Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2021 | Jul. 27, 2021 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2021 | |
Entity File Number | 001-12400 | |
Entity Registrant Name | INCYTE CORP | |
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, $.001 par value per share | |
Trading Symbol | INCY | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 220,835,269 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Entity Central Index Key | 0000879169 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 1,797,582 | $ 1,513,008 |
Marketable securities-available-for-sale (amortized cost $283,380 and $288,199 as of June 30, 2021 and December 31, 2020; allowance for credit losses $0 and $0 as of June 30, 2021 and December 31, 2020) | 283,385 | 288,369 |
Accounts receivable | 438,170 | 481,994 |
Inventory | 16,675 | 16,425 |
Prepaid expenses and other current assets | 84,248 | 60,098 |
Total current assets | 2,620,060 | 2,359,894 |
Restricted cash and investments | 1,679 | 1,757 |
Long term investments | 220,691 | 222,301 |
Inventory | 35,585 | 19,548 |
Property and equipment, net | 661,360 | 559,625 |
Finance lease right-of-use assets, net | 27,683 | 28,451 |
Other intangible assets, net | 161,523 | 172,291 |
Goodwill | 155,593 | 155,593 |
Other assets, net | 20,449 | 41,458 |
Total assets | 3,904,623 | 3,560,918 |
Current liabilities: | ||
Accounts payable | 122,100 | 98,767 |
Accrued compensation | 82,762 | 113,340 |
Accrued and other current liabilities | 413,067 | 378,404 |
Finance lease liabilities | 2,408 | 2,284 |
Acquisition-related contingent consideration | 39,987 | 38,400 |
Total current liabilities | 660,324 | 631,195 |
Acquisition-related contingent consideration | 219,013 | 227,600 |
Finance lease liabilities | 31,838 | 32,573 |
Other liabilities | 57,587 | 58,282 |
Total liabilities | 968,762 | 949,650 |
Commitments and contingencies (Note 15) | ||
Stockholders' equity: | ||
Preferred stock, $0.001 par value; 5,000,000 shares authorized; none issued or outstanding as of June 30, 2021 and December 31, 2020 | ||
Common stock, $0.001 par value; 400,000,000 shares authorized; 220,424,569 and 219,489,329 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively | 220 | 219 |
Additional paid-in capital | 4,477,378 | 4,352,864 |
Accumulated other comprehensive loss | (18,273) | (15,360) |
Accumulated deficit | (1,523,464) | (1,726,455) |
Total stockholders' equity | 2,935,861 | 2,611,268 |
Total liabilities and stockholders' equity | $ 3,904,623 | $ 3,560,918 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Marketable securities-amortized cost | $ 283,380 | $ 288,199 |
Marketable securities-allowance for credit losses | $ 0 | $ 0 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 400,000,000 | 400,000,000 |
Common stock, shares issued | 220,424,569 | 219,489,329 |
Common stock, shares outstanding | 220,424,569 | 219,489,329 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Revenues: | ||||
Total revenues | $ 705,709 | $ 688,043 | $ 1,310,427 | $ 1,256,550 |
Costs and expenses: | ||||
Cost of product revenues (including definite-lived intangible amortization) | 38,028 | 33,364 | 67,248 | 60,683 |
Research and development | 343,511 | 286,601 | 650,407 | 1,371,888 |
Selling, general and administrative | 168,859 | 117,998 | 322,654 | 229,146 |
Change in fair value of acquisition-related contingent consideration | 4,632 | 6,054 | 10,158 | 12,681 |
Collaboration loss sharing | 9,843 | 13,253 | 20,327 | 15,383 |
Total costs and expenses | 564,873 | 457,270 | 1,070,794 | 1,689,781 |
Income (loss) from operations | 140,836 | 230,773 | 239,633 | (433,231) |
Other income (expense), net | 4,390 | 4,817 | 2,983 | 13,479 |
Interest expense | (358) | (600) | (717) | (1,202) |
Unrealized gain (loss) on long term investments | 26,765 | 72,274 | (944) | 24,142 |
Income (loss) before provision for income taxes | 171,633 | 307,264 | 240,955 | (396,812) |
Provision for income taxes | 22,177 | 16,966 | 37,964 | 33,532 |
Net income (loss) | $ 149,456 | $ 290,298 | $ 202,991 | $ (430,344) |
Net income (loss) per share: | ||||
Basic | $ 0.68 | $ 1.33 | $ 0.92 | $ (1.98) |
Diluted | $ 0.67 | $ 1.32 | $ 0.91 | $ (1.98) |
Shares used in computing net income (loss) per share: | ||||
Basic | 220,083 | 217,549 | 219,942 | 217,135 |
Diluted | 222,250 | 220,434 | 222,061 | 217,135 |
Product revenues, net | ||||
Revenues: | ||||
Total revenues | $ 575,150 | $ 500,290 | $ 1,079,961 | $ 987,017 |
Product royalty revenues | ||||
Revenues: | ||||
Total revenues | 120,559 | 92,753 | 220,466 | 174,533 |
Milestone revenues | ||||
Revenues: | ||||
Total revenues | $ 10,000 | $ 95,000 | $ 10,000 | $ 95,000 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Net income (loss) | $ 149,456 | $ 290,298 | $ 202,991 | $ (430,344) |
Other comprehensive Income (loss): | ||||
Foreign currency translation | 1,876 | 993 | (3,432) | 2,553 |
Unrealized (loss) gain on marketable securities, net of tax | (133) | (529) | (165) | 125 |
Defined benefit pension obligations, net of tax | 342 | 220 | 684 | 441 |
Other comprehensive income (loss) | 2,085 | 684 | (2,913) | 3,119 |
Comprehensive income (loss) | $ 151,541 | $ 290,982 | $ 200,078 | $ (427,225) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total |
Balances at Dec. 31, 2019 | $ 216 | $ 4,044,490 | $ (15,542) | $ (1,430,758) | $ 2,598,406 |
Increase (Decrease) in Stockholders' Equity | |||||
Issuance of shares of Common Stock upon exercise of stock options and settlement of employee restricted stock units | 1 | 14,618 | 14,619 | ||
Issuance of shares of Common Stock for services rendered | 145 | 145 | |||
Stock compensation | 42,758 | 42,758 | |||
Other comprehensive income (loss) | 2,435 | 2,435 | |||
Net income (loss) | (720,642) | (720,642) | |||
Balances at Mar. 31, 2020 | 217 | 4,102,011 | (13,107) | (2,151,400) | 1,937,721 |
Balances at Dec. 31, 2019 | 216 | 4,044,490 | (15,542) | (1,430,758) | 2,598,406 |
Increase (Decrease) in Stockholders' Equity | |||||
Other comprehensive income (loss) | 3,119 | ||||
Net income (loss) | (430,344) | ||||
Balances at Jun. 30, 2020 | 218 | 4,217,911 | (12,423) | (1,861,102) | 2,344,604 |
Balances at Mar. 31, 2020 | 217 | 4,102,011 | (13,107) | (2,151,400) | 1,937,721 |
Increase (Decrease) in Stockholders' Equity | |||||
Issuance of shares of Common Stock upon exercise of stock options and settlement of employee restricted stock units and shares of Common Stock under the ESPP | 1 | 69,193 | 69,194 | ||
Issuance of shares of Common Stock for services rendered | 139 | 139 | |||
Issuance of shares of Common Stock upon conversion of Convertible Senior Notes | 162 | 162 | |||
Stock compensation | 46,406 | 46,406 | |||
Other comprehensive income (loss) | 684 | 684 | |||
Net income (loss) | 290,298 | 290,298 | |||
Balances at Jun. 30, 2020 | 218 | 4,217,911 | (12,423) | (1,861,102) | 2,344,604 |
Balances at Dec. 31, 2020 | 219 | 4,352,864 | (15,360) | (1,726,455) | 2,611,268 |
Increase (Decrease) in Stockholders' Equity | |||||
Issuance of shares of Common Stock upon exercise of stock options and settlement of employee restricted stock units | 1 | 20,027 | 20,028 | ||
Issuance of shares of Common Stock for services rendered | 108 | 108 | |||
Stock compensation | 47,903 | 47,903 | |||
Other comprehensive income (loss) | (4,998) | (4,998) | |||
Net income (loss) | 53,535 | 53,535 | |||
Balances at Mar. 31, 2021 | 220 | 4,420,902 | (20,358) | (1,672,920) | 2,727,844 |
Balances at Dec. 31, 2020 | 219 | 4,352,864 | (15,360) | (1,726,455) | 2,611,268 |
Increase (Decrease) in Stockholders' Equity | |||||
Other comprehensive income (loss) | (2,913) | ||||
Net income (loss) | 202,991 | ||||
Balances at Jun. 30, 2021 | 220 | 4,477,378 | (18,273) | (1,523,464) | 2,935,861 |
Balances at Mar. 31, 2021 | 220 | 4,420,902 | (20,358) | (1,672,920) | 2,727,844 |
Increase (Decrease) in Stockholders' Equity | |||||
Issuance of shares of Common Stock upon exercise of stock options and settlement of employee restricted stock units and shares of Common Stock under the ESPP | 11,016 | 11,016 | |||
Issuance of shares of Common Stock for services rendered | 109 | 109 | |||
Stock compensation | 45,351 | 45,351 | |||
Other comprehensive income (loss) | 2,085 | 2,085 | |||
Net income (loss) | 149,456 | 149,456 | |||
Balances at Jun. 30, 2021 | $ 220 | $ 4,477,378 | $ (18,273) | $ (1,523,464) | $ 2,935,861 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - shares | 3 Months Ended | |||
Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2020 | Mar. 31, 2020 | |
Issuance of shares of Common Stock upon exercise of stock options and restricted stock units | 390,001 | 389,512 | 936,688 | 772,538 |
Issuance of shares of Common Stock under the ESPP | 153,082 | 175,615 | ||
Issuance of shares of Common Stock for services rendered | 1,288 | 1,357 | 1,403 | 1,957 |
Convertible Senior Notes 1.25 Percent Due 2020 | ||||
Issuance of shares of Common Stock upon conversion of convertible senior notes | 3,187 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 202,991 | $ (430,344) |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 28,295 | 25,692 |
Stock-based compensation | 92,090 | 88,816 |
Deferred income taxes | (160) | |
Other, net | 3,214 | 8,567 |
Unrealized loss (gain) on long term investments | 944 | (24,142) |
Change in fair value of acquisition-related contingent consideration | 10,158 | 12,681 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 43,824 | (119,724) |
Prepaid expenses and other assets | (2,981) | (11,663) |
Inventory | (16,287) | (9,384) |
Accounts payable | 23,333 | 7,262 |
Accrued and other liabilities | (6,382) | 38,204 |
Net cash provided by (used in) operating activities | 379,039 | (414,035) |
Cash flows from investing activities: | ||
Purchase of long term investments | (8,662) | (95,468) |
Sale of long term investments | 9,328 | 4,536 |
Capital expenditures | (114,390) | (83,125) |
Purchases of marketable securities | (102,288) | (287,419) |
Sale and maturities of marketable securities | 107,114 | 309,658 |
Net cash (used in) investing activities | (108,898) | (151,818) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock under stock plans | 31,044 | 83,813 |
Payment of finance lease liabilities | (1,173) | (387) |
Payment of contingent consideration | (13,357) | (24,520) |
Net cash provided by financing activities | 16,514 | 58,906 |
Effect of exchange rates on cash, cash equivalents, restricted cash and investments | (2,159) | 2,553 |
Net increase (decrease) in cash, cash equivalents, restricted cash and investments | 284,496 | (504,394) |
Cash, cash equivalents, restricted cash and investments at beginning of period | 1,514,765 | 1,833,707 |
Cash, cash equivalents, restricted cash and investments at end of period | 1,799,261 | 1,329,313 |
Supplemental Schedule of Cash Flow Information | ||
Interest paid | 119 | |
Income taxes paid | 35,996 | 24,165 |
Reclassification to common stock and additional paid in capital in connection with conversion/exchange of debt instruments | 162 | |
Unpaid purchases of property and equipment | 30,823 | 14,817 |
Leased assets obtained in exchange for new operating lease liabilities | 7,217 | 8,720 |
Leased assets obtained in exchange for new finance lease liabilities | $ 408 | $ 529 |
CONDENSED CONSOLIDATED STATEM_6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) | Dec. 31, 2020 |
Convertible Senior Notes 1.25 Percent Due 2020 | |
Interest rate of debt (as a percent) | 1.25% |
Organization and business
Organization and business | 6 Months Ended |
Jun. 30, 2021 | |
Organization and business | |
Organization and business | 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) and MONJUVI® (tafasitamab-cxix), which is co-commercialized. Our operations are treated as one operating segment. |
Summary of significant accounti
Summary of significant accounting policies | 6 Months Ended |
Jun. 30, 2021 | |
Summary of significant accounting policies | |
Summary of significant accounting policies | 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, 2021, the condensed consolidated statements of operations, comprehensive income (loss), and stockholders’ equity for the three and six months ended June 30, 2021 and 2020, and the condensed consolidated statements of cash flows for the six months ended June 30, 2021 and 2020 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, 2020 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, 2020. Principles of Consolidation. Foreign Currency Translation Use of Estimates. Concentrations of Credit Risk. approximates the carrying value based on available market information. By policy, we invest our excess available funds primarily in U.S. government debt securities which are securities issued or guaranteed by the U.S. government and money market funds that meet certain guidelines, which limits exposure to potential credit losses. Our receivables mainly relate to our product sales and collaborative agreements with pharmaceutical companies. We have not experienced any significant credit losses on cash, cash equivalents, marketable securities, or trade receivables to date and do not require collateral on receivables. Current Expected Credit Losses. Cash and Cash Equivalents. Marketable Securities—Available-for-Sale. Accounts Receivable. Inventory. We began capitalizing PEMAZYRE inventory after FDA approval in April 2020 as the related costs were expected to be recoverable through the commercialization of the product. Costs incurred prior to FDA approval have been recorded as research and development expense in our statements of operations. As a result, cost of product revenues for the next 33 months will reflect a lower average per unit cost of materials. JAKAFI, ICLUSIG PEMAZYRE Variable Interest Entities Long Term Investments. In assessing whether we exercise significant influence over any of the companies in which we hold equity investments, we consider the nature and magnitude of our investment, any voting and protective rights we hold, any participation in the governance of the other company, and other relevant factors such as the presence of a collaboration or other business relationship. Currently, none of our equity investments in publicly-held companies are considered relationships in which we are able to assert control. Property and Equipment, net. Lease Accounting. Other Intangible Assets, net. Impairment of Long-Lived Assets. Goodwill. for impairment at the reporting unit level at least annually as of October 1 or when a triggering event occurs that could indicate a potential impairment by assessing qualitative factors or performing a quantitative analysis in determining whether it is more likely than not that the fair value of net assets are below their carrying amounts. A reporting unit is the same as, or one level below, an operating segment. Our operations are currently comprised of a single, entity wide reporting unit. We completed our most recent annual impairment assessment as of October 1, 2020 and determined that the carrying value of our goodwill was not impaired. Income Taxes. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. We recognize the tax benefit from an uncertain tax position only if it is more-likely-than-not that the position will be sustained upon examination by the taxing authorities, including resolutions of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit that is recorded for these positions is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. We adjust the level of the liability to reflect any subsequent changes in the relevant facts surrounding the uncertain positions. Any interest and penalties on uncertain tax positions are included within the tax provision. The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law in March 2020 to provide an estimated $2.2 trillion designed to stimulate the U.S. economy during the COVID-19 pandemic. The Act includes tax relief, government loans, grants and investments for entities in affected industries, which has related accounting and financial reporting impacts. Disclosure for certain income tax accounting measures are required in the period of enactment and disclosure for government loans, investments, grants, and revenue recognition are required in future periods as federal agencies establish rules and procedures to implement the CARES Act. During 2020, we delayed the payment of certain employer payroll tax amounts to future periods as allowed under the Act. We do not expect the CARES Act to have a material impact on our overall financial results, our income tax provision or our liquidity. We have further described the impact and risks of the COVID-19 pandemic on our business in Item 1. Business and in Item 1A. Risk Factors. Net Income (Loss) Per Share. Accumulated Other Comprehensive Income (Loss). Revenue Recognition. in time. We also assess collectability based primarily on the customer’s payment history and on the creditworthiness of the customer. Product Revenues Our product revenues consist of sales of JAKAFI and PEMAZYRE in the U.S., sales of PEMAZYRE and ICLUSIG in Europe, and sales of PEMAZYRE in Japan. Product revenues are recognized once we satisfy the performance obligation at a point in time under the revenue recognition criteria as described above. We sell JAKAFI and PEMAZYRE to our customers in the U.S., which include specialty pharmacies and wholesalers. We sell PEMAZYRE and ICLUSIG to our customers in the European Union and certain other jurisdictions, which include retail pharmacies, hospital pharmacies and distributors. We sell PEMAZYRE in Japan to an exclusive wholesaler. We recognize revenues for product received by our customers net of allowances for customer credits, including estimated rebates, chargebacks, discounts, returns, distribution service fees, patient assistance programs, and government rebates, such as Medicare Part D coverage gap reimbursements in the U.S. Product shipping and handling costs are included in cost of product revenues. Customer Credits: Rebates and Discounts: Chargebacks: Medicare Part D Coverage Gap: Co-payment Assistance: Product Royalty Revenues Royalty revenues on commercial sales for ruxolitinib (marketed as JAKAVI ® Milestone and Contract Revenues For each collaborative research, development and/or commercialization agreement that results in revenue under the guidance of ASC 606, Revenue from Contracts with Customers, we identify all material performance obligations, which may include the license to intellectual property and know-how, research and development activities and/or other activities. In order to determine the transaction price, in addition to any upfront payment, we estimate the amount of variable consideration, including milestone payments, at the outset of the contract utilizing the most likely amount method. The most likely amount method is used since the milestone payments have a binary outcome (i.e., we receive all or none of the milestone payment). We constrain the estimate of variable consideration such that it is probable that a significant reversal of previously recognized revenue will not occur. When determining if variable consideration should be constrained, management considers whether there are factors outside the Company’s control that could result in a significant reversal of revenue. In making these assessments, management considers the likelihood and magnitude of a potential reversal of revenue. These estimates are re-assessed each reporting period as required. Once the estimated transaction price is established, amounts are allocated to the performance obligations that have been identified. The transaction price is generally allocated to each separate performance obligation on a relative standalone selling price basis. Out-licensing arrangements contain the right to use functional intellectual property, which is the underlying performance obligation of these collaborative arrangements. If the license of our