CERUS CORP, 10-K filed on 2/21/2020
Annual Report
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Document and Entity Information - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2019
Feb. 10, 2020
Jun. 28, 2019
Cover [Abstract]      
Document Type 10-K    
Amendment Flag false    
Document Period End Date Dec. 31, 2019    
Document Fiscal Year Focus 2019    
Document Fiscal Period Focus FY    
Trading Symbol CERS    
Entity Registrant Name CERUS CORP    
Entity Central Index Key 0001020214    
Current Fiscal Year End Date --12-31    
Entity Well-known Seasoned Issuer Yes    
Entity Current Reporting Status Yes    
Entity Voluntary Filers No    
Entity Filer Category Large Accelerated Filer    
Entity Shell Company false    
Entity Small Business false    
Entity Emerging Growth Company false    
Entity Common Stock, Shares Outstanding   162,165,720  
Entity Public Float     $ 771
Title of 12(b) Security Common Stock    
Security Exchange Name NASDAQ    
Document Annual Report true    
Document Transition Report false    
Entity Interactive Data Current Yes    
Entity File Number 000-21937    
Entity Tax Identification Number 68-0262011    
Entity Incorporation, State or Country Code DE    
Entity Address, Address Line One 1220 Concord Avenue    
Entity Address, Address Line Two Suite 600    
Entity Address, City or Town Concord    
Entity Address, State or Province CA    
Entity Address, Postal Zip Code 94520    
City Area Code 925    
Local Phone Number 288-6000    
Documents Incorporated by Reference

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive proxy statement in connection with the registrant’s 2020 Annual Meeting of Stockholders, to be filed with the Securities and Exchange Commission pursuant to Regulation 14A not later than 120 days after the end of the fiscal year ended December 31, 2019, are incorporated by reference into Part III of this Annual Report on Form 10-K.

