ACORDA THERAPEUTICS INC, 10-Q filed on 5/9/2018
Quarterly Report
v3.8.0.1
Document and Entity Information - shares
3 Months Ended
Mar. 31, 2018
May 07, 2018
Document And Entity Information [Abstract]    
Entity Registrant Name ACORDA THERAPEUTICS INC  
Entity Central Index Key 0001008848  
Document Type 10-Q  
Document Period End Date Mar. 31, 2018  
Amendment Flag false  
Current Fiscal Year End Date --12-31  
Entity Current Reporting Status Yes  
Entity Filer Category Large Accelerated Filer  
Entity Common Stock, Shares Outstanding   47,066,476
Document Fiscal Year Focus 2018  
Document Fiscal Period Focus Q1  
Trading Symbol ACOR  
v3.8.0.1
Consolidated Balance Sheets - USD ($)
Mar. 31, 2018
Dec. 31, 2017
Current assets:    
Cash and cash equivalents $ 226,276,000 $ 307,068,000
Restricted cash 460,000 410,000
Short term investments 106,767,000 0
Trade accounts receivable, net of allowances of $2,129 and $845, as of March 31, 2018 and December 31, 2017, respectively 50,787,000 81,403,000
Prepaid expenses 14,782,000 13,333,000
Finished goods inventory held by the Company 27,662,000 37,501,000
Other current assets 1,454,000 1,983,000
Total current assets 428,188,000 441,698,000
Property and equipment, net of accumulated depreciation 39,023,000 36,669,000
Goodwill 289,577,000 286,611,000
Intangible assets, net of accumulated amortization 429,791,000 430,603,000
Non-current portion of deferred cost of license revenue   1,638,000
Other assets 494,000 750,000
Total assets 1,187,073,000 1,197,969,000
Current liabilities:    
Accounts payable 18,377,000 27,367,000
Accrued expenses and other current liabilities 91,782,000 100,128,000
Current portion of deferred license revenue   9,057,000
Current portion of loans payable 663,000 645,000
Current portion of liability related to sale of future royalties 6,536,000 6,763,000
Total current liabilities 117,358,000 143,960,000
Convertible senior notes (due 2021) 311,228,000 308,805,000
Non-current portion of acquired contingent consideration 117,983,000 112,722,000
Non-current portion of deferred license revenue   23,398,000
Non-current portion of loans payable 25,900,000 25,670,000
Deferred tax liability 24,936,000 22,459,000
Non-current portion of liability related to sale of future royalties 27,859,000 29,025,000
Other non-current liabilities 11,884,000 11,943,000
Commitments and contingencies
Stockholders’ equity:    
Preferred stock, $0.001 par value. Authorized 1,000,000 shares at March 31, 2018 and December 31, 2017; no shares issued as of March 31, 2018 and December 31, 2017, respectively
Common stock, $0.001 par value. Authorized 80,000,000 shares at March 31, 2018 and December 31, 2017; issued 46,724,546 and 46,441,428 shares, including those held in treasury, as of March 31, 2018 and December 31, 2017, respectively 47,000 46,000
Treasury stock at cost (62,936 shares at March 31, 2018 and 16,151 shares at December 31, 2017) (1,591,000) (389,000)
Additional paid-in capital 977,881,000 968,580,000
Accumulated deficit (435,725,000) (455,108,000)
Accumulated other comprehensive income 9,313,000 6,858,000
Total stockholders’ equity 549,925,000 519,987,000
Total liabilities and stockholders’ equity $ 1,187,073,000 $ 1,197,969,000
v3.8.0.1
Consolidated Balance Sheets (Parenthetical) - USD ($)
$ in Thousands
Mar. 31, 2018
Dec. 31, 2017
Statement Of Financial Position [Abstract]    
Trade accounts receivable, allowances (in dollars) $ 2,129 $ 845
Preferred stock, par value (in dollars per share) $ 0.001 $ 0.001
Preferred stock, Authorized shares 1,000,000 1,000,000
Preferred stock, issued shares 0 0
Common stock, par value (in dollars per share) $ 0.001 $ 0.001
Common stock, Authorized shares 80,000,000 80,000,000
Common stock, issued shares 46,724,546 46,441,428
Treasury stock, shares 62,936 16,151
v3.8.0.1
Consolidated Statements of Operations - USD ($)
shares in Thousands, $ in Thousands
3 Months Ended
Mar. 31, 2018
Mar. 31, 2017
Revenues:    
Net product revenues $ 103,003 $ 112,593
Royalty revenues 3,162 4,528
License revenue   2,265
Total net revenues 106,165 119,386
Costs and expenses:    
Cost of sales 21,350 25,183
Cost of license revenue   159
Research and development 30,560 46,493
Selling, general and administrative 47,601 52,024
Changes in fair value of acquired contingent consideration 6,200 10,800
Total operating expenses 105,711 134,659
Operating income (loss) 454 (15,273)
Other (expense) income, (net):    
Interest and amortization of debt discount expense (5,497) (4,143)
Interest income 326 38
Realized loss on foreign currency transactions (5) (444)
Total other expense, (net) (5,176) (4,549)
Loss before taxes (4,722) (19,822)
(Provision for) benefit from income taxes (3,477) 918
Net loss $ (8,199) $ (18,904)
Net loss per share—basic and diluted $ (0.18) $ (0.41)
Weighted average common shares outstanding used in computing net loss per share—basic and diluted 46,529 45,808
v3.8.0.1
Consolidated Statements of Comprehensive Loss - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2018
Mar. 31, 2017
Statement Of Income And Comprehensive Income [Abstract]    
Net loss $ (8,199) $ (18,904)
Other comprehensive income (loss), net of tax:    
Foreign currency translation adjustment 2,547 2,402
Unrealized losses on available for sale debt securities (92)  
Other comprehensive income, net of tax 2,455 2,402
Comprehensive loss $ (5,744) $ (16,502)
v3.8.0.1
Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2018
Mar. 31, 2017
Cash flows from operating activities:    
Net loss $ (8,199) $ (18,904)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:    
Share-based compensation expense 5,867 7,872
Amortization of net premiums and discounts on investments (92)  
Amortization of debt discount and debt issuance costs 4,003 2,580
Depreciation and amortization expense 3,310 5,647
Change in acquired contingent consideration obligation 6,200 10,800
Unrealized foreign currency transaction loss   247
Non-cash royalty revenue (2,782)  
Deferred tax benefit (293) (4,673)
Changes in assets and liabilities:    
Decrease in accounts receivable 30,616 2,011
(Increase) decrease in prepaid expenses and other current assets (1,535) 497
Decrease (increase) in inventory 9,839 (2,918)
Decrease in non-current portion of deferred cost of license revenue   159
Decrease (increase) in other assets 8 (3,415)
Decrease in accounts payable, accrued expenses, other current liabilities (18,271) (23,093)
Decrease in non-current portion of deferred license revenue   (2,264)
Increase in other non-current liabilities 30 35
Net cash provided by (used in) operating activities 28,701 (25,419)
Cash flows from investing activities:    
Purchases of property and equipment (4,807) (5,773)
Purchases of intangible assets (5) (76)
Purchases of investments (106,767)  
Net cash used in investing activities (111,579) (5,849)
Cash flows from financing activities:    
Proceeds from issuance of common stock and option exercises 3,367 5,474
Refund of deposit for purchase of noncontrolling interest   2,722
Purchase of treasury stock (1,202)  
Repayment of loans payable (656) (2,225)
Net cash provided by financing activities 1,509 5,971
Effect of exchange rate changes on cash, cash equivalents and restricted cash 378 361
Net decrease in cash, cash equivalents and restricted cash (80,991) (24,936)
Cash, cash equivalents and restricted cash at beginning of period 308,039 158,871
Cash, cash equivalents and restricted cash at end of period 227,048 133,935
Supplemental disclosure:    
Cash paid for interest 26 29
Cash paid for taxes $ 465 $ 1,915
v3.8.0.1
Organization and Business Activities
3 Months Ended
Mar. 31, 2018
Organization Consolidation And Presentation Of Financial Statements [Abstract]  
Organization and Business Activities

(1) Organization and Business Activities

Acorda Therapeutics, Inc. (“Acorda” or the “Company”) is a biopharmaceutical company focused on developing therapies that restore function and improve the lives of people with neurological disorders.

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information, Accounting Standards Codification (ASC) Topic 270-10 and with the instructions to Form 10-Q. Accordingly, these financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. In management’s opinion, all adjustments considered necessary for a fair presentation have been included in the interim periods presented and all adjustments are of a normal recurring nature. The Company has evaluated subsequent events through the date of this filing. Operating results for the three-month period ended March 31, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. When used in these notes, the terms “Acorda” or “the Company” mean Acorda Therapeutics, Inc. The December 31, 2017 consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. You should read these unaudited interim condensed consolidated financial statements in conjunction with the consolidated financial statements and footnotes included in the Company's Annual Report on Form 10-K, as amended by Amendment No. 1 on Form 10-K/A, for the year ended December 31, 2017.

Certain reclassifications were made to prior period amounts in the consolidated financial statements and accompanying notes to conform with the current year presentation due to the adoption of ASU 2016-18 “Statement of Cash Flows” and Topic 230: Restricted Cash. See Note 2.

v3.8.0.1
Summary of Significant Accounting Policies
3 Months Ended
Mar. 31, 2018
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies

(2) Summary of Significant Accounting Policies

Our critical accounting policies are detailed in our Annual Report on Form 10-K, as amended by Amendment No. 1 on Form 10-K/A, for the year ended December 31, 2017. Effective January 1, 2018, the Company adopted ASU 2014-09, “Revenue from Contracts with Customers” (Topic 606), ASU 2016-01, “Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities”, ASU 2016-15 “Statement of Cash Flows” (Topic 230): Classification of Certain Cash Receipts and Cash Payments, ASU 2016-18 “Statement of Cash Flows” (Topic 230): Restricted Cash, ASU 2017-01, “Business Combinations” (Topic 805): Clarifying the Definition of a Business, and ASU 2017-09, “Compensation – Stock Compensation” (Topic 718): Scope of Modification Accounting and ASU 2017-01. Other than the adoption of the new accounting guidance, our critical accounting policies have not changed materially from December 31, 2017.

Revenue Recognition

On January 1, 2018, we adopted the new accounting standard ASC 606, “Revenue from Contracts with Customers” (Topic 606) (“ASC 606”) and the related amendments to all contracts with customers that were not completed as of the date of adoption using the modified retrospective method. ASC 606 supersedes prior revenue guidance under ASC 605 “Revenue Recognition” (“ASC 605”) and requires entities to recognize revenue to depict the transfer of promised goods or services to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company completed its assessment of the new guidance and evaluated the new requirements as applied to its existing revenue contracts not completed as of the date of initial application. As a result of the assessment, with the exception of the changes to our recognition of license revenue as further described below, the Company determined that adoption of the new standard did not have a significant impact on its revenue recognition methodology. In accordance with ASC 606, the Company recognizes revenue when the customer obtains control of a promised good or service, in an amount that reflects the consideration to which the Company expects to be entitled in exchange for the good or service.

The Company determined that the revenue recognition methodology for the deferred license revenue changed as a result of the adoption of ASC 606. License revenue recorded by the Company prior to January 1, 2018 related exclusively to the recognition of the upfront payment received from Biogen upon the execution of the License and Collaboration agreement that granted Biogen an exclusive non sub-licensable license to sell Fampyra outside of the U.S. License revenue recorded prior to January 1, 2018 was recognized under ASC 605 on a pro rata basis as the Company’s obligations were satisfied throughout the duration of the license and collaboration agreement. As of January 1, 2018, the Company adopted ASC 606 which changed the Company’s determination of its distinct performance obligations resulting in an acceleration of the recognition of the revenue in the arrangement. The material performance obligations were completed prior to January 1, 2018, and as a result, the Company recognized its previously deferred revenue as a cumulative effect adjustment of $27.6 million within the accumulated deficit on the consolidated balance sheet as of January 1, 2018.

