Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Feb. 24, 2017 | Jun. 30, 2016 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2016 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | NKTR | ||
Entity Registrant Name | NEKTAR THERAPEUTICS | ||
Entity Central Index Key | 906,709 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 153,831,047 | ||
Entity Public Float | $ 1,935,384,918 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 59,640 | $ 55,570 |
Short-term investments | 329,462 | 253,374 |
Accounts receivable, net of allowance of nil at December 31, 2016 and 2015 | 15,678 | 19,947 |
Inventory | 11,109 | 11,346 |
Other current assets | 10,363 | 9,814 |
Total current assets | 426,252 | 350,051 |
Property, plant and equipment, net | 65,601 | 71,336 |
Goodwill | 76,501 | 76,501 |
Other assets | 517 | 754 |
Total assets | 568,871 | 498,642 |
Current liabilities: | ||
Accounts payable | 2,816 | 2,363 |
Accrued compensation | 18,280 | 5,998 |
Accrued clinical trial expenses | 7,958 | 8,220 |
Other accrued expenses | 4,711 | 4,156 |
Interest payable | 4,198 | 4,198 |
Capital lease obligations, current portion | 2,908 | 4,756 |
Liability related to refundable upfront payment | 12,500 | 0 |
Deferred revenue, current portion | 14,352 | 21,428 |
Other current liabilities | 4,499 | 10,127 |
Total current liabilities | 72,222 | 61,246 |
Senior secured notes, net | 243,464 | 241,699 |
Capital lease obligations, less current portion | 2,223 | 1,073 |
Liability related to the sale of future royalties, net | 105,950 | 116,029 |
Deferred revenue, less current portion | 51,887 | 62,426 |
Other long-term liabilities | 5,000 | 9,740 |
Total liabilities | 480,746 | 492,213 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock, $0.0001 par value; 10,000 shares authorized; no shares designated, issued or outstanding at December 31, 2016 or 2015 | 0 | 0 |
Common stock, $0.0001 par value; 300,000 shares authorized; 153,212 shares and 135,289 shares issued and outstanding at December 31, 2016 and 2015, respectively | 15 | 13 |
Capital in excess of par value | 2,111,483 | 1,876,072 |
Accumulated other comprehensive loss | (2,363) | (2,170) |
Accumulated deficit | (2,021,010) | (1,867,486) |
Total stockholders’ equity | 88,125 | 6,429 |
Total liabilities and stockholders’ equity | $ 568,871 | $ 498,642 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Statement Of Financial Position [Abstract] | ||
Allowance for accounts receivable | $ 0 | $ 0 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares designated | 0 | 0 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 153,212,000 | 135,289,000 |
Common stock, shares outstanding | 153,212,000 | 135,289,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenue: | |||
Product sales | $ 55,354 | $ 40,155 | $ 25,152 |
Royalty revenue | 19,542 | 2,967 | 329 |
Non-cash royalty revenue related to sale of future royalties | 30,158 | 22,058 | 21,937 |
License, collaboration and other revenue | 60,382 | 165,604 | 153,289 |
Total revenue | 165,436 | 230,784 | 200,707 |
Operating costs and expenses: | |||
Cost of goods sold | 30,215 | 34,102 | 28,533 |
Research and development | 203,801 | 182,787 | 147,734 |
General and administrative | 44,275 | 43,266 | 40,925 |
Total operating costs and expenses | 278,291 | 260,155 | 217,192 |
Loss from operations | (112,855) | (29,371) | (16,485) |
Non-operating income (expense): | |||
Interest expense | (22,468) | (18,282) | (17,869) |
Non-cash interest expense on liability related to sale of future royalties | (19,712) | (20,619) | (20,888) |
Loss on extinguishment of debt | 0 | (14,079) | 0 |
Interest income and other income (expense), net | 2,387 | 1,680 | 814 |
Total non-operating expense, net | (39,793) | (51,300) | (37,943) |
Loss before provision (benefit) for income taxes | (152,648) | (80,671) | (54,428) |
Provision (benefit) for income taxes | 876 | 506 | (512) |
Net loss | $ (153,524) | $ (81,177) | $ (53,916) |
Basic and diluted net loss per share | $ (1.10) | $ (0.61) | $ (0.42) |
Weighted average shares outstanding used in computing basic and diluted net loss per share | 139,596 | 132,458 | 126,873 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statement Of Income And Comprehensive Income [Abstract] | |||
Net loss | $ (153,524) | $ (81,177) | $ (53,916) |
Other comprehensive income (loss): | |||
Net unrealized gain (loss) on available-for-sale investments, net of tax | 79 | (226) | (95) |
Net foreign currency translation loss | (272) | (377) | (291) |
Other comprehensive loss, net of tax | (193) | (603) | (386) |
Comprehensive loss | $ (153,717) | $ (81,780) | $ (54,302) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Deficit) - USD ($) shares in Thousands, $ in Thousands | Total | Common Shares [Member] | Capital in Excess of Par Value [Member] | Accumulated Other Comprehensive Income/(Loss) [Member] | Accumulated Deficit [Member] |
Beginning Balance at Dec. 31, 2013 | $ (89,903) | $ 11 | $ 1,643,660 | $ (1,181) | $ (1,732,393) |
Beginning Balance, Shares at Dec. 31, 2013 | 116,494 | ||||
Sale of common stock, net of issuance costs | 116,536 | $ 1 | 116,535 | 0 | 0 |
Sale of common stock, Shares | 9,775 | ||||
Shares issued under equity compensation plans | 46,984 | $ 1 | 46,983 | 0 | 0 |
Shares issued under equity compensation plans, Shares | 4,947 | ||||
Stock-based compensation | 17,017 | $ 0 | 17,017 | 0 | 0 |
Other comprehensive loss | (386) | 0 | 0 | (386) | 0 |
Net loss | (53,916) | 0 | 0 | 0 | (53,916) |
Ending Balance at Dec. 31, 2014 | 36,332 | $ 13 | 1,824,195 | (1,567) | (1,786,309) |
Ending Balance, Shares at Dec. 31, 2014 | 131,216 | ||||
Shares issued under equity compensation plans | 32,208 | $ 0 | 32,208 | 0 | 0 |
Shares issued under equity compensation plans, Shares | 4,073 | ||||
Stock-based compensation | 19,669 | $ 0 | 19,669 | 0 | 0 |
Other comprehensive loss | (603) | 0 | 0 | (603) | 0 |
Net loss | (81,177) | 0 | 0 | 0 | (81,177) |
Ending Balance at Dec. 31, 2015 | 6,429 | $ 13 | 1,876,072 | (2,170) | (1,867,486) |
Ending Balance, Shares at Dec. 31, 2015 | 135,289 | ||||
Sale of common stock, net of issuance costs | 189,276 | $ 2 | 189,274 | 0 | 0 |
Sale of common stock, Shares | 14,950 | ||||
Shares issued under equity compensation plans | 20,287 | $ 0 | 20,287 | 0 | 0 |
Shares issued under equity compensation plans, Shares | 2,973 | ||||
Stock-based compensation | 25,850 | $ 0 | 25,850 | 0 | 0 |
Other comprehensive loss | (193) | 0 | 0 | (193) | 0 |
Net loss | (153,524) | 0 | 0 | 0 | (153,524) |
Ending Balance at Dec. 31, 2016 | $ 88,125 | $ 15 | $ 2,111,483 | $ (2,363) | $ (2,021,010) |
Ending Balance, Shares at Dec. 31, 2016 | 153,212 |
Consolidated Statements of Sto7
Consolidated Statements of Stockholders' Equity (Deficit) (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2014 | |
Statement Of Stockholders Equity [Abstract] | ||
Stock issuance costs | $ 439 | $ 617 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities: | |||
Net loss | $ (153,524) | $ (81,177) | $ (53,916) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Non-cash royalty revenue related to sale of future royalties | (30,158) | (22,058) | (21,937) |
Non-cash interest expense on liability related to sale of future royalties | 19,712 | 20,619 | 20,888 |
Stock-based compensation | 25,850 | 19,669 | 17,017 |
Depreciation and amortization | 15,351 | 12,855 | 12,927 |
Loss from redemption premium and incremental interest on 12% senior secured notes | 0 | 12,500 | 0 |
Write-off of deferred financing costs on 12% senior secured notes | 0 | 1,579 | 0 |
Other non-cash transactions | (2,185) | (2,365) | (560) |
Changes in assets and liabilities: | |||
Accounts receivable, net | 4,269 | (16,340) | (1,378) |
Inventory | 237 | 1,606 | 500 |
Other assets | (312) | (825) | (3,294) |
Accounts payable | 518 | (412) | (6,359) |
Accrued compensation | 12,282 | 249 | (8,505) |
Accrued clinical trial expenses | (262) | 512 | (9,197) |
Other accrued expenses | 191 | (2,278) | 273 |
Interest payable | 0 | (2,719) | 0 |
Liability related to refundable upfront payment | 12,500 | 0 | 0 |
Deferred revenue | (17,615) | (17,530) | (4,664) |
Liability related to receipt of refundable milestone payment | 0 | 0 | (70,000) |
Other liabilities | (3,878) | 3,032 | (13,801) |
Net cash used in operating activities | (117,024) | (73,083) | (142,006) |
Cash flows from investing activities: | |||
Purchases of investments | (334,659) | (297,608) | (297,251) |
Maturities of investments | 253,682 | 226,923 | 247,995 |
Sales of investments | 4,969 | 42,544 | 21,661 |
Release of restricted cash | 0 | 25,000 | 0 |
Purchases of property, plant and equipment | (6,392) | (11,195) | (9,976) |
Net cash used in investing activities | (82,400) | (14,336) | (37,571) |
Cash flows from financing activities: | |||
Payment of capital lease obligations | (5,945) | (5,187) | (3,536) |
Issuance of common stock, net of issuance costs | 189,276 | 0 | 116,536 |
Proceeds from shares issued under equity compensation plans | 20,287 | 32,208 | 46,984 |
Proceeds from issuance of 7.75% senior secured notes, net of issuance costs | 0 | 241,262 | 0 |
Repayment of 12% senior secured notes | 0 | (125,000) | 0 |
Payment of redemption premium and incremental interest on 12% senior secured notes | 0 | (12,500) | 0 |
Repayment of proceeds from sale of future royalties | 0 | 0 | (7,000) |
Net cash provided by financing activities | 203,618 | 130,783 | 152,984 |
Effect of exchange rates on cash and cash equivalents | (124) | (159) | (109) |
Net increase (decrease) in cash and cash equivalents | 4,070 | 43,205 | (26,702) |
Cash and cash equivalents at beginning of year | 55,570 | 12,365 | 39,067 |
Cash and cash equivalents at end of year | 59,640 | 55,570 | 12,365 |
Supplemental disclosure of cash flow information: | |||
Cash paid for interest | 20,589 | 20,225 | 17,445 |
Cash paid for income taxes | 757 | 860 | 964 |
Supplemental schedule of non-cash investing and financing activities: | |||
Property and equipment acquired through capital leases and other financing | $ 1,568 | $ 93 | $ 5,231 |
Consolidated Statements of Cas9
Consolidated Statements of Cash Flows (Parenthetical) | Dec. 31, 2016 |
7.75% Senior Secured Notes [Member] | |
Senior secured notes, interest rate | 7.75% |
12% Senior Secured Notes [Member] | |
Senior secured notes, interest rate | 12.00% |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization and Summary of Significant Accounting Policies | Note 1 — Organization and Summary of Significant Accounting Policies Organization We are a research-based biopharmaceutical company headquartered in San Francisco, California and incorporated in Delaware. We are developing a pipeline of drug candidates that utilize our advanced polymer conjugate technology platforms, which are designed to enable the development of new molecular entities that target known mechanisms of action. Our research and development pipeline of new investigational drugs includes treatments for cancer, auto-immune disease and chronic pain. Our research and development activities have required significant ongoing investment to date and are expected to continue to require significant investment. As a result, we expect to continue to incur substantial losses and negative cash flows from operations in the future. We have financed our operations primarily through cash generated from licensing, collaboration and manufacturing agreements and financing transactions. At December 31, 2016, we had approximately $389.1 million in cash and investments in marketable securities. Also, as of December 31, 2016, we had $255.1 million in debt, including $250.0 million in principal of senior secured notes and $5.1 million of capital lease obligations, of which $2.9 million is current. Basis of Presentation, Principles of Consolidation and Use of Estimates Our consolidated financial statements include the financial position, results of operations and cash flows of our wholly-owned subsidiaries: Nektar Therapeutics (India) Private Limited (Nektar India) and Nektar Therapeutics UK Limited. All intercompany accounts and transactions have been eliminated in consolidation. Our Consolidated Financial Statements are denominated in U.S. dollars. Accordingly, changes in exchange rates between the applicable foreign currency and the U.S. dollar will affect the translation of each foreign subsidiary’s financial results into U.S. dollars for purposes of reporting our consolidated financial results. Translation gains and losses are included in accumulated other comprehensive income (loss) in the stockholders’ equity section of the Consolidated Balance Sheets. To date, such cumulative translation adjustments have not been significant to our consolidated financial position. Aggregate gross foreign currency transaction gains (losses) recorded in operations for the years ended December 31, 2016, 2015, and 2014 were not significant. The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Accounting estimates and assumptions are inherently uncertain. Actual results could differ materially from those estimates and assumptions. Our estimates include those related to estimated selling prices of deliverables in collaboration agreements, estimated periods of performance, the net realizable value of inventory, the impairment of investments, the impairment of goodwill and long-lived assets, contingencies, accrued clinical trial expenses, estimated non-cash royalty revenue and non-cash interest expense from our liability related to our sale of future royalties, stock-based compensation, and ongoing litigation, among other estimates. We base our estimates on historical experience and on other assumptions that management believes are reasonable under the circumstances. These estimates form the basis for making judgments about the carrying values of assets and liabilities when these values are not readily apparent from other sources. As appropriate, estimates are assessed each period and updated to reflect current information and any changes in estimates will generally be reflected in the period first identified. Reclassifications Certain items previously reported in specific financial statement captions have been reclassified to conform to the current period presentation, including as a result of the adoption of new accounting guidance related to the classification of debt issuance costs described below. Such reclassifications do not materially impact previously reported revenue, operating loss, net loss, total assets, liabilities or stockholders’ equity. Cash, Cash Equivalents, and Investments, and Fair Value of Financial Instruments We consider all investments in marketable securities with an original maturity of three months or less when purchased to be cash equivalents. Investments in securities with remaining maturities of less than one year, or where our intent is to use the investments to fund current operations or to make them available for current operations, are classified as short-term investments. Investments are designated as available-for-sale and are carried at fair value, with unrealized gains and losses reported in stockholders’ equity as accumulated other comprehensive income (loss). The disclosed fair value related to our cash equivalents and investments is based primarily on the reported fair values in our period-end brokerage statements, which are based on market prices from a variety of industry standard data providers and generally represent quoted prices for similar assets in active markets or have been derived from observable market data. We independently validate these fair values using available market quotes and other information. Interest and dividends on securities classified as available-for-sale, as well as amortization of premiums and accretion of discounts to maturity, are included in interest income. Realized gains and losses and declines in value of available-for-sale securities judged to be other-than-temporary, if any, are included in other income (expense). The cost of securities sold is based on the specific identification method. Our cash, cash equivalents, and short-term investments are exposed to credit risk in the event of default by the third parties that hold or issue such assets. Our cash, cash equivalents, and short-term investments are held by financial institutions that management believes are of high credit quality. Our investment policy limits investments to fixed income securities denominated and payable in U.S. dollars such as U.S. government obligations, money market instruments and funds, and corporate bonds and places restrictions on maturities and concentrations by type and issuer. Accounts Receivable and Significant Customer Concentrations Our customers are primarily pharmaceutical and biotechnology companies that are located in the U.S. and Europe. Our accounts receivable balance contains billed and unbilled trade receivables from product sales, milestones, other contingent payments and royalties, as well as time and materials based billings from collaborative research and development agreements. When appropriate, we provide for an allowance for doubtful accounts by reserving for specifically identified doubtful accounts. We generally do not require collateral from our customers. We perform a regular review of our customers’ credit risk and payment histories, including payments made subsequent to year-end. We have not experienced significant credit losses from our accounts receivable. At December 31, 2016, three different customers represented 39%, 32%, and 13%, respectively, of our accounts receivable. At December 31, 2015, three different customers represented 50%, 35%, and 10%, respectively, of our accounts receivable. Inventory and Significant Supplier Concentrations Inventory is generally manufactured upon receipt of firm purchase orders from our collaboration partners. Inventory includes direct materials, direct labor, and manufacturing overhead and cost is determined on a first-in, first-out basis. Inventory is valued at the lower of cost or market and defective or excess inventory is written down to net realizable value based on historical experience or projected usage. Inventory related to our research and development activities is expensed when purchased. We are dependent on our suppliers and contract manufacturers to provide raw materials, drugs and devices of appropriate quality and reliability and to meet applicable contract and regulatory requirements. In certain cases, we rely on single sources of supply of one or more critical materials. Consequently, in the event that supplies are delayed or interrupted for any reason, our ability to develop and produce our drug candidates or our ability to meet our supply obligations could be significantly impaired, which could have a material adverse effect on our business, financial condition and results of operations. Long-Lived Assets Property, plant and equipment are stated at cost. Major improvements are capitalized, while maintenance and repairs are expensed when incurred. Manufacturing, laboratory and other equipment are depreciated using the straight-line method generally over estimated useful lives of three to ten years. Buildings are depreciated using the straight-line method generally over the estimated useful life of twenty years. Leasehold improvements and buildings recorded under capital leases are depreciated using the straight-line method over the shorter of the estimated useful life or the remaining term of the lease. Goodwill represents the excess of the price paid for another entity over the fair value of the assets acquired and liabilities assumed in a business combination. We are organized in one reporting unit and evaluate the goodwill for the Company as a whole. Goodwill has an indefinite useful life and is not amortized, but instead tested for impairment at least annually in the fourth quarter of each year using an October 1 measurement date. We assess the impairment of long-lived assets, primarily property, plant and equipment and goodwill, whenever events or changes in business circumstances indicate that the carrying amounts of the assets may not be fully recoverable. When such events occur, we determine whether there has been an impairment in value by comparing the carrying value of the asset with its fair value, as measured by the anticipated undiscounted net cash flows associated with the asset. In the case of goodwill impairment, market capitalization is generally used as the measure of fair value. If an impairment in value exists, the asset is written down to its estimated fair value. Revenue Recognition Our revenue is derived from our arrangements with pharmaceutical and biotechnology collaboration partners and may result from one or more of the following: upfront and license fees, payments for contract research and development, milestone and other contingent payments, manufacturing and supply payments, and royalties. Our performance obligations under our collaborations may include licensing our intellectual property, manufacturing and supply obligations, and research and development obligations. In order to account for the multiple-element arrangements, we identify the deliverables included within the arrangement and evaluate which deliverables represent separate units of accounting. Analyzing the arrangement to identify deliverables requires the use of judgment, and each deliverable may be an obligation to deliver goods or services, a right or license to use an asset, or another performance obligation. Revenue is recognized separately for each identified unit of accounting when the basic revenue recognition criteria are met: there is persuasive evidence that an arrangement exists, delivery has occurred, the price is fixed or determinable, and collection is reasonably assured. At the inception of each new multiple-element arrangement or the material modification of an existing multiple-element arrangement, we allocate all consideration received under multiple-element arrangements to all units of accounting based on the relative selling price method, generally based on our best estimate of selling price (ESP). The objective of ESP is to determine the price at which we would transact a sale if the product or service was sold on a stand-alone basis. We determine ESP for the elements in our collaboration arrangements by considering multiple factors including, but not limited to, technical complexity of the performance obligation and similarity of elements to those performed under previous arrangements. Since we apply