intellectual property is determined to be distinct from other performance obligations in the arrangement, the functional intellectual property that is transferred to the collaborative partner at the onset of the arrangement is concluded to have significant standalone functionality and value at the point in time at which the intellectual property is made available to the collaborative partner. For licenses that are not distinct from other obligations identified in the arrangement, we utilize judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time. If the combined performance obligation is satisfied over time, we apply an appropriate method of measuring progress for purposes of recognizing revenue from nonrefundable, upfront license fees. We evaluate the measure of progress each reporting period and, if necessary, adjust the measure of performance and related revenue recognition. For the three and six months ended June 30, 2021 and 2020, we had no revenues from intellectual property licenses recognized over time. For milestone revenues related to sales-based achievements, we recognize the milestone revenues in the corresponding period of the product sale, in accordance with the guidance of ASC 606-10-55-65 for contracts that include a license to intellectual property and the license is the predominant item to which the product sale relates. Subsequent to the transfer of the intellectual property, we may earn milestones through achievement of pre-specified developmental or regulatory events and, as such, milestones are accounted for as variable consideration. We include developmental or regulatory milestones in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the milestone is subsequently resolved. Under the agreements currently in place, we do not consider these events to be within our control, but rather dependent upon the development activities of our collaborative partners and the decisions made by regulatory agencies. Accordingly, these milestones are not included in the transaction price until the counterparty, or third-party in the event of a regulatory submission, confirms the satisfaction or completion of the milestone triggering event. Given the high level of uncertainty of achievement, variable consideration associated with milestones are fully constrained until confirmation of the satisfaction or completion of the milestone by the third-party. Generally, the milestone events contained in our collaboration agreements coincide with the progression of our drugs from development, to regulatory approval and then to commercialization. The value of these milestones is dictated within the contract and is fixed upon achievement and reflects the amount of consideration which we expect to be entitled to in exchange for the satisfaction of that milestone. The process of successfully discovering a new development candidate, having it approved and successfully commercialized is highly uncertain. As such, the milestone payments we may earn from our partners involve a significant degree of risk to achieve and therefore, subsequent milestone payments due to Incyte are recognized as revenue at the point in time when such milestones are achieved. Our collaboration agreements may also include an option for the collaborative partner to elect to participate in research and development activities, such as shared participation in additional clinical trials using the compound. The presence of additional options for future participatory activities are assessed to determine if they represent material rights offered by us to the collaborative partner. We also determine whether the reimbursement of research and development expenses should be accounted for as collaborative revenues or an offset to research and development expenses in accordance with the provisions of gross or net revenue presentation and recognize the corresponding revenues or records the corresponding offset to research and development expenses as incurred. Our collaborative agreements may also include provisions for additional future collaborative efforts, such as options for shared commercialization staffing or licensing of additional molecules, involvement in joint committees, or options for inclusion in negotiations of future supply rights, which at the time of each collaborative agreement’s inception, are assessed to determine if these meet the definition of a performance obligation under ASC 606. Cost of Product Revenues Cost of product revenues includes all JAKAFI, ICLUSIG and PEMAZYRE related product costs. In addition, cost of product revenues include low single-digit royalties under our collaboration and license agreement to Novartis on all future sales of JAKAFI in the United States and the amortization of our licensed intellectual property for ICLUSIG using the straight-line method over the estimated useful life of 12.5 years from the date of acquisition on June 1, 2016 of all of the outstanding shares of ARIAD Pharmaceuticals (Luxembourg) S.à.r.l. (since renamed Incyte Biosciences Luxembourg S.à.r.l.) from ARIAD Pharmaceuticals, Inc. (“ARIAD”). Cost of product revenues also includes employee personnel costs, including stock compensation, for those employees dedicated to the production of our commercial products. Research and Development Costs. We often contract with contract research organizations (“CROs”) to facilitate, coordinate and perform agreed upon research and development of a new drug. To ensure that research and development costs are expensed as incurred, we record monthly accruals for clinical trials and preclinical testing costs based on the work performed under the contract. These CRO contracts typically call for the payment of fees for services at the initiation of the contract and/or upon the achievement of certain clinical trial milestones. In the event that we prepay CRO fees, we record the prepayment as a prepaid asset and amortize the asset into research and development expense over the period of time the contracted research and development services are performed. Most professional fees, including project and clinical management, data management, monitoring, and medical writing fees are incurred throughout the contract period. These professional fees are expensed based on their percentage of completion at a particular date. Our CRO contracts generally include pass through fees. Pass through fees include, but are not limited to, regulatory expenses, investigator fees, travel costs, and other miscellaneous costs, including shipping and printing fees. We expense the costs of pass through fees under our CRO contracts as they are incurred, based on the best information available to us at the time. The estimates of the pass through fees incurred are based on the amount of work completed for the clinical trial and are monitored through correspondence with the CROs, internal reviews and a review of contractual terms. The factors utilized to derive the estimates include the number of patients enrolled, duration of the clinical trial, estimated patient attrition, screening rate and length of the dosing regimen. CRO fees incurred to set up the clinical trial are expensed during the setup period. Under our clinical trial collaboration agreements we may be reimbursed for certain development costs incurred. Such costs are recorded as a reduction of research and development expense in the period in which the related expense is incurred. Stock Compensation. Advertising Expenses. Long Term Incentive Plans. Acquisition-Related Contingent Consideration. Collaboration loss sharing. sharing represents our 50% share of the United States loss for commercialization of MONJUVI (tafasitamab) under our agreement with MorphoSys. Recent Accounting Pronouncements In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” This guidance applies to all entities and aims to reduce the complexity of tax accounting standards while enhancing reporting disclosures. This guidance is effective for fiscal years beginning after December 15, 2020 and interim periods therein. We adopted this guidance for the period beginning January 1, 2021. Upon adoption, ASU No. 2019-12 had an immaterial impact on the condensed consolidated financial statements. |
Revenues
Revenues | 6 Months Ended |
Jun. 30, 2021 | |
Revenues | |
Revenues | 3. Revenues As discussed in Note 2, revenues are recognized under guidance within ASC 606. The following table presents our disaggregated revenue for the periods presented (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020 JAKAFI revenues, net $ 529,055 $ 473,706 $ 994,765 $ 933,185 ICLUSIG revenues, net 28,189 22,798 53,834 50,046 PEMAZYRE revenues, net 17,906 3,786 31,362 3,786 Total product revenues, net 575,150 500,290 1,079,961 987,017 JAKAVI product royalty revenues 82,038 66,217 147,640 122,550 OLUMIANT product royalty revenues 36,045 25,830 68,303 51,277 TABRECTA product royalty revenues 2,476 706 4,523 706 Total product royalty revenues 120,559 92,753 220,466 174,533 Milestone and contract revenues 10,000 95,000 10,000 95,000 Total revenues $ 705,709 $ 688,043 $ 1,310,427 $ 1,256,550 For further information on our revenue-generating contracts, |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 6 Months Ended |
Jun. 30, 2021 | |
Fair Value of Financial Instruments | |
Fair Value of Financial Instruments | 4. Fair value of financial instruments 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, 2021 and December 31, 2020, 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, 2021. 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 Active Markets for Observable Unobservable Identical Assets Inputs Inputs Balance as of (Level 1) (Level 2) (Level 3) June 30, 2021 Cash and cash equivalents $ 1,797,582 $ — $ — $ 1,797,582 Debt securities (government) — 283,385 — 283,385 Long term investments (Note 9) 220,691 — — 220,691 Total assets $ 2,018,273 $ 283,385 $ — $ 2,301,658 Fair Value Measurement at Reporting Date Using: Quoted Prices in Significant Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs Balance as of (Level 1) (Level 2) (Level 3) December 31, 2020 Cash and cash equivalents $ 1,513,008 $ — $ — $ 1,513,008 Debt securities (government) — 288,369 — 288,369 Long term investments (Note 9) 222,301 — — 222,301 Total assets $ 1,735,309 $ 288,369 $ — $ 2,023,678 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 Active Markets for Observable Unobservable Identical Liabilities Inputs Inputs Balance as of (Level 1) (Level 2) (Level 3) June 30, 2021 Acquisition-related contingent consideration $ — $ — $ 259,000 $ 259,000 Total liabilities $ — $ — $ 259,000 $ 259,000 Fair Value Measurement at Reporting Date Using: Quoted Prices in Significant Other Significant Active Markets for Observable Unobservable Identical Liabilities Inputs Inputs Balance as of (Level 1) (Level 2) (Level 3) December 31, 2020 Acquisition-related contingent consideration $ — $ — $ 266,000 $ 266,000 Total liabilities $ — $ — $ 266,000 $ 266,000 The following is a rollforward of our Level 3 liabilities (in thousands): 2021 Balance at January 1, $ 266,000 Contingent consideration earned during the period but not yet paid (8,632) Payments made during the period (8,526) Change in fair value of contingent consideration 10,158 Balance at June 30, $ 259,000 The fair value of the contingent consideration was determined on the date of acquisition, June 1, 2016, using an income approach based on estimated ICLUSIG revenues 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, 2021 included a weighted average cost of capital of 10% and updated projections of future ICLUSIG revenues in the European Union and other countries for the approved third line treatment. The change in fair value of the contingent consideration during the three and six months ended June 30, 2021 was due primarily to the passage of time as there were no other significant changes in the key assumptions during the period. We make payments to Takeda quarterly based on the royalties or any additional milestone payments earned in the previous quarter. At June 30, 2021 and December 31, 2020, contingent consideration earned but not yet paid was $8.6 million and $9.6 million, respectively, and was included in accrued and other current liabilities. The following is a summary of our marketable security portfolio for the periods presented (in thousands): Net Amortized Unrealized Estimated Cost Gains Fair Value June 30, 2021 Debt securities (government) $ 283,380 $ 5 $ 283,385 December 31, 2020 Debt securities (government) $ 288,199 $ 170 $ 288,369 Our available-for-sale debt securities generally have contractual maturity dates of between 12 |
Concentrations of Credit Risk a
Concentrations of Credit Risk and Current Expected Credit Losses | 6 Months Ended |
Jun. 30, 2021 | |
Concentrations of Credit Risk and Current Expected Credit Losses | |
Concentrations of Credit Risk and Current Expected Credit Losses | 5. Concentration of credit risk and current expected credit losses In November 2009, we entered into a collaboration and license agreement with Novartis. In December 2009, we entered into a license, development and commercialization agreement with Lilly. In December 2018, we entered into a research collaboration and licensing agreement with Innovent Biologics, Inc. (“Innovent”). In July 2019, we entered into a collaboration and license agreement with Zai Lab (Shanghai) Co., Ltd., a subsidiary of Zai Lab Limited (collectively, “Zai Lab”). The above collaboration partners comprised, in aggregate, 28% and 42% of the accounts receivable balance as of June 30, 2021 and December 31, 2020, respectively. For further information relating to these collaboration and license agreements, In November 2011, we began commercialization and distribution of JAKAFI, and in April 2020, we began commercialization and distribution of PEMAZYRE to a number of customers. Our product revenues are concentrated in a number of these customers. The concentration of credit risk related to our JAKAFI and PEMAZYRE product revenues is as follows: Percentage of Total Net Percentage of Total Net Product Revenues for the Product Revenues for the Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020 Customer A 19 % 20 % 18 % 19 % Customer B 13 % 14 % 13 % 13 % Customer C 18 % 16 % 18 % 17 % Customer D 10 % 11 % 10 % 11 % We are exposed to risks associated with extending credit to customers related to the sale of products. Customers A, B, C and D comprised, in aggregate, 34% and 29% of the accounts receivable balance as of June 30, 2021 and December 31, 2020, respectively. The concentration of credit risk relating to ICLUSIG product revenues or accounts receivable is not significant. We assessed our collaborative and customer receivable assets as of June 30, 2021 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. |
Inventory
Inventory | 6 Months Ended |
Jun. 30, 2021 | |
Inventory | |
Inventory | 6. Inventory Our inventory balance consists of the following (in thousands): June 30, December 31, 2021 2020 Raw materials $ 1,275 $ 1,275 Work-in-process 37,307 21,242 Finished goods 13,678 13,456 52,260 35,973 Inventories-current 16,675 16,425 Inventories-noncurrent $ 35,585 $ 19,548 Inventories, stated at the lower of cost and net realizable value, consist of raw materials, work in process and finished goods. At June 30, 2021, $16.7 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, 2021, $35.6 million of inventory was classified as noncurrent on the condensed consolidated balance sheets 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. |
Property and Equipment, net
Property and Equipment, net | 6 Months Ended |
Jun. 30, 2021 | |
Property and Equipment, net | |
Property and Equipment, net | 7. Property and equipment, net Property and equipment, net consists of the following (in thousands): June 30, December 31, 2021 2020 Office equipment $ 18,190 $ 17,880 Manufacturing and laboratory equipment 100,599 86,021 Computer equipment 69,863 66,640 Land 10,435 10,671 Building and leasehold improvements 263,010 238,042 Operating lease right-of-use assets 26,953 26,816 Construction in progress 331,569 257,929 820,619 703,999 Less accumulated depreciation and amortization (159,259) (144,374) Property and equipment, net $ 661,360 $ 559,625 In March 2017, we acquired additional adjacent buildings to our global headquarters in Wilmington, Delaware and in 2019, began demolition of these buildings and construction of a new laboratory and office building totaling approximately 200,000 square feet. As of June 30, 2021, we have capitalized approximately $125.6 million in on site preparation, design and construction costs and currently expect the building to be completed in the first half of 2022. In February 2018, we signed an agreement to rent a building in Morges, Switzerland for an initial term of 15 years plus one year of free rent, with multiple options to extend for an additional 20 years. The building serves as our European headquarters and consists of approximately 100,000 square feet of office space. This building allowed for consolidation of our European operations that were located in Geneva and Lausanne, Switzerland. In June 2019, we obtained control of the Morges building to begin our construction activity, which was completed in 2020. At that time, we determined the lease to be a finance lease and recorded a lease liability of $31.1 million and a finance lease right-of-use asset of $29.1 million, net of a lease incentive from our landlord of $2.0 million. At March 31, 2021, we capitalized approximately $19.1 million in leasehold improvements. In July 2018, we signed an agreement to purchase land located in Yverdon, Switzerland. The land was purchased, in cash, for approximately $4.8 million. Upon this parcel, we are constructing a large molecule production facility. Construction activity commenced in July 2018 and as of June 30, 2021, we have capitalized approximately $188.8 million in costs for construction, ground preparation and architectural and engineering studies. We currently expect the facility will be operational in the first half of 2022. We are the lessee of several contracts, including those to secure fleet vehicles, buildings and equipment. Our lease agreements do not contain any material residual value guarantees or restrictive covenants. Some of our building leases include options to renew and the exercise of these options is at our discretion. Our current operating lease liabilities are reflected in accrued and other current liabilities and our noncurrent operating lease liabilities are reflected in other liabilities on the condensed consolidated balance sheets and are as follows (in thousands): June 30, December 31, 2021 2020 Current Operating lease liabilities $ 10,995 $ 12,674 Finance lease liabilities 2,408 2,284 Noncurrent Operating lease liabilities 15,501 14,188 Finance lease liabilities 31,838 32,573 Total lease liabilities $ 60,742 $ 61,719 The cash paid for amounts included in the measurement of our operating lease liabilities for the six months ended June 30, 2021 and 2020 was $6.9 million and $5.9 million, respectively, in operating cash flows. The cash paid for amounts included in the measurement of our finance lease liabilities for the six months ended June 30, 2021 and 2020 was $1.2 million and $0.4 million, respectively, in financing cash flows. As of June 30, 2021, our finance and operating leases had a weighted average lease term of approximately 13.8 and 4.7 years, respectively. The discount rate of our leases is an approximation of an estimated incremental borrowing rate and is dependent upon the term and economics of each agreement. The weighted average discount rate of our finance and operating leases is approximately 3.9% and 6.7%, respectively. For the three and six months ended June 30, 2021, we incurred approximately $3.7 million and $7.2 million, respectively, of expense related to our operating leases, approximately $0.7 million and $1.3 million, respectively, of amortization on our finance lease right-of-use assets and approximately $0.3 million and $0.6 million, respectively, of interest expense on our finance lease liabilities. For the three and six months ended June 30, 2020, we incurred approximately $2.9 million and $6.1 million, respectively, of expense related to our operating leases, approximately $0.7 million and $1.3 million, respectively, of amortization on our finance lease right-of-use assets and approximately $0.3 million and $0.6 million, respectively, of interest expense on our finance lease liabilities. For the three and six months ended June 30, 2021 and 2020, the cost of our short term leases with a term less than 12 months was de minimis. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 6 Months Ended |
