Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 03, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-33093 | |
Entity Registrant Name | LIGAND PHARMACEUTICALS INCORPORATED | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 77-0160744 | |
Entity Address, Address Line One | 3911 Sorrento Valley Boulevard, Suite 110 | |
Entity Address, City or Town | San Diego | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92121 | |
City Area Code | 858 | |
Local Phone Number | 550-7500 | |
Title of 12(b) Security | Common Stock , par value $0.001 per share | |
Trading Symbol | LGND | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 16,091,319 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0000886163 | |
Current Fiscal Year End Date | --12-31 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 456,916,000 | $ 71,543,000 |
Short-term investments | 338,154,000 | 998,324,000 |
Accounts receivable, net | 32,907,000 | 30,387,000 |
Inventory | 13,430,000 | 7,296,000 |
Income taxes receivable | 0 | 11,361,000 |
Other current assets | 3,191,000 | 4,734,000 |
Assets held for sale | 13,143,000 | 0 |
Total current assets | 857,741,000 | 1,123,645,000 |
Deferred income taxes, net | 27,026,000 | 25,608,000 |
Intangible assets, net | 224,582,000 | 210,448,000 |
Goodwill | 102,136,000 | 95,229,000 |
Commercial license and other economic rights, net | 10,834,000 | 20,090,000 |
Property and equipment, net | 7,157,000 | 7,185,000 |
Operating lease right-of-use assets | 4,269,000 | 10,353,000 |
Other assets | 13,704,000 | 2,357,000 |
Total assets | 1,247,449,000 | 1,494,915,000 |
Current liabilities: | ||
Accounts payable | 10,169,000 | 2,420,000 |
Accrued liabilities | 14,498,000 | 9,836,000 |
Income taxes payable | 674,000 | 0 |
Current contingent liabilities | 1,194,000 | 2,607,000 |
Deferred revenue | 5,404,000 | 2,139,000 |
Liabilities related to assets held for sale | 10,361,000 | 0 |
Total current liabilities | 42,300,000 | 17,002,000 |
2023 convertible senior notes, net | 454,973,000 | 638,959,000 |
Long-term contingent liabilities | 9,604,000 | 6,335,000 |
Deferred income taxes, net | 13,508,000 | 32,937,000 |
Long-term operating lease liabilities | 3,920,000 | 9,970,000 |
Other long-term liabilities | 25,320,000 | 22,480,000 |
Total liabilities | 549,625,000 | 727,683,000 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, $0.001 par value; 5,000 shares authorized; zero issued and outstanding at September 30, 2020 and December 31, 2019 | 0 | 0 |
Common stock, $0.001 par value; 60,000 shares authorized; 16,091 and 16,823 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively | 16,000 | 17,000 |
Additional paid-in capital | 313,057,000 | 367,326,000 |
Accumulated other comprehensive loss | (1,441,000) | (216,000) |
Retained earnings | 386,192,000 | 400,105,000 |
Total stockholders' equity | 697,824,000 | 767,232,000 |
Total liabilities and stockholders' equity | $ 1,247,449,000 | $ 1,494,915,000 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (USD per share) | $ 0.001 | $ 0.001 |
Preferred stock authorized (shares) | 5,000,000 | 5,000,000 |
Preferred stock issued (shares) | 0 | 0 |
Preferred stock outstanding (shares) | 0 | 0 |
Common stock, par value (USD per share) | $ 0.001 | $ 0.001 |
Common stock authorized (shares) | 60,000,000 | 60,000,000 |
Common stock issued (shares) | 16,091,000 | 16,823,000 |
Common stock outstanding (shares) | 16,091,000 | 16,823,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenues: | ||||
Total revenues | $ 41,848 | $ 24,808 | $ 116,429 | $ 93,279 |
Operating costs and expenses: | ||||
Cost of Captisol | 6,353 | 3,147 | 18,680 | 9,410 |
Amortization of intangibles | 3,875 | 3,552 | 11,285 | 10,560 |
Research and development | 12,853 | 13,742 | 37,476 | 37,244 |
General and administrative | 15,020 | 9,525 | 34,353 | 31,607 |
Total operating costs and expenses | 38,101 | 29,966 | 101,794 | 88,821 |
Gain from sale of Promacta license | 0 | 0 | 0 | 812,797 |
Income (loss) from operations | 3,747 | (5,158) | 14,635 | 817,255 |
Other income (expense): | ||||
Loss from short-term investments | (9,862) | (13,297) | (17,143) | (8,524) |
Interest income | 991 | 7,396 | 7,690 | 22,590 |
Interest expense | (6,269) | (8,993) | (21,030) | (26,911) |
Other income (expense), net | (219) | 181 | 1,940 | 404 |
Total other income (loss), net | (15,359) | (14,713) | (28,543) | (12,441) |
Income (loss) before income taxes | (11,612) | (19,871) | (13,908) | 804,814 |
Income tax benefit (expense) | 4,911 | 4,620 | 5,162 | (168,147) |
Net income (loss) | $ (6,701) | $ (15,251) | $ (8,746) | $ 636,667 |
Earnings Per Share, Basic and Diluted: | ||||
Basic net income (loss) per share (USD per share) | $ (0.42) | $ (0.81) | $ (0.54) | $ 32.51 |
Shares used in basic per share calculations (shares) | 16,082,000 | 18,770,000 | 16,222,000 | 19,586,000 |
Diluted net income (loss) per share (USD per share) | $ (0.42) | $ (0.81) | $ (0.54) | $ 31.29 |
Shares used in diluted per share calculations (shares) | 16,082,000 | 18,770,000 | 16,222,000 | 20,349,000 |
Royalties | ||||
Revenues: | ||||
Total revenues | $ 9,005 | $ 9,767 | $ 22,751 | $ 35,931 |
Captisol | ||||
Revenues: | ||||
Total revenues | 23,389 | 6,849 | 68,966 | 24,357 |
Contract revenue | ||||
Revenues: | ||||
Total revenues | $ 9,454 | $ 8,192 | $ 24,712 | $ 32,991 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss): | $ (6,701) | $ (15,251) | $ (8,746) | $ 636,667 |
Unrealized net gain (loss) on available-for-sale securities, net of tax | (54) | (187) | (84) | 546 |
Foreign currency translation | 923 | (764) | (1,141) | (1,015) |
Comprehensive income (loss) | $ (5,832) | $ (16,202) | $ (9,971) | $ 636,198 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity - USD ($) | Total | Adjustment | Common Stock | Additional paid in capital | Accumulated other comprehensive income (loss) | Retained earnings | Retained earningsAdjustment |
Balance at beginning of period (shares) at Dec. 31, 2018 | 20,765,000 | ||||||
Balance at beginning of period at Dec. 31, 2018 | $ 560,914,000 | $ 21,000 | $ 791,114,000 | $ (1,024,000) | $ (229,197,000) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock under employee stock compensation plans, net (shares) | 135,000 | ||||||
Issuance of common stock under employee stock compensation plans, net | (991,000) | (991,000) | |||||
Share-based compensation | 5,347,000 | 5,347,000 | |||||
Repurchase of common stock (shares) | (1,236,000) | ||||||
Repurchase of common stock | (151,585,000) | $ (1,000) | (151,584,000) | ||||
Unrealized net gain (loss) on available-for-sale securities, net of deferred tax | 230,000 | 230,000 | |||||
Foreign currency translation adjustment | 291,000 | 291,000 | |||||
Other tax adjustments | (569,000) | (569,000) | |||||
Net income (loss) | 666,337,000 | 666,337,000 | |||||
Balance at end of period (shares) at Mar. 31, 2019 | 19,664,000 | ||||||
Balance at end of period at Mar. 31, 2019 | 1,079,974,000 | $ 20,000 | 643,317,000 | (503,000) | 437,140,000 | ||
Balance at beginning of period (shares) at Dec. 31, 2018 | 20,765,000 | ||||||
Balance at beginning of period at Dec. 31, 2018 | 560,914,000 | $ 21,000 | 791,114,000 | (1,024,000) | (229,197,000) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | 636,667,000 | ||||||
Balance at end of period (shares) at Sep. 30, 2019 | 17,563,000 | ||||||
Balance at end of period at Sep. 30, 2019 | 850,581,000 | $ 17,000 | 444,587,000 | (1,493,000) | 407,470,000 | ||
Balance at beginning of period (shares) at Mar. 31, 2019 | 19,664,000 | ||||||
Balance at beginning of period at Mar. 31, 2019 | 1,079,974,000 | $ 20,000 | 643,317,000 | (503,000) | 437,140,000 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock under employee stock compensation plans, net (shares) | 17,000 | ||||||
Issuance of common stock under employee stock compensation plans, net | 740,000 | 740,000 | |||||
Share-based compensation | 6,571,000 | 6,571,000 | |||||
Repurchase of common stock (shares) | (291,000) | ||||||
Repurchase of common stock | (33,717,000) | $ (1,000) | (33,716,000) | ||||
Unrealized net gain (loss) on available-for-sale securities, net of deferred tax | 503,000 | 503,000 | |||||
Foreign currency translation adjustment | (542,000) | (542,000) | |||||
Other tax adjustments | 2,343,000 | 2,343,000 | |||||
Net income (loss) | (14,419,000) | (14,419,000) | |||||
Balance at end of period (shares) at Jun. 30, 2019 | 19,390,000 | ||||||
Balance at end of period at Jun. 30, 2019 | 1,041,453,000 | $ 19,000 | 619,255,000 | (542,000) | 422,721,000 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock under employee stock compensation plans, net (shares) | 7,000 | ||||||
Issuance of common stock under employee stock compensation plans, net | 199,000 | 199,000 | |||||
Share-based compensation | 6,297,000 | 6,297,000 | |||||
Repurchase of common stock (shares) | (1,834,000) | ||||||
Repurchase of common stock | (181,188,000) | $ (2,000) | (181,186,000) | ||||
Unrealized net gain (loss) on available-for-sale securities, net of deferred tax | (187,000) | (187,000) | |||||
Foreign currency translation adjustment | (764,000) | (764,000) | |||||
Other tax adjustments | 22,000 | 22,000 | |||||
Net income (loss) | (15,251,000) | (15,251,000) | |||||
Balance at end of period (shares) at Sep. 30, 2019 | 17,563,000 | ||||||
Balance at end of period at Sep. 30, 2019 | 850,581,000 | $ 17,000 | 444,587,000 | (1,493,000) | 407,470,000 | ||
Balance at beginning of period (shares) at Dec. 31, 2019 | 16,823,000 | ||||||
Balance at beginning of period at Dec. 31, 2019 | 767,232,000 | $ (5,167,000) | $ 17,000 | 367,326,000 | (216,000) | 400,105,000 | $ (5,167,000) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock under employee stock compensation plans, net (shares) | 105,000 | ||||||
Issuance of common stock under employee stock compensation plans, net | (1,008,000) | (1,008,000) | |||||
Share-based compensation | 5,653,000 | 5,653,000 | |||||
Repurchase of common stock (shares) | (878,000) | ||||||
Repurchase of common stock | (73,287,000) | $ (1,000) | (73,286,000) | ||||
Unrealized net gain (loss) on available-for-sale securities, net of deferred tax | (2,772,000) | (2,772,000) | |||||
Foreign currency translation adjustment | (1,879,000) | (1,879,000) | |||||
Reacquisition of equity due to 2023 debt extinguishment, net of tax | (2,745,000) | (2,745,000) | |||||
Net income (loss) | (24,131,000) | (24,131,000) | |||||
Balance at end of period (shares) at Mar. 31, 2020 | 16,050,000 | ||||||
Balance at end of period at Mar. 31, 2020 | $ 661,896,000 | $ 16,000 | 295,940,000 | (4,867,000) | 370,807,000 | ||
Accounting Standards Update | us-gaap:AccountingStandardsUpdate201613Member | ||||||
Balance at beginning of period (shares) at Dec. 31, 2019 | 16,823,000 | ||||||
Balance at beginning of period at Dec. 31, 2019 | $ 767,232,000 | $ (5,167,000) | $ 17,000 | 367,326,000 | (216,000) | 400,105,000 | $ (5,167,000) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | (8,746,000) | ||||||
Balance at end of period (shares) at Sep. 30, 2020 | 16,091,000 | ||||||
Balance at end of period at Sep. 30, 2020 | 697,824,000 | $ 16,000 | 313,057,000 | (1,441,000) | 386,192,000 | ||
Balance at beginning of period (shares) at Mar. 31, 2020 | 16,050,000 | ||||||
Balance at beginning of period at Mar. 31, 2020 | 661,896,000 | $ 16,000 | 295,940,000 | (4,867,000) | 370,807,000 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock under employee stock compensation plans, net (shares) | 21,000 | ||||||
Issuance of common stock under employee stock compensation plans, net | 1,128,000 | 1,128,000 | |||||
Share-based compensation | 7,359,000 | 7,359,000 | |||||
Repurchase of common stock | 0 | ||||||
Unrealized net gain (loss) on available-for-sale securities, net of deferred tax | 2,742,000 | 2,742,000 | |||||
Foreign currency translation adjustment | (185,000) | (185,000) | |||||
Reacquisition of equity due to 2023 debt extinguishment, net of tax | (23,000) | (23,000) | |||||
Net income (loss) | 22,086,000 | 22,086,000 | |||||
Balance at end of period (shares) at Jun. 30, 2020 | 16,071,000 | ||||||
Balance at end of period at Jun. 30, 2020 | 695,003,000 | $ 16,000 | 304,404,000 | (2,310,000) | 392,893,000 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock under employee stock compensation plans, net (shares) | 20,000 | ||||||
Issuance of common stock under employee stock compensation plans, net | 910,000 | 910,000 | |||||
Share-based compensation | 7,740,000 | 7,740,000 | |||||
Repurchase of common stock | 0 | ||||||
Unrealized net gain (loss) on available-for-sale securities, net of deferred tax | (54,000) | (54,000) | |||||
Foreign currency translation adjustment | 923,000 | 923,000 | |||||
Other | 3,000 | 3,000 | |||||
Net income (loss) | (6,701,000) | (6,701,000) | |||||
Balance at end of period (shares) at Sep. 30, 2020 | 16,091,000 | ||||||
Balance at end of period at Sep. 30, 2020 | $ 697,824,000 | $ 16,000 | $ 313,057,000 | $ (1,441,000) | $ 386,192,000 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (8,746) | $ 636,667 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Gain from sale of Promacta license | 0 | (812,797) |
Change in estimated fair value of contingent liabilities | (397) | 762 |
Depreciation and amortization of intangible assets | 12,645 | 11,648 |
Amortization of premium (discount) on investments, net | 1,507 | (7,477) |
Amortization of debt discount and issuance fees | 17,743 | 22,562 |
Amortization of commercial license and other economic rights | 2,505 | 10,047 |
Gain on debt extinguishment | (659) | 0 |
Share-based compensation | 20,752 | 18,215 |
Deferred income taxes | (19,311) | 57,766 |
Loss from short-term investments | 17,143 | 8,524 |
Other | (1,525) | (4,253) |
Changes in operating assets and liabilities, net of acquisition: | ||
Accounts receivable, net | (5,080) | 33,892 |
Inventory | (4,914) | (1,500) |
Accounts payable and accrued liabilities | 9,894 | (3,302) |
Income tax receivable and payable | 12,026 | 16,571 |
Other economic rights | 0 | (12,000) |
Other | 466 | 2,678 |
Net cash provided by (used in ) operating activities | 54,049 | (21,997) |
Cash flows from investing activities: | ||
Proceeds from sale of Promacta license | 0 | 812,797 |
Purchase of short-term investments | (337,016) | (1,682,586) |
Proceeds from sale of short-term investments | 389,296 | 144,182 |
Proceeds from maturity of short-term investments | 589,155 | 1,274,851 |
Cash paid for acquisition, net of cash acquired | (26,857) | (11,840) |
Cash paid for equity method investment | (500) | (1,000) |
Other | (228) | (6,307) |
Net cash provided by investing activities | 613,850 | 530,097 |
Cash flows from financing activities: | ||
Proceeds from convertible bond hedge settlement | 0 | 12,401 |
Payments to convertible bond holders for bond conversion | 0 | (12,401) |
Net proceeds from stock option exercises and ESPP | 2,459 | 2,856 |
Taxes paid related to net share settlement of equity awards | (1,429) | (2,906) |
Share repurchase | (73,287) | (371,106) |
Payments to CVR Holders | (2,325) | (3,000) |
Other | (5,224) | 0 |
Net cash used in financing activities | (283,016) | (401,479) |
Effect of exchange rate changes on cash | (50) | (88) |
Net increase in cash, cash equivalents and restricted cash | 384,833 | 106,533 |
Cash, cash equivalents and restricted cash at beginning of period | 72,273 | 119,780 |
Cash, cash equivalents and restricted cash at end of period | 457,106 | 226,313 |
Supplemental disclosure of cash flow information: | ||
Interest paid | 2,531 | 3,015 |
Taxes paid | 2,130 | 93,817 |
Restricted cash in other current assets | 190 | 1,011 |
Supplemental schedule of non-cash activity: | ||
Accrued fixed asset purchases | 381 | 0 |
Accrued inventory purchases | 1,390 | 0 |
Accrued financing lease payment | 2,500 | 0 |
Unrealized gain (loss) on AFS investments | (109) | 699 |
2023 Convertible Senior Notes | ||
Cash flows from financing activities: | ||
Repurchase/ Repayment of Notes | (203,210) | 0 |
2019 Convertible Senior Notes | ||
Cash flows from financing activities: | ||