significant judgment in arriving at the ESPs, any material change in our estimates would significantly affect the allocation of the total consideration to the different elements of a multiple element arrangement. Product sales Product sales are primarily derived from fixed price manufacturing and supply agreements with our collaboration partners. We have not experienced any significant returns from our customers. Royalty revenue Generally, we are entitled to royalties from our collaboration partners based on the net sales of their approved drugs that are marketed and sold in one or more countries where we hold royalty rights. We recognize royalty revenue when the cash is received or when the royalty amount to be received is estimable and collection is reasonably assured. With respect to the non-cash royalties related to sale of future royalties described in Note 7, revenue is recognized when estimable, otherwise, revenue is recognized during the period in which the related royalty report is received, which generally occurs in the quarter after the applicable product sales are made. License, collaboration and other revenue The amount of upfront fees and other payments received by us in license and collaboration arrangements that are allocated to continuing performance obligations, such as manufacturing and supply obligations, is deferred and generally recognized ratably over our expected performance period under each respective arrangement. We make our best estimate of the period over which we expect to fulfill our performance obligations, which may include technology transfer assistance, research activities, clinical development activities, and manufacturing activities from research and development through the commercialization of the product. Given the uncertainties of these collaboration arrangements, significant judgment is required to determine the duration of the performance period and this estimate is periodically re-evaluated. Contingent consideration received from the achievement of a substantive milestone is recognized in its entirety in the period in which the milestone is achieved, which we believe is consistent with the substance of our performance under our various license and collaboration agreements. A milestone is defined as an event (i) that can only be achieved based in whole or in part either on the entity’s performance or on the occurrence of a specific outcome resulting from the entity’s performance, (ii) for which there is substantive uncertainty at the date the arrangement is entered into that the event will be achieved, and (iii) that would result in additional payments being due to the entity. A milestone is substantive if the consideration earned from the achievement of the milestone is consistent with our performance required to achieve the milestone or the increase in value to the collaboration resulting from our performance, relates solely to our past performance, and is reasonable relative to all of the other deliverables and payments within the arrangement. Our license and collaboration agreements with our partners provide for payments to us upon the achievement of development milestones, such as the completion of clinical trials or regulatory submissions, approvals by regulatory authorities, and commercial launches of drugs. Given the challenges inherent in developing and obtaining regulatory approval for drug products and in achieving commercial launches, there was substantial uncertainty whether any such milestones would be achieved at the time of execution of these licensing and collaboration agreements. In addition, we evaluated whether the development milestones met the remaining criteria to be considered substantive. As a result of our analysis, we consider our remaining development milestones under all of our license and collaboration agreements to be substantive and, accordingly, we expect to recognize as revenue future payments received from each milestone only if and as such milestone is achieved. Our license and collaboration agreements with certain partners also provide for contingent payments to us based solely upon the performance of the respective partner. For such contingent amounts, we expect to recognize the payments as revenue when earned under the applicable contract, which is generally upon completion of performance by the respective partner, provided that collection is reasonably assured. Our license and collaboration agreements with our partners also provide for payments to us upon the achievement of specified sales volumes of approved drugs. We consider these payments to be similar to royalty payments and we will recognize such sales-based payments upon achievement of such sales volumes, provided that collection is reasonably assured. Shipping and Handling Costs We recognize costs related to shipping and handling of product to customers in cost of goods sold. Research and Development Expense Research and development costs are expensed as incurred and include salaries, benefits and other operating costs such as outside services, supplies and allocated overhead costs. We perform research and development for our proprietary drug candidates and technology development and for certain third parties under collaboration agreements. For our proprietary drug candidates and our internal technology development programs, we invest our own funds without reimbursement from a third party. We record accruals for the estimated costs of our clinical trial activities performed by third parties. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows to our vendors. Payments under the contracts depend on factors such as the achievement of certain events, successful enrollment of patients, and completion of certain clinical trial activities. We generally accrue costs associated with the start-up and reporting phases of the clinical trials ratably over the estimated duration of the start-up and reporting phases. We generally accrue costs associated with the treatment phase of clinical trials based on the total estimated cost of the treatment phase on a per patient basis and we expense the per patient cost ratably over the estimated patient treatment period based on patient enrollment in the trials. In specific circumstances, such as for certain time-based costs, we recognize clinical trial expenses using a methodology that we consider to be more reflective of the timing of costs incurred. Advance payments for goods or services that will be used or rendered for future research and development activities are capitalized as prepaid expenses and recognized as expense as the related goods are delivered or the related services are performed. We base our estimates on the best information available at the time. However, additional information may become available to us which may allow us to make a more accurate estimate in future periods. In this event, we may be required to record adjustments to research and development expenses in future periods when the actual level of activity becomes more certain. Such increases or decreases in cost are generally considered to be changes in estimates and will be reflected in research and development expenses in the period identified. Stock-Based Compensation Stock-based compensation arrangements include stock option grants and restricted stock unit (RSU) awards under our equity incentive plans, as well as shares issued under our Employee Stock Purchase Plan (ESPP), through which employees may purchase our common stock at a discount to the market price. We use the Black-Scholes option pricing model for the respective grant to determine the estimated fair value of the option on the date of grant (grant date fair value) and the estimated fair value of common stock purchased under the ESPP. The Black-Scholes option pricing model requires the input of highly subjective assumptions. These variables include, but are not limited to, our stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors. Because our employee stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion, the existing models may not provide a reliable single measure of the fair value of our employee stock options or common stock purchased under the ESPP. Management will continue to assess the assumptions and methodologies used to calculate the estimated fair value of stock-based compensation. Circumstances may change and additional data may become available over time, which could result in changes to these assumptions and methodologies, and which could materially impact our fair value determination. We expense the value of the portion of the option or award that is ultimately expected to vest based on the historical forfeiture rate on a straight line basis over the requisite service periods in our Consolidated Statements of Operations. For options and awards that vest upon the achievement of performance milestones, we estimate the vesting period based on our evaluation of the probability of achievement of each respective milestone and the related estimated date of achievement. Stock-based compensation expense for purchases under the ESPP is recognized over the respective six-month purchase period. Expense amounts are recorded in cost of goods sold, research and development expense, and general and administrative expense based on the function of the applicable employee. Stock-based compensation charges are non-cash charges and as such have no impact on our reported cash flows. Net Loss Per Share Basic net loss per share is calculated based on the weighted-average number of common shares outstanding during the periods presented. For all periods presented in the Consolidated Statements of Operations, the net loss available to common stockholders is equal to the reported net loss. Basic and diluted net loss per share are the same due to our historical net losses and the requirement to exclude potentially dilutive securities which would have an anti-dilutive effect on net loss per share. During 2016, 2015 and 2014, potentially dilutive securities consisted of common shares underlying outstanding stock options and RSUs. There were weighted average outstanding stock options and RSUs of 19.9 million, 21.1 million and 21.9 million during the years ended December 31, 2016, 2015 and 2014, respectively. Income Taxes We account for income taxes under the liability method. Under this method, deferred tax assets and liabilities are determined based on differences between the financial reporting and tax reporting bases of assets and liabilities and are measured using enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. Realization of deferred tax assets is dependent upon future earnings, the timing and amount of which are uncertain. We record a valuation allowance against deferred tax assets to reduce their carrying value to an amount that is more likely than not to be realized. When we establish or reduce the valuation allowance related to the deferred tax assets, our provision for income taxes will increase or decrease, respectively, in the period such determination is made. We utilize a two-step approach to recognize and measure uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained upon tax authority examination, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement. Comprehensive loss Comprehensive loss is the change in stockholders’ equity from transactions and other events and circumstances other than those resulting from investments by stockholders and distributions to stockholders. Our other comprehensive income (loss) is comprised of net loss, gains and losses from the foreign currency translation of the assets and liabilities of our India and UK subsidiaries, and unrealized gains and losses on investments in available-for-sale securities. Adoption of New Accounting Principle In April 2015, the Financial Accounting Standards Board (FASB) issued guidance to simplify the presentation of debt issuance costs by requiring debt issuance costs to be presented as a deduction from the corresponding debt liability. This guidance is effective for our interim and annual periods beginning January 1, 2016. Upon adoption, the new guidance must be applied retrospectively to all periods presented. Accordingly, as of January 1, 2016, we reclassified $0.4 million and $3.0 million of capitalized debt issuance costs to senior secured notes, net, and liability related to the sale of future royalties, net, respectively, from our other assets balance. This reclassification has also been applied retrospectively to these balances in our Consolidated Balance Sheet as of December 31, 2015. Recent Accounting Pronouncements In May 2014, the FASB issued guidance codified in Accounting Standards Codification (ASC) 606, Revenue Recognition — Revenue from Contracts with Customers, which amends the guidance in former ASC 605, Revenue Recognition, and is effective for public companies for annual and interim periods beginning after December 15, 2017. Numerous updates have been issued subsequent to the initial FASB guidance that provide clarification on a number of specific issues as well as requiring additional disclosures. We plan to adopt the standard in the first quarter of 2018 using the modified retrospective method. Although we are still evaluating our contracts and assessing all the potential impacts of the standard on existing arrangements we anticipate the adoption may have a material impact on our consolidated financial statements. Specifically, the new standard differs from the current accounting standard in many respects, such as in the accounting for variable consideration, including milestone payments or contingent payments from our collaboration partners. Under our current accounting policy, we recognize contingent or milestone payments as revenue in the period that the payment-triggering event occurred or is achieved. The new revenue standard, however, may require us to recognize these payments before the payment-triggering event is completely achieved, subject to management’s assessment of whether it is probable that the triggering event will be achieved and that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. In March 2016, the FASB issued guidance to simplify several aspects of employee share-based payment accounting, including income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This guidance will become effective for us beginning in the first quarter of 2017. We do not believe the adoption of this guidance will have a material impact on our consolidated financial statements. In February 2016, the FASB issued guidance to amend a number of aspects of lease accounting, including requiring lessees to recognize almost all leases with a term greater than one year as a right-of-use asset and corresponding liability, measured at the present value of the lease payments. The guidance will become effective for us beginning in the first quarter of 2019 and is required to be adopted using a modified retrospective approach. Early adoption is permitted. We are currently evaluating the impact of the adoption of this standard. |
Cash and Investments in Marketa
Cash and Investments in Marketable Securities | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Cash and Investments in Marketable Securities | Note 2 — Cash and Investments in Marketable Securities Cash and investments in marketable securities, including cash equivalents and restricted cash, are as follows (in thousands). Estimated Fair Value at December 31, 2016 December 31, 2015 Cash and cash equivalents $ 59,640 $ 55,570 Short-term investments 329,462 253,374 Total cash and investments in marketable securities $ 389,102 $ 308,944 We invest in liquid, high quality debt securities. Our investments in debt securities are subject to interest rate risk. To minimize the exposure due to an adverse shift in interest rates, we invest in securities with maturities of two years or less and maintain a weighted average maturity of one year or less. As December 31, 2016 and 2015, all of our investments had maturities of one year or less. Gross unrealized gains and losses were not significant at either December 31, 2016 or 2015. During the years ended December 31, 2016, 2015 and 2014, we sold available-for-sale securities totaling $5.0 million, $42.5 million, and $21.7 million, respectively, and realized gains and losses were not significant in any of those periods. Under the terms of our 7.75% senior secured notes due October 2020, we are required to maintain a minimum cash and investments in marketable securities balance of $60.0 million. Our portfolio of cash and investments in marketable securities includes (in thousands): Estimated Fair Value at Fair Value Hierarchy Level December 31, 2016 December 31, 2015 Corporate commercial paper 2 $ 160,920 $ 61,150 Corporate notes and bonds 2 156,044 181,969 Obligations of U.S. government agencies 2 13,749 7,325 Available-for-sale investments 330,713 250,444 Money market funds 1 51,104 53,728 Certificate of deposit N/A 2,930 2,930 Cash N/A 4,355 1,842 Total cash and investments in marketable securities $ 389,102 $ 308,944 Level 1 — Quoted prices in active markets for identical assets or liabilities. Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. All of our investments are categorized as Level 1 or Level 2, as explained in the table above. During the years ended December 31, 2016, 2015 and 2014 there were no transfers between Level 1 and Level 2 of the fair value hierarchy. At December 31, 2016 and 2015, we had letter of credit arrangements in favor of a landlord and certain vendors totaling $2.4 million. These letters of credit are secured by investments of similar amounts. |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Inventory | Note 3 — Inventory Inventory consists of the following (in thousands): December 31, 2016 2015 Raw materials $ 2,055 $ 3,236 Work-in-process 7,311 6,087 Finished goods 1,743 2,023 Total inventory $ 11,109 $ 11,346 |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2016 | |
Property Plant And Equipment [Abstract] | |
Property, Plant and Equipment | Note 4 — Property, Plant and Equipment Property, plant and equipment consists of the following (in thousands): December 31, 2016 2015 Building and leasehold improvements $ 75,137 $ 77,665 Manufacturing equipment 44,237 35,631 Laboratory equipment 27,424 27,309 Furniture, fixtures and other equipment 26,590 24,987 Depreciable property, plant and equipment at cost 173,388 165,592 Less: accumulated depreciation (111,243 ) (102,712 ) Depreciable property, plant and equipment, net 62,145 62,880 Construction-in-progress 3,456 8,456 Property, plant and equipment, net $ 65,601 $ 71,336 Building and leasehold improvements include our manufacturing, research and development and administrative facilities and the related improvements to these facilities. Laboratory and manufacturing equipment include assets that support both our manufacturing and research and development efforts. Construction-in-progress includes assets being built to enhance our manufacturing and research and development efforts. Depreciation expense, including depreciation of assets acquired through capital leases, for the years ended December 31, 2016, 2015, and 2014 was $13.2 million, $11.4 million, and $11.7 million, respectively. |
Senior Secured Notes
Senior Secured Notes | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Senior Secured Notes | Note 5 — Senior Secured Notes On September 30, 2015, we entered into a purchase agreement with TC Lending, LLC and TAO Fund, LLC for the sale of $250.0 million in aggregate principal amount of 7.75% senior secured notes due 2020 (the “Notes”). On October 5, 2015, we completed the sale and issuance of the Notes. The Notes are secured by a first-priority lien on substantially all of our assets. The Notes bear interest at a rate of 7.75% per annum payable in cash quarterly in arrears on January 15, April 15, July 15, and October 15 of each year. Interest is calculated based on actual days outstanding over a 360 day year. The Notes will mature on October 5, 2020, at which time the outstanding principal will be due and payable. In connection with the issuance of the Notes, we paid fees and expenses of $8.9 million, of which $8.7 million of transaction and facility fees paid directly to the purchasers of the Notes and other direct issuance costs were capitalized as a debt discount and issuance costs and are recorded as a reduction to the senior secured notes, net liability balance in our Consolidated Balance Sheet. The unamortized balance of these costs is $6.5 million at December 31, 2016 and will be amortized to interest expense over the remainder of the five year term of the Notes. On October 5, 2015, we used a portion of the proceeds from the Notes to redeem the $125.0 million in aggregate principal amount of 12.0% senior secured notes due in 2017 (12% Notes). In addition, on October 5, 2015, we paid $3.3 million of accrued interest on the 12% Notes and made a $12.5 million redemption payment, which includes $1.2 million of additional interest paid to the note holders at redemption. As a result, we received $100.3 million in net proceeds in connection with these transactions. In addition, as a result of these transactions, in the year ended December 31, 2015, we recognized a $14.1 million loss on extinguishment of our 12% Notes, which consists of the $11.3 million redemption premium and $1.2 million of incremental interest paid to the note holders and the write-off of $1.6 million of unamortized issuance costs. The agreement, pursuant to which the Notes were issued, contains customary covenants, including covenants that limit or restrict our ability to incur liens, incur indebtedness, declare or pay dividends, redeem stock, issue preferred stock, make certain investments, merge or consolidate, make dispositions of assets, or enter into certain new businesses or transactions with affiliates, but do not contain covenants related to future financial performance. In particular, the Notes agreement requires us to maintain a minimum cash and investments in marketable securities balance of $60.0 million during the term of the Notes. The Notes agreement provides that, beginning on October 5, 2017, we may redeem some or all of the Notes, subject to certain prepayment premiums and conditions. If we experience certain change of control events, the holders of the Notes will have the right to require us to purchase all or a portion of the Notes at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest to the date of purchase. In addition, upon certain asset sales, we may be required to offer to use the net proceeds thereof to purchase some of the Notes at 100% of the principal amount thereof, plus accrued and unpaid interest to the date of purchase. As of December 31, 2016, based on a discounted cash flow analysis using Level 3 inputs including financial discount rates, we believe the $250.0 million in principal amount of the Notes is consistent with its fair value. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2016 | |