Jun. 30, 2021 | |
Intangible Assets and Goodwill | |
Intangible Assets and Goodwill | 8. Intangible assets and goodwill Intangible Assets, Net The components of intangible assets were as follows (in thousands, except for useful life): Balance at June 30, 2021 Balance at December 31, 2020 Weighted- Gross Net Gross Net Average Useful Carrying Accumulated Carrying Carrying Accumulated Carrying Lives (Years) Amount Amortization Amount Amount Amortization Amount Finite-lived intangible assets: Licensed IP 12.5 $ 271,000 $ 109,477 $ 161,523 $ 271,000 $ 98,709 $ 172,291 Estimated aggregate amortization expense based on the current carrying value of amortizable intangible assets is as follows (in thousands): Remainder of 2021 2022 2023 2024 2025 Thereafter Amortization expense $ 10,770 $ 21,536 $ 21,536 $ 21,536 $ 21,536 $ 64,609 Goodwill There were no changes to the carrying amount of goodwill for the six months ended June 30, 2021. |
License agreements
License agreements | 6 Months Ended |
Jun. 30, 2021 | |
License Agreements | |
License agreements | 9. 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 received an upfront payment and immediate milestone payment totaling $210.0 million and were initially eligible to receive up to $1.2 billion in milestone payments across multiple indications upon the achievement of pre-specified events, including 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 April 2016, we amended this agreement to provide that Novartis has exclusive research, development and commercialization rights outside of the United States to ruxolitinib (excluding topical formulations) in the graft-versus-host-disease (“GVHD”) field. We became eligible to receive up to $75.0 million of additional potential development and regulatory milestones relating to GVHD. Exclusive of the upfront payment of $150.0 million received in 2009 and the immediate milestone of $60.0 million earned in 2010, we have recognized and received, in the aggregate, $157.0 million for the achievement of development milestones, $280.0 million for the achievement of regulatory milestones and $200.0 million for the achievement of sales milestones through June 30, 2021. We recognize development and regulatory milestones upon confirmation of achievement of the event, as development and regulatory approvals are events not controllable by us but rather development activities of Novartis and decisions made by regulatory agencies. We recognize sales milestones in the corresponding period of the product sale upon confirmation of net sales milestone threshold achievement by Novartis. In May 2020, we recognized a $25.0 million development milestone and a $45.0 million regulatory milestone for the FDA approval of capmatinib as TABRECTA for the treatment of adult patients with metastatic non-small cell lung cancer (NSCLC) whose tumors have a mutation that leads to MET exon 14 skipping (METex14) as detected by an FDA-approved test. In June 2020, we recognized a $20.0 million regulatory milestone for the Japanese Ministry of Health, Labour and Welfare approval of TABRECTA for METex14 mutation-positive advanced and/or recurrent unresectable non-small cell lung cancer. 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%. Since the achievement of the $60.0 million regulatory milestone related to reimbursement of JAKAVI in Europe in September 2014, we are obligated to pay to Novartis tiered royalties in the low single-digits on future JAKAFI net sales within the United States. During the three and six months ended June 30, 2021, such royalties payable to Novartis on net sales within the United States totaled $25.9 million and $43.7 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, 2020, such royalties payable to Novartis on net sales within the United States totaled $23.2 million and $40.7 million, respectively, and were reflected in cost of product revenues on the condensed consolidated statements of operations. At June 30, 2021 and December 31, 2020, $118.6 million and $96.4 million, respectively, of accrued royalties payable to Novartis were included in accrued and other current liabilities on the condensed consolidated balance sheets. 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. The Novartis agreement will continue on a program-by-program basis until Novartis has no royalty payment obligations with respect to such program or, if earlier, the termination of the agreement or any program in accordance with the terms of the agreement. Royalties are payable by Novartis on a product-by-product and country-by-country basis until the latest to occur of (i) the expiration of the last valid claim of the licensed patent rights covering the licensed product in the relevant country, (ii) the expiration of regulatory exclusivity for the licensed product in such country and (iii) a specified period from first commercial sale in such country of the licensed product by Novartis or its affiliates or sublicensees. The agreement may be terminated in its entirety or on a program-by-program basis by Novartis for convenience. The agreement may also be terminated by either party under certain other circumstances, including material breach. Reimbursable costs incurred after the effective date of the agreement with Novartis are recorded net against the related research and development expenses. Research and development expenses for the three and six months ended June 30, 2021 were net of $0.0 million and $0.1 million, respectively, of costs reimbursed by Novartis. Research and development expenses for the three and six months ended June 30, 2020 were net of $0.0 million and $0.3 million, respectively, of costs reimbursed by Novartis. At June 30, 2021 and December 31, 2020, $0.1 million and $0.2 million, respectively, of reimbursable costs were included in accounts receivable on the condensed consolidated balance sheets. Milestone and contract revenue under the Novartis agreement for the three and six months ended June 30, 2021 was $0.0 million. Milestone and contract revenue under the Novartis agreement for the three and six months ended June 30, 2020 was $90.0 million. Product royalty revenue related to Novartis net sales of JAKAVI outside of the United States for the three and six months ended June 30, 2021 was $82.0 million and $147.6 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, 2020 was $66.2 million and $122.6 million, respectively. Product royalty revenue related to Novartis net sales of TABRECTA worldwide for the three and six months ended June 30, 2021 was $2.5 million and $4.5 million, respectively. Product royalty revenue related to Novartis net sales of TABRECTA worldwide for the three and six months ended June 30, 2020 was $0.7 million. 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. We received an upfront payment of $90.0 million, and were initially eligible to receive up to $665.0 million in substantive milestone payments across multiple indications upon the achievement of pre-specified events, including 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. Exclusive of the upfront payment of $90.0 million received in 2009, we have recognized and received, in aggregate, $149.0 million for the achievement of development milestones and $265.0 million for the achievement of regulatory milestones through June 30, 2021. We recognize development and regulatory milestones upon confirmation of achievement of the event, as development and regulatory approvals are events not controllable by us but rather development activities of Lilly and decisions made by regulatory agencies. We recognize sales milestones in the corresponding period of the product sale upon confirmation of net sales milestone threshold achievement by Lilly. In January 2016, Lilly submitted an NDA to the FDA and a Marketing Authorization Application (MAA) to the European Medicines Agency for baricitinib as treatment for rheumatoid arthritis. In February 2017, we and Lilly announced that the European Commission approved baricitinib as OLUMIANT for the treatment of moderate-to-severe rheumatoid arthritis in adult patients who have responded inadequately to, or who are intolerant to, one or more disease-modifying antirheumatic drugs. In July 2017, Japan's Ministry of Health, Labor and Welfare granted marketing approval for OLUMIANT In June 2018, the FDA approved the 2mg dose of OLUMIANT for the treatment of adults with moderately-to-severely active rheumatoid arthritis who have had an inadequate response to one or more tumor necrosis factor inhibitor therapies. In October 2020, Lilly announced that the European Commission approved baricitinib as OLUMIANT for the treatment of moderate-to-severe atopic dermatitis in adult patients who are candidates for systemic therapy. We retained options to co-develop our JAK1/JAK2 inhibitors with Lilly on a compound-by-compound and indication-by-indication basis. Lilly is responsible for all costs relating to the development and commercialization of the compounds unless we elect to co-develop any compounds or indications. If we elect to co-develop any compounds and/or indications, we would be responsible for funding 30% of the associated future global development costs from the initiation of a Phase IIb trial through regulatory approval, including post-launch studies required by a regulatory authority. We would receive an incremental royalty rate increase across all tiers resulting in effective royalty rates ranging up to the high twenties on potential future global net sales for compounds and/or indications that we elect to co-develop. For indications that we elect not to co-develop, we would receive tiered, double-digit royalty payments on future global net sales with rates ranging up to 20% if the product is successfully commercialized. If we have started co-development funding for any indication, we can at any time opt out and stop future co-development cost sharing. If we elect to do this we would still be eligible for our base royalties plus an incremental pro-rated royalty commensurate with our contribution to the total co-development cost for those indications for which we co-funded. We previously had retained an option to co-promote products in the United States but, in March 2016, we waived our co-promotion option as part of an amendment to the agreement. In July 2010, we elected to co-develop baricitinib with Lilly in rheumatoid arthritis and became responsible for funding 30% of the associated future global development costs for this indication from the initiation of the Phase IIb trial through regulatory approval, including post-launch studies required by a regulatory authority. We subsequently elected to co-develop baricitinib with Lilly in psoriatic arthritis, atopic dermatitis, alopecia areata, systemic lupus erythematosus and axial spondyloarthritis and were responsible for funding 30% of future global development costs for those indications through regulatory approval, including post-launch studies required by a regulatory authority. In April 2019, we elected to end additional co-funding of the development of baricitinib effective as of January 1, 2019. We will continue to receive royalties on global net sales of OLUMIANT, pursuant to the terms in the Lilly agreement, as described above. 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. The Lilly agreement will continue until Lilly no longer has any royalty payment obligations or, if earlier, the termination of the agreement in accordance with its terms. Royalties are payable by Lilly on a product-by-product and country-by-country basis until the latest to occur of (i) the expiration of the last valid claim of the licensed patent rights covering the licensed product in the relevant country, (ii) the expiration of regulatory exclusivity for the licensed product in such country and (iii) a specified period from first commercial sale in such country of the licensed product by Lilly or its affiliates or sublicensees. The agreement may be terminated by Lilly for convenience, and may also be terminated under certain other circumstances, including material breach. Milestone and contract revenue under the Lilly agreement for the three and six months ended June 30, 2021 and 2020 was $0.0 million. Product royalty revenue related to Lilly global net sales of OLUMIANT for the three and six months ended June 30, 2021 was $36.0 million and $68.3 million, respectively. Product royalty revenue related to Lilly global net sales of OLUMIANT for the three and six months ended June 30, 2020 was $25.8 million and $51.3 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. Upon execution of the amendment, we paid Lilly an upfront payment of $35.0 million and Lilly is 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. 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, the parties have agreed to collaborate on the discovery of novel immuno-therapeutics using Agenus’ antibody discovery platforms. The agreement became effective on February 18, 2015, upon the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. Upon closing of the agreement, we paid Agenus total consideration of $60.0 million. In February 2017, we and Agenus amended this agreement (the “Amended Agreement”). 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. In addition to the initial four program targets, we and Agenus have the option to jointly nominate and pursue additional targets within the framework of the collaboration, and in November 2015, three more targets were added. 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. The programs relating to GITR and OX40 and two of the undisclosed targets were profit-share programs until February 2017, while the other targets currently under collaboration are royalty-bearing programs. The Amended Agreement converted the programs relating to GITR and OX40 to royalty-bearing programs and removed from the collaboration the profit-share programs relating to the two undisclosed targets, with one reverting to us and one reverting to Agenus. Should any of those removed programs be successfully developed by a party, the other party will be eligible to receive the same milestone payments as the royalty-bearing programs and royalties at a 15% rate on global net sales. There are currently no profit-share programs. For each royalty-bearing product other than GITR and OX40, Agenus will be eligible to receive tiered royalties on global net sales ranging from 6% to 12%. For GITR and OX40, Agenus will be eligible to receive 15% royalties on global net sales. In 2017 under the Amended Agreement, we paid Agenus $20.0 million in accelerated milestones relating to the clinical development of the GITR and OX40 programs. As of March 31, 2021, we have paid Agenus additional milestones totaling $10.0 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. 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. In connection with the Amended Agreement, we also agreed to purchase 10.0 million shares of Agenus Inc. common stock for an aggregate purchase price of $60.0 million in cash, or $6.00 per share. We completed the purchase of the shares on February 14, 2017, when the closing price on The Nasdaq Stock Market for Agenus Inc. shares was $4.40 per share. The shares we acquired were not registered under the Securities Act of 1933 on the purchase date and were subject to certain security specific restrictions for a period of time, and accordingly, we estimated a discount for lack of marketability on the shares on the issuance date of $4.5 million, which resulted in a net fair value of the shares on the issuance date of $39.5 million. Therefore, of the total consideration paid of $60.0 million, $39.5 million was allocated to our stock purchase in Agenus Inc. and was recorded within long term investments and $20.5 million was allocated to research and development expense. We concluded Agenus Inc. is not a VIE because it has sufficient equity to finance its activities without additional subordinated financial support and its at-risk equity holders have the characteristics of a controlling financial interest. After completion of our stock purchases from Agenus Inc., we held an approximate ownership interest of 18% and, under circumstances present at that time, concluded that we had the ability to exercise significant influence, but not control, over Agenus Inc., primarily due to the level of intra-entity transactions between us and Agenus related to development expenses, as well as other qualitative factors. In the second quarter of 2020, we sold an aggregate of approximately 1.2 million shares of Agenus Inc. common stock. The sales transactions were priced at market, with per share pricing ranging from $3.57 to $4.21, resulting in gross proceeds of approximately $4.5 million. In the third quarter of 2020, we sold an aggregate of approximately 2.5 million shares of Agenus Inc. common stock. The sales transactions were priced at market, with per share pricing ranging from $4.28 to $5.25, resulting in gross proceeds of approximately $12.7 million. In the first quarter of 2021, we sold approximately 0.2 million shares of Agenus Inc. common stock priced at market at $5.45, resulting in gross proceeds of approximately $1.1 million. In the second quarter of 2021, we sold approximately 1.6 million shares of Agenus Inc. common stock priced at market, with per share pricing ranging from $4.59 to $5.41, resulting in gross proceeds of approximately $8.2 million. As of June 30, 2021, we owned approximately 6% of the outstanding shares of Agenus Inc. common stock. As a result of having a less than 10% ownership interest and the recent diversification of Agenus Inc.’s development pipeline with other collaboration partners, we concluded that we no longer have significant influence over Agenus Inc. As such, we no longer account for our equity investment in Agenus Inc. as an equity method investment previously accounted for under the fair value option. We account for our investment in Agenus Inc. at fair value, whereby the investment is marked to market through earnings in each reporting period. For the three and six months ended June 30, 2021, we recorded an unrealized gain of $37.8 million and $31.9 million, respectively, based on the change in fair value of Agenus Inc.’s common stock during these periods. For the three and six months ended June 30, 2020, we recorded an unrealized gain of $26.2 million and an unrealized loss of $2.7 million, respectively, based on the change in fair value of Agenus Inc.’s common stock during these periods. The fair market value of our long term investment in Agenus Inc. at June 30, 2021 and December 31, 2020 was $67.3 million and $44.7 million, respectively. Research and development expenses for the three and six months ended June 30, 2021 also included $0.2 million and $0.7 million, respectively, of development costs incurred pursuant to the Agenus arrangement. Research and development expenses for the three and six months ended June 30, 2020 also included $0.2 million and $0.3 million, respectively, of development costs incurred pursuant to the Agenus arrangement. At June 30, 