stock, par value (in USD per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in USD per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 400,000,000 | 400,000,000 |
Common stock, shares issued (in shares) | 223,338,330 | 222,746,719 |
Common stock, shares outstanding (in shares) | 223,338,330 | 222,746,719 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Revenues: | ||||
Total revenues | $ 954,610 | $ 911,397 | $ 1,763,283 | $ 1,644,632 |
Costs and expenses: | ||||
Cost of product revenues (including definite-lived intangible amortization) | 68,326 | 50,636 | 125,148 | 93,250 |
Research and development | 400,750 | 347,196 | 807,391 | 700,569 |
Selling, general and administrative | 283,929 | 253,277 | 599,535 | 462,861 |
Loss on change in fair value of acquisition-related contingent consideration | 8,374 | 3,313 | 14,570 | 9,695 |
(Profit) and loss sharing under collaboration agreements | (549) | 2,544 | (1,911) | 7,286 |
Total costs and expenses | 760,830 | 656,966 | 1,544,733 | 1,273,661 |
Income from operations | 193,780 | 254,431 | 218,550 | 370,971 |
Interest income and other, net | 42,668 | 522 | 75,541 | 1,782 |
Interest expense | (655) | (678) | (1,124) | (1,358) |
Unrealized gain (loss) on long term investments | 41,811 | (24,897) | 36,493 | (71,482) |
Income before provision for income taxes | 277,604 | 229,378 | 329,460 | 299,913 |
Provision for income taxes | 74,056 | 67,946 | 104,209 | 100,489 |
Net income | $ 203,548 | $ 161,432 | $ 225,251 | $ 199,424 |
Net income per share: | ||||
Basic (in USD per share) | $ 0.91 | $ 0.73 | $ 1.01 | $ 0.90 |
Diluted (in USD per share) | $ 0.90 | $ 0.72 | $ 1 | $ 0.89 |
Shares used in computing net income per share: | ||||
Basic (in shares) | 223,248 | 221,660 | 223,104 | 221,493 |
Diluted (in shares) | 225,649 | 223,661 | 225,541 | 223,277 |
Product revenues, net | ||||
Revenues: | ||||
Total revenues | $ 827,005 | $ 663,851 | $ 1,520,242 | $ 1,269,672 |
Product royalty revenues | ||||
Revenues: | ||||
Total revenues | 127,605 | 117,546 | 243,041 | 239,960 |
Milestone and contract revenues | ||||
Revenues: | ||||
Total revenues | $ 0 | $ 130,000 | $ 0 | $ 135,000 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 203,548 | $ 161,432 | $ 225,251 | $ 199,424 |
Other comprehensive income (loss): | ||||
Foreign currency translation gain (loss) | 5,189 | (1,837) | 8,449 | (2,619) |
Unrealized gain (loss) on marketable securities, net of tax | 489 | (1,094) | 2,909 | (4,187) |
Defined benefit pension gain, net of tax | 186 | 282 | 379 | 564 |
Other comprehensive income (loss) | 5,864 | (2,649) | 11,737 | (6,242) |
Comprehensive income | $ 209,412 | $ 158,783 | $ 236,988 | $ 193,182 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income | Accumulated Deficit | |
Beginning Balance at Dec. 31, 2021 | $ 3,770,004 | $ 221 | $ 4,567,111 | $ (19,454) | $ (777,874) | |
Increase (Decrease) in Stockholders' Equity | ||||||
Issuance of shares of Common Stock upon exercise of stock options and settlement of employee restricted stock units, net of shares withheld for taxes | 14,237 | 14,237 | ||||
Issuance of shares of Common Stock for services rendered | 112 | 112 | ||||
Stock compensation | 44,320 | 44,320 | ||||
Other comprehensive income (loss) | (3,593) | (3,593) | ||||
Net income | 37,992 | 37,992 | ||||
Ending Balance at Mar. 31, 2022 | 3,863,072 | 221 | 4,625,780 | (23,047) | (739,882) | |
Beginning Balance at Dec. 31, 2021 | 3,770,004 | 221 | 4,567,111 | (19,454) | (777,874) | |
Increase (Decrease) in Stockholders' Equity | ||||||
Other comprehensive income (loss) | (6,242) | |||||
Net income | 199,424 | |||||
Ending Balance at Jun. 30, 2022 | 4,085,061 | 222 | 4,688,985 | (25,696) | (578,450) | |
Beginning Balance at Mar. 31, 2022 | 3,863,072 | 221 | 4,625,780 | (23,047) | (739,882) | |
Increase (Decrease) in Stockholders' Equity | ||||||
Issuance of shares of Common Stock upon exercise of stock options and settlement of employee restricted stock units and performance shares, net of shares withheld for taxes and shares of Common Stock under the ESPP | 16,601 | 1 | 16,600 | |||
Issuance of shares of Common Stock for services rendered | 109 | 109 | ||||
Stock compensation | 46,496 | 46,496 | ||||
Other comprehensive income (loss) | (2,649) | (2,649) | ||||
Net income | 161,432 | 161,432 | ||||
Ending Balance at Jun. 30, 2022 | 4,085,061 | 222 | 4,688,985 | (25,696) | (578,450) | |
Beginning Balance at Dec. 31, 2022 | 4,370,119 | [1] | 223 | 4,792,041 | 15,069 | (437,214) |
Increase (Decrease) in Stockholders' Equity | ||||||
Issuance of shares of Common Stock upon exercise of stock options and settlement of employee restricted stock units, net of shares withheld for taxes | 11,235 | 11,235 | ||||
Issuance of shares of Common Stock for services rendered | 80 | 80 | ||||
Stock compensation | 53,558 | 53,558 | ||||
Other comprehensive income (loss) | 5,873 | 5,873 | ||||
Net income | 21,703 | 21,703 | ||||
Ending Balance at Mar. 31, 2023 | 4,462,568 | 223 | 4,856,914 | 20,942 | (415,511) | |
Beginning Balance at Dec. 31, 2022 | 4,370,119 | [1] | 223 | 4,792,041 | 15,069 | (437,214) |
Increase (Decrease) in Stockholders' Equity | ||||||
Other comprehensive income (loss) | 11,737 | |||||
Net income | 225,251 | |||||
Ending Balance at Jun. 30, 2023 | 4,740,692 | 223 | 4,925,626 | 26,806 | (211,963) | |
Beginning Balance at Mar. 31, 2023 | 4,462,568 | 223 | 4,856,914 | 20,942 | (415,511) | |
Increase (Decrease) in Stockholders' Equity | ||||||
Issuance of shares of Common Stock upon exercise of stock options and settlement of employee restricted stock units and performance shares, net of shares withheld for taxes and shares of Common Stock under the ESPP | 13,704 | 13,704 | ||||
Issuance of shares of Common Stock for services rendered | 80 | 80 | ||||
Stock compensation | 54,928 | 54,928 | ||||
Other comprehensive income (loss) | 5,864 | 5,864 | ||||
Net income | 203,548 | 203,548 | ||||
Ending Balance at Jun. 30, 2023 | $ 4,740,692 | $ 223 | $ 4,925,626 | $ 26,806 | $ (211,963) | |
[1]The condensed consolidated balance sheet at December 31, 2022 has been derived from the audited consolidated financial statements at that date. |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - shares | 3 Months Ended | |||
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | |
Statement of Stockholders' Equity [Abstract] | ||||
Issuance of shares of Common Stock upon exercise of stock options and settlement of employee restricted stock units and performance shares (in shares) | 59,093 | 313,995 | 274,693 | 323,582 |
Issuance of shares of Common Stock under the ESPP (in shares) | 216,168 | 189,684 | ||
Issuance of shares of Common Stock for services rendered (in shares) | 1,282 | 1,073 | 1,469 | 1,535 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Cash flows from operating activities: | ||
Net income | $ 225,251 | $ 199,424 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 39,508 | 32,945 |
Stock-based compensation | 107,899 | 90,337 |
Deferred income taxes | (61,864) | 32,475 |
Other, net | (3,670) | 8,467 |
Unrealized (gain) loss on long term investments | (36,493) | 71,482 |
Loss on change in fair value of acquisition-related contingent consideration | 14,570 | 9,695 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 6,885 | (66,668) |
Prepaid expenses and other assets | (8,219) | (25,380) |
Inventory | (53,436) | (37,190) |
Accounts payable | (122,008) | 22,660 |
Accrued and other liabilities | 92,500 | 51,651 |
Net cash provided by operating activities | 200,923 | 389,898 |
Cash flows from investing activities: | ||
Sale of long term investments | 45 | 0 |
Capital expenditures | (19,243) | (28,749) |
Payments for intangible assets | (15,000) | 0 |
Purchases of marketable securities | (152,277) | (43,988) |
Sale and maturities of marketable securities | 150,487 | 43,509 |
Net cash used in investing activities | (35,988) | (29,228) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock under stock plans | 28,367 | 37,692 |
Tax withholdings related to restricted and performance share vesting | (3,428) | (6,854) |
Payment of finance lease liabilities | (1,638) | (1,368) |
Payment of contingent consideration | (6,424) | (13,473) |
Net cash provided by financing activities | 16,877 | 15,997 |
Effect of exchange rates on cash, cash equivalents, restricted cash and investments | (2,090) | 1,198 |
Net increase in cash, cash equivalents, restricted cash and investments | 179,722 | 377,865 |
Cash, cash equivalents, restricted cash and investments at beginning of period | 2,953,120 | 2,059,160 |
Cash, cash equivalents, restricted cash and investments at end of period | 3,132,842 | 2,437,025 |
Supplemental Schedule of Cash Flow Information | ||
Income taxes paid | 137,313 | 76,464 |
Unpaid purchases of property and equipment | 4,420 | 8,952 |
Leased assets obtained in exchange for new operating lease liabilities | 5,275 | 2,025 |
Leased assets obtained in exchange for new finance lease liabilities | $ 1,024 | $ 1,308 |
Organization and Business
Organization and Business | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business | Note 1. Organization and Business Incyte Corporation (including its subsidiaries, “Incyte,” “we,” “us,” or “our”) is a biopharmaceutical company focused on developing and commercializing proprietary therapeutics. Our portfolio includes compounds in various stages, ranging from preclinical to late stage development, and commercialized products JAKAFI® (ruxolitinib), ICLUSIG® (ponatinib), PEMAZYRE® (pemigatinib), OPZELURA™ (ruxolitinib cream), MINJUVI® (tafasitamab), MONJUVI® (tafasitamab-cxix), which is co-commercialized, and ZYNYZ™ (retifanlimab-dlwr). Our operations are treated as one operating segment. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2. Summary of Significant Accounting Policies Basis of presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. The condensed consolidated balance sheet as of June 30, 2023, the condensed consolidated statements of operations, comprehensive income (loss), and stockholders’ equity for the three and six months ended June 30, 2023 and 2022, and the condensed consolidated statements of cash flows for the six months ended June 30, 2023 and 2022, are unaudited, but include all adjustments, consisting only of normal recurring adjustments, which we consider necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The condensed consolidated balance sheet at December 31, 2022 has been derived from our audited consolidated financial statements. Although we believe that the disclosures in these financial statements are adequate to make the information presented not misleading, certain information and footnote information normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. Results for any interim period are not necessarily indicative of results for any future interim period or for the entire year. The accompanying financial statements should be read in conjunction with the financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2022. Principles of Consolidation. The condensed consolidated financial statements include the accounts of Incyte Corporation and our wholly owned subsidiaries. All inter-company accounts, transactions, and profits have been eliminated in consolidation. Use of Estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Other Intangible Assets, net. Other intangible assets, net consist of licensed intellectual property rights acquired in business combinations, which are reported at acquisition date fair value, less accumulated amortization, as well as milestone payments made to collaboration partners incurred at or after the product has obtained regulatory approval. Intangible assets with finite lives are amortized over their estimated useful lives using the straight-line method. Intangible assets with finite lives are tested for recoverability whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. Cost of Product Revenues. Cost of product revenues includes all product related costs and royalties owed under our collaboration and license agreements, contingent on certain conditions. In addition, cost of product revenues includes the amortization of our licensed intellectual property for ICLUSIG and the amortization of capitalized milestone payments, using the straight-line method over the respective estimated useful lives, which range between approximately 11 to 14 years. Cost of product revenues also includes employee personnel costs, including stock compensation, for those employees dedicated to the production of our commercial products. |
Revenues
Revenues | 6 Months Ended |
Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | Note 3. Revenues Revenues are recognized under guidance within ASC 606, Revenue from Contracts with Customers . The following table presents our disaggregated revenue for the periods presented (in thousands): Three Months Ended Six Months Ended 2023 2022 2023 2022 JAKAFI revenues, net $ 682,384 $ 597,673 $ 1,262,353 $ 1,142,137 OPZELURA revenues, net 80,233 16,560 136,785 29,314 ICLUSIG revenues, net 29,087 26,224 56,772 52,293 PEMAZYRE revenues, net 21,572 18,983 44,047 37,015 MINJUVI revenues, net 13,159 4,411 19,715 8,913 ZYNYZ revenues, net 570 — 570 — Total product revenues, net 827,005 663,851 1,520,242 1,269,672 JAKAVI product royalty revenues 90,448 83,711 167,140 154,578 OLUMIANT product royalty revenues 32,009 30,254 66,164 78,318 TABRECTA product royalty revenues 4,799 3,581 8,976 7,064 PEMAZYRE product royalty revenues 349 — 761 — Total product royalty revenues 127,605 117,546 243,041 239,960 Milestone and contract revenues — 130,000 — 135,000 Total revenues $ 954,610 $ 911,397 $ 1,763,283 $ 1,644,632 For further information on our revenue-generating contracts, refer to Note 7. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Note 4. Fair Value of Financial Instruments The following is a summary of our marketable security portfolio for the periods presented (in thousands): Amortized Net Estimated June 30, 2023 Debt securities (government) $ 294,371 $ (2,128) $ 292,243 December 31, 2022 Debt securities (government) $ 292,580 $ (5,037) $ 287,543 Our available-for-sale debt securities generally have contractual maturity dates of between 12 to 18 months. Debt security assets were assessed for risk of expected credit losses. As of June 30, 2023 and December 31, 2022, the available-for-sale debt securities were held in U.S.-government backed securities and in Treasury bonds and were assessed on an individual security basis to have a de minimis risk of credit loss. Fair Value Measurements FASB accounting guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability (“the exit price”) in an orderly transaction between market participants at the measurement date. The standard outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. In determining fair value we use quoted prices and observable inputs. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of us. The fair value hierarchy is broken down into three levels based on the source of inputs as follows: Level 1—Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities. Level 2—Valuations based on observable inputs and quoted prices in active markets for similar assets and liabilities. Level 3—Valuations based on inputs that are unobservable and models that are significant to the overall fair value measurement. Recurring Fair Value Measurements Our marketable securities consist of investments in U.S. government debt securities that are classified as available-for-sale. At June 30, 2023 and December 31, 2022, our Level 2 U.S. government debt securities were valued using readily available pricing sources which utilize market observable inputs, including the current interest rate and other characteristics for similar types of investments. Our long term investments classified as Level 1 were valued using their respective closing stock prices on The Nasdaq Stock Market. We did not experience any transfers of financial instruments between the fair value hierarchy levels during the six months ended June 30, 2023. The following fair value hierarchy table presents information about each major category of our financial assets measured at fair value on a recurring basis (in thousands): Fair Value Measurement at Reporting Date Using: Quoted Prices in Significant Other Significant Balance as of Cash and cash equivalents $ 3,131,123 $ — $ — $ 3,131,123 Debt securities (government) — 292,243 — 292,243 Long term investments (Note 7) 170,316 — — 170,316 Total assets $ 3,301,439 $ 292,243 $ — $ 3,593,682 Fair Value Measurement at Reporting Date Using: Quoted Prices in Significant Other Significant Balance as of Cash and cash equivalents $ 2,951,422 $ — $ — $ 2,951,422 Debt securities (government) — 287,543 — 287,543 Long term investments (Note 7) 133,676 — — 133,676 Total assets $ 3,085,098 $ 287,543 $ — $ 3,372,641 The following fair value hierarchy table presents information about each major category of our financial liabilities measured at fair value on a recurring basis as (in thousands): Fair Value Measurement at Reporting Date Using: Quoted Prices in Significant Other Significant Balance as of Acquisition-related contingent consideration $ — $ — $ 217,000 $ 217,000 Total liabilities $ — $ — $ 217,000 $ 217,000 Fair Value Measurement at Reporting Date Using: Quoted Prices in Significant Other Significant Balance as of Acquisition-related contingent consideration $ — $ — $ 221,000 $ 221,000 Total liabilities $ — $ — $ 221,000 $ 221,000 The following is a rollforward of our Level 3 liabilities (in thousands): 2023 Balance at January 1, $ 221,000 Contingent consideration earned during the period but not yet paid (18,570) Change in fair value of contingent consideration 14,570 Balance at June 30, $ 217,000 The initial fair value of the contingent consideration was determined on the date of acquisition, June 1, 2016, using an income approach based on projected future net revenues of ICLUSIG in the European Union and other countries for the approved third line treatment over 18 years, and discounted to present value at a rate of 10%. The fair value of the contingent consideration is remeasured each reporting period, with changes in fair value recorded in the condensed consolidated statements of operations. The valuation inputs utilized to estimate the fair value of the contingent consideration as of June 30, 2023 and December 31, 2022 included a discount rate of 10% and updated projections of future net revenues of ICLUSIG in the European Union and other countries for the approved third line treatment. The loss on change in fair value of the contingent consideration during the three and six months ended June 30, 2023 was due primarily to the passage of time. We generally make payments to Takeda Pharmaceutical Company Limited quarterly based on the royalties or any additional milestone payments earned in the previous quarter. At June 30, 2023 and December 31, 2022, contingent consideration earned but not yet paid was $18.6 million and $9.3 million, respectively, and was included in accrued and other current liabilities. |
Concentration of Credit Risk an
Concentration of Credit Risk and Current Expected Credit Losses | 6 Months Ended |
Jun. 30, 2023 | |
Risks and Uncertainties [Abstract] | |
Concentration of Credit Risk and Current Expected Credit Losses | Note 5. Concentration of Credit Risk and Current Expected Credit Losses In November 2009, we entered into a collaboration and license agreement with Novartis Pharmaceutical International Ltd. (“Novartis”). In December 2009, we entered into a license, development and commercialization agreement with Eli Lilly and Company (“Lilly”). The above collaboration partners comprised, in aggregate, 20% and 20% of the accounts receivable balance as of June 30, 2023 and December 31, 2022, respectively. For further information relating to these collaboration and license agreements, refer to Note 7. In November 2011, we began commercialization and distribution of JAKAFI, in April 2020, we began commercialization and distribution of PEMAZYRE, and in October 2021, we began commercialization and distribution of OPZELURA. Our product revenues are concentrated in a number of these customers. The concentration of credit risk related to our JAKAFI, PEMAZYRE and OPZELURA product revenues is as follows: Percentage of Total Net Percentage of Total Net June 30, June 30, 2023 2022 2023 2022 Customer A 16 % 19 % 17 % 19 % Customer B 9 % 12 % 10 % 12 % Customer C 20 % 16 % 19 % 18 % Customer D 10 % 10 % 10 % 10 % Customer E 11 % 14 % 11 % 15 % We are exposed to risks associated with extending credit to customers related to the sale of products. Customers A, B, C, D, and E comprised, in aggregate, 35% and 41% of the accounts receivable balance as of June 30, 2023 and December 31, 2022, respectively. The concentration of credit risk relating to our other product revenues or accounts receivable is not significant. We assessed our collaborative and customer receivable assets as of June 30, 2023 according to our accounting policy for applying reserves for expected credit losses, noting minimal history of uncollectible receivables and the continued perceived creditworthiness of our third party sales relationships, upon which the expected credit losses were considered de minimis. As of June 30, 2023 and December 31, 2022, we had no allowance for doubtful accounts. |
Inventory
Inventory | 6 Months Ended |
Jun. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Inventory | Note 6. Inventory Our inventory balance consists of the following (in thousands): June 30, December 31, Raw materials $ 32,630 $ 31,874 Work-in-process 122,971 54,455 Finished goods 22,384 34,630 Total inventory $ 177,985 $ 120,959 Inventories, stated at the lower of cost and net realizable value, consist of raw materials, work in process and finished goods. At June 30, 2023, $35.9 million of inventory was classified as current on the condensed consolidated balance sheet as we expect this inventory to be consumed for commercial use within the next twelve months. At June 30, 2023, $142.0 million of inventory was classified as non-current on the condensed consolidated balance sheet as we did not expect this inventory to be consumed for commercial use within the next twelve months. We obtain some inventory components from a limited number of suppliers due to technology, availability, price, quality or other considerations. The loss of a supplier, the deterioration of our relationship with a supplier, or any unilateral violation of the contractual terms under which we are supplied components by a supplier could adversely affect our total revenues and gross margins. |
License Agreements
License Agreements | 6 Months Ended |
Jun. 30, 2023 | |
License Agreements | |
License Agreements | Note 7. License Agreements Novartis In November 2009, we entered into a Collaboration and License Agreement with Novartis. Under the terms of the agreement, Novartis received exclusive development and commercialization rights outside of the United States to our JAK inhibitor ruxolitinib and certain back-up compounds for hematologic and oncology indications, including all hematological malignancies, solid tumors and myeloproliferative diseases. We retained exclusive development and commercialization rights to JAKAFI (ruxolitinib) in the United States and in certain other indications. Novartis also received worldwide exclusive development and commercialization rights to our MET inhibitor compound capmatinib and certain back-up compounds in all indications. Under this agreement, we were initially eligible to receive up to $174.0 million for the achievement of development milestones, up to $495.0 million for the achievement of regulatory milestones and up to $500.0 million for the achievement of sales milestones. In addition, we are eligible to receive up to $75.0 million of additional potential development and regulatory milestones relating to graft-versus-host-disease (“GVHD”). Since the inception of the agreement through June 30, 2023, we have recognized and received, in the aggregate, $157.0 million for the achievement of development milestones, $340.0 million for the achievement of regulatory milestones, and $200.0 million for the achievement of sales milestones. We also are eligible to receive tiered, double-digit royalties ranging from the upper-teens to the mid-twenties on future JAKAVI net sales outside of the United States, and tiered, worldwide royalties on TABRECTA net sales that range from 12% to 14%. We are obligated to pay to Novartis tiered royalties in the low single-digits on future JAKAFI net sales within the United States contingent on certain conditions. During the three and six months ended June 30, 2023, such royalties on net sales within the United States totaled $33.5 million and $56.9 million, respectively, and were reflected in cost of product revenues on the condensed consolidated statements of operations. During the three and six months ended June 30, 2022, such royalties on net sales within the United States totaled $29.3 million and $51.0 million, respectively, and were reflected in cost of product revenues on the condensed consolidated statements of operations. At June 30, 2023 and December 31, 2022, $310.3 million and $253.5 million, respectively, of accrued royalties were included in accrued and other current liabilities on the condensed consolidated balance sheets, payment of which is dependent on the outcome of a contract dispute with Novartis. Each company is responsible for costs relating to the development and commercialization of ruxolitinib in its respective territories, with costs of collaborative studies shared equally. Novartis is also responsible for all costs relating to the development and commercialization of capmatinib. We had no milestone and contract revenue under the Novartis agreement for the three and six months ended June 30, 2023. Milestone and contract revenue under the Novartis agreement was $60.0 million for both the three and six months ended June 30, 2022. Product royalty revenue related to Novartis net sales of JAKAVI outside of the United States for the three and six months ended June 30, 2023 was $90.4 million and $167.1 million, respectively. Product royalty revenue related to Novartis net sales of JAKAVI outside of the United States for the three and six months ended June 30, 2022 was $83.7 million and $154.6 million, respectively. Product royalty revenue related to Novartis net sales of TABRECTA worldwide for the three and six months ended June 30, 2023 was $4.8 million and $9.0 million, respectively. Product royalty revenue related to Novartis net sales of TABRECTA worldwide for the three and six months ended June 30, 2022 was $3.6 million and $7.1 million, respectively. Lilly – Baricitinib In December 2009, we entered into a License, Development and Commercialization Agreement with Lilly. Under the terms of the agreement, Lilly received exclusive worldwide development and commercialization rights to our JAK inhibitor baricitinib, and certain back-up compounds for inflammatory and autoimmune diseases. Under this agreement, we were initially eligible to receive up to $150.0 million for the achievement of development milestones, up to $365.0 million for the achievement of regulatory milestones and up to $150.0 million for the achievement of sales milestones. Since the inception of the agreement through June 30, 2023, we have recognized and received, in aggregate, $149.0 million for the achievement of development milestones, $335.0 million for the achievement of regulatory milestones and $50.0 million for the achievement of sales milestones. We are also eligible to receive tiered, double-digit royalties on future global sales with rates ranging up to the mid-twenties if a product is successfully commercialized. In May 2020, we amended our agreement with Lilly to enable Lilly to develop and commercialize baricitinib for the treatment of COVID-19. As part of the amended agreement, in addition to the royalties described above, we will be