 

The cumulative effect of applying ASC 606 to the company’s consolidated balance sheet was as follows:

(In thousands)

Balance as of December 31, 2017

 

Net Adjustments

 

Balance as of

January 1, 2018

 

Assets

 

 

 

 

 

 

 

 

 

Other current assets

$

1,983

 

$

(634

)

$

1,349

 

Non-current portion of deferred cost of license revenue

 

1,638

 

 

(1,638

)

 

 

    Total Assets

$

1,197,969

 

$

(2,272

)

$

1,195,697

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

Current portion of deferred license revenue

$

9,057

 

$

(9,057

)

$

 

Non-current portion of deferred license revenue

 

23,398

 

 

(23,398

)

 

 

Deferred tax liability

 

22,459

 

 

2,600

 

 

25,059

 

Accumulated deficit

 

(455,108

)

 

27,583

 

 

(427,525

)

    Total liabilities and stockholders' equity

$

1,197,969

 

$

(2,272

)

$

1,195,697

 

          

The impact of the adoption of ASC 606 on the Company’s consolidated balance sheet as of March 31, 2018 was as follows:

(In thousands)

Balance as of

March 31, 2018

Prior to Adoption

of ASC 606

 

Net Adjustments

 

Balance as of

March 31, 2018

as Reported

Under ASC 606

 

Assets

 

 

 

 

 

 

 

 

 

Other current assets

$

2,088

 

$

(634

)

$

1,454

 

Non-current portion of deferred cost of license revenue

 

1,479

 

 

(1,479

)

 

 

    Total Assets

$

1,189,186

 

$

(2,113

)

$

1,187,073

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

Current portion of deferred license revenue

$

9,057

 

$

(9,057

)

$

 

Non-current portion of deferred license revenue

 

21,134

 

 

(21,134

)

 

 

Deferred tax liability

 

22,336

 

 

2,600

 

 

24,936

 

Accumulated deficit

 

(461,203

)

 

25,478

 

 

(435,725

)

    Total liabilities and stockholders' equity

$

1,189,186

 

$

(2,113

)

$

1,187,073

 

 

The impact of the adoption of ASC 606 on the Company’s consolidated statement of operations for the three-month period ended March 31, 2018 was as follows:

(In thousands)

Three-Month Period Ended March 31, 2018 Balance Prior to

Adoption of ASC 606

 

Effect of Change

 

Three-Month Period

Ended March 31, 2018

Balance as Reported

Under ASC 606

 

License revenue

$

2,264

 

$

(2,264

)

$

 

Cost of license revenue

 

159

 

 

(159

)

 

 

Operating income

$

2,559

 

$

(2,105

)

$

454

 

 

 

 

 

 

 

 

 

 

 

Net loss

$

(6,094

)

$

(2,105

)

$

(8,199

)

Net loss per share (basic and diluted)

$

(0.13

)

$

(0.05

)

$

(0.18

)

 

ASC 606 did not have an aggregate impact on the Company’s net cash provided by operating activities.

ASC 606 outlines a five-step process for recognizing revenue from contracts with customers: i) identify the contract with the customer, ii) identify the performance obligations in the contract, (iii) determine the transaction price, iv) allocate the transaction price to the separate performance obligations in the contract, and (v) recognize revenue associated with the performance obligations as they are satisfied.

The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. Once a contract is determined to be within the scope of ASC 606, the Company determines the performance obligations that are distinct. The Company recognizes as revenues the amount of the transaction price that is allocated to each respective performance obligation when the performance obligation is satisfied or as it is satisfied. Generally, the Company's performance obligations are transferred to customers at a point in time, typically upon receipt of the product by the customer.

Product Revenue, Net

 Net revenue from product sales is recognized at the transaction price when the customer obtains control of the Company’s product, which occurs at a point in time, typically upon receipt of the product by the customer. The Company’s products are sold to a network of specialty providers which are contractually obligated to hold no more than an agreed upon number of days inventory. The Company’s payment terms are between 30 to 34 days.

The Company’s net revenues represent total revenues adjusted for discounts and allowances, including estimated price discounts, rebates and chargebacks. These adjustments represent variable consideration under ASC 606 and are recorded for cash consideration given by the Company to a customer that is presumed to be a reduction of the transaction price of the Company’s products and, therefore, are characterized as a reduction of revenue. These adjustments are established by management as its best estimate based on available information and will be adjusted to reflect known changes in the factors that impact such allowances. Adjustments for variable consideration are determined based on the contractual terms with customers, historical trends, communications with customers and the levels of inventory remaining in the distribution channel, as well as expectations about the market for the product and anticipated introduction of competitive products.

Discounts and Allowances

Revenue from product sales are recorded at the transaction price, which includes estimates for discounts and allowances for which reserves are established and includes cash discounts, chargebacks, rebates, returns, copay assistance, data fees and wholesaler fees for servicesDiscounts and allowances are recorded following shipment of product and the appropriate reserves are credited. These reserves are classified as reductions of accounts receivable (if the amount is payable to the Customer and right of offset exists) or a current liability (if the amount is payable to a party other than a Customer). These allowances are established by management as its best estimate based on historical experience and data points available and are adjusted to reflect known changes in the factors that impact such reserves. Allowances for customer credits, chargebacks, rebates, data fees and wholesaler fees for services, returns, and discounts are established based on contractual terms with customers and analyses of historical usage of these items. Actual amounts of consideration ultimately received may differ from the Company’s estimates. If actual results in the future vary from the Company’s estimates, the Company will adjust these estimates, which would affect net product revenue and earnings in the period such variances become known. The nature of our allowances and accruals requiring critical estimates, and the specific considerations it uses in estimating their amounts are as follows:

Government Chargebacks and Rebates: We contract for Medicaid and other U.S. Federal government programs to allow for our products to remain eligible for reimbursement under these programs. For Medicare, the Company also estimates the number of patients in the prescription drug coverage gap for whom the Company will owe an additional liability under the Medicare Part D program. Based upon our contracts and the most recent experience with respect to sales through each of these channels, we provide an allowance for chargebacks and rebates. We monitor the sales trends and adjust the chargeback and rebate percentages on a regular basis to reflect the most recent chargebacks and rebate experience. The Company’s liability for these rebates consists of invoices received for claims from prior quarters that have not been paid or for which an invoice has not yet been received, estimates of claims for the current quarter, and estimated future claims that will be made for product that has been recognized as revenue, but remains in the distribution channel inventories at the end of each reporting period.

Managed Care Contract Rebates: We contract with various managed care organizations including health insurance companies and pharmacy benefit managers. These contracts stipulate that rebates and, in some cases, administrative fees, are paid to these organizations provided our product is placed on a specific tier on the organization’s drug formulary. Based upon our contracts and the most recent experience with respect to sales through managed care channels, we provide an allowance for managed care contract rebates. We monitor the sales trends and adjust the allowance on a regular basis to reflect the most recent rebate experience. The Company’s liability for these rebates consists of invoices received for claims from prior quarters that have not been paid or for which an invoice has not yet been received, estimates of claims for the current quarter, and estimated future claims that will be made for product that has been recognized as revenue, but remains in the distribution channel inventories at the end of each reporting period.

Copay Mitigation Rebates: We offer copay mitigation to commercially insured patients who have coverage for our products (in accordance with applicable law) and are responsible for a cost share. Based upon our contracts and the most recent experience with respect to actual copay assistance provided, we provide an allowance for copay mitigation rebates. We monitor the sales trends and adjust the rebate percentages on a regular basis to reflect the most recent rebate experience.

Cash Discounts: We sell directly to our network of specialty pharmacies, Kaiser and the specialty distributor to the U.S. Department of Veterans Affairs. We generally provide invoice discounts for prompt payment for our products. We estimate our cash discounts based on the terms offered to our customers. Discounts are estimated based on rates that are explicitly stated in the Company’s contracts as it is expected they will take the discount and are recorded as a reduction of revenue at the time of product shipment when product revenue is recognized. We adjust estimates based on actual activity as necessary.

Product Returns: We either offer customers no return except for products damaged in shipping or consistent with industry practice, a limited right of return based on the product’s expiration date. The Company estimates the amount of its product sales that may be returned by its customers and records this estimate as a reduction of revenue in the period the related product revenue is recognized. The company currently estimates product return liabilities using historical sales information and inventory remaining in the distribution channel.

Data Fees and Fees for Service Payable to Specialty Pharmacies: We have contracted with certain specialty pharmacies to obtain transactional data related to our products in order to develop a better understanding of our selling channel as well as patient activity and utilization by the Medicaid program and other government agencies and managed care organizations. We pay a variable fee to the specialty pharmacies to provide us the data. We also pay the specialty pharmacies a flat fee in exchange for providing distribution and inventory management services, including the provision of inventory management data to the Company. We estimate our fee for service accruals and allowances based on sales to each specialty pharmacy and the applicable contracted rate.

Royalty Revenue

Royalty revenue recorded by the Company relates exclusively to the Company’s License and Collaboration agreement with Biogen which provides for ongoing royalties based on sales of Fampyra outside of the U.S. The Company recognizes revenue for royalties under ASC 606, which provides revenue recognition constraints by requiring the recognition of revenue at the later of the following: 1) sale or usage of the products or 2) satisfaction of the performance obligations. The Company has satisfied its performance obligations and therefore recognizes royalty revenue when the sales to which the royalties relate are completed.

Milestone Revenue

Milestone revenue relates to the License and Collaboration agreement with Biogen which provides for milestone payments for the achievement of certain regulatory and sales milestones during the term of the agreement. Regulatory milestones are contingent upon the approval of Fampyra for new indications outside of the U.S. Sales milestones are contingent upon the achievement of certain net sales targets for Fampyra sales outside of the U.S. The Company recognizes milestone revenue under ASC 606, which provides constraints for entities to recognize milestone revenue which is deemed to be variable by requiring the Company to estimate the amount of consideration to which it is entitled in exchange for transferring the promised goods or services to a customer. The Company recognizes an estimate of revenue to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the milestone is achieved. For regulatory milestones, the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the Company’s control or the licensee’s control, such as regulatory approvals, are generally not considered probable of being achieved until those approvals are received. For sales-based milestones, the Company has satisfied its performance obligations and, therefore, recognizes revenue upon the achievement of the specific sale milestones.

The following table disaggregates our revenue by major source (in thousands):

 

 

Three-month period ended March 31, 2018

 

 

Three-month period ended March 31, 2017

 

Revenues:

 

 

 

 

 

 

 

 

Net product revenues

 

$

103,003

 

 

$

112,593

 

Royalty revenues

 

 

3,162

 

 

 

4,528

 

License revenue

 

 

 

 

 

2,265

 

Total net revenues

 

$

106,165

 

 

$

119,386

 

Foreign Currency Translation

The functional currency of operations outside the United States of America is deemed to be the currency of the local country, unless otherwise determined that the United States dollar would serve as a more appropriate functional currency given the economic operations of the entity. Accordingly, the assets and liabilities of the Company’s foreign subsidiary, Biotie, are translated into United States dollars using the period-end exchange rate; income and expense items are translated using the average exchange rate during the period; and equity transactions are translated at historical rates. Cumulative translation adjustments are reflected as a separate component of equity. Foreign currency transaction gains and losses are recognized in the period incurred and are reported as other income (expense) in the statement of operations.

Segment and Geographic Information

 

The Company is managed and operated as one business which is focused on developing therapies that restore function and improve the lives of people with neurological disorders. The entire business is managed by a single management team that reports to the Chief Executive Officer. The Company does not operate separate lines of business with respect to any of its products or product candidates and the Company does not prepare discrete financial information with respect to separate products or product candidates or by location. Accordingly, the Company views its business as one reportable operating segment. Net product revenues reported to date are derived from the sales of Ampyra and Qutenza in the U.S.