2021 and December 31, 2020, a total of $0.6 million and $0.5 million, respectively, of such costs were included in accrued and other liabilities on the condensed consolidated balance sheets. Merus In December 2016, we entered into a Collaboration and License Agreement with Merus N.V. (“Merus”). Under this agreement, which became effective in January 2017, 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 eleven independent programs. The most advanced collaboration program is MCLA-145, a bispecific antibody targeting PD-L1 and CD137, for which we received exclusive development and commercialization rights outside of the United States. Merus retained exclusive development and commercialization rights in the United States to MCLA-145. Each party will share equally the costs of mutually agreed global development activities for MCLA-145, and fund itself any independent development activities in its territory. Merus will be responsible for commercializing MCLA-145 in the United States and we will be responsible for commercializing it outside of the United States. In addition to receiving rights to MCLA-145 outside of the United States, we received 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. In 2017, we paid Merus an upfront non-refundable payment of $120.0 million. For each program as to which Merus does not have commercialization or development co-funding rights, Merus will be 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 will be 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. For MCLA-145, we and Merus will each be eligible to receive tiered royalties on net sales in the other party’s territory at rates ranging from 6% to 10%. The Merus agreement will continue on a program-by-program basis until we have no royalty payment obligations with respect to such program or, if earlier, the termination of the agreement or any program in accordance with the terms of the agreement. The agreement may be terminated in its entirety or on a program-by-program basis by us for convenience. The agreement may also be terminated by either party under certain other circumstances, including material breach, as set forth in the agreement. If the agreement is terminated with respect to one or more programs, all rights in the terminated programs revert to Merus, subject to payment to us of a reverse royalty of up to 4% on sales of future products, if Merus elects to pursue development and commercialization of products arising from the terminated programs. In addition, in December 2016, we entered into a Share Subscription Agreement with Merus, pursuant to which we agreed to purchase 3.2 million common shares of Merus for an aggregate purchase price of $80.0 million in cash, or $25.00 per share. We completed the purchase of the shares on January 23, 2017 when the closing price on The Nasdaq Stock Market for Merus shares was $24.50 per share. The shares we acquired were not registered under the Securities Act of 1933 on the purchase date and were subject to certain security specific restrictions for a period of time, and accordingly, we estimated a discount for lack of marketability on the shares on the issuance date of $5.6 million, which resulted in a net fair value of the shares on the issuance date of $72.8 million. Of the total consideration paid of $80.0 million, $72.8 million was allocated to our stock purchase in Merus and was recorded as a long term investment and $7.2 million was allocated to research and development expense. In January 2021, we purchased 350,000 common shares in Merus’ underwritten public offering of 4,848,485 common shares at the public offering price of $24.75 per share, or an aggregate purchase price of $8.7 million. The fair market value of our total long term investment in Merus at June 30, 2021 and December 31, 2020 was $74.8 million and $56.1 million, respectively. We concluded Merus is not a VIE because it has sufficient equity to finance its activities without additional subordinated financial support and its at-risk equity holders have the characteristics of a controlling financial interest. As of June 30, 2021, we owned approximately 9% of the outstanding common shares of Merus and conclude that we have the ability to exercise significant influence, but not control, over Merus based primarily on our ownership interest, the level of intra-entity transactions between us and Merus related to development expenses, as well as other qualitative factors. We have elected the fair value option to account for our long term investment in Merus whereby the investment is marked to market through earnings in each reporting period. We believe the fair value option to be the most appropriate accounting method to account for securities in publicly held collaborators for which we have significant influence. For the three and six months ended June 30, 2021, we recorded an unrealized gain of $0.6 million and $10.0 million, respectively, based on the change in fair value of Merus’ common shares during these periods. For the three and six months ended June 30, 2020, we recorded an unrealized gain of $12.7 million and $6.4 million, respectively, based on the change in fair value of Merus’ common shares during these periods. Research and development expenses for the three and six months ended June 30, 2021 included $5.5 million and $7.8 million, respectively, of additional development costs incurred pursuant to the Merus agreement. Research and development expenses for the three and six months ended June 30, 2020 included $1.9 million and $4.2 million, respectively, of additional development costs incurred pursuant to the Merus agreement. At June 30, 2021 and December 31, 2020, a total of $2.2 million and $1.6 million, respectively, of such costs were included in accrued and other liabilities on the condensed consolidated balance sheets. Calithera In January 2017, we entered into a Collaboration and License Agreement with Calithera Biosciences, Inc. (“Calithera”). Under this agreement, we received an exclusive, worldwide license to develop and commercialize small molecule arginase inhibitors, including INCB01158. We have agreed to co-fund 70% of the global development costs for the development of the licensed products for hematology and oncology indications. Calithera will have the right to conduct certain clinical development under the collaboration, including combination studies of a licensed product with a proprietary compound of Calithera. We will be entitled to 60% of the profits and losses from net sales of licensed product in the United States, and Calithera will have the right to co-detail licensed products in the United States, and we have agreed to pay Calithera tiered royalties ranging from the low to mid-double digits on net sales of licensed products outside the United States. As of June 30, 2021, we have paid Calithera an upfront license fee of $45.0 million and an additional $12.0 million milestone payment. In August 2020, Calithera delivered notice of its decision to opt out of its co-funding obligation, effective on September 30, 2020. As a result, the U.S. profit sharing will no longer be in effect, we will be responsible for funding all of the development costs of INCB01158 and any other licensed products, and the agreement provides that we will pay Calithera tiered royalties ranging from the low to mid-double digits on net sales of licensed products both in the United States and outside the United States and additional royalties to reimburse Calithera for previously incurred development costs. Calithera is eligible to receive $738.0 million in potential future development, regulatory and sales milestone payments and will have no further rights to research, develop or co-detail INCB001158. We will have the right to take over the conduct of all activities related to the research, development and commercialization of INCB001158 for all indications in the hematology/oncology field. The Calithera agreement will continue on a product-by-product and country-by-country basis for so long as we are developing or commercializing products in the United States (if the parties are sharing profits in the United States) and until we have no further royalty payment obligations, unless earlier terminated according to the terms of the agreement. The agreement may be terminated in its entirety or on a product-by-product and/or a country-by-country basis by us for convenience. The agreement may also be terminated by us for Calithera’s uncured material breach, by Calithera for our uncured material breach and by either party for bankruptcy or patent challenge. If the agreement is terminated early with respect to one or more products or countries, all rights in the terminated products and countries revert to Calithera. In addition, in January 2017, we entered into a Stock Purchase Agreement with Calithera for the purchase of 1.7 mill |
Stock Compensation
Stock Compensation | 6 Months Ended |
Jun. 30, 2021 | |
Stock Compensation | |
Stock Compensation | 10. Stock compensation We recorded $44.8 million and $92.1 million of stock compensation expense on our condensed consolidated statements of operations for the three and six months ended June 30, 2021, respectively. We recorded $46.3 million and $88.8 million of stock compensation expense on our condensed consolidated statements of operations for the three and six months ended June 30, 2020, respectively. Stock compensation expense included within our condensed consolidated statements of operations included research and development expense of $28.0 million, $57.9 million, $32.5 million and $61.2 million for the three and six months ended June 30, 2021 and 2020, respectively. Stock compensation expense included within our condensed consolidated statements of operations also included selling, general and administrative expense of $16.4 million, $33.6 million, $13.6 million and $27.1 million for the three and six months ended June 30, 2021 and 2020, respectively. Stock compensation expense included within our condensed consolidated statements of operations also included cost of product revenues of $0.4 million, $0.6 million, $0.2 million and $0.5 million, respectively, for the three and six months ended June 30, 2021 and 2020. For the three and six months ended June 30, 2021 and 2020, we capitalized $0.7 million, $1.2 million, $0.1 million and $0.3 million, respectively, of stock compensation expense as part of the cost of an asset. 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, 2021 2020 2021 2020 2021 2020 2021 2020 Average risk-free interest rates 0.75 % 0.33 % 0.44 % 1.32 % 0.25 % 0.16 % 0.18 % 0.19 % Average expected life (in years) 5.32 5.48 4.84 4.80 0.50 0.50 0.50 0.50 Volatility 38 % 39 % 39 % 40 % 26 % 38 % 33 % 48 % Weighted-average fair value (in dollars) 29.55 34.13 29.80 29.49 16.14 19.50 18.48 17.47 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 Amended and Restated Stock Incentive Plan (the “2010 Stock Plan”) was as follows: Shares Subject to Outstanding Options Weighted Average Shares Exercise Price Balance at December 31, 2020 12,115,288 $ 88.31 Options granted 1,198,198 $ 88.47 Options exercised (484,578) $ 67.63 Options cancelled (422,979) $ 92.99 Balance at June 30, 2021 12,405,929 $ 88.98 In July 2016, we revised the terms of our annual stock option grants to provide that new option grants would generally have a 10-year 36 7 24 Restricted stock unit (“RSU”) and performance share (“PSU”) award activity under the 2010 Stock Plan was as follows: Shares Subject to Outstanding Awards Shares Grant Date Value Balance at December 31, 2020 3,284,583 $ 87.42 RSUs granted 549,473 $ 89.56 RSUs released (276,393) $ 75.88 PSUs released (164,898) $ 65.76 RSUs cancelled (150,917) $ 91.93 PSUs cancelled (126,500) $ 65.76 Balance at June 30, 2021 3,115,348 $ 89.76 In January 2014, we began granting RSUs and PSUs 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 prior to July 2016 was subject to cliff vesting after three years. In July 2016, we revised the terms of our RSU grants to provide that the awards will vest 25% annually over four years. In June 2018, we granted 190,000 RSUs and 446,500 PSUs under long term incentive plans with performance and/or service-based milestones with graded and/or cliff vesting over three Compensation expense for the performance-based awards is recorded over the estimated service period for each milestone when the performance conditions are deemed probable of achievement. For the period ended June 30, 2021, the stock compensation expense recorded during the period was for service-based awards and performance conditions deemed probable of achievement and/or achieved. For PSUs containing performance conditions which were not deemed probable of achievement at June 30, 2021, no stock compensation expense was recognized. In July 2018, we granted 77,243 PSUs to executives with performance milestones and graded vesting over four years. The shares of our common stock into which each PSU may convert is subject to a multiplier up to 150% based on the level at which the performance condition is achieved. Compensation expense for the performance-based awards is recorded over the estimated service period when the performance condition is deemed probable of achievement. The actual number of shares of our common stock into which each PSU converted was at a multiplier of 83% based on the performance condition being achieved as of December 31, 2018. These PSUs will continue to vest through July 2022. In July 2019, we granted 86,975 PSUs to executives with a performance milestone and graded vesting over four years. The shares of our common stock into which each PSU may convert is subject to a multiplier up to 125% based on the level at which the performance condition is achieved. Compensation expense for the performance-based awards is recorded over the estimated service period when the performance condition is deemed probable of achievement. The actual number of shares of our common stock into which each PSU will convert is at a multiplier of 101.8% based on the performance condition being achieved as of December 31, 2019. These PSUs will continue to vest through July 2023. In July 2020, we granted 92,347 PSUs to executives with performance milestones and cliff vesting on the third The following table summarizes our shares available for grant under the 2010 Stock Plan: Shares Available for Grant Balance at December 31, 2020 5,515,182 Additional authorization 9,500,000 Options, RSUs and PSUs granted (2,297,144) Options, RSUs and PSUs cancelled 705,939 Balance at June 30, 2021 13,423,977 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. Total compensation cost of options granted but not yet vested, as of June 30, 2021, was $65.3 million, which is expected to be recognized over the weighted average period of approximately 1.1 years. Total compensation cost of RSUs granted but not yet vested, as of June 30, 2021, was $110.7 million, which is expected to be recognized over the weighted average period of approximately 1.7 years. Total compensation cost of PSUs granted but not yet vested, as of June 30, 2021, was $13.5 million, which is expected to be recognized over the weighted average period of 1.2 years, should the underlying performance conditions be deemed probable of achievement. |
Accrued and Other Current Liabi
Accrued and Other Current Liabilities | 6 Months Ended |
Jun. 30, 2021 | |
Accrued and Other Current Liabilities | |
Accrued and Other Current Liabilities | 11. Accrued and other current liabilities Accrued and other current liabilities consisted of the following (in thousands): June 30, December 31, 2021 2020 Royalties $ 127,216 $ 106,011 Clinical related costs 103,369 115,897 Sales allowances 81,729 73,204 Construction in progress 30,823 22,807 Operating lease liabilities 10,995 12,674 Other current liabilities 58,935 47,811 Total accrued and other current liabilities $ 413,067 $ 378,404 |
Employee Benefit Plans
Employee Benefit Plans | 6 Months Ended |
Jun. 30, 2021 | |
Employee Benefit Plans | |
Employee Benefit Plans | 12. 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, 2021 was $4.3 million and $8.4 million, respectively. Defined contribution expense for the three and six months ended June 30, 2020 was $3.3 million and $6.6 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 June 30, June 30, 2021 2020 2021 2020 Service cost $ 1,997 $ 1,477 $ 3,952 $ 2,934 Interest cost 23 47 45 93 Expected return on plan assets (15) (31) (30) (61) Amortization of prior service cost 54 53 108 107 Amortization of actuarial losses 288 167 576 334 Net periodic benefit cost $ 2,347 $ 1,713 $ 4,651 $ 3,407 The components of net periodic benefit cost other than the service cost component are included in other income (expense), net on the condensed consolidated statements of operations. We expect to contribute a total of $5.3 million to the pension plans in 2021 inclusive of the amounts contributed to the plan during the current period. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2021 | |
Income Taxes | |
Income Taxes | 13. Income taxes For the three and six months ended June 30, 2021, we recorded income tax expense of approximately $22.2 million and $38.0 million, respectively. For the three and six months ended June 30, 2020, we recorded income tax expense of approximately $17.0 million and $33.5 million, respectively. The tax expense for the three and six months ended June 30, 2021 and 2020 represents primarily federal and state tax liabilities that are not fully sheltered by net operating losses or research and development tax credit carryforwards. As of June 30, 2021, a full valuation allowance continues to be recorded against our U.S. and Swiss net deferred tax assets. Based upon our analysis of our historical operating results, as well as projections of our future taxable income (losses) during the periods in which the temporary differences will be recoverable, we believe the uncertainty regarding the realization of our U.S. and Swiss net deferred tax assets requires a full valuation allowance against such net assets as of June 30, 2021. When performing our assessment on projections of future taxable income (losses), we consider factors such as the likelihood of regulatory approval and commercial success of products currently under development, among other factors. The balance of our unrecognized tax benefits (including penalties and interest) increased by approximately $1.7 million during the six months ended June 30, 2021. The overall net increase is primarily driven by unrecognized tax benefits related to current year operations and research and development tax credits. After considering valuation allowance impacts, the change in unrecognized tax benefits resulted in a $0.1 million decrease to noncurrent other liabilities on the condensed consolidated balance sheet. |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 6 Months Ended |
Jun. 30, 2021 | |
Net Income (Loss) Per Share | |
Net Income (Loss) Per Share | 14. Net income (loss) per share Net income (loss) per share was calculated as follows for the periods indicated below: Three Months Ended Six Months Ended June 30, June 30, (in thousands, except per share data) 2021 2020 2021 2020 Basic Net Income (Loss) Per Share Basic net income (loss) $ 149,456 $ 290,298 $ 202,991 $ (430,344) Weighted average common shares outstanding 220,083 217,549 219,942 217,135 Basic net income (loss) per share $ 0.68 $ 1.33 $ 0.92 $ (1.98) Diluted Net Income (Loss) Per Share Diluted net income (loss) $ 149,456 $ 290,298 $ 202,991 $ (430,344) Weighted average common shares outstanding 220,083 217,549 219,942 217,135 Dilutive stock options and awards 2,167 2,885 2,119 — Weighted average shares used to compute diluted net income (loss) per share 222,250 220,434 222,061 217,135 Diluted net income (loss) per share $ 0.67 $ 1.32 $ 0.91 $ (1.98) The potential common shares that were excluded from the diluted net income (loss) per share computation are as follows: Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020 Outstanding stock options and awards 9,238,385 4,970,884 8,982,288 14,598,523 Common shares issuable upon conversion of the 1.25% Convertible Senior Notes due 2020 — 365,752 — 365,752 Total potential common shares excluded from diluted net income (loss) per share computation 9,238,385 5,336,636 8,982,288 14,964,275 |