   
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CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Thousands
Dec. 31, 2019
Dec. 31, 2018
Current assets:    
Cash and cash equivalents $ 34,986 $ 28,859
Short-term investments 50,732 88,718
Accounts receivable 16,882 8,752
Inventories 19,490 13,539
Prepaid and other current assets 6,018 7,034
Total current assets 128,108 146,902
Non-current assets:    
Property and equipment, net 14,898 8,130
Goodwill 1,316 1,316
Operating lease right-of-use assets 14,122  
Intangible assets, net 132 334
Restricted cash 2,435 2,728
Other assets 4,524 4,050
Total assets 165,535 163,460
Current liabilities:    
Accounts payable 22,185 18,595
Accrued liabilities 20,951 19,800
Manufacturing and development obligations   5,928
Debt – current 5,017 7,857
Operating lease liabilities – current 1,613  
Deferred product revenue – current 570 498
Total current liabilities 50,336 52,678
Non-current liabilities:    
Debt – non-current 39,414 22,013
Operating lease liabilities – non-current 18,406  
Other non-current liabilities 327 4,250
Total liabilities 108,483 78,941
Commitments and contingencies
Stockholders' equity:    
Preferred stock, $0.001 par value; 5,000 shares authorized, issuable in series; zero shares issued and outstanding at December 31, 2019 and 2018, respectively
Common stock, $0.001 par value; 225,000 shares authorized; 144,291 and 136,853 shares issued and outstanding at December 31, 2019 and 2018, respectively 144 136
Additional paid-in capital 906,905 863,531
Accumulated other comprehensive income (loss) 114 (281)
Accumulated deficit (850,111) (778,867)
Total stockholders' equity 57,052 84,519
Total liabilities and stockholders' equity $ 165,535 $ 163,460
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CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares
Dec. 31, 2019
Dec. 31, 2018
Statement Of Financial Position [Abstract]    
Preferred stock, par value $ 0.001 $ 0.001
Preferred stock, shares authorized 5,000,000 5,000,000
Preferred stock, shares issued 0 0
Preferred stock, shares outstanding 0 0
Common stock, par value $ 0.001 $ 0.001
Common stock, shares authorized 225,000,000 225,000,000
Common stock, shares issued 144,291,000 136,853,000
Common stock, shares outstanding 144,291,000 136,853,000
v3.19.3.a.u2
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)
shares in Thousands, $ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Revenue $ 93,774 $ 76,051 $ 51,326
Cost of revenue 33,419 31,634 22,531
Gross profit 41,230 29,274 21,037
Operating expenses:      
Research and development 60,376 42,564 33,710
Selling, general and administrative 66,205 56,841 52,615
Total operating expenses 126,581 99,405 86,325
Loss from operations (66,226) (54,988) (57,530)
Non-operating (expense) income, net:      
Foreign exchange loss (86) (87) (10)
Interest expense (6,065) (4,008) (3,022)
Other income, net 1,396 1,748 3,864
Total non-operating (expense) income, net (4,755) (2,347) 832
Loss before income taxes (70,981) (57,335) (56,698)
Provision for income taxes 263 229 3,887
Net loss $ (71,244) $ (57,564) $ (60,585)
Net loss per share:      
Basic and diluted $ (0.51) $ (0.44) $ (0.56)
Weighted average shares used for calculating net loss per share:      
Basic and diluted 139,831 131,663 108,221
Product      
Revenue $ 74,649 $ 60,908 $ 43,568
Government Contract      
Revenue $ 19,125 $ 15,143 $ 7,758
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CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Statement Of Income And Comprehensive Income [Abstract]      
Net loss $ (71,244) $ (57,564) $ (60,585)
Other comprehensive income (loss)      
Unrealized gains (losses) on available-for-sale investments, net of taxes 395 (184) (200)
Comprehensive loss $ (70,849) $ (57,748) $ (60,785)
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CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($)
shares in Thousands, $ in Thousands
Total
Common Stock
Additional Paid-in Capital
Accumulated Other Comprehensive Income (Loss)
Accumulated Deficit
Balance at Dec. 31, 2016 $ 57,787 $ 103 $ 718,299 $ 103 $ (660,718)
Balance (in shares) at Dec. 31, 2016   103,475      
Issuance of common stock from public offering, net of offering costs 30,156 $ 11 30,145    
Issuance of common stock from public offering, net of offering costs (in shares)   10,986      
Issuance of common stock from exercise of stock options, vesting of restricted stock units, and purchases from ESPP 2,427 $ 1 2,426    
Issuance of common stock from exercise of stock options, vesting of restricted stock units, and purchases from ESPP (In Shares)   1,094      
Stock-based compensation 9,355   9,355    
Other comprehensive income (loss) (200)     (200)  
Net loss (60,585)       (60,585)
Balance at Dec. 31, 2017 38,940 $ 115 760,225 (97) (721,303)
Balance (in shares) at Dec. 31, 2017   115,555      
Issuance of common stock from public offering, net of offering costs 85,085 $ 18 85,067    
Issuance of common stock from public offering, net of offering costs (in shares)   18,202      
Issuance of common stock from exercise of stock options, vesting of restricted stock units, and purchases from ESPP 7,848 $ 3 7,845    
Issuance of common stock from exercise of stock options, vesting of restricted stock units, and purchases from ESPP (In Shares)   3,096      
Stock-based compensation 10,394   10,394    
Other comprehensive income (loss) (184)     (184)  
Net loss (57,564)       (57,564)
Balance at Dec. 31, 2018 84,519 $ 136 863,531 (281) (778,867)
Balance (in shares) at Dec. 31, 2018   136,853      
Issuance of common stock from public offering, net of offering costs 26,860 $ 6 26,854    
Issuance of common stock from public offering, net of offering costs (in shares)   5,648      
Issuance of common stock from exercise of stock options, vesting of restricted stock units, and purchases from ESPP 3,210 $ 2 3,208    
Issuance of common stock from exercise of stock options, vesting of restricted stock units, and purchases from ESPP (In Shares)   1,790      
Stock-based compensation 13,312   13,312    
Other comprehensive income (loss) 395     395  
Net loss (71,244)       (71,244)
Balance at Dec. 31, 2019 $ 57,052 $ 144 $ 906,905 $ 114 $ (850,111)
Balance (in shares) at Dec. 31, 2019   144,291      
v3.19.3.a.u2
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Operating activities      
Net loss $ (71,244) $ (57,564) $ (60,585)
Adjustments to reconcile net loss to net cash used in operating activities:      
Depreciation and amortization 2,403 1,445 1,811
Stock-based compensation 13,312 10,394 9,355
Non-cash operating lease cost 1,580    
Non-cash interest expense 386 1,248 551
Loss on disposal of property and equipment 15 5  
Non-cash tax expense from realized gain on available-for-sale securities     3,825
Gain on sale of investment in marketable equity securities     (3,466)
Changes in operating assets and liabilities:      
Accounts receivable (8,130) 3,663 (5,547)
Inventories (6,043) 806 (2,092)
Other assets 1,787 (2,744) 1,107
Accounts payable 5,017 5,683 2,487
Accrued liabilities and other non-current liabilities 1,295 6,046 (626)
Manufacturing and development obligations (6,288) (266) 680
Deferred product revenue 72 38 265
Net cash used in operating activities (65,838) (31,246) (52,235)
Investing activities      
Capital expenditures (8,935) (1,144) (353)
Purchases of investments (43,907) (80,701) (68,792)
Proceeds from maturities and sale of investments 81,027 37,997 69,566
Net cash provided by (used in) investing activities 28,185 (43,848) 421
Financing activities      
Net proceeds from equity incentives 3,210 7,848 2,428
Net proceeds from public offering 26,931 85,036 30,197
Net proceeds from revolving line of credit 5,017    
Proceeds from loans 39,433   30,000
Repayment of debt (31,104) (133) (19,625)
Net cash provided by financing activities 43,487 92,751 43,000
Net increase (decrease) in cash, cash equivalents and restricted cash 5,834 17,657 (8,814)
Cash, cash equivalents and restricted cash, beginning of period 31,587 13,930 22,744
Cash, cash equivalents and restricted cash, end of period 37,421 31,587 13,930
Supplemental disclosure of cash flow information:      
Cash paid for interest 3,077 2,728 2,034
Cash paid for income taxes 229 254 $ 160
Non-cash investing activities:      
Non-cash purchases of capital expenditures $ 2,949 $ 2,222  
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Nature of Operations and Basis of Presentation
12 Months Ended
Dec. 31, 2019
Accounting Policies [Abstract]  
Nature of Operations and Basis of Presentation