 

 

Subsequent Events

Subsequent events are defined as those events or transactions that occur after the balance sheet date, but before the financial statements are filed with the Securities and Exchange Commission. The Company completed an evaluation of the impact of any subsequent events through the date these financial statements were issued, and determined there were no subsequent events requiring disclosure in these financial statements.

Accounting Pronouncements Adopted

As noted above, in May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2014-09, “Revenue from Contracts with Customers” (Topic 606) (ASU 2014-09). This new standard replaced all previous U.S. GAAP guidance on this topic and eliminated all industry-specific guidance. The new standard requires the application of a five-step model to determine the amount and timing of revenue to be recognized. The underlying principle is that revenue is to be recognized for the transfer of goods or services to customers that reflects the amount of consideration that the Company expects to be entitled to in exchange for those goods or services. The Company adopted the new standard effective January 1, 2018 using the modified retrospective transition method. See discussion of the adoption above in Revenue Recognition.

In January 2016, the FASB issued Accounting Standards Update 2016-01, “Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.” The main objective of this update is to enhance the reporting model for financial instruments to provide users of financial statements with more decision-useful information. The new guidance addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The Company adopted this guidance effective January 1, 2018. The adoption of this guidance did not have an impact on the Company’s consolidated financial statements.

In August 2016, the FASB issued Accounting Standards Update ASU 2016-15 “Statement of Cash Flows” (Topic 230): Classification of Certain Cash Receipts and Cash Payments (ASU 2016-15), which specifies how certain cash receipts and cash payments are presented and classified in the statement of cash flows. This ASU requires retrospective application to all periods presented. The Company adopted this guidance effective January 1, 2018. The adoption of this guidance did not have an impact on the Company’s consolidated financial statements.

In November 2016, the FASB issued Accounting Standards Update ASU 2016-18 “Statement of Cash Flows” (Topic 230); Restricted Cash (ASU 2016-18), which defines new requirements for the presentation of restricted cash and restricted cash equivalents in the statement of cash flows. The amendments in this ASU require retrospective application to each period presented. The Company adopted this guidance effective January 1, 2018 retrospectively. This ASU requires the entities to present statement of cash flows in a manner such that it reconciles beginning and ending totals of cash, cash equivalents, restricted cash or restricted cash equivalents. Also, when cash, cash equivalents, restricted cash or restricted cash equivalents are presented in more than one line item within the statement of financial position, an entity should, for each period that a statement of financial position is presented, present on the face of the statement of cash flows or disclose in the notes to the financial statements, the line items and amounts of cash, cash equivalents, and restricted cash or restricted cash equivalents reported within the statement of financial position. The amounts, disaggregated by the line item in which they appear within the statement of financial position, shall sum to the total amount of cash, cash equivalents, and restricted cash or restricted cash equivalents at the end of the corresponding period shown in the statement of cash flows.

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the statement of financial position that sum to the total of the same amounts shown in the statement of cash flows:

 

Three months ended March 31, 2018

 

 

Three months ended March 31, 2017

 

(In thousands)

Beginning of period

 

 

End of period

 

 

Beginning of period

 

 

End of period

 

Cash and cash equivalents

$

307,068

 

 

$

226,276

 

 

$

158,537

 

 

$

133,619

 

Restricted cash

 

410

 

 

 

460

 

 

 

79

 

 

 

61

 

Restricted cash included in Other assets

 

561

 

 

 

312

 

 

 

255

 

 

 

255

 

Total Cash, cash equivalents and restricted cash per statement of cash flows

$

308,039

 

 

$

227,048

 

 

$

158,871

 

 

$

133,935

 

Amounts included in restricted cash represent those amounts required to be set aside to cover the Company’s self-funded employee health insurance. Restricted cash included in other assets on the statement of financial position relates to cash collateralized standby letters of credit in connection with obligations under facility leases, which is included with other assets in the consolidated balance sheet due to the long-term nature of the letters of credit.

In January 2017, the FASB issued Accounting Standards Update 2017-01, “Business Combinations” (Topic 805): Clarifying the Definition of a Business (ASU 2017-01), which provides additional clarification to aid in determining when a set of assets and activities is not a business. The amendments in this update require prospective applications. The Company adopted this guidance effective January 1, 2018. The adoption of this guidance did not have an impact on the Company’s consolidated financial statements.

In May 2017, the FASB issued Accounting Standards Update 2017-09, “Compensation – Stock Compensation” (Topic 718): Scope of Modification Accounting (ASU 2017-09). This new standard provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. ASU 2017-09 allows for prospective application and is effective for fiscal years beginning after December 15, 2017, and interim periods therein with early adoption permitted for interim or annual periods. The Company adopted this guidance effective January 1, 2018. The adoption of this guidance did not have an impact on the Company’s consolidated financial statements.

Accounting Pronouncements Not Yet Adopted

In February 2016, the FASB issued Accounting Standards Update 2016-02, “Leases” (Topic 842). The main objective of this update is to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the impact it may have on its consolidated financial statements.

In January 2017, the FASB issued Accounting Standards Update 2017-04, “Intangibles – Goodwill and Other” (Topic 350): Simplifying the Test for Goodwill Impairment (ASU 2017-04). This new standard simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. ASU 2017-04 allows for prospective application and is effective for fiscal years beginning after December 15, 2019, and interim periods therein with early adoption permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating whether it will adopt this guidance early. The Company does not expect the adoption of this guidance to have a significant impact on the consolidated financial statements.

In February 2018, the FASB issued Accounting Standards Update 2018-02, ‘Income Statement—Reporting Comprehensive Income’ (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (ASU 2018-02). This new standard provides entities with an option to reclassify stranded tax effects within AOCI to retained earnings in each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act (or portion thereof) is recorded. ASC 740-10-35-4 requires that deferred tax assets and liabilities should be adjusted to account for any changes in tax laws or rates within the period that the enactment of these changes occurs and any adjustments to flow through income from continuing operations. Since the adjustments due to the Tax Cuts and Jobs Act are required to flow through income from continuing operations, the tax effects of items within accumulated other comprehensive income known now as “stranded tax effects,” do not reflect the appropriate tax rate. As such, FASB issued ASU 2018-02, in order to address these stranded income tax effects. The new standard requires entities to disclose the following:

 

A description of the accounting policy for releasing income tax effects from AOCI;

 

Whether they elect to reclassify the stranded income tax effects from the Tax Cuts and Jobs Act, and

 

Information about the other income tax effects that are reclassified.

 

The ASU is effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years with early adoption permitted. The Company is currently evaluating the impact it may have on its consolidated financial statements.

In March 2018, the FASB issued Accounting Standards Update 2018-05, “Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin (SAB) No. 118’. The ASU adds seven paragraphs to ASC 740, Income Taxes, that contain SEC guidance related to SAB 118 (codified as SEC SAB Topic 5.EE, “Income Tax Accounting Implications of the Tax Cuts and Jobs Act”), which provides guidance for companies that are not able to complete their accounting for the income tax effects of the Tax Cuts and Jobs Act in the period of enactment which is the period that includes December 22, 2017. The measurement period should not extend beyond one year from the enactment date. The Company is currently evaluating the impact the adoption of this guidance may have on its consolidated financial statements.

v3.8.0.1
Share-based Compensation
3 Months Ended
Mar. 31, 2018
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Share-based Compensation

(3) Share-based Compensation

During the three‑month periods ended March 31, 2018 and 2017, the Company recognized share-based compensation expense of $5.9 million and $7.8 million, respectively. Activity in options and restricted stock during the three-month period ended March 31, 2018 and related balances outstanding as of that date are reflected below. The weighted average fair value per share of options granted to employees for the three-month periods ended March 31, 2018 and 2017 were approximately $12.37 and $13.02, respectively.

The following table summarizes share-based compensation expense included within the consolidated statements of operations:

 

 

 

For the three-month

period ended March 31,

 

(In millions)

 

2018

 

 

2017

 

Research and development

 

$

1.7

 

 

$

2.5

 

Selling, general and administrative

 

 

4.2

 

 

 

5.3

 

Total

 

$

5.9

 

 

$

7.8

 

 

A summary of share-based compensation activity for the three-month period ended March 31, 2018 is presented below:

Stock Option Activity

 

 

 

Number of

Shares

(In thousands)

 

 

Weighted

Average

Exercise

Price

 

 

Weighted

Average

Remaining

Contractual

Term

 

 

Intrinsic

Value

(In thousands)

 

Balance at January 1, 2018

 

 

8,929

 

 

$

29.46

 

 

 

 

 

 

 

 

 

Granted

 

 

536

 

 

 

24.39

 

 

 

 

 

 

 

 

 

Cancelled

 

 

(201

)

 

 

23.89

 

 

 

 

 

 

 

 

 

Exercised

 

 

(172

)

 

 

19.61

 

 

 

 

 

 

 

 

 

Balance at March 31, 2017

 

 

9,092

 

 

$

29.47

 

 

 

6.0

 

 

$

8,141

 

Vested and expected to vest at

    March 31, 2018

 

 

9,032

 

 

$

29.50

 

 

 

6.0

 

 

$

8,068

 

Vested and exercisable at

    March 31, 2018

 

 

6,728

 

 

$

30.49

 

 

 

5.1

 

 

$

4,605

 

 

Restricted Stock and Performance Stock Unit Activity

 

(In thousands)

 

 

 

 

Restricted Stock and Performance Stock Units

 

Number of Shares

 

Nonvested at January 1, 2018

 

 

698

 

Granted

 

 

 

Vested

 

 

(111

)

Forfeited

 

 

(71

)

Nonvested at March 31, 2018

 

 

516

 

 

Unrecognized compensation cost for unvested stock options, restricted stock awards and performance stock units as of March 31, 2018 totaled $33.7 million and is expected to be recognized over a weighted average period of approximately 1.9 years.

During the three‑month period ended March 31, 2018, the Company repurchased 46,785 shares of common stock at an average price of $25.69 per share or approximately $1.2 million. The share repurchase consists of common stock withheld to cover the tax liability in connection with the settlement of vested restricted stock units and stock options that were exercised in the there-month period ended March 31, 2018.

v3.8.0.1
Loss Per Share
3 Months Ended
Mar. 31, 2018
Earnings Per Share [Abstract]  
Loss Per Share

(4) Loss Per Share

The following table sets forth the computation of basic and diluted loss per share for the three-month periods ended March 31, 2018 and 2017:

 

(In thousands, except per share data)

 

Three-month period ended March 31, 2018

 

 

Three-month period ended March 31, 2017

 

 

Basic and diluted

 

 

 

 

 

 

 

 

 

Net loss

 

$

(8,199

)

 

$

(18,904

)

 

Weighted average common shares outstanding used in

   computing net loss per share—basic and diluted

 

 

46,529

 

 

 

45,808

 

 

Net loss per share—basic and diluted

 

$

(0.18

)

 

$

(0.41

)

 

 

Securities that could potentially be dilutive are excluded from the computation of diluted earnings per share when a loss from continuing operations exists or when the exercise price exceeds the average closing price of the Company’s common stock during the period, because their inclusion would result in an anti-dilutive effect on per share amounts.