Repurchase/ Repayment of Notes | $ 0 | $ (27,323) |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation Our condensed consolidated financial statements include the financial statements of Ligand and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. We have included all adjustments, consisting only of normal recurring adjustments, which we considered necessary for a fair presentation of our financial results. These unaudited condensed consolidated financial statements and accompanying notes should be read together with the audited consolidated financial statements included in our 2019 Annual Report. Interim financial results are not necessarily indicative of the results that may be expected for the full year. Reclassifications Certain amounts in the prior period condensed consolidated financial statements have been reclassified to conform with the current period presentation. Specifically, effective the second quarter of 2020, we began to include our investment in Viking in “short-term investments” in the condensed consolidated balance sheet, and present “gain (loss) from short-term investments” in the condensed consolidated statements of operations to include both the gain (loss) from investment in Viking and other short-term investments, which was previously included in “other income, net”. As a result, the audited consolidated balance sheet as of December 31, 2019 and the condensed consolidated statements of operations for the three and nine months ended September 30, 2019 have been reclassified to conform to the current period presentation. Significant Accounting Policies We have described our significant accounting policies in Note 1, Basis of Presentation and Summary of Significant Accounting Policies , of Notes to Consolidated Financial Statements in our 2019 Annual Report. Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires the use of estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and the accompanying notes. Actual results may differ from those estimates. Impact of COVID-19 Pandemic The current COVID-19 worldwide pandemic has presented substantial public health and economic challenges and is affecting our employees and partners, patients, communities and business operations, as well as the U.S. and global economy and financial markets. International and U.S. governmental authorities in impacted regions have taken actions in an effort to slow the spread of COVID-19, including issuing varying forms of “stay-at-home” orders, and restricting business functions outside of one’s home. In response, we have restricted in-person access to our executive offices, our administrative employees are mostly working remotely, and we have limited the number of staff in our research and development laboratories and other facilities. The continued spread of the COVID-19 pandemic and the measures taken by the governments of countries have affected, and could continue to affect, our business and the business of our partners, including future disruptions to our supply chain and the manufacture or shipment of drug substance and finished drug product for Captisol, delays by us or our partners in the initiation or enrollment of patients in clinical trials, discontinuations by patients enrolled in clinical trials, difficulties launching or commercializing products and other related activities, which could delay ongoing clinical trials, increase development costs, reduce royalty revenues and have a material adverse effect on our business, financial condition and results of operations. Several of our partners have reported that their operations have been impacted including delays in research and development programs and deprioritizing clinical trials in favor of treating patients who have contracted the virus or to prevent the spread of the virus. This may lead to clinical trial protocol deviations or to discontinuation of treatment for patients who are currently enrolled in the clinical trials being conducted by us or our partners. In addition, certain of our partners have reported negative impacts on product sales which will impact our royalty revenues. Some of our partners are working to develop drugs to treat COVID-19. For example, we are supplying Captisol to partners, including Gilead for Veklury ® (remdesivir), the first FDA-approved treatment for COVID-19 for the treatment of patients with COVID-19 requiring hospitalization and, as a result, we have extended our Captisol supply agreement with Gilead until September 2030 and worked to increase our manufacturing of Captisol to meet this increased demand. We believe our existing production capacity, together with our planned expansion, will provide adequate supply of Captisol and do not expect any significant risk or disruption to our supply chain for the foreseeable future. In addition, certain of our OmniAb and Vernalis partners have initiated antibody discovery programs for the potential treatment of COVID-19. The full extent to which the COVID-19 pandemic will directly or indirectly impact our business, the businesses of our partners, our results of operations and our financial condition will depend on future developments that are highly uncertain and cannot be accurately predicted, including new information that may emerge concerning COVID-19, the actions taken to contain it or treat its impact, including the timing and extent of governments reopening or further restricting activities, and the economic impact on local, regional, national and international markets. Accounting Standards Recently Adopted Credit Losses - In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments (Topic 326) , which amends the impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses on certain types of financial instruments, including trade receivables and available for sale debt securities. This standard includes our financial instruments, such as accounts receivable, investments that are generally of high credit quality, and commercial license rights. Previously, when credit losses were measured under GAAP, an entity generally only considered past events and current conditions in measuring the incurred loss. The new guidance requires us to identify, analyze, document and support new methodologies for quantifying expected credit loss estimates for our financial instruments, using information such as historical experience and current economic conditions, plus the use of reasonable supportable forecast information. We adopted ASU 2016-13 “Short-term Investments” , “Accounts Receivable and Allowance for Credit Losses” and “Commercial License and Other Economic Rights” discussed below. Goodwill Impairment Testing - In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment, which eliminates the requirement to perform a hypothetical purchase price allocation to measure goodwill impairment. Under the new standard the goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount, and recognizing an impairment charge for the amount by which the carrying amount of the reporting unit exceeds its fair value, although it cannot exceed the total amount of goodwill allocated to that reporting unit. We adopted this standard on January 1, 2020, and the adoption did not have a material impact on our condensed consolidated financial statements. Fair Value Measurement - In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement: Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement (Topic 820) , which modifies the disclosure requirements on fair value measurements. We adopted this standard on January 1, 2020, and the adoption did not have a material impact on our condensed consolidated financial statements. Collaborative Arrangements - In November 2018, the FASB issued ASU 2018-18, Collaborative Arrangements: Clarifying the Interaction between Topic 808 and Topic 606 (Topic 808) . The new standard clarifies that certain transactions between participants in a collaborative arrangement should be accounted for under Topic 606, Revenue from Contracts with Customers , when the counterparty is a customer for a good or service that is a distinct unit of account. The amendments also preclude entities from presenting consideration from transactions with a collaborator that is not a customer together with revenue recognized from contracts with customers. We adopted this standard on January 1, 2020, and the adoption did not have a material impact on our condensed consolidated financial statements. Income Taxes - In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes . The standard is expected to reduce cost and complexity related to accounting for income taxes. The new guidance eliminates certain exceptions and clarifies and amends existing guidance to promote consistent application among reporting entities. This standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. Depending on the amendment, adoption may be applied on a retrospective, modified retrospective or prospective basis. We adopted this standard on a prospective basis on January 1, 2020, and the adoption did not have a material impact on our condensed consolidated financial statements. Accounting Standards Not Yet Adopted In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The new guidance simplifies accounting for convertible instruments by removing major separation models required under current GAAP. This standard removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings per share calculation in certain areas. This standard is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020 and adoption must be as of the beginning of the Company’s annual fiscal year. We are currently evaluating the impact of this standard on our consolidated financial statements and related disclosures. We do not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material impact on our condensed consolidated financial statements or disclosures. Revenue Our revenue is generated primarily from royalties on sales of products commercialized by our partners, Captisol material sales, and contract revenue for services, license fees and development, regulatory and sales based milestone payments. Royalties We receive royalty revenue on sales by our partners of products covered by patents that we own. We do not have future performance obligations under these license arrangements. We generally satisfy our obligation to grant intellectual property rights on the effective date of the contract. However, we apply the royalty recognition constraint required under the guidance for sales-based royalties which requires a sales-based royalty to be recorded when the underlying sale occurs. Therefore, royalties on sales of products commercialized by our partners are recognized in the quarter the product is sold. Our partners generally report sales information to us on a one quarter lag. Thus, we estimate the expected royalty proceeds based on an analysis of historical experience and interim data provided by our partners including their publicly announced sales. Differences between actual and estimated royalty revenues are adjusted for in the period in which they become known, typically the following quarter. Contract Revenue Our contract revenue includes service revenue, license fees and future contingent milestone based payments. We recognize service revenue for contracted R&D services performed for our customers over time. We measure our progress using an input method based on the effort we expend or costs we incur toward the satisfaction of our performance obligation. We estimate the amount of effort we expend, including the time we estimate it will take us to complete the activities, or costs we incur in a given period, relative to the estimated total effort or costs to satisfy the performance obligation. This results in a percentage that we multiply by the transaction price to determine the amount of revenue we recognize each period. This approach requires us to make estimates and use judgement. If our estimates or judgements change over the course of the collaboration, they may affect the timing and amount of revenue that we recognize in the current and future periods. We include contingent milestone based payments in the estimated transaction price when there is a basis to reasonably estimate the amount of the payment. These estimates are based on historical experience, anticipated results and our best judgment at the time. If the contingent milestone based payment is sales-based, we apply the royalty recognition constraint and record revenue when the underlying sale has taken place. Significant judgments must be made in determining the transaction price for our sales of intellectual property. Because of the risk that products in development with our partners will not reach development based milestones or receive regulatory approval, we generally recognize any contingent payments that would be due to us upon or after the development milestone or regulatory approval. Captisol Sales We recognize revenue when control of Captisol material is transferred to our customers in an amount that reflects the consideration we expect to receive from our customers in exchange for those products. This process involves identifying the contract with a customer, determining the performance obligations in the contract, determining the contract price, allocating the contract price to the distinct performance obligations in the contract, and recognizing revenue when the performance obligations have been satisfied. A performance obligation is considered distinct from other obligations in a contract when it provides a benefit to the customer either on its own or together with other resources that are readily available to the customer and is separately identified in the contract. We consider a performance obligation satisfied once we have transferred control of the product, meaning the customer has the ability to use and obtain the benefit of the Captisol material or intellectual property license right. We recognize revenue for satisfied performance obligations only when we determine there are no uncertainties regarding payment terms or transfer of control. We have elected to recognize the cost for freight and shipping when or after control over Captisol material has transferred to the customer as an expense in cost of Captisol. Sales tax and other taxes we collect concurrent with revenue-producing activities are excluded from revenue. We expense incremental costs of obtaining a contract when incurred if the expected amortization period of the asset that we would have recognized is one year or less or the amount is immaterial. We did not incur any incremental costs of obtaining a contract during the periods reported. Deferred Revenue Depending on the terms of the arrangement, we may also defer a portion of the consideration received because we have to satisfy a future obligation. We use an observable price to determine the stand-alone selling price for separate performance obligations or a cost plus margin approach when one is not available. The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets), and customer advances and deposits (contract liabilities) on the consolidated balance sheet. Except for royalty revenue and certain service revenue, we generally receive payment at the point we satisfy our obligation or soon after. Therefore, we do not generally carry a contract asset balance. Any fees billed in advance of being earned are recorded as deferred revenue. During the three and nine months ended September 30, 2020, the amount recognized as revenue that was previously deferred was $5.8 million and $8.3 million, respectively. During the three and nine months ended September 30, 2019, the amount recognized as revenue that was previously deferred was $1.0 million and $5.0 million, respectively. We expect to satisfy the performance obligations related to long-term deferred revenue within the next 3 years. Disaggregation of Revenue The following table represents disaggregation of royalties, Captisol and contract revenue (in thousands): Three months ended Nine months ended September 30, September 30, 2020 2019 2020 2019 Royalties Kyprolis $ 6,923 $ 7,602 $ 16,809 $ 16,317 Evomela 1,802 1,515 4,577 3,570 Other 280 650 1,365 1,851 Promacta — — — 14,193 $ 9,005 $ 9,767 $ 22,751 $ 35,931 Captisol $ 23,389 $ 6,849 $ 68,966 $ 24,357 Contract Service Revenue $ 7,341 $ 4,548 $ 15,280 $ 12,990 License Fees 158 243 1,793 3,083 Milestone 960 2,674 4,766 15,425 Other 995 727 2,873 1,493 $ 9,454 $ 8,192 $ 24,712 $ 32,991 Total $ 41,848 $ 24,808 $ 116,429 $ 93,279 Short-term Investments Our investments, excluding investment in Viking, consist of the following at September 30, 2020 and December 31, 2019 (in thousands): September 30, 2020 December 31, 2019 Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value Short-term investments Bank deposits $ 68,226 $ 101 $ — $ 68,327 $ 411,690 $ 188 $ (3) $ 411,875 Corporate bonds 27,125 102 — 27,227 63,818 161 — 63,979 Commercial paper 47,943 60 — 48,003 210,525 43 (16) 210,552 Corporate equity securities 4,484 415 (2,624) 2,275 4,506 416 (1,850) 3,072 Mutual fund 151,513 204 — 151,717 250,635 — (249) 250,386 Warrants — 155 — 155 — 125 — 125 $ 299,291 $ 1,037 $ (2,624) $ 297,704 $ 941,174 $ 933 $ (2,118) $ 939,989 In addition, as of September 30, 2020 and December 31, 2019, we recorded shares of Viking common stock we own at fair value of $33.9 million and $48.4 million, respectively, in “Short-term investments” in our consolidated balance sheets. We also own warrants to purchase up to 1.5 million shares of Viking's common stock at an exercise price of $1.50 per share. We recorded the warrants in “Short-term investments” in our consolidated balance sheet at fair value of $6.6 million and $9.9 million at September 30, 2020 and December 31, 2019, respectively. Gain (loss) from short-term investments on our condensed consolidated statements of operations includes both realized and unrealized gain (loss) from our short-term investments in public equity and warrant securities. For available-for-sale debt securities with unrealized losses, the new credit losses standard (Topic 326) now requires allowances to be recorded instead of reducing the amortized cost of the investment. This standard limits the amount of credit losses to be recognized for available-for-sale debt securities to be the amount by which carrying value exceeds fair value and requires the reversal of previously recognized credit losses if fair value increases. The provisions of the new credit losses standard did not have a material impact on our available-for-sale debt securities during the three and nine months ended September 30, 2020. The following table summarizes our available-for-sale debt securities by contractual maturity (in thousands): September 30, 2020 Amortized Cost Fair Value Within one year $ 121,452 $ 121,610 After one year through five years 21,842 21,947 After five years — — Total $ 143,294 $ 143,557 The following table summarizes our available-for-sale debt securities in an unrealized loss position (in thousands): Less than 12 months 12 months or greater Total Gross Estimated Gross Estimated Gross Estimated September 30, 2020 Bank deposits $ — $ 5,011 $ — $ — $ — $ 5,011 Corporate bonds (0.4) 3,007 — — (0.4) 3,007 Total $ (0.4) $ 8,018 $ — $ — $ (0.4) $ 8,018 December 31, 2019 Bank deposits $ (3) $ 58,584 $ — $ — $ (3) $ 58,584 Commercial paper (16) 79,363 — — (16) 79,363 Total $ (19) $ 137,947 $ — $ — $ (19) $ 137,947 Our investment policy is capital preservation and we only invested in U.S.