entitled to receive additional royalty payments with rates in the low teens on global net sales of baricitinib for the treatment of COVID-19 that exceed a specified aggregate global net sales threshold. We had no milestone and contract revenue under the Lilly agreement for the three and six months ended June 30, 2023. Milestone and contract revenue under the Lilly agreement was $70.0 million for both the three and six months ended June 30, 2022. Product royalty revenue related to Lilly net sales of OLUMIANT outside of the United States for the three and six months ended June 30, 2023 was $32.0 million and $66.2 million, respectively. Product royalty revenue related to Lilly net sales of OLUMIANT outside of the United States for the three and six months ended June 30, 2022 was $30.3 million and $78.3 million, respectively. Lilly - Ruxolitinib In March 2016, we entered into an amendment to the agreement with Lilly that amended the non-compete provision of the agreement to allow us to engage in the development and commercialization of ruxolitinib in the GVHD field. Lilly was eligible to receive up to $40.0 million in regulatory milestone payments relating to ruxolitinib in the GVHD field. In May 2019, the approval of JAKAFI in steroid-refractory acute GVHD triggered a $20.0 million milestone payment to Lilly. In March 2022, the positive recommendation from the European Medicines Agency for regulatory approval of ruxolitinib in the GVHD field triggered an additional $20.0 million milestone payment to Lilly, which was recorded as research and development expense in our condensed consolidated statements of operations for the three months ended March 31, 2022. Agenus In January 2015, we entered into a License, Development and Commercialization Agreement with Agenus Inc. and its wholly-owned subsidiary, 4-Antibody AG (now known as Agenus Switzerland Inc.), which we collectively refer to as Agenus. Under this agreement, which was amended in February 2017, the parties have agreed to collaborate on the discovery of novel immuno-therapeutics using Agenus’ antibody discovery platforms. Under the terms of the amended agreement, we received exclusive worldwide development and commercialization rights to four checkpoint modulators directed against GITR, OX40, LAG-3 and TIM-3 as well as two undisclosed targets. Targets may be designated profit-share programs, where all costs and profits are shared equally by us and Agenus, or royalty-bearing programs, where we are responsible for all costs associated with discovery, preclinical, clinical development and commercialization activities. There are currently no profit-share programs. For each royalty-bearing product other than GITR and one undisclosed target, Agenus will be eligible to receive tiered royalties on global net sales ranging from 6% to 12%. For GITR and one undisclosed target, Agenus will be eligible to receive 15% royalties on global net sales. The agreement may be terminated by us for convenience upon 12 months’ notice and may also be terminated under certain other circumstances, including material breach. On October 19, 2022 we notified Agenus that we were terminating the OX40 project. Since the inception of the agreement through June 30, 2023, we have paid Agenus milestones totaling $30.0 million, and Agenus is eligible to receive up to an additional $500.0 million in future contingent development, regulatory and commercialization milestones across all programs in the collaboration. As of June 30, 2023, we held an investment of approximately 12.1 million shares of Agenus Inc. common stock. The fair market value of our long term investment in Agenus Inc. at June 30, 2023 and December 31, 2022 was $19.3 million and $29.0 million, respectively. For the three and six months ended June 30, 2023, we recorded an unrealized gain of $0.9 million and an unrealized loss of $9.7 million, respectively, based on the change in fair value of Agenus Inc.’s common stock during the respective periods. For the three and six months ended June 30, 2022, we recorded an unrealized loss of $6.3 million and $15.4 million, respectively, based on the change in fair value of Agenus Inc.’s common stock during the respective periods. During May 2023, Agenus Inc. distributed a dividend of shares it owned of its publicly traded subsidiary MiNK Therapeutics' ("MiNK") common stock to shareholders who held Agenus Inc. shares. As a result, we acquired approximately 0.2 million shares of MiNK common stock. The fair market value of our long term investment in MiNK at June 30, 2023 was $0.4 million, and during the three months ended June 30, 2023, and we recorded an unrealized gain of $0.2 million based on the change in fair value of MiNK’s common stock during the period. Merus In December 2016, we entered into a Collaboration and License Agreement with Merus N.V. (“Merus”). Under this agreement, the parties have agreed to collaborate with respect to the research, discovery and development of bispecific antibodies utilizing Merus’ technology platform. The collaboration encompasses up to ten independent programs. In January 2022, we decided to opt-out of the continued development of MCLA-145, a bispecific antibody targeting PD-L1 and CD137. We continue to collaborate with Merus and leverage the Merus platform to develop a pipeline of novel agents, as we continue to hold worldwide exclusive development and commercialization rights to up to ten additional programs. Of these ten additional programs, Merus retained the option, subject to certain conditions, to co-fund development of up to two such programs. If Merus exercises its co-funding option for a program, Merus would be responsible for funding 35% of the associated future global development costs and, for certain of such programs, would be responsible for reimbursing us for certain development costs incurred prior to the option exercise. Merus will also have the right to participate in a specified proportion of detailing activities in the United States for one of those co-developed programs. All costs related to the co-funded collaboration programs are subject to joint research and development plans and overseen by a joint development committee, but we will have final determination as to such plans in cases of dispute. We will be responsible for all research, development and commercialization costs relating to all other programs. For each program as to which Merus does not have commercialization or development co-funding rights, Merus is eligible to receive up to $100.0 million in future contingent development and regulatory milestones, and up to $250.0 million in commercialization milestones as well as tiered royalties ranging from 6% to 10% of global net sales. For each program as to which Merus exercises its option to co-fund development, Merus is eligible to receive a 50% share of profits (or sustain 50% of any losses) in the United States and be eligible to receive tiered royalties ranging from 6% to 10% of net sales of products outside of the United States. If Merus opts to cease co-funding a program as to which it exercised its co-development option, then Merus will no longer receive a share of profits in the United States but will be eligible to receive the same milestones from the co-funding termination date and the same tiered royalties described above with respect to programs where Merus does not have a right to co-fund development and, depending on the stage at which Merus chose to cease co-funding development costs, Merus will be eligible to receive additional royalties ranging up to 4% of net sales in the United States. In January 2023, we paid Merus a milestone of $2.5 million, which was recorded as research and development expense in our condensed consolidated statements of operations during the three months ended March 31, 2023. Since the inception of the agreement through June 30, 2023, we have paid and expensed Merus milestones totaling $5.5 million. As of June 30, 2023, we held an investment of approximately 3.6 million common shares. The fair market value of our total long term investment in Merus at June 30, 2023 and December 31, 2022 was $93.5 million and $54.9 million, respectively. For the three and six months ended June 30, 2023, we recorded an unrealized gain of $28.2 million and $38.6 million, respectively, based on the change in fair value of Merus’ common shares during the respective periods. For the three and six months ended June 30, 2022, we recorded an unrealized loss of $13.5 million and $32.5 million, respectively, based on the change in fair value of Merus’ common shares during the respective periods. MacroGenics In October 2017, we entered into a Global Collaboration and License Agreement with MacroGenics, Inc. (“MacroGenics”). Under this agreement, we received exclusive development and commercialization rights worldwide to MacroGenics’ INCMGA0012 (formerly MGA012), an investigational monoclonal antibody that inhibits PD-1. Except as set forth in the succeeding sentence, we have sole authority over and bear all costs and expenses in connection with the development and commercialization of INCMGA0012 in all indications, whether as a monotherapy or as part of a combination regimen. MacroGenics has retained the right to develop and commercialize, at its cost and expense, its pipeline assets in combination with INCMGA0012. In addition, MacroGenics has the right to manufacture a portion of both companies’ global clinical and commercial supply needs of INCMGA0012. In July 2022, we amended our agreement with MacroGenics to reflect changes related to the payment of certain milestones and paid MacroGenics $30.0 million, which was previously recorded as research and development expense in our condensed consolidated statements of operations in the third quarter of 2022. In March 2023, we made a $15.0 million regulatory milestone payment to MacroGenics for the FDA approval of ZYNYZ for the treatment of adults with Merkel cell carcinoma. This milestone payment was capitalized as an intangible asset and included in Other intangible assets, net on the condensed consolidated balance sheet as of June 30, 2023, and is being amortized through cost of product revenues over the estimated useful life of 13.5 years. Since the inception of the agreement through June 30, 2023, we have paid MacroGenics developmental and regulatory milestones totaling $115.0 million. After the amendment and subsequent payments, MacroGenics will be eligible to receive up to an additional $320.0 million in future contingent development and regulatory milestones, and up to $330.0 million in sales milestones as well as tiered royalties ranging from 15% to 24% of global net sales. Research and development expenses for the three and six months ended June 30, 2023 also included $12.1 million and $29.9 million, respectively, of development costs incurred pursuant to the MacroGenics agreement. Research and development expenses for the three and six months ended June 30, 2022 also included $14.8 million and $28.3 million, respectively, of development costs incurred pursuant to the MacroGenics agreement. At June 30, 2023 and December 31, 2022, a total of $0.2 million and $2.9 million of such costs were included in accrued and other liabilities on the condensed consolidated balance sheets. Syros In January 2018, we entered into a Target Discovery, Research Collaboration and Option Agreement with Syros Pharmaceuticals, Inc. (“Syros”). Under this agreement, Syros will use its proprietary gene control platform to identify novel therapeutic targets with a focus in myeloproliferative neoplasms and we have received options to obtain exclusive worldwide rights to intellectual property resulting from the collaboration for up to seven validated targets. We will have exclusive worldwide rights to develop and commercialize any therapies under the collaboration that modulate those validated targets. We have agreed to pay Syros up to $54.0 million in target selection and option exercise fees should we decide to exercise all of our options under the agreement. For products resulting from the collaboration against each of the seven selected and validated targets, we have agreed to pay up to $50.0 million in potential development and regulatory milestones and up to $65.0 million in potential sales milestones. Syros is also eligible to receive low single-digit royalties on net sales of products resulting from the collaboration. As of June 30, 2023, we held an investment of approximately 0.1 million shares of Syros common stock. The fair market value of our long term investment in Syros as of June 30, 2023 and December 31, 2022 was $0.3 million and $0.3 million, respectively. For the three and six months ended June 30, 2023, we recorded a nominal unrealized loss and an unrealized loss of $0.1 million, respectively, based on the change in fair value of Syros’ common stock during the respective periods. For the three and six months ended June 30, 2022, we recorded an unrealized loss of $0.2 million and $2.2 million, respectively, based on the change in fair value of Syros’ common stock during the respective periods. MorphoSys In January 2020, we entered into a Collaboration and License Agreement with MorphoSys AG and MorphoSys US Inc., a wholly-owned subsidiary of MorphoSys AG (together with MorphoSys AG, “MorphoSys”), covering the worldwide development and commercialization of MOR208 (tafasitamab), an investigational Fc engineered monoclonal antibody directed against the target molecule CD19 that was under clinical development by MorphoSys at the beginning of the agreement, and has subsequently been commercialized as MONJUVI/MINJUVI. MorphoSys has exclusive worldwide development and commercialization rights to tafasitamab under a June 2010 collaboration and license agreement with Xencor, Inc. Under the terms of the agreement, we received exclusive commercialization rights outside of the United States, and MorphoSys and we have co-commercialization rights in the United States, with respect to tafasitamab. MorphoSys is responsible for leading the commercialization strategy and booking all revenue from sales of tafasitamab in the United States, and we and MorphoSys are both responsible for commercialization efforts in the United States and will share equally the profits and losses from the co-commercialization efforts. We will lead the commercialization strategy outside of the United States, and will be responsible for commercialization efforts and book all revenue from sales of tafasitamab outside of the United States, subject to our royalty payment obligations set forth below. We and MorphoSys have agreed to co-develop tafasitamab and to share development costs associated with global and U.S.