The following amounts were not included in the calculation of net loss per diluted share because their effects were anti-dilutive:

 

(In thousands)

 

Three-month period ended March 31, 2018

 

 

Three-month period ended March 31, 2017

 

Denominator

 

 

 

 

 

 

 

 

Stock options and restricted common shares

 

 

7,504

 

 

 

8,258

 

 

Additionally, the impact of the convertible debt and the impact of the convertible capital loan assumed from Biotie were determined to be anti-dilutive and excluded from the calculation of net loss per diluted share for the three-month periods ended March 31, 2018 and 2017.

v3.8.0.1
Income Taxes
3 Months Ended
Mar. 31, 2018
Income Tax Disclosure [Abstract]  
Income Taxes

(5) Income Taxes

The Company’s effective income tax rate differs from the U.S. statutory rate principally due to state taxes, Federal research and development tax credits, jurisdictions with pretax losses for which no tax benefit can be recognized, changes in the valuation allowance and the effects of share based compensation which are recorded discretely in the quarters in which they occur

For the three-month periods ended March 31, 2018 and 2017, the Company recorded a $(3.5) million provision and $0.9 million benefit for income taxes, respectively. The effective income tax rates for the Company for the three-month periods ended March 31, 2018 and 2017 were (74%) and 5%, respectively. The variance in the effective tax rates for the three-month period ended March 31, 2018 as compared to the three-month period ended March 31, 2017 was due primarily to the decrease in the federal statutory tax rate as a result of tax reform, the valuation allowance recorded on deferred tax assets for which no tax benefit can be recognized, state taxes, and the reduction in the research & development tax credit.

 

The Company continues to evaluate the realizability of its deferred tax assets and liabilities on a quarterly basis and will adjust such amounts in light of changing facts and circumstances including, but not limited to, future projections of taxable income, tax legislation, rulings by relevant tax authorities, the progress of ongoing tax audits and the regulatory approval of products currently under development. Any changes to the valuation allowance or deferred tax assets and liabilities in the future would impact the Company's income taxes.

 

The Tax Cuts and Jobs Act of 2017 (the “Act”) was enacted on December 22, 2017. The Act reduces the U.S. federal corporate tax rate from 35% to 21% effective for tax years beginning after December 31, 2017, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously deferred and includes a variety of other changes.

 

On December 22, 2017, Staff Accounting Bulletin No. 118 (“SAB 118”) was issued to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Act. For the three months ended March 31, 2018, the Company has not completed its accounting for the tax effects of the enactment of the Act; however, in certain cases, we have made a reasonable estimate of the effects on our existing deferred tax balances. In other cases, we have not been able to make a reasonable estimate and continue to account for those items based on our existing accounting under ASC 740, Income Taxes, and the provisions of the tax laws that were in effect immediately prior to the enactment. The Company has not obtained additional information affecting the provisional amounts initially recorded. The Company did not record a provision related to the one-time transition tax on mandatory repatriation of undistributed foreign earnings and profits per the Act, since a preliminary analysis has determined that there is no accumulated earnings and profits.

 

Additional work is still necessary for a more detailed analysis of the Company's deferred tax assets and liabilities and its historical foreign earnings as well as potential correlative adjustments. Any subsequent adjustment to these amounts will be recorded to current tax expense in the quarter of 2018 when the analysis is complete.

 

The Internal Revenue Service commenced an examination of the Company’s US income tax return for 2015 in the third quarter of 2017.

v3.8.0.1
Fair Value Measurements
3 Months Ended
Mar. 31, 2018
Fair Value Disclosures [Abstract]  
Fair Value Measurements

(6) Fair Value Measurements

The following table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis as of March 31, 2018 and December 31, 2017 and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. Fair values determined by Level 2 inputs utilize data points that are observable, such as quoted prices, interest rates, exchange rates and yield curves. Fair values determined by Level 3 inputs utilize unobservable data points for the asset or liability. The Company’s Level 1 assets consist of time deposits and investments in a Treasury money market fund. The Company’s level 2 assets consist of investments in corporate bonds and commercial paper which are categorized as cash equivalents for those investments with original maturities of three months or less and short-term investments for those investments with original maturities between three months and one year. The Company’s Level 3 liabilities represent acquired contingent consideration related to the acquisition of Civitas and are valued using a probability weighted discounted cash flow valuation approach. No changes in valuation techniques occurred during the three-month period ended March 31, 2018. The estimated fair values of all of our financial instruments approximate their carrying values at March 31, 2018, except for the fair value of the Company’s convertible senior notes, which was approximately $313.1 million as of March 31, 2018. The Company estimates the fair value of its notes utilizing market quotations for the debt (Level 2).

 

(In thousands)

 

Level 1

 

 

Level 2

 

 

Level 3

 

March 31, 2018

 

 

 

 

 

 

 

 

 

 

 

 

Assets Carried at Fair Value:

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

 

$

19,621

 

 

$

32,452

 

 

$

 

Short-term investments

 

 

 

 

 

106,767

 

 

 

 

Liabilities Carried at Fair Value:

 

 

 

 

 

 

 

 

 

 

 

 

Acquired contingent consideration

 

 

 

 

 

 

 

 

119,200

 

December 31, 2017

 

 

 

 

 

 

 

 

 

 

 

 

Assets Carried at Fair Value:

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

 

$

9,163

 

 

$

 

 

$

 

Liabilities Carried at Fair Value:

 

 

 

 

 

 

 

 

 

 

 

 

Acquired contingent consideration

 

 

 

 

 

 

 

 

113,000

 

 

The following table presents additional information about liabilities measured at fair value on a recurring basis and for which the Company utilizes Level 3 inputs to determine fair value.

Acquired contingent consideration

 

(In thousands)

 

Three-month period ended March 31, 2018

 

 

Three-month period ended March 31, 2017

 

Acquired contingent consideration:

 

 

 

 

 

 

 

 

Balance, beginning of period

 

$

113,000

 

 

$

72,100

 

Fair value change to contingent consideration

   included in the statement of operations

 

 

6,200

 

 

 

10,800

 

Balance, end of period

 

$

119,200

 

 

$

82,900

 

 

The Company estimates the fair value of its acquired contingent consideration using a probability weighted discounted cash flow valuation approach based on estimated future sales expected from Inbrija (levodopa inhalation powder), a potential new drug candidate for the treatment of OFF periods of Parkinson’s disease and CVT-427, a Phase I candidate. CVT-427 is an inhaled triptan intended for acute treatment of migraine using the ARCUS drug delivery technology. Using this approach, expected probability adjusted future cash flows are calculated over the expected life of the agreement and discounted to estimate the current value of the liability at the period end date. Some of the more significant assumptions made in the valuation include (i) the estimated Inbrija and CVT-427 revenue forecasts, (ii) probabilities of success, and (iii) discount periods and rate. The probability of achievement of revenue milestones ranged from 26.3% to 85.0% with milestone payment outcomes ranging from $0 to $69 million in the aggregate for Inbrija and CVT-427. The valuation is performed quarterly. Gains and losses are included in the statement of operations. For the three-month period ended March 31, 2018, changes in the fair value of the acquired contingent consideration were due to the re-calculation of cash flows for the passage of time.

The acquired contingent consideration is classified as a Level 3 liability as its valuation requires substantial judgment and estimation of factors that are not currently observable in the market. If different assumptions were used for the various inputs to the valuation approach, including but not limited to, assumptions involving probability adjusted sales estimates for Inbrija and CVT-427 and estimated discount rates, the estimated fair value could be significantly higher or lower than the fair value determined.

 

v3.8.0.1
Investments
3 Months Ended
Mar. 31, 2018
Available For Sale Securities Current [Abstract]  
Investments

(7) Investments

The Company has determined that all of its investments are classified as available-for-sale. Available-for-sale debt securities are carried at fair value with interest on these investments included in interest income and are recorded based primarily on quoted market prices. Available-for-sale investments consisted of the following at March 31, 2018:

 

 

 

 

 

 

 

Gross

 

 

Gross

 

 

Estimated

 

 

 

Amortized

 

 

Unrealized

 

 

Unrealized

 

 

Fair

 

(In thousands)

 

Cost

 

 

Gains

 

 

Losses

 

 

Value

 

Cash Equivalents

 

$

32,457

 

 

$

1

 

 

$

(6

)

 

$

32,452

 

Short Term Investments

 

 

106,854

 

 

 

6

 

 

 

(93

)

 

 

106,767

 

Total

 

$

139,311

 

 

$

7

 

 

$

(99

)

 

$

139,219

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Short-term investments with maturities of three months or less from date of purchase have been classified as cash equivalents, and amounted to approximately $32.5 million as of March 31, 2018. Short-term investments have original maturities of greater than 3 months but less than 1 year and amounted to approximately $106.8 million as of March 31, 2018. The Company held no short-term investments at December 31, 2017. Short-term investments at March 31, 2018 primarily consisted of high-grade commercial paper and corporate bonds. Long-term investments have original maturities of greater than 1 year. There were no investments classified as long-term at March 31, 2018 or December 31, 2017. The Company has determined that there were no other-than-temporary declines in the fair values of its investments as of March 31, 2018 as the Company does not intend to sell its investments and it is not more likely than not that the Company will be required to sell its investments prior to the recovery of its amortized cost basis.

Unrealized holding gains and losses, which relate to debt instruments, are reported within accumulated other comprehensive income (AOCI) in the statements of comprehensive income. The changes in AOCI associated with the unrealized holding gains on available-for-sale investments during the three-month period ended March 31, 2018, were as follows (in thousands):

 

(In thousands)

 

Net Unrealized Gains (Losses) on Marketable Securities

 

Balance at December 31, 2017

 

$

 

Other comprehensive loss before reclassifications

 

 

(92

)

Amounts reclassified from accumulated other comprehensive income

 

 

 

Net current period other comprehensive loss

 

 

(92

)

Balance at March 31, 2018

 

$

(92

)

 

v3.8.0.1
Liability Related to Sale of Future Royalties
3 Months Ended
Mar. 31, 2018
Deferred Revenue Disclosure [Abstract]  
Liability Related to Sale of Future Royalties

(8) Liability Related to Sale of Future Royalties

As of October 1, 2017, the Company completed a royalty purchase agreement with HealthCare Royalty Partners, or HCRP (“Royalty Agreement”). In exchange for the payment of $40 million to the Company, HCRP obtained the right to receive Fampyra royalties payable by Biogen under the License and Collaboration Agreement between the Company and Biogen, up to an agreed upon threshold of royalties. When this threshold is met, if ever, the Fampyra royalties will revert back to the Company and the Company will continue to receive the Fampyra royalties from Biogen until the revenue stream ends. The transaction does not include potential future milestones to be paid.

The Company maintained the rights under the license and collaboration agreement with Biogen, therefore, the Royalty Agreement has been accounted for as a liability that will be amortized using the effective interest method over the life of the arrangement, in accordance with the relevant accounting guidance. The Company recorded the receipt of the $40 million payment from HCRP and established a corresponding liability in the amount of $40 million, net of transaction costs of approximately $2.2 million. The net liability is classified between the current and non-current portion of liability related to sale of future royalties in the consolidated balance sheets based on the recognition of the interest and principal payments to be received by HCRP in the next 12 months from the financial statement reporting date. The total net royalties to be paid, less the net proceeds received will be recorded to interest expense using the effective interest method over the life of the Royalty Agreement. The Company will estimate the payments to be made to HCRP over the term of the Agreement based on forecasted royalties and will calculate the interest rate required to discount such payments back to the liability balance. Over the course of the Royalty Agreement, the actual interest rate will be affected by the amount and timing of net royalty revenue recognized and changes in forecasted revenue. On a quarterly basis, the Company will reassess the effective interest rate and adjust the rate prospectively as necessary.

The Company recognized non-cash royalty revenue of approximately $2.8 million, non-cash interest expense of approximately $1.2 million and debt discount amortization costs of approximately $0.2 million for the three-month period ended March 31, 2018. The interest and debt discount amortization expense is reflected as interest and amortization of debt discount expense in the Statement of Operations.