-dollar denominated investments. We held a total of 2 positions which were in an unrealized loss position as of September 30, 2020. We believe that we will collect the principal and interest due on our debt securities that have an amortized cost in excess of fair value. The unrealized losses are largely due to changes in interest rates and not to unfavorable changes in the credit quality associated with these securities that impacted our assessment on collectability of principal and interest. We do not intend to sell these securities nor do we believe that we will be required to sell these securities before the recovery of the amortized cost basis. Accordingly, no credit losses were recognized for the three and nine months ended September 30, 2020. Accounts Receivable and Allowance for Credit Losses Our accounts receivable arise primarily from sales on credit to customers. We establish an allowance for credit losses to present the net amount of accounts receivable expected to be collected. The allowance is determined by using the loss-rate method, which requires an estimation of loss rates based upon historical loss experience adjusted for factors that are relevant to determining the expected collectability of accounts receivable. Some of these factors include macroeconomic conditions that correlate with historical loss experience, delinquency trends, aging behavior of receivables and credit and liquidity quality indicators for industry groups, customer classes or individual customers. During the three and nine months ended September 30, 2020, we considered the current and expected future economic and market conditions including, but not limited to, the anticipated unfavorable impacts of the surrounding novel coronavirus (COVID-19) pandemic on our business and recorded an adjustment of $(0.1) million and $0.2 million, of allowance for credit losses, respectively, as of September 30, 2020. Inventory Inventory, which consists of finished goods, is stated at the lower of cost or net realizable value. We determine cost using the first-in, first-out method or the specific identification method. Goodwill and Other Identifiable Intangible Assets Goodwill and other identifiable intangible assets consist of the following (in thousands): September 30, December 31, 2020 2019 Goodwill $ 102,136 $ 95,229 Definite lived intangible assets Complete technology 257,317 242,813 Less: accumulated amortization (1) (59,869) (50,203) Trade name 2,642 2,642 Less: accumulated amortization (1,279) (1,180) Customer relationships 40,700 29,600 Less: accumulated amortization (14,929) (13,224) Total goodwill and other identifiable intangible assets, net $ 326,718 $ 305,677 (1) Accumulated amortization for complete technology includes immaterial amount of foreign currency translation adjustments for the complete technology acquired from the Vernalis acquisition. Commercial License and Other Economic Rights Commercial license and other economic rights consist of the following (in thousands): September 30, 2020 December 31, 2019 Gross Adjustments (1) Net Gross Adjustments (2) Net Aziyo and CorMatrix $ 17,696 $ (9,644) $ 8,052 $ 17,696 $ (5,500) $ 12,196 Palvella 10,000 (10,000) — 10,000 (7,492) 2,508 Selexis and Dianomi 10,602 (7,820) 2,782 10,602 (5,216) 5,386 Total $ 38,298 $ (27,464) $ 10,834 $ 38,298 $ (18,208) $ 20,090 (1) Amounts represent accumulated amortization to principal or research and development expenses of $21.5 million and credit loss adjustments of $6.0 million as of September 30, 2020. (2) Amounts represent accumulated amortization to principal or research and development expenses as of December 31, 2019. Commercial license and other economics rights represent a portfolio of future milestone and royalty payment rights acquired from Selexis in April 2013 and April 2015, CorMatrix in May 2016, Palvella in December 2018, and Dianomi in January 2019. Commercial license rights acquired are accounted for as financial assets and other economic rights are accounted for as funded research and developments as further discussed below. In May 2017, we entered into a Royalty Agreement with Aziyo pursuant to which we will receive royalties from certain marketed products that Aziyo acquired from CorMatrix. We account for the Aziyo commercial license right as a financial asset, and in accordance with ASC 310, Receivables , we amortize the commercial license right using the effective interest method whereby we forecast expected cash flows over the term of the arrangement to arrive at an annualized effective interest. The annual effective interest associated with the forecasted cash flows from the Royalty Agreement with Aziyo as of September 30, 2020 is 23%. Revenue is calculated by multiplying the carrying value of the commercial license right by the effective interest. In December 2018, we entered into a development funding and royalties agreement with Palvella. Pursuant to the agreement, we may receive up to $8.0 million of milestone payments upon the achievement by Palvella of certain corporate, financing and regulatory milestones for PTX-022, a product candidate being developed to treat pachyonychia congentia. In addition to the milestone payments, Palvella will pay us tiered royalties from 5.0% to 9.8% based on any aggregate annual worldwide net sales of any PTX-022 products, subject to Palvella’s right to reduce the royalty rates by making payments in certain circumstances. We paid Palvella an upfront payment of $10.0 million, which Palvella is required to use to fund the development of PTX-022. We are not obligated to provide additional funding to Palvella for the development or commercialization of PTX-022. We determined the economic rights related to Palvella should be characterized as a funded research and development arrangement, thus we account for it in accordance with ASC 730-20, Research and Development Arrangements , and reduce our asset as the funds are expended by Palvella. As of September 30, 2020, the fund has been fully expended by Palvella and our cost basis for the asset has been reduced to zero, we will recognize milestones and royalties as revenue when earned. During the second quarter of 2020, we recorded a $3.0 million milestone from Palvella under contract revenue, which has been included in our condensed consolidated statement of operations for the nine months ended September 30, 2020. We recorded a $5.5 million pre-tax reserve for credit losses upon adoption of the new credit losses on January 1, 2020. We estimated the credit losses at the individual asset level by considering the performance against the programs, the company operating performance and the macroeconomic forecast. In addition, we have judgmentally applied credit loss risk factors to the future expected payments with consideration given to the timing of the payment. Given the higher inherent credit risk associated with longer term receivables, we applied a lower risk factor to the earlier years and progressively higher risk factors to the later years. During the nine months ended September 30, 2020, we further considered the current and expected future economic and market conditions surrounding novel coronavirus (COVID-19) pandemic and recorded an additional $0.5 million reserve for credit losses in other expense, net, in our condensed consolidated statement of operations. See further detail described in Note 1, Basis of Presentation and Summary of Significant Accounting Policies , of Notes to Consolidated Financial Statements in our 2019 Annual Report. Other Assets Other assets consist of the following (in thousands): September 30, December 31, 2020 2019 Captisol manufacturing ramp up fee $ 9,215 $ — Long-term investment receivable 2,000 — Equity investment 813 750 Deposits 138 219 Other 1,538 1,388 Total other assets $ 13,704 $ 2,357 Accrued Liabilities Accrued liabilities consist of the following (in thousands): September 30, December 31, 2020 2019 Compensation $ 4,840 $ 1,986 Professional fees 1,226 1,135 Amounts owed to former licensees 407 381 Royalties owed to third parties 805 — Return reserve 2,835 3,027 Current operating lease liabilities 1,029 1,242 Accrued interest 1,437 690 Other 1,919 1,375 Total accrued liabilities $ 14,498 $ 9,836 Share-Based Compensation Share-based compensation expense for awards to employees and non-employee directors is a non-cash expense and is recognized on a straight-line basis over the vesting period until the last tranche vests. The following table summarizes share-based compensation expense recorded as components of research and development expenses and general and administrative expenses for the periods indicated (in thousands): Three months ended Nine months ended September 30, September 30, 2020 2019 2020 2019 SBC - Research and development expenses $ 3,094 $ 2,481 $ 8,510 $ 7,136 SBC - General and administrative expenses 4,646 3,816 12,242 11,079 $ 7,740 $ 6,297 $ 20,752 $ 18,215 The fair-value for options that were awarded to employees and directors was estimated at the date of grant using the Black-Scholes option valuation model with the following weighted-average assumptions: Three months ended Nine months ended September 30, September 30, 2020 2019 2020 2019 Risk-free interest rate 0.3% 1.6% 1.0% 2.4% Dividend yield — — — — Expected volatility 59% 41% 55% 43% Expected term 4.9 5.3 4.8 5.2 Net Income (loss) Per Share Basic net income (loss) per share is calculated by dividing net income (loss) by the weighted-average number of common shares outstanding during the period. Diluted net income per share is computed based on the sum of the weighted average number of common shares and potentially dilutive common shares outstanding during the period. For the three and nine months ended September 30, 2020, all of the 0.70 million and 0.65 million, respectively, weighted average shares of outstanding equity awards as of September 30, 2020 were anti-dilutive due to the net loss for the period. For the three months ended September 30, 2019, all of the 0.70 million weighted average shares of outstanding equity awards as of September 30, 2019 were anti-dilutive due to the net loss for the period Potentially dilutive common shares consist of shares issuable under the 2023 Notes, stock options and restricted stock. The 2023 Notes have a dilutive impact when the average market price of our common stock exceeds the applicable conversion price of the respective notes. It is our intent and policy to settle conversions through combination settlement, which involves payment in cash equal to the principal portion and delivery of shares of common stock for the excess of the conversion value over the principal portion. Potentially dilutive common shares from stock options and restricted stock are determined using the average share price for each period under the treasury stock method. In addition, the following amounts are assumed to be used to repurchase shares: proceeds from exercise of stock options and the average amount of unrecognized compensation expense for the awards. See Note 4 - Convertible Senior Notes and Note 6 - Stockholders’ Equity . The following table presents the calculation of weighted average shares used to calculate basic and diluted earnings per share (in thousands): Three months ended Nine months ended September 30, September 30, 2020 2019 2020 2019 Weighted average shares outstanding: 16,082 18,770 16,222 19,586 Dilutive potential common shares: Restricted stock — — — 35 Stock options — — — 728 Shares used to compute diluted income per share 16,082 18,770 16,222 20,349 Potentially dilutive shares excluded from calculation due to anti-dilutive effect 7,028 11,549 8,330 8,694 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Assets and Liabilities Measured on a Recurring Basis The following table presents the hierarchy for our assets and liabilities measured at fair value (in thousands): September 30, 2020 December 31, 2019 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets: Short-term investments, excluding Viking (1) $ 2,274 $ 295,275 $ 155 $ 297,704 $ 3,073 $ 936,791 $ 125 $ 939,989 Investment in Viking common stock 33,869 — — 33,869 48,425 — — 48,425 Investment in Viking warrants (2) 6,581 — — 6,581 9,910 — — 9,910 Total assets $ 42,724 $ 295,275 $ 155 $ 338,154 $ 61,408 $ 936,791 $ 125 $ 998,324 Liabilities: Crystal contingent liabilities (3) $ — $ — $ 800 $ 800 $ — $ — $ 2,659 $ 2,659 CyDex contingent liabilities — — 509 509 — — 348 348 Metabasis contingent liabilities (4) — 4,985 — 4,985 — 5,935 — 5,935 Icagen contingent liabilities (5) — — 4,504 4,504 — — — — Amounts owed to former licensor 71 — — 71 75 — — 75 Total liabilities $ 71 $ 4,985 $ 5,813 $ 10,869 $ 75 $ 5,935 $ 3,007 $ 9,017 1. Excluding our investment in Viking, our short-term investments in marketable debt and equity securities are classified as available-for-sale securities based on management's intentions and are at level 2 of the fair value hierarchy, as these investment securities are valued based upon quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market. Short-term investments in mutual funds are valued at their net asset value (NAV) on the last day of the period. We have classified marketable securities with original maturities of greater than one year as short-term investments based upon our ability and intent to use any and all of those marketable securities to satisfy the liquidity needs of our current operations. In addition, we have investment in warrants resulting from Seelos Therapeutics Inc. milestone payments that were settled in shares during the first quarter of 2019 and are at level 3 of the fair value hierarchy, based on Black Scholes value estimated by management on the last day of the period. 2. Investment in warrants, which we received as a result of Viking’s partial repayment of the Viking note receivable and our purchase of Viking common stock and warrants in April 2016, are classified as level 1 as the fair value is determined using quoted market prices in active markets for the same securities. The change of the fair value is recorded in "Gain (loss) from short-term investments" in our condensed consolidated statement of operations. 3. The fair value of Crystal contingent liabilities was determined using a probability weighted income approach. Most of the contingent payments are based on development or regulatory milestones as defined in the merger agreement with Crystal. The fair value is subjective and is affected by changes in inputs to the valuation model including management’s estimates regarding the timing and probability of achievement of certain developmental and regulatory milestones. Changes in these estimates may materially affect the fair value. During the first quarter of 2020, we paid a $1.8 million contingent liability on development milestones to former Crystal shareholders. 4. In connection with our acquisition of Metabasis in January 2010, we issued Metabasis stockholders four tradable CVRs, one CVR from each of four respective series of CVR, for each Metabasis share. The CVRs entitle Metabasis stockholders to cash payments as frequently as every six months as cash is received by us from proceeds from the sale or partnering of any of the Metabasis drug development programs, among other triggering events. The liability for the CVRs is determined using quoted prices in a market that is not active for the underlying CVR. The carrying amount of the liability may fluctuate significantly based upon quoted market prices and actual amounts paid under the agreements may be materially different than the carrying amount of the liability. Several of the Metabasis drug development programs have been outlicensed to Viking, including VK2809. VK2809 is a novel selective TR-β agonist with potential in multiple indications, including hypercholesterolemia, dyslipidemia, NASH, and X-ALD. Under the terms of the agreement with Viking, we may be entitled to up to $375 million of development, regulatory and commercial milestones and tiered royalties on potential future sales including a $10 million payment upon initiation of a Phase 3 clinical trial. 