-specific clinical trials, with Incyte responsible for 55% of such costs and MorphoSys responsible for 45% of such costs. Each company is responsible for funding any independent development activities, and we are responsible for funding development activities specific to territories outside of the United States. All development costs related to the collaboration are subject to a joint development plan. MorphoSys is eligible to receive up to $737.5 million in future contingent development and regulatory milestones and up to $315.0 million in commercialization milestones as well as tiered royalties ranging from the mid-teens to mid-twenties of net sales outside of the United States. MorphoSys’ right to receive royalties in any particular country will expire upon the last to occur of (a) the expiration of patent rights in that particular country, (b) a specified period of time after the first post-marketing authorization sale of a licensed product comprising tafasitamab in that country, and (c) the expiration of any regulatory exclusivity for that licensed product in that country. Since the inception of the agreement through June 30, 2023, we have paid MorphoSys milestones totaling $2.5 million, all of which have previously been recorded as research and development expenses. As of June 30, 2023, we held an investment of approximately 3.6 million American Depository Shares, each representing 0.25 of an ordinary share of MorphoSys AG. The fair market value of our long term investment in MorphoSys AG as of June 30, 2023 and December 31, 2022 was $27.1 million and $13.0 million, respectively. For the three and six months ended June 30, 2023, we recorded an unrealized gain of $12.7 million and $14.1 million, respectively, based on the change in fair value of MorphoSys AG's ordinary shares during the respective periods. For the three and six months ended June 30, 2022, we recorded an unrealized loss of $7.1 million and $16.7 million, respectively, based on the change in fair value of MorphoSys AG's ordinary shares during the respective periods. Our 50% share of the United States profit or loss for the commercialization of tafasitamab for the three and six months ended June 30, 2023 was a profit of $0.5 million and $1.9 million, respectively, and is recorded as (profit) and loss sharing under collaboration agreements on the condensed consolidated statement of operations. Our 50% share of the United States loss for the commercialization of tafasitamab for the three and six months ended June 30, 2022 was $2.5 million and $7.3 million, respectively, and is recorded as (profit) and loss sharing under collaboration agreements on the condensed consolidated statement of operations. Research and development expenses for the three and six months ended June 30, 2023, includes $20.3 million and $45.5 million, respectively, related to our 55% share of the co-development costs for tafasitamab. Research and development expenses for the three and six months ended June 30, 2022, includes $27.5 million and $48.5 million, respectively, related to our 55% share of the co-development costs for tafasitamab. At June 30, 2023 and December 31, 2022, $39.3 million and $28.5 million, respectively, was included in accrued and other liabilities on the condensed consolidated balance sheets for amounts due to MorphoSys under the agreement. Syndax In September 2021, we entered into a Collaboration and License Agreement with Syndax Pharmaceuticals, Inc. (“Syndax”), covering the worldwide development and commercialization of SNDX-6352 (“axatilimab”). Axatilimab, currently in clinical development by Syndax, is a monoclonal antibody that blocks the colony stimulating factor-1 (CSF-1) receptor. Syndax has exclusive worldwide development and commercialization rights to axatilimab under a June 2016 license agreement with UCB Biopharma Sprl. The agreement became effective in December 2021. Under the terms of the agreement, we received exclusive commercialization rights outside of the United States, and Syndax and we have co-commercialization rights in the United States, with respect to axatilimab. We will be responsible for leading the commercialization strategy and booking all revenue from sales of axatilimab globally. Incyte and Syndax will share equally the profits and losses from the co-commercialization efforts in the United States. Sales of axatilimab outside the United States will be subject to our royalty payment obligations to Syndax, as set forth below. We and Syndax have agreed to co-develop axatilimab and to share development costs associated with global and U.S.-specific clinical trials, with Incyte responsible for 55% of such costs and Syndax responsible for 45% of such costs. Each company is responsible for funding any independent development activities. All development costs related to the collaboration are subject to a joint development plan. In December 2021, we paid Syndax an upfront, non-refundable payment of $117.0 million, which was recorded in research and development expense on the consolidated statement of operations for the year ended December 31, 2021. Syndax is eligible to receive up to $220.0 million in future contingent development and regulatory milestones and up to $230.0 million in sales milestones as well as tiered royalties ranging in the mid-teens on net sales in Europe and Japan and low double digit percentage on net sales in the rest of the world outside of the United States. Syndax’ right to receive royalties in any particular country will expire upon the last to occur of (a) the expiration of patent rights in that particular country, (b) a specified period of time after the first post-marketing authorization sale of a licensed product comprising axatilimab in that country, and (c) the expiration of any regulatory exclusivity for that licensed product in that country. As of June 30, 2023, we held an investment of approximately 1.4 million shares of Syndax common stock. The fair market value of our long term investment in Syndax as of June 30, 2023 and December 31, 2022 was $29.8 million and $36.2 million. For the three and six months ended June 30, 2023, we recorded an unrealized loss of $0.2 million and $6.4 million, respectively, based on the change in fair value of Syndax’s common stock during the respective periods. For the three and six months ended June 30, 2022, we recorded an unrealized gain of $2.7 million and an unrealized loss of $3.8 million, respectively, based on the change in fair value of Syndax’s common stock during the respective periods. Research and development expenses for the three and six months ended June 30, 2023, includes $6.2 million and $11.8 million, respectively, related to our 55% share of the co-development costs for axatilimab. At June 30, 2023, $4.4 million was included in accrued and other liabilities on the condensed consolidated balance sheet for amounts due to Syndax under the agreement. Other Agreements In addition to the license and collaboration agreements discussed above, we have various other license and collaboration agreements that are not individually material to our operating results or financial condition at this time. Pursuant to the terms of those agreements, we may be required to pay, or we may receive, additional amounts contingent upon the occurrence of various future events such as future discovery, development, regulatory or commercial milestones, which in the aggregate could be material. In addition, if any products related to these collaborations are approved for sale, we may be required to pay, or we may receive, royalties on future sales. The payment or receipt of these amounts, however, is contingent upon the occurrence of various future events, the likelihood of which cannot presently be determined. |
Property and Equipment, net
Property and Equipment, net | 6 Months Ended |
Jun. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, net | Note 8. Property and Equipment, net Property and equipment, net consists of the following (in thousands): June 30, December 31, Office equipment $ 23,182 $ 22,734 Laboratory equipment 202,929 192,141 Computer equipment 121,048 92,115 Land 10,581 10,429 Building and leasehold improvements 571,694 564,170 Operating lease right-of-use assets 24,528 23,311 Construction in progress 34,534 47,224 988,496 952,124 Less accumulated depreciation and amortization (239,144) (212,814) Property and equipment, net $ 749,352 $ 739,310 |
Accrued and Other Current Liabi
Accrued and Other Current Liabilities | 6 Months Ended |
Jun. 30, 2023 | |
Payables and Accruals [Abstract] | |
Accrued and Other Current Liabilities | Note 9. Accrued and Other Current Liabilities Accrued and other current liabilities consisted of the following (in thousands): June 30, December 31, Royalties $ 321,816 $ 263,466 Clinical related costs 137,780 130,570 Sales allowances 224,474 192,133 Sales and marketing 29,006 31,149 Construction in progress 4,420 3,493 Operating lease liabilities 7,084 8,195 Other current liabilities 86,272 72,047 Total accrued and other current liabilities $ 810,852 $ 701,053 |
Stock Compensation
Stock Compensation | 6 Months Ended |
Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock Compensation | Note 10. Stock Compensation We recorded $54.5 million and $107.9 million of stock compensation expense on our condensed consolidated statements of operations for the three and six months ended June 30, 2023, respectively. We recorded $46.5 million and $90.3 million of stock compensation expense on our condensed consolidated statements of operations for the three and six months ended June 30, 2022, respectively. Stock compensation expense included within our condensed consolidated statements of operations included research and development expense of $32.8 million, $63.8 million, $28.1 million and $54.4 million for the three and six months ended June 30, 2023 and 2022, respectively. Stock compensation expense included within our condensed consolidated statements of operations also included selling, general and administrative expense of $20.9 million, $42.5 million, $17.7 million and $34.6 million for the three and six months ended June 30, 2023 and 2022, respectively. Stock compensation expense included within our condensed consolidated statements of operations also included cost of product revenues of $0.8 million, $1.6 million, $0.7 million and $1.3 million, respectively, for the three and six months ended June 30, 2023 and 2022. We utilized the Black-Scholes valuation model for estimating the fair value of the stock compensation granted, with the following weighted-average assumptions: Employee Stock Options Employee Stock Purchase Plan For the Three Months Ended For the Six Months Ended For the Three Months Ended For the Six Months Ended June 30, June 30, 2023 2022 2023 2022 2023 2022 2023 2022 Average risk-free interest rates 3.88 % 3.04 % 3.76 % 1.67 % 4.87 % 2.92 % 4.27 % 2.77 % Average expected life (in years) 5.58 5.51 4.95 4.77 0.50 0.50 0.50 0.50 Volatility 29 % 33 % 32 % 37 % 27 % 39 % 23 % 28 % Weighted-average fair value (in dollars) $ 22.57 $ 26.35 $ 26.78 $ 25.30 $ 13.82 $ 14.91 $ 14.08 $ 14.53 The risk-free interest rate is derived from the U.S. Federal Reserve rate in effect at the time of grant. The expected life calculation is based on the observed and expected time to the exercise of options by our employees based on historical exercise patterns for similar type options. Expected volatility is based on the historical volatility of our common stock over the period commensurate with the expected life of the options. A dividend yield of zero is assumed based on the fact that we have never paid cash dividends and have no present intention to pay cash dividends. Nonemployee awards are measured on the grant date by estimating the fair value of the equity instruments to be issued using the expected term, similar to our employee awards. Option activity under our 2010 Stock Incentive Plan (the “2010 Stock Plan”) was as follows: Shares Subject to Shares Weighted Average Balance at December 31, 2022 12,650,359 $ 87.25 Options granted 702,470 $ 78.53 Options exercised (231,417) $ 67.05 Options cancelled (755,507) $ 94.07 Balance at June 30, 2023 12,365,905 $ 86.72 Our annual stock option grants generally have a 10-year term and vest over four years, with 25% vesting after one year and the remainder vesting in 36 equal monthly installments. Restricted stock unit (“RSU”) and performance share (“PSU”) award activity under the 2010 Stock Plan was as follows: Shares Subject to Shares Grant Date Value Balance at December 31, 2022 5,187,592 $ 81.24 RSUs granted 829,206 $ 77.15 RSUs released (186,167) $ 77.96 RSUs cancelled (125,325) $ 80.67 PSUs cancelled (971) $ 106.47 Balance at June 30, 2023 5,704,335 $ 80.77 RSUs and PSUs are granted to our employees at the share price on the date of grant. Each RSU represents the right to acquire one share of our common stock. Each RSU granted in connection with our annual equity awards will vest 25% annually over four years, while each RSU granted as outstanding merit awards or as part of retention award programs will vest in a single installment at the end of four years. We grant PSUs with performance and/or service-based milestones with graded and/or cliff vesting over three The following table summarizes our shares available for grant under the 2010 Stock Plan. Each RSU and PSU grant reduces the available share pool by 2 shares. Shares Available Balance at December 31, 2022 5,056,370 Additional authorization 12,500,000 Options, RSUs and PSUs granted (2,360,882) Options, RSUs and PSUs cancelled 1,006,844 Balance at June 30, 2023 16,202,332 Based on our historical experience of employee turnover, we have assumed an annualized forfeiture rate of 5% for our options, RSUs and PSUs. Under the true-up provisions of the stock compensation guidance, we will record additional expense if the actual forfeiture rate is lower than we estimated, and will record a recovery of prior expense if the actual forfeiture is higher than we estimated. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 11. Income Taxes For the three and six months ended June 30, 2023 and 2022, we recorded the following provisions for income taxes and effective tax rates as compared to our income before provision for income taxes: Three Months Ended Six Months Ended 2023 2022 2023 2022 Income before provision for income taxes $ 277,604 $ 229,378 $ 329,460 $ 299,913 Provision for income taxes 74,056 67,946 104,209 100,489 Effective tax rate 26.7% 29.6% 31.6% 33.5% Our effective tax rate for each of the three and six months ended June 30, 2023 and 2022 was higher than the U.S. statutory rate primarily due to foreign losses with no associated tax benefit (i.e., full valuation allowance) and an increase in our valuation allowance against certain U.S. federal and state deferred tax assets offset to a lesser extent by tax rate benefits associated with research and development and orphan drug tax credit generations and foreign derived intangible income deductions. The effective tax rate for the three and six months ended June 30, 2023 decreased as compared to that for the prior year periods due to a greater tax benefit recognized in 2023 associated with research and development and orphan drug tax credit generations. The balance of our unrecognized tax benefits (including penalties and interest) decreased marginally during the six months ended June 30, 2023. This movement was primarily driven by additions to current and prior period tax positions of $4.2 million, as well as $2.8 million of interest and penalties, offset by reductions related to prior period tax positions of $7.1 million. We accrue interest and penalties related to unrecognized tax benefits as a component of its provision for income taxes. In August 2022, the Inflation Reduction Act of 2022 (“IRA”) was enacted into law. The IRA includes a 15% corporate alternative minimum tax and a 1% excise tax on share repurchases. We do not expect the IRA to have a material impact on our consolidated financial statements. |
Net Income Per Share
Net Income Per Share | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | Note 12. Net Income Per Share Net income per share was calculated as follows for the periods indicated below: Three Months Ended Six Months Ended 2023 2022 2023 2022 Basic net income $ 203,548 $ 161,432 $ 225,251 $ 199,424 Weighted average common shares outstanding 223,248 221,660 223,104 221,493 Basic net income per share $ 0.91 $ 0.73 $ 1.01 $ 0.90 Diluted net income $ 203,548 $ 161,432 $ 225,251 $ 199,424 Weighted average common shares outstanding 223,248 221,660 223,104 221,493 Dilutive stock options and awards 2,401 2,001 2,437 1,784 Weighted average shares used to compute diluted net income per share 225,649 223,661 225,541 223,277 Diluted net income per share $ 0.90 $ 0.72 $ 1.00 $ 0.89 The potential common shares that were excluded from the diluted net income per share computation are as follows: Three Months Ended Six Months Ended 2023 2022 2023 2022 Outstanding stock options and awards 12,806,418 10,767,335 10,781,677 10,901,507 |
Employee Benefit Plans
Employee Benefit Plans | 6 Months Ended |
Jun. 30, 2023 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | Note 13. Employee Benefit Plans Defined Contribution Plans We have a defined contribution plan qualified under Section 401(k) of the Internal Revenue Code covering all U.S. employees and defined contribution plans for other Incyte employees in Europe and Japan. Employees may contribute a portion of their compensation, which is then matched by us, subject to certain limitations. Defined contribution expense for the three and six months ended June 30, 2023 was $4.0 million and $9.6 million, respectively. Defined contribution expense for the three and six months ended June 30, 2022 was $4.7 million and $9.6 million, respectively. Defined Benefit Pension Plans We have defined benefit pension plans for our employees in Europe which provide benefits to employees upon retirement, death or disability. The assets of the pension plans are held in collective investment accounts represented by the cash surrender value of an insurance policy and are classified as Level 2 within the fair value hierarchy. The net periodic benefit cost was as follows (in thousands): Three Months Ended Six Months Ended 2023 2022 2023 2022 Service cost $ 1,733 $ 2,438 $ 3,821 $ 4,960 Interest cost 44 62 661 126 Expected return on plan assets (736) (1,035) (2,276) (2,106) Amortization of prior service cost 276 193 379 387 Amortization of actuarial losses (90) 89 — 177 Net periodic benefit cost $ 1,227 $ 1,747 $ 2,585 $ 3,544 Interest income and other, net |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 14. Commitments and Contingencies We have entered into the collaboration agreements described in Note 7, as well as various other collaboration agreements that are not individually, or in the aggregate, significant to our operating results or financial condition at this time. We may in the future seek to license additional rights relating to technologies or drug development candidates in connection with our drug discovery and development programs. Under these agreements, we may be required to pay upfront fees, milestone payments, and royalties on sales of future products. In the ordinary course of our business, we may become involved in lawsuits, proceedings, and other disputes, including commercial, intellectual property, regulatory, employment, and other matters. We record a reserve for these matters when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Pay vs Performance Disclosure | ||||||
Net Income (Loss) Attributable to Parent | $ 203,548 | $ 21,703 | $ 161,432 | $ 37,992 | $ 225,251 | $ 199,424 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended | 6 Months Ended |
Jun. 30, 2023 shares | Jun. 30, 2023 shares | |
Trading Arrangements, by Individual | ||
Non-Rule 10b5-1 Arrangement Adopted | false | |
Rule 10b5-1 Arrangement Terminated | false | |
Non-Rule 10b5-1 Arrangement Terminated | false | |
Steven Stein [Member] | ||
Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | Steven Stein, our Executive Vice President and Chief Medical Officer, adopted a trading plan on June 5, 2023 providing for the sale of up to an aggregate of 29,154 shares of our common stock until June 5, 2024. | |
Name | Steven Stein | |
Title | Executive Vice President and Chief Medical Officer | |
Rule 10b5-1 Arrangement Adopted | true | |
Adoption Date | June 5, 2023 | |
Aggregate Available | 29,154 | 29,154 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. The condensed consolidated balance sheet as of June 30, 2023, the condensed consolidated statements of operations, comprehensive income (loss), and stockholders’ equity for the three and six months ended June 30, 2023 and 2022, and the condensed consolidated statements of cash flows for the six months ended June 30, 2023 and 2022, are unaudited, but include all adjustments, consisting only of normal recurring adjustments, which we consider necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The condensed consolidated balance sheet at December 31, 2022 has been derived from our audited consolidated financial statements. Although we believe that the disclosures in these financial statements are adequate to make the information presented not misleading, certain information and footnote information normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. Results for any interim period are not necessarily indicative of results for any future interim period or for the entire year. The accompanying financial statements should be read in conjunction with the financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2022. |
Principles of Consolidation | Principles of Consolidation. The condensed consolidated financial statements include the accounts of Incyte Corporation and our wholly owned subsidiaries. All inter-company accounts, transactions, and profits have been eliminated in consolidation. |
Use of Estimates | Use of Estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. |
Other Intangible Assets, net | Other Intangible Assets, net. Other intangible assets, net consist of licensed intellectual property rights acquired in business combinations, which are reported at acquisition date fair value, less accumulated amortization, as well as milestone payments made to collaboration partners incurred at or after the product has obtained regulatory approval. Intangible assets with finite lives are amortized over their estimated useful lives using the straight-line method. Intangible assets with finite lives are tested for recoverability whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. |
Cost of Product Revenues | Cost of Product Revenues. Cost of product revenues includes all product related costs and royalties owed under our collaboration and license agreements, contingent on certain conditions. In addition, cost of product revenues includes the amortization of our licensed intellectual property for ICLUSIG and the amortization of capitalized milestone payments, using the straight-line method over the respective estimated useful lives, which range between approximately 11 to 14 years. Cost of product revenues also includes employee personnel costs, including stock compensation, for those employees dedicated to the production of our commercial products. |
Recent Accounting Pronouncements | Recent Accounting PronouncementsThere were no new accounting pronouncements issued nor adopted since our filing of the Annual Report on Form 10-K for the year ended December 31, 2022, which could have a significant effect on our condensed consolidated financial statements. |
Revenues (Tables)
Revenues (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of disaggregated revenue | Revenues are recognized under guidance within ASC 606, Revenue from Contracts with Customers . The following table presents our disaggregated revenue for the periods presented (in thousands): Three Months Ended Six Months Ended 2023 2022 2023 2022 JAKAFI revenues, net $ 682,384 $ 597,673 $ 1,262,353 $ 1,142,137 OPZELURA revenues, net 80,233 16,560 136,785 29,314 ICLUSIG revenues, net 29,087 26,224 56,772 52,293 PEMAZYRE revenues, net 21,572 18,983 44,047 37,015 MINJUVI revenues, net 13,159 4,411 19,715 8,913 ZYNYZ revenues, net 570 — 570 — Total product revenues, net 827,005 663,851 1,520,242 1,269,672 JAKAVI product royalty revenues 90,448 83,711 167,140 154,578 OLUMIANT product royalty revenues 32,009 30,254 66,164 78,318 TABRECTA product royalty revenues 4,799 3,581 8,976 7,064 PEMAZYRE product royalty revenues 349 — 761 — Total product royalty revenues 127,605 117,546 243,041 239,960 Milestone and contract revenues — 130,000 — 135,000 Total revenues $ 954,610 $ 911,397 $ 1,763,283 $ 1,644,632 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Summary of marketable securities portfolio | The following is a summary of our marketable security portfolio for the periods presented (in thousands): Amortized Net Estimated June 30, 2023 Debt securities (government) $ 294,371 $ (2,128) $ 292,243 December 31, 2022 Debt securities (government) $ 292,580 $ (5,037) $ 287,543 |
Schedule of fair value of assets measured on recurring basis | The following fair value hierarchy table presents information about each major category of our financial assets measured at fair value on a recurring basis (in thousands): Fair Value Measurement at Reporting Date Using: Quoted Prices in Significant Other Significant Balance as of Cash and cash equivalents $ 3,131,123 $ — $ — $ 3,131,123 Debt securities (government) — 292,243 — 292,243 Long term investments (Note 7) 170,316 — — 170,316 Total assets $ 3,301,439 $ 292,243 $ — $ 3,593,682 Fair Value Measurement at Reporting Date Using: Quoted Prices in Significant Other Significant Balance as of Cash and cash equivalents $ 2,951,422 $ — $ — $ 2,951,422 Debt securities (government) — 287,543 — 287,543 Long term investments (Note 7) 133,676 — — 133,676 Total assets $ 3,085,098 $ 287,543 $ — $ 3,372,641 |
Schedule of fair value of liabilities measured on recurring basis | The following fair value hierarchy table presents information about each major category of our financial liabilities measured at fair value on a recurring basis as (in thousands): Fair Value Measurement at Reporting Date Using: Quoted Prices in Significant Other Significant Balance as of Acquisition-related contingent consideration $ — $ — $ 217,000 $ 217,000 Total liabilities $ — $ — $ 217,000 $ 217,000 Fair Value Measurement at Reporting Date Using: Quoted Prices in Significant Other Significant Balance as of Acquisition-related contingent consideration $ — $ — $ 221,000 $ 221,000 Total liabilities $ — $ — $ 221,000 $ 221,000 |
Schedule of roll forward of Level 3 liabilities | The following is a rollforward of our Level 3 liabilities (in thousands): 2023 Balance at January 1, $ 221,000 Contingent consideration earned during the period but not yet paid (18,570) Change in fair value of contingent consideration 14,570 Balance at June 30, $ 217,000 |
Concentration of Credit Risk _2
Concentration of Credit Risk and Current Expected Credit Losses (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Risks and Uncertainties [Abstract] | |