(In thousands)

 

Three-month period ended March 31, 2018

 

 

Liability related to sale of future royalties - beginning balance

 

$

35,788

 

 

Deferred transaction costs recognized

 

 

202

 

 

Non-cash royalty revenue payable to HCRP

 

 

(2,781

)

 

Non-cash interest expense recognized

 

 

1,186

 

 

Liability related to sale of future royalties - ending balance

 

$

34,395

 

 

 

 

 

 

 

 

 

v3.8.0.1
Commitments and Contingencies
3 Months Ended
Mar. 31, 2018
Commitments And Contingencies Disclosure [Abstract]  
Commitments and Contingencies

(9) Commitments and Contingencies

The Company is currently party to various legal proceedings which are principally patent litigation matters. The Company has assessed such legal proceedings and does not believe that it is probable that a liability has been incurred or that the amount of any potential liability or range of losses can be reasonably estimated. As a result, the Company did not record any loss contingencies for any of these matters. Litigation expenses are expensed as incurred.

v3.8.0.1
Summary of Significant Accounting Policies (Policies)
3 Months Ended
Mar. 31, 2018
Accounting Policies [Abstract]  
Revenue Recognition

Revenue Recognition

On January 1, 2018, we adopted the new accounting standard ASC 606, “Revenue from Contracts with Customers” (Topic 606) (“ASC 606”) and the related amendments to all contracts with customers that were not completed as of the date of adoption using the modified retrospective method. ASC 606 supersedes prior revenue guidance under ASC 605 “Revenue Recognition” (“ASC 605”) and requires entities to recognize revenue to depict the transfer of promised goods or services to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company completed its assessment of the new guidance and evaluated the new requirements as applied to its existing revenue contracts not completed as of the date of initial application. As a result of the assessment, with the exception of the changes to our recognition of license revenue as further described below, the Company determined that adoption of the new standard did not have a significant impact on its revenue recognition methodology. In accordance with ASC 606, the Company recognizes revenue when the customer obtains control of a promised good or service, in an amount that reflects the consideration to which the Company expects to be entitled in exchange for the good or service.

The Company determined that the revenue recognition methodology for the deferred license revenue changed as a result of the adoption of ASC 606. License revenue recorded by the Company prior to January 1, 2018 related exclusively to the recognition of the upfront payment received from Biogen upon the execution of the License and Collaboration agreement that granted Biogen an exclusive non sub-licensable license to sell Fampyra outside of the U.S. License revenue recorded prior to January 1, 2018 was recognized under ASC 605 on a pro rata basis as the Company’s obligations were satisfied throughout the duration of the license and collaboration agreement. As of January 1, 2018, the Company adopted ASC 606 which changed the Company’s determination of its distinct performance obligations resulting in an acceleration of the recognition of the revenue in the arrangement. The material performance obligations were completed prior to January 1, 2018, and as a result, the Company recognized its previously deferred revenue as a cumulative effect adjustment of $27.6 million within the accumulated deficit on the consolidated balance sheet as of January 1, 2018.

 

The cumulative effect of applying ASC 606 to the company’s consolidated balance sheet was as follows:

(In thousands)

Balance as of December 31, 2017

 

Net Adjustments

 

Balance as of

January 1, 2018

 

Assets

 

 

 

 

 

 

 

 

 

Other current assets

$

1,983

 

$

(634

)

$

1,349

 

Non-current portion of deferred cost of license revenue

 

1,638

 

 

(1,638

)

 

 

    Total Assets

$

1,197,969

 

$

(2,272

)

$

1,195,697

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

Current portion of deferred license revenue

$

9,057

 

$

(9,057

)

$

 

Non-current portion of deferred license revenue

 

23,398

 

 

(23,398

)

 

 

Deferred tax liability

 

22,459

 

 

2,600

 

 

25,059

 

Accumulated deficit

 

(455,108

)

 

27,583

 

 

(427,525

)

    Total liabilities and stockholders' equity

$

1,197,969

 

$

(2,272

)

$

1,195,697

 

          

The impact of the adoption of ASC 606 on the Company’s consolidated balance sheet as of March 31, 2018 was as follows:

(In thousands)

Balance as of

March 31, 2018

Prior to Adoption

of ASC 606

 

Net Adjustments

 

Balance as of

March 31, 2018

as Reported

Under ASC 606

 

Assets

 

 

 

 

 

 

 

 

 

Other current assets

$

2,088

 

$

(634

)

$

1,454

 

Non-current portion of deferred cost of license revenue

 

1,479

 

 

(1,479

)

 

 

    Total Assets

$

1,189,186

 

$

(2,113

)

$

1,187,073

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

Current portion of deferred license revenue

$

9,057

 

$

(9,057

)

$

 

Non-current portion of deferred license revenue

 

21,134

 

 

(21,134

)

 

 

Deferred tax liability

 

22,336

 

 

2,600

 

 

24,936

 

Accumulated deficit

 

(461,203

)

 

25,478

 

 

(435,725

)

    Total liabilities and stockholders' equity

$

1,189,186

 

$

(2,113

)

$

1,187,073

 

 

The impact of the adoption of ASC 606 on the Company’s consolidated statement of operations for the three-month period ended March 31, 2018 was as follows:

(In thousands)

Three-Month Period Ended March 31, 2018 Balance Prior to

Adoption of ASC 606

 

Effect of Change

 

Three-Month Period

Ended March 31, 2018

Balance as Reported

Under ASC 606

 

License revenue

$

2,264

 

$

(2,264

)

$

 

Cost of license revenue

 

159

 

 

(159

)

 

 

Operating income

$

2,559

 

$

(2,105

)

$

454

 

 

 

 

 

 

 

 

 

 

 

Net loss

$

(6,094

)

$

(2,105

)

$

(8,199

)

Net loss per share (basic and diluted)

$

(0.13

)

$

(0.05

)

$

(0.18

)

 

ASC 606 did not have an aggregate impact on the Company’s net cash provided by operating activities.

ASC 606 outlines a five-step process for recognizing revenue from contracts with customers: i) identify the contract with the customer, ii) identify the performance obligations in the contract, (iii) determine the transaction price, iv) allocate the transaction price to the separate performance obligations in the contract, and (v) recognize revenue associated with the performance obligations as they are satisfied.

The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. Once a contract is determined to be within the scope of ASC 606, the Company determines the performance obligations that are distinct. The Company recognizes as revenues the amount of the transaction price that is allocated to each respective performance obligation when the performance obligation is satisfied or as it is satisfied. Generally, the Company's performance obligations are transferred to customers at a point in time, typically upon receipt of the product by the customer.

Product Revenue, Net

 Net revenue from product sales is recognized at the transaction price when the customer obtains control of the Company’s product, which occurs at a point in time, typically upon receipt of the product by the customer. The Company’s products are sold to a network of specialty providers which are contractually obligated to hold no more than an agreed upon number of days inventory. The Company’s payment terms are between 30 to 34 days.

The Company’s net revenues represent total revenues adjusted for discounts and allowances, including estimated price discounts, rebates and chargebacks. These adjustments represent variable consideration under ASC 606 and are recorded for cash consideration given by the Company to a customer that is presumed to be a reduction of the transaction price of the Company’s products and, therefore, are characterized as a reduction of revenue. These adjustments are established by management as its best estimate based on available information and will be adjusted to reflect known changes in the factors that impact such allowances. Adjustments for variable consideration are determined based on the contractual terms with customers, historical trends, communications with customers and the levels of inventory remaining in the distribution channel, as well as expectations about the market for the product and anticipated introduction of competitive products.

Discounts and Allowances

Revenue from product sales are recorded at the transaction price, which includes estimates for discounts and allowances for which reserves are established and includes cash discounts, chargebacks, rebates, returns, copay assistance, data fees and wholesaler fees for servicesDiscounts and allowances are recorded following shipment of product and the appropriate reserves are credited. These reserves are classified as reductions of accounts receivable (if the amount is payable to the Customer and right of offset exists) or a current liability (if the amount is payable to a party other than a Customer). These allowances are established by management as its best estimate based on historical experience and data points available and are adjusted to reflect known changes in the factors that impact such reserves. Allowances for customer credits, chargebacks, rebates, data fees and wholesaler fees for services, returns, and discounts are established based on contractual terms with customers and analyses of historical usage of these items. Actual amounts of consideration ultimately received may differ from the Company’s estimates. If actual results in the future vary from the Company’s estimates, the Company will adjust these estimates, which would affect net product revenue and earnings in the period such variances become known. The nature of our allowances and accruals requiring critical estimates, and the specific considerations it uses in estimating their amounts are as follows:

Government Chargebacks and Rebates: We contract for Medicaid and other U.S. Federal government programs to allow for our products to remain eligible for reimbursement under these programs. For Medicare, the Company also estimates the number of patients in the prescription drug coverage gap for whom the Company will owe an additional liability under the Medicare Part D program. Based upon our contracts and the most recent experience with respect to sales through each of these channels, we provide an allowance for chargebacks and rebates. We monitor the sales trends and adjust the chargeback and rebate percentages on a regular basis to reflect the most recent chargebacks and rebate experience. The Company’s liability for these rebates consists of invoices received for claims from prior quarters that have not been paid or for which an invoice has not yet been received, estimates of claims for the current quarter, and estimated future claims that will be made for product that has been recognized as revenue, but remains in the distribution channel inventories at the end of each reporting period.

Managed Care Contract Rebates: We contract with various managed care organizations including health insurance companies and pharmacy benefit managers. These contracts stipulate that rebates and, in some cases, administrative fees, are paid to these organizations provided our product is placed on a specific tier on the organization’s drug formulary. Based upon our contracts and the most recent experience with respect to sales through managed care channels, we provide an allowance for managed care contract rebates. We monitor the sales trends and adjust the allowance on a regular basis to reflect the most recent rebate experience. The Company’s liability for these rebates consists of invoices received for claims from prior quarters that have not been paid or for which an invoice has not yet been received, estimates of claims for the current quarter, and estimated future claims that will be made for product that has been recognized as revenue, but remains in the distribution channel inventories at the end of each reporting period.

Copay Mitigation Rebates: We offer copay mitigation to commercially insured patients who have coverage for our products (in accordance with applicable law) and are responsible for a cost share. Based upon our contracts and the most recent experience with respect to actual copay assistance provided, we provide an allowance for copay mitigation rebates. We monitor the sales trends and adjust the rebate percentages on a regular basis to reflect the most recent rebate experience.

Cash Discounts: We sell directly to our network of specialty pharmacies, Kaiser and the specialty distributor to the U.S. Department of Veterans Affairs. We generally provide invoice discounts for prompt payment for our products. We estimate our cash discounts based on the terms offered to our customers. Discounts are estimated based on rates that are explicitly stated in the Company’s contracts as it is expected they will take the discount and are recorded as a reduction of revenue at the time of product shipment when product revenue is recognized. We adjust estimates based on actual activity as necessary.

Product Returns: We either offer customers no return except for products damaged in shipping or consistent with industry practice, a limited right of return based on the product’s expiration date. The Company estimates the amount of its product sales that may be returned by its customers and records this estimate as a reduction of revenue in the period the related product revenue is recognized. The company currently estimates product return liabilities using historical sales information and inventory remaining in the distribution channel.

Data Fees and Fees for Service Payable to Specialty Pharmacies: We have contracted with certain specialty pharmacies to obtain transactional data related to our products in order to develop a better understanding of our selling channel as well as patient activity and utilization by the Medicaid program and other government agencies and managed care organizations. We pay a variable fee to the specialty pharmacies to provide us the data. We also pay the specialty pharmacies a flat fee in exchange for providing distribution and inventory management services, including the provision of inventory management data to the Company. We estimate our fee for service accruals and allowances based on sales to each specialty pharmacy and the applicable contracted rate.

Royalty Revenue

Royalty revenue recorded by the Company relates exclusively to the Company’s License and Collaboration agreement with Biogen which provides for ongoing royalties based on sales of Fampyra outside of the U.S. The Company recognizes revenue for royalties under ASC 606, which provides revenue recognition constraints by requiring the recognition of revenue at the later of the following: 1) sale or usage of the products or 2) satisfaction of the performance obligations. The Company has satisfied its performance obligations and therefore recognizes royalty revenue when the sales to which the royalties relate are completed.