Leases [Abstract] | |
Leases | Note 6 — Leases Capital Leases We have purchased certain manufacturing and office equipment under capital leases. As of December 31, 2016 and 2015, the gross amount of assets recorded under capital leases was $8.2 million and $5.1 million, respectively, and the recorded value of these assets, net of depreciation, was $7.4 million and $3.2 million, respectively. We previously leased office space at 201 Industrial Road in San Carlos, California under a capital lease arrangement. This lease and related subleases ended on October 5, 2016. Future minimum payments for our capital leases at December 31, 2016 are as follows (in thousands): Year ending December 31, 2017 $ 3,270 2018 2,339 Total minimum payments required 5,609 Less: amount representing interest (478 ) Present value of future minimum lease payments 5,131 Less: current portion (2,908 ) Capital lease obligation, less current portion $ 2,223 Operating Leases On September 30, 2009, we entered into an operating sublease (Sublease) with Pfizer, Inc. for a 126,285 square foot facility located in San Francisco, California (Mission Bay Facility). The Sublease term is 114 months, commencing in August 2010 and terminating on January 31, 2020 and we began making non-cancelable lease payments in 2014, after the expiration of our free rent period on August 1, 2014. Monthly base rent will escalate over the term of the sublease at various intervals. In addition, throughout the term of the Sublease, we are responsible for paying certain costs and expenses specified in the Sublease, including insurance costs and a pro rata share of operating expenses and applicable taxes for the Mission Bay Facility. We recognize rent expense on a straight-line basis over the lease period. For the years ended December 31, 2016, 2015, and 2014, rent expense was approximately $3.2 million in each year. As of December 31, 2016 and 2015, we had total deferred rent balances of $6.6 million and $8.5 million, respectively, which are recorded in other current and other long-term liabilities in our Consolidated Balance Sheets. Our future minimum lease payments for our operating leases at December 31, 2016 are as follows (in thousands): Year ending December 31, 2017 $ 5,037 2018 5,187 2019 5,344 2020 452 Total future minimum lease payments $ 16,020 |
Liability Related to the Sale o
Liability Related to the Sale of Future Royalties | 12 Months Ended |
Dec. 31, 2016 | |
Liability Related To Sale Of Potential Future Royalties [Abstract] | |
Liability Related to Sale of Future Royalties | Note 7 — Liability Related to the Sale of Future Royalties On February 24, 2012, we entered into a Purchase and Sale Agreement (the Purchase and Sale Agreement) with RPI Finance Trust (RPI), an affiliate of Royalty Pharma, pursuant to which we sold, and RPI purchased, our right to receive royalty payments (the Royalty Entitlement) arising from the worldwide net sales, from and after January 1, 2012, of (a) CIMZIA ® ® ® ® The following table shows the activity within the liability account during the year ended December 31, 2016 and for the period from the inception of the royalty transaction on February 24, 2012 (inception) to December 31, 2016 (in thousands): Year ended December 31, 2016 Period from inception to December 31, 2016 Liability related to the sale of future royalties—beginning balance $ 119,032 $ — Proceeds from sale of future royalties — 124,000 Payments from Nektar to RPI — (10,000 ) Non-cash CIMZIA ® ® (30,158 ) (106,999 ) Non-cash interest expense recognized 19,712 101,585 Liability related to the sale of future royalties – ending balance 108,586 108,586 Less: unamortized transaction costs (2,636 ) (2,636 ) Liability related to the sale of future royalties, net $ 105,950 $ 105,950 Pursuant to the Purchase and Sale Agreement, in March 2014 and March 2013, we were required to pay RPI $7.0 million and $3.0 million, respectively, as a result of worldwide net sales of MIRCERA ® During the years ended December 31, 2016, 2015 and 2014, we recognized $30.2 million, $22.1 million, and $21.9 million, respectively, in non-cash royalties from net sales of CIMZIA ® ® As royalties are remitted to RPI from Roche and UCB, the balance of the Royalty Obligation will be effectively repaid over the life of the agreement. In order to determine the amortization of the Royalty Obligation, we are required to estimate the total amount of future royalty payments to be received by RPI. The sum of these amounts less the $124.0 million proceeds we received will be recorded as interest expense over the life of the Royalty Obligation. Since inception, our estimate of this total interest expense resulted in an effective annual interest rate of approximately 17%. We periodically assess the estimated royalty payments to RPI from UCB and Roche and to the extent the amount or timing of such payments is materially different than our original estimates, we will prospectively adjust the amortization of the Royalty Obligation. There are a number of factors that could materially affect the amount and timing of royalty payments from CIMZIA ® ® ® ® ® ® ® ® In addition, the Purchase and Sale Agreement grants RPI the right to receive certain reports and other information relating to the Royalty Entitlement and contains other representations and warranties, covenants and indemnification obligations that are customary for a transaction of this nature. To our knowledge, we are currently in compliance with these provisions of the Purchase and Sale Agreement; however, if we were to breach our obligations, we could be required to pay damages to RPI that are not limited to the purchase price we received in the sale transaction. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 8 — Commitments and Contingencies Royalty Expense We have third party licenses that require us to pay royalties based on our sales of certain products and/or on our recognition of royalty revenue under certain of our collaboration agreements. Royalty expense, which is reflected in cost of goods sold in our Consolidated Statements of Operations, was approximately $3.7 million, $2.8 million, and $3.4 million for the years ended December 31, 2016, 2015, and 2014, respectively. The overall maximum amount of these obligations is based upon sales of the applicable products by our collaboration partners and cannot be reasonably estimated. Purchase Commitments In the normal course of business, we enter into various firm purchase commitments related to contract manufacturing, clinical development and certain other items. As of December 31, 2016, these commitments were approximately $5.8 million, all of which are expected to be paid in 2017. Legal Matters From time to time, we are involved in lawsuits, arbitrations, claims, investigations and proceedings, consisting of intellectual property, commercial, employment and other matters, which arise in the ordinary course of business. We make provisions for liabilities when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Such provisions are reviewed at least quarterly and adjusted to reflect the impact of settlement negotiations, judicial and administrative rulings, advice of legal counsel, and other information and events pertaining to a particular case. Litigation is inherently unpredictable. If any unfavorable ruling were to occur in any specific period, there exists the possibility of a material adverse impact on the results of our operations of that period and on our cash flows and liquidity. On August 14, 2015, Enzon, Inc. filed a breach of contract complaint in the Supreme Court of the State of New York (Court) claiming damages of $1.5 million (plus interest) for unpaid licensing fees through the date of the complaint. Enzon alleged that we failed to pay a post-patent expiration immunity fee related to one of the licenses. Following a hearing held on December 21, 2015, the Court granted Nektar’s motion to dismiss the Enzon complaint. Enzon filed an appeal to the Court’s dismissal decision. On October 25, 2016 the Supreme Court of the State of New York, Appellate Division, reversed the earlier decision by the Court granting Nektar’s motion to dismiss the Enzon complaint. As a result, the case has been remanded to the Court for further proceedings. No liability has been recorded for this matter on our Consolidated Balance Sheets as of December 31, 2016 or 2015. Foreign Operations We operate in a number of foreign countries. As a result, we are subject to numerous local laws and regulations that can result in claims made by foreign government agencies or other third parties that are often difficult to predict even after the application of good faith compliance efforts. Indemnification Obligations During the course of our normal operating activities, we have agreed to certain contingent indemnification obligations as further described below. The term of our indemnification obligations is generally perpetual. There is generally no limitation on the potential amount of future payments we could be required to make under these indemnification obligations. To date, we have not incurred significant costs to defend lawsuits or settle claims based on our indemnification obligations. If any of our indemnification obligations is triggered, we may incur substantial liabilities. Because the aggregate amount of any potential indemnification obligation is not a stated amount, the overall maximum amount of any such obligations cannot be reasonably estimated. No liabilities have been recorded for these obligations on our Consolidated Balance Sheets as of December 31, 2016 or 2015. Indemnifications in Connection with Commercial Agreements As part of our collaboration agreements with our partners related to the license, development, manufacture and supply of drugs based on our proprietary technologies and drug candidates, we generally agree to defend, indemnify and hold harmless our partners from and against third party liabilities arising out of the agreement, including product liability (with respect to our activities) and infringement of intellectual property to the extent the intellectual property is developed by us and licensed to our partners. As part of the sale of our royalty interest in the CIMZIA ® ® Indemnification of Underwriters and Initial Purchasers of our Securities In connection with our sale of equity and senior secured debt securities, we have agreed to defend, indemnify and hold harmless our underwriters or initial purchasers, as applicable, as well as certain related parties from and against certain liabilities, including liabilities under the Securities Act of 1933, as amended. Director and Officer Indemnifications As permitted under Delaware law, and as set forth in our Certificate of Incorporation and our Bylaws, we indemnify our directors, executive officers, other officers, employees, and other agents for certain events or occurrences that may arise while in such capacity. The maximum potential amount of future payments we could be required to make under this indemnification is unlimited; however, we have insurance policies that may limit our exposure and may enable us to recover a portion of any future amounts paid. Assuming the applicability of coverage, the willingness of the insurer to assume coverage, and subject to certain retention, loss limits and other policy provisions, we believe any obligations under this indemnification would not be material, other than an initial $1.5 million per incident for merger and acquisition related claims, $1.3 million per incident for securities related claims and $0.5 million per incident for non-securities related claims retention deductible per our insurance policy. However, no assurances can be given that the covering insurers will not attempt to dispute the validity, applicability, or amount of coverage without expensive litigation against these insurers, in which case we may incur substantial liabilities as a result of these indemnification obligations. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Stockholders' Equity | Note 9 — Stockholders’ Equity Preferred Stock We have authorized 10,000,000 shares of Preferred Stock with each share having a par value of $0.0001. As of December 31, 2016 and 2015, no preferred shares are designated, issued or outstanding. Common Stock On October 24, 2016, we completed the issuance and sale of 14,950,000 shares of our common stock in an underwritten public offering with total proceeds of approximately $189.7 million after deducting the underwriting commissions and discounts of approximately $12.1 million. In addition, we incurred approximately $0.4 million in legal and accounting fees, filing fees, and other costs in connection with this offering. On January 28, 2014, we completed the issuance and sale of 9,775,000 shares of our common stock in a public offering with total proceeds of approximately $117.2 million after deducting the underwriting commissions and discounts of approximately $7.5 million. In addition, we incurred approximately $0.6 million in legal and accounting fees, filing fees, and other costs in connection with this offering. Equity Compensation Plans At December 31, 2016, we had 24,772,837 reserved shares of common stock, all of which are reserved for issuance under our equity compensation plans as summarized in the following table (share numbers in thousands): Plan Category Number of Securities to be Issued Upon Exercise of Outstanding Options & Vesting of RSUs (a) Weighted- Average Exercise Price of Outstanding Options (b) Number of Securities Remaining Available Issuance Equity Compensation Plans (Excluding Securities Reflected in Column(a) (c) Equity compensation plans approved by security holders(1) 20,218 $ 12.08 3,113 Equity compensation plans not approved by security holders 1,442 $ 11.18 — Total 21,660 $ 12.01 3,113 (1) Includes shares of common stock available for future issuance under our ESPP as of December 31, 2016. 2012 Performance Incentive Plan Our 2012 Performance Incentive Plan (2012 Plan) was adopted by the Board of Directors on April 4, 2012 and was approved by our stockholders on June 28, 2012. On the date of approval, any shares of our common stock that were available for issuance under all other previously existing stock plans (the 2008 Equity Incentive Plan, the 2000 Equity Incentive Plan, and the 2000 Non-Officer Equity Incentive Plan) became available for issuance under the 2012 Plan. In addition, 5,300,000 new shares were made available for award grants under the 2012 Plan. No new awards were granted under any of the previous stock plans after June 28, 2012. Any shares of common stock subject to outstanding awards under the previous stock plans that expire, are cancelled, or otherwise terminate at any time after December 31, 2011 are also available for award grant purposes under the 2012 Plan. On June 16, 2015, our stockholders approved an amendment to the 2012 Plan whereby 7,000,000 additional shares were made available for award grants under the 2012 Plan. The purpose of the 2012 Plan and our other incentive plans is to attract, motivate, retain, and reward directors, officers, employees, and other eligible persons through the grant of awards and incentives for high levels of individual performance and increasing the value of our business, as well as to further align the interests of award recipients and our stockholders. The 2012 Plan authorizes stock options, stock appreciation rights, restricted stock, performance stock, stock units, stock bonuses, dividend equivalents, other similar rights to purchase or acquire shares, and other forms of awards granted or denominated in our common stock or units of the Company’s common stock, as well as cash bonus awards. Directors, officers, or employees, and certain consultants and advisors may receive awards under the 2012 Plan. Pursuant to the 2012 Plan, we granted or issued incentive stock options to officers and non-qualified stock options and RSUs to employees, officers, and non-employee directors. The requisite service period for stock options granted to our employees under the 2012 Plan as well as all other previously existing stock plans is generally four years; the requisite service period for stock options granted to our directors is generally one year. The requisite service period for RSUs granted under the 2012 Plan is generally three years for employees and one year for directors. The maximum number of shares of our common stock that may be issued or transferred pursuant to awards under the 2012 Plan is 19,936,433 shares, plus any shares subject to outstanding awards under the previous stock plans that expire, are cancelled, or otherwise terminate for any reason. Generally, shares that are subject to or underlie awards which expire or for any reason are cancelled or terminated, are forfeited, fail to vest, or for any other reason (except for shares exchanged by a participant or withheld to pay the exercise price of an award granted and related tax withholding obligations) are not paid or delivered under the 2012 Plan will again be available for subsequent awards under the 2012 Plan. Shares issued in respect of any award, other than a stock option or stock appreciation right, granted under the 2012 Plan will be counted against the plan’s share limit as 1.5 shares for every one share actually issued in connection with the award. The 2012 Plan will terminate on April 3, 2022, unless earlier terminated by the Board of Directors. The maximum term of a stock option or stock appreciation right under the 2012 Plan is eight years from the date of grant. The per share exercise price of an option generally may not be less than the fair market value of a share of the Company’s common stock on the NASDAQ Global Select Market on the date of grant. Other Equity Incentive Plans In addition to the 2012 Plan, we have other equity incentive plans under which options granted remain outstanding but no new options may be granted either as a result of the approval of the 2012 Plan or plan expiration. These plans include: (i) the 2008 Equity Incentive Plan (2008 Plan) which was adopted by the Board of Directors on March 20, 2008 and approved by our stockholders on June 6, 2008; (ii) the 2000 Equity Incentive Plan (2000 Plan) which was adopted by the Board of Directors on April 19, 2000 by amending and restating our 1994 Equity Incentive Plan, and which expired on February 9, 2010; and (iii) the 1998 Non-Officer Equity Incentive Plan which was adopted by our Board of Directors on August 18, 1998, and which was amended and restated in its entirety and renamed the 2000 Non-Officer Equity Incentive Plan on June 6, 2000 (2000 Non-Officer Plan). Pursuant to the 2008 Plan and the 2000 Plan, we previously granted or issued incentive stock options to employees and officers and non-qualified stock options, rights to acquire restricted stock, restricted stock units, and stock bonuses to employees, officers, non-employee directors, and consultants. Pursuant to the 2000 Non-Officer Plan, we previously granted or issued non-qualified stock options, rights to acquire restricted stock and stock bonuses to employees and consultants who are neither officers nor directors of Nektar. The maximum term of a stock option under all of these plans is eight years. Employee Stock Purchase Plan In February 1994, our Board of Directors adopted the Employee Stock Purchase Plan (ESPP) pursuant to section 423(b) of the Internal Revenue Code of 1986. Under the ESPP, 2,500,000 shares of our common stock have been authorized for issuance. The terms of the ESPP provide eligible employees with the opportunity to acquire an ownership interest in Nektar through participation in a program of periodic payroll deductions for the purchase of our common stock. Employees may elect to enroll or re-enroll in the ESPP on a semi-annual basis. Stock is purchased at 85% of the lower of the closing price on the first day of the enrollment period or the last day of the enrollment period. 401(k) Retirement Plan We sponsor a 401(k) retirement plan whereby eligible employees may elect to contribute up to the lesser of 60% of their annual compensation or the statutorily prescribed annual limit allowable under Internal Revenue Service regulations. The 401(k) plan permits us to make matching contributions on behalf of all participants, up to a maximum of $3,000 per participant. For the years ended December 31, 2016, 2015, and 2014, we recognized $1.1 million, $0.9 million, and $0.9 million, respectively, of compensation expense in connection with our 401(k) retirement plan. Change in Control Severance Plan On December 6, 2006, our Board of Directors approved a Change of Control Severance Benefit Plan (CIC Plan). This CIC Plan has subsequently been amended a number of times by our Board of Directors with the most recent amendment occurring on April 5, 2011. The CIC Plan is designed to make certain benefits available to our eligible employees in the event of a change of control of Nektar and, following such change of control, an employee’s employment with us or a successor company is terminated in certain specified circumstances. We adopted the CIC Plan to support the continuity of the business in the context of a change of control transaction. The CIC Plan was not adopted in contemplation of any specific change of control transaction. Under the CIC Plan, in the event of a change of control of Nektar and a subsequent termination of employment initiated by us or a successor company other than for Cause (as defined in the CIC Plan) or initiated by the employee for a Good Reason Resignation (as defined in the CIC Plan) in each case within twelve months following a change of control transaction, (i) the Chief Executive Officer would be entitled to receive cash severance pay equal to 24 months base salary plus annual target incentive pay, the extension of employee benefits over this severance period and the full acceleration of unvested outstanding equity awards, and (ii) our Senior Vice Presidents and Vice Presidents (including Principal Fellows) would each be entitled to receive cash severance pay equal to twelve months base salary plus annual target incentive pay, the extension of employee benefits over this severance period and the full acceleration of unvested outstanding equity awards. In the event of a change of control of Nektar and a subsequent termination of employment initiated by the Company or a successor company other than for Cause within twelve months following a change of control transaction, all other employees would each be entitled to receive cash severance pay equal to 6 months base salary plus a pro-rata portion of annual target incentive pay, the extension of employee benefits over this severance period and the full acceleration of each such employee’s unvested outstanding equity awards. Under the CIC Plan, as amended, non-employee directors would also be entitled to full acceleration of vesting of all outstanding stock awards in the event of a change of control transaction. |