Contingencies
Contingencies | 6 Months Ended |
Jun. 30, 2021 | |
Contingencies | |
Contingencies | 15. Contingencies We have entered into the collaboration agreements described in Note 9, 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 December 2018, we received a civil investigative demand from the U.S. Department of Justice (“DOJ”) for documents and information relating to our speaker programs and patient assistance programs, including our support of non-profit organizations that provide financial assistance to eligible patients. In November 2019, the qui tam complaint underlying the DOJ inquiry was unsealed (“Complaint”), at which time we learned that a former employee whom we had terminated had made certain allegations relating to the programs described above. We filed an Answer to the Complaint on January 22, 2020 and on November 12, 2020 we filed a Motion for Summary Judgment (“Motion”). All briefing on the Motion was completed on December 22, 2020. While we deny that any improper claims were submitted to government payers, we agreed on May 4, 2021 to settle the matter with the DOJ Civil Division for $12.6 million, plus certain statutory fees, which was recorded in selling, general and administrative expense during the six months ended June 30, 2021. 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. |
Summary of significant accoun_2
Summary of significant accounting policies (Policies) | 6 Months Ended |
Jun. 30, 2021 | |
Summary of significant accounting policies | |
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, 2021, the condensed consolidated statements of operations, comprehensive income (loss), and stockholders’ equity for the three and six months ended June 30, 2021 and 2020, and the condensed consolidated statements of cash flows for the six months ended June 30, 2021 and 2020 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, 2020 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, 2020. |
Principles of Consolidation | Principles of Consolidation. |
Foreign Currency Translation | Foreign Currency Translation |
Use of Estimates | Use of Estimates. |
Concentrations of Credit Risk | Concentrations of Credit Risk. approximates the carrying value based on available market information. By policy, we invest our excess available funds primarily in U.S. government debt securities which are securities issued or guaranteed by the U.S. government and money market funds that meet certain guidelines, which limits exposure to potential credit losses. Our receivables mainly relate to our product sales and collaborative agreements with pharmaceutical companies. We have not experienced any significant credit losses on cash, cash equivalents, marketable securities, or trade receivables to date and do not require collateral on receivables. |
Current Expected Credit Losses | Current Expected Credit Losses. |
Cash and Cash Equivalents | Cash and Cash Equivalents. |
Marketable Securities-Available-for-Sale | Marketable Securities—Available-for-Sale. |
Accounts Receivable | Accounts Receivable. |
Inventory | Inventory. We began capitalizing PEMAZYRE inventory after FDA approval in April 2020 as the related costs were expected to be recoverable through the commercialization of the product. Costs incurred prior to FDA approval have been recorded as research and development expense in our statements of operations. As a result, cost of product revenues for the next 33 months will reflect a lower average per unit cost of materials. JAKAFI, ICLUSIG PEMAZYRE |
Variable Interest Entities | Variable Interest Entities |
Long Term Investments | Long Term Investments. In assessing whether we exercise significant influence over any of the companies in which we hold equity investments, we consider the nature and magnitude of our investment, any voting and protective rights we hold, any participation in the governance of the other company, and other relevant factors such as the presence of a collaboration or other business relationship. Currently, none of our equity investments in publicly-held companies are considered relationships in which we are able to assert control. |
Property and Equipment, net | Property and Equipment, net. |
Lease Accounting | Lease Accounting. |
Other Intangible Assets, net | Other Intangible Assets, net. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets. |
Goodwill | Goodwill. for impairment at the reporting unit level at least annually as of October 1 or when a triggering event occurs that could indicate a potential impairment by assessing qualitative factors or performing a quantitative analysis in determining whether it is more likely than not that the fair value of net assets are below their carrying amounts. A reporting unit is the same as, or one level below, an operating segment. Our operations are currently comprised of a single, entity wide reporting unit. We completed our most recent annual impairment assessment as of October 1, 2020 and determined that the carrying value of our goodwill was not impaired. |
Income Taxes | Income Taxes. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. We recognize the tax benefit from an uncertain tax position only if it is more-likely-than-not that the position will be sustained upon examination by the taxing authorities, including resolutions of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit that is recorded for these positions is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. We adjust the level of the liability to reflect any subsequent changes in the relevant facts surrounding the uncertain positions. Any interest and penalties on uncertain tax positions are included within the tax provision. The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law in March 2020 to provide an estimated $2.2 trillion designed to stimulate the U.S. economy during the COVID-19 pandemic. The Act includes tax relief, government loans, grants and investments for entities in affected industries, which has related accounting and financial reporting impacts. Disclosure for certain income tax accounting measures are required in the period of enactment and disclosure for government loans, investments, grants, and revenue recognition are required in future periods as federal agencies establish rules and procedures to implement the CARES Act. During 2020, we delayed the payment of certain employer payroll tax amounts to future periods as allowed under the Act. We do not expect the CARES Act to have a material impact on our overall financial results, our income tax provision or our liquidity. We have further described the impact and risks of the COVID-19 pandemic on our business in Item 1. Business and in Item 1A. Risk Factors. |
Net Income (Loss) Per Share | Net Income (Loss) Per Share. |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss). |
Revenue Recognition | Revenue Recognition. in time. We also assess collectability based primarily on the customer’s payment history and on the creditworthiness of the customer. Product Revenues Our product revenues consist of sales of JAKAFI and PEMAZYRE in the U.S., sales of PEMAZYRE and ICLUSIG in Europe, and sales of PEMAZYRE in Japan. Product revenues are recognized once we satisfy the performance obligation at a point in time under the revenue recognition criteria as described above. We sell JAKAFI and PEMAZYRE to our customers in the U.S., which include specialty pharmacies and wholesalers. We sell PEMAZYRE and ICLUSIG to our customers in the European Union and certain other jurisdictions, which include retail pharmacies, hospital pharmacies and distributors. We sell PEMAZYRE in Japan to an exclusive wholesaler. We recognize revenues for product received by our customers net of allowances for customer credits, including estimated rebates, chargebacks, discounts, returns, distribution service fees, patient assistance programs, and government rebates, such as Medicare Part D coverage gap reimbursements in the U.S. Product shipping and handling costs are included in cost of product revenues. Customer Credits: Rebates and Discounts: Chargebacks: Medicare Part D Coverage Gap: Co-payment Assistance: Product Royalty Revenues Royalty revenues on commercial sales for ruxolitinib (marketed as JAKAVI ® Milestone and Contract Revenues For each collaborative research, development and/or commercialization agreement that results in revenue under the guidance of ASC 606, Revenue from Contracts with Customers, we identify all material performance obligations, which may include the license to intellectual property and know-how, research and development activities and/or other activities. In order to determine the transaction price, in addition to any upfront payment, we estimate the amount of variable consideration, including milestone payments, at the outset of the contract utilizing the most likely amount method. The most likely amount method is used since the milestone payments have a binary outcome (i.e., we receive all or none of the milestone payment). We constrain the estimate of variable consideration such that it is probable that a significant reversal of previously recognized revenue will not occur. When determining if variable consideration should be constrained, management considers whether there are factors outside the Company’s control that could result in a significant reversal of revenue. In making these assessments, management considers the likelihood and magnitude of a potential reversal of revenue. These estimates are re-assessed each reporting period as required. Once the estimated transaction price is established, amounts are allocated to the performance obligations that have been identified. The transaction price is generally allocated to each separate performance obligation on a relative standalone selling price basis. Out-licensing arrangements contain the right to use functional intellectual property, which is the underlying performance obligation of these collaborative arrangements. If the license of our intellectual property is determined to be distinct from other performance obligations in the arrangement, the functional intellectual property that is transferred to the collaborative partner at the onset of the arrangement is concluded to have significant standalone functionality and value at the point in time at which the intellectual property is made available to the collaborative partner. For licenses that are not distinct from other obligations identified in the arrangement, we utilize judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time. If the combined performance obligation is satisfied over time, we apply an appropriate method of measuring progress for purposes of recognizing revenue from nonrefundable, upfront license fees. We evaluate the measure of progress each reporting period and, if necessary, adjust the measure of performance and related revenue recognition. For the three and six months ended June 30, 2021 and 2020, we had no revenues from intellectual property licenses recognized over time. For milestone revenues related to sales-based achievements, we recognize the milestone revenues in the corresponding period of the product sale, in accordance with the guidance of ASC 606-10-55-65 for contracts that include a license to intellectual property and the license is the predominant item to which the product sale relates. Subsequent to the transfer of the intellectual property, we may earn milestones through achievement of pre-specified developmental or regulatory events and, as such, milestones are accounted for as variable consideration. We include developmental or regulatory milestones in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the milestone is subsequently resolved. Under the agreements currently in place, we do not consider these events to be within our control, but rather dependent upon the development activities of our collaborative partners and the decisions made by regulatory agencies. Accordingly, these milestones are not included in the transaction price until the counterparty, or third-party in the event of a regulatory submission, confirms the satisfaction or completion of the milestone triggering event. Given the high level of uncertainty of achievement, variable consideration associated with milestones are fully constrained until confirmation of the satisfaction or completion of the milestone by the third-party. Generally, the milestone events contained in our collaboration agreements coincide with the progression of our drugs from development, to regulatory approval and then to commercialization. The value of these milestones is dictated within the contract and is fixed upon achievement and reflects the amount of consideration which we expect to be entitled to in exchange for the satisfaction of that milestone. The process of successfully discovering a new development candidate, having it approved and successfully commercialized is highly uncertain. As such, the milestone payments we may earn from our partners involve a significant degree of risk to achieve and therefore, subsequent milestone payments due to Incyte are recognized as revenue at the point in time when such milestones are achieved. Our collaboration agreements may also include an option for the collaborative partner to elect to participate in research and development activities, such as shared participation in additional clinical trials using the compound. The presence of additional options for future participatory activities are assessed to determine if they represent material rights offered by us to the collaborative partner. We also determine whether the reimbursement of research and development expenses should be accounted for as collaborative revenues or an offset to research and development expenses in accordance with the provisions of gross or net revenue presentation and recognize the corresponding revenues or records the corresponding offset to research and development expenses as incurred. Our collaborative agreements may also include provisions for additional future collaborative efforts, such as options for shared commercialization staffing or licensing of additional molecules, involvement in joint committees, or options for inclusion in negotiations of future supply rights, which at the time of each collaborative agreement’s inception, are assessed to determine if these meet the definition of a performance obligation under ASC 606. Cost of Product Revenues Cost of product revenues includes all JAKAFI, ICLUSIG and PEMAZYRE related product costs. In addition, cost of product revenues include low single-digit royalties under our collaboration and license agreement to Novartis on all future sales of JAKAFI in the United States and the amortization of our licensed intellectual property for ICLUSIG using the straight-line method over the estimated useful life of 12.5 years from the date of acquisition on June 1, 2016 of all of the outstanding shares of ARIAD Pharmaceuticals (Luxembourg) S.à.r.l. (since renamed Incyte Biosciences Luxembourg S.à.r.l.) from ARIAD Pharmaceuticals, Inc. (“ARIAD”). Cost of product revenues also includes employee personnel costs, including stock compensation, for those employees dedicated to the production of our commercial products. |
Research and Development Costs | Research and Development Costs. We often contract with contract research organizations (“CROs”) to facilitate, coordinate and perform agreed upon research and development of a new drug. To ensure that research and development costs are expensed as incurred, we record monthly accruals for clinical trials and preclinical testing costs based on the work performed under the contract. These CRO contracts typically call for the payment of fees for services at the initiation of the contract and/or upon the achievement of certain clinical trial milestones. In the event that we prepay CRO fees, we record the prepayment as a prepaid asset and amortize the asset into research and development expense over the period of time the contracted research and development services are performed. Most professional fees, including project and clinical management, data management, monitoring, and medical writing fees are incurred throughout the contract period. These professional fees are expensed based on their percentage of completion at a particular date. Our CRO contracts generally include pass through fees. Pass through fees include, but are not limited to, regulatory expenses, investigator fees, travel costs, and other miscellaneous costs, including shipping and printing fees. We expense the costs of pass through fees under our CRO contracts as they are incurred, based on the best information available to us at the time. The estimates of the pass through fees incurred are based on the amount of work completed for the clinical trial and are monitored through correspondence with the CROs, internal reviews and a review of contractual terms. The factors utilized to derive the estimates include the number of patients enrolled, duration of the clinical trial, estimated patient attrition, screening rate and length of the dosing regimen. CRO fees incurred to set up the clinical trial are expensed during the setup period. Under our clinical trial collaboration agreements we may be reimbursed for certain development costs incurred. Such costs are recorded as a reduction of research and development expense in the period in which the related expense is incurred. |
Stock Compensation and Long-term Incentive Plans | Stock Compensation. Long Term Incentive Plans. |
Advertising Expenses | Advertising Expenses. |
Acquisition-Related Contingent Consideration | Acquisition-Related Contingent Consideration. |
Collaboration loss sharing | Collaboration loss sharing. sharing represents our 50% share of the United States loss for commercialization of MONJUVI (tafasitamab) under our agreement with MorphoSys. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” This guidance applies to all entities and aims to reduce the complexity of tax accounting standards while enhancing reporting disclosures. This guidance is effective for fiscal years beginning after December 15, 2020 and interim periods therein. We adopted this guidance for the period beginning January 1, 2021. Upon adoption, ASU No. 2019-12 had an immaterial impact on the condensed consolidated financial statements. |
Revenues (Tables)
Revenues (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Revenues | |
Schedule of disaggregated revenue | As discussed in Note 2, revenues are recognized under guidance within ASC 606. The following table presents our disaggregated revenue for the periods presented (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020 JAKAFI revenues, net $ 529,055 $ 473,706 $ 994,765 $ 933,185 ICLUSIG revenues, net 28,189 22,798 53,834 50,046 PEMAZYRE revenues, net 17,906 3,786 31,362 3,786 Total product revenues, net 575,150 500,290 1,079,961 987,017 JAKAVI product royalty revenues 82,038 66,217 147,640 122,550 OLUMIANT product royalty revenues 36,045 25,830 68,303 51,277 TABRECTA product royalty revenues 2,476 706 4,523 706 Total product royalty revenues 120,559 92,753 220,466 174,533 Milestone and contract revenues 10,000 95,000 10,000 95,000 Total revenues $ 705,709 $ 688,043 $ 1,310,427 $ 1,256,550 |
Fair value of financial instr_2
Fair value of financial instruments (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Fair Value of Financial Instruments | |