Milestone Revenue

Milestone revenue relates to the License and Collaboration agreement with Biogen which provides for milestone payments for the achievement of certain regulatory and sales milestones during the term of the agreement. Regulatory milestones are contingent upon the approval of Fampyra for new indications outside of the U.S. Sales milestones are contingent upon the achievement of certain net sales targets for Fampyra sales outside of the U.S. The Company recognizes milestone revenue under ASC 606, which provides constraints for entities to recognize milestone revenue which is deemed to be variable by requiring the Company to estimate the amount of consideration to which it is entitled in exchange for transferring the promised goods or services to a customer. The Company recognizes an estimate of revenue to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the milestone is achieved. For regulatory milestones, the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the Company’s control or the licensee’s control, such as regulatory approvals, are generally not considered probable of being achieved until those approvals are received. For sales-based milestones, the Company has satisfied its performance obligations and, therefore, recognizes revenue upon the achievement of the specific sale milestones.

The following table disaggregates our revenue by major source (in thousands):

 

 

Three-month period ended March 31, 2018

 

 

Three-month period ended March 31, 2017

 

Revenues:

 

 

 

 

 

 

 

 

Net product revenues

 

$

103,003

 

 

$

112,593

 

Royalty revenues

 

 

3,162

 

 

 

4,528

 

License revenue

 

 

 

 

 

2,265

 

Total net revenues

 

$

106,165

 

 

$

119,386

 

 

Foreign Currency Translation

Foreign Currency Translation

The functional currency of operations outside the United States of America is deemed to be the currency of the local country, unless otherwise determined that the United States dollar would serve as a more appropriate functional currency given the economic operations of the entity. Accordingly, the assets and liabilities of the Company’s foreign subsidiary, Biotie, are translated into United States dollars using the period-end exchange rate; income and expense items are translated using the average exchange rate during the period; and equity transactions are translated at historical rates. Cumulative translation adjustments are reflected as a separate component of equity. Foreign currency transaction gains and losses are recognized in the period incurred and are reported as other income (expense) in the statement of operations.

Segment and Geographic Information

Segment and Geographic Information

 

The Company is managed and operated as one business which is focused on developing therapies that restore function and improve the lives of people with neurological disorders. The entire business is managed by a single management team that reports to the Chief Executive Officer. The Company does not operate separate lines of business with respect to any of its products or product candidates and the Company does not prepare discrete financial information with respect to separate products or product candidates or by location. Accordingly, the Company views its business as one reportable operating segment. Net product revenues reported to date are derived from the sales of Ampyra and Qutenza in the U.S.

Subsequent Events

Subsequent Events

Subsequent events are defined as those events or transactions that occur after the balance sheet date, but before the financial statements are filed with the Securities and Exchange Commission. The Company completed an evaluation of the impact of any subsequent events through the date these financial statements were issued, and determined there were no subsequent events requiring disclosure in these financial statements.

Accounting Pronouncements Adopted

Accounting Pronouncements Adopted

As noted above, in May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2014-09, “Revenue from Contracts with Customers” (Topic 606) (ASU 2014-09). This new standard replaced all previous U.S. GAAP guidance on this topic and eliminated all industry-specific guidance. The new standard requires the application of a five-step model to determine the amount and timing of revenue to be recognized. The underlying principle is that revenue is to be recognized for the transfer of goods or services to customers that reflects the amount of consideration that the Company expects to be entitled to in exchange for those goods or services. The Company adopted the new standard effective January 1, 2018 using the modified retrospective transition method. See discussion of the adoption above in Revenue Recognition.

In January 2016, the FASB issued Accounting Standards Update 2016-01, “Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.” The main objective of this update is to enhance the reporting model for financial instruments to provide users of financial statements with more decision-useful information. The new guidance addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The Company adopted this guidance effective January 1, 2018. The adoption of this guidance did not have an impact on the Company’s consolidated financial statements.

In August 2016, the FASB issued Accounting Standards Update ASU 2016-15 “Statement of Cash Flows” (Topic 230): Classification of Certain Cash Receipts and Cash Payments (ASU 2016-15), which specifies how certain cash receipts and cash payments are presented and classified in the statement of cash flows. This ASU requires retrospective application to all periods presented. The Company adopted this guidance effective January 1, 2018. The adoption of this guidance did not have an impact on the Company’s consolidated financial statements.

In November 2016, the FASB issued Accounting Standards Update ASU 2016-18 “Statement of Cash Flows” (Topic 230); Restricted Cash (ASU 2016-18), which defines new requirements for the presentation of restricted cash and restricted cash equivalents in the statement of cash flows. The amendments in this ASU require retrospective application to each period presented. The Company adopted this guidance effective January 1, 2018 retrospectively. This ASU requires the entities to present statement of cash flows in a manner such that it reconciles beginning and ending totals of cash, cash equivalents, restricted cash or restricted cash equivalents. Also, when cash, cash equivalents, restricted cash or restricted cash equivalents are presented in more than one line item within the statement of financial position, an entity should, for each period that a statement of financial position is presented, present on the face of the statement of cash flows or disclose in the notes to the financial statements, the line items and amounts of cash, cash equivalents, and restricted cash or restricted cash equivalents reported within the statement of financial position. The amounts, disaggregated by the line item in which they appear within the statement of financial position, shall sum to the total amount of cash, cash equivalents, and restricted cash or restricted cash equivalents at the end of the corresponding period shown in the statement of cash flows.

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the statement of financial position that sum to the total of the same amounts shown in the statement of cash flows:

 

Three months ended March 31, 2018

 

 

Three months ended March 31, 2017

 

(In thousands)

Beginning of period

 

 

End of period

 

 

Beginning of period

 

 

End of period

 

Cash and cash equivalents

$

307,068

 

 

$

226,276

 

 

$

158,537

 

 

$

133,619

 

Restricted cash

 

410

 

 

 

460

 

 

 

79

 

 

 

61

 

Restricted cash included in Other assets

 

561

 

 

 

312

 

 

 

255

 

 

 

255

 

Total Cash, cash equivalents and restricted cash per statement of cash flows

$

308,039

 

 

$

227,048

 

 

$

158,871

 

 

$

133,935

 

Amounts included in restricted cash represent those amounts required to be set aside to cover the Company’s self-funded employee health insurance. Restricted cash included in other assets on the statement of financial position relates to cash collateralized standby letters of credit in connection with obligations under facility leases, which is included with other assets in the consolidated balance sheet due to the long-term nature of the letters of credit.

In January 2017, the FASB issued Accounting Standards Update 2017-01, “Business Combinations” (Topic 805): Clarifying the Definition of a Business (ASU 2017-01), which provides additional clarification to aid in determining when a set of assets and activities is not a business. The amendments in this update require prospective applications. The Company adopted this guidance effective January 1, 2018. The adoption of this guidance did not have an impact on the Company’s consolidated financial statements.

In May 2017, the FASB issued Accounting Standards Update 2017-09, “Compensation – Stock Compensation” (Topic 718): Scope of Modification Accounting (ASU 2017-09). This new standard provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. ASU 2017-09 allows for prospective application and is effective for fiscal years beginning after December 15, 2017, and interim periods therein with early adoption permitted for interim or annual periods. The Company adopted this guidance effective January 1, 2018. The adoption of this guidance did not have an impact on the Company’s consolidated financial statements.

Accounting Pronouncements Not Yet Adopted

Accounting Pronouncements Not Yet Adopted

In February 2016, the FASB issued Accounting Standards Update 2016-02, “Leases” (Topic 842). The main objective of this update is to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the impact it may have on its consolidated financial statements.

In January 2017, the FASB issued Accounting Standards Update 2017-04, “Intangibles – Goodwill and Other” (Topic 350): Simplifying the Test for Goodwill Impairment (ASU 2017-04). This new standard simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. ASU 2017-04 allows for prospective application and is effective for fiscal years beginning after December 15, 2019, and interim periods therein with early adoption permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating whether it will adopt this guidance early. The Company does not expect the adoption of this guidance to have a significant impact on the consolidated financial statements.

In February 2018, the FASB issued Accounting Standards Update 2018-02, ‘Income Statement—Reporting Comprehensive Income’ (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (ASU 2018-02). This new standard provides entities with an option to reclassify stranded tax effects within AOCI to retained earnings in each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act (or portion thereof) is recorded. ASC 740-10-35-4 requires that deferred tax assets and liabilities should be adjusted to account for any changes in tax laws or rates within the period that the enactment of these changes occurs and any adjustments to flow through income from continuing operations. Since the adjustments due to the Tax Cuts and Jobs Act are required to flow through income from continuing operations, the tax effects of items within accumulated other comprehensive income known now as “stranded tax effects,” do not reflect the appropriate tax rate. As such, FASB issued ASU 2018-02, in order to address these stranded income tax effects. The new standard requires entities to disclose the following:

 

A description of the accounting policy for releasing income tax effects from AOCI;

 

Whether they elect to reclassify the stranded income tax effects from the Tax Cuts and Jobs Act, and

 

Information about the other income tax effects that are reclassified.

 

The ASU is effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years with early adoption permitted. The Company is currently evaluating the impact it may have on its consolidated financial statements.

In March 2018, the FASB issued Accounting Standards Update 2018-05, “Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin (SAB) No. 118’. The ASU adds seven paragraphs to ASC 740, Income Taxes, that contain SEC guidance related to SAB 118 (codified as SEC SAB Topic 5.EE, “Income Tax Accounting Implications of the Tax Cuts and Jobs Act”), which provides guidance for companies that are not able to complete their accounting for the income tax effects of the Tax Cuts and Jobs Act in the period of enactment which is the period that includes December 22, 2017. The measurement period should not extend beyond one year from the enactment date. The Company is currently evaluating the impact the adoption of this guidance may have on its consolidated financial statements.

v3.8.0.1
Summary of Significant Accounting Policies (Tables)
3 Months Ended
Mar. 31, 2018
Disaggregation of Revenue

The following table disaggregates our revenue by major source (in thousands):

 

 

Three-month period ended March 31, 2018

 

 

Three-month period ended March 31, 2017

 

Revenues:

 

 

 

 

 

 

 

 

Net product revenues

 

$

103,003

 

 

$

112,593

 

Royalty revenues

 

 

3,162

 

 

 

4,528

 

License revenue

 

 

 

 

 

2,265

 

Total net revenues

 

$

106,165

 

 

$

119,386

 

 

Reconciliation of Cash, Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the statement of financial position that sum to the total of the same amounts shown in the statement of cash flows:

 

Three months ended March 31, 2018

 

 

Three months ended March 31, 2017

 

(In thousands)

Beginning of period

 

 

End of period

 

 

Beginning of period

 

 

End of period

 

Cash and cash equivalents

$

307,068

 

 

$

226,276

 

 

$

158,537

 

 

$

133,619

 

Restricted cash

 

410

 

 

 

460

 

 

 

79

 

 

 

61

 

Restricted cash included in Other assets

 

561

 

 

 

312

 

 

 

255

 

 

 

255

 

Total Cash, cash equivalents and restricted cash per statement of cash flows

$

308,039

 

 

$

227,048

 

 

$

158,871

 

 

$

133,935

 

 

ASC 606  
Cumulative Effect and Impact of Adoption of ASC 606 on Consolidated Balance Sheet And Consolidated Statement Of Operations

The cumulative effect of applying ASC 606 to the company’s consolidated balance sheet was as follows:

(In thousands)

Balance as of December 31, 2017

 

Net Adjustments

 

Balance as of

January 1, 2018

 

Assets

 

 

 

 

 

 

 

 

 

Other current assets

$

1,983

 

$

(634

)

$

1,349

 

Non-current portion of deferred cost of license revenue

 

1,638

 

 

(1,638

)

 

 

    Total Assets

$

1,197,969

 