License and Collaboration Agree
License and Collaboration Agreements | 12 Months Ended |
Dec. 31, 2016 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
License and Collaboration Agreements | Note 10 — License and Collaboration Agreements We have entered into various collaboration agreements including license agreements and collaborative research, development and commercialization agreements with various pharmaceutical and biotechnology companies. Under these collaboration arrangements, we are entitled to receive license fees, upfront payments, milestone and other contingent payments, royalties, sales milestones, and payments for the manufacture and supply of our proprietary PEGylation materials and/or reimbursement for research and development activities. All of our collaboration agreements are generally cancelable by our partners without significant financial penalty. Our costs of performing these services are generally included in research and development expense, except that costs for product sales to our collaboration partners are included in cost of goods sold. In accordance with our collaboration agreements, we recognized license, collaboration and other revenue as follows (in thousands): Year Ended December 31, Partner Agreement 2016 2015 2014 AstraZeneca AB MOVANTIK ® ® combination program $ 33,000 $ 130,000 $ 105,001 Roche PEGASYS ® ® 7,685 12,816 12,845 Amgen, Inc. Neulasta ® 5,000 5,000 5,000 Daiichi Sankyo Europe GmbH ONZEALD TM 3,690 — — Bayer Healthcare LLC BAY41-6551 (Amikacin Inhale) 1,429 1,919 4,717 Baxalta Incorporated ADYNOVATE ® 650 10,694 10,258 Other 8,928 5,175 15,468 License, collaboration and other revenue $ 60,382 $ 165,604 $ 153,289 As of December 31, 2016, our collaboration agreements with partners included potential future payments for development milestones totaling approximately $147.0 million, including amounts from our agreements with Daiichi, Bayer, Baxalta and Ophthotech described below. In addition, under our collaboration agreements we are entitled to receive contingent development payments and contingent sales milestones and royalty payments, including those related to MOVANTIK ® ® AstraZeneca AB : MOVANTIK ® ® We are a party to an agreement with AstraZeneca AB (AstraZeneca) under which we granted AstraZeneca a worldwide, exclusive license under our patents and other intellectual property to develop, market, and sell MOVANTIK ® ® ® ® ® ® ® ® On September 16, 2014, the United States Food and Drug Administration (FDA) approved MOVANTIK ® ® ® ® On March 1, 2016, AstraZeneca announced that it had entered into an agreement with ProStrakan Group plc, a subsidiary of Kyowa Hakko Kirin Co. Ltd. (Kirin), granting Kirin exclusive marketing rights to MOVENTIG ® ® ® In general, other than as described above and in this paragraph, AstraZeneca has full responsibility for all research, development and commercialization costs under our license agreement. As part of its approval of MOVANTIK ® ® ® Daiichi Sankyo Europe GmbH : ONZEALD TM (etirinotecan pegol), also referred to as NKTR-102 Effective May 30, 2016, we entered into a collaboration and license agreement with Daiichi Sankyo Europe GmbH, a German limited liability company (Daiichi), under which we granted Daiichi exclusive commercialization rights in the European Economic Area, Switzerland, and Turkey (collectively, the European Territory) to our proprietary product candidate ONZEALD TM TM Under the terms of the agreement and in consideration for the exclusive commercialization rights in the European Territory, Daiichi paid us a $20.0 million up-front payment in August 2016 and we will be eligible to receive up to an aggregate of $60.0 million in regulatory and commercial milestones, including a $10.0 million payment upon the first commercial sale of ONZEALD TM TM TM TM TM Daiichi may terminate the agreement in the event that the EC does not grant conditional marketing approval for ONZEALD TM TM TM TM We identified our grant of the exclusive license to Daiichi on May 30, 2016 and our ongoing clinical and regulatory development service obligations as the significant, non-contingent deliverables under the agreement and determined that each represents a separate unit of accounting. We made our best estimate of the selling price for the license grant based on a discounted cash flow analysis of projected ONZEALD TM We determined that the milestones noted above payable to us by Daiichi upon the first commercial sale of ONZEALD TM TM Baxalta Incorporated: Hemophilia We are a party to an exclusive research, development, license and manufacturing and supply agreement with Baxalta Incorporated (Baxalta), a subsidiary of Shire Plc, entered into in September 2005 to develop products designed to improve therapies for Hemophilia A patients using our PEGylation technology. Under the terms of the agreement, we are entitled to research and development funding and are responsible for supplying Baxalta with its requirements for our proprietary materials. Baxalta is responsible for all clinical development, regulatory, and commercialization expenses. The agreement is terminable by the parties under customary conditions. This Hemophilia A program includes ADYNOVATE ® Roche: PEGASYS ® ® In February 2012, we entered into a toll-manufacturing agreement with Roche under which we agreed to manufacture the proprietary PEGylation material used by Roche to produce MIRCERA ® ® ® ® In February 1997, we entered into a license, manufacturing and supply agreement with Roche, under which we granted Roche a worldwide, exclusive license to certain intellectual property related to our proprietary PEGylation materials used in the manufacture and commercialization of PEGASYS ® ® Amgen, Inc. : Neulasta ® In October 2010, we amended and restated an existing supply and license agreement by entering into a supply, dedicated suite and manufacturing guarantee agreement (the amended and restated agreement) and a license agreement with Amgen Inc. and Amgen Manufacturing, Limited (together referred to as Amgen). Under the terms of the amended and restated agreement, we guarantee the manufacture and supply of our proprietary PEGylation materials (Polymer Materials) to Amgen in an existing manufacturing suite to be used exclusively for the manufacture of Polymer Materials for Amgen (the Manufacturing Suite) in our manufacturing facility in Huntsville, Alabama (the Facility). This supply arrangement is on a non-exclusive basis (other than the use of the Manufacturing Suite and certain equipment) whereby we are free to manufacture and supply the Polymer Materials to any other third party and Amgen is free to procure the Polymer Materials from any other third party. Under the terms of the amended and restated agreement, we received a $50.0 million payment in the fourth quarter of 2010 in return for our guaranteeing the supply of certain quantities of Polymer Materials to Amgen including without limitation the Additional Rights described below and manufacturing fees that are calculated based on fixed and variable components applicable to the Polymer Materials ordered by Amgen and delivered by us. Amgen has no minimum purchase commitments. If quantities of the Polymer Materials ordered by Amgen exceed specified quantities, significant additional payments become payable to us in return for our guaranteeing the supply of additional quantities of the Polymer Materials. The term of the amended and restated agreement ends on October 29, 2020. In the event we become subject to a bankruptcy or insolvency proceeding, we cease to own or control the Facility, we fail to manufacture and supply or certain other events, Amgen or its designated third party will have the right to elect, among certain other options, to take title to the dedicated equipment and access the Facility to operate the Manufacturing Suite solely for the purpose of manufacturing the Polymer Materials. Amgen may terminate the amended and restated agreement for convenience or due to an uncured material default by us. As of December 31, 2016, we have deferred revenue of approximately $19.2 million related to this agreement, which we expect to recognize through October 2020, the estimated end of our obligations under this agreement. Bayer Healthcare LLC : BAY41-6551 (Amikacin Inhale) In August 2007, we entered into a co-development, license and co-promotion agreement with Bayer Healthcare LLC (Bayer) to develop a specially-formulated inhaled Amikacin. We are responsible for development and manufacturing and supply of our proprietary nebulizer device included in the Amikacin product. Bayer is responsible for most future clinical development and commercialization costs, all activities to support worldwide regulatory filings, approvals and related activities, further development of Amikacin Inhale and final product packaging and distribution. In April 2013, Bayer initiated a Phase 3 clinical trial in the treatment of intubated and mechanically ventilated patients with Gram-negative pneumonia. As of December 31, 2016, we have received an upfront payment of $40.0 million (which was paid to us in 2007) and milestone payments totaling $30.0 million (the last of which was paid to us in 2013). In addition, in June 2013, we made a $10.0 million payment to Bayer for the reimbursement of some of its costs of the Phase 3 clinical trial. We are entitled to receive a total of up to an additional $50.0 million of development milestones upon achievement of certain development objectives, including $25.0 million related to a successful regulatory approval filing, as well as sales milestones upon achievement of annual sales targets and royalties based on annual worldwide net sales of Amikacin Inhale. As of December 31, 2016, we have deferred revenue of approximately $17.9 million related to this agreement, which we expect to recognize through June 2029, the estimated end of our obligations under this agreement. Ophthotech Corporation : Fovista ® We are a party to an agreement with Ophthotech Corporation (Ophthotech), dated September 30, 2006, under which Ophthotech received a worldwide, exclusive license to certain of our proprietary PEGylation technology to develop, manufacture and sell Fovista®. Under the terms of our agreement, we are the exclusive supplier of all of Ophthotech’s clinical and commercial requirements for our proprietary PEGylation reagent used in Fovista ® ® On December 12, 2016, Ophthotech announced that its two pivotal Phase 3 clinical trials investigating the superiority of Fovista ® ® ® ® ® ® ® ® Based on successful clinical study outcomes, we are entitled to additional payments based upon Ophthotech’s potential achievement of certain regulatory milestones. If commercialized, we are also entitled to royalties on net sales of Fovista ® Bristol-Myers Squibb : NKTR-214 On September 21, 2016, we entered into a Clinical Trial Collaboration Agreement (BMS Agreement) with Bristol-Myers Squibb Company, a Delaware corporation (BMS), pursuant to which we and BMS will collaborate to conduct Phase 1/2 clinical trials evaluating our IL-2-based CD122-biased agonist, known as NKTR-214, and BMS’ human monoclonal antibody that binds PD-1, known as ® nivolumab) We will act as the sponsor of each Combination Therapy Trial. Under the BMS Agreement, BMS will be responsible for 50% of all out-of-pocket costs reasonably incurred in connection with third party contract research organizations, laboratories, clinical sites and institutional review boards and we record cost reimbursement payments to us from BMS as a reduction to research and development expense. Each party will otherwise be responsible for its own internal costs, including internal personnel costs, incurred in connection with each Combination Therapy Trial. Nektar and BMS will use commercially reasonable efforts to manufacture and supply NKTR-214 and Opdivo ® Ownership of, and global commercial rights to, NKTR-214 remain solely with us under the BMS Agreement. If we wish to license the right to commercialize NKTR-214 in one of certain major market territories prior to September 30, 2018 (Exclusivity Expiration Date), we must first negotiate with BMS, for a period of three months (Negotiation Period), to grant an exclusive license to develop and commercialize NKTR-214 in any of these major market territories. If we do not reach an agreement with BMS for an exclusive license within the Negotiation Period, we will be free to license any right to NKTR-214 to other parties in any territory worldwide except that in the event that we receive a license offer from a third party during a period of 90 calendar days after the end of the Negotiation Period, we will provide BMS ten business days to match the terms of such third-party offer. After the Exclusivity Expiration Date, we are free to license NKTR-214 without any further obligation to BMS. Each party grants to the other party a non-exclusive, worldwide (subject to certain exceptions in the case of the license granted by BMS), non-transferable and royalty-free research and development license to such licensing party’s patent rights, technology and regulatory documentation to use its compound solely to the extent necessary to discharge its obligations under the BMS Agreement with respect to the conduct of the Combination Therapy Trials. Other In addition, as of December 31, 2016, we have a number of other collaboration agreements, including with our collaboration partner UCB, under which we are entitled to up to a total of $45.5 million of development milestones upon achievement of certain development objectives, as well as sales milestones upon achievement of annual sales targets and royalties based on net sales of commercialized products, if any. However, given the current phase of development of the potential products under these collaboration agreements, we cannot estimate the probability or timing of achieving these milestones. As of December 31, 2016, we have deferred revenue of approximately $8.6 million related to these other collaboration agreements, which we expect to recognize through 2020, the estimated end of our obligations under those agreements. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation | Note 11 — Stock-Based Compensation We issue stock-based awards from our equity incentive plans, which are more fully described in Note 9. Stock-based compensation expense was recognized as follows (in thousands): Year Ended December 31, 2016 2015 2014 Cost of goods sold $ 1,620 $ 1,142 $ 1,161 Research and development 13,093 9,207 7,528 General and administrative 11,137 9,320 8,328 Total stock-based compensation $ 25,850 $ 19,669 $ 17,017 As of December 31, 2016, total unrecognized compensation costs of $71.2 million related to unvested stock-based compensation arrangements are expected to be recognized as expense over a weighted-average period of 1.8 years. Black-Scholes Assumptions The following table lists the Black-Scholes option-pricing model assumptions used to calculate the fair value of employee and director stock options. Year Ended December 31, 2016 2015 2014 Average risk-free interest rate 1.4 % 1.6 % 1.6 % Dividend yield 0.0 % 0.0 % 0.0 % Average volatility factor 51.7 % 50.8 % 51.6 % Average weighted average expected life 5.3 years 5.3 years 5.2 years The average risk-free interest rate is based on the U.S. treasury yield curve in effect at the time of grant for periods commensurate with the expected life of the stock-based award. We have never paid dividends, nor do we expect to pay dividends in the foreseeable future; therefore, we used a dividend yield of 0.0%. Our estimate of expected volatility is based on the daily historical trading data of our common stock at the time of grant over a historical period commensurate with the expected life of the stock-based award. We estimated the weighted-average expected life based on the contractual and vesting terms of the stock options, as well as historical cancellation and exercise data. Stock-based compensation expense resulting from our ESPP was not material in the years ended December 31, 2016, 2015, and 2014. Summary of Stock Option Activity The table below presents a summary of stock option activity under our equity incentive plans (in thousands, except for price per share and contractual life information): Number of Shares Weighted- Average Exercise Price per Share Weighted- Average Remaining Contractual Life (in Years) Aggregate Intrinsic Value(1) Outstanding at December 31, 2015 18,782 $ 11.22 Options granted 3,368 13.92 Options exercised (2,337 ) 8.03 Options forfeited & canceled (400 ) 13.97 Outstanding at December 31, 2016 19,413 $ 12.01 4.61 $ 26,513 Vested and expected to vest at December 31, 2016 18,970 $ 11.97 4.55 $ 26,485 Exercisable at December 31, 2016 12,783 $ 10.94 3.49 $ 25,684 (1) Aggregate intrinsic value represents the difference between the exercise price of the option and the closing market price of our common stock on December 31, 2016. The weighted-average grant-date fair value per share of options granted during the years ended December 31, 2016, 2015, and 2014 was $6.54, $6.55, and $6.50, respectively. The total intrinsic value of options exercised during the years ended December 31, 2016, 2015, and 2014 was $17.9 million, $20.5 million, and $25.9 million, respectively. The estimated fair value of options vested during the years ended December 31, 2016, 2015, and 2014 was $16.7 million, $16.8 million, and $15.2 million, respectively. Summary of RSU Activity During the years ended December 31, 2016 and 2015, we granted RSUs to officers, employees and non-employee directors. No RSUs vested during 2015 and no RSUs were granted during 2014. Most of our RSU awards have a strictly time-based vesting schedule while some RSU awards vest upon achievement of pre-determined performance milestones along with a time-based vesting schedule. We expense the grant date fair value of the RSUs expected to vest ratably over the expected service or performance period. The fair value of an RSU is equal to the closing price of our common stock on the grant date. A summary of RSU award activity is as follows (in thousands except for per share amounts): Units Issued Weighted- Average Grant Date Fair Value Aggregate Intrinsic Value(1) Balance at December 31, 2015 1,306 $ 15.30 Granted 1,493 12.50 Vested and released (491 ) 14.96 Forfeited and canceled (60 ) 14.87 Balance at December 31, 2016 2,248 $ 13.53 $ 27,593 (1) Aggregate intrinsic value represents the difference between the grant price of the award, which is zero, and the closing market price of our common stock on December 31, 2016. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 12 — Income Taxes Loss before provision (benefit) for income taxes includes the following components (in thousands): Year Ended December 31, 2016 2015 2014 Domestic $ (155,375 ) $ (81,931 ) $ (56,414 ) Foreign 2,727 1,260 1,986 Loss before provision (benefit) for income taxes $ (152,648 ) $ (80,671 ) $ (54,428 ) Provision for Income Taxes The provision (benefit) for income taxes consists of the following (in thousands): Year Ended December 31, 2016 2015 2014 Current: Federal $ — $ — $ — State (1 ) (1 ) 1 Foreign 992 529 (482 ) Total Current 991 528 (481 ) Deferred: Federal — — — State — — — Foreign (115 ) (22 ) (31 ) Total Deferred (115 ) (22 ) (31 ) Provision (benefit) for income taxes $ 876 $ 506 $ (512 ) The foreign benefit provision in the year ended December 31, 2014 is due to the reduction in taxes related to a favorable determination received from India proceedings. Income tax provision related to continuing operations differs from the amount computed by applying the statutory income tax rate of 35% to pretax loss as follows (in thousands): Year Ended December 31, 2016 2015 2014 U.S. federal provision (benefit) At statutory rate $ (53,427 ) $ (28,235 ) $ (19,050 ) Change in valuation allowance 51,981 22,210 11,831 Non-cash interest expense on liability related to sale of future royalties 6,899 7,217 7,311 Stock-based compensation 528 674 2,832 Foreign tax deduction — 1,773 — Research credits (4,543 ) (4,529 ) (2,933 ) Other (562 ) 1,396 (503 ) Provision (benefit) for income taxes $ 876 $ 506 $ (512 ) Deferred Tax Assets and Liabilities Deferred income taxes reflect the net tax effects of loss and credit carryforwards and temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets for federal and state income taxes are as follows (in thousands): December 31, 2016 2015 Deferred tax assets: Net operating loss carryforwards $ 508,406 $ 447,761 Research and other credits 74,917 70,258 Stock-based compensation 26,357 22,832 Deferred revenue 23,035 29,658 Reserves and accruals 12,269 8,309 Capitalized research expenses 11,587 12,440 Property, plant and equipment 6,882 6,451 Sale of future royalties 1,611 12,319 Other 750 3,158 Deferred tax assets before valuation allowance 665,814 613,186 Valuation allowance for deferred tax assets (665,514 ) (612,996 ) Total deferred tax assets 300 190 Total deferred tax liabilities — — Net deferred tax assets $ 300 $ 190 Realization of our deferred tax assets is dependent upon future earnings, if any, the timing and amount of which are uncertain. Because of our lack of U.S. earnings history, the net U.S. deferred tax assets have been fully offset by a valuation allowance. The valuation allowance increased by $52.5 million and $17.3 million during the years ended December 31, 2016 and 2015, respectively. The valuation allowance includes approximately $35.6 million of income tax benefit at both December 31, 2016 and December 31, 2015 related to stock-based compensation and exercises prior to the implementation of the accounting guidance for stock-based compensation that will be credited to additional paid in capital when realized. Undistributed earnings of our foreign subsidiary in India are considered to be permanently reinvested and accordingly, no deferred U.S. income taxes have been provided thereon. Upon distribution of those earnings in the form of dividends or otherwise, we would be subject to U.S. income tax. As of December 31, 2016, U.S. income taxes have not been provided on a cumulative total of $3.4 million of such earnings. Any incremental tax liability would be insignificant due to foreign tax credits that would be realized upon distribution. Net Operating Loss and Tax Credit Carryforwards As of December 31, 2016, we had a net operating loss carryforward for federal income tax purposes of approximately $1,413.3 million, portions of which will begin to expire in 2018. As of December 31, 2016, we had a total state net operating loss carryforward of approximately $473.6 million, portions of which will begin to expire in 2017. Utilization of some of the federal and state net operating loss and credit carryforwards are subject to annual limitations due to the “change in ownership” provisions of the Internal Revenue Code of 1986 and similar state provisions. We have federal research credits of approximately $50.1 million, which will begin to expire in 2019 and state research credits of approximately $25.2 million which have no expiration date. We have federal orphan drug credits of $17.7 million which will begin to expire in 2026. These tax credits are subject to the same limitations discussed above. Unrecognized tax benefits We have incurred net operating losses since inception. Our policy is to include interest and penalties related to unrecognized tax benefits, if any, within the provision for income taxes in the consolidated statements of operations. If we are eventually able to recognize our uncertain positions, our effective tax rate may be reduced. We currently have a full valuation allowance against our U.S. net deferred tax asset which would impact the timing of the effective tax rate benefit should any of these uncertain tax positions be favorably settled in the future. Any adjustments to our uncertain tax positions would result in an adjustment of our net operating loss or tax credit carry forwards rather than resulting in a cash outlay. The decrease in the unrecognized tax benefits in 2015 primarily relates to a California Supreme Court decision relating to the calculation of apportionment of income. We file income tax returns in the U.S., California, Alabama, and India. Because of net operating losses and research credit carryovers, substantially all of our domestic tax years remain open and subject to examination. We are currently under examination in India for the fiscal years ending 2009, 2013 and 2014. We have the following activity relating to unrecognized tax benefits (in thousands): December 31, 2016 2015 2014 Beginning balance $ 17,384 $ 27,522 $ 16,363 Tax positions related to current year Additions: Federal 530 529 502 State 499 443 6,141 Reductions — — — Tax positions related to prior year Additions: Federal — — — State — — 5,258 Foreign — — — Reductions — (11,110 ) (742 ) Settlements — — — Lapses in statute of limitations — — — Ending balance $ 18,413 $ 17,384 $ 27,522 Although it is reasonably possible that certain unrecognized tax benefits may increase or decrease within the next twelve months, we do not anticipate any significant changes to unrecognized tax benefits over the next twelve months. During the years ended December 31, 2016, 2015 and 2014, no significant interest or penalties were recognized relating to unrecognized tax benefits. |
Segment Reporting
Segment Reporting | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Segment Reporting | Note 13 — Segment Reporting We operate in one business segment which focuses on applying our technology platforms to improve the performance of established and novel medicines. We operate in one segment because our business offerings have similar economics and other characteristics, including the nature of products and manufacturing processes, types of customers, distribution methods and regulatory environment. We are comprehensively managed as one business segment by our Chief Executive Officer. Our revenue is derived primarily from clients in the pharmaceutical and biotechnology industries. AstraZeneca, UCB, Ophthotech and Roche represented 29%, 21%, 19% and 11% of our revenue, respectively, for the year ended December 31, 2016. Revenue from AstraZeneca and UCB represented 57% and 13% of our revenue, respectively, for the year ended December 31, 2015. Revenue from AstraZeneca, UCB and Roche represented 52%, 16% and 11% of our revenue, respectively, for the year ended December 31, 2014. Revenue by geographic area is based on the locations of our partners. The following table sets forth revenue by geographic area (in thousands): Year Ended December 31, 2016 2015 2014 United States $ 39,147 $ 40,400 $ 32,514 Europe 126,289 190,384 168,193 Total revenue $ 165,436 $ 230,784 $ 200,707 At December 31, 2016, $48.8 million, or approximately 74%, of the net book value of our property, plant and equipment was located in the United States, $10.4 million, or approximately 16% was located at contract manufacturers in Germany and the Netherlands, $5.6 million, or approximately 9%, was located in India, and $0.8 million or approximately 1%, was located in other countries. At December 31, 2015, $54.2 million, or approximately 76%, of the net book value of our property, plant and equipment was located in the United States, $11.1 million, or approximately 16% was located at contract manufacturers in Germany and the Netherlands, and $6.0 million, or approximately 8%, was located in India. |
Selected Quarterly Financial Da
Selected Quarterly Financial Data | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financial Data | Note 14 — Selected Quarterly Financial Data (Unaudited) The following table sets forth certain unaudited quarterly financial data. In our opinion, the unaudited information set forth below has been prepared on the same basis as our audited information and includes all adjustments necessary to present fairly the information set forth herein. We have experienced fluctuations in our quarterly results and expect these fluctuations to continue in the future. Due to these and other factors, we believe that quarter-to-quarter comparisons of our operating results will not be meaningful, and you should not rely on our results for any one quarter as an indication of our future performance. Certain items previously reported in specific financial statement captions have been reclassified to conform to the current period presentation. Such reclassifications have not materially impacted previously reported total revenues, operating loss or net loss. All data is in thousands except per share information. Year Ended December 31, 2016 Year Ended December 31, 2015 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Product sales $ 14,099 $ 12,867 $ 14,698 $ 13,690 $ 7,974 $ 10,968 $ 7,240 $ 13,973 Total revenue $ 58,882 $ 32,768 $ 36,336 $ 37,450 $ 108,801 $ 22,661 $ 59,952 $ 39,370 Cost of goods sold $ 8,870 $ 7,708 $ 7,033 $ 6,604 $ 8,444 $ 10,534 $ 6,760 $ 8,364 Research and development expenses $ 49,268 $ 52,350 $ 51,951 $ 50,232 $ 47,011 $ 45,412 $ 43,229 $ 47,135 Operating income (loss) $ (9,484 ) $ (38,325 ) $ (32,901 ) $ (32,145 ) $ 43,043 $ (43,469 ) $ 419 $ (29,364 ) Net income (loss) $ (19,498 ) $ (48,603 ) $ (43,224 ) $ (42,199 ) $ 33,820 $ (52,657 ) $ (8,203 ) $ (54,137 ) Net income (loss) per share(1) Basic $ (0.14 ) $ (0.36 ) $ (0.32 ) $ (0.28 ) $ 0.26 $ (0.40 ) $ (0.06 ) $ (0.40 ) Diluted $ (0.14 ) $ (0.36 ) $ (0.32 ) $ (0.28 ) $ 0.25 $ (0.40 ) $ (0.06 ) $ (0.40 ) (1) Quarterly loss per share amounts may not total to the year-to-date loss per share due to rounding. |
Organization and Summary of S24
Organization and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization | Organization We are a research-based biopharmaceutical company headquartered in San Francisco, California and incorporated in Delaware. We are developing a pipeline of drug candidates that utilize our advanced polymer conjugate technology platforms, which are designed to enable the development of new molecular entities that target known mechanisms of action. Our research and development pipeline of new investigational drugs includes treatments for cancer, auto-immune disease and chronic pain. Our research and development activities have required significant ongoing investment to date and are expected to continue to require significant investment. As a result, we expect to continue to incur substantial losses and negative cash flows from operations in the future. We have financed our operations primarily through cash generated from licensing, collaboration and manufacturing agreements and financing transactions. At December 31, 2016, we had approximately $389.1 million in cash and investments in marketable securities. Also, as of December 31, 2016, we had $255.1 million in debt, including $250.0 million in principal of senior secured notes and $5.1 million of capital lease obligations, of which $2.9 million is current. |
Basis of Presentation, Principles of Consolidation and Use of Estimates | Basis of Presentation, Principles of Consolidation and Use of Estimates Our consolidated financial statements include the financial position, results of operations and cash flows of our wholly-owned subsidiaries: Nektar Therapeutics (India) Private Limited (Nektar India) and Nektar Therapeutics UK Limited. All intercompany accounts and transactions have been eliminated in consolidation. Our Consolidated Financial Statements are denominated in U.S. dollars. Accordingly, changes in exchange rates between the applicable foreign currency and the U.S. dollar will affect the translation of each foreign subsidiary’s financial results into U.S. dollars for purposes of reporting our consolidated financial results. Translation gains and losses are included in accumulated other comprehensive income (loss) in the stockholders’ equity section of the Consolidated Balance Sheets. To date, such cumulative translation adjustments have not been significant to our consolidated financial position. Aggregate gross foreign currency transaction gains (losses) recorded in operations for the years ended December 31, 2016, 2015, and 2014 were not significant. The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Accounting estimates and assumptions are inherently uncertain. Actual results could differ materially from those estimates and assumptions. Our estimates include those related to estimated selling prices of deliverables in collaboration agreements, estimated periods of performance, the net realizable value of inventory, the impairment of investments, the impairment of goodwill and long-lived assets, contingencies, accrued clinical trial expenses, estimated non-cash royalty revenue and non-cash interest expense from our liability related to our sale of future royalties, stock-based compensation, and ongoing litigation, among other estimates. We base our estimates on historical experience and on other assumptions that management believes are reasonable under the circumstances. These estimates form the basis for making judgments about the carrying values of assets and liabilities when these values are not readily apparent from other sources. As appropriate, estimates are assessed each period and updated to reflect current information and any changes in estimates will generally be reflected in the period first identified. |
Reclassifications | Reclassifications Certain items previously reported in specific financial statement captions have been reclassified to conform to the current period presentation, including as a result of the adoption of new accounting guidance related to the classification of debt issuance costs described below. Such reclassifications do not materially impact previously reported revenue, operating loss, net loss, total assets, liabilities or stockholders’ equity. |
Cash, Cash Equivalents, and Investments, and Fair Value of Financial Instruments | Cash, Cash Equivalents, and Investments, and Fair Value of Financial Instruments We consider all investments in marketable securities with an original maturity of three months or less when purchased to be cash equivalents. Investments in securities with remaining maturities of less than one year, or where our intent is to use the investments to fund current operations or to make them available for current operations, are classified as short-term investments. Investments are designated as available-for-sale and are carried at fair value, with unrealized gains and losses reported in stockholders’ equity as accumulated other comprehensive income (loss). The disclosed fair value related to our cash equivalents and investments is based primarily on the reported fair values in our period-end brokerage statements, which are based on market prices from a variety of industry standard data providers and generally represent quoted prices for similar assets in active markets or have been derived from observable market data. We independently validate these fair values using available market quotes and other information. Interest and dividends on securities classified as available-for-sale, as well as amortization of premiums and accretion of discounts to maturity, are included in interest income. Realized gains and losses and declines in value of available-for-sale securities judged to be other-than-temporary, if any, are included in other income (expense). The cost of securities sold is based on the specific identification method. Our cash, cash equivalents, and short-term investments are exposed to credit risk in the event of default by the third parties that hold or issue such assets. Our cash, cash equivalents, and short-term investments are held by financial institutions that management believes are of high credit quality. Our investment policy limits investments to fixed income securities denominated and payable in U.S. dollars such as U.S. government obligations, money market instruments and funds, and corporate bonds and places restrictions on maturities and concentrations by type and issuer. |
Accounts Receivable and Significant Customer Concentrations | Accounts Receivable and Significant Customer Concentrations Our customers are primarily pharmaceutical and biotechnology companies that are located in the U.S. and Europe. Our accounts receivable balance contains billed and unbilled trade receivables from product sales, milestones, other contingent payments and royalties, as well as time and materials based billings from collaborative research and development agreements. When appropriate, we provide for an allowance for doubtful accounts by reserving for specifically identified doubtful accounts. We generally do not require collateral from our customers. We perform a regular review of our customers’ credit risk and payment histories, including payments made subsequent to year-end. We have not experienced significant credit losses from our accounts receivable. At December 31, 2016, three different customers represented 39%, 32%, and 13%, respectively, of our accounts receivable. At December 31, 2015, three different customers represented 50%, 35%, and 10%, respectively, of our accounts receivable. |
Inventory and Significant Supplier Concentrations | Inventory and Significant Supplier Concentrations Inventory is generally manufactured upon receipt of firm purchase orders from our collaboration partners. Inventory includes direct materials, direct labor, and manufacturing overhead and cost is determined on a first-in, first-out basis. Inventory is valued at the lower of cost or market and defective or excess inventory is written down to net realizable value based on historical experience or projected usage. Inventory related to our research and development activities is expensed when purchased. We are dependent on our suppliers and contract manufacturers to provide raw materials, drugs and devices of appropriate quality and reliability and to meet applicable contract and regulatory requirements. In certain cases, we rely on single sources of supply of one or more critical materials. Consequently, in the event that supplies are delayed or interrupted for any reason, our ability to develop and produce our drug candidates or our ability to meet our supply obligations could be significantly impaired, which could have a material adverse effect on our business, financial condition and results of operations. |
Long-Lived Assets | Long-Lived Assets Property, plant and equipment are stated at cost. Major improvements are capitalized, while maintenance and repairs are expensed when incurred. Manufacturing, laboratory and other equipment are depreciated using the straight-line method generally over estimated useful lives of three to ten years. Buildings are depreciated using the straight-line method generally over the estimated useful life of twenty years. Leasehold improvements and buildings recorded under capital leases are depreciated using the straight-line method over the shorter of the estimated useful life or the remaining term of the lease. Goodwill represents the excess of the price paid for another entity over the fair value of the assets acquired and liabilities assumed in a business combination. We are organized in one reporting unit and evaluate the goodwill for the Company as a whole. Goodwill has an indefinite useful life and is not amortized, but instead tested for impairment at least annually in the fourth quarter of each year using an October 1 measurement date. We assess the impairment of long-lived assets, primarily property, plant and equipment and goodwill, whenever events or changes in business circumstances indicate that the carrying amounts of the assets may not be fully recoverable. When such events occur, we determine whether there has been an impairment in value by comparing the carrying value of the asset with its fair value, as measured by the anticipated undiscounted net cash flows associated with the asset. In the case of goodwill impairment, market capitalization is generally used as the measure of fair value. If an impairment in value exists, the asset is written down to its estimated fair value. |
Revenue Recognition | Revenue Recognition Our revenue is derived from our arrangements with pharmaceutical and biotechnology collaboration partners and may result from one or more of the following: upfront and license fees, payments for contract research and development, milestone and other contingent payments, manufacturing and supply payments, and royalties. Our performance obligations under our collaborations may include licensing our intellectual property, manufacturing and supply obligations, and research and development obligations. In order to account for the multiple-element arrangements, we identify the deliverables included within the arrangement and evaluate which deliverables represent separate units of accounting. Analyzing the arrangement to identify deliverables requires the use of judgment, and each deliverable may be an obligation to deliver goods or services, a right or license to use an asset, or another performance obligation. Revenue is recognized separately for each identified unit of accounting when the basic revenue recognition criteria are met: there is persuasive evidence that an arrangement exists, delivery has occurred, the price is fixed or determinable, and collection is reasonably assured. At the inception of each new multiple-element arrangement or the material modification of an existing multiple-element arrangement, we allocate all consideration received under multiple-element arrangements to all units of accounting based on the relative selling price method, generally based on our best estimate of selling price (ESP). The objective of ESP is to determine the price at which we would transact a sale if the product or service was sold on a stand-alone basis. We determine ESP for the elements in our collaboration arrangements by considering multiple factors including, but not limited to, technical complexity of the performance obligation and similarity of elements to those performed under previous arrangements. Since we apply significant judgment in arriving at the ESPs, any material change in our estimates would significantly affect the allocation of the total consideration to the different elements of a multiple element arrangement. Product sales Product sales are primarily derived from fixed price manufacturing and supply agreements with our collaboration partners. We have not experienced any significant returns from our customers. Royalty revenue Generally, we are entitled to royalties from our collaboration partners based on the net sales of their approved drugs that are marketed and sold in one or more countries where we hold royalty rights. We recognize royalty revenue when the cash is received or when the royalty amount to be received is estimable and collection is reasonably assured. With respect to the non-cash royalties related to sale of future royalties described in Note 7, revenue is recognized when estimable, otherwise, revenue is recognized during the period in which the related royalty report is received, which generally occurs in the quarter after the applicable product sales are made. License, collaboration and other revenue The amount of upfront fees and other payments received by us in license and collaboration arrangements that are allocated to continuing performance obligations, such as manufacturing and supply obligations, is deferred and generally recognized ratably over our expected performance period under each respective arrangement. We make our best estimate of the period over which we expect to fulfill our performance obligations, which may include technology transfer assistance, research activities, clinical development activities, and manufacturing activities from research and development through the commercialization of the product. Given the uncertainties of these collaboration arrangements, significant judgment is required to determine the duration of the performance period and this estimate is periodically re-evaluated. Contingent consideration received from the achievement of a substantive milestone is recognized in its entirety in the period in which the milestone is achieved, which we believe is consistent with the substance of our performance under our various license and collaboration agreements. A milestone is defined as an event (i) that can only be achieved based in whole or in part either on the entity’s performance or on the occurrence of a specific outcome resulting from the entity’s performance, (ii) for which there is substantive uncertainty at the date the arrangement is entered into that the event will be achieved, and (iii) that would result in additional payments being due to the entity. A milestone is substantive if the consideration earned from the achievement of the milestone is consistent with our performance required to achieve the milestone or the increase in value to the collaboration resulting from our performance, relates solely to our past performance, and is reasonable relative to all of the other deliverables and payments within the arrangement. Our license and collaboration agreements with our partners provide for payments to us upon the achievement of development milestones, such as the completion of clinical trials or regulatory submissions, approvals by regulatory authorities, and commercial launches of drugs. Given the challenges inherent in developing and obtaining regulatory approval for drug products and in achieving commercial launches, there was substantial uncertainty whether any such milestones would be achieved at the time of execution of these licensing and collaboration agreements. In addition, we evaluated whether the development milestones met the remaining criteria to be considered substantive. As a result of our analysis, we consider our remaining development milestones under all of our license and collaboration agreements to be substantive and, accordingly, we expect to recognize as revenue future payments received from each milestone only if and as such milestone is achieved. Our license and collaboration agreements with certain partners also provide for contingent payments to us based solely upon the performance of the respective partner. For such contingent amounts, we expect to recognize the payments as revenue when earned under the applicable contract, which is generally upon completion of performance by the respective partner, provided that collection is reasonably assured. Our license and collaboration agreements with our partners also provide for payments to us upon the achievement of specified sales volumes of approved drugs. We consider these payments to be similar to royalty payments and we will recognize such sales-based payments upon achievement of such sales volumes, provided that collection is reasonably assured. |