5. The fair value of Icagen contingent liabilities was determined using a probability weighted income approach. Most of the contingent payments are based on certain revenue milestones as defined in the asset purchase agreement with Icagen. The fair value is subjective and is affected by changes in inputs to the valuation model including management’s estimates regarding the timing and probability of achievement of certain developmental and regulatory milestones. Changes in these estimates may materially affect the fair value. During the third quarter of 2020, we paid a $0.5 million contingent liability based on revenue milestones to Icagen. Assets Measured on a Non-Recurring Basis We apply fair value techniques on a non-recurring basis associated with valuing potential impairment losses related to our goodwill, indefinite-lived intangible assets and long-lived assets. We evaluate goodwill and indefinite-lived intangible assets annually for impairment and whenever circumstances occur indicating that goodwill might be impaired. We determine the fair value of our reporting unit based on a combination of inputs, including the market capitalization of Ligand, as well as Level 3 inputs such as discounted cash flows, which are not observable from the market, directly or indirectly. We determine the fair value of our indefinite-lived intangible assets using the income approach based on Level 3 inputs. |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions Taurus Acquisition On September 9, 2020, we acquired Taurus, which discovers and develops novel antibodies from immunized cows and cow-derived libraries. The purchase price of $5.1 million included $4.6 million in cash, and a $0.5 million holdback to satisfy indemnification obligations which will be settled by September 2021. We also issued nontransferable CVRs for up to $4.5 million tied to partnered and internal research and development and for up to $25.0 million as a 25% share of post-clinical Taurus product revenues (including milestone payments) received by us. We evaluated this acquisition in accordance with ASC 805, Business Combinations , to discern whether the assets and operations of Taurus met the definition of a business. We concluded that substantially all of the fair value of the gross assets acquired is concentrated in the acquired core technology. Accordingly, we accounted for this transaction as an asset acquisition. Of the $5.1 million consideration transferred, we recognized (1) $0.05 million of tangible assets acquired, and (2) $5.0 million of core completed technology intangibles acquired. The core technology is being amortized on a straight-line basis over the estimated useful life of 10 years. We account for the CVRs in accordance with ASC 450, Contingencies , when the contingency is resolved and the liability becomes payable. None of the CVRs are recognized as of the acquisition date. xCella Acquisition On September 8, 2020, we acquired xCella, an antibody discovery company. We paid $7.1 million in cash (including a $0.5 million holdback to satisfy indemnification obligations which will be settled by September 2021), and issued earnout rights for up to $5.0 million tied to our use of the xCella technology for partnered research and development and for up to $25.75 million as a 25% share of any future milestone payments we received under a certain existing xCella partner arrangement. We evaluated this acquisition in accordance with ASC 805, Business Combinations , to discern whether the assets and operations of xCella met the definition of a business. We concluded that substantially all of the fair value of the gross assets acquired is concentrated in the acquired core technology. Accordingly, we accounted for this transaction as an asset acquisition. Of the $7.1 million consideration transferred, we recognized (1) $0.2 million of tangible assets acquired, (2) $(0.1) million of liabilities assumed, (3) $7.8 million of core completed technology acquired, and (4) $(0.8) million of deferred tax liability. The core technology is being amortized on a straight-line basis over the estimated useful life of 15 years. We account for the earnout rights in accordance with ASC 450, Contingencies , when the contingency is resolved and the liability becomes payable. None of the earnout rights are recognized as of the acquisition date. Icagen Acquisition On April 1, 2020, we acquired the core assets, including its partnered programs and ion channel technology from Icagen and certain of its affiliates. The acquisition was accounted for as a business combination and we applied the acquisition method of accounting. Accordingly, we recorded the tangible and intangible assets acquired and liabilities assumed at their estimated fair values as of the applicable date of acquisition. We did not incur any material acquisition related costs. The purchase price of $19.9 million included $15.1 million cash consideration paid upon acquisition, and a contingent earn-out payment of up to $25.0 million of cash payments based on certain revenue milestones with an estimated fair value of $4.8 million. The fair value of the earn-out liability was determined using a probability weighted income approach incorporating the estimated future cash flows from expected future milestones. These cash flows were then discounted to present value using a discount rate based on the market participants' cost of debt reflective of Icagen. Refer to Note 2, Fair Value Measurement , for further discussion. The liability will be periodically assessed based on events and circumstances related to the underlying milestones, and any change in fair value will be recorded in our consolidated statements of operations. The carrying amount of the liability may fluctuate significantly and actual amount paid may be materially different than the carrying amount of the liability. There was no change in the fair value of the continent liabilities during the second quarter of 2020. As the acquisition is not considered significant, pro forma information has not been provided. The results of Icagen have been included in our results of operations since the date of acquisition. The preliminary allocation of the purchase price consisted of (1) $1.8 million of fair value of tangible assets acquired, (2) $(0.8) million of liabilities assumed, (3) $12.8 million of acquired intangibles, (4) $(3.7) million of deferred revenue in connection with assumed performance obligations under a collaboration agreement, (5) $0.8 million of deferred tax asset associated with the deferred revenue, and (6) $9.0 million of goodwill, the majority of which is deductible for tax purposes. Acquired intangibles include $11.1 million of customer relationships and $1.7 million of core technology. The fair values of the customer relationships were based on a discounted cash flow analysis incorporating the estimated future cash flows from these relationships during the contractual term. These cash flows were then discounted to present value using a discount rate of 17%. The fair value of the customer relationships is being amortized on a straight-line basis over the weighted average estimated useful life of 9.6 years The fair value of the core technology was based on the discounted cash flow method that estimated the present value of the potential royalties, milestones, and collaboration revenue streams derived from the licensing of the related technologies. These projected cash flows were discounted to present value using a discount rate of 17%. The fair value of the core technology is being amortized on a straight-line basis over the estimated useful life of 10 years. The total acquired intangibles are being amortized on a straight-line basis over the estimated useful life of 9.7 years. The estimated fair values of assets acquired and liabilities assumed, including deferred tax assets and liabilities, and purchased intangibles are provisional. The accounting for these amounts falls within the measurement period and therefore we may adjust these provisional amounts to reflect new information obtained about facts and circumstances that existed as of the acquisition date. Ab Initio Acquisition On July 23, 2019, we acquired privately-held Ab Initio Biotherapeutics, Inc., an antigen-discovery company located in South San Francisco, California. The acquisition was accounted for as a business combination and we applied the acquisition method of accounting. Accordingly, we recorded the tangible and intangible assets acquired and liabilities assumed at their estimated fair values as of the applicable date of acquisition. We did not incur any material acquisition related costs. The purchase price of $12.0 million included $11.86 million cash consideration paid upon acquisition, net of cash acquired, and $0.15 million cash holdback for potential indemnification claims, which was paid during the third quarter of 2020. As the acquisition is not considered significant, pro forma information has not been provided. The results of Ab Initio have been included in our results of operations since the date of acquisition. |
Convertible Senior Notes
Convertible Senior Notes | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Convertible Senior Notes | Convertible Senior Notes 0.75% Convertible Senior Notes due 2023 In May 2018, we issued $750.0 million aggregate principal amount of 0.75% convertible senior notes. The net proceeds from the offering, after deducting the initial purchasers' discount and offering expenses, were approximately $733.1 million. The 2023 Notes will be convertible into cash, shares of common stock, or a combination of cash and shares of common stock, at our election, based on an initial conversion rate, subject to adjustment, of 4.0244 shares per $1,000 principal amount of the 2023 Notes which represents an initial conversion price of approximately $248.48 per share. Holders of the 2023 Notes may convert the notes at any time prior to the close of business on the business day immediately preceding November 15, 2022, under any of the following circumstances: (1) during any fiscal quarter (and only during such fiscal quarter) commencing after September 30, 2018, if, for at least 20 trading days (whether or not consecutive) during the 30 consecutive trading day period ending on the last trading day of the immediately preceding fiscal quarter, the last reported sale price of our common stock on such trading day is greater than 130% of the conversion price on such trading day; (2) during the five business day period immediately following any 10 consecutive trading day period, in which the trading price per $1,000 principal amount of notes was less than 98% of the product of the last reported sale price of our common stock on such trading day and the conversion rate on each such trading day; or (3) upon the occurrence of certain specified corporate events as specified in the indenture governing the notes. The notes will have a dilutive effect to the extent the average market price per share of common stock for a given reporting period exceeds the conversion price of $248.48. As of September 30, 2020, the “if-converted value” did not exceed the principal amount of the 2023 Notes. In connection with the issuance of the 2023 Notes, we incurred $16.9 million of issuance costs, which primarily consisted of underwriting, legal and other professional fees. The portion of these costs allocated to the liability component totaling $13.7 million is amortized to interest expense using the effective interest method over the five year expected life of the 2023 Notes. It is our intent and policy to settle conversions through combination settlement, which essentially involves payment in cash equal to the principal portion and delivery of shares of common stock for the excess of the conversion value over the principal portion. In March 2020, we repurchased $234.4 million in principal of the 2023 Notes for $203.8 million in cash, including accrued interest of $0.6 million. We accounted for the repurchase as a debt extinguishment, which resulted (1) a gain of $0.7 million reflected in other income (expense), net, in our condensed consolidated statement of operations for the nine months ended September 30, 2020; (2) a $32.7 million reduction in debt discount, and (3) a $2.7 million reduction to additional paid in capital, net of tax, related to the reacquisition of the equity component in our condensed consolidated balance sheet as of September 30, 2020. After the repurchases, approximately $515.6 million in principal amount of the 2023 Notes remain outstanding. Convertible Bond Hedge and Warrant Transactions In conjunction with the 2023 Notes, in May 2018, we entered into convertible bond hedges and sold warrants covering 3,018,327 shares of our common stock to minimize the impact of potential dilution to our common stock and/or offset the cash payments we are required to make in excess of the principal amount upon conversion of the 2023 Notes. The convertible bond hedges have an exercise price of $248.48 per share and are exercisable when and if the 2023 Notes are converted. We paid $140.3 million for these convertible bond hedges. If upon conversion of the 2023 Notes, the price of our common stock is above the exercise price of the convertible bond hedges, the counterparties will deliver shares of common stock and/or cash with an aggregate value approximately equal to the difference between the price of common stock at the conversion date and the exercise price, multiplied by the number of shares of common stock related to the convertible bond hedge transaction being exercised. The convertible bond hedges and warrants described below are separate transactions entered into by us and are not part of the terms of the 2023 Notes. Holders of the 2023 Notes and warrants will not have any rights with respect to the convertible bond hedges. Concurrently with the convertible bond hedge transactions, we entered into warrant transactions whereby we sold warrants covering approximately 3,018,327 shares of common stock with an exercise price of approximately $315.38 per share, subject to certain adjustments. We received $90.0 million for these warrants. The warrants have various expiration dates ranging from August 15, 2023 to February 6, 2024. The warrants will have a dilutive effect to the extent the market price per share of common stock exceeds the applicable exercise price of the warrants, as measured under the terms of the warrant transactions. The common stock issuable upon exercise of the warrants will be in unregistered shares, and we do not have the obligation and do not intend to file any registration statement with the SEC registering the issuance of the shares under the warrants. In April 2020, in connection with the repurchases of $234.4 million in principal of the 2023 Notes for $203.8 million in cash, including accrued interest of $0.6 million, during the quarter ended March 31, 2020, we entered into amendments with Barclays Bank PLC, Deutsche Bank AG, London Branch, and Goldman Sachs & Co. LLC to the convertible note hedges transactions we initially entered into in connection with the issuance of the 2023 Notes. The amendments provide that the options under the convertible note hedges corresponding to such repurchased 2023 Notes will remain outstanding notwithstanding such repurchase. The following table summarizes information about the 2023 Notes (in thousands): September 30, 2020 December 31, 2019 Principal amount of the 2023 Notes outstanding $ 515,560 $ 750,000 Unamortized discount (including unamortized debt issuance cost) (60,587) (111,041) Total long-term portion of notes payable $ 454,973 $ 638,959 Carrying value of equity component of the 2023 Notes $ 55,339 $ 101,422 Fair value of the 2023 Notes outstanding (Level 2) $ 464,958 $ 647,280 |
Income Tax