Note 1. Nature of Operations and Basis of Presentation

Cerus Corporation (the “Company”) was incorporated in September 1991 and is developing and commercializing the INTERCEPT Blood System, which is designed to enhance the safety of blood components through pathogen reduction. The Company has worldwide commercialization rights for the INTERCEPT Blood System for platelets, plasma and red blood cells.

The Company sells its INTERCEPT platelet and plasma systems in the United States of America (“U.S.”), Europe, the Commonwealth of Independent States (“CIS”) countries, the Middle East and selected countries in other regions around the world. The Company conducts significant research, development, testing and regulatory compliance activities on its product candidates that, together with anticipated selling, general, and administrative expenses, are expected to result in substantial additional losses, and the Company may need to adjust its operating plans and programs based on the availability of cash resources. The Company’s ability to achieve a profitable level of operations will depend on successfully completing development, obtaining additional regulatory approvals and achieving widespread market acceptance of its products. There can be no assurance that the Company will ever achieve a profitable level of operations.

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Summary of Significant Accounting Policies
12 Months Ended
Dec. 31, 2019
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies

Note 2. Summary of Significant Accounting Policies

Principles of Consolidation

The accompanying consolidated financial statements include those of Cerus Corporation and its subsidiary, Cerus Europe B.V. (together with Cerus Corporation, hereinafter “Cerus” or the “Company”) after elimination of all intercompany accounts and transactions. These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).