Shipping and Handling Costs | Shipping and Handling Costs We recognize costs related to shipping and handling of product to customers in cost of goods sold. |
Research and Development Expense | Research and Development Expense Research and development costs are expensed as incurred and include salaries, benefits and other operating costs such as outside services, supplies and allocated overhead costs. We perform research and development for our proprietary drug candidates and technology development and for certain third parties under collaboration agreements. For our proprietary drug candidates and our internal technology development programs, we invest our own funds without reimbursement from a third party. We record accruals for the estimated costs of our clinical trial activities performed by third parties. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows to our vendors. Payments under the contracts depend on factors such as the achievement of certain events, successful enrollment of patients, and completion of certain clinical trial activities. We generally accrue costs associated with the start-up and reporting phases of the clinical trials ratably over the estimated duration of the start-up and reporting phases. We generally accrue costs associated with the treatment phase of clinical trials based on the total estimated cost of the treatment phase on a per patient basis and we expense the per patient cost ratably over the estimated patient treatment period based on patient enrollment in the trials. In specific circumstances, such as for certain time-based costs, we recognize clinical trial expenses using a methodology that we consider to be more reflective of the timing of costs incurred. Advance payments for goods or services that will be used or rendered for future research and development activities are capitalized as prepaid expenses and recognized as expense as the related goods are delivered or the related services are performed. We base our estimates on the best information available at the time. However, additional information may become available to us which may allow us to make a more accurate estimate in future periods. In this event, we may be required to record adjustments to research and development expenses in future periods when the actual level of activity becomes more certain. Such increases or decreases in cost are generally considered to be changes in estimates and will be reflected in research and development expenses in the period identified. |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation arrangements include stock option grants and restricted stock unit (RSU) awards under our equity incentive plans, as well as shares issued under our Employee Stock Purchase Plan (ESPP), through which employees may purchase our common stock at a discount to the market price. We use the Black-Scholes option pricing model for the respective grant to determine the estimated fair value of the option on the date of grant (grant date fair value) and the estimated fair value of common stock purchased under the ESPP. The Black-Scholes option pricing model requires the input of highly subjective assumptions. These variables include, but are not limited to, our stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors. Because our employee stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion, the existing models may not provide a reliable single measure of the fair value of our employee stock options or common stock purchased under the ESPP. Management will continue to assess the assumptions and methodologies used to calculate the estimated fair value of stock-based compensation. Circumstances may change and additional data may become available over time, which could result in changes to these assumptions and methodologies, and which could materially impact our fair value determination. We expense the value of the portion of the option or award that is ultimately expected to vest based on the historical forfeiture rate on a straight line basis over the requisite service periods in our Consolidated Statements of Operations. For options and awards that vest upon the achievement of performance milestones, we estimate the vesting period based on our evaluation of the probability of achievement of each respective milestone and the related estimated date of achievement. Stock-based compensation expense for purchases under the ESPP is recognized over the respective six-month purchase period. Expense amounts are recorded in cost of goods sold, research and development expense, and general and administrative expense based on the function of the applicable employee. Stock-based compensation charges are non-cash charges and as such have no impact on our reported cash flows. |
Net Loss Per Share | Net Loss Per Share Basic net loss per share is calculated based on the weighted-average number of common shares outstanding during the periods presented. For all periods presented in the Consolidated Statements of Operations, the net loss available to common stockholders is equal to the reported net loss. Basic and diluted net loss per share are the same due to our historical net losses and the requirement to exclude potentially dilutive securities which would have an anti-dilutive effect on net loss per share. During 2016, 2015 and 2014, potentially dilutive securities consisted of common shares underlying outstanding stock options and RSUs. There were weighted average outstanding stock options and RSUs of 19.9 million, 21.1 million and 21.9 million during the years ended December 31, 2016, 2015 and 2014, respectively. |
Income Taxes | Income Taxes We account for income taxes under the liability method. Under this method, deferred tax assets and liabilities are determined based on differences between the financial reporting and tax reporting bases of assets and liabilities and are measured using enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. Realization of deferred tax assets is dependent upon future earnings, the timing and amount of which are uncertain. We record a valuation allowance against deferred tax assets to reduce their carrying value to an amount that is more likely than not to be realized. When we establish or reduce the valuation allowance related to the deferred tax assets, our provision for income taxes will increase or decrease, respectively, in the period such determination is made. We utilize a two-step approach to recognize and measure uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained upon tax authority examination, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement. |
Comprehensive loss | Comprehensive loss Comprehensive loss is the change in stockholders’ equity from transactions and other events and circumstances other than those resulting from investments by stockholders and distributions to stockholders. Our other comprehensive income (loss) is comprised of net loss, gains and losses from the foreign currency translation of the assets and liabilities of our India and UK subsidiaries, and unrealized gains and losses on investments in available-for-sale securities. |
Adoption of New Accounting Principle | Adoption of New Accounting Principle In April 2015, the Financial Accounting Standards Board (FASB) issued guidance to simplify the presentation of debt issuance costs by requiring debt issuance costs to be presented as a deduction from the corresponding debt liability. This guidance is effective for our interim and annual periods beginning January 1, 2016. Upon adoption, the new guidance must be applied retrospectively to all periods presented. Accordingly, as of January 1, 2016, we reclassified $0.4 million and $3.0 million of capitalized debt issuance costs to senior secured notes, net, and liability related to the sale of future royalties, net, respectively, from our other assets balance. This reclassification has also been applied retrospectively to these balances in our Consolidated Balance Sheet as of December 31, 2015. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued guidance codified in Accounting Standards Codification (ASC) 606, Revenue Recognition — Revenue from Contracts with Customers, which amends the guidance in former ASC 605, Revenue Recognition, and is effective for public companies for annual and interim periods beginning after December 15, 2017. Numerous updates have been issued subsequent to the initial FASB guidance that provide clarification on a number of specific issues as well as requiring additional disclosures. We plan to adopt the standard in the first quarter of 2018 using the modified retrospective method. Although we are still evaluating our contracts and assessing all the potential impacts of the standard on existing arrangements we anticipate the adoption may have a material impact on our consolidated financial statements. Specifically, the new standard differs from the current accounting standard in many respects, such as in the accounting for variable consideration, including milestone payments or contingent payments from our collaboration partners. Under our current accounting policy, we recognize contingent or milestone payments as revenue in the period that the payment-triggering event occurred or is achieved. The new revenue standard, however, may require us to recognize these payments before the payment-triggering event is completely achieved, subject to management’s assessment of whether it is probable that the triggering event will be achieved and that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. In March 2016, the FASB issued guidance to simplify several aspects of employee share-based payment accounting, including income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This guidance will become effective for us beginning in the first quarter of 2017. We do not believe the adoption of this guidance will have a material impact on our consolidated financial statements. In February 2016, the FASB issued guidance to amend a number of aspects of lease accounting, including requiring lessees to recognize almost all leases with a term greater than one year as a right-of-use asset and corresponding liability, measured at the present value of the lease payments. The guidance will become effective for us beginning in the first quarter of 2019 and is required to be adopted using a modified retrospective approach. Early adoption is permitted. We are currently evaluating the impact of the adoption of this standard. |
Liability Related to Sale of Future Royalties | We periodically assess the estimated royalty payments to RPI from UCB and Roche and to the extent the amount or timing of such payments is materially different than our original estimates, we will prospectively adjust the amortization of the Royalty Obligation. |
Cash and Investments in Marke25
Cash and Investments in Marketable Securities (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Cash and Investments in Marketable Securities, Including Cash Equivalents and Restricted Cash | Cash and investments in marketable securities, including cash equivalents and restricted cash, are as follows (in thousands). Estimated Fair Value at December 31, 2016 December 31, 2015 Cash and cash equivalents $ 59,640 $ 55,570 Short-term investments 329,462 253,374 Total cash and investments in marketable securities $ 389,102 $ 308,944 |
Portfolio of Cash and Investments in Marketable Securities | Our portfolio of cash and investments in marketable securities includes (in thousands): Estimated Fair Value at Fair Value Hierarchy Level December 31, 2016 December 31, 2015 Corporate commercial paper 2 $ 160,920 $ 61,150 Corporate notes and bonds 2 156,044 181,969 Obligations of U.S. government agencies 2 13,749 7,325 Available-for-sale investments 330,713 250,444 Money market funds 1 51,104 53,728 Certificate of deposit N/A 2,930 2,930 Cash N/A 4,355 1,842 Total cash and investments in marketable securities $ 389,102 $ 308,944 |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventory consists of the following (in thousands): December 31, 2016 2015 Raw materials $ 2,055 $ 3,236 Work-in-process 7,311 6,087 Finished goods 1,743 2,023 Total inventory $ 11,109 $ 11,346 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property Plant And Equipment [Abstract] | |
Property, Plant and Equipment | Property, plant and equipment consists of the following (in thousands): December 31, 2016 2015 Building and leasehold improvements $ 75,137 $ 77,665 Manufacturing equipment 44,237 35,631 Laboratory equipment 27,424 27,309 Furniture, fixtures and other equipment 26,590 24,987 Depreciable property, plant and equipment at cost 173,388 165,592 Less: accumulated depreciation (111,243 ) (102,712 ) Depreciable property, plant and equipment, net 62,145 62,880 Construction-in-progress 3,456 8,456 Property, plant and equipment, net $ 65,601 $ 71,336 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Leases [Abstract] | |
Future Minimum Payments for Capital Leases | Future minimum payments for our capital leases at December 31, 2016 are as follows (in thousands): Year ending December 31, 2017 $ 3,270 2018 2,339 Total minimum payments required 5,609 Less: amount representing interest (478 ) Present value of future minimum lease payments 5,131 Less: current portion (2,908 ) Capital lease obligation, less current portion $ 2,223 |
Future Minimum Lease Payments for Operating Leases | Our future minimum lease payments for our operating leases at December 31, 2016 are as follows (in thousands): Year ending December 31, 2017 $ 5,037 2018 5,187 2019 5,344 2020 452 Total future minimum lease payments $ 16,020 |
Liability Related to the Sale29
Liability Related to the Sale of Future Royalties (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Liability Related To Sale Of Potential Future Royalties [Abstract] | |
Summary of Liability Related to Potential Future Royalties | The following table shows the activity within the liability account during the year ended December 31, 2016 and for the period from the inception of the royalty transaction on February 24, 2012 (inception) to December 31, 2016 (in thousands): Year ended December 31, 2016 Period from inception to December 31, 2016 Liability related to the sale of future royalties—beginning balance $ 119,032 $ — Proceeds from sale of future royalties — 124,000 Payments from Nektar to RPI — (10,000 ) Non-cash CIMZIA ® ® (30,158 ) (106,999 ) Non-cash interest expense recognized 19,712 101,585 Liability related to the sale of future royalties – ending balance 108,586 108,586 Less: unamortized transaction costs (2,636 ) (2,636 ) Liability related to the sale of future royalties, net $ 105,950 $ 105,950 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Summarization of Common Stock Shares for Issuance Under Existing Equity Compensation Plans | At December 31, 2016, we had 24,772,837 reserved shares of common stock, all of which are reserved for issuance under our equity compensation plans as summarized in the following table (share numbers in thousands): Plan Category Number of Securities to be Issued Upon Exercise of Outstanding Options & Vesting of RSUs (a) Weighted- Average Exercise Price of Outstanding Options (b) Number of Securities Remaining Available Issuance Equity Compensation Plans (Excluding Securities Reflected in Column(a) (c) Equity compensation plans approved by security holders(1) 20,218 $ 12.08 3,113 Equity compensation plans not approved by security holders 1,442 $ 11.18 — Total 21,660 $ 12.01 3,113 (1) Includes shares of common stock available for future issuance under our ESPP as of December 31, 2016. |
License and Collaboration Agr31
License and Collaboration Agreements (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
License, Collaboration and Other Revenue | In accordance with our collaboration agreements, we recognized license, collaboration and other revenue as follows (in thousands): Year Ended December 31, Partner Agreement 2016 2015 2014 AstraZeneca AB MOVANTIK ® ® combination program $ 33,000 $ 130,000 $ 105,001 Roche PEGASYS ® ® 7,685 12,816 12,845 Amgen, Inc. Neulasta ® 5,000 5,000 5,000 Daiichi Sankyo Europe GmbH ONZEALD TM 3,690 — — Bayer Healthcare LLC BAY41-6551 (Amikacin Inhale) 1,429 1,919 4,717 Baxalta Incorporated ADYNOVATE ® 650 10,694 10,258 Other 8,928 5,175 15,468 License, collaboration and other revenue $ 60,382 $ 165,604 $ 153,289 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Stock-Based Compensation Expense | We issue stock-based awards from our equity incentive plans, which are more fully described in Note 9. Stock-based compensation expense was recognized as follows (in thousands): Year Ended December 31, 2016 2015 2014 Cost of goods sold $ 1,620 $ 1,142 $ 1,161 Research and development 13,093 9,207 7,528 General and administrative 11,137 9,320 8,328 Total stock-based compensation $ 25,850 $ 19,669 $ 17,017 |
Black-Scholes Option-Pricing Model Assumptions Used to Calculate Fair Value of Employee Stock Options | The following table lists the Black-Scholes option-pricing model assumptions used to calculate the fair value of employee and director stock options. Year Ended December 31, 2016 2015 2014 Average risk-free interest rate 1.4 % 1.6 % 1.6 % Dividend yield 0.0 % 0.0 % 0.0 % Average volatility factor 51.7 % 50.8 % 51.6 % Average weighted average expected life 5.3 years 5.3 years 5.2 years |
Stock Option Activity Under Equity Incentive Plans | The table below presents a summary of stock option activity under our equity incentive plans (in thousands, except for price per share and contractual life information): Number of Shares Weighted- Average Exercise Price per Share Weighted- Average Remaining Contractual Life (in Years) Aggregate Intrinsic Value(1) Outstanding at December 31, 2015 18,782 $ 11.22 Options granted 3,368 13.92 Options exercised (2,337 ) 8.03 Options forfeited & canceled (400 ) 13.97 Outstanding at December 31, 2016 19,413 $ 12.01 4.61 $ 26,513 Vested and expected to vest at December 31, 2016 18,970 $ 11.97 4.55 $ 26,485 Exercisable at December 31, 2016 12,783 $ 10.94 3.49 $ 25,684 (1) Aggregate intrinsic value represents the difference between the exercise price of the option and the closing market price of our common stock on December 31, 2016. |
Restricted Stock Units (RSU) [Member] | |
Restricted Stock Unit Award Activity | A summary of RSU award activity is as follows (in thousands except for per share amounts): Units Issued Weighted- Average Grant Date Fair Value Aggregate Intrinsic Value(1) Balance at December 31, 2015 1,306 $ 15.30 Granted 1,493 12.50 Vested and released (491 ) 14.96 Forfeited and canceled (60 ) 14.87 Balance at December 31, 2016 2,248 $ 13.53 $ 27,593 (1) Aggregate intrinsic value represents the difference between the grant price of the award, which is zero, and the closing market price of our common stock on December 31, 2016. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Loss Before Provision (Benefit) for Income Taxes | Loss before provision (benefit) for income taxes includes the following components (in thousands): Year Ended December 31, 2016 2015 2014 Domestic $ (155,375 ) $ (81,931 ) $ (56,414 ) Foreign 2,727 1,260 1,986 Loss before provision (benefit) for income taxes $ (152,648 ) $ (80,671 ) $ (54,428 ) |
Provision (Benefit) for Income Taxes | The provision (benefit) for income taxes consists of the following (in thousands): Year Ended December 31, 2016 2015 2014 Current: Federal $ — $ — $ — State (1 ) (1 ) 1 Foreign 992 529 (482 ) Total Current 991 528 (481 ) Deferred: Federal — — — State — — — Foreign (115 ) (22 ) (31 ) Total Deferred (115 ) (22 ) (31 ) Provision (benefit) for income taxes $ 876 $ 506 $ (512 ) |