Income Tax | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Tax | Income TaxOur effective tax rate may vary from the U.S. federal statutory tax rate due to the change in the mix of earnings in various state jurisdictions with different statutory rates, benefits related to tax credits, and the tax impact of non-deductible expenses, stock award activities and other permanent differences between income before income taxes and taxable income. The effective tax rate for the three and nine months ended September 30, 2020 was 42.3% and 37.1%, respectively. The variances from the U.S. federal statutory tax rate of 21% for the three and nine months ended September 30, 2020 were primarily attributable to the mix of earnings in the jurisdictions with lower statutory rates than the U.S. and tax deductions related to stock award activities offset by tax deductions related to foreign derived intangible income tax credits. The effective tax rate for the three and nine months ended September 30, 2019 was 23.2% and 20.9%, respectively. The variances from the U.S. federal statutory tax rate of 21% for the three months ended September 30, 2019 were primarily attributable to the mix of earnings in the jurisdictions with lower statutory tax rates than the U.S.. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity We grant options and awards to employees and non-employee directors pursuant to a stockholder approved stock incentive plan, which is described in further detail in Note 9, Stockholders’ Equity , of Notes to Consolidated Financial Statements in our 2019 Annual Report. The following is a summary of our stock option and restricted stock activity and related information: Stock Options Restricted Stock Awards Shares Weighted-Average Exercise Price Shares Weighted-Average Grant Date Fair Value Balance as of December 31, 2019 1,956,379 $ 77.54 147,259 $ 125.11 Granted 480,250 $ 90.08 104,306 $ 89.58 Options exercised/RSUs vested (113,107) $ 23.91 (50,053) $ 122.16 Forfeited (10,200) $ 72.01 — $ — Balance as of September 30, 2020 2,313,322 $ 82.79 201,512 $ 107.45 As of September 30, 2020, outstanding options to purchase 1.6 million shares were exercisable with a weighted average exercise price per share of $72.60. Employee Stock Purchase Plan The price at which common stock is purchased under the Amended Employee Stock Purchase Plan, or ESPP, is equal to 85% of the fair market value of the common stock on the first or last day of the offering period, whichever is lower. As of September 30, 2020, 56,079 shares were available for future purchases under the ESPP. Share Repurchases During the first quarter of 2020, we repurchased $73.3 million of our common stock under our stock repurchase programs as discussed below. We did not have any share repurchases during the second and third quarter of 2020. On September 11, 2019, our Board of Directors approved a stock repurchase program authorizing, but not obligating, the repurchase of up to $500.0 million of our common stock from time to time over the next three years. We expect to acquire shares primarily through open-market transactions and may enter into Rule 10b5-1 trading plans, to facilitate open-market |
Commitment and Contingencies_ L
Commitment and Contingencies: Legal Proceedings | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitment and Contingencies: Legal Proceedings | Commitment and Contingencies: Legal Proceedings We record an estimate of a loss when the loss is considered probable and estimable. Where a liability is probable and there is a range of estimated loss and no amount in the range is more likely than any other number in the range, we record the minimum estimated liability related to the claim in accordance with ASC 450, Contingencies. As additional information becomes available, we assess the potential liability related to our pending litigation and revises our estimates. Revisions in our estimates of potential liability could materially impact our results of operations. On April 9, 2019, CyDex received a Paragraph IV certification Notice Letter from Alembic Global Holdings SA (“Alembic”) stating that Alembic had submitted an ANDA to the FDA, seeking approval to manufacture, offer to sell, and sell a generic version of EVOMELA® prior to the expiration of any of the ’077 patent; the ’088 patent, the ’582 patent, or U.S. Patent No. 10,040,872 (“the ’872 patent”), and alleging that these patents, each of which relates to Captisol®, are invalid, unenforceable, and/or would not be infringed by Alembic’s ANDA product. On May 23, 2019, CyDex filed a complaint against Alembic, Alembic Pharmaceuticals, Ltd., and Alembic Pharmaceuticals, Inc. in the U.S. District Court for the District of Delaware, asserting that the filing of Alembic’s ANDA constitutes infringement of each of the ’088 patent and the ’582 patent. On July 29, 2019, Alembic filed an answer and counterclaims seeking declarations of non-infringement and invalidity as to each of the asserted patents and, on August 19, 2019, CyDex filed an answer to Alembic’s counterclaims. On April 7, 2020, the Court ordered that the Scheduling Order be amended such that, inter alia , the fact discovery cut off was set for November 2, 2020, the close of expect discovery was set for March 22, 2021, and that May 17, 2021 would remain the first day of a five-to-six-day bench trial. On September 16, 2019, CyDex received a Paragraph IV certification Notice Letter from Lupin Ltd. (“Lupin”) stating that Lupin had submitted an ANDA to the FDA, seeking approval to manufacture, offer to sell, and sell a generic version of EVOMELA® prior to the expiration of any of the ’077 patent; the ’088 patent, the ’582 patent, or the ’872 patent, and alleging that these patents, each of which relates to Captisol®, are invalid, unenforceable, and/or would not be infringed by Lupin’s ANDA product. CyDex filed a complaint on October 29, 2019, alleging patent infringement against Lupin. Lupin filed an answer on December 11, 2019 and counterclaimed for declaratory judgments of invalidity and non-infringement as to all four patents and CyDex filed its answer to Lupin’s counterclaims on January 2, 2020. Fact discovery is ongoing. The Court’s scheduling order sets close of discovery on May 7, 2021 and a five day bench trial starting on December 13, 2021. On October 31, 2019, we received three civil complaints filed in the US District Court for the Northern District of Ohio on behalf of several Indian tribes. The Northern District of Ohio is the Court that the Judicial Panel on Multi-District Litigation (“JPML”) has assigned more than one thousand civil cases which have been designated as a Multi-District Litigation (“MDL”) and captioned In Re: National Prescription Opiate Litigation. The allegations in these complaints focus on the activities of defendants other than the company and no individualized factual allegations have been advanced against us in any of the three complaints. We reject all claims raised in the complaints and intend to vigorously defend these matters. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Leases | Leases We lease certain office facilities and equipment primarily under various operating leases. Our leases have remaining contractual terms up to seven seven Lease assets and lease liabilities are recognized at the commencement of an arrangement where it is determined at inception that a lease exists. Lease assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. These assets and liabilities are initially recognized based on the present value of lease payments over the lease term calculated using our incremental borrowing rate generally applicable to the location of the lease asset, unless the implicit rate is readily determinable. Lease assets also include any upfront lease payments made and lease incentives. Lease terms include options to extend or terminate the lease when it is reasonably certain that those options will be exercised. For leases with a term of 12 months or less, we elected to not recognize lease assets and lease liabilities and expense the leases over a straight-line basis for the term of those leases. In addition to base rent, certain of our operating leases require variable payments, such as insurance and common area maintenance. These variable lease costs, other than those dependent upon an index or rate, are expensed when the obligation for those payments is incurred. Leases with an initial term of 12 months or less are not recorded on the balance sheet, and the expense for these short-term leases and for operating leases is recognized on a straight-line basis over the lease term. The depreciable life of lease assets and leasehold improvements is limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. |
Assets Held for Sale
Assets Held for Sale | 9 Months Ended |
Sep. 30, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Assets Held for Sale | Assets Held for Sale As discussed in Note 10 - Subsequent Events , we entered into an agreement to divest Vernalis (R&D) Limited in October 2020. As a result of meeting the criteria to classify the disposal group as held for sale under generally accepted accounting principles, Vernalis (R&D) Limited was classified as held for sale as of September 30, 2020. Assets classified as held for sale are recorded at the lower of their carrying amount or fair value less costs to sell and are not depreciated or amortized. Classification of our disposal group held for sale occurs when sufficient authority to sell the disposal group has been obtained, the disposal group is available for immediate sale and its sale is probable within one year. If at any time these criteria are no longer met, the disposal group would be reclassified as held and used. We evaluate the held for sale classification during each reporting period. The disposal group did not meet the requirements for presentation as discontinued operations and are included in income from continuing operations for the three and nine months ended September 30, 2020. We did not have any assets held for sale as of December 31, 2019. The following table presents the carrying amounts of major classes of assets and liabilities related to assets held for sale with respect to the Vernalis (R&D) Limited divestiture as of September 30, 2020. September 30, 2020 Assets: Accounts receivable, net $ 2,581 Other current assets 2,871 Property and equipment, net 2,445 Operating lease right-of-use assets 5,246 Total assets held for sale $ 13,143 Liabilities: Accounts payable $ 463 Accrued liabilities 1,697 Deferred revenue 2,464 Long-term operating lease liability 5,084 Other long-term liabilities 653 Total liabilities related to assets held for sale $ 10,361 |
Subsequent Event
Subsequent Event | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Events Pfenex Acquisition On October 1, 2020, we completed the acquisition of Pfenex for $437.5 million in cash, plus one non-transferable CVR per share representing the right to receive an aggregate contingent payment of $78 million in cash if a certain specified milestone is achieved. The acquisition was funded using cash on hand. We are currently evaluating the accounting impact of this transaction and anticipate using ASC 805, Business Combinations , but the initial purchase price allocation is not yet complete. Divestiture of Vernalis Research Operations |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of PresentationOur condensed consolidated financial statements include the financial statements of Ligand and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. We have included all adjustments, consisting only of normal recurring adjustments, which we considered necessary for a fair presentation of our financial results. These unaudited condensed consolidated financial statements and accompanying notes should be read together with the audited consolidated financial statements included in our 2019 Annual Report. Interim financial results are not necessarily indicative of the results that may be expected for the full year. |
Reclassifications and Prior Period Immaterial Error | Reclassifications Certain amounts in the prior period condensed consolidated financial statements have been reclassified to conform with the current period presentation. Specifically, effective the second quarter of 2020, we began to include our investment in Viking in “short-term investments” in the condensed consolidated balance sheet, and present “gain (loss) from short-term investments” in the condensed consolidated statements of operations to include both the gain (loss) from investment in Viking and other short-term investments, which was previously included in “other income, net”. As a result, the audited consolidated balance sheet as of December 31, 2019 and the condensed consolidated statements of operations for the three and nine months ended September 30, 2019 have been reclassified to conform to the current period presentation. |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires the use of estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and the accompanying notes. Actual results may differ from those estimates. |
Accounting Standards Recently Adopted and Accounting Standards Not Yet Adopted | Accounting Standards Recently Adopted Credit Losses - In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments (Topic 326) , which amends the impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses on certain types of financial instruments, including trade receivables and available for sale debt securities. This standard includes our financial instruments, such as accounts receivable, investments that are generally of high credit quality, and commercial license rights. Previously, when credit losses were measured under GAAP, an entity generally only considered past events and current conditions in measuring the incurred loss. The new guidance requires us to identify, analyze, document and support new methodologies for quantifying expected credit loss estimates for our financial instruments, using information such as historical experience and current economic conditions, plus the use of reasonable supportable forecast information. We adopted ASU 2016-13 “Short-term Investments” , “Accounts Receivable and Allowance for Credit Losses” and “Commercial License and Other Economic Rights” discussed below. Goodwill Impairment Testing - In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment, which eliminates the requirement to perform a hypothetical purchase price allocation to measure goodwill impairment. Under the new standard the goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount, and recognizing an impairment charge for the amount by which the carrying amount of the reporting unit exceeds its fair value, although it cannot exceed the total amount of goodwill allocated to that reporting unit. We adopted this standard on January 1, 2020, and the adoption did not have a material impact on our condensed consolidated financial statements. Fair Value Measurement - In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement: Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement (Topic 820) , which modifies the disclosure requirements on fair value measurements. We adopted this standard on January 1, 2020, and the adoption did not have a material impact on our condensed consolidated financial statements. Collaborative Arrangements - In November 2018, the FASB issued ASU 2018-18, Collaborative Arrangements: Clarifying the Interaction between Topic 808 and Topic 606 (Topic 808) . The new standard clarifies that certain transactions between participants in a collaborative arrangement should be accounted for under Topic 606, Revenue from Contracts with Customers , when the counterparty is a customer for a good or service that is a distinct unit of account. The amendments also preclude entities from presenting consideration from transactions with a collaborator that is not a customer together with revenue recognized from contracts with customers. We adopted this standard on January 1, 2020, and the adoption did not have a material impact on our condensed consolidated financial statements. Income Taxes - In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes . The standard is expected to reduce cost and complexity related to accounting for income taxes. The new guidance eliminates certain exceptions and clarifies and amends existing guidance to promote consistent application among reporting entities. This standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. Depending on the amendment, adoption may be applied on a retrospective, modified retrospective or prospective basis. We adopted this standard on a prospective basis on January 1, 2020, and the adoption did not have a material impact on our condensed consolidated financial statements. Accounting Standards Not Yet Adopted In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The new guidance simplifies accounting for convertible instruments by removing major separation models required under current GAAP. This standard removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings per share calculation in certain areas. This standard is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020 and adoption must be as of the beginning of the Company’s annual fiscal year. We are currently evaluating the impact of this standard on our consolidated financial statements and related disclosures. We do not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material impact on our condensed consolidated financial statements or disclosures. |