Schedule of concentration of credit risk related to collaborative partners | The concentration of credit risk related to our JAKAFI, PEMAZYRE and OPZELURA product revenues is as follows: Percentage of Total Net Percentage of Total Net June 30, June 30, 2023 2022 2023 2022 Customer A 16 % 19 % 17 % 19 % Customer B 9 % 12 % 10 % 12 % Customer C 20 % 16 % 19 % 18 % Customer D 10 % 10 % 10 % 10 % Customer E 11 % 14 % 11 % 15 % |
Inventory (Tables)
Inventory (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | Our inventory balance consists of the following (in thousands): June 30, December 31, Raw materials $ 32,630 $ 31,874 Work-in-process 122,971 54,455 Finished goods 22,384 34,630 Total inventory $ 177,985 $ 120,959 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment, net | Property and equipment, net consists of the following (in thousands): June 30, December 31, Office equipment $ 23,182 $ 22,734 Laboratory equipment 202,929 192,141 Computer equipment 121,048 92,115 Land 10,581 10,429 Building and leasehold improvements 571,694 564,170 Operating lease right-of-use assets 24,528 23,311 Construction in progress 34,534 47,224 988,496 952,124 Less accumulated depreciation and amortization (239,144) (212,814) Property and equipment, net $ 749,352 $ 739,310 |
Accrued and Other Current Lia_2
Accrued and Other Current Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of accrued and other current liabilities | Accrued and other current liabilities consisted of the following (in thousands): June 30, December 31, Royalties $ 321,816 $ 263,466 Clinical related costs 137,780 130,570 Sales allowances 224,474 192,133 Sales and marketing 29,006 31,149 Construction in progress 4,420 3,493 Operating lease liabilities 7,084 8,195 Other current liabilities 86,272 72,047 Total accrued and other current liabilities $ 810,852 $ 701,053 |
Stock compensation (Tables)
Stock compensation (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of valuation assumptions used for valuation of fair value of stock compensation granted | We utilized the Black-Scholes valuation model for estimating the fair value of the stock compensation granted, with the following weighted-average assumptions: Employee Stock Options Employee Stock Purchase Plan For the Three Months Ended For the Six Months Ended For the Three Months Ended For the Six Months Ended June 30, June 30, 2023 2022 2023 2022 2023 2022 2023 2022 Average risk-free interest rates 3.88 % 3.04 % 3.76 % 1.67 % 4.87 % 2.92 % 4.27 % 2.77 % Average expected life (in years) 5.58 5.51 4.95 4.77 0.50 0.50 0.50 0.50 Volatility 29 % 33 % 32 % 37 % 27 % 39 % 23 % 28 % Weighted-average fair value (in dollars) $ 22.57 $ 26.35 $ 26.78 $ 25.30 $ 13.82 $ 14.91 $ 14.08 $ 14.53 |
Schedule of option activity under the 2010 Stock Plan | Option activity under our 2010 Stock Incentive Plan (the “2010 Stock Plan”) was as follows: Shares Subject to Shares Weighted Average Balance at December 31, 2022 12,650,359 $ 87.25 Options granted 702,470 $ 78.53 Options exercised (231,417) $ 67.05 Options cancelled (755,507) $ 94.07 Balance at June 30, 2023 12,365,905 $ 86.72 |
Schedule of RSU award and PSU activity under the 2010 Stock Plan | Restricted stock unit (“RSU”) and performance share (“PSU”) award activity under the 2010 Stock Plan was as follows: Shares Subject to Shares Grant Date Value Balance at December 31, 2022 5,187,592 $ 81.24 RSUs granted 829,206 $ 77.15 RSUs released (186,167) $ 77.96 RSUs cancelled (125,325) $ 80.67 PSUs cancelled (971) $ 106.47 Balance at June 30, 2023 5,704,335 $ 80.77 |
Summary of shares available for grant | The following table summarizes our shares available for grant under the 2010 Stock Plan. Each RSU and PSU grant reduces the available share pool by 2 shares. Shares Available Balance at December 31, 2022 5,056,370 Additional authorization 12,500,000 Options, RSUs and PSUs granted (2,360,882) Options, RSUs and PSUs cancelled 1,006,844 Balance at June 30, 2023 16,202,332 |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of effective income tax rate reconciliation | For the three and six months ended June 30, 2023 and 2022, we recorded the following provisions for income taxes and effective tax rates as compared to our income before provision for income taxes: Three Months Ended Six Months Ended 2023 2022 2023 2022 Income before provision for income taxes $ 277,604 $ 229,378 $ 329,460 $ 299,913 Provision for income taxes 74,056 67,946 104,209 100,489 Effective tax rate 26.7% 29.6% 31.6% 33.5% |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of calculation of net income (loss) per share | Net income per share was calculated as follows for the periods indicated below: Three Months Ended Six Months Ended 2023 2022 2023 2022 Basic net income $ 203,548 $ 161,432 $ 225,251 $ 199,424 Weighted average common shares outstanding 223,248 221,660 223,104 221,493 Basic net income per share $ 0.91 $ 0.73 $ 1.01 $ 0.90 Diluted net income $ 203,548 $ 161,432 $ 225,251 $ 199,424 Weighted average common shares outstanding 223,248 221,660 223,104 221,493 Dilutive stock options and awards 2,401 2,001 2,437 1,784 Weighted average shares used to compute diluted net income per share 225,649 223,661 225,541 223,277 Diluted net income per share $ 0.90 $ 0.72 $ 1.00 $ 0.89 |
Schedule of antidilutive securities excluded from the computation of earnings per share | The potential common shares that were excluded from the diluted net income per share computation are as follows: Three Months Ended Six Months Ended 2023 2022 2023 2022 Outstanding stock options and awards 12,806,418 10,767,335 10,781,677 10,901,507 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Retirement Benefits [Abstract] | |
Schedule of net periodic benefit cost | The net periodic benefit cost was as follows (in thousands): Three Months Ended Six Months Ended 2023 2022 2023 2022 Service cost $ 1,733 $ 2,438 $ 3,821 $ 4,960 Interest cost 44 62 661 126 Expected return on plan assets (736) (1,035) (2,276) (2,106) Amortization of prior service cost 276 193 379 387 Amortization of actuarial losses (90) 89 — 177 Net periodic benefit cost $ 1,227 $ 1,747 $ 2,585 $ 3,544 |
Organization and Business (Deta
Organization and Business (Details) | 6 Months Ended |
Jun. 30, 2023 segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of operating segments | 1 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - ICLUSIG | Jun. 30, 2023 |
Minimum | |
Property and equipment, net | |
Amortization period | 11 years |
Maximum | |
Property and equipment, net | |
Amortization period | 14 years |
Revenues (Details)
Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Revenues | ||||
Total revenues | $ 954,610 | $ 911,397 | $ 1,763,283 | $ 1,644,632 |
Product revenues, net | ||||
Revenues | ||||
Total revenues | 827,005 | 663,851 | 1,520,242 | 1,269,672 |
JAKAFI | ||||
Revenues | ||||
Total revenues | 682,384 | 597,673 | 1,262,353 | 1,142,137 |
OPZELURA | ||||
Revenues | ||||
Total revenues | 80,233 | 16,560 | 136,785 | 29,314 |
ICLUSIG | ||||
Revenues | ||||
Total revenues | 29,087 | 26,224 | 56,772 | 52,293 |
PEMAZYRE | ||||
Revenues | ||||
Total revenues | 21,572 | 18,983 | 44,047 | 37,015 |
MINJUVI | ||||
Revenues | ||||
Total revenues | 13,159 | 4,411 | 19,715 | 8,913 |
ZYNYZ | ||||
Revenues | ||||
Total revenues | 570 | 0 | 570 | 0 |
Product royalty revenues | ||||
Revenues | ||||
Total revenues | 127,605 | 117,546 | 243,041 | 239,960 |
JAKAVI Royalty Revenues | ||||
Revenues | ||||
Total revenues | 90,448 | 83,711 | 167,140 | 154,578 |
OLUMIANT Royalty Revenues | ||||
Revenues | ||||
Total revenues | 32,009 | 30,254 | 66,164 | 78,318 |
TABRECTA Royalty Revenues | ||||
Revenues | ||||
Total revenues | 4,799 | 3,581 | 8,976 | 7,064 |
PEMAZYRE Royalty Revenues | ||||
Revenues | ||||
Total revenues | 349 | 0 | 761 | 0 |
Milestone and contract revenues | ||||
Revenues | ||||
Total revenues | $ 0 | $ 130,000 | $ 0 | $ 135,000 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Marketable securities portfolio (Details) - Debt securities (government) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Dec. 31, 2022 | |
Summary of marketable security portfolio | ||
Amortized Cost | $ 294,371 | $ 292,580 |
Net Unrealized Losses | (2,128) | (5,037) |
Estimated Fair Value | $ 292,243 | $ 287,543 |
Minimum | ||
Summary of marketable security portfolio | ||
Contractual maturity dates | 12 months | |
Maximum | ||
Summary of marketable security portfolio | ||
Contractual maturity dates | 18 months |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Assets measured on a recurring basis (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 | |
Fair value of financial instruments | |||
Long term investments | $ 170,316 | $ 133,676 | [1] |
Fair Value, Recurring | Estimate of Fair Value Measurement | |||
Fair value of financial instruments | |||
Cash and cash equivalents | 3,131,123 | 2,951,422 | |
Debt securities (government) | 292,243 | 287,543 | |
Long term investments | 170,316 | 133,676 | |
Total assets | 3,593,682 | 3,372,641 | |
Fair Value, Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Fair value of financial instruments | |||
Cash and cash equivalents | 3,131,123 | 2,951,422 | |
Debt securities (government) | 0 | 0 | |
Long term investments | 170,316 | 133,676 | |
Total assets | 3,301,439 | 3,085,098 | |
Fair Value, Recurring | Significant Other Observable Inputs (Level 2) | |||
Fair value of financial instruments | |||
Cash and cash equivalents | 0 | 0 | |
Debt securities (government) | 292,243 | 287,543 | |
Long term investments | 0 | 0 | |
Total assets | 292,243 | 287,543 | |
Fair Value, Recurring | Significant Unobservable Inputs (Level 3) | |||
Fair value of financial instruments | |||
Cash and cash equivalents | 0 | 0 | |
Debt securities (government) | 0 | 0 | |
Long term investments | 0 | 0 | |
Total assets | $ 0 | $ 0 | |
[1]The condensed consolidated balance sheet at December 31, 2022 has been derived from the audited consolidated financial statements at that date. |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments - Liabilities measured on a recurring basis (Details) - Fair Value, Recurring - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Estimate of Fair Value Measurement | ||
Fair value of financial instruments | ||
Acquisition-related contingent consideration | $ 217,000 | $ 221,000 |
Total liabilities | 217,000 | 221,000 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair value of financial instruments | ||
Acquisition-related contingent consideration | 0 | 0 |
Total liabilities | 0 | 0 |
Significant Other Observable Inputs (Level 2) | ||
Fair value of financial instruments | ||
Acquisition-related contingent consideration | 0 | 0 |
Total liabilities | 0 | 0 |
Significant Unobservable Inputs (Level 3) | ||
Fair value of financial instruments | ||
Acquisition-related contingent consideration | 217,000 | 221,000 |
Total liabilities | $ 217,000 | $ 221,000 |
Fair Value of Financial Instr_6
Fair Value of Financial Instruments - Level 3 liabilities (Details) - Significant Unobservable Inputs (Level 3) - Estimate of Fair Value Measurement $ in Thousands | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Roll forward of Level 3 liabilities | |
Balance at the beginning of the period | $ 221,000 |
Contingent consideration earned during the period but not yet paid | (18,570) |
Change in fair value of contingent consideration | 14,570 |
Balance at the end of the period | $ 217,000 |
Fair Value of Financial Instr_7
Fair Value of Financial Instruments - Narrative (Details) - ARIAD $ in Millions | 6 Months Ended | 12 Months Ended | |
Jun. 01, 2016 | Jun. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Accrued and other current liabilities | |||
Fair value of financial instruments | |||
Contingent consideration earned during the period but not yet paid | $ (18.6) | $ (9.3) | |
Liability | |||
Fair value of financial instruments | |||
Projected cash flows period | 18 years | ||
Liability | Measurement Input, Discount Rate | |||
Fair value of financial instruments | |||
Valuation input (as a percent) | 0.10 | 0.10 | 0.10 |
Concentration of Credit Risk _3
Concentration of Credit Risk and Current Expected Credit Losses (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Concentration of risk | |||||
Allowance for doubtful accounts | $ 0 | $ 0 | $ 0 | ||
Revenue, Product and Service Benchmark | Customer Concentration Risk | Customer A | |||||
Concentration of risk | |||||
Percentage of concentration risk | 16% | 19% | 17% | 19% | |
Revenue, Product and Service Benchmark | Customer Concentration Risk | Customer B | |||||
Concentration of risk | |||||
Percentage of concentration risk | 9% | 12% | 10% | 12% | |
Revenue, Product and Service Benchmark | Customer Concentration Risk | Customer C | |||||
Concentration of risk | |||||
Percentage of concentration risk | 20% | 16% | 19% | 18% | |
Revenue, Product and Service Benchmark | Customer Concentration Risk | Customer D | |||||
Concentration of risk | |||||
Percentage of concentration risk | 10% | 10% | 10% | 10% | |
Revenue, Product and Service Benchmark | Customer Concentration Risk | Customer E | |||||
Concentration of risk | |||||
Percentage of concentration risk | 11% | 14% | 11% | 15% | |
Accounts Receivable | Credit Concentration Risk | Collaboration Partner A, B, C and D | |||||
Concentration of risk | |||||
Percentage of concentration risk | 20% | 20% | |||
Accounts Receivable | Credit Concentration Risk | Customer A, B, C, D, and E | |||||
Concentration of risk | |||||
Percentage of concentration risk | 35% | 41% |
Inventory (Details)
Inventory (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2023 | Dec. 31, 2022 | ||
Raw materials | $ 32,630 | $ 31,874 | |
Work-in-process | 122,971 | 54,455 | |
Finished goods | 22,384 | 34,630 | |
Total inventory | 177,985 | 120,959 | |
Inventories - current | 35,937 | 41,995 | [1] |
Inventories-noncurrent | 142,048 | $ 78,964 | [1] |
Inventory incurred prior to FDA approval | $ 32,600 | ||
Minimum | |||
Period of lower average per unit cost of materials | 12 months | ||
Maximum | |||
Period of lower average per unit cost of materials | 18 months | ||