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 Active Markets for Observable Unobservable Identical Assets Inputs Inputs Balance as of (Level 1) (Level 2) (Level 3) June 30, 2021 Cash and cash equivalents $ 1,797,582 $ — $ — $ 1,797,582 Debt securities (government) — 283,385 — 283,385 Long term investments (Note 9) 220,691 — — 220,691 Total assets $ 2,018,273 $ 283,385 $ — $ 2,301,658 Fair Value Measurement at Reporting Date Using: Quoted Prices in Significant Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs Balance as of (Level 1) (Level 2) (Level 3) December 31, 2020 Cash and cash equivalents $ 1,513,008 $ — $ — $ 1,513,008 Debt securities (government) — 288,369 — 288,369 Long term investments (Note 9) 222,301 — — 222,301 Total assets $ 1,735,309 $ 288,369 $ — $ 2,023,678 |
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 Active Markets for Observable Unobservable Identical Liabilities Inputs Inputs Balance as of (Level 1) (Level 2) (Level 3) June 30, 2021 Acquisition-related contingent consideration $ — $ — $ 259,000 $ 259,000 Total liabilities $ — $ — $ 259,000 $ 259,000 Fair Value Measurement at Reporting Date Using: Quoted Prices in Significant Other Significant Active Markets for Observable Unobservable Identical Liabilities Inputs Inputs Balance as of (Level 1) (Level 2) (Level 3) December 31, 2020 Acquisition-related contingent consideration $ — $ — $ 266,000 $ 266,000 Total liabilities $ — $ — $ 266,000 $ 266,000 |
Schedule of roll forward of Level 3 liabilities | The following is a rollforward of our Level 3 liabilities (in thousands): 2021 Balance at January 1, $ 266,000 Contingent consideration earned during the period but not yet paid (8,632) Payments made during the period (8,526) Change in fair value of contingent consideration 10,158 Balance at June 30, $ 259,000 |
Summary of marketable securities portfolio | The following is a summary of our marketable security portfolio for the periods presented (in thousands): Net Amortized Unrealized Estimated Cost Gains Fair Value June 30, 2021 Debt securities (government) $ 283,380 $ 5 $ 283,385 December 31, 2020 Debt securities (government) $ 288,199 $ 170 $ 288,369 |
Concentrations of Credit Risk_2
Concentrations of Credit Risk and Current Expected Credit Losses (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Concentrations of Credit Risk and Current Expected Credit Losses | |
Schedule of concentration of credit risk related to specialty pharmacy customers | In November 2011, we began commercialization and distribution of JAKAFI, and in April 2020, we began commercialization and distribution of PEMAZYRE to a number of customers. Our product revenues are concentrated in a number of these customers. The concentration of credit risk related to our JAKAFI and PEMAZYRE product revenues is as follows: Percentage of Total Net Percentage of Total Net Product Revenues for the Product Revenues for the Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020 Customer A 19 % 20 % 18 % 19 % Customer B 13 % 14 % 13 % 13 % Customer C 18 % 16 % 18 % 17 % Customer D 10 % 11 % 10 % 11 % |
Inventory (Tables)
Inventory (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Inventory | |
Schedule of inventory | Our inventory balance consists of the following (in thousands): June 30, December 31, 2021 2020 Raw materials $ 1,275 $ 1,275 Work-in-process 37,307 21,242 Finished goods 13,678 13,456 52,260 35,973 Inventories-current 16,675 16,425 Inventories-noncurrent $ 35,585 $ 19,548 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Property and Equipment, net | |
Schedule of property and equipment, net | Property and equipment, net consists of the following (in thousands): June 30, December 31, 2021 2020 Office equipment $ 18,190 $ 17,880 Manufacturing and laboratory equipment 100,599 86,021 Computer equipment 69,863 66,640 Land 10,435 10,671 Building and leasehold improvements 263,010 238,042 Operating lease right-of-use assets 26,953 26,816 Construction in progress 331,569 257,929 820,619 703,999 Less accumulated depreciation and amortization (159,259) (144,374) Property and equipment, net $ 661,360 $ 559,625 |
Summary of lease liability | We are the lessee of several contracts, including those to secure fleet vehicles, buildings and equipment. Our lease agreements do not contain any material residual value guarantees or restrictive covenants. Some of our building leases include options to renew and the exercise of these options is at our discretion. Our current operating lease liabilities are reflected in accrued and other current liabilities and our noncurrent operating lease liabilities are reflected in other liabilities on the condensed consolidated balance sheets and are as follows (in thousands): June 30, December 31, 2021 2020 Current Operating lease liabilities $ 10,995 $ 12,674 Finance lease liabilities 2,408 2,284 Noncurrent Operating lease liabilities 15,501 14,188 Finance lease liabilities 31,838 32,573 Total lease liabilities $ 60,742 $ 61,719 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Intangible Assets and Goodwill | |
Schedule of finite-lived intangible assets, net | The components of intangible assets were as follows (in thousands, except for useful life): Balance at June 30, 2021 Balance at December 31, 2020 Weighted- Gross Net Gross Net Average Useful Carrying Accumulated Carrying Carrying Accumulated Carrying Lives (Years) Amount Amortization Amount Amount Amortization Amount Finite-lived intangible assets: Licensed IP 12.5 $ 271,000 $ 109,477 $ 161,523 $ 271,000 $ 98,709 $ 172,291 |
Schedule of estimated aggregate amortization expense | Estimated aggregate amortization expense based on the current carrying value of amortizable intangible assets is as follows (in thousands): Remainder of 2021 2022 2023 2024 2025 Thereafter Amortization expense $ 10,770 $ 21,536 $ 21,536 $ 21,536 $ 21,536 $ 64,609 |
Stock compensation (Tables)
Stock compensation (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Stock Compensation | |
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, 2021 2020 2021 2020 2021 2020 2021 2020 Average risk-free interest rates 0.75 % 0.33 % 0.44 % 1.32 % 0.25 % 0.16 % 0.18 % 0.19 % Average expected life (in years) 5.32 5.48 4.84 4.80 0.50 0.50 0.50 0.50 Volatility 38 % 39 % 39 % 40 % 26 % 38 % 33 % 48 % Weighted-average fair value (in dollars) 29.55 34.13 29.80 29.49 16.14 19.50 18.48 17.47 |
Schedule of option activity under the 2010 Stock Plan | Option activity under our 2010 Amended and Restated Stock Incentive Plan (the “2010 Stock Plan”) was as follows: Shares Subject to Outstanding Options Weighted Average Shares Exercise Price Balance at December 31, 2020 12,115,288 $ 88.31 Options granted 1,198,198 $ 88.47 Options exercised (484,578) $ 67.63 Options cancelled (422,979) $ 92.99 Balance at June 30, 2021 12,405,929 $ 88.98 |
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 Outstanding Awards Shares Grant Date Value Balance at December 31, 2020 3,284,583 $ 87.42 RSUs granted 549,473 $ 89.56 RSUs released (276,393) $ 75.88 PSUs released (164,898) $ 65.76 RSUs cancelled (150,917) $ 91.93 PSUs cancelled (126,500) $ 65.76 Balance at June 30, 2021 3,115,348 $ 89.76 |
Summary of shares available for grant | The following table summarizes our shares available for grant under the 2010 Stock Plan: Shares Available for Grant Balance at December 31, 2020 5,515,182 Additional authorization 9,500,000 Options, RSUs and PSUs granted (2,297,144) Options, RSUs and PSUs cancelled 705,939 Balance at June 30, 2021 13,423,977 |
Accrued and Other Current Lia_2
Accrued and Other Current Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Accrued and Other Current Liabilities | |
Schedule of accrued and other current liabilities | Accrued and other current liabilities consisted of the following (in thousands): June 30, December 31, 2021 2020 Royalties $ 127,216 $ 106,011 Clinical related costs 103,369 115,897 Sales allowances 81,729 73,204 Construction in progress 30,823 22,807 Operating lease liabilities 10,995 12,674 Other current liabilities 58,935 47,811 Total accrued and other current liabilities $ 413,067 $ 378,404 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Employee Benefit Plans | |
Schedule of net periodic benefit cost | The net periodic benefit cost was as follows (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020 Service cost $ 1,997 $ 1,477 $ 3,952 $ 2,934 Interest cost 23 47 45 93 Expected return on plan assets (15) (31) (30) (61) Amortization of prior service cost 54 53 108 107 Amortization of actuarial losses 288 167 576 334 Net periodic benefit cost $ 2,347 $ 1,713 $ 4,651 $ 3,407 |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Net Income (Loss) Per Share | |
Schedule of calculation of net income (loss) per share | Net income (loss) per share was calculated as follows for the periods indicated below: Three Months Ended Six Months Ended June 30, June 30, (in thousands, except per share data) 2021 2020 2021 2020 Basic Net Income (Loss) Per Share Basic net income (loss) $ 149,456 $ 290,298 $ 202,991 $ (430,344) Weighted average common shares outstanding 220,083 217,549 219,942 217,135 Basic net income (loss) per share $ 0.68 $ 1.33 $ 0.92 $ (1.98) Diluted Net Income (Loss) Per Share Diluted net income (loss) $ 149,456 $ 290,298 $ 202,991 $ (430,344) Weighted average common shares outstanding 220,083 217,549 219,942 217,135 Dilutive stock options and awards 2,167 2,885 2,119 — Weighted average shares used to compute diluted net income (loss) per share 222,250 220,434 222,061 217,135 Diluted net income (loss) per share $ 0.67 $ 1.32 $ 0.91 $ (1.98) |
Schedule of antidilutive securities excluded from the computation of earnings per share | The potential common shares that were excluded from the diluted net income (loss) per share computation are as follows: Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020 Outstanding stock options and awards 9,238,385 4,970,884 8,982,288 14,598,523 Common shares issuable upon conversion of the 1.25% Convertible Senior Notes due 2020 — 365,752 — 365,752 Total potential common shares excluded from diluted net income (loss) per share computation 9,238,385 5,336,636 8,982,288 14,964,275 |
Organization and business (Deta
Organization and business (Details) | 6 Months Ended |
Jun. 30, 2021segment | |
Organization and Business | |
Number of operating segments | 1 |
Summary of significant accoun_3
Summary of significant accounting policies (Details) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021USD ($)item | Jun. 30, 2020USD ($) | Jun. 30, 2021USD ($)item | Jun. 30, 2020USD ($) | Dec. 31, 2020USD ($) | |
Accounts Receivable | |||||
Allowance for doubtful accounts | $ 0 | $ 0 | $ 0 | ||
Variable Interest Entities | |||||
Number of entities in which variable interest held | item | 0 | 0 | |||
Percentage of MediCare Part D Insurance Coverage Gap Required to be Funded by Manufacturers | 70.00% | ||||
Medicare Part D Insurance Coverage Gap, Increase in Eligible Patient Spending, Percentage | 30.00% | ||||
Advertising Expenses | |||||
Advertising expenses | $ 7.5 | $ 5.3 | $ 18.3 | $ 10.1 | |
MorphoSys AG | |||||
Variable Interest Entities | |||||
Collaboration Agreement Profit Loss Sharing Ratio | 50.00% | 50.00% | |||
JAKAFI | |||||
Inventory | |||||
Shelf life for finished goods inventory, maximum | 36 months | ||||
ICLUSIG | |||||
Inventory | |||||
Shelf life for finished goods inventory, maximum | 36 months | ||||
Variable Interest Entities | |||||
Amortization period | 12 years 6 months | ||||
PEMAZYRE | |||||
Inventory | |||||
Period of lower average per unit cost of materials | 33 months | ||||
Shelf life for finished goods inventory, maximum | 36 months |
Revenues (Details)
Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Revenues | ||||
Total revenues | $ 705,709 | $ 688,043 | $ 1,310,427 | $ 1,256,550 |
Product revenues, net | ||||
Revenues | ||||
Total revenues | 575,150 | 500,290 | 1,079,961 | 987,017 |
JAKAFI | ||||
Revenues | ||||
Total revenues | 529,055 | 473,706 | 994,765 | 933,185 |
ICLUSIG | ||||
Revenues | ||||
Total revenues | 28,189 | 22,798 | 53,834 | 50,046 |
PEMAZYRE | ||||
Revenues | ||||
Total revenues | 17,906 | 3,786 | 31,362 | 3,786 |
Product royalty revenues | ||||
Revenues | ||||
Total revenues | 120,559 | 92,753 | 220,466 | 174,533 |
JAKAVI Royalty Revenues | ||||
Revenues | ||||
Total revenues | 82,038 | 66,217 | 147,640 | 122,550 |
OLUMIANT Royalty Revenues | ||||
Revenues | ||||
Total revenues | 36,045 | 25,830 | 68,303 | 51,277 |
TABRECTA Royalty Revenues | ||||
Revenues | ||||
Total revenues | 2,476 | 706 | 4,523 | 706 |
Milestone and contract revenues | ||||
Revenues | ||||
Total revenues | $ 10,000 | $ 95,000 | $ 10,000 | $ 95,000 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Fair value on a recurring basis (Details) $ in Thousands | Jun. 01, 2016 | Jun. 30, 2021USD ($) | Dec. 31, 2020USD ($) |
Fair value of financial instruments | |||
Long term investments (Note 6) | $ 220,691 | $ 222,301 | |
ARIAD | Contingent Consideration | |||
Roll forward of Level 3 liabilities | |||
Projected cash flows period | 18 years | ||
ARIAD | Discount rate | Contingent Consideration | |||
Roll forward of Level 3 liabilities | |||
Valuation input (as a percent) | 10 | ||
ARIAD | Average Cost of Capital | Contingent Consideration | |||
Roll forward of Level 3 liabilities | |||
Valuation input (as a percent) | 10 | ||
ARIAD | Accrued and other current liabilities | |||
Roll forward of Level 3 liabilities | |||
Contingent consideration earned during the period but not yet paid | $ (8,600) | (9,600) | |
Level 3 | Fair Value | |||
Roll forward of Level 3 liabilities | |||
Balance at the beginning of the period | 266,000 | ||
Contingent consideration earned during the period but not yet paid | (8,632) | ||
Payments made during the period | (8,526) | ||
Change in fair value of contingent consideration | 10,158 | ||
Balance at the end of the period | 259,000 | 266,000 | |
Recurring | Fair Value | |||
Fair value of financial instruments | |||
Cash and cash equivalents | 1,797,582 | 1,513,008 | |
Debt securities (government) | 283,385 | 288,369 | |
Long term investments (Note 6) | 220,691 | 222,301 | |
Total assets | 2,301,658 | 2,023,678 | |
Acquisition-related contingent consideration | 259,000 | 266,000 | |
Total liabilities | 259,000 | 266,000 | |
Recurring | Level 1 | |||
Fair value of financial instruments | |||
Cash and cash equivalents | 1,797,582 | 1,513,008 | |
Long term investments (Note 6) | 220,691 | 222,301 | |
Total assets | 2,018,273 | 1,735,309 | |
Recurring | Level 2 | |||
Fair value of financial instruments | |||
Debt securities (government) | 283,385 | 288,369 | |
Total assets | 283,385 | 288,369 | |
Recurring | Level 3 | |||
Fair value of financial instruments | |||
Acquisition-related contingent consideration | 259,000 | 266,000 | |
Total liabilities | $ 259,000 | $ 266,000 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Marketable securities portfolio (Details) - Debt securities (government) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2021 | Dec. 31, 2020 | |
Summary of marketable security portfolio | ||
Amortized Cost | $ 283,380 | $ 288,199 |
Net Unrealized Gains | 5 | 170 |
Estimated Fair Value | $ 283,385 | $ 288,369 |
Minimum | ||
Summary of marketable security portfolio | ||
Contractual maturity dates | 12 months | |
Maximum | ||
Summary of marketable security portfolio | ||
Contractual maturity dates | 18 months |
Concentrations of Credit Risk_3
Concentrations of Credit Risk and Current Expected Credit Losses (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Net Product Revenues | Customer Concentration Risk | Customer A | |||||
Concentration of risk | |||||
Percentage of concentration risk | 19.00% | 20.00% | 18.00% | 19.00% | |
Net Product Revenues | Customer Concentration Risk | Customer B | |||||
Concentration of risk | |||||
Percentage of concentration risk | 13.00% | 14.00% | 13.00% | 13.00% | |
Net Product Revenues | Customer Concentration Risk | Customer C | |||||
Concentration of risk | |||||
Percentage of concentration risk | 18.00% | 16.00% | 18.00% | 17.00% | |
Net Product Revenues | Customer Concentration Risk | Customer D | |||||
Concentration of risk | |||||
Percentage of concentration risk | 10.00% | 11.00% | 10.00% | 11.00% | |
Accounts Receivable | Credit Concentration Risk | Collaboration Partner A, B, C and D | |||||
Concentration of risk | |||||
Percentage of concentration risk | 28.00% | 42.00% | |||
Accounts Receivable | Credit Concentration Risk | Customer A, B, C and D | |||||
Concentration of risk | |||||
Percentage of concentration risk | 34.00% | 29.00% |
Inventory (Details)
Inventory (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Inventory | ||
Raw materials | $ 1,275 | $ 1,275 |
Work-in-process | 37,307 | 21,242 |
Finished goods | 13,678 | 13,456 |
Total inventories | 52,260 | 35,973 |
Inventories - current | 16,675 | 16,425 |
Inventories-noncurrent | $ 35,585 | $ 19,548 |
Property and Equipment, net - P
Property and Equipment, net - Property and equipment, net (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Property and equipment, net | ||
Property and Equipment, gross | $ 820,619 | $ 703,999 |
Less accumulated depreciation and amortization | (159,259) | (144,374) |
Property and Equipment, net | 661,360 | 559,625 |
Office equipment | ||
Property and equipment, net | ||
Property and Equipment, gross | 18,190 | 17,880 |
Laboratory equipment | ||
Property and equipment, net | ||
Property and Equipment, gross | 100,599 | 86,021 |
Computer equipment | ||
Property and equipment, net | ||
Property and Equipment, gross | 69,863 | 66,640 |
Land | ||
Property and equipment, net | ||
Property and Equipment, gross | 10,435 | 10,671 |
Building and leasehold improvements | ||
Property and equipment, net | ||
Property and Equipment, gross | 263,010 | 238,042 |
Operating lease right-of-use assets | ||
Property and equipment, net | ||
Property and Equipment, gross | 26,953 | 26,816 |
Construction in Progress | ||
Property and equipment, net | ||
Property and Equipment, gross | $ 331,569 | $ 257,929 |
Property and Equipment, net - B
Property and Equipment, net - Buildings and construction (Details) $ in Thousands | 1 Months Ended | |||||
Jul. 31, 2018USD ($) | Feb. 28, 2018ft² | Jun. 30, 2021USD ($)ft² | Mar. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Jun. 30, 2019USD ($) | |
Property and equipment, net | ||||||
Finance lease right-of-use assets, net | $ 27,683 | $ 28,451 | ||||
Costs for architectural and engineering studies and initial ground preparation | $ 820,619 | $ 703,999 | ||||
Office Building in Wilmington, Delaware | ||||||
Property and equipment, net | ||||||
Square footage | ft² | 200,000 | |||||
Capitalized construction costs | $ 125,600 | |||||
Office Building in Morges, Switzerland | ||||||
Property and equipment, net | ||||||
Initial lease term | 15 years | |||||
Options to extend | true | |||||
Renewal term of agreement to rent | 20 years | |||||
Square footage | ft² | 100,000 | |||||
Financing lease liabilities | $ 31,100 | |||||
Finance lease right-of-use assets, net | 29,100 | |||||
Finance Lease, Lease Incentive Receivable | $ 2,000 | |||||
Capitalized construction costs | $ 19,100 | |||||
Land in Y-PARC, Switzerland's largest technology park, Yverdon | ||||||
Property and equipment, net | ||||||
Purchase price | $ 4,800 | |||||
Costs for architectural and engineering studies and initial ground preparation | $ 188,800 |
Property and Equipment, net - L
Property and Equipment, net - Lease and maturity of lease liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Lease liabilities | |||||
Lessee, Operating Lease, Existence of Residual Value Guarantee [true false] | false | ||||
Lessee, Operating Lease, Existence of Option to Extend [true false] | true | ||||
Operating lease liabilities, current | $ 10,995 | $ 10,995 | $ 12,674 | ||