Revenue | Revenue Our revenue is generated primarily from royalties on sales of products commercialized by our partners, Captisol material sales, and contract revenue for services, license fees and development, regulatory and sales based milestone payments. Royalties We receive royalty revenue on sales by our partners of products covered by patents that we own. We do not have future performance obligations under these license arrangements. We generally satisfy our obligation to grant intellectual property rights on the effective date of the contract. However, we apply the royalty recognition constraint required under the guidance for sales-based royalties which requires a sales-based royalty to be recorded when the underlying sale occurs. Therefore, royalties on sales of products commercialized by our partners are recognized in the quarter the product is sold. Our partners generally report sales information to us on a one quarter lag. Thus, we estimate the expected royalty proceeds based on an analysis of historical experience and interim data provided by our partners including their publicly announced sales. Differences between actual and estimated royalty revenues are adjusted for in the period in which they become known, typically the following quarter. Contract Revenue Our contract revenue includes service revenue, license fees and future contingent milestone based payments. We recognize service revenue for contracted R&D services performed for our customers over time. We measure our progress using an input method based on the effort we expend or costs we incur toward the satisfaction of our performance obligation. We estimate the amount of effort we expend, including the time we estimate it will take us to complete the activities, or costs we incur in a given period, relative to the estimated total effort or costs to satisfy the performance obligation. This results in a percentage that we multiply by the transaction price to determine the amount of revenue we recognize each period. This approach requires us to make estimates and use judgement. If our estimates or judgements change over the course of the collaboration, they may affect the timing and amount of revenue that we recognize in the current and future periods. We include contingent milestone based payments in the estimated transaction price when there is a basis to reasonably estimate the amount of the payment. These estimates are based on historical experience, anticipated results and our best judgment at the time. If the contingent milestone based payment is sales-based, we apply the royalty recognition constraint and record revenue when the underlying sale has taken place. Significant judgments must be made in determining the transaction price for our sales of intellectual property. Because of the risk that products in development with our partners will not reach development based milestones or receive regulatory approval, we generally recognize any contingent payments that would be due to us upon or after the development milestone or regulatory approval. Captisol Sales We recognize revenue when control of Captisol material is transferred to our customers in an amount that reflects the consideration we expect to receive from our customers in exchange for those products. This process involves identifying the contract with a customer, determining the performance obligations in the contract, determining the contract price, allocating the contract price to the distinct performance obligations in the contract, and recognizing revenue when the performance obligations have been satisfied. A performance obligation is considered distinct from other obligations in a contract when it provides a benefit to the customer either on its own or together with other resources that are readily available to the customer and is separately identified in the contract. We consider a performance obligation satisfied once we have transferred control of the product, meaning the customer has the ability to use and obtain the benefit of the Captisol material or intellectual property license right. We recognize revenue for satisfied performance obligations only when we determine there are no uncertainties regarding payment terms or transfer of control. We have elected to recognize the cost for freight and shipping when or after control over Captisol material has transferred to the customer as an expense in cost of Captisol. Sales tax and other taxes we collect concurrent with revenue-producing activities are excluded from revenue. We expense incremental costs of obtaining a contract when incurred if the expected amortization period of the asset that we would have recognized is one year or less or the amount is immaterial. We did not incur any incremental costs of obtaining a contract during the periods reported. Deferred Revenue Depending on the terms of the arrangement, we may also defer a portion of the consideration received because we have to satisfy a future obligation. We use an observable price to determine the stand-alone selling price for separate performance obligations or a cost plus margin approach when one is not available. The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets), and customer advances and deposits (contract liabilities) on the consolidated balance sheet. Except for royalty revenue and certain service revenue, we generally receive payment at the point we satisfy our obligation or soon after. Therefore, we do not generally carry a contract asset balance. Any fees billed in advance of being earned are recorded as deferred revenue. During the three and nine months ended September 30, 2020, the amount recognized as revenue that was previously deferred was $5.8 million and $8.3 million, respectively. During the three and nine months ended September 30, 2019, the amount recognized as revenue that was previously deferred was $1.0 million and $5.0 million, respectively. We expect to satisfy the performance obligations related to long-term deferred revenue within the next 3 years. |
Share-Based Compensation | Share-Based Compensation Share-based compensation expense for awards to employees and non-employee directors is a non-cash expense and is recognized on a straight-line basis over the vesting period until the last tranche vests. The following table summarizes share-based compensation expense recorded as components of research and development expenses and general and administrative expenses for the periods indicated (in thousands): Three months ended Nine months ended September 30, September 30, 2020 2019 2020 2019 SBC - Research and development expenses $ 3,094 $ 2,481 $ 8,510 $ 7,136 SBC - General and administrative expenses 4,646 3,816 12,242 11,079 $ 7,740 $ 6,297 $ 20,752 $ 18,215 The fair-value for options that were awarded to employees and directors was estimated at the date of grant using the Black-Scholes option valuation model with the following weighted-average assumptions: Three months ended Nine months ended September 30, September 30, 2020 2019 2020 2019 Risk-free interest rate 0.3% 1.6% 1.0% 2.4% Dividend yield — — — — Expected volatility 59% 41% 55% 43% Expected term 4.9 5.3 4.8 5.2 |
Net Income (loss) Per Share | Net Income (loss) Per Share Basic net income (loss) per share is calculated by dividing net income (loss) by the weighted-average number of common shares outstanding during the period. Diluted net income per share is computed based on the sum of the weighted average number of common shares and potentially dilutive common shares outstanding during the period. For the three and nine months ended September 30, 2020, all of the 0.70 million and 0.65 million, respectively, weighted average shares of outstanding equity awards as of September 30, 2020 were anti-dilutive due to the net loss for the period. For the three months ended September 30, 2019, all of the 0.70 million weighted average shares of outstanding equity awards as of September 30, 2019 were anti-dilutive due to the net loss for the period Potentially dilutive common shares consist of shares issuable under the 2023 Notes, stock options and restricted stock. The 2023 Notes have a dilutive impact when the average market price of our common stock exceeds the applicable conversion price of the respective notes. It is our intent and policy to settle conversions through combination settlement, which involves payment in cash equal to the principal portion and delivery of shares of common stock for the excess of the conversion value over the principal portion. Potentially dilutive common shares from stock options and restricted stock are determined using the average share price for each period under the treasury stock method. In addition, the following amounts are assumed to be used to repurchase shares: proceeds from exercise of stock options and the average amount of unrecognized compensation expense for the awards. See Note 4 - Convertible Senior Notes and Note 6 - Stockholders’ Equity . |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Revenue by Source | The following table represents disaggregation of royalties, Captisol and contract revenue (in thousands): Three months ended Nine months ended September 30, September 30, 2020 2019 2020 2019 Royalties Kyprolis $ 6,923 $ 7,602 $ 16,809 $ 16,317 Evomela 1,802 1,515 4,577 3,570 Other 280 650 1,365 1,851 Promacta — — — 14,193 $ 9,005 $ 9,767 $ 22,751 $ 35,931 Captisol $ 23,389 $ 6,849 $ 68,966 $ 24,357 Contract Service Revenue $ 7,341 $ 4,548 $ 15,280 $ 12,990 License Fees 158 243 1,793 3,083 Milestone 960 2,674 4,766 15,425 Other 995 727 2,873 1,493 $ 9,454 $ 8,192 $ 24,712 $ 32,991 Total $ 41,848 $ 24,808 $ 116,429 $ 93,279 |
Schedule of Short-Term Investments | Our investments, excluding investment in Viking, consist of the following at September 30, 2020 and December 31, 2019 (in thousands): September 30, 2020 December 31, 2019 Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value Short-term investments Bank deposits $ 68,226 $ 101 $ — $ 68,327 $ 411,690 $ 188 $ (3) $ 411,875 Corporate bonds 27,125 102 — 27,227 63,818 161 — 63,979 Commercial paper 47,943 60 — 48,003 210,525 43 (16) 210,552 Corporate equity securities 4,484 415 (2,624) 2,275 4,506 416 (1,850) 3,072 Mutual fund 151,513 204 — 151,717 250,635 — (249) 250,386 Warrants — 155 — 155 — 125 — 125 $ 299,291 $ 1,037 $ (2,624) $ 297,704 $ 941,174 $ 933 $ (2,118) $ 939,989 |
Schedule of Available-for-Sale Debt Securities | The following table summarizes our available-for-sale debt securities by contractual maturity (in thousands): September 30, 2020 Amortized Cost Fair Value Within one year $ 121,452 $ 121,610 After one year through five years 21,842 21,947 After five years — — Total $ 143,294 $ 143,557 The following table summarizes our available-for-sale debt securities in an unrealized loss position (in thousands): Less than 12 months 12 months or greater Total Gross Estimated Gross Estimated Gross Estimated September 30, 2020 Bank deposits $ — $ 5,011 $ — $ — $ — $ 5,011 Corporate bonds (0.4) 3,007 — — (0.4) 3,007 Total $ (0.4) $ 8,018 $ — $ — $ (0.4) $ 8,018 December 31, 2019 Bank deposits $ (3) $ 58,584 $ — $ — $ (3) $ 58,584 Commercial paper (16) 79,363 — — (16) 79,363 Total $ (19) $ 137,947 $ — $ — $ (19) $ 137,947 |
Schedule of Goodwill and Other Identifiable Intangible Assets | Goodwill and other identifiable intangible assets consist of the following (in thousands): September 30, December 31, 2020 2019 Goodwill $ 102,136 $ 95,229 Definite lived intangible assets Complete technology 257,317 242,813 Less: accumulated amortization (1) (59,869) (50,203) Trade name 2,642 2,642 Less: accumulated amortization (1,279) (1,180) Customer relationships 40,700 29,600 Less: accumulated amortization (14,929) (13,224) Total goodwill and other identifiable intangible assets, net $ 326,718 $ 305,677 (1) Accumulated amortization for complete technology includes immaterial amount of foreign currency translation adjustments for the complete technology acquired from the Vernalis acquisition. |
Schedule of Commercial License Rights | Commercial license and other economic rights consist of the following (in thousands): September 30, 2020 December 31, 2019 Gross Adjustments (1) Net Gross Adjustments (2) Net Aziyo and CorMatrix $ 17,696 $ (9,644) $ 8,052 $ 17,696 $ (5,500) $ 12,196 Palvella 10,000 (10,000) — 10,000 (7,492) 2,508 Selexis and Dianomi 10,602 (7,820) 2,782 10,602 (5,216) 5,386 Total $ 38,298 $ (27,464) $ 10,834 $ 38,298 $ (18,208) $ 20,090 (1) Amounts represent accumulated amortization to principal or research and development expenses of $21.5 million and credit loss adjustments of $6.0 million as of September 30, 2020. (2) Amounts represent accumulated amortization to principal or research and development expenses as of December 31, 2019. |
Schedule of Other Assets | Other assets consist of the following (in thousands): September 30, December 31, 2020 2019 Captisol manufacturing ramp up fee $ 9,215 $ — Long-term investment receivable 2,000 — Equity investment 813 750 Deposits 138 219 Other 1,538 1,388 Total other assets $ 13,704 $ 2,357 |
Schedule of Accrued Liabilities | Accrued liabilities consist of the following (in thousands): September 30, December 31, 2020 2019 Compensation $ 4,840 $ 1,986 Professional fees 1,226 1,135 Amounts owed to former licensees 407 381 Royalties owed to third parties 805 — Return reserve 2,835 3,027 Current operating lease liabilities 1,029 1,242 Accrued interest 1,437 690 Other 1,919 1,375 Total accrued liabilities $ 14,498 $ 9,836 |
Schedule of Accounting for Share-Based Compensation | The following table summarizes share-based compensation expense recorded as components of research and development expenses and general and administrative expenses for the periods indicated (in thousands): Three months ended Nine months ended September 30, September 30, 2020 2019 2020 2019 SBC - Research and development expenses $ 3,094 $ 2,481 $ 8,510 $ 7,136 SBC - General and administrative expenses 4,646 3,816 12,242 11,079 $ 7,740 $ 6,297 $ 20,752 $ 18,215 |
Schedule of Fair-Value Options Awarded to Employees and Directors | The fair-value for options that were awarded to employees and directors was estimated at the date of grant using the Black-Scholes option valuation model with the following weighted-average assumptions: Three months ended Nine months ended September 30, September 30, 2020 2019 2020 2019 Risk-free interest rate 0.3% 1.6% 1.0% 2.4% Dividend yield — — — — Expected volatility 59% 41% 55% 43% Expected term 4.9 5.3 4.8 5.2 |
Schedule of Computation of Basic and Diluted Earnings per Share | The following table presents the calculation of weighted average shares used to calculate basic and diluted earnings per share (in thousands): Three months ended Nine months ended September 30, September 30, 2020 2019 2020 2019 Weighted average shares outstanding: 16,082 18,770 16,222 19,586 Dilutive potential common shares: Restricted stock — — — 35 Stock options — — — 728 Shares used to compute diluted income per share 16,082 18,770 16,222 20,349 Potentially dilutive shares excluded from calculation due to anti-dilutive effect 7,028 11,549 8,330 8,694 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value | The following table presents the hierarchy for our assets and liabilities measured at fair value (in thousands): September 30, 2020 December 31, 2019 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets: Short-term investments, excluding Viking (1) $ 2,274 $ 295,275 $ 155 $ 297,704 $ 3,073 $ 936,791 $ 125 $ 939,989 Investment in Viking common stock 33,869 — — 33,869 48,425 — — 48,425 Investment in Viking warrants (2) 6,581 — — 6,581 9,910 — — 9,910 Total assets $ 42,724 $ 295,275 $ 155 $ 338,154 $ 61,408 $ 936,791 $ 125 $ 998,324 Liabilities: Crystal contingent liabilities (3) $ — $ — $ 800 $ 800 $ — $ — $ 2,659 $ 2,659 CyDex contingent liabilities — — 509 509 — — 348 348 Metabasis contingent liabilities (4) — 4,985 — 4,985 — 5,935 — 5,935 Icagen contingent liabilities (5) — — 4,504 4,504 — — — — Amounts owed to former licensor 71 — — 71 75 — — 75 Total liabilities $ 71 $ 4,985 $ 5,813 $ 10,869 $ 75 $ 5,935 $ 3,007 $ 9,017 1. Excluding our investment in Viking, our short-term investments in marketable debt and equity securities are classified as available-for-sale securities based on management's intentions and are at level 2 of the fair value hierarchy, as these investment securities are valued based upon quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market. Short-term investments in mutual funds are valued at their net asset value (NAV) on the last day of the period. We have classified marketable securities with original maturities of greater than one year as short-term investments based upon our ability and intent to use any and all of those marketable securities to satisfy the liquidity needs of our current operations. In addition, we have investment in warrants resulting from Seelos Therapeutics Inc. milestone payments that were settled in shares during the first quarter of 2019 and are at level 3 of the fair value hierarchy, based on Black Scholes value estimated by management on the last day of the period. 2. Investment in warrants, which we received as a result of Viking’s partial repayment of the Viking note receivable and our purchase of Viking common stock and warrants in April 2016, are classified as level 1 as the fair value is determined using quoted market prices in active markets for the same securities. The change of the fair value is recorded in "Gain (loss) from short-term investments" in our condensed consolidated statement of operations. 3. The fair value of Crystal contingent liabilities was determined using a probability weighted income approach. Most of the contingent payments are based on development or regulatory milestones as defined in the merger agreement with Crystal. The fair value is subjective and is affected by changes in inputs to the valuation model including management’s estimates regarding the timing and probability of achievement of certain developmental and regulatory milestones. Changes in these estimates may materially affect the fair value. During the first quarter of 2020, we paid a $1.8 million contingent liability on development milestones to former Crystal shareholders. 4. In connection with our acquisition of Metabasis in January 2010, we issued Metabasis stockholders four tradable CVRs, one CVR from each of four respective series of CVR, for each Metabasis share. The CVRs entitle Metabasis stockholders to cash payments as frequently as every six months as cash is received by us from proceeds from the sale or partnering of any of the Metabasis drug development programs, among other triggering events. The liability for the CVRs is determined using quoted prices in a market that is not active for the underlying CVR. The carrying amount of the liability may fluctuate significantly based upon quoted market prices and actual amounts paid under the agreements may be materially different than the carrying amount of the liability. Several of the Metabasis drug development programs have been outlicensed to Viking, including VK2809. VK2809 is a novel selective TR-β agonist with potential in multiple indications, including hypercholesterolemia, dyslipidemia, NASH, and X-ALD. Under the terms of the agreement with Viking, we may be entitled to up to $375 million of development, regulatory and commercial milestones and tiered royalties on potential future sales including a $10 million payment upon initiation of a Phase 3 clinical trial. 5. The fair value of Icagen contingent liabilities was determined using a probability weighted income approach. Most of the contingent payments are based on certain revenue milestones as defined in the asset purchase agreement with Icagen. The fair value is subjective and is affected by changes in inputs to the valuation model including management’s estimates regarding the timing and probability of achievement of certain developmental and regulatory milestones. Changes in these estimates may materially affect the fair value. During the third quarter of 2020, we paid a $0.5 million contingent liability based on revenue milestones to Icagen. |