$

(2,272

)

$

1,195,697

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

Current portion of deferred license revenue

$

9,057

 

$

(9,057

)

$

 

Non-current portion of deferred license revenue

 

23,398

 

 

(23,398

)

 

 

Deferred tax liability

 

22,459

 

 

2,600

 

 

25,059

 

Accumulated deficit

 

(455,108

)

 

27,583

 

 

(427,525

)

    Total liabilities and stockholders' equity

$

1,197,969

 

$

(2,272

)

$

1,195,697

 

The impact of the adoption of ASC 606 on the Company’s consolidated balance sheet as of March 31, 2018 was as follows:

(In thousands)

Balance as of

March 31, 2018

Prior to Adoption

of ASC 606

 

Net Adjustments

 

Balance as of

March 31, 2018

as Reported

Under ASC 606

 

Assets

 

 

 

 

 

 

 

 

 

Other current assets

$

2,088

 

$

(634

)

$

1,454

 

Non-current portion of deferred cost of license revenue

 

1,479

 

 

(1,479

)

 

 

    Total Assets

$

1,189,186

 

$

(2,113

)

$

1,187,073

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

Current portion of deferred license revenue

$

9,057

 

$

(9,057

)

$

 

Non-current portion of deferred license revenue

 

21,134

 

 

(21,134

)

 

 

Deferred tax liability

 

22,336

 

 

2,600

 

 

24,936

 

Accumulated deficit

 

(461,203

)

 

25,478

 

 

(435,725

)

    Total liabilities and stockholders' equity

$

1,189,186

 

$

(2,113

)

$

1,187,073

 

 

The impact of the adoption of ASC 606 on the Company’s consolidated statement of operations for the three-month period ended March 31, 2018 was as follows:

(In thousands)

Three-Month Period Ended March 31, 2018 Balance Prior to

Adoption of ASC 606

 

Effect of Change

 

Three-Month Period

Ended March 31, 2018

Balance as Reported

Under ASC 606

 

License revenue

$

2,264

 

$

(2,264

)

$

 

Cost of license revenue

 

159

 

 

(159

)

 

 

Operating income

$

2,559

 

$

(2,105

)

$

454

 

 

 

 

 

 

 

 

 

 

 

Net loss

$

(6,094

)

$

(2,105

)

$

(8,199

)

Net loss per share (basic and diluted)

$

(0.13

)

$

(0.05

)

$

(0.18

)

 

v3.8.0.1
Share-based Compensation (Tables)
3 Months Ended
Mar. 31, 2018
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]  
Schedule of Share-based Compensation Expense

The following table summarizes share-based compensation expense included within the consolidated statements of operations:

 

 

 

For the three-month

period ended March 31,

 

(In millions)

 

2018

 

 

2017

 

Research and development

 

$

1.7

 

 

$

2.5

 

Selling, general and administrative

 

 

4.2

 

 

 

5.3

 

Total

 

$

5.9

 

 

$

7.8

 

 

Schedule of Stock Option Activity

A summary of share-based compensation activity for the three-month period ended March 31, 2018 is presented below:

 

 

 

Number of

Shares

(In thousands)

 

 

Weighted

Average

Exercise

Price

 

 

Weighted

Average

Remaining

Contractual

Term

 

 

Intrinsic

Value

(In thousands)

 

Balance at January 1, 2018

 

 

8,929

 

 

$

29.46

 

 

 

 

 

 

 

 

 

Granted

 

 

536

 

 

 

24.39

 

 

 

 

 

 

 

 

 

Cancelled

 

 

(201

)

 

 

23.89

 

 

 

 

 

 

 

 

 

Exercised

 

 

(172

)

 

 

19.61

 

 

 

 

 

 

 

 

 

Balance at March 31, 2017

 

 

9,092

 

 

$

29.47

 

 

 

6.0

 

 

$

8,141

 

Vested and expected to vest at

    March 31, 2018

 

 

9,032

 

 

$

29.50

 

 

 

6.0

 

 

$

8,068

 

Vested and exercisable at

    March 31, 2018

 

 

6,728

 

 

$

30.49

 

 

 

5.1

 

 

$

4,605

 

 

Restricted Stock and Performance Stock Unit  
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]  
Schedule of Restricted Stock and Performance Stock Unit Activity

 

(In thousands)

 

 

 

 

Restricted Stock and Performance Stock Units

 

Number of Shares

 

Nonvested at January 1, 2018

 

 

698

 

Granted

 

 

 

Vested

 

 

(111

)

Forfeited

 

 

(71

)

Nonvested at March 31, 2018

 

 

516

 

 

v3.8.0.1
Loss Per Share (Tables)
3 Months Ended
Mar. 31, 2018
Earnings Per Share [Abstract]  
Schedule of computation of basic and diluted loss per share

The following table sets forth the computation of basic and diluted loss per share for the three-month periods ended March 31, 2018 and 2017:

 

(In thousands, except per share data)

 

Three-month period ended March 31, 2018

 

 

Three-month period ended March 31, 2017

 

 

Basic and diluted

 

 

 

 

 

 

 

 

 

Net loss

 

$

(8,199

)

 

$

(18,904

)

 

Weighted average common shares outstanding used in

   computing net loss per share—basic and diluted

 

 

46,529

 

 

 

45,808

 

 

Net loss per share—basic and diluted

 

$

(0.18

)

 

$

(0.41

)

 

 

Schedule of antidilutive securities excluded from calculation of net loss per diluted share

The following amounts were not included in the calculation of net loss per diluted share because their effects were anti-dilutive:

 

(In thousands)

 

Three-month period ended March 31, 2018

 

 

Three-month period ended March 31, 2017

 

Denominator

 

 

 

 

 

 

 

 

Stock options and restricted common shares

 

 

7,504

 

 

 

8,258

 

 

v3.8.0.1
Fair Value Measurements (Tables)
3 Months Ended
Mar. 31, 2018
Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis

 

(In thousands)

 

Level 1

 

 

Level 2

 

 

Level 3

 

March 31, 2018

 

 

 

 

 

 

 

 

 

 

 

 

Assets Carried at Fair Value:

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

 

$

19,621

 

 

$

32,452

 

 

$

 

Short-term investments

 

 

 

 

 

106,767

 

 

 

 

Liabilities Carried at Fair Value:

 

 

 

 

 

 

 

 

 

 

 

 

Acquired contingent consideration

 

 

 

 

 

 

 

 

119,200

 

December 31, 2017

 

 

 

 

 

 

 

 

 

 

 

 

Assets Carried at Fair Value:

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

 

$

9,163

 

 

$

 

 

$

 

Liabilities Carried at Fair Value:

 

 

 

 

 

 

 

 

 

 

 

 

Acquired contingent consideration

 

 

 

 

 

 

 

 

113,000

 

 

Contingent consideration liability  
Schedule of Contingent Liabilities

 

(In thousands)

 

Three-month period ended March 31, 2018

 

 

Three-month period ended March 31, 2017

 

Acquired contingent consideration:

 

 

 

 

 

 

 

 

Balance, beginning of period

 

$

113,000

 

 

$

72,100

 

Fair value change to contingent consideration

   included in the statement of operations

 

 

6,200

 

 

 

10,800

 

Balance, end of period

 

$

119,200

 

 

$

82,900

 

 

v3.8.0.1
Investments (Tables)
3 Months Ended
Mar. 31, 2018
Available For Sale Securities Current [Abstract]  
Schedule of Available-for-Sale Securities

The Company has determined that all of its investments are classified as available-for-sale. Available-for-sale debt securities are carried at fair value with interest on these investments included in interest income and are recorded based primarily on quoted market prices. Available-for-sale investments consisted of the following at March 31, 2018:

 

 

 

 

 

 

 

Gross

 

 

Gross

 

 

Estimated

 

 

 

Amortized

 

 

Unrealized

 

 

Unrealized

 

 

Fair

 

(In thousands)

 

Cost

 

 

Gains

 

 

Losses

 

 

Value

 

Cash Equivalents

 

$

32,457

 

 

$

1

 

 

$

(6

)

 

$

32,452

 

Short Term Investments

 

 

106,854

 

 

 

6

 

 

 

(93

)

 

 

106,767

 

Total

 

$

139,311

 

 

$

7

 

 

$

(99

)

 

$

139,219

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Schedule of Changes in Accumulated Other Comprehensive (Loss) Income

The changes in AOCI associated with the unrealized holding gains on available-for-sale investments during the three-month period ended March 31, 2018, were as follows (in thousands):

 

(In thousands)

 

Net Unrealized Gains (Losses) on Marketable Securities

 

Balance at December 31, 2017

 

$

 

Other comprehensive loss before reclassifications

 

 

(92

)

Amounts reclassified from accumulated other comprehensive income

 

 

 

Net current period other comprehensive loss

 

 

(92

)

Balance at March 31, 2018

 

$

(92

)

 

v3.8.0.1
Liability Related to Sale of Future Royalties (Tables)
3 Months Ended
Mar. 31, 2018
Deferred Revenue Disclosure [Abstract]  
Schedule of Activity Within Liability Related to Sale of Future Royalties

(In thousands)

 

Three-month period ended March 31, 2018

 

 

Liability related to sale of future royalties - beginning balance

 

$

35,788

 

 

Deferred transaction costs recognized

 

 

202

 

 

Non-cash royalty revenue payable to HCRP

 

 

(2,781

)

 

Non-cash interest expense recognized

 

 

1,186

 

 

Liability related to sale of future royalties - ending balance

 

$

34,395

 

 

 

 

 

 

 

 

 