Use of Estimates

The preparation of financial statements requires management to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosures of contingent assets and liabilities. On an ongoing basis, management evaluates its estimates, including those related to the nature and timing of satisfaction of performance obligations, the timing when the customer obtains control of products or services, the standalone selling price (“SSP”) of performance obligations, variable consideration, accounts receivable, inventory reserves, fair values of investments, stock-based compensation, intangible assets and goodwill, useful lives of intangible assets and property and equipment, income taxes, accrued liabilities, and incremental borrowing rate, among others. The Company bases its estimates on historical experience, future projections, and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ from those estimates under different assumptions or conditions.

Revenue

Revenue is recognized in accordance with Accounting Standards Codification (“ASC”) Topic 606, “Revenue from Contracts with Customers”, by applying the following five steps: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when (or as) the entity satisfies a performance obligation.

The Company’s main source of revenue is product revenue from sales of the INTERCEPT Blood System for platelets and plasma (“platelet and plasma systems” or “disposable kits”), UVA illumination devices (“illuminators”), spare parts and storage solutions, and maintenance services of illuminators. The Company sells its platelet and plasma systems directly to blood banks, hospitals, universities, government agencies, as well as to distributors in certain regions. The Company uses a binding purchase order or signed sales contract as evidence of a contract and satisfaction of its policy. Generally, the Company’s contracts with its customers do not provide for open return rights, except within a reasonable time after receipt of goods in the case of defective or non-conforming product. The contracts with customers can include various combinations of products, and to a lesser extent, services. The Company must determine whether products or services are capable of being distinct and accounted for as separate performance obligations, or are accounted for as a combined performance obligation. The Company must allocate the transaction price to each performance obligation on a relative SSP basis, and recognize the product revenue when the performance obligation is satisfied. The Company determines the SSP by using the historical selling price of the products and services. If the amount of consideration in a contract is variable, the Company estimates the amount of variable consideration that should be included in the transaction price using the most likely amount method, to the extent it is probable that a significant future reversal of cumulative product revenue under the contract

will not occur. Product revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration to which the Company expects to receive in exchange for those products or services. Product revenue from the sale of illuminators, disposable kits, spare parts and storage solutions are recognized upon the transfer of control of the products to the customer. Product revenue from maintenance services are recognized ratably on a straight-line basis over the term of maintenance as customers simultaneously consume and receive benefits. Freight costs charged to customers are recorded as a component of product revenue. Taxes that the Company invoices to its customers and remits to governments are recorded on a net basis, which excludes such tax from product revenue.

The Company receives reimbursement under its U.S. government contract with the Biomedical Advanced Research and Development Authority (“BARDA”) that supports research and development of defined projects. See “Note 13 Development and License Agreements—Agreement with BARDA”. The contract generally provides for reimbursement of approved costs incurred under the terms of the contract. Revenue related to the cost reimbursement provisions under the Company’s U.S. government contract are recognized as the qualified direct and indirect costs on the projects are incurred. The Company invoices under its U.S. government contract using the provisional rates in the government contract and thus is subject to future audits at the discretion of government. These audits could result in an adjustment to government contract revenue previously reported, which adjustments potentially could be significant. The Company believes that revenue for periods not yet audited has been recorded in amounts that are expected to be realized upon final audit and settlement. Costs incurred related to services performed under the contract are included as a component of research and development or selling, general and administrative expenses in the Company’s consolidated statements of operations. The Company’s use of estimates in recording accrued liabilities for government contract activities (see “Use of Estimates” above) affects the revenue recorded from development funding and under the government contract.

 

Disaggregation of Product Revenue

Product revenue by geographical locations of customers during the years ended December 31, 2019, 2018 and 2017, were as follows (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

 

2019

 

 

2018

 

 

2017

 

Product revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Europe, Middle East and Africa

 

$

52,499

 

 

$

46,974

 

 

$

36,241

 

North America

 

 

20,936

 

 

 

12,696

 

 

 

6,325

 

Other

 

 

1,214

 

 

 

1,238

 

 

 

1,002

 

Total product revenue

 

$

74,649

 

 

$

60,908

 

 

$

43,568

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contract Balances

The Company invoices its customers based upon the terms in the contracts, which generally requires payment 30 to 60 days from the date of invoice. Accounts receivable are recorded when the Company’s right to the consideration are estimated to be unconditional. The Company had no contract assets at December 31, 2019 and December 31, 2018.