Convertible Senior Notes (Table
Convertible Senior Notes (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Carrying Values and Coupon Rates on Financing Arrangements | The following table summarizes information about the 2023 Notes (in thousands): September 30, 2020 December 31, 2019 Principal amount of the 2023 Notes outstanding $ 515,560 $ 750,000 Unamortized discount (including unamortized debt issuance cost) (60,587) (111,041) Total long-term portion of notes payable $ 454,973 $ 638,959 Carrying value of equity component of the 2023 Notes $ 55,339 $ 101,422 Fair value of the 2023 Notes outstanding (Level 2) $ 464,958 $ 647,280 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Schedule of Stock Option Plan Activity | The following is a summary of our stock option and restricted stock activity and related information: Stock Options Restricted Stock Awards Shares Weighted-Average Exercise Price Shares Weighted-Average Grant Date Fair Value Balance as of December 31, 2019 1,956,379 $ 77.54 147,259 $ 125.11 Granted 480,250 $ 90.08 104,306 $ 89.58 Options exercised/RSUs vested (113,107) $ 23.91 (50,053) $ 122.16 Forfeited (10,200) $ 72.01 — $ — Balance as of September 30, 2020 2,313,322 $ 82.79 201,512 $ 107.45 |
Schedule of Restricted Stock Activity | The following is a summary of our stock option and restricted stock activity and related information: Stock Options Restricted Stock Awards Shares Weighted-Average Exercise Price Shares Weighted-Average Grant Date Fair Value Balance as of December 31, 2019 1,956,379 $ 77.54 147,259 $ 125.11 Granted 480,250 $ 90.08 104,306 $ 89.58 Options exercised/RSUs vested (113,107) $ 23.91 (50,053) $ 122.16 Forfeited (10,200) $ 72.01 — $ — Balance as of September 30, 2020 2,313,322 $ 82.79 201,512 $ 107.45 |
Assets Held for Sale (Tables)
Assets Held for Sale (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Carrying Amounts of Major Classes of Assets and Liabilities Related to Assets Held for Sale | The following table presents the carrying amounts of major classes of assets and liabilities related to assets held for sale with respect to the Vernalis (R&D) Limited divestiture as of September 30, 2020. September 30, 2020 Assets: Accounts receivable, net $ 2,581 Other current assets 2,871 Property and equipment, net 2,445 Operating lease right-of-use assets 5,246 Total assets held for sale $ 13,143 Liabilities: Accounts payable $ 463 Accrued liabilities 1,697 Deferred revenue 2,464 Long-term operating lease liability 5,084 Other long-term liabilities 653 Total liabilities related to assets held for sale $ 10,361 |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of Significant Accounting Policies - Narrative (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||
Dec. 31, 2018USD ($) | Sep. 30, 2020USD ($)position$ / sharesshares | Jun. 30, 2020USD ($) | Sep. 30, 2019USD ($)shares | Sep. 30, 2020USD ($)position$ / sharesshares | Sep. 30, 2019USD ($)shares | Jan. 01, 2020USD ($) | Dec. 31, 2019USD ($) | |
Property, Plant and Equipment [Line Items] | ||||||||
Accounting Standards Update | us-gaap:AccountingStandardsUpdate201613Member | |||||||
Revenue recognized from milestone method revenue | $ 5,800,000 | $ 1,000,000 | $ 8,300,000 | $ 5,000,000 | ||||
Fair value of equity securities | $ 6,581,000 | $ 6,581,000 | $ 9,910,000 | |||||
Number of positions in an unrealized loss position | position | 2 | 2 | ||||||
Credit losses related to available-for-sale debt securities | $ 0 | $ 0 | ||||||
Additional allowance for credit losses recorded related to COVID-19 | $ (100,000) | 200,000 | ||||||
Allowance for credit loss | $ 5,500,000 | |||||||
Increase (decrease) to allowance for credit loss during period | $ 500,000 | |||||||
Potentially dilutive shares excluded from calculation due to anti-dilutive effect (shares) | shares | 7,028,000 | 11,549,000 | 8,330,000 | 8,694,000 | ||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-10-01 | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Expected timing of satisfaction of remaining performance obligation | 3 years | 3 years | ||||||
Warrants | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Fair value of equity securities | $ 155,000 | $ 155,000 | 125,000 | |||||
Warrants | Short-term Investments | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Fair value of equity securities | $ 6,600,000 | $ 6,600,000 | 9,900,000 | |||||
Share-based Compensation | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Potentially dilutive shares excluded from calculation due to anti-dilutive effect (shares) | shares | 700,000 | 700,000 | 650,000 | |||||
Adjustment | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Cumulative-effect adjustment from adoption of ASU 2016-13, net of tax | (5,200,000) | |||||||
Viking Therapeutics, Inc. | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Warrant exercise price (USD per share) | $ / shares | $ 1.50 | $ 1.50 | ||||||
Viking Therapeutics, Inc. | Common Stock | Short-term Investments | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Fair value of equity securities | $ 33,900,000 | $ 33,900,000 | 48,400,000 | |||||
Palvella | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Revenue recognized from milestone method revenue | $ 3,000,000 | |||||||
Royalty Agreements | Aziyo | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Effective interest rate for forecasted cash flows (as a percent) | 23.00% | |||||||
Commercial license rights | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Up-front payment | 38,298,000 | $ 38,298,000 | 38,298,000 | |||||
Commercial license rights | Palvella | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Contract asset | $ 8,000,000 | |||||||
Up-front payment | $ 10,000,000 | $ 10,000,000 | $ 10,000,000 | $ 10,000,000 | ||||
Minimum | Royalty Agreements | Palvella | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Royalty rate (as a percent) | 5.00% | |||||||
Maximum | Viking Therapeutics, Inc. | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Outstanding warrants to purchase shares of Viking's common stock (shares) | shares | 1,500,000 | 1,500,000 | ||||||
Maximum | Royalty Agreements | Palvella | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Royalty rate (as a percent) | 9.80% |
Basis of Presentation and Sum_5
Basis of Presentation and Summary of Significant Accounting Policies - Revenue by Source (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 41,848 | $ 24,808 | $ 116,429 | $ 93,279 |
Royalties | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 9,005 | 9,767 | 22,751 | 35,931 |
Kyprolis | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 6,923 | 7,602 | 16,809 | 16,317 |
Evomela | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 1,802 | 1,515 | 4,577 | 3,570 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 280 | 650 | 1,365 | 1,851 |
Promacta | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 0 | 0 | 0 | 14,193 |
Captisol | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 23,389 | 6,849 | 68,966 | 24,357 |
Contract revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 9,454 | 8,192 | 24,712 | 32,991 |
Service Revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 7,341 | 4,548 | 15,280 | 12,990 |
License Fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 158 | 243 | 1,793 | 3,083 |
Milestone | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 960 | 2,674 | 4,766 | 15,425 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 995 | $ 727 | $ 2,873 | $ 1,493 |
Basis of Presentation and Sum_6
Basis of Presentation and Summary of Significant Accounting Policies - Investment Categories (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Equity Securities, FV-NI [Abstract] | ||
Estimated fair value | $ 6,581 | $ 9,910 |
Debt and Equity Securities, FV-NI [Abstract] | ||
Amortized cost | 299,291 | 941,174 |
Gross unrealized gains | 1,037 | 933 |
Gross unrealized losses | (2,624) | (2,118) |
Estimated fair value | 297,704 | 939,989 |
Bank deposits | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized cost | 68,226 | 411,690 |
Gross unrealized gains | 101 | 188 |
Gross unrealized losses | 0 | (3) |
Estimated fair value | 68,327 | 411,875 |
Corporate bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized cost | 27,125 | 63,818 |
Gross unrealized gains | 102 | 161 |
Gross unrealized losses | 0 | 0 |
Estimated fair value | 27,227 | 63,979 |
Commercial paper | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized cost | 47,943 | 210,525 |
Gross unrealized gains | 60 | 43 |
Gross unrealized losses | 0 | (16) |
Estimated fair value | 48,003 | 210,552 |
Corporate equity securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized cost | 4,484 | 4,506 |
Gross unrealized gains | 415 | 416 |
Gross unrealized losses | (2,624) | (1,850) |
Estimated fair value | 2,275 | 3,072 |
Mutual fund | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized cost | 151,513 | 250,635 |
Gross unrealized gains | 204 | 0 |
Gross unrealized losses | 0 | (249) |
Estimated fair value | 151,717 | 250,386 |
Warrants | ||
Equity Securities, FV-NI [Abstract] | ||
Amortized cost | 0 | 0 |
Gross unrealized gains | 155 | 125 |
Gross unrealized losses | 0 | 0 |
Estimated fair value | $ 155 | $ 125 |
Basis of Presentation and Sum_7
Basis of Presentation and Summary of Significant Accounting Policies - Available-for-Sale Debt Securities by Contractual Maturity (Details) $ in Thousands | Sep. 30, 2020USD ($) |
Amortized Cost | |
Within one year | $ 121,452 |
After one year through five years | 21,842 |
After five years | 0 |
Total | 143,294 |
Fair Value | |
Within one year | 121,610 |
After one year through five years | 21,947 |
After five years | 0 |
Total | $ 143,557 |
Basis of Presentation and Sum_8
Basis of Presentation and Summary of Significant Accounting Policies - Available-for-Sale Debt Securities in an Unrealized Loss Position (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Gross Unrealized Losses | ||
Less than 12 months | $ (400) | $ (19,000) |
12 months or greater | 0 | 0 |
Total | (400) | (19,000) |
Estimated Fair Value | ||
Less than 12 months | 8,018,000 | 137,947,000 |
12 months or greater | 0 | 0 |
Total | 8,018,000 | 137,947,000 |
Bank deposits | ||
Gross Unrealized Losses | ||
Less than 12 months | 0 | (3,000) |
12 months or greater | 0 | 0 |
Total | 0 | (3,000) |
Estimated Fair Value | ||
Less than 12 months | 5,011,000 | 58,584,000 |
12 months or greater | 0 | 0 |
Total | 5,011,000 | 58,584,000 |
Corporate bonds | ||
Gross Unrealized Losses | ||
Less than 12 months | (400) | |
12 months or greater | 0 | |
Total | (400) | |
Estimated Fair Value | ||
Less than 12 months | 3,007,000 | |
12 months or greater | 0 | |
Total | $ 3,007,000 | |
Commercial paper | ||
Gross Unrealized Losses | ||
Less than 12 months | (16,000) | |
12 months or greater | 0 | |
Total | (16,000) | |
Estimated Fair Value | ||
Less than 12 months | 79,363,000 | |
12 months or greater | 0 | |
Total | $ 79,363,000 |
Basis of Presentation and Sum_9
Basis of Presentation and Summary of Significant Accounting Policies - Goodwill and Other Identifiable Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Summary of Goodwill and Other Identifiable Intangible Assets | ||
Goodwill | $ 102,136 | $ 95,229 |
Total goodwill and other identifiable intangible assets, net | 326,718 | 305,677 |
Complete technology | ||
Summary of Goodwill and Other Identifiable Intangible Assets | ||
Definite lived intangible assets | 257,317 | 242,813 |
Less: accumulated amortization | (59,869) | (50,203) |
Trade name | ||
Summary of Goodwill and Other Identifiable Intangible Assets | ||
Definite lived intangible assets | 2,642 | 2,642 |
Less: accumulated amortization | (1,279) | (1,180) |
Customer relationships | ||
Summary of Goodwill and Other Identifiable Intangible Assets | ||
Definite lived intangible assets | 40,700 | 29,600 |
Less: accumulated amortization | (14,929) | (13,224) |
Commercial license rights | ||
Summary of Goodwill and Other Identifiable Intangible Assets | ||
Definite lived intangible assets | 38,298 | 38,298 |
Less: accumulated amortization | (21,500) | |
Commercial license rights | Selexis and Dianomi | ||
Summary of Goodwill and Other Identifiable Intangible Assets | ||
Definite lived intangible assets | $ 10,602 | $ 10,602 |
Basis of Presentation and Su_10
Basis of Presentation and Summary of Significant Accounting Policies - Commercial License and Other Economic Rights (Details) - Commercial license rights - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Commercial License and Other Economic Rights | |||
Gross | $ 38,298 | $ 38,298 | |
Adjustments | (27,464) | (18,208) | |
Net | 10,834 | 20,090 | |
Accumulated amortization on finite-lived intangible assets | (21,500) | ||
Credit loss adjustments of finite-lived intangible assets | (6,000) | ||
Aziyo and CorMatrix | |||
Commercial License and Other Economic Rights | |||
Gross | 17,696 | 17,696 | |
Adjustments | (9,644) | (5,500) | |
Net | 8,052 | 12,196 | |
Palvella | |||
Commercial License and Other Economic Rights | |||
Gross | 10,000 | 10,000 | $ 10,000 |
Adjustments | (10,000) | (7,492) | |
Net | 0 | 2,508 | |
Selexis and Dianomi | |||
Commercial License and Other Economic Rights | |||
Gross | 10,602 | 10,602 | |
Adjustments | (7,820) | (5,216) | |
Net | $ 2,782 | $ 5,386 |
Basis of Presentation and Su_11
Basis of Presentation and Summary of Significant Accounting Policies - Other Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Text Block [Abstract] | ||
Captisol manufacturing ramp up fee | $ 9,215 | $ 0 |
Long-term investment receivable | 2,000 | 0 |
Equity investment | 813 | 750 |
Deposits | 138 | 219 |
Other | 1,538 | 1,388 |
Total other assets | $ 13,704 | $ 2,357 |
Basis of Presentation and Su_12
Basis of Presentation and Summary of Significant Accounting Policies - Accrued Liabilities and Other Long-Term Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Accrued Liabilities | ||
Compensation | $ 4,840 | $ 1,986 |
Professional fees | 1,226 | 1,135 |
Amounts owed to former licensees | 407 | 381 |
Royalties owed to third parties | 805 | 0 |
Return reserve | 2,835 | 3,027 |
Current operating lease liabilities | 1,029 | 1,242 |
Accrued interest | 1,437 | 690 |
Other | 1,919 | 1,375 |
Total accrued liabilities | $ 14,498 | $ 9,836 |
Basis of Presentation and Su_13
Basis of Presentation and Summary of Significant Accounting Policies - Accounting for Share-Based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Basis of Presentation [Line Items] | ||||
Share-based compensation expense | $ 7,740 | $ 6,297 | $ 20,752 | $ 18,215 |
SBC - Research and development expenses | ||||
Basis of Presentation [Line Items] | ||||
Share-based compensation expense | 3,094 | 2,481 | 8,510 | 7,136 |