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued Liabilities, Current | Accrued Liabilities, Current | Accrued Liabilities, Current | ||
Finance lease liabilities, current | $ 2,408 | $ 2,408 | $ 2,284 | ||
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | Finance lease liabilities, current | Finance lease liabilities, current | Finance lease liabilities, current | ||
Operating lease liabilities, noncurrent | $ 15,501 | $ 15,501 | $ 14,188 | ||
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Other Liabilities, Noncurrent | Other Liabilities, Noncurrent | Other Liabilities, Noncurrent | ||
Finance lease liabilities, noncurrent | $ 31,838 | $ 31,838 | $ 32,573 | ||
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Finance lease liabilities, noncurrent | Finance lease liabilities, noncurrent | Finance lease liabilities, noncurrent | ||
Total lease liabilities | $ 60,742 | $ 60,742 | $ 61,719 | ||
Cash paid for operating lease liabilities | 6,900 | $ 5,900 | |||
Cash paid for financing lease liabilities in financing cash flows | $ 1,173 | 387 | |||
Maturity of our finance lease liabilities | |||||
Weighted average lease term, finance leases | 13 years 9 months 18 days | 13 years 9 months 18 days | |||
Weighted average lease term, operating leases | 4 years 8 months 12 days | 4 years 8 months 12 days | |||
Weighted average discount rate, finance leases | 3.90% | 3.90% | |||
Weighted average discount rate, operating leases | 6.70% | 6.70% | |||
Expense related to our operating leases | $ 3,700 | $ 2,900 | $ 7,200 | 6,100 | |
Amortization on our finance lease right-of-use assets | 700 | 700 | 1,300 | 1,300 | |
Interest expense on finance lease liabilities | $ 300 | $ 300 | $ 600 | $ 600 |
Intangible Assets and Goodwil_2
Intangible Assets and Goodwill (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2021 | Dec. 31, 2020 | |
Amortization Expense | ||
Remainder of 2021 | $ 10,770 | |
2022 | 21,536 | |
2023 | 21,536 | |
2024 | 21,536 | |
2025 | 21,536 | |
Thereafter | 64,609 | |
Changes to carrying amount of goodwill | ||
Changes to the carry amount of goodwill | $ 0 | |
Licensed IP | ||
Intangible assets | ||
Weighted Average Useful Lives (Years) | 12 years 6 months | |
Finite-lived intangible assets: | ||
Gross Carrying Amount | $ 271,000 | $ 271,000 |
Accumulated Amortization | 109,477 | 98,709 |
Net Carrying Amount | $ 161,523 | $ 172,291 |
License Agreements - Novartis (
License Agreements - Novartis (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 140 Months Ended | |||||||||
Jun. 30, 2020 | May 31, 2020 | Apr. 30, 2016 | Sep. 30, 2014 | Jan. 31, 2010 | Dec. 31, 2009 | Nov. 30, 2009 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Dec. 31, 2020 | |
License agreements | |||||||||||||
Revenues | $ 705,709 | $ 688,043 | $ 1,310,427 | $ 1,256,550 | |||||||||
JAKAFI | |||||||||||||
License agreements | |||||||||||||
Revenues | 529,055 | 473,706 | 994,765 | 933,185 | |||||||||
Novartis | |||||||||||||
License agreements | |||||||||||||
Upfront and immediate milestone payment to be received under license agreement | $ 210,000 | ||||||||||||
Upfront payment received under license agreement | $ 150,000 | ||||||||||||
Immediate milestone payment received under license agreement | $ 60,000 | ||||||||||||
Revenues | 0 | 90,000 | 0 | 90,000 | |||||||||
Royalties payable | 118,600 | 118,600 | $ 118,600 | $ 96,400 | |||||||||
Reimbursable costs included in accounts receivable | 100 | 100 | 100 | $ 200 | |||||||||
Research and development expenses reimbursed | 0 | 0 | 100 | 300 | |||||||||
Novartis | Pre-specified Events | Maximum | |||||||||||||
License agreements | |||||||||||||
Upfront and immediate milestone payment to be received under license agreement | 1,200,000 | ||||||||||||
Novartis | Development Milestones | |||||||||||||
License agreements | |||||||||||||
Amount recognized and received for the achievement of a predefined milestone | 157,000 | ||||||||||||
Novartis | Development Milestones | Maximum | |||||||||||||
License agreements | |||||||||||||
Upfront and immediate milestone payment to be received under license agreement | 174,000 | ||||||||||||
Novartis | Regulatory Milestones | |||||||||||||
License agreements | |||||||||||||
Amount recognized and received for the achievement of a predefined milestone | 280,000 | ||||||||||||
Novartis | Regulatory Milestones | Maximum | |||||||||||||
License agreements | |||||||||||||
Upfront and immediate milestone payment to be received under license agreement | 495,000 | ||||||||||||
Novartis | Sales and Commercial Milestones | |||||||||||||
License agreements | |||||||||||||
Amount recognized and received for the achievement of a predefined milestone | $ 200,000 | ||||||||||||
Novartis | Sales and Commercial Milestones | Maximum | |||||||||||||
License agreements | |||||||||||||
Upfront and immediate milestone payment to be received under license agreement | $ 500,000 | ||||||||||||
Novartis | TABRECTA | |||||||||||||
License agreements | |||||||||||||
Revenues | 2,500 | 700 | 4,500 | 700 | |||||||||
Novartis | TABRECTA | Development Milestones | |||||||||||||
License agreements | |||||||||||||
Amount recognized and received for the achievement of a predefined milestone | $ 25,000 | ||||||||||||
Novartis | TABRECTA | Regulatory Milestones | |||||||||||||
License agreements | |||||||||||||
Amount recognized and received for the achievement of a predefined milestone | $ 45,000 | ||||||||||||
Novartis | TABRECTA | Regulatory Milestones | JAPAN | |||||||||||||
License agreements | |||||||||||||
Amount recognized and received for the achievement of a predefined milestone | $ 20,000 | ||||||||||||
Novartis | GVHD | Development and Regulatory Milestones | Maximum | |||||||||||||
License agreements | |||||||||||||
Upfront and immediate milestone payment to be received under license agreement | $ 75,000 | ||||||||||||
Novartis | JAKAFI | U.S. | |||||||||||||
License agreements | |||||||||||||
Royalties payable on net sales | 25,900 | 23,200 | 43,700 | 40,700 | |||||||||
Novartis | JAKAVI | |||||||||||||
License agreements | |||||||||||||
Revenues | $ 82,000 | $ 66,200 | $ 147,600 | $ 122,600 | |||||||||
Novartis | JAKAVI | Minimum | |||||||||||||
License agreements | |||||||||||||
Royalty payments on future global net sales (as a percent) | 12.00% | ||||||||||||
Novartis | JAKAVI | Maximum | |||||||||||||
License agreements | |||||||||||||
Royalty payments on future global net sales (as a percent) | 14.00% | ||||||||||||
Novartis | JAKAVI | Regulatory Milestones | Europe | |||||||||||||
License agreements | |||||||||||||
Amount recognized and received for the achievement of a predefined milestone | $ 60,000 |
License Agreements - Lilly (Det
License Agreements - Lilly (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 139 Months Ended | ||||
May 31, 2019 | Mar. 31, 2016 | Dec. 31, 2009 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | |
License agreements | ||||||||
Research and Development Expense | $ 343,511 | $ 286,601 | $ 650,407 | $ 1,371,888 | ||||
Revenues | 705,709 | 688,043 | 1,310,427 | 1,256,550 | ||||
Product royalty revenues | ||||||||
License agreements | ||||||||
Revenues | 120,559 | 92,753 | $ 220,466 | 174,533 | ||||
Eli Lilly | ||||||||
License agreements | ||||||||
Upfront payment received under license agreement | $ 90,000 | |||||||
Eli Lilly | Phase IIB | ||||||||
License agreements | ||||||||
Associated future global development costs from the initiation of a Phase IIb trial, if elected to co-develop (as a percentage) | 30.00% | |||||||
Associated future royalty payments from the initiation of a Phase IIb trial, if elected to not co-develop, percentage | 20.00% | |||||||
Eli Lilly | Pre-specified Events | Maximum | ||||||||
License agreements | ||||||||
Upfront and immediate milestone payment to be received under license agreement | 665,000 | |||||||
Eli Lilly | Development Milestones | ||||||||
License agreements | ||||||||
Amount recognized and received for the achievement of a predefined milestone | $ 149,000 | |||||||
Eli Lilly | Development Milestones | Maximum | ||||||||
License agreements | ||||||||
Upfront and immediate milestone payment to be received under license agreement | 150,000 | |||||||
Eli Lilly | Regulatory Milestones | ||||||||
License agreements | ||||||||
Amount recognized and received for the achievement of a predefined milestone | $ 265,000 | |||||||
Eli Lilly | Regulatory Milestones | Maximum | ||||||||
License agreements | ||||||||
Upfront and immediate milestone payment to be received under license agreement | 365,000 | |||||||
Eli Lilly | Sales and Commercial Milestones | Maximum | ||||||||
License agreements | ||||||||
Upfront and immediate milestone payment to be received under license agreement | $ 150,000 | |||||||
Eli Lilly | Product royalty revenues | ||||||||
License agreements | ||||||||
Revenues | 36,000 | 25,800 | $ 68,300 | 51,300 | ||||
Eli Lilly | GVHD | ||||||||
License agreements | ||||||||
Upfront payment under license agreement | $ 35,000 | |||||||
Additional milestone payments under the license agreement | $ 40,000 | |||||||
Eli Lilly | GVHD | Regulatory Milestones | ||||||||
License agreements | ||||||||
Milestone payment made under license agreement | $ 20,000 | |||||||
Eli Lilly | Milestone revenues | ||||||||
License agreements | ||||||||
Revenues | $ 0 | $ 0 | $ 0 | $ 0 |
License Agreements - Agenus (De
License Agreements - Agenus (Details) $ / shares in Units, $ in Thousands, shares in Millions | Feb. 14, 2017USD ($)$ / shares | Feb. 01, 2017USD ($)$ / sharesshares | Feb. 28, 2017USD ($) | Nov. 30, 2015item | Jan. 31, 2015USD ($)item | Jun. 30, 2021USD ($)$ / sharesshares | Mar. 31, 2021USD ($)$ / sharesshares | Sep. 30, 2020USD ($)$ / sharesshares | Jun. 30, 2020USD ($)$ / sharesshares | Jun. 30, 2021USD ($)$ / shares | Jun. 30, 2020USD ($)$ / shares | Dec. 31, 2017USD ($) | Dec. 31, 2020USD ($) |
License agreements | |||||||||||||
Long term investments | $ 220,691 | $ 220,691 | $ 222,301 | ||||||||||
Unrealized gain (loss) on long term investments | 26,765 | $ 72,274 | (944) | $ 24,142 | |||||||||
Research and development expense | 343,511 | $ 286,601 | $ 650,407 | 1,371,888 | |||||||||
Agenus | |||||||||||||
License agreements | |||||||||||||
Number of program targets | item | 3 | 4 | |||||||||||
Royalty payments on future global net sales (as a percent) | 15.00% | ||||||||||||
Upfront payment under license agreement | $ 60,000 | ||||||||||||
Period of notice for termination of license agreement | 12 months | ||||||||||||
Agenus | Development, Regulatory and Commercialization Milestones | Minimum | |||||||||||||
License agreements | |||||||||||||
Royalty payments on future global net sales (as a percent) | 6.00% | ||||||||||||
Agenus | Development, Regulatory and Commercialization Milestones | Maximum | |||||||||||||
License agreements | |||||||||||||
Royalty payments on future global net sales (as a percent) | 12.00% | ||||||||||||
Additional milestone payments under the license agreement | $ 500,000 | ||||||||||||
Agenus | Development Milestones | |||||||||||||
License agreements | |||||||||||||
Upfront payment under license agreement | $ 20,000 | ||||||||||||
Additional milestone payments under the license agreement | $ 10,000 | ||||||||||||
Agenus | |||||||||||||
License agreements | |||||||||||||
Long term investments | $ 67,300 | $ 67,300 | 44,700 | ||||||||||
Ownership percentage (as a percent) | 18.00% | 6.00% | 6.00% | ||||||||||
Shares divested (in shares) | shares | 1.6 | 0.2 | 2.5 | 1.2 | |||||||||
Share price (per share) | $ / shares | $ 5.45 | ||||||||||||
Gross proceeds from sale of stock | $ 8,200 | $ 1,100 | $ 12,700 | $ 4,500 | |||||||||
Unrealized gain (loss) on long term investments | 37,800 | 26,200 | $ 31,900 | (2,700) | |||||||||
Research and development expense | 200 | $ 200 | 700 | $ 300 | |||||||||
Agenus | Accrued and other liabilities | |||||||||||||
License agreements | |||||||||||||
Accrued and other liabilities | $ 600 | $ 600 | $ 500 | ||||||||||
Agenus | Minimum | |||||||||||||
License agreements | |||||||||||||
Share price (per share) | $ / shares | $ 4.59 | $ 4.28 | $ 3.57 | $ 4.59 | $ 3.57 | ||||||||
Agenus | Maximum | |||||||||||||
License agreements | |||||||||||||
Share price (per share) | $ / shares | $ 5.41 | $ 5.25 | $ 4.21 | $ 5.41 | $ 4.21 | ||||||||
Agenus | Stock purchase agreement | |||||||||||||
License agreements | |||||||||||||
Total consideration paid | $ 60,000 | ||||||||||||
Purchase of common stock under Stock Purchase Agreement (in shares ) | shares | 10 | ||||||||||||
Purchase price of common stock | $ 60,000 | ||||||||||||
Per share price | $ / shares | $ 4.40 | $ 6 | |||||||||||
Discount for lack of marketability | $ 4,500 | ||||||||||||
Fair value of shares on the issuance date | $ 39,500 | ||||||||||||
Long term investments | 39,500 | ||||||||||||
Research and development expense | $ 20,500 |
License Agreements - Merus (Det
License Agreements - Merus (Details) - USD ($) $ / shares in Units, $ in Thousands | Jan. 23, 2017 | Jan. 31, 2021 | Feb. 28, 2017 | Jan. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2017 | Dec. 31, 2020 |
License agreements | |||||||||||
Long term investments | $ 220,691 | $ 220,691 | $ 222,301 | ||||||||
Research and development expense | 343,511 | $ 286,601 | 650,407 | $ 1,371,888 | |||||||
Unrealized gain (loss) on long term investments | 26,765 | 72,274 | (944) | 24,142 | |||||||
Total revenues | 705,709 | 688,043 | 1,310,427 | 1,256,550 | |||||||
Net income (loss) | 202,991 | (430,344) | |||||||||
Current assets | 2,620,060 | 2,620,060 | 2,359,894 | ||||||||
Current liabilities | 660,324 | 660,324 | 631,195 | ||||||||
Merus | |||||||||||
License agreements | |||||||||||
Associated future global development costs , if elected to co-develop (as a percent) | 35.00% | ||||||||||
Upfront payment under license agreement | $ 120,000 | ||||||||||
Research and development expense | 5,500 | 1,900 | 7,800 | 4,200 | |||||||
Merus | Accrued and other liabilities | |||||||||||
License agreements | |||||||||||
Accrued and other liabilities | 2,200 | 2,200 | 1,600 | ||||||||
Merus | U.S. | |||||||||||
License agreements | |||||||||||
Profit sharing (as a percent) | 50.00% | ||||||||||
Percentage of profit (losses) | 50.00% | ||||||||||
Merus | Minimum | |||||||||||
License agreements | |||||||||||
Royalty payments on future global net sales (as a percent) | 6.00% | ||||||||||
Merus | Minimum | U.S. | |||||||||||
License agreements | |||||||||||
Royalty payments on future global net sales (as a percent) | 6.00% | ||||||||||
Merus | Minimum | Non-U.S. | |||||||||||
License agreements | |||||||||||
Royalty payments on future global net sales (as a percent) | 6.00% | ||||||||||
Merus | Maximum | |||||||||||
License agreements | |||||||||||
Royalty payments on future global net sales (as a percent) | 10.00% | ||||||||||
Percentage of reverse royalty | 4.00% | ||||||||||
Merus | Maximum | U.S. | |||||||||||
License agreements | |||||||||||
Royalty payments on future global net sales (as a percent) | 10.00% | ||||||||||
Percentage of additional royalties | 4.00% | ||||||||||
Merus | Maximum | Non-U.S. | |||||||||||
License agreements | |||||||||||
Royalty payments on future global net sales (as a percent) | 10.00% | ||||||||||
Merus | Maximum | Development and Regulatory Milestones | |||||||||||
License agreements | |||||||||||
Additional milestone payments under the license agreement | $ 100,000 | ||||||||||
Merus | Maximum | Sales and Commercial Milestones | |||||||||||
License agreements | |||||||||||
Additional milestone payments under the license agreement | $ 250,000 | ||||||||||
Merus | |||||||||||
License agreements | |||||||||||
Per share price of common stock | $ 24.50 | ||||||||||
Discount for lack of marketability | $ 5,600 | ||||||||||
Fair value of shares on the issuance date | 72,800 | ||||||||||
Total consideration paid | 80,000 | ||||||||||
Long term investments | $ 72,800 | ||||||||||
Research and development expense | $ 7,200 | ||||||||||
Fair market value of our long term investments | $ 74,800 | $ 74,800 | $ 56,100 | ||||||||
Ownership percentage (as a percent) | 9.00% | 9.00% | |||||||||
Unrealized gain (loss) on long term investments | $ 600 | $ 12,700 | $ 10,000 | $ 6,400 | |||||||
Merus | IPO | |||||||||||
License agreements | |||||||||||
Common shares purchased (in shares) | 350,000 | ||||||||||
Number of shares in underwritten public offering (in shares) | 4,848,485 | ||||||||||
Per share price | $ 24.75 | ||||||||||
Value of shares acquired | $ 8,700 | ||||||||||
Merus | Stock purchase agreement | |||||||||||
License agreements | |||||||||||
Purchase of common stock under Stock Purchase Agreement (in shares ) | 3,200,000 | ||||||||||
Purchase price of common stock | $ 80,000 | ||||||||||
Per share price | $ 25 |
License Agreements - Calithera
License Agreements - Calithera (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | Jan. 30, 2017 | Jan. 31, 2017 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2017 | Dec. 31, 2020 | Jan. 01, 2017 |
License agreements | |||||||||
Long term investments | $ 220,691 | $ 220,691 | $ 222,301 | ||||||
Research and development expense | 343,511 | $ 286,601 | 650,407 | $ 1,371,888 | |||||
Unrealized gain (loss) on long term investments | 26,765 | 72,274 | (944) | 24,142 | |||||
Calithera | |||||||||
License agreements | |||||||||
Funding of future development costs (as a percent) | 70.00% | ||||||||
Upfront payment made under license agreement | $ 45,000 | ||||||||
Potential milestone payments to be made with profit sharing in effect | 12,000 | ||||||||
Potential milestone payments to be made with profit sharing terminated | $ 738,000 | ||||||||
Research and development expense | 2,000 | 1,900 | 4,500 | 4,400 | |||||
Calithera | Accrued and other liabilities | |||||||||
License agreements | |||||||||
Accrued and other liabilities | 0 | 0 | |||||||
Calithera | U.S. | |||||||||
License agreements | |||||||||
Percentage of profit (losses) | 60.00% | ||||||||
Calithera | |||||||||
License agreements | |||||||||
Total consideration paid | $ 53,000 | $ 53,000 | |||||||
Long term investments | $ 3,600 | $ 3,600 | 8,400 | ||||||
Ownership percentage (as a percent) | 2.00% | 2.00% | |||||||
Calithera | Other Comprehensive Income | |||||||||
License agreements | |||||||||
Unrealized gain (loss) on long term investments | $ (500) | $ 1,500 | $ (4,800) | $ (700) | |||||
Calithera | Calithera | Accrued and other liabilities | |||||||||
License agreements | |||||||||
Accrued and other liabilities | $ 600 | ||||||||
Calithera | Stock purchase agreement | |||||||||
License agreements | |||||||||
Purchase of common stock under Stock Purchase Agreement (in shares ) | 1.7 | ||||||||
Purchase price of common stock | $ 8,000 | ||||||||
Per share price | $ 6.75 | $ 4.65 | |||||||
Fair market value of our long term investments | $ 11,600 | ||||||||
Stock purchase price | $ 8,000 | ||||||||
Long term investments | $ 11,600 | ||||||||
Research and development expense | $ 41,400 | ||||||||
Calithera | Collaboration and license agreement | |||||||||
License agreements | |||||||||
Upfront license fees | $ 45,000 |
License Agreements - MacroGenic
License Agreements - MacroGenics (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2017 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
License agreements | ||||||
Research and development | $ 343,511 | $ 286,601 | $ 650,407 | $ 1,371,888 | ||
MacroGenics | ||||||
License agreements | ||||||
Upfront payment under license agreement | $ 150,000 | |||||
Research and development | 17,600 | $ 16,300 | 31,200 | $ 32,700 | ||
MacroGenics | Accrued and other liabilities | ||||||
License agreements | ||||||
Accrued and other liabilities | $ 900 | 900 | $ 100 | |||
Minimum | MacroGenics | ||||||
License agreements | ||||||
Royalty payments on future global net sales (as a percent) | 15.00% | |||||
Maximum | MacroGenics | ||||||
License agreements | ||||||
Royalty payments on future global net sales (as a percent) | 24.00% | |||||