Contract liabilities mainly consist of deferred product revenue related to maintenance services, unshipped products, and uninstalled illuminators. Maintenance services are generally billed upfront at the beginning of each annual service period and recognized ratably over the service period. The increase in the deferred product revenue balance for the year ended December 31, 2019, is primarily driven by performance obligations not satisfied but invoiced as of December 31, 2019, offset by $0.5 million of revenue recognized that were included in the deferred product revenue balance as of December 31, 2018.

The Company applies an optional exemption to not disclose the value of unsatisfied performance obligations for contracts that have an original expected duration of one year or less.

Research and Development Expenses

Research and development (“R&D”) expenses are charged to expense when incurred, including cost incurred pursuant to the terms of the Company’s U.S. government contract. Research and development expenses include salaries and related expenses for scientific and regulatory personnel, payments to consultants, supplies and chemicals used in in-house laboratories, costs of R&D facilities, depreciation of equipment and external contract research expenses, including clinical trials, preclinical safety studies, other laboratory studies, process development and product manufacturing for research use.

The Company’s use of estimates in recording accrued liabilities for R&D activities (see “Use of Estimates” above) affects the amounts of R&D expenses recorded from development funding and under its U.S. government contract. Actual results may differ from those estimates under different assumptions or conditions.

Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less from the date of purchase to be classified as cash equivalents. These investments primarily consist of money market instruments, and are classified as available-for-sale.

Investments

Investments with original maturities of greater than three months primarily include corporate debt and U.S. government agency securities that are designated as available-for-sale and classified as short-term investments. Available-for-sale securities are carried at estimated fair value. The Company views its available-for-sale portfolio as available for use in its current operations. Unrealized gains and losses derived by changes in the estimated fair value of available-for-sale securities were recorded in “Unrealized gains (losses) on available-for-sale investments, net of taxes” on the Company’s consolidated statements of comprehensive loss. Realized gains (losses) from the sale of available-for-sale investments, if any, were recorded in “Other income, net” on the Company’s consolidated statements of operations. The costs of securities sold are based on the specific identification method, if applicable. The Company reported the amortization of any premium and accretion of any discount resulting from the purchase of debt securities as a component of interest income.

The Company also reviews its available-for-sale securities on a regular basis to evaluate whether any security has experienced an other-than-temporary decline in fair value. Other-than-temporary declines in market value, if any, are recorded in “Other income, net” on the Company’s consolidated statements of operations.

Restricted Cash

As of December 31, 2019 and December 31, 2018, the Company’s “Restricted cash” primarily consisted of a letter of credit relating to the lease of the Company’s new office building. As of December 31, 2019 and December 31, 2018, the Company also had certain non-U.S. dollar denominated deposits recorded as “Restricted cash” in compliance with certain foreign contractual requirements.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash equivalents, available-for-sale securities and accounts receivable.

Pursuant to the Company’s investment policy, substantially all of the Company’s cash, cash equivalents and available-for-sale securities are maintained at major financial institutions of high credit standing. The Company monitors the financial credit worthiness of the issuers of its investments and limits the concentration in individual securities and types of investments that exist within its investment portfolio. Generally, all of the Company’s investments carry high credit quality ratings, which is in accordance with its investment policy. At December 31, 2019, the Company does not believe there is significant financial risk from non-performance by the issuers of the Company’s cash equivalents and short-term investments.

Concentrations of credit risk with respect to trade receivables exist. On a regular basis, including at the time of sale, the Company performs credit evaluations of its significant customers that it expects to sell to on credit terms. Generally, the Company does not require collateral from its customers to secure accounts receivable. To the extent that the Company determines specific invoices or customer accounts may be uncollectible, the Company establishes an allowance for doubtful accounts against the accounts receivable on its consolidated balance sheets and records a charge on its consolidated statements of operations as a component of selling, general and administrative expenses.