SBC - General and administrative expenses | ||||
Basis of Presentation [Line Items] | ||||
Share-based compensation expense | $ 4,646 | $ 3,816 | $ 12,242 | $ 11,079 |
Basis of Presentation and Su_14
Basis of Presentation and Summary of Significant Accounting Policies - Fair Value Valuation Assumptions (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Risk-free interest rate (as a percent) | 0.30% | 1.60% | 1.00% | 2.40% |
Dividend yield (as a percent) | 0.00% | 0.00% | 0.00% | 0.00% |
Expected volatility (as a percent) | 59.00% | 41.00% | 55.00% | 43.00% |
Expected term | 4 years 10 months 24 days | 5 years 3 months 18 days | 4 years 9 months 18 days | 5 years 2 months 12 days |
Basis of Presentation and Su_15
Basis of Presentation and Summary of Significant Accounting Policies - Earnings (Loss) Per Share (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Summary of computation of basic and diluted net income (loss) per share | ||||
Weighted average shares outstanding (shares) | 16,082,000 | 18,770,000 | 16,222,000 | 19,586,000 |
Dilutive potential common shares: | ||||
Restricted stock (in shares) | 0 | 0 | 0 | 35,000 |
Stock options (in shares) | 0 | 0 | 0 | 728,000 |
Shares used to compute diluted income per share (shares) | 16,082,000 | 18,770,000 | 16,222,000 | 20,349,000 |
Potentially dilutive shares excluded from calculation due to anti-dilutive effect (shares) | 7,028,000 | 11,549,000 | 8,330,000 | 8,694,000 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities at Fair Value (Details) | 1 Months Ended | 3 Months Ended | ||
Jan. 31, 2010contingentValueRightcontingentValueRightSeries | Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Dec. 31, 2019USD ($) | |
Assets: | ||||
Short-term investments, excluding Viking | $ 297,704,000 | $ 939,989,000 | ||
Investment in Viking common stock | 33,869,000 | 48,425,000 | ||
Investment in warrants | 6,581,000 | 9,910,000 | ||
Total assets | 338,154,000 | 998,324,000 | ||
Liabilities: | ||||
Amounts owed to former licensor | 71,000 | 75,000 | ||
Total liabilities | 10,869,000 | 9,017,000 | ||
Repayments of related party debt | $ 1,800,000 | |||
Number of CVR Series | contingentValueRightSeries | 4 | |||
Metabasis | ||||
Liabilities: | ||||
Number of CVRs issued per acquiree share | contingentValueRight | 4 | |||
Number of CVRs issued from each CVR series | contingentValueRight | 1 | |||
Frequency of cash payments to CVR holders | 6 months | |||
Transferred over Time | Phase 3 Clinical Trial | ||||
Liabilities: | ||||
Contract asset | 10,000,000 | |||
Maximum | Transferred over Time | Development, Regulatory, & Commercial Milestones and Tiered Royalties | ||||
Liabilities: | ||||
Investments | 375,000,000 | |||
Crystal contingent liabilities | ||||
Liabilities: | ||||
Contingent liabilities | 800,000 | 2,659,000 | ||
CyDex contingent liabilities | ||||
Liabilities: | ||||
Contingent liabilities | 509,000 | 348,000 | ||
Metabasis contingent liabilities | ||||
Liabilities: | ||||
Contingent liabilities | 4,985,000 | 5,935,000 | ||
Icagen contingent liabilities | ||||
Liabilities: | ||||
Contingent liabilities | 4,504,000 | 0 | ||
Payment for contingent liability | 500,000 | |||
Level 1 | ||||
Assets: | ||||
Short-term investments, excluding Viking | 2,274,000 | 3,073,000 | ||
Investment in Viking common stock | 33,869,000 | 48,425,000 | ||
Investment in warrants | 6,581,000 | 9,910,000 | ||
Total assets | 42,724,000 | 61,408,000 | ||
Liabilities: | ||||
Amounts owed to former licensor | 71,000 | 75,000 | ||
Total liabilities | 71,000 | 75,000 | ||
Level 1 | Crystal contingent liabilities | ||||
Liabilities: | ||||
Contingent liabilities | 0 | 0 | ||
Level 1 | CyDex contingent liabilities | ||||
Liabilities: | ||||
Contingent liabilities | 0 | 0 | ||
Level 1 | Metabasis contingent liabilities | ||||
Liabilities: | ||||
Contingent liabilities | 0 | 0 | ||
Level 1 | Icagen contingent liabilities | ||||
Liabilities: | ||||
Contingent liabilities | 0 | 0 | ||
Level 2 | ||||
Assets: | ||||
Short-term investments, excluding Viking | 295,275,000 | 936,791,000 | ||
Investment in Viking common stock | 0 | 0 | ||
Investment in warrants | 0 | 0 | ||
Total assets | 295,275,000 | 936,791,000 | ||
Liabilities: | ||||
Amounts owed to former licensor | 0 | 0 | ||
Total liabilities | 4,985,000 | 5,935,000 | ||
Level 2 | Crystal contingent liabilities | ||||
Liabilities: | ||||
Contingent liabilities | 0 | 0 | ||
Level 2 | CyDex contingent liabilities | ||||
Liabilities: | ||||
Contingent liabilities | 0 | 0 | ||
Level 2 | Metabasis contingent liabilities | ||||
Liabilities: | ||||
Contingent liabilities | 4,985,000 | 5,935,000 | ||
Level 2 | Icagen contingent liabilities | ||||
Liabilities: | ||||
Contingent liabilities | 0 | 0 | ||
Level 3 | ||||
Assets: | ||||
Short-term investments, excluding Viking | 155,000 | 125,000 | ||
Investment in Viking common stock | 0 | 0 | ||
Investment in warrants | 0 | 0 | ||
Total assets | 155,000 | 125,000 | ||
Liabilities: | ||||
Amounts owed to former licensor | 0 | 0 | ||
Total liabilities | 5,813,000 | 3,007,000 | ||
Level 3 | Crystal contingent liabilities | ||||
Liabilities: | ||||
Contingent liabilities | 800,000 | 2,659,000 | ||
Level 3 | CyDex contingent liabilities | ||||
Liabilities: | ||||
Contingent liabilities | 509,000 | 348,000 | ||
Level 3 | Metabasis contingent liabilities | ||||
Liabilities: | ||||
Contingent liabilities | 0 | 0 | ||
Level 3 | Icagen contingent liabilities | ||||
Liabilities: | ||||
Contingent liabilities | $ 4,504,000 | $ 0 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) - USD ($) | Sep. 09, 2020 | Sep. 08, 2020 | Apr. 01, 2020 | Jul. 23, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Business Acquisition [Line Items] | ||||||
Cash payments for acquisition | $ 26,857,000 | $ 11,840,000 | ||||
Taurus | ||||||
Business Acquisition [Line Items] | ||||||
Consideration transferred in acquisition | $ 5,100,000 | |||||
Cash payments for acquisition | 4,600,000 | |||||
Holdback from acquisition | 500,000 | |||||
Contingent earn-out payment | 0 | |||||
Tangible assets acquired | 50,000 | |||||
Taurus | Contingent Value Right for Internal Research and Development | ||||||
Business Acquisition [Line Items] | ||||||
Contingent earn-out payment | 4,500,000 | |||||
Taurus | Contingent Value Right on Product Revenues | ||||||
Business Acquisition [Line Items] | ||||||
Contingent earn-out payment | $ 25,000,000 | |||||
Proportion of milestone payments (as a percent) | 25.00% | |||||
Taurus | Core Technology | ||||||
Business Acquisition [Line Items] | ||||||
Finite-lived intangible assets acquired | $ 5,000,000 | |||||
Weighted-average estimated useful life of finite-lived intangible assets acquired | 10 years | |||||
xCella | ||||||
Business Acquisition [Line Items] | ||||||
Consideration transferred in acquisition | $ 7,100,000 | |||||
Holdback from acquisition | 500,000 | |||||
Contingent earn-out payment | 0 | |||||
Tangible assets acquired | 200,000 | |||||
Liabilities assumed | (100,000) | |||||
Deferred tax liability acquired in connection with the acquired intangibles | (800,000) | |||||
xCella | Earnout Rights for Partner Research and Development | ||||||
Business Acquisition [Line Items] | ||||||
Contingent earn-out payment | 5,000,000 | |||||
xCella | Milestone Payments | ||||||
Business Acquisition [Line Items] | ||||||
Contingent earn-out payment | $ 25,750,000 | |||||
Proportion of milestone payments (as a percent) | 25.00% | |||||
xCella | Core Technology | ||||||
Business Acquisition [Line Items] | ||||||
Finite-lived intangible assets acquired | $ 7,800,000 | |||||
Weighted-average estimated useful life of finite-lived intangible assets acquired | 15 years | |||||
Icagen | ||||||
Business Acquisition [Line Items] | ||||||
Consideration transferred in acquisition | $ 19,900,000 | |||||
Cash payments for acquisition | 15,100,000 | |||||
Contingent earn-out payment | 25,000,000 | |||||
Tangible assets acquired | 1,800,000 | |||||
Liabilities assumed | (800,000) | |||||
Finite-lived intangible assets acquired | $ 12,800,000 | |||||
Weighted-average estimated useful life of finite-lived intangible assets acquired | 9 years 8 months 12 days | |||||
Acquisition related costs | $ 0 | |||||
Fair value of contingent earn-out payment | 4,800,000 | |||||
Deferred revenue acquired | (3,700,000) | |||||
Deferred tax assets acquired | 800,000 | |||||
Goodwill acquired | 9,000,000 | |||||
Icagen | Core Technology | ||||||
Business Acquisition [Line Items] | ||||||
Finite-lived intangible assets acquired | $ 1,700,000 | |||||
Weighted-average estimated useful life of finite-lived intangible assets acquired | 10 years | |||||
Discount rate used to value intangible assets acquired (as a percent) | 17.00% | |||||
Icagen | Customer Relationships | ||||||
Business Acquisition [Line Items] | ||||||
Finite-lived intangible assets acquired | $ 11,100,000 | |||||
Weighted-average estimated useful life of finite-lived intangible assets acquired | 9 years 7 months 6 days | |||||
Discount rate used to value intangible assets acquired (as a percent) | 17.00% | |||||
Ab Initio | ||||||
Business Acquisition [Line Items] | ||||||
Consideration transferred in acquisition | $ 12,000,000 | |||||
Cash payments for acquisition | 11,860,000 | |||||
Tangible assets acquired | 30,000 | |||||
Liabilities assumed | (80,000) | |||||
Deferred tax liability acquired in connection with the acquired intangibles | (150,000) | |||||
Acquisition related costs | 0 | |||||
Goodwill acquired | 4,810,000 | |||||
Cash holdback for potential indemnification claims | 150,000 | |||||
Ab Initio | Core Technology | ||||||
Business Acquisition [Line Items] | ||||||
Finite-lived intangible assets acquired | $ 7,400,000 | |||||
Weighted-average estimated useful life of finite-lived intangible assets acquired | 20 years | |||||
Discount rate used to value intangible assets acquired (as a percent) | 12.00% |
Convertible Senior Notes - Narr
Convertible Senior Notes - Narrative (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Mar. 31, 2020USD ($) | May 31, 2018USD ($)d$ / sharesshares | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) | |
Debt Instrument [Line Items] | |||||||
Gain (loss) on extinguishment of debt | $ 659,000 | $ 0 | |||||
Adjustments to additional paid in capital, equity component of convertible debt | $ 23,000 | $ 2,745,000 | |||||
Convertible Notes | 2023 Convertible Senior Notes | |||||||
Debt Instrument [Line Items] | |||||||
Aggregate principal amount outstanding | $ 750,000,000 | 515,560,000 | $ 750,000,000 | ||||
Interest rate (as a percent) | 0.75% | ||||||
Proceeds from debt, net of issuance costs | $ 733,100,000 | ||||||
Initial conversion rate (shares per $1,000) | 0.0040244 | ||||||
Initial conversion price (USD per share) | $ / shares | $ 248.48 | ||||||
Debt issuance costs | 16,900,000 | ||||||
Debt premium | 13,700,000 | ||||||
Long-term debt | $ 234,400,000 | $ 234,400,000 | 515,600,000 | ||||
Repayments of notes | 203,800,000 | ||||||
Accrued Interest | $ 600,000 | ||||||
Gain (loss) on extinguishment of debt | 700,000 | ||||||
Increase (decrease) in debt discount | 32,700,000 | ||||||
Adjustments to additional paid in capital, equity component of convertible debt | $ 2,700,000 | ||||||
Warrants issued in public offering (shares) | shares | 3,018,327 | ||||||
Payments for convertible bond hedges | $ 140,300,000 | ||||||
Warrant exercise price (USD per share) | $ / shares | $ 315.38 | ||||||
Warrant derivative in connection with Notes | $ 90,000,000 | ||||||
Convertible Notes | 2023 Convertible Senior Notes | Debt Instrument, Redemption, Period One | |||||||
Debt Instrument [Line Items] | |||||||
Threshold trading days | d | 20 | ||||||
Consecutive trading days | d | 30 | ||||||
Stock price trigger to classify convertible debt as current (as a percent) | 130.00% | ||||||
Convertible Notes | 2023 Convertible Senior Notes | Debt Instrument, Redemption, Period Two | |||||||
Debt Instrument [Line Items] | |||||||
Threshold trading days | d | 5 | ||||||
Consecutive trading days | d | 10 | ||||||
Maximum threshold of debt trading price trigger (as a percent) | 98.00% |
Convertible Senior Notes - Note
Convertible Senior Notes - Notes Payable (Details) - Convertible Notes - 2023 Convertible Senior Notes - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 | May 31, 2018 |
Notes Payable, Current and Noncurrent [Abstract] | |||
Principal amount of the 2023 Notes outstanding | $ 515,560,000 | $ 750,000,000 | $ 750,000,000 |
Unamortized discount (including unamortized debt issuance cost) | (60,587,000) | (111,041,000) | |
Total long-term portion of notes payable | 454,973,000 | 638,959,000 | |
Carrying value of equity component of the 2023 Notes | 55,339,000 | 101,422,000 | |
Fair value of the 2023 Notes outstanding (Level 2) | $ 464,958,000 | $ 647,280,000 |
Income Tax - Narrative (Details
Income Tax - Narrative (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate (as a percent) | 42.30% | 23.20% | 37.10% | 20.90% |
Stockholders' Equity - Stock Op
Stockholders' Equity - Stock Option Plan and Restricted Stock Activity (Details) | 9 Months Ended |
Sep. 30, 2020$ / sharesshares | |
Stock Options | |
Shares | |
Balance at beginning of period (shares) | shares | 1,956,379 |
Granted (shares) | shares | 480,250 |
Options exercised (shares) | shares | (113,107) |
Forfeited (shares) | shares | (10,200) |
Balance at end of period (shares) | shares | 2,313,322 |
Weighted-Average Exercise Price | |
Balance at beginning of period (USD per share) | $ / shares | $ 77.54 |
Granted (USD per share) | $ / shares | 90.08 |
Options exercised (USD per share) | $ / shares | 23.91 |
Forfeited (USD per share) | $ / shares | 72.01 |
Balance at end of period (USD per share) | $ / shares | $ 82.79 |
Restricted Stock Awards | |
Restricted Stock Awards | |
Nonvested at beginning of period (shares) | shares | 147,259 |
Granted (shares) | shares | 104,306 |
RSUs vested (shares) | shares | (50,053) |
Forfeited (shares) | shares | 0 |
Nonvested at end of period (shares) | shares | 201,512 |
Weighted-Average Grant Date Fair Value | |
Nonvested at beginning of period (USD per share) | $ / shares | $ 125.11 |
Granted (USD per share) | $ / shares | 89.58 |
RSUs vested (USD per share) | $ / shares | 122.16 |
Forfeited (USD per share) | $ / shares | 0 |
Nonvested at end of period (USD per share) | $ / shares | $ 107.45 |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) - USD ($) | Sep. 11, 2019 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Outstanding options that are exercisable (shares) | 1,600,000 | 1,600,000 | ||||||
Outstanding options that are exercisable, weighted average exercise price (USD per share) | $ 72.60 | $ 72.60 | ||||||
Employee Stock Purchase Plan | ||||||||
Stock repurchased during period | $ 0 | $ 0 | $ 73,287,000 | $ 181,188,000 | $ 33,717,000 | $ 151,585,000 | ||
Authorized stock repurchase amount | $ 500,000,000 | |||||||
Period in force of stock repurchase program | 3 years | |||||||
Remaining authorized stock repurchase amount | $ 253,500,000 | $ 253,500,000 | ||||||
Employee Stock Purchase Plan | ||||||||
Employee Stock Purchase Plan | ||||||||
Share purchase price as percent of market price (as a percent) | 85.00% | |||||||
Shares available for future purchases (shares) | 56,079 |
Commitment and Contingencies__2
Commitment and Contingencies: Legal Proceedings - Narrative (Details) | Oct. 31, 2019civilComplaint | Oct. 29, 2019patent |
Lupin Patent Infringement | ||
Gain Contingencies [Line Items] | ||
Number of patents allegedly infringed upon | patent | 4 | |
US District Court for the Northern District of Ohio | ||
Gain Contingencies [Line Items] | ||
Number of civil complaints filed against entity | civilComplaint | 3 |
Leases - Narrative (Details)
Leases - Narrative (Details) | Sep. 30, 2020 |
Leases [Abstract] | |
Remaining lease term | 7 years |
Lease renewal term | 7 years |
Assets Held for Sale - Summary
Assets Held for Sale - Summary (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Assets: | ||
Accounts receivable, net | $ 2,581,000 | |
Other current assets | 2,871,000 | |
Property and equipment, net | 2,445,000 | |
Operating lease right-of-use assets | 5,246,000 | |
Total assets held for sale | 13,143,000 | $ 0 |
Liabilities: | ||
Accounts payable | 463,000 | |
Accrued liabilities | 1,697,000 | |
Deferred revenue | 2,464,000 | |
Long-term operating lease liability | 5,084,000 | |
Other long-term liabilities | 653,000 | |
Total liabilities related to assets held for sale | $ 10,361,000 |
Subsequent Event (Details)
Subsequent Event (Details) - USD ($) $ in Thousands | Oct. 11, 2020 | Oct. 01, 2020 | Sep. 30, 2020 | Sep. 30, 2019 |
Subsequent Event [Line Items] | ||||
Cash payments for acquisition | $ 26,857 | $ 11,840 | ||
Subsequent Event | Vernalis | Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||
Subsequent Event [Line Items] | ||||
Expected proceeds from divestiture of business | $ 25,000 | |||
Subsequent Event | Pfenex Inc. | ||||
Subsequent Event [Line Items] | ||||
Cash payments for acquisition | $ 437,500 | |||
Contingent consideration | $ 78,000 |