Development and Regulatory Milestones | MacroGenics | ||||||
License agreements | ||||||
Milestone payment made under license agreement | $ 70,000 | |||||
Development and Regulatory Milestones | Maximum | MacroGenics | ||||||
License agreements | ||||||
Additional milestone payments under the license agreement | $ 350,000 | |||||
Sales and Commercial Milestones | Maximum | MacroGenics | ||||||
License agreements | ||||||
Additional milestone payments under the license agreement | $ 330,000 |
License Agreements - Syros (Det
License Agreements - Syros (Details) $ / shares in Units, $ in Thousands, shares in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||||
Jan. 31, 2018USD ($)item$ / sharesshares | Jun. 30, 2021USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2021USD ($) | Jun. 30, 2020USD ($) | Dec. 31, 2020USD ($) | Feb. 28, 2018USD ($) | Jan. 08, 2018$ / shares | |
License agreements | ||||||||
Long term investments | $ 220,691 | $ 220,691 | $ 222,301 | |||||
Research and development expense | 343,511 | $ 286,601 | 650,407 | $ 1,371,888 | ||||
Unrealized gain (loss) on long term investments | 26,765 | 72,274 | (944) | 24,142 | ||||
Syros Pharmaceuticals, Inc. | ||||||||
License agreements | ||||||||
Number of program targets | item | 7 | |||||||
Long term investments | $ 5,100 | $ 5,100 | $ 10,200 | |||||
Ownership percentage (as a percent) | 2.00% | 2.00% | ||||||
Unrealized gain (loss) on long term investments | $ (1,900) | $ 4,400 | $ (5,100) | $ 3,500 | ||||
Syros Pharmaceuticals, Inc. | Stock purchase agreement | ||||||||
License agreements | ||||||||
Purchase of common stock under Stock Purchase Agreement (in shares ) | shares | 0.8 | |||||||
Purchase price of common stock | $ 10,000 | |||||||
Per share price | $ / shares | $ 12.61 | $ 9.77 | ||||||
Lock-up period | 12 months | |||||||
Discount for lack of marketability | $ 100 | |||||||
Fair value of shares on the issuance date | 7,600 | |||||||
Long term investments | 7,600 | |||||||
Research and development expense | $ 2,400 | |||||||
Syros Pharmaceuticals, Inc. | Amended stock purchase agreement | ||||||||
License agreements | ||||||||
Purchase of common stock under Stock Purchase Agreement (in shares ) | shares | 0.1 | |||||||
Purchase price of common stock | $ 1,400 | |||||||
Per share price | $ / shares | $ 9.55 | |||||||
Long term investments | $ 1,400 | |||||||
Syros Pharmaceuticals, Inc. | Maximum | ||||||||
License agreements | ||||||||
Target selection and option exercise fee payment | $ 54,000 | |||||||
Syros Pharmaceuticals, Inc. | Development and Regulatory Milestones | Maximum | ||||||||
License agreements | ||||||||
Additional milestone payments under the license agreement | 50,000 | |||||||
Syros Pharmaceuticals, Inc. | Sales and Commercial Milestones | Maximum | ||||||||
License agreements | ||||||||
Additional milestone payments under the license agreement | $ 65,000 |
License Agreements - Innovent (
License Agreements - Innovent (Details) - Innovent - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2021 | Apr. 30, 2020 | Jan. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
License agreements | |||||||||
Upfront and immediate milestone payment to be received under license agreement | $ 40 | ||||||||
Research and development expenses reimbursed | $ 2.3 | $ 2.6 | $ 2.3 | $ 2.6 | |||||
Reimbursable costs included in accounts receivable | $ 0.9 | $ 0.9 | $ 0.9 | $ 1.2 | |||||
Regulatory Milestones | |||||||||
License agreements | |||||||||
Amount recognized and received for the achievement of a predefined milestone | $ 10 | ||||||||
Regulatory Milestones | PEMAZYRE | |||||||||
License agreements | |||||||||
Amount recognized and received for the achievement of a predefined milestone | $ 5 | ||||||||
Development and Regulatory Milestones | Maximum | |||||||||
License agreements | |||||||||
Upfront and immediate milestone payment to be received under license agreement | $ 94 | ||||||||
Sales and Commercial Milestones | Maximum | |||||||||
License agreements | |||||||||
Upfront and immediate milestone payment to be received under license agreement | $ 202.5 |
License Agreements - Zai Lab (D
License Agreements - Zai Lab (Details) - Zai Lab Ltd - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Aug. 31, 2019 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Upfront and immediate milestone payment to be received under license agreement | $ 17.5 | |||||
Research and development expenses reimbursed | $ 0 | $ 0 | $ 0 | $ 0.2 | ||
Reimbursable costs included in accounts receivable | $ 0.9 | $ 0.9 | $ 0.6 | |||
Development and Regulatory Milestones | Maximum | ||||||
Upfront payment under license agreement | 22.5 | |||||
Sales and Commercial Milestones | Maximum | ||||||
Upfront payment under license agreement | $ 37.5 |
License Agreements - MorphoSys
License Agreements - MorphoSys (Details) $ / shares in Units, $ in Thousands, € in Millions | Mar. 03, 2020USD ($)$ / shares | Mar. 31, 2020EUR (€) | Jan. 31, 2020USD ($)$ / shares | Jun. 30, 2021USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2021USD ($) | Jun. 30, 2020USD ($) | Dec. 31, 2020USD ($) |
Long term investments | $ 220,691 | $ 220,691 | $ 222,301 | |||||
Research and development expense | 343,511 | $ 286,601 | 650,407 | $ 1,371,888 | ||||
Unrealized gain (loss) on long term investments | 26,765 | 72,274 | (944) | 24,142 | ||||
Collaboration loss sharing | 9,843 | 13,253 | 20,327 | 15,383 | ||||
ADSs | ||||||||
Equity Method Investment, Ownership Percentage | 25.00% | |||||||
Equity Method Investment, Aggregate Cost | $ 150,000 | |||||||
Per share price | $ / shares | $ 27.65 | $ 41.33 | ||||||
Lock-up period | 18 months | |||||||
Discount for lack of marketability | $ 4,900 | |||||||
Fair value of shares | 95,500 | |||||||
Long term investments | 95,500 | $ 69,900 | $ 69,900 | 102,900 | ||||
Research and development expense | $ 54,500 | |||||||
MorphoSys AG | ||||||||
Upfront payment under license agreement | € | € 750 | |||||||
Equity Method Investment, Ownership Percentage | 3.00% | 3.00% | ||||||
Research and development expense | $ 19,400 | 15,700 | $ 34,300 | 27,300 | ||||
Unrealized gain (loss) on long term investments | (9,200) | 27,500 | $ (32,900) | $ 17,600 | ||||
Profit (loss) sharing ratio | 50.00% | 50.00% | ||||||
Collaboration loss sharing | 9,800 | $ 13,300 | $ 20,300 | $ 15,400 | ||||
Associated future global development costs from the initiation of a Phase IIb trial, if elected to co-develop (as a percentage) | 55.00% | 55.00% | ||||||
Accrued and other liabilities | $ 34,200 | $ 34,200 | $ 54,200 | |||||
MorphoSys AG | Development and Regulatory Milestones | Maximum | ||||||||
Additional milestone payments under the license agreement | $ 740,000 | |||||||
MorphoSys AG | Sales and Commercial Milestones | Maximum | ||||||||
Additional milestone payments under the license agreement | $ 315,000 | |||||||
MorphoSys AG | MorphoSys AG | ||||||||
Funding of future development costs (as a percent) | 45.00% | |||||||
MorphoSys AG | Incyte | ||||||||
Funding of future development costs (as a percent) | 55.00% |
License Agreements - Nimble (De
License Agreements - Nimble (Details) - Nimble - Maximum $ in Millions | Sep. 30, 2020USD ($) |
Future contingent discovery milestones | |
Additional milestone payments under the license agreement | $ 8 |
Development and Regulatory Milestones | |
Additional milestone payments under the license agreement | 127 |
Sales and Commercial Milestones | |
Additional milestone payments under the license agreement | $ 130 |
Stock Compensation (Details)
Stock Compensation (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Stock compensation | ||||
Stock compensation expense | $ 44.8 | $ 46.3 | $ 92.1 | $ 88.8 |
Stock Compensation Expense Capitalized | 0.7 | 0.1 | $ 1.2 | 0.3 |
Assumed annualized forfeiture rate (as a percent) | 5.00% | |||
Weighted-average fair value assumptions | ||||
Valuation method | Black-Scholes valuation model | |||
Research and Development Expense | ||||
Stock compensation | ||||
Stock compensation expense | 28 | 32.5 | $ 57.9 | 61.2 |
Selling, General and Administrative Expenses | ||||
Stock compensation | ||||
Stock compensation expense | 16.4 | 13.6 | 33.6 | 27.1 |
Cost of product revenues | ||||
Stock compensation | ||||
Stock compensation expense | $ 0.4 | $ 0.2 | $ 0.6 | $ 0.5 |
Stock Options | ||||
Weighted-average fair value assumptions | ||||
Average risk-free interest rates (as a percent) | 0.75% | 0.33% | 0.44% | 1.32% |
Average expected life (in years) | 5 years 3 months 25 days | 5 years 5 months 23 days | 4 years 10 months 2 days | 4 years 9 months 18 days |
Volatility (as a percent) | 38.00% | 39.00% | 39.00% | 40.00% |
Weighted-average fair value (in dollars per share) | $ 29.55 | $ 34.13 | $ 29.80 | $ 29.49 |
Unrecognized compensation | ||||
Unrecognized compensation cost for nonvested option (in dollars) | $ 65.3 | $ 65.3 | ||
Vesting period of recognition of the unrecognized compensation cost of nonvested awards | 1 year 1 month 6 days | |||
Restricted Stock Units (RSUs) | ||||
Weighted-average fair value assumptions | ||||
Average risk-free interest rates (as a percent) | 0.25% | 0.16% | 0.18% | 0.19% |
Average expected life (in years) | 6 months | 6 months | 6 months | 6 months |
Volatility (as a percent) | 26.00% | 38.00% | 33.00% | 48.00% |
Weighted-average fair value (in dollars per share) | $ 16.14 | $ 19.50 | $ 18.48 | $ 17.47 |
Unrecognized compensation | ||||
Unrecognized compensation cost for nonvested option (in dollars) | $ 110.7 | $ 110.7 | ||
Vesting period of recognition of the unrecognized compensation cost of nonvested awards | 1 year 8 months 12 days | |||
Performance Stock Units (PSUs) | ||||
Unrecognized compensation | ||||
Unrecognized compensation cost for nonvested option (in dollars) | $ 13.5 | $ 13.5 | ||
Vesting period of recognition of the unrecognized compensation cost of nonvested awards | 1 year 2 months 12 days |
Stock Compensation - Option act
Stock Compensation - Option activity (Details) - Stock Options - $ / shares | 1 Months Ended | 6 Months Ended | |
Jul. 31, 2016 | Jun. 30, 2021 | Jun. 30, 2016 | |
Shares Subject to Outstanding Options, Shares | |||
Outstanding at the beginning of the period (in shares) | 12,115,288 | ||
Options granted (in shares) | 1,198,198 | ||
Options exercised (in shares) | (484,578) | ||
Options cancelled (in shares) | (422,979) | ||
Outstanding at the end of the period (in shares) | 12,405,929 | ||
Shares Subject to Outstanding Options, Weighted Average Exercise Price | |||
Outstanding at the beginning of the period (in dollars per share) | $ 88.31 | ||
Options granted (in dollars per share) | 88.47 | ||
Options exercised (in dollars per share) | 67.63 | ||
Options cancelled (in dollars per share) | 92.99 | ||
Outstanding at the end of the period (in dollars per share) | $ 88.98 | ||
Termination period | 10 years | 7 years | |
Vesting period | 4 years | 3 years | |
Tranche One | |||
Shares Subject to Outstanding Options, Weighted Average Exercise Price | |||
Vesting period | 1 year | 1 year | |
Vesting Percentage | 25.00% | 33.00% | |
Tranche Two | |||
Shares Subject to Outstanding Options, Weighted Average Exercise Price | |||
Vesting period | 36 months | 24 months |
Stock Compensation - RSU and PS
Stock Compensation - RSU and PSU award activity (Details) - $ / shares | 1 Months Ended | 6 Months Ended | ||||
Jul. 31, 2020 | Jul. 31, 2019 | Apr. 30, 2019 | Jul. 31, 2018 | Jun. 30, 2018 | Jun. 30, 2021 | |
Shares Subject to Outstanding Options, Shares | ||||||
Outstanding at the beginning of the period (in shares) | 3,284,583 | |||||
Outstanding at the end of the period (in shares) | 3,115,348 | |||||
Shares Subject to Outstanding Options, Weighted Average Exercise Price | ||||||
Outstanding at the beginning of the period (in dollars per share) | $ 87.42 | |||||
Outstanding at the end of the period (in dollars per share) | $ 89.76 | |||||
Restricted Stock Units (RSUs) | ||||||
Shares Subject to Outstanding Options, Shares | ||||||
Granted (in shares) | 190,000 | 549,473 | ||||
Released (in shares) | (276,393) | |||||
Cancelled (in shares) | (150,917) | |||||
Shares Subject to Outstanding Options, Weighted Average Exercise Price | ||||||
Granted (in dollars per share) | $ 89.56 | |||||
Released (in dollars per share) | 75.88 | |||||
Cancelled (in dollars per share) | $ 91.93 | |||||
Performance Stock Units (PSUs) | ||||||
Shares Subject to Outstanding Options, Shares | ||||||
Granted (in shares) | 92,347 | 86,975 | 100,000 | 77,243 | 446,500 | |
Released (in shares) | (164,898) | |||||
Cancelled (in shares) | (126,500) | |||||
Shares Subject to Outstanding Options, Weighted Average Exercise Price | ||||||
Released (in dollars per share) | $ 65.76 | |||||
Cancelled (in dollars per share) | $ 65.76 |
Stock Compensation - RSU and _2
Stock Compensation - RSU and PSU Narrative (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||||||||||
Jul. 31, 2020 | Jul. 31, 2019 | Apr. 30, 2019 | Jul. 31, 2018 | Jun. 30, 2018 | Jul. 31, 2016 | Jan. 31, 2014 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2016 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | |
Stock Compensation Plans | |||||||||||||||
Allocated Share-based Compensation Expense | $ 44.8 | $ 46.3 | $ 92.1 | $ 88.8 | |||||||||||
Stock Options | |||||||||||||||
Stock Compensation Plans | |||||||||||||||
Vesting period | 4 years | 3 years | |||||||||||||
Stock Options | Tranche One | |||||||||||||||
Stock Compensation Plans | |||||||||||||||
Percentage of units vesting at the end of each calendar year (as a percent) | 25.00% | 33.00% | |||||||||||||
Vesting period | 1 year | 1 year | |||||||||||||
Stock Options | Tranche Two | |||||||||||||||
Stock Compensation Plans | |||||||||||||||
Vesting period | 36 months | 24 months | |||||||||||||
Restricted Stock Units (RSUs) | |||||||||||||||
Stock Compensation Plans | |||||||||||||||
Number of shares awarded for each RSU (in shares) | 1 | ||||||||||||||
Percentage of units vesting at the end of each calendar year (as a percent) | 25.00% | ||||||||||||||
Vesting period | 4 years | ||||||||||||||
Granted (in shares) | 190,000 | 549,473 | |||||||||||||
Service period | 3 years | ||||||||||||||
Performance Stock Units (PSUs) | |||||||||||||||
Stock Compensation Plans | |||||||||||||||
Vesting period | 3 years | 4 years | 4 years | ||||||||||||
Granted (in shares) | 92,347 | 86,975 | 100,000 | 77,243 | 446,500 | ||||||||||
Multiplying factor | 101.80% | 83.00% | |||||||||||||
Performance Stock Units (PSUs) | Minimum | |||||||||||||||
Stock Compensation Plans | |||||||||||||||
Vesting period | 3 years | ||||||||||||||
Performance Stock Units (PSUs) | Maximum | |||||||||||||||
Stock Compensation Plans | |||||||||||||||
Vesting period | 4 years | ||||||||||||||
Multiplier conversion rate of units into common stock (as a percent) | 200.00% | 125.00% | 150.00% | ||||||||||||
Performance Stock Units (PSUs) | Tranche One | |||||||||||||||
Stock Compensation Plans | |||||||||||||||
Granted (in shares) | 106,500 | ||||||||||||||
Multiplying factor | 142.00% | ||||||||||||||
Performance Stock Units (PSUs) | Tranche One | Maximum | |||||||||||||||
Stock Compensation Plans | |||||||||||||||
Multiplying factor | 267.00% | ||||||||||||||
Performance Stock Units (PSUs) | Tranche Two | |||||||||||||||
Stock Compensation Plans | |||||||||||||||
Granted (in shares) | 150,000 | ||||||||||||||
Multiplying factor | 100.00% | ||||||||||||||
Performance Stock Units (PSUs) | Tranche Two | Minimum | |||||||||||||||
Stock Compensation Plans | |||||||||||||||
Multiplying factor | 0.00% | ||||||||||||||
Performance Stock Units (PSUs) | Tranche Two | Maximum | |||||||||||||||
Stock Compensation Plans | |||||||||||||||
Multiplying factor | 100.00% | ||||||||||||||
Performance Stock Units (PSUs) | Tranche Three | |||||||||||||||
Stock Compensation Plans | |||||||||||||||
Granted (in shares) | 290,000 | ||||||||||||||
Multiplying factor | 50.00% | 50.00% | |||||||||||||
Performance Stock Units (PSUs) | Tranche Three | Maximum | |||||||||||||||
Stock Compensation Plans | |||||||||||||||
Multiplying factor | 100.00% |
Stock Compensation - Shares ava
Stock Compensation - Shares available for grant (Details) | 6 Months Ended |
Jun. 30, 2021shares | |
Shares Available For Grant | |
Outstanding at the beginning of the period (in shares) | 5,515,182 |
Additional authorization (in shares) | 9,500,000 |
Options, RSUs and PSUs granted (in shares) | (2,297,144) |
Options, RSUs and PSUs cancelled (in shares) | 705,939 |
Outstanding at the end of the period (in shares) | 13,423,977 |
Accrued and Other Current Lia_3
Accrued and Other Current Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Accrued and Other Current Liabilities | ||
Royalties | $ 127,216 | $ 106,011 |
Clinical related costs | 103,369 | 115,897 |
Sales allowances | 81,729 | 73,204 |
Construction in progress | 30,823 | 22,807 |
Operating lease liabilities | 10,995 | 12,674 |
Other current liabilities | 58,935 | 47,811 |
Total accrued and other current liabilities | $ 413,067 | $ 378,404 |
Employee Benefit Plans - Define
Employee Benefit Plans - Defined Contribution Plan (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Employee Benefit Plans | ||||
Defined contribution expense | $ 4.3 | $ 3.3 | $ 8.4 | $ 6.6 |
Employee benefit plans - Period
Employee benefit plans - Periodic Benefit Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Employee Benefit Plans | ||||
Service cost | $ 1,997 | $ 1,477 | $ 3,952 | $ 2,934 |
Interest cost | 23 | 47 | 45 | 93 |
Expected return on plan assets | (15) | (31) | (30) | (61) |
Amortization of prior service cost | 54 | 53 | 108 | 107 |
Amortization of actuarial losses | 288 | 167 | 576 | 334 |
Net periodic benefit cost | $ 2,347 | $ 1,713 | $ 4,651 | $ 3,407 |
Location of costs excluding the service component | Other income (expense), net | Other income (expense), net | Other income (expense), net | Other income (expense), net |
Expected contributions | $ 5,300 | $ 5,300 |
Income taxes (Details)
Income taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Income Taxes | ||||
Income tax (benefit) expense | $ 22,177 | $ 16,966 | $ 37,964 | $ 33,532 |
Increase in unrecognized tax benefits | 1,700 | |||
Increase (decrease) noncurrent other liabilities | $ (100) |
Net Income (Loss) Per Share (De
Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Basic Net Income (Loss) Per Share | ||||
Basic net income (loss) per share | $ 149,456 | $ 290,298 | $ 202,991 | $ (430,344) |
Weighted average common shares outstanding | 220,083,000 | 217,549,000 | 219,942,000 | 217,135,000 |
Basic net income (loss) per share | $ 0.68 | $ 1.33 | $ 0.92 | $ (1.98) |
Diluted Net Income (Loss) Per Share | ||||
Diluted net income (loss) | $ 149,456 | $ 290,298 | $ 202,991 | $ (430,344) |
Weighted average common shares outstanding | 220,083,000 | 217,549,000 | 219,942,000 | 217,135,000 |
Dilutive stock options and awards | 2,167,000 | 2,885,000 | 2,119,000 | |
Weighted average shares used to compute diluted net income (loss) per share | 222,250,000 | 220,434,000 | 222,061,000 | 217,135,000 |
Diluted net income (loss) per share | $ 0.67 | $ 1.32 | $ 0.91 | $ (1.98) |
Anti-dilutive securities | ||||
Potential common shares excluded from diluted net income (loss) per share computation | 9,238,385 | 5,336,636 | 8,982,288 | 14,964,275 |
Stock Options | ||||
Anti-dilutive securities | ||||
Potential common shares excluded from diluted net income (loss) per share computation | 9,238,385 | 4,970,884 | 8,982,288 | 14,598,523 |
Convertible Senior Notes 1.25 Percent Due 2020 | ||||
Anti-dilutive securities | ||||
Potential common shares excluded from diluted net income (loss) per share computation | 365,752 | 365,752 |
Contingencies (Details)
Contingencies (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2021USD ($) | |
US Department of Justice | |
Contingencies | |
Settlement amount | $ 12.6 |