Income Tax Provision Related to Continuing Operations | Income tax provision related to continuing operations differs from the amount computed by applying the statutory income tax rate of 35% to pretax loss as follows (in thousands): Year Ended December 31, 2016 2015 2014 U.S. federal provision (benefit) At statutory rate $ (53,427 ) $ (28,235 ) $ (19,050 ) Change in valuation allowance 51,981 22,210 11,831 Non-cash interest expense on liability related to sale of future royalties 6,899 7,217 7,311 Stock-based compensation 528 674 2,832 Foreign tax deduction — 1,773 — Research credits (4,543 ) (4,529 ) (2,933 ) Other (562 ) 1,396 (503 ) Provision (benefit) for income taxes $ 876 $ 506 $ (512 ) |
Significant Components of Deferred Tax Assets and Liabilities | Significant components of our deferred tax assets for federal and state income taxes are as follows (in thousands): December 31, 2016 2015 Deferred tax assets: Net operating loss carryforwards $ 508,406 $ 447,761 Research and other credits 74,917 70,258 Stock-based compensation 26,357 22,832 Deferred revenue 23,035 29,658 Reserves and accruals 12,269 8,309 Capitalized research expenses 11,587 12,440 Property, plant and equipment 6,882 6,451 Sale of future royalties 1,611 12,319 Other 750 3,158 Deferred tax assets before valuation allowance 665,814 613,186 Valuation allowance for deferred tax assets (665,514 ) (612,996 ) Total deferred tax assets 300 190 Total deferred tax liabilities — — Net deferred tax assets $ 300 $ 190 |
Unrecognized Tax Benefits | We have the following activity relating to unrecognized tax benefits (in thousands): December 31, 2016 2015 2014 Beginning balance $ 17,384 $ 27,522 $ 16,363 Tax positions related to current year Additions: Federal 530 529 502 State 499 443 6,141 Reductions — — — Tax positions related to prior year Additions: Federal — — — State — — 5,258 Foreign — — — Reductions — (11,110 ) (742 ) Settlements — — — Lapses in statute of limitations — — — Ending balance $ 18,413 $ 17,384 $ 27,522 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Revenue by Geographic Area | Revenue by geographic area is based on the locations of our partners. The following table sets forth revenue by geographic area (in thousands): Year Ended December 31, 2016 2015 2014 United States $ 39,147 $ 40,400 $ 32,514 Europe 126,289 190,384 168,193 Total revenue $ 165,436 $ 230,784 $ 200,707 |
Selected Quarterly Financial 35
Selected Quarterly Financial Data (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data | The following table sets forth certain unaudited quarterly financial data. In our opinion, the unaudited information set forth below has been prepared on the same basis as our audited information and includes all adjustments necessary to present fairly the information set forth herein. We have experienced fluctuations in our quarterly results and expect these fluctuations to continue in the future. Due to these and other factors, we believe that quarter-to-quarter comparisons of our operating results will not be meaningful, and you should not rely on our results for any one quarter as an indication of our future performance. Certain items previously reported in specific financial statement captions have been reclassified to conform to the current period presentation. Such reclassifications have not materially impacted previously reported total revenues, operating loss or net loss. All data is in thousands except per share information. Year Ended December 31, 2016 Year Ended December 31, 2015 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Product sales $ 14,099 $ 12,867 $ 14,698 $ 13,690 $ 7,974 $ 10,968 $ 7,240 $ 13,973 Total revenue $ 58,882 $ 32,768 $ 36,336 $ 37,450 $ 108,801 $ 22,661 $ 59,952 $ 39,370 Cost of goods sold $ 8,870 $ 7,708 $ 7,033 $ 6,604 $ 8,444 $ 10,534 $ 6,760 $ 8,364 Research and development expenses $ 49,268 $ 52,350 $ 51,951 $ 50,232 $ 47,011 $ 45,412 $ 43,229 $ 47,135 Operating income (loss) $ (9,484 ) $ (38,325 ) $ (32,901 ) $ (32,145 ) $ 43,043 $ (43,469 ) $ 419 $ (29,364 ) Net income (loss) $ (19,498 ) $ (48,603 ) $ (43,224 ) $ (42,199 ) $ 33,820 $ (52,657 ) $ (8,203 ) $ (54,137 ) Net income (loss) per share(1) Basic $ (0.14 ) $ (0.36 ) $ (0.32 ) $ (0.28 ) $ 0.26 $ (0.40 ) $ (0.06 ) $ (0.40 ) Diluted $ (0.14 ) $ (0.36 ) $ (0.32 ) $ (0.28 ) $ 0.25 $ (0.40 ) $ (0.06 ) $ (0.40 ) (1) Quarterly loss per share amounts may not total to the year-to-date loss per share due to rounding. |
Organization and Summary of S36
Organization and Summary of Significant Accounting Policies - Additional Information (Detail) $ in Thousands, shares in Millions | Jan. 01, 2016USD ($) | Dec. 31, 2016USD ($)CustomerReporting_Unitshares | Dec. 31, 2015USD ($)Customershares | Dec. 31, 2014shares |
Organization And Summary Of Significant Accounting Policies [Line Items] | ||||
Cash and investments in marketable securities | $ 389,102 | $ 308,944 | ||
Senior secured notes | 250,000 | |||
Debt and capital lease obligation | 255,100 | |||
Capital lease obligations | 5,100 | |||
Capital lease obligations, current portion | $ 2,908 | $ 4,756 | ||
Number of customers accounted for major accounts receivable | Customer | 3 | 3 | ||
Percentage of accounts receivable customers one | 39.00% | 50.00% | ||
Percentage of accounts receivable customers two | 32.00% | 35.00% | ||
Percentage of accounts receivable customers three | 13.00% | 10.00% | ||
Number of reporting unit evaluated for goodwill | Reporting_Unit | 1 | |||
Minimum percentage of amount realized upon ultimate settlement | 50.00% | |||
Senior Secured Notes [Member] | ||||
Organization And Summary Of Significant Accounting Policies [Line Items] | ||||
Reclassification of capitalized issuance costs | $ 400 | |||
Liability Related To Future Royalties Liability Balances [Member] | ||||
Organization And Summary Of Significant Accounting Policies [Line Items] | ||||
Reclassification of capitalized issuance costs | $ 3,000 | |||
Stock Options and Restricted Stock Units [Member] | ||||
Organization And Summary Of Significant Accounting Policies [Line Items] | ||||
Weighted average diluted securities excluded from diluted net loss per share | shares | 19.9 | 21.1 | 21.9 | |
Buildings [Member] | ||||
Organization And Summary Of Significant Accounting Policies [Line Items] | ||||
Property and equipment estimated useful lives | 20 years | |||
Manufacturing Laboratory and Other Equipment [Member] | Minimum [Member] | ||||
Organization And Summary Of Significant Accounting Policies [Line Items] | ||||
Property and equipment estimated useful lives | 3 years | |||
Manufacturing Laboratory and Other Equipment [Member] | Maximum [Member] | ||||
Organization And Summary Of Significant Accounting Policies [Line Items] | ||||
Property and equipment estimated useful lives | 10 years |
Cash and Investments in Marke37
Cash and Investments in Marketable Securities - Cash and Investments in Marketable Securities, Including Cash Equivalents and Restricted Cash (Detail) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract] | ||||
Cash and cash equivalents | $ 59,640 | $ 55,570 | $ 12,365 | $ 39,067 |
Short-term investments | 329,462 | 253,374 | ||
Total cash and investments in marketable securities | $ 389,102 | $ 308,944 |
Cash and Investments in Marke38
Cash and Investments in Marketable Securities - Additional Information (Detail) - USD ($) | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Oct. 05, 2015 | |
Cash and Investments in Marketable Securities [Line Items] | ||||
Maximum maturity term for debt securities investment | Two years or less | |||
Weighted average maturity term for debt securities investment | One year or less | |||
Available-for-sale securities, sold | $ 4,969,000 | $ 42,544,000 | $ 21,661,000 | |
Level 1 to level 2 transfers | 0 | 0 | 0 | |
Level 2 to level 1 transfers | 0 | 0 | $ 0 | |
Letter of credit | $ 2,400,000 | $ 2,400,000 | ||
7.75% Senior Secured Notes Due October 2020 [Member] | ||||
Cash and Investments in Marketable Securities [Line Items] | ||||
Senior secured notes, interest rate | 7.75% | |||
Senior Notes [Member] | 7.75% Senior Secured Notes Due October 2020 [Member] | ||||
Cash and Investments in Marketable Securities [Line Items] | ||||
Senior secured notes, interest rate | 7.75% | 7.75% | ||
Senior secured notes, maturity date | Oct. 5, 2020 | |||
Minimum cash and investments in marketable securities to be maintained | $ 60,000,000 |
Cash and Investments in Marke39
Cash and Investments in Marketable Securities - Portfolio of Cash and Investments in Marketable Securities (Detail) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale investments | $ 330,713 | $ 250,444 |
Cash | 4,355 | 1,842 |
Total cash and investments in marketable securities | 389,102 | 308,944 |
Corporate Commercial Paper [Member] | Fair Value Hierarchy Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale investments | 160,920 | 61,150 |
Corporate Notes and Bonds [Member] | Fair Value Hierarchy Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale investments | 156,044 | 181,969 |
Obligations of U.S. government agencies [Member] | Fair Value Hierarchy Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale investments | 13,749 | 7,325 |
Money Market Funds [Member] | Fair Value Hierarchy Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments in marketable securities | 51,104 | 53,728 |
Certificates of Deposit [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments in marketable securities | $ 2,930 | $ 2,930 |
Inventory - Inventory (Detail)
Inventory - Inventory (Detail) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 2,055 | $ 3,236 |
Work-in-process | 7,311 | 6,087 |
Finished goods | 1,743 | 2,023 |
Total inventory | $ 11,109 | $ 11,346 |
Property, Plant and Equipment -
Property, Plant and Equipment - Property, Plant and Equipment (Detail) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment [Line Items] | ||
Depreciable property and equipment at cost | $ 173,388 | $ 165,592 |
Less: accumulated depreciation | (111,243) | (102,712) |
Depreciable property, plant and equipment, net | 62,145 | 62,880 |
Construction-in-progress | 3,456 | 8,456 |
Property plant and equipment, net | 65,601 | 71,336 |
Building and Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable property and equipment at cost | 75,137 | 77,665 |
Manufacturing Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable property and equipment at cost | 44,237 | 35,631 |
Laboratory Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable property and equipment at cost | 27,424 | 27,309 |
Furniture, Fixtures and Other Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Depreciable property and equipment at cost | $ 26,590 | $ 24,987 |
Property, Plant and Equipment42
Property, Plant and Equipment - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Property Plant And Equipment [Abstract] | |||
Depreciation expense | $ 13.2 | $ 11.4 | $ 11.7 |
Senior Secured Notes - Addition
Senior Secured Notes - Additional Information (Detail) - USD ($) | Oct. 05, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Line of Credit Facility [Line Items] | ||||
Cash paid for interest | $ 20,589,000 | $ 20,225,000 | $ 17,445,000 | |
Loss on extinguishment of debt | 0 | 14,079,000 | 0 | |
Write-off of unamortized issuance costs | $ 0 | 1,579,000 | $ 0 | |
Percentage of repurchase of notes on principal amount of notes | 101.00% | |||
Percentage of repurchase of notes on principal amount of notes upon sale of assets | 100.00% | |||
Senior secured notes, principal amount | $ 250,000,000 | |||
7.75% Senior Secured Notes Due October 2020 [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Senior secured notes, interest rate | 7.75% | |||
Senior Notes [Member] | 7.75% Senior Secured Notes Due October 2020 [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Senior secured notes, issued | $ 250,000,000 | |||
Senior secured notes, interest rate | 7.75% | 7.75% | ||
Senior secured notes, maturity date | Oct. 5, 2020 | |||
Frequency of payment | Quarterly | |||
Issuance costs | $ 8,900,000 | |||
Debt discount on transaction and facility fees | 8,700,000 | |||
Unamortized debt discount and issuance costs | $ 6,500,000 | |||
Debt instrument term | 5 years | |||
Senior secured notes, cash received | $ 100,300,000 | |||
Minimum cash and investments in marketable securities to be maintained | $ 60,000,000 | |||
Senior Notes [Member] | 7.75% Senior Secured Notes Due October 2020 [Member] | Level 3 [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Senior secured notes, principal amount | $ 250,000,000 | |||
Senior Notes [Member] | 12% Senior Secured Notes Due July 2017 [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Senior secured notes, interest rate | 12.00% | |||
Senior secured notes, maturity date | Jul. 15, 2017 | |||
Repayment of senior secured notes | $ 125,000,000 | |||
Accrued interest paid on 12% notes at redemption | 3,300,000 | |||
Redemption premium | 12,500,000 | 11,300,000 | ||
Cash paid for interest | $ 1,200,000 | 1,200,000 | ||
Loss on extinguishment of debt | 14,100,000 | |||
Write-off of unamortized issuance costs | $ 1,600,000 |
Leases - Additional Information
Leases - Additional Information (Detail) $ in Millions | 12 Months Ended | |||
Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2009ft² | |
Leases [Line Items] | ||||
Book value of assets, gross | $ 8.2 | $ 5.1 | ||
Net book value of assets | $ 7.4 | 3.2 | ||
San Carlos facility capital leases, end date | Oct. 5, 2016 | |||
Operating Sublease term commenced start date | 2010-08 | |||
Operating Sublease term commenced period | 114 months | |||
Operating Sublease term commenced end date | Jan. 31, 2020 | |||
Rent expense | $ 3.2 | 3.2 | $ 3.2 | |
Deferred rent | $ 6.6 | $ 8.5 | ||
Pfizer, Inc. [Member] | ||||
Leases [Line Items] | ||||
Operating sublease | ft² | 126,285 |
Leases - Future Minimum Payment
Leases - Future Minimum Payments for Capital Leases (Detail) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Leases [Abstract] | ||
2,017 | $ 3,270 | |
2,018 | 2,339 | |
Total minimum payments required | 5,609 | |
Less: amount representing interest | (478) | |
Present value of future minimum lease payments | 5,131 | |
Less: current portion | (2,908) | $ (4,756) |
Capital lease obligation, less current portion | $ 2,223 | $ 1,073 |
Leases - Future Minimum Lease P
Leases - Future Minimum Lease Payments for Operating Leases (Detail) $ in Thousands | Dec. 31, 2016USD ($) |
Leases [Abstract] | |
2,017 | $ 5,037 |
2,018 | 5,187 |
2,019 | 5,344 |
2,020 | 452 |
Total future minimum lease payments | $ 16,020 |
Liability Related to the Sale47
Liability Related to the Sale of Future Royalties - Additional Information (Detail) - USD ($) $ in Thousands | Feb. 24, 2012 | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2016 |
Liability Related to the Sale of Future Royalties [Line Items] | |||||||
Royalty agreement contingent payment description | As a result of worldwide net sales of MIRCERA? for the 12 month periods ended December?31, 2013 and 2012 not reaching certain minimum thresholds. | ||||||
Non-cash royalty revenue related to sale of future royalties | $ 30,158 | $ 22,058 | $ 21,937 | $ 106,999 | |||
Non-cash interest expense on liability related to sale of future royalties | $ 19,712 | $ 20,619 | $ 20,888 | $ 101,585 | |||
Annual interest rate | 17.00% | ||||||
Purchase and Sale Agreement with RPI [Member] | |||||||
Liability Related to the Sale of Future Royalties [Line Items] | |||||||
Proceeds from sale of royalty rights | $ 124,000 | ||||||
Transaction costs related to sale of potential future royalties | $ 4,400 | ||||||
Payment made for milestone not achieved year two | $ 7,000 | ||||||
Payment made for milestone not achieved year one | $ 3,000 |
Liability Related to the Sale48
Liability Related to the Sale of Future Royalties - Summary of Liability Related to Potential Future Royalties (Detail) - USD ($) $ in Thousands | 12 Months Ended | 58 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2016 | |
Other Liabilities Disclosure [Abstract] | ||||
Liability related to the sale of future royalties—beginning balance | $ 119,032 | $ 0 | ||
Proceeds from sale of future royalties | 0 | 124,000 | ||
Payments from Nektar to RPI | 0 | (10,000) | ||
Non-cash CIMZIA® and MIRCERA® royalty revenue | (30,158) | $ (22,058) | $ (21,937) | (106,999) |
Non-cash interest expense recognized | 19,712 | 20,619 | $ 20,888 | 101,585 |
Liability related to the sale of future royalties – ending balance | 108,586 | 119,032 | 108,586 | |
Less: unamortized transaction costs | (2,636) | (2,636) | ||
Liability related to the sale of future royalties, net | $ 105,950 | $ 116,029 | $ 105,950 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Aug. 14, 2015 | |
Loss Contingencies [Line Items] | ||||
Royalty expense | $ 3,700,000 | $ 2,800,000 | $ 3,400,000 | |
Purchase commitments related to contract manufacturing, clinical development and certain other items | 5,800,000 | |||
Damage claim for alleged unpaid licenses | $ 1,500,000 | |||
Indemnification obligations, liabilities | 0 | 0 | ||
Indemnification Obligation [Member] | ||||
Loss Contingencies [Line Items] | ||||
Indemnification obligations, liabilities | 0 | $ 0 | ||
Merger and Acquisition Related Claims [Member] | ||||
Loss Contingencies [Line Items] | ||||
Obligations under Director and Officer Indemnifications per incident | 1,500,000 | |||
Securities Related Claims [Member] | ||||
Loss Contingencies [Line Items] | ||||
Obligations under Director and Officer Indemnifications per incident | 1,300,000 | |||
Non-Securities Related Claims [Member] | ||||
Loss Contingencies [Line Items] | ||||
Obligations under Director and Officer Indemnifications per incident | $ 500,000 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - USD ($) | Oct. 24, 2016 | Jun. 16, 2015 | Jan. 28, 2014 | Jun. 28, 2012 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Class of Stock [Line Items] | |||||||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | |||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | |||||
Preferred stock, shares designated | 0 | 0 | |||||
Preferred stock, shares issued | 0 | 0 | |||||
Preferred stock, shares outstanding | 0 | 0 | |||||
Proceeds from sale of common stock | $ 189,700,000 | $ 117,200,000 | |||||
Common stock, shares authorized | 300,000,000 | 300,000,000 | |||||
Maximum 401(k) per employee, percentage of annual salary | 60.00% | ||||||
Compensation expense in connection with 401(k) retirement plan | $ 1,100,000 | $ 900,000 | $ 900,000 | ||||
Change in control severance payment period for executives | 12 months | ||||||
Change in control severance payment period for employees | 6 months | ||||||
Change in control cash severance payment for chief executive officer | 24 months base salary plus annual target incentive pay | ||||||
Employee Stock Purchase Plan [Member] | |||||||
Class of Stock [Line Items] | |||||||
Common stock, shares authorized | 2,500,000 | ||||||
Percentage of purchase price of stock | 85.00% | ||||||
Maximum [Member] | |||||||
Class of Stock [Line Items] | |||||||
Matching 401(k) employer contribution, maximum amount | $ 3,000 | ||||||
2012 Performance Incentive Plan [Member] | |||||||
Class of Stock [Line Items] | |||||||
Additional new shares available for award grants | 7,000,000 | 5,300,000 | |||||
Share-based compensation plan's share limit reduction for every one restricted stock unit granted | 1.5 | ||||||
2012 Performance Incentive Plan [Member] | Maximum [Member] | |||||||
Class of Stock [Line Items] | |||||||
Number of common stock shares available for stock options grants | 19,936,433 | ||||||
Stock options term under equity incentive plans | 8 years | ||||||
2012 Performance Incentive Plan [Member] | Employee [Member] | |||||||
Class of Stock [Line Items] | |||||||
Service period for stock-based compensation award granted | 3 years | ||||||
2012 Performance Incentive Plan [Member] | Director [Member] | |||||||
Class of Stock [Line Items] | |||||||
Service period for stock-based compensation award granted | 1 year | ||||||
2012 Performance Incentive Plan [Member] | Stock Options [Member] | Employee [Member] | |||||||
Class of Stock [Line Items] | |||||||
Service period for stock-based compensation award granted | 4 years | ||||||
2012 Performance Incentive Plan [Member] | Stock Options [Member] | Director [Member] | |||||||
Class of Stock [Line Items] | |||||||
Service period for stock-based compensation award granted | 1 year | ||||||
2000 Non-Officer Equity Incentive Plan [Member] | |||||||
Class of Stock [Line Items] | |||||||
Stock options term under equity incentive plans | 8 years | ||||||
Common Shares [Member] | |||||||
Class of Stock [Line Items] | |||||||
Sale of common stock, Shares | 14,950,000 | 9,775,000 | 14,950,000 | 9,775,000 | |||
Underwriting commissions and discounts | $ 12,100,000 | $ 7,500,000 | |||||
Legal, accounting fees, filing fees and other offering expenses | $ 400,000 | $ 600,000 | |||||
Common stock, shares reserved for issuance in equity compensation plans | 24,772,837 |
Stockholders' Equity - Summariz
Stockholders' Equity - Summarization of Common Stock Shares for Issuance Under Existing Equity Compensation Plans (Detail) shares in Thousands | Dec. 31, 2016$ / sharesshares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Securities to be Issued Upon Exercise of Outstanding Options & Vesting of RSUs | 21,660 |
Weighted-Average Exercise Price of Outstanding Options | $ / shares | $ 12.01 |
Number of Securities Remaining Available for Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column) | 3,113 |
Equity Compensation Plans Approved by Security Holders [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Securities to be Issued Upon Exercise of Outstanding Options & Vesting of RSUs | 20,218 |
Weighted-Average Exercise Price of Outstanding Options | $ / shares | $ 12.08 |
Number of Securities Remaining Available for Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column) | 3,113 |
Equity Compensation Plans Not Approved by Security Holders [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Securities to be Issued Upon Exercise of Outstanding Options & Vesting of RSUs | 1,442 |
Weighted-Average Exercise Price of Outstanding Options | $ / shares | $ 11.18 |
Number of Securities Remaining Available for Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column) | 0 |
License and Collaboration Agr52
License and Collaboration Agreements - License, Collaboration and Other Revenue (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
License And Collaboration Agreements [Line Items] | |||
License, collaboration and other revenue | $ 60,382 | $ 165,604 | $ 153,289 |