[1]The condensed consolidated balance sheet at December 31, 2022 has been derived from the audited consolidated financial statements at that date. |
License Agreements - Novartis (
License Agreements - Novartis (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 164 Months Ended | |||
Nov. 30, 2009 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Dec. 31, 2022 | |
License Agreements | |||||||
Total revenues | $ 954,610 | $ 911,397 | $ 1,763,283 | $ 1,644,632 | |||
Product royalty revenues | |||||||
License Agreements | |||||||
Total revenues | 127,605 | 117,546 | 243,041 | 239,960 | |||
JAKAFI | |||||||
License Agreements | |||||||
Total revenues | 682,384 | 597,673 | 1,262,353 | 1,142,137 | |||
Milestone and contract revenues | |||||||
License Agreements | |||||||
Total revenues | 0 | 130,000 | 0 | 135,000 | |||
Novartis | |||||||
License Agreements | |||||||
Royalties payable | 310,300 | 310,300 | $ 310,300 | $ 253,500 | |||
Novartis | JAKAVI | Non-US | |||||||
License Agreements | |||||||
Royalties payable on net sales | 90,400 | 83,700 | 167,100 | 154,600 | |||
Novartis | JAKAFI | UNITED STATES | |||||||
License Agreements | |||||||
Royalties payable on net sales | 33,500 | 29,300 | 56,900 | 51,000 | |||
Novartis | Milestone and contract revenues | |||||||
License Agreements | |||||||
Total revenues | 0 | 60,000 | 0 | 60,000 | |||
Novartis | TABRECTA PROD SERV | Non-US | |||||||
License Agreements | |||||||
Royalties payable on net sales | $ 4,800 | $ 3,600 | $ 9,000 | $ 7,100 | |||
Minimum | Novartis | JAKAVI | |||||||
License Agreements | |||||||
Royalty payments on future global net sales (as a percent) | 12% | ||||||
Maximum | Novartis | JAKAVI | |||||||
License Agreements | |||||||
Royalty payments on future global net sales (as a percent) | 14% | ||||||
Development Milestones | Novartis | |||||||
License Agreements | |||||||
Amount recognized and received for the achievement of a predefined milestone | 157,000 | ||||||
Development Milestones | Maximum | Novartis | |||||||
License Agreements | |||||||
Upfront and immediate milestone payment to be received under license agreement | $ 174,000 | ||||||
Regulatory Milestones | Novartis | |||||||
License Agreements | |||||||
Amount recognized and received for the achievement of a predefined milestone | 340,000 | ||||||
Regulatory Milestones | Maximum | Novartis | |||||||
License Agreements | |||||||
Upfront and immediate milestone payment to be received under license agreement | 495,000 | ||||||
Commercialization Milestones | Novartis | |||||||
License Agreements | |||||||
Amount recognized and received for the achievement of a predefined milestone | $ 200,000 | ||||||
Commercialization Milestones | Maximum | Novartis | |||||||
License Agreements | |||||||
Upfront and immediate milestone payment to be received under license agreement | 500,000 | ||||||
Development and Regulatory Milestones | Maximum | Novartis | |||||||
License Agreements | |||||||
Upfront and immediate milestone payment to be received under license agreement | $ 75,000 |
License Agreements - Lilly (Det
License Agreements - Lilly (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 163 Months Ended | |||||
Mar. 31, 2022 | May 31, 2019 | Dec. 31, 2009 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Mar. 31, 2016 | |
License Agreements | |||||||||
Total revenues | $ 954,610 | $ 911,397 | $ 1,763,283 | $ 1,644,632 | |||||
OLUMIANT Royalty Revenues | |||||||||
License Agreements | |||||||||
Total revenues | 32,009 | 30,254 | 66,164 | 78,318 | |||||
Eli Lilly | OLUMIANT | |||||||||
License Agreements | |||||||||
Total revenues | 0 | 70,000 | 0 | 70,000 | |||||
Eli Lilly | OLUMIANT Royalty Revenues | Non-US | |||||||||
License Agreements | |||||||||
Royalties payable on net sales | $ 32,000 | $ 30,300 | $ 66,200 | $ 78,300 | |||||
Development Milestones | Eli Lilly | |||||||||
License Agreements | |||||||||
Amount recognized and received for the achievement of a predefined milestone | $ 149,000 | ||||||||
Development Milestones | Maximum | Eli Lilly | |||||||||
License Agreements | |||||||||
Upfront and immediate milestone payment to be received under license agreement | $ 150,000 | ||||||||
Regulatory Milestones | Eli Lilly | |||||||||
License Agreements | |||||||||
Amount recognized and received for the achievement of a predefined milestone | 335,000 | ||||||||
Regulatory Milestones | Eli Lilly | GVHD | |||||||||
License Agreements | |||||||||
Milestone payment made under license agreement | $ 20,000 | ||||||||
Regulatory Milestones | Eli Lilly | GVHD | Europe | |||||||||
License Agreements | |||||||||
Milestone payment made under license agreement | $ 20,000 | ||||||||
Regulatory Milestones | Maximum | Eli Lilly | |||||||||
License Agreements | |||||||||
Upfront and immediate milestone payment to be received under license agreement | 365,000 | ||||||||
Regulatory Milestones | Maximum | Eli Lilly | GVHD | |||||||||
License Agreements | |||||||||
Additional milestone payments under the license agreement | $ 40,000 | ||||||||
Commercialization Milestones | Eli Lilly | |||||||||
License Agreements | |||||||||
Amount recognized and received for the achievement of a predefined milestone | $ 50,000 | ||||||||
Commercialization Milestones | Maximum | Eli Lilly | |||||||||
License Agreements | |||||||||
Upfront and immediate milestone payment to be received under license agreement | $ 150,000 |
License Agreements - Agenus (De
License Agreements - Agenus (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 102 Months Ended | |||||
Feb. 28, 2017 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | May 31, 2023 | Dec. 31, 2022 | ||
License Agreements | |||||||||
Fair market long term investments | $ 170,316 | $ 170,316 | $ 170,316 | $ 133,676 | [1] | ||||
Unrealized gain (loss) on long term investments | $ 41,811 | $ (24,897) | $ 36,493 | $ (71,482) | |||||
Agenus | |||||||||
License Agreements | |||||||||
Common stock held from investment (in shares) | 12,100,000 | 12,100,000 | 12,100,000 | ||||||
Fair market long term investments | $ 19,300 | $ 19,300 | $ 19,300 | $ 29,000 | |||||
Unrealized gain (loss) on long term investments | 900 | $ (6,300) | (9,700) | $ (15,400) | |||||
MiNK | |||||||||
License Agreements | |||||||||
Fair market long term investments | 400 | 400 | 400 | ||||||
Unrealized gain (loss) on long term investments | 200 | ||||||||
Shares acquired due to distribution of dividend (in shares) | 200,000 | ||||||||
Agenus | |||||||||
License Agreements | |||||||||
Period of notice for termination of license agreement | 12 months | ||||||||
Agenus | Development, Regulatory and Commercialization Milestones | |||||||||
License Agreements | |||||||||
Milestone payment made under license agreement | 30,000 | ||||||||
Additional milestone payments under the license agreement | $ 500,000 | $ 500,000 | $ 500,000 | ||||||
Royalty-bearing product other than GITR, OX40 and one undisclosed target | Minimum | Agenus | |||||||||
License Agreements | |||||||||
Royalty payments on future global net sales (as a percent) | 6% | ||||||||
Royalty-bearing product other than GITR, OX40 and one undisclosed target | Maximum | Agenus | |||||||||
License Agreements | |||||||||
Royalty payments on future global net sales (as a percent) | 12% | ||||||||
Royalty-bearing product GITR, OX40 and one undisclosed target | Maximum | Agenus | |||||||||
License Agreements | |||||||||
Royalty payments on future global net sales (as a percent) | 15% | ||||||||
[1]The condensed consolidated balance sheet at December 31, 2022 has been derived from the audited consolidated financial statements at that date. |
License Agreements - Merus (Det
License Agreements - Merus (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||||
Jan. 31, 2023 USD ($) | Jan. 31, 2022 item | Dec. 31, 2016 item | Jun. 30, 2023 USD ($) shares | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) shares | Jun. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
License Agreements | ||||||||
Unrealized gain (loss) on long term investments | $ 41,811 | $ (24,897) | $ 36,493 | $ (71,482) | ||||
Merus | ||||||||
License Agreements | ||||||||
Common stock held from investment (in shares) | shares | 3,600,000 | 3,600,000 | ||||||
Fair market value of our long term investments | $ 93,500 | $ 93,500 | $ 54,900 | |||||
Unrealized gain (loss) on long term investments | 28,200 | $ (13,500) | 38,600 | $ (32,500) | ||||
Merus | ||||||||
License Agreements | ||||||||
Number of independent programs | item | 10 | |||||||
Number of additional preclinical discovery programs | item | 10 | |||||||
Number of programs under the resulting products are co-funded for development | item | 2 | |||||||
Associated future global development costs , if elected to co-develop (as a percent) | 35% | |||||||
Milestone payment made under license agreement | $ 2,500 | $ 5,500 | ||||||
Merus | UNITED STATES | ||||||||
License Agreements | ||||||||
Profit sharing (as a percent) | 50% | |||||||
Percentage of profit (losses) | 50% | |||||||
Merus | Minimum | ||||||||
License Agreements | ||||||||
Royalty payments on future global net sales (as a percent) | 6% | |||||||
Merus | Minimum | Non-US | ||||||||
License Agreements | ||||||||
Royalty payments on future global net sales (as a percent) | 6% | |||||||
Merus | Maximum | ||||||||
License Agreements | ||||||||
Royalty payments on future global net sales (as a percent) | 10% | |||||||
Merus | Maximum | UNITED STATES | ||||||||
License Agreements | ||||||||
Royalty payments on future global net sales (as a percent) | 4% | |||||||
Merus | Maximum | Non-US | ||||||||
License Agreements | ||||||||
Royalty payments on future global net sales (as a percent) | 10% | |||||||
Merus | Development and Regulatory Milestones | Maximum | ||||||||
License Agreements | ||||||||
Additional milestone payments under the license agreement | 100,000 | $ 100,000 | ||||||
Merus | Commercialization Milestones | Maximum | ||||||||
License Agreements | ||||||||
Additional milestone payments under the license agreement | $ 250,000 | $ 250,000 |
License Agreements - MacroGenic
License Agreements - MacroGenics (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||
Mar. 31, 2023 | Jul. 31, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
License Agreements | |||||||
Research and development | $ 400,750 | $ 347,196 | $ 807,391 | $ 700,569 | |||
MacroGenics | |||||||
License Agreements | |||||||
Research and development | 12,100 | $ 14,800 | 29,900 | $ 28,300 | |||
MacroGenics | Accrued Liabilities | |||||||
License Agreements | |||||||
Accrued and other liabilities | 200 | $ 200 | $ 2,900 | ||||
MacroGenics | Minimum | |||||||
License Agreements | |||||||
Royalty payments on future global net sales (as a percent) | 15% | ||||||
MacroGenics | Maximum | |||||||
License Agreements | |||||||
Royalty payments on future global net sales (as a percent) | 24% | ||||||
Regulatory Milestone | MacroGenics | |||||||
License Agreements | |||||||
Milestone payment made under license agreement | $ 15,000 | ||||||
Milestone payment, estimated useful life | 13 years 6 months | ||||||
Development and Regulatory Milestones | MacroGenics | Maximum | |||||||
License Agreements | |||||||
Additional milestone payments under the license agreement | 320,000 | $ 320,000 | |||||
Development Milestones | MacroGenics | |||||||
License Agreements | |||||||
Milestone payment made under license agreement | $ 30,000 | ||||||
Developmental And Regulatory Milestones | MacroGenics | |||||||
License Agreements | |||||||
Milestone payment made under license agreement | 115,000 | ||||||
Commercialization Milestones | MacroGenics | Maximum | |||||||
License Agreements | |||||||
Additional milestone payments under the license agreement | $ 330,000 | $ 330,000 |
License Agreements - Syros (Det
License Agreements - Syros (Details) $ in Thousands, shares in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||
Jan. 31, 2018 USD ($) item | Jun. 30, 2023 USD ($) shares | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) shares | Jun. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | ||
License Agreements | |||||||
Fair market long term investments | $ 170,316 | $ 170,316 | $ 133,676 | [1] | |||
Unrealized gain (loss) on long term investments | $ 41,811 | $ (24,897) | $ 36,493 | $ (71,482) | |||
Syros Pharmaceuticals, Inc. | |||||||
License Agreements | |||||||
Common stock held from investment (in shares) | shares | 0.1 | 0.1 | |||||
Fair market long term investments | $ 300 | $ 300 | $ 300 | ||||
Unrealized gain (loss) on long term investments | $ 0 | $ (200) | $ (100) | $ (2,200) | |||
Syros Pharmaceuticals, Inc. | |||||||
License Agreements | |||||||
Number of program targets | item | 7 | ||||||
Syros Pharmaceuticals, Inc. | Maximum | |||||||
License Agreements | |||||||
Target selection and option exercise fee payment | $ 54,000 | ||||||
Syros Pharmaceuticals, Inc. | Maximum | Development and Regulatory Milestones | |||||||
License Agreements | |||||||
Additional milestone payments under the license agreement | 50,000 | ||||||
Syros Pharmaceuticals, Inc. | Maximum | Commercialization Milestones | |||||||
License Agreements | |||||||
Additional milestone payments under the license agreement | $ 65,000 | ||||||
[1]The condensed consolidated balance sheet at December 31, 2022 has been derived from the audited consolidated financial statements at that date. |
License Agreements - MorphoSys
License Agreements - MorphoSys (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2023 USD ($) shares | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) shares | Jun. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | Jan. 31, 2020 USD ($) | |
License Agreements | ||||||
Unrealized gain (loss) on long term investments | $ 41,811 | $ (24,897) | $ 36,493 | $ (71,482) | ||
(Profit) and loss sharing under collaboration agreements | (549) | 2,544 | (1,911) | 7,286 | ||
Research and development expense | $ 400,750 | 347,196 | $ 807,391 | 700,569 | ||
MorphoSys AG | ||||||
License Agreements | ||||||