The Company had three customers and two customers that accounted for more than 10% of the Company’s outstanding trade receivables at December 31, 2019 and December 31, 2018, respectively. These customers cumulatively represented approximately 56% and 50% of the Company’s outstanding trade receivables at December 31, 2019 and December 31, 2018, respectively. To date, the Company has not experienced collection difficulties from these customers.

Inventories

At December 31, 2019 and December 31, 2018, inventory consisted of work-in-process and finished goods only. Finished goods include INTERCEPT disposable kits, illuminators, and certain replacement parts for the illuminators. Platelet and plasma systems’ disposable kits generally have 18 to 24 month shelf lives from the date of manufacture. Illuminators and replacement parts do not have regulated expiration dates. Work-in-process includes certain components that are manufactured over a protracted length of time before being sold to, and ultimately incorporated and assembled by Fresenius Kabi Deutschland GmbH or Fresenius, Inc. (with their affiliates, “Fresenius”) into the finished INTERCEPT disposable kits. The Company maintains an inventory balance based on its current sales projections, and at each reporting period, the Company evaluates whether its work-in-process inventory would be sold to Fresenius for production within the next twelve-month period and evaluates its finished units in order to sell to existing and prospective customers within the next twelve-month period. It is not customary for the Company’s production cycle for inventory to exceed twelve months. Instead, the Company uses its best judgment to factor in lead times for the production of its work-in-process and finished units to meet the Company’s forecasted demands. If actual results differ from those estimates, work-in-process inventory could potentially accumulate for periods exceeding one year. At December 31, 2019 and December 31, 2018, the Company classified its work-in-process inventory as a current asset on its consolidated balance sheets based on its evaluation that the work-in-process inventory would be sold to Fresenius for finished disposable kit production within each respective subsequent twelve-month period.

Inventory is recorded at the lower of cost, determined on a first-in, first-out basis, or net realizable value. The Company uses significant judgment to analyze and determine if the composition of its inventory is obsolete, slow-moving or unsalable and frequently reviews such determinations. The Company writes down specifically identified unusable, obsolete, slow-moving, or known unsalable inventory that has no alternative use in the period that it is first recognized by using a number of factors including product expiration dates, open and unfulfilled orders, and sales forecasts. Any write-down of its inventory to net realizable value establishes a new cost basis and will be maintained even if certain circumstances suggest that the inventory is recoverable in subsequent periods. Costs associated with the write-down of inventory are recorded in “Cost of product revenue” on the Company’s consolidated statements of operations. At December 31, 2019 and December 31, 2018, the Company had $0.1 million and $0.3 million, respectively, recorded for potential obsolete, expiring or unsalable product.

Property and Equipment, net

Property and equipment is comprised of furniture, equipment, leasehold improvements, construction-in-progress, information technology hardware and software and is recorded at cost. At the time the property and equipment is ready for its intended use, it is depreciated on a straight-line basis over the estimated useful lives of the assets (generally three to five years). Leasehold improvements are amortized on a straight-line basis over the shorter of the lease term or the estimated useful lives of the improvements. As of December 31, 2019 and December 31, 2018, the Company capitalized construction-in-progress costs included in “Property and Equipment, net” on the Company’s consolidated balance sheets, of zero and $6.9 million, respectively, related to leasehold improvements. As of December 31, 2019 and December 31, 2018, the Company had receivables included in “Prepaid and other current assets” on the Company's consolidated balance sheets, of zero and $1.2 million, respectively, related to its new office building.

 

Goodwill and Intangible Assets, net

Intangible assets, net, which include a license for the right to commercialize the INTERCEPT Blood System in Asia, are subject to ratable amortization over the original estimated useful life of ten years. Accumulated amortization of intangible assets as of December 31, 2019 and December 31, 2018, was $1.9 million and $1.7 million, respectively. Goodwill is not amortized but instead is subject to an impairment test performed on an annual basis, or more frequently if events or changes in circumstances indicate that goodwill may be impaired. Such impairment analysis is performed on August 31 of each fiscal year, or more frequently if indicators of impairment exist. The test for goodwill impairment may be assessed using qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than