v3.8.0.1
Summary of Significant Accounting Policies - Additional Information (Details)
$ in Thousands
3 Months Ended
Mar. 31, 2018
USD ($)
Segment
Jan. 01, 2018
USD ($)
Dec. 31, 2017
USD ($)
Revenue Recognition      
Accumulated deficit $ (435,725)   $ (455,108)
Segment and Geographic Information      
Number of operating segments | Segment 1    
Number of reportable operating segments | Segment 1    
Minimum      
Revenue Recognition      
Product revenue payment term 30 days    
Maximum      
Revenue Recognition      
Product revenue payment term 34 days    
ASC 606      
Revenue Recognition      
Accumulated deficit   $ (427,525)  
ASC 606 | Net Adjustments      
Revenue Recognition      
Accumulated deficit $ 25,478 $ 27,583  
v3.8.0.1
Summary of Significant Accounting Policies - Cumulative Effect and Impact of Adoption of ASC 606 on Consolidated Balance Sheet (Details) - USD ($)
$ in Thousands
Mar. 31, 2018
Jan. 01, 2018
Dec. 31, 2017
Assets      
Other current assets $ 1,454   $ 1,983
Non-current portion of deferred cost of license revenue     1,638
Total Assets 1,187,073   1,197,969
Liabilities      
Current portion of deferred license revenue     9,057
Non-current portion of deferred license revenue     23,398
Deferred tax liability 24,936   22,459
Accumulated deficit (435,725)   (455,108)
Total liabilities and stockholders' equity 1,187,073   $ 1,197,969
ASC 606      
Assets      
Other current assets   $ 1,349  
Total Assets   1,195,697  
Liabilities      
Deferred tax liability   25,059  
Accumulated deficit   (427,525)  
Total liabilities and stockholders' equity   1,195,697  
ASC 606 | Net Adjustments      
Assets      
Other current assets (634) (634)  
Non-current portion of deferred cost of license revenue (1,479) (1,638)  
Total Assets (2,113) (2,272)  
Liabilities      
Current portion of deferred license revenue (9,057) (9,057)  
Non-current portion of deferred license revenue (21,134) (23,398)  
Deferred tax liability 2,600 2,600  
Accumulated deficit 25,478 27,583  
Total liabilities and stockholders' equity (2,113) $ (2,272)  
ASC 606 | Prior to Adoption of ASC 606      
Assets      
Other current assets 2,088    
Non-current portion of deferred cost of license revenue 1,479    
Total Assets 1,189,186    
Liabilities      
Current portion of deferred license revenue 9,057    
Non-current portion of deferred license revenue 21,134    
Deferred tax liability 22,336    
Accumulated deficit (461,203)    
Total liabilities and stockholders' equity $ 1,189,186    
v3.8.0.1
Summary of Significant Accounting Policies - Impact of Adoption of ASC 606 on Consolidated Statement of Operations (Details) - USD ($)
$ / shares in Units, $ in Thousands
3 Months Ended
Mar. 31, 2018
Mar. 31, 2017
Revenue Initial Application Period Cumulative Effect Transition [Line Items]    
License revenue   $ 2,265
Cost of license revenue   159
Operating income $ 454 (15,273)
Net loss $ (8,199) $ (18,904)
Net loss per share—basic and diluted $ (0.18) $ (0.41)
ASC 606 | Prior to Adoption of ASC 606    
Revenue Initial Application Period Cumulative Effect Transition [Line Items]    
License revenue $ 2,264  
Cost of license revenue 159  
Operating income 2,559  
Net loss $ (6,094)  
Net loss per share—basic and diluted $ (0.13)  
ASC 606 | Net Adjustments    
Revenue Initial Application Period Cumulative Effect Transition [Line Items]    
License revenue $ (2,264)  
Cost of license revenue (159)  
Operating income (2,105)  
Net loss $ (2,105)  
Net loss per share—basic and diluted $ (0.05)  
v3.8.0.1
Summary of Significant Accounting Policies - Disaggregation of Revenue (Details) - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2018
Mar. 31, 2017
Disaggregation Of Revenue [Line Items]    
Total net revenues $ 106,165 $ 119,386
Net Product Revenues    
Disaggregation Of Revenue [Line Items]    
Total net revenues 103,003 112,593
Royalty Revenues    
Disaggregation Of Revenue [Line Items]    
Total net revenues $ 3,162 4,528
License Revenue    
Disaggregation Of Revenue [Line Items]    
Total net revenues   $ 2,265
v3.8.0.1
Summary of Significant Accounting Policies - Reconciliation of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($)
$ in Thousands
Mar. 31, 2018
Dec. 31, 2017
Mar. 31, 2017
Dec. 31, 2016
Accounting Policies [Abstract]        
Cash and cash equivalents $ 226,276 $ 307,068 $ 133,619 $ 158,537
Restricted cash 460 410 61 79
Restricted cash included in Other assets $ 312 $ 561 $ 255 $ 255
Restricted cash, noncurrent, statement of financial position [extensible list] us-gaap:OtherAssetsNoncurrent us-gaap:OtherAssetsNoncurrent us-gaap:OtherAssetsNoncurrent us-gaap:OtherAssetsNoncurrent
Total Cash, cash equivalents and restricted cash per statement of cash flows $ 227,048 $ 308,039 $ 133,935 $ 158,871
v3.8.0.1
Share-based Compensation - Additional Information (Details) - USD ($)
$ / shares in Units, $ in Millions
3 Months Ended
Mar. 31, 2018
Mar. 31, 2017
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]    
Share-based compensation expense recognized $ 5.9 $ 7.8
Weighted average fair value of options granted (in dollars per share) $ 12.37 $ 13.02
Share based compensation, other disclosures    
Total unrecognized compensation costs related to unvested stock options and restricted stock awards that the company expects to recognize $ 33.7  
Weighted average period 1 year 10 months 24 days  
Repurchases of common stock, shares 46,785  
Average price of common stock per share $ 25.69  
Repurchases of common stock $ 1.2  
v3.8.0.1
Share-based Compensation - Schedule of Share-based Compensation Expense (Details) - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2018
Mar. 31, 2017
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Share-based compensation expense recognized $ 5.9 $ 7.8
Research and development    
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Share-based compensation expense recognized 1.7 2.5
Selling, general, and administrative    
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Share-based compensation expense recognized $ 4.2 $ 5.3
v3.8.0.1
Share-based Compensation - Schedule of Stock Options Activity (Details)
$ / shares in Units, shares in Thousands, $ in Thousands
3 Months Ended
Mar. 31, 2018
USD ($)
$ / shares
shares
Stock Option Activity  
Beginning balance (in shares) | shares 8,929
Granted (in shares) | shares 536
Cancelled (in shares) | shares (201)
Exercised (in shares) | shares (172)
Ending balance (in shares) | shares 9,092
Vested and expected to vest at the end of the period | shares 9,032
Vested and exercisable at the end of the period | shares 6,728
Weighted Average Exercise Price  
Balance at the beginning of the period (in dollars per share) | $ / shares $ 29.46
Granted (in dollars per share) | $ / shares 24.39
Cancelled (in dollars per share) | $ / shares 23.89
Exercised (in dollars per share) | $ / shares 19.61
Balance at the end of the period (in dollars per share) | $ / shares 29.47
Vested and expected to vest at the end of the period (in dollars per share) | $ / shares 29.50
Vested and exercisable at the end of the period (in dollars per share) | $ / shares $ 30.49
Weighted Average Remaining Contractual Term  
Balance at the end of the period 6 years
Vested and expected to vest at the end of the period 6 years
Vested and exercisable at the end of the period 5 years 1 month 6 days
Intrinsic Value  
Balance at the end of the period | $ $ 8,141
Vested and expected to vest at the end of the period | $ 8,068
Vested and exercisable at the end of the period | $ $ 4,605
v3.8.0.1
Share-based Compensation - Schedule of Restricted Stock and Performance Stock Unit Activity (Details) - Restricted Stock and Performance Stock Unit
shares in Thousands
3 Months Ended
Mar. 31, 2018
shares
Restricted Stock and Performance Stock Units  
Nonvested at the beginning of the period (in shares) 698
Granted (in shares) 0
Vested (in shares) (111)
Forfeited (in shares) (71)
Nonvested at the end of the period (in shares) 516
v3.8.0.1
Loss Per Share - Schedule of Computation of Basic and Diluted Loss Per Share (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
3 Months Ended
Mar. 31, 2018
Mar. 31, 2017
Basic and diluted    
Net loss $ (8,199) $ (18,904)
Weighted average common shares outstanding used in computing net loss per share—basic and diluted 46,529 45,808
Net loss per share—basic and diluted $ (0.18) $ (0.41)
v3.8.0.1
Loss Per Share - Schedule of Antidilutive Securities Excluded from Calculation of Net Loss Per Diluted Share (Details) - shares
shares in Thousands
3 Months Ended
Mar. 31, 2018
Mar. 31, 2017
Stock options and restricted common shares    
Antidilutive Securities    
Anti-dilutive securities excluded from computation of loss per share (in shares) 7,504 8,258
v3.8.0.1
Income Taxes - Additional Information (Details) - USD ($)
$ in Thousands
3 Months Ended 12 Months Ended
Mar. 31, 2018
Mar. 31, 2017
Dec. 31, 2017
Reconciliation of statutory federal income tax rate to effective income tax rate      
(Provision for) benefit from income taxes $ (3,477) $ 918  
Effective income tax rate (as a percent) (74.00%) 5.00%  
US federal corporate tax rate 21.00%   35.00%
v3.8.0.1
Fair Value Measurements - Additional Information (Details)
Mar. 31, 2018
USD ($)
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]  
Milestone payment, minimum (as a percent) 26.30%
Milestone payment, maximum (as a percent) 85.00%
Milestone payment, minimum $ 0
Milestone payment, maximum 69,000,000
Level 2  
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]  
Convertible senior notes $ 313,100,000
v3.8.0.1
Fair Value Measurements - Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($)
Mar. 31, 2018
Dec. 31, 2017
Assets Carried at Fair Value:    
Short-term investments $ 106,767,000 $ 0
Liabilities Carried at Fair Value:    
Acquired contingent consideration 117,983,000 112,722,000
Level 1 | Recurring basis    
Assets Carried at Fair Value:    
Cash equivalents 19,621,000 9,163,000
Level 2 | Recurring basis    
Assets Carried at Fair Value:    
Cash equivalents 32,452,000  
Short-term investments 106,767,000  
Level 3 | Recurring basis    
Liabilities Carried at Fair Value:    
Acquired contingent consideration $ 119,200,000  
Acquired contingent consideration   $ 113,000,000
v3.8.0.1
Fair Value Measurements - Schedule of Contingent Liabilities (Details) - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2018
Mar. 31, 2017
Assets and liabilities measured at fair value on a recurring basis utilizing Level 3 inputs    
Balance, beginning of period $ 113,000 $ 72,100
Fair value change to contingent consideration included in the statement of operations 6,200 10,800
Balance, end of period $ 119,200 $ 82,900
v3.8.0.1
Investments - Schedule of Available-for-Sale Securities (Details)
$ in Thousands
Mar. 31, 2018
USD ($)
Schedule Of Available For Sale Securities [Line Items]  
Amortized cost $ 139,311
Gross Unrealized Gains 7
Gross Unrealized Losses (99)
Estimated Fair Value 139,219
Cash Equivalents  
Schedule Of Available For Sale Securities [Line Items]  
Amortized cost 32,457
Gross Unrealized Gains 1
Gross Unrealized Losses (6)
Estimated Fair Value 32,452
Short Term Investments  
Schedule Of Available For Sale Securities [Line Items]  
Amortized cost 106,854
Gross Unrealized Gains 6
Gross Unrealized Losses (93)
Estimated Fair Value $ 106,767
v3.8.0.1
Investments - Additional Information (Details) - USD ($)
Mar. 31, 2018
Dec. 31, 2017
Available For Sale Securities Current [Abstract]    
Long-term Investments $ 0 $ 0
Short-term investments 106,767,000 $ 0
Short-term investments classified as cash equivalents $ 32,500,000  
v3.8.0.1
Investments - Schedule of Changes in Accumulated Other Comprehensive (loss) Income (Details) - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2018
Mar. 31, 2017
Accumulated Other Comprehensive Income Loss [Line Items]    
Balance at December 31, 2017 $ 6,858  
Net current period other comprehensive loss 2,455 $ 2,402
Balance at March 31, 2018 9,313  
Net Unrealized Gains (Losses) on Marketable Securities    
Accumulated Other Comprehensive Income Loss [Line Items]    
Other comprehensive loss before reclassifications (92)  
Net current period other comprehensive loss (92)  
Balance at March 31, 2018 $ (92)  
v3.8.0.1
Liability Related to Sale of Future Royalties - Additional Information (Details) - USD ($)
$ in Thousands
3 Months Ended
Oct. 01, 2017
Mar. 31, 2018
Liability Related To Sale Of Future Royalties [Line Items]    
Non-cash royalty revenue   $ 2,782
Royalty Purchase Agreement    
Liability Related To Sale Of Future Royalties [Line Items]    
Non cash royalty payment received $ 40,000  
Payment from royalties 40,000  
Royalty liability 40,000  
Net of transaction costs $ 2,200 (202)
Non-cash royalty revenue   2,781
Non-cash interest expense   1,186
Debt discount amortization costs   $ 200
v3.8.0.1
Liability Related to Sale of Future Royalties - Schedule of Activity Within Liability Related to Sale of Future Royalties (Details) - USD ($)
$ in Thousands
3 Months Ended
Oct. 01, 2017
Mar. 31, 2018
Liability Related To Sale Of Future Royalties [Line Items]    
Non-cash royalty revenue payable to HCRP   $ (2,782)
Royalty Purchase Agreement    
Liability Related To Sale Of Future Royalties [Line Items]    
Liability related to sale of future royalties - beginning balance   35,788
Deferred transaction costs recognized $ (2,200) 202
Non-cash royalty revenue payable to HCRP   (2,781)
Non-cash interest expense recognized   1,186
Liability related to sale of future royalties - ending balance   $ 34,395