Common stock held from investment (in shares) | shares | 3,600,000 | 3,600,000 | ||||
Share conversion | 0.25 | 0.25 | ||||
Fair market value of our long term investments | $ 27,100 | $ 27,100 | $ 13,000 | |||
Unrealized gain (loss) on long term investments | 12,700 | (7,100) | 14,100 | (16,700) | ||
MorphoSys AG | ||||||
License Agreements | ||||||
Research and development expense | 20,300 | 27,500 | 45,500 | 48,500 | ||
Accrued and other liabilities | 39,300 | $ 39,300 | $ 28,500 | |||
MorphoSys AG | UNITED STATES | ||||||
License Agreements | ||||||
Profit (loss) sharing ratio | 50% | |||||
MorphoSys AG | UNITED STATES | Tafasitamab Product and Service | ||||||
License Agreements | ||||||
(Profit) and loss sharing under collaboration agreements | $ (500) | $ 2,500 | $ (1,900) | $ 7,300 | ||
MorphoSys AG | Development and Regulatory Milestones | ||||||
License Agreements | ||||||
Milestone payment made under license agreement | $ 2,500 | |||||
MorphoSys AG | Development and Regulatory Milestones | Maximum | ||||||
License Agreements | ||||||
Additional milestone payments under the license agreement | $ 737,500 | |||||
MorphoSys AG | Commercialization Milestones | Maximum | ||||||
License Agreements | ||||||
Additional milestone payments under the license agreement | $ 315,000 | |||||
MorphoSys AG | MorphoSys AG | ||||||
License Agreements | ||||||
Funding of future development costs (as a percent) | 45% | |||||
MorphoSys AG | Incyte | ||||||
License Agreements | ||||||
Funding of future development costs (as a percent) | 55% |
License Agreements - Syndax (De
License Agreements - Syndax (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||||
Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | ||
License Agreements | ||||||||
Fair market long term investments | $ 170,316 | $ 170,316 | $ 133,676 | [1] | ||||
Unrealized gain (loss) on long term investments | 41,811 | $ (24,897) | 36,493 | $ (71,482) | ||||
Research and development | $ 400,750 | 347,196 | $ 807,391 | 700,569 | ||||
Investment in Syndax | ||||||||
License Agreements | ||||||||
Common stock held from investment (in shares) | 1,400,000 | 1,400,000 | ||||||
Fair market long term investments | $ 29,800 | $ 29,800 | $ 36,200 | |||||
Unrealized gain (loss) on long term investments | (200) | $ 2,700 | (6,400) | $ (3,800) | ||||
Syndax | ||||||||
License Agreements | ||||||||
Upfront payment under license agreement | $ 117,000 | |||||||
Research and development | 6,200 | 11,800 | ||||||
Syndax | Accrued Liabilities | ||||||||
License Agreements | ||||||||
Accrued and other liabilities | 4,400 | 4,400 | ||||||
Syndax | Development and Regulatory Milestones | Maximum | ||||||||
License Agreements | ||||||||
Additional milestone payments under the license agreement | 220,000 | 220,000 | ||||||
Syndax | Commercialization Milestones | Maximum | ||||||||
License Agreements | ||||||||
Additional milestone payments under the license agreement | $ 230,000 | $ 230,000 | ||||||
Syndax | Incyte | ||||||||
License Agreements | ||||||||
Funding of future development costs (as a percent) | 55% | |||||||
UNITED STATES | Syndax | Syndax | ||||||||
License Agreements | ||||||||
Funding of future development costs (as a percent) | 45% | |||||||
UNITED STATES | Syndax | Incyte | ||||||||
License Agreements | ||||||||
Funding of future development costs (as a percent) | 55% | |||||||
[1]The condensed consolidated balance sheet at December 31, 2022 has been derived from the audited consolidated financial statements at that date. |
Property and Equipment, net - P
Property and Equipment, net - Property and equipment, net (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 | |
Property and equipment, net | |||
Property and Equipment, gross | $ 988,496 | $ 952,124 | |
Less accumulated depreciation and amortization | (239,144) | (212,814) | |
Property and equipment, net | 749,352 | 739,310 | [1] |
Office equipment | |||
Property and equipment, net | |||
Property and Equipment, gross | 23,182 | 22,734 | |
Laboratory equipment | |||
Property and equipment, net | |||
Property and Equipment, gross | 202,929 | 192,141 | |
Computer equipment | |||
Property and equipment, net | |||
Property and Equipment, gross | 121,048 | 92,115 | |
Land | |||
Property and equipment, net | |||
Property and Equipment, gross | 10,581 | 10,429 | |
Building and leasehold improvements | |||
Property and equipment, net | |||
Property and Equipment, gross | 571,694 | 564,170 | |
Operating lease right-of-use assets | |||
Property and equipment, net | |||
Property and Equipment, gross | 24,528 | 23,311 | |
Construction in progress | |||
Property and equipment, net | |||
Property and Equipment, gross | $ 34,534 | $ 47,224 | |
[1]The condensed consolidated balance sheet at December 31, 2022 has been derived from the audited consolidated financial statements at that date. |
Accrued and Other Current Lia_3
Accrued and Other Current Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 | |
Accrued and Other Current Liabilities | |||
Royalties | $ 321,816 | $ 263,466 | |
Clinical related costs | 137,780 | 130,570 | |
Sales allowances | 224,474 | 192,133 | |
Sales and marketing | 29,006 | 31,149 | |
Construction in progress | 4,420 | 3,493 | |
Operating lease liabilities | 7,084 | 8,195 | |
Other current liabilities | 86,272 | 72,047 | |
Total accrued and other current liabilities | $ 810,852 | $ 701,053 | [1] |
[1]The condensed consolidated balance sheet at December 31, 2022 has been derived from the audited consolidated financial statements at that date. |
Stock Compensation - Narrative
Stock Compensation - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Stock compensation | ||||
Stock compensation expense | $ 54.5 | $ 46.5 | $ 107.9 | $ 90.3 |
Dividend yield (as a percent) | 0% | |||
Assumed annualized forfeiture rate (as a percent) | 5% | |||
Share-based Payment Arrangement, Option | ||||
Stock compensation | ||||
Stock option grant term | 10 years | |||
Vesting period | 4 years | |||
Percentage of units vesting at the end of each calendar year (as a percent) | 25% | |||
Unrecognized compensation cost for nonvested option (in dollars) | 34.5 | $ 34.5 | ||
Vesting period of recognition of the unrecognized compensation cost of nonvested awards | 1 year 1 month 6 days | |||
Share-based Payment Arrangement, Option | Share-based Payment Arrangement, Tranche One | ||||
Stock compensation | ||||
Vesting period | 1 year | |||
Share-based Payment Arrangement, Option | Share-based Payment Arrangement, Tranche Two | ||||
Stock compensation | ||||
Vesting period | 36 months | |||
Restricted Stock Units (RSUs) | ||||
Stock compensation | ||||
Vesting period | 4 years | |||
Percentage of units vesting at the end of each calendar year (as a percent) | 25% | |||
Number of shares awarded for each RSU (in shares) | 1 | |||
Unrecognized compensation cost for nonvested option (in dollars) | 175 | $ 175 | ||
Vesting period of recognition of the unrecognized compensation cost of nonvested awards | 1 year 7 months 6 days | |||
Performance Shares | ||||
Stock compensation | ||||
Stock compensation expense | 2.7 | 0.1 | $ 9.2 | 1.9 |
Unrecognized compensation cost for nonvested option (in dollars) | 28.2 | $ 28.2 | ||
Vesting period of recognition of the unrecognized compensation cost of nonvested awards | 1 year 4 months 24 days | |||
Performance Shares | Minimum | ||||
Stock compensation | ||||
Vesting period | 3 years | |||
Performance Shares | Maximum | ||||
Stock compensation | ||||
Vesting period | 4 years | |||
Research and Development Expense | ||||
Stock compensation | ||||
Stock compensation expense | 32.8 | 28.1 | $ 63.8 | 54.4 |
Selling, General and Administrative Expenses | ||||
Stock compensation | ||||
Stock compensation expense | 20.9 | 17.7 | 42.5 | 34.6 |
Cost of Sales | ||||
Stock compensation | ||||
Stock compensation expense | $ 0.8 | $ 0.7 | $ 1.6 | $ 1.3 |
Stock Compensation - Valuation
Stock Compensation - Valuation assumptions used for value of stock compensation granted (Details) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Employee Stock Purchase Plan | ||||
Weighted-average fair value assumptions | ||||
Average risk-free interest rates (as a percent) | 4.87% | 2.92% | 4.27% | 2.77% |
Average expected life (in years) | 6 months | 6 months | 6 months | 6 months |
Volatility (as a percent) | 27% | 39% | 23% | 28% |
Weighted-average fair value (in dollars per share) | $ 13.82 | $ 14.91 | $ 14.08 | $ 14.53 |
Employee Stock Option | ||||
Weighted-average fair value assumptions | ||||
Average risk-free interest rates (as a percent) | 3.88% | 3.04% | 3.76% | 1.67% |
Average expected life (in years) | 5 years 6 months 29 days | 5 years 6 months 3 days | 4 years 11 months 12 days | 4 years 9 months 7 days |
Volatility (as a percent) | 29% | 33% | 32% | 37% |
Weighted-average fair value (in dollars per share) | $ 22.57 | $ 26.35 | $ 26.78 | $ 25.30 |
Stock Compensation - Option act
Stock Compensation - Option activity under the 2010 stock plan (Details) - Share-based Payment Arrangement, Option | 6 Months Ended |
Jun. 30, 2023 $ / shares shares | |
Option Activity Shares | |
Outstanding at the beginning of the period (in shares) | shares | 12,650,359 |
Options granted (in shares) | shares | 702,470 |
Options exercised (in shares) | shares | (231,417) |
Options cancelled (in shares) | shares | (755,507) |
Outstanding at the end of the period (in shares) | shares | 12,365,905 |
Stock Options Weighted Average Price | |
Weighted average price of options at the beginning of the period (in USD per share) | $ / shares | $ 87.25 |
Granted (in USD per share) | $ / shares | 78.53 |
Exercised (in USD per share) | $ / shares | 67.05 |
Cancelled (in USD per share) | $ / shares | 94.07 |
Weighted average price of options at the end of the period (in USD per share) | $ / shares | $ 86.72 |
Stock Compensation - RSU award
Stock Compensation - RSU award and PSU activity under the 2010 stock plan (Details) | 6 Months Ended |
Jun. 30, 2023 $ / shares shares | |
RSU and PSU Activity Shares | |
Outstanding at the beginning of the period (in shares) | shares | 5,187,592 |
Outstanding at the end of the period (in shares) | shares | 5,704,335 |
RSU and PSU Grant Price | |
Grant date value of shares outstanding at the beginning of the period (in USD per share) | $ / shares | $ 81.24 |
Grant date value of shares at the end of the period (in USD per share) | $ / shares | $ 80.77 |
Restricted Stock Units (RSUs) | |
RSU and PSU Activity Shares | |
Granted (in shares) | shares | 829,206 |
Released (in shares) | shares | (186,167) |
Cancelled (in shares) | shares | (125,325) |
RSU and PSU Grant Price | |
Granted (in USD per share) | $ / shares | $ 77.15 |
Released (in USD per share) | $ / shares | 77.96 |
Cancelled (in USD per share) | $ / shares | $ 80.67 |
Performance Shares | |
RSU and PSU Activity Shares | |
Cancelled (in shares) | shares | (971) |
RSU and PSU Grant Price | |
Cancelled (in USD per share) | $ / shares | $ 106.47 |
Stock Compensation - Shares ava
Stock Compensation - Shares available for grant (Details) | 6 Months Ended |
Jun. 30, 2023 shares | |
Available Shares for Grant | |
Beginning Balance (in shares) | 5,056,370 |
Additional authorization (in shares) | 12,500,000 |
Options, RSUs and PSUs granted (in shares) | (2,360,882) |
Options, RSUs and PSUs cancelled (in shares) | 1,006,844 |
Ending Balance (in shares) | 16,202,332 |
Income Taxes - Provision for In
Income Taxes - Provision for Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income before provision for income taxes | $ 277,604 | $ 229,378 | $ 329,460 | $ 299,913 |
Provision for income taxes | $ 74,056 | $ 67,946 | $ 104,209 | $ 100,489 |
Effective tax rate | 26.70% | 29.60% | 31.60% | 33.50% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Income Tax Disclosure [Abstract] | |
Unrecognized tax benefits current and prior period tax positions | $ 4.2 |
Interest and penalties | 2.8 |
Reductions related to prior period tax positions | $ 7.1 |
Net Income Per Share - Net inco
Net Income Per Share - Net income (loss) per share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Basic Net Income (Loss) Per Share | ||||
Basic net income | $ 203,548 | $ 161,432 | $ 225,251 | $ 199,424 |
Weighted average common shares outstanding (in shares) | 223,248 | 221,660 | 223,104 | 221,493 |
Basic net income per share ( in USD per share) | $ 0.91 | $ 0.73 | $ 1.01 | $ 0.90 |
Diluted Net Income (Loss) Per Share | ||||
Diluted net income | $ 203,548 | $ 161,432 | $ 225,251 | $ 199,424 |
Weighted average common shares outstanding (in shares) | 223,248 | 221,660 | 223,104 | 221,493 |
Dilutive stock options and awards ( in shares) | 2,401 | 2,001 | 2,437 | 1,784 |
Weighted average shares used to compute diluted net income per share ( in shares) | 225,649 | 223,661 | 225,541 | 223,277 |
Diluted net income per share ( in USD per share) | $ 0.90 | $ 0.72 | $ 1 | $ 0.89 |
Net Income Per Share - Antidilu
Net Income Per Share - Antidilutive securities (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Share-Based Payment Arrangement | ||||
Anti-dilutive securities | ||||
Outstanding stock options and awards | 12,806,418 | 10,767,335 | 10,781,677 | 10,901,507 |
Employee Benefit Plans - Narrat
Employee Benefit Plans - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Retirement Benefits [Abstract] | ||||
Defined contribution expense | $ 4 | $ 4.7 | $ 9.6 | $ 9.6 |
Location of costs excluding the service component | Interest income and other, net | |||
Current year expected contributions total | $ 8 | $ 8 |
Employee Benefit plans - Net pe
Employee Benefit plans - Net periodic benefit cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Retirement Benefits [Abstract] | ||||
Service cost | $ 1,733 | $ 2,438 | $ 3,821 | $ 4,960 |
Interest cost | 44 | 62 | 661 | 126 |
Expected return on plan assets | (736) | (1,035) | (2,276) | (2,106) |
Amortization of prior service cost | 276 | 193 | 379 | 387 |
Amortization of actuarial losses | (90) | 89 | 0 | 177 |
Net periodic benefit cost | $ 1,227 | $ 1,747 | $ 2,585 | $ 3,544 |