AstraZeneca AB [Member] | MOVANTIK and MOVANTIK fixed-dose combination program [Member] | |||
License And Collaboration Agreements [Line Items] | |||
License, collaboration and other revenue | 33,000 | 130,000 | 105,001 |
Roche [Member] | PEGASYS and MIRCERA [Member] | |||
License And Collaboration Agreements [Line Items] | |||
License, collaboration and other revenue | 7,685 | 12,816 | 12,845 |
Amgen, Inc. [Member] | Neulasta [Member] | |||
License And Collaboration Agreements [Line Items] | |||
License, collaboration and other revenue | 5,000 | 5,000 | 5,000 |
Daiichi Sankyo Europe GmbH [Member] | ONZEALDTM (NKTR-102) [Member] | |||
License And Collaboration Agreements [Line Items] | |||
License, collaboration and other revenue | 3,690 | 0 | 0 |
Bayer Healthcare LLC [Member] | BAY41-6551 (Amikacin Inhale) [Member] | |||
License And Collaboration Agreements [Line Items] | |||
License, collaboration and other revenue | 1,429 | 1,919 | 4,717 |
Baxalta Incorporated [Member] | ADYNOVATE [Member] | |||
License And Collaboration Agreements [Line Items] | |||
License, collaboration and other revenue | 650 | 10,694 | 10,258 |
Other [Member] | |||
License And Collaboration Agreements [Line Items] | |||
License, collaboration and other revenue | $ 8,928 | $ 5,175 | $ 15,468 |
License and Collaboration Agr53
License and Collaboration Agreements - Additional Information (Detail) - USD ($) | Sep. 21, 2016 | May 30, 2016 | Mar. 01, 2016 | Sep. 16, 2014 | Aug. 31, 2016 | Apr. 30, 2016 | Nov. 30, 2015 | Aug. 31, 2015 | Mar. 31, 2015 | Sep. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2013 | Feb. 29, 2012 | Dec. 31, 2010 | Dec. 31, 2009 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2007 | Jul. 31, 2016 | Jul. 31, 2015 |
Deferred Revenue Arrangement [Line Items] | ||||||||||||||||||||||
Potential future additional payments for development milestones | $ 147,000,000 | |||||||||||||||||||||
Liability for refundable upfront payment | 12,500,000 | $ 0 | ||||||||||||||||||||
Accounts receivable | 15,678,000 | 19,947,000 | ||||||||||||||||||||
AstraZeneca-Kirin [Member] | ||||||||||||||||||||||
Deferred Revenue Arrangement [Line Items] | ||||||||||||||||||||||
Percentage of upfront payment, market access milestones, royalties and sales milestones | 40.00% | |||||||||||||||||||||
ONZEALDTM (NKTR-102) [Member] | Turkey [Member] | ||||||||||||||||||||||
Deferred Revenue Arrangement [Line Items] | ||||||||||||||||||||||
Percentage of royalty on net sales | 15.00% | |||||||||||||||||||||
AstraZeneca AB [Member] | United States [Member] | ||||||||||||||||||||||
Deferred Revenue Arrangement [Line Items] | ||||||||||||||||||||||
Liability to AZ for DTC advertising payments | $ 10,000,000 | $ 5,000,000 | $ 5,000,000 | |||||||||||||||||||
Reduction of revenue | $ (10,000,000) | |||||||||||||||||||||
AstraZeneca AB [Member] | MOVANTIK and MOVANTIK fixed-dose combination program [Member] | Upfront Payment Arrangement [Member] | ||||||||||||||||||||||
Deferred Revenue Arrangement [Line Items] | ||||||||||||||||||||||
Received upfront and milestone payments | $ 125,000,000 | |||||||||||||||||||||
AstraZeneca AB [Member] | MOVANTIK Fixed-dose Combination Program [Member] | ||||||||||||||||||||||
Deferred Revenue Arrangement [Line Items] | ||||||||||||||||||||||
Potential contingent payments based on development events | 75,000,000 | |||||||||||||||||||||
AstraZeneca AB [Member] | MOVANTIK [Member] | ||||||||||||||||||||||
Deferred Revenue Arrangement [Line Items] | ||||||||||||||||||||||
Received upfront and milestone payments | $ 100,000,000 | |||||||||||||||||||||
Development milestones achieved | $ 105,000,000 | |||||||||||||||||||||
Percentage of post approval study costs to repay | 33.00% | |||||||||||||||||||||
Maximum potential reduction in royalties | $ 35,000,000 | |||||||||||||||||||||
AstraZeneca AB [Member] | MOVANTIK [Member] | United States [Member] | ||||||||||||||||||||||
Deferred Revenue Arrangement [Line Items] | ||||||||||||||||||||||
Potential reduction in U.S. royalty rate for repayment | 2.00% | |||||||||||||||||||||
AstraZeneca AB [Member] | MOVANTIK [Member] | European Union [Member] | ||||||||||||||||||||||
Deferred Revenue Arrangement [Line Items] | ||||||||||||||||||||||
Received upfront and milestone payments | $ 40,000,000 | |||||||||||||||||||||
AstraZeneca AB [Member] | AstraZeneca-Kirin [Member] | ||||||||||||||||||||||
Deferred Revenue Arrangement [Line Items] | ||||||||||||||||||||||
Received upfront and milestone payments | $ 28,000,000 | 5,000,000 | ||||||||||||||||||||
Upfront and milestone payments received by Our collaboration partner under sublicense arrangement | $ 70,000,000 | |||||||||||||||||||||
Percentage of upfront milestones royalty and sales milestone payments from sublicense agreement retained by our collaboration partner | 60.00% | |||||||||||||||||||||
Deferred revenue | 0 | |||||||||||||||||||||
Daiichi Sankyo Europe GmbH [Member] | ONZEALDTM (NKTR-102) [Member] | ||||||||||||||||||||||
Deferred Revenue Arrangement [Line Items] | ||||||||||||||||||||||
Eligible milestone payments receivable upon achievement of regulatory and commercial milestones | $ 60,000,000 | |||||||||||||||||||||
Milestone payments to be received upon first commercial sales | 10,000,000 | |||||||||||||||||||||
Milestone payment to be received upon first commercial sale after final regulatory approval | 25,000,000 | |||||||||||||||||||||
Milestone payments to be received upon first achievement of annual net sales target | $ 25,000,000 | |||||||||||||||||||||
Liability for refundable upfront payment | 12,500,000 | |||||||||||||||||||||
Daiichi Sankyo Europe GmbH [Member] | ONZEALDTM (NKTR-102) [Member] | European Territory Except Turkey [Member] | ||||||||||||||||||||||
Deferred Revenue Arrangement [Line Items] | ||||||||||||||||||||||
Percentage of royalty on net sales | 20.00% | |||||||||||||||||||||
Daiichi Sankyo Europe GmbH [Member] | ONZEALDTM (NKTR-102) [Member] | Upfront Payment Arrangement [Member] | ||||||||||||||||||||||
Deferred Revenue Arrangement [Line Items] | ||||||||||||||||||||||
Received upfront and milestone payments | $ 20,000,000 | |||||||||||||||||||||
Deferred revenue | 3,800,000 | |||||||||||||||||||||
Non-refundable portion of upfront payment | $ 7,500,000 | |||||||||||||||||||||
Revenue recognized from upfront payment | 3,700,000 | |||||||||||||||||||||
Baxalta Incorporated [Member] | ADYNOVATE (Hemophilia) [Member] | ||||||||||||||||||||||
Deferred Revenue Arrangement [Line Items] | ||||||||||||||||||||||
Development milestones achieved | $ 10,000,000 | $ 8,000,000 | ||||||||||||||||||||
Deferred revenue | 0 | |||||||||||||||||||||
Baxalta Incorporated [Member] | ADYNOVATE (Hemophilia) [Member] | European Union [Member] | ||||||||||||||||||||||
Deferred Revenue Arrangement [Line Items] | ||||||||||||||||||||||
Potential future additional payments for development milestones | 10,000,000 | |||||||||||||||||||||
Roche [Member] | MIRCERA [Member] | ||||||||||||||||||||||
Deferred Revenue Arrangement [Line Items] | ||||||||||||||||||||||
Consideration received for product delivered | $ 18,600,000 | |||||||||||||||||||||
Roche [Member] | MIRCERA [Member] | Performance-based Milestone Payments [Member] | ||||||||||||||||||||||
Deferred Revenue Arrangement [Line Items] | ||||||||||||||||||||||
Received upfront and milestone payments | $ 22,000,000 | |||||||||||||||||||||
Roche [Member] | MIRCERA [Member] | Upfront Payment Arrangement [Member] | ||||||||||||||||||||||
Deferred Revenue Arrangement [Line Items] | ||||||||||||||||||||||
Received upfront and milestone payments | $ 5,000,000 | |||||||||||||||||||||
Roche [Member] | PEGASYS and MIRCERA [Member] | ||||||||||||||||||||||
Deferred Revenue Arrangement [Line Items] | ||||||||||||||||||||||
Deferred revenue | 0 | |||||||||||||||||||||
Amgen, Inc. [Member] | ||||||||||||||||||||||
Deferred Revenue Arrangement [Line Items] | ||||||||||||||||||||||
Received upfront and milestone payments | $ 50,000,000 | |||||||||||||||||||||
Deferred revenue | 19,200,000 | |||||||||||||||||||||
Bayer Healthcare LLC [Member] | ||||||||||||||||||||||
Deferred Revenue Arrangement [Line Items] | ||||||||||||||||||||||
Potential future additional payments for development milestones | 50,000,000 | |||||||||||||||||||||
Deferred revenue | 17,900,000 | |||||||||||||||||||||
Payment made to Bayer for cost of Phase 3 clinical trial | $ 10,000,000 | |||||||||||||||||||||
Potential future development milestones related to successful regulatory approval filling | 25,000,000 | |||||||||||||||||||||
Bayer Healthcare LLC [Member] | Performance-based Milestone Payments [Member] | ||||||||||||||||||||||
Deferred Revenue Arrangement [Line Items] | ||||||||||||||||||||||
Received upfront and milestone payments | $ 30,000,000 | |||||||||||||||||||||
Bayer Healthcare LLC [Member] | Upfront Payment Arrangement [Member] | ||||||||||||||||||||||
Deferred Revenue Arrangement [Line Items] | ||||||||||||||||||||||
Received upfront and milestone payments | $ 40,000,000 | |||||||||||||||||||||
Ophthotech Corporation [Member] | Fovista [Member] | ||||||||||||||||||||||
Deferred Revenue Arrangement [Line Items] | ||||||||||||||||||||||
Received upfront and milestone payments | $ 19,800,000 | |||||||||||||||||||||
Deferred revenue | 16,800,000 | |||||||||||||||||||||
Accounts receivable | $ 6,100,000 | |||||||||||||||||||||
Bristol-Myers Squibb [Member] | NKTR-214 [Member] | ||||||||||||||||||||||
Deferred Revenue Arrangement [Line Items] | ||||||||||||||||||||||
Percentage of out-of-pocket costs reimbursed by partner | 50.00% | |||||||||||||||||||||
License agreement exclusivity expiration date | Sep. 30, 2018 | |||||||||||||||||||||
License agreement exclusivity negotiation period | 3 months | |||||||||||||||||||||
Other [Member] | ||||||||||||||||||||||
Deferred Revenue Arrangement [Line Items] | ||||||||||||||||||||||
Potential future additional payments for development milestones | $ 45,500,000 | |||||||||||||||||||||
Deferred revenue | $ 8,600,000 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock-Based Compensation Expense (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation | $ 25,850 | $ 19,669 | $ 17,017 |
Cost of Goods Sold [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation | 1,620 | 1,142 | 1,161 |
Research and Development Expense [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation | 13,093 | 9,207 | 7,528 |
General and Administrative Expense [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation | $ 11,137 | $ 9,320 | $ 8,328 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2012 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total unrecognized compensation costs | $ 71.2 | |||
Recognized over a weighted-average period | 1 year 9 months 18 days | |||
Dividend yield | 0.00% | 0.00% | 0.00% | |
Stock Options [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Dividend yield | 0.00% | |||
Weighted-average grant-date fair value | $ 6.54 | $ 6.55 | $ 6.50 | |
Total intrinsic value of options exercised | $ 17.9 | $ 20.5 | $ 25.9 | |
Estimated fair value of options vested | $ 16.7 | $ 16.8 | $ 15.2 | |
Restricted Stock Units (RSU) [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Awards vested | 491,000 | 0 | ||
Awards granted | 1,493,000 | 0 |
Stock-Based Compensation - Blac
Stock-Based Compensation - Black-Scholes Option-Pricing Model Assumptions Used to Calculate Fair Value of Employee Stock Options (Detail) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |||
Average risk-free interest rate | 1.40% | 1.60% | 1.60% |
Dividend yield | 0.00% | 0.00% | 0.00% |
Average volatility factor | 51.70% | 50.80% | 51.60% |
Average weighted average expected life | 5 years 3 months 18 days | 5 years 3 months 18 days | 5 years 2 months 12 days |
Stock-Based Compensation - St57
Stock-Based Compensation - Stock Option Activity Under Equity Incentive Plans (Detail) - Stock Options [Member] $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Shares, Outstanding, Beginning balance | shares | 18,782 |
Number of Shares, Options granted | shares | 3,368 |
Number of Shares, Options exercised | shares | (2,337) |
Number of Shares, Options forfeited and canceled | shares | (400) |
Number of Shares, Outstanding, Ending balance | shares | 19,413 |
Number of Shares, Vested and Expected to Vest | shares | 18,970 |
Number of Shares, Exercisable | shares | 12,783 |
Weighted-Average Exercise Price per Share, Outstanding, Beginning balance | $ / shares | $ 11.22 |
Weighted-Average Exercise Price per Share, Options granted | $ / shares | 13.92 |
Weighted-Average Exercise Price per Share, Options exercised | $ / shares | 8.03 |
Weighted-Average Exercise Price per Share, Options forfeited and Canceled | $ / shares | 13.97 |
Weighted-Average Exercise Price per Share, Outstanding, Ending balance | $ / shares | 12.01 |
Weighted-Average Exercise Price per Share, Vested and expected to vest | $ / shares | 11.97 |
Weighted-Average Exercise Price per Share, Exercisable | $ / shares | $ 10.94 |
Weighted-Average Remaining Contractual Life, Outstanding | 4 years 7 months 10 days |
Weighted-Average Remaining Contractual Life, Vested and expected to Vest | 4 years 6 months 18 days |
Weighted-Average Remaining Contractual Life, Exercisable | 3 years 5 months 27 days |
Aggregate Intrinsic Value, Outstanding | $ | $ 26,513 |
Aggregate Intrinsic Value, Vested and expected to Vest | $ | 26,485 |
Aggregate Intrinsic Value, Exercisable | $ | $ 25,684 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Unit Award Activity (Detail) - Restricted Stock Units (RSU) [Member] - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Units Issued, Beginning balance | 1,306,000 | ||
Granted | 1,493,000 | 0 | |
Vested and released | (491,000) | 0 | |
Forfeited and canceled | (60,000) | ||
Units Issued, Ending balance | 2,248,000 | 1,306,000 | |
Weighted Average Grant Date Fair Value, Beginning balance | $ 15.30 | ||
Weighted Average Grant Date Fair Value, Granted | 12.50 | ||
Weighted Average Grant Date Fair Value, Vested and released | 14.96 | ||
Weighted Average Grant Date Fair Value, Forfeited and canceled | 14.87 | ||
Weighted Average Grant Date Fair Value, Ending balance | $ 13.53 | $ 15.30 | |
Aggregate Intrinsic Value, Ending balance | $ 27,593 |
Stock-Based Compensation - Re59
Stock-Based Compensation - Restricted Stock Unit Award Activity (Parenthetical) (Detail) | 12 Months Ended |
Dec. 31, 2016$ / shares | |
Restricted Stock Units (RSU) [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Grant price of the award | $ 0 |
Income Taxes - Loss Before Prov
Income Taxes - Loss Before Provision (Benefit) for Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ (155,375) | $ (81,931) | $ (56,414) |
Foreign | 2,727 | 1,260 | 1,986 |
Loss before provision (benefit) for income taxes | $ (152,648) | $ (80,671) | $ (54,428) |
Income Taxes - Provision (Benef
Income Taxes - Provision (Benefit) for Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Current: | |||
Federal | $ 0 | $ 0 | $ 0 |
State | (1) | (1) | 1 |
Foreign | 992 | 529 | (482) |
Total Current | 991 | 528 | (481) |
Deferred: | |||
Federal | 0 | 0 | 0 |
State | 0 | 0 | 0 |
Foreign | (115) | (22) | (31) |
Total Deferred | (115) | (22) | (31) |
Provision (benefit) for income taxes | $ 876 | $ 506 | $ (512) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Taxes Disclosure [Line Items] | |||
Statutory income tax rate | 35.00% | ||
Increase in valuation allowance | $ 52,500 | $ 17,300 | |
Valuation allowance related to stock-based compensation and exercises prior to the implementation of ASC 515 and 718 | 35,600 | 35,600 | |
Deferred U.S. income taxes | 0 | 0 | $ 0 |
Income taxes have not been provided on a cumulative total | 3,400 | ||
Income tax research credits | 4,543 | $ 4,529 | $ 2,933 |
Federal orphan drug credits | $ 17,700 | ||
Federal orphan drug credits, expiration year | 2,026 | ||
Unrecognized tax benefits, period may increase or decrease due to tax examination | Next twelve months | ||
Federal [Member] | |||
Income Taxes Disclosure [Line Items] | |||
Net operating loss carryforward for income tax | $ 1,413,300 | ||
Net operating loss carryforward, expiration year | 2,018 | ||
Income tax research credits | $ 50,100 | ||
Income tax research credits, expiration year | 2,019 | ||
State [Member] | |||
Income Taxes Disclosure [Line Items] | |||
Net operating loss carryforward for income tax | $ 473,600 | ||
Net operating loss carryforward, expiration year | 2,017 | ||
Income tax research credits | $ 25,200 |
Income Taxes - Income Tax Provi
Income Taxes - Income Tax Provision Related to Continuing Operations (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
U.S. federal provision (benefit) | |||
At statutory rate | $ (53,427) | $ (28,235) | $ (19,050) |
Change in valuation allowance | 51,981 | 22,210 | 11,831 |
Non-cash interest expense on liability related to sale of future royalties | 6,899 | 7,217 | 7,311 |
Stock-based compensation | 528 | 674 | 2,832 |
Foreign tax deduction | 0 | 1,773 | 0 |
Research credits | (4,543) | (4,529) | (2,933) |
Other | (562) | 1,396 | (503) |
Provision (benefit) for income taxes | $ 876 | $ 506 | $ (512) |
Income Taxes - Significant Comp
Income Taxes - Significant Components of Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 508,406 | $ 447,761 |
Research and other credits | 74,917 | 70,258 |
Stock-based compensation | 26,357 | 22,832 |
Deferred revenue | 23,035 | 29,658 |
Reserves and accruals | 12,269 | 8,309 |
Capitalized research expenses | 11,587 | 12,440 |
Property, plant and equipment | 6,882 | 6,451 |
Sale of future royalties | 1,611 | 12,319 |
Other | 750 | 3,158 |
Deferred tax assets before valuation allowance | 665,814 | 613,186 |
Valuation allowance for deferred tax assets | (665,514) | (612,996) |
Total deferred tax assets | 300 | 190 |
Total deferred tax liabilities | 0 | 0 |
Net deferred tax assets | $ 300 | $ 190 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Contingency [Line Items] | |||
Beginning balance | $ 17,384 | $ 27,522 | $ 16,363 |
Reductions | 0 | 0 | 0 |
Reductions | 0 | (11,110) | (742) |
Settlements | 0 | 0 | 0 |
Lapses in statute of limitations | 0 | 0 | 0 |
Ending balance | 18,413 | 17,384 | 27,522 |
Federal [Member] | |||
Income Tax Contingency [Line Items] | |||
Tax positions related to current year, Additions | 530 | 529 | 502 |
Tax positions related to prior year, Additions | 0 | 0 | 0 |
State [Member] | |||
Income Tax Contingency [Line Items] | |||
Tax positions related to current year, Additions | 499 | 443 | 6,141 |
Tax positions related to prior year, Additions | 0 | 0 | 5,258 |
Foreign [Member] | |||
Income Tax Contingency [Line Items] | |||
Tax positions related to prior year, Additions | $ 0 | $ 0 | $ 0 |
Segment Reporting - Additional
Segment Reporting - Additional Information (Detail) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016USD ($)Segment | Dec. 31, 2015USD ($) | Dec. 31, 2014 | |
Segment Reporting Information [Line Items] | |||
Number of operating business segment | Segment | 1 | ||
Property, plant and equipment, net | $ 65,601 | $ 71,336 | |
United States [Member] | |||
Segment Reporting Information [Line Items] | |||
Property, plant and equipment, net | $ 48,800 | $ 54,200 | |
Percentage of net book value of property and equipment | 74.00% | 76.00% | |
India [Member] | |||
Segment Reporting Information [Line Items] | |||
Property, plant and equipment, net | $ 5,600 | $ 6,000 | |
Percentage of net book value of property and equipment | 9.00% | 8.00% | |
Germany and Netherlands [Member] | |||
Segment Reporting Information [Line Items] | |||
Property, plant and equipment, net | $ 10,400 | $ 11,100 | |
Percentage of net book value of property and equipment | 16.00% | 16.00% | |
Other Countries [Member] | |||
Segment Reporting Information [Line Items] | |||
Property, plant and equipment, net | $ 800 | ||
Percentage of net book value of property and equipment | 1.00% | ||
Revenue [Member] | AstraZeneca [Member] | Customer Concentration Risk [Member] | |||
Segment Reporting Information [Line Items] | |||
Percentage revenue from clients | 29.00% | 57.00% | 52.00% |
Revenue [Member] | UCB [Member] | Customer Concentration Risk [Member] | |||
Segment Reporting Information [Line Items] | |||
Percentage revenue from clients | 21.00% | 13.00% | 16.00% |
Revenue [Member] | Ophthotech Corporation [Member] | Customer Concentration Risk [Member] | |||
Segment Reporting Information [Line Items] | |||
Percentage revenue from clients | 19.00% | ||
Revenue [Member] | Roche [Member] | Customer Concentration Risk [Member] | |||
Segment Reporting Information [Line Items] | |||
Percentage revenue from clients | 11.00% | 11.00% |
Segment Reporting - Revenue by
Segment Reporting - Revenue by Geographic Area (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenue by geographic area | |||||||||||
Total revenue | $ 37,450 | $ 36,336 | $ 32,768 | $ 58,882 | $ 39,370 | $ 59,952 | $ 22,661 | $ 108,801 | $ 165,436 | $ 230,784 | $ 200,707 |
United States [Member] | Reportable Geographical Components [Member] | |||||||||||
Revenue by geographic area | |||||||||||
Total revenue | 39,147 | 40,400 | 32,514 | ||||||||
European [Member] | Reportable Geographical Components [Member] | |||||||||||
Revenue by geographic area | |||||||||||
Total revenue | $ 126,289 | $ 190,384 | $ 168,193 |
Selected Quarterly Financial 68
Selected Quarterly Financial Data - Quarterly Financial Data (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Statement [Abstract] | |||||||||||
Product sales | $ 13,690 | $ 14,698 | $ 12,867 | $ 14,099 | $ 13,973 | $ 7,240 | $ 10,968 | $ 7,974 | $ 55,354 | $ 40,155 | $ 25,152 |
Total revenue | 37,450 | 36,336 | 32,768 | 58,882 | 39,370 | 59,952 | 22,661 | 108,801 | 165,436 | 230,784 | 200,707 |
Cost of goods sold | 6,604 | 7,033 | 7,708 | 8,870 | 8,364 | 6,760 | 10,534 | 8,444 | 30,215 | 34,102 | 28,533 |
Research and development expenses | 50,232 | 51,951 | 52,350 | 49,268 | 47,135 | 43,229 | 45,412 | 47,011 | 203,801 | 182,787 | 147,734 |
Operating income (loss) | (32,145) | (32,901) | (38,325) | (9,484) | (29,364) | 419 | (43,469) | 43,043 | (112,855) | (29,371) | (16,485) |
Net income (loss) | $ (42,199) | $ (43,224) | $ (48,603) | $ (19,498) | $ (54,137) | $ (8,203) | $ (52,657) | $ 33,820 | $ (153,524) | $ (81,177) | $ (53,916) |
Net income (loss) per share | |||||||||||
Basic | $ (0.28) | $ (0.32) | $ (0.36) | $ (0.14) | $ (0.40) | $ (0.06) | $ (0.40) | $ 0.26 | |||
Diluted | $ (0.28) | $ (0.32) | $ (0.36) | $ (0.14) | $ (0.40) | $ (0.06) | $ (0.40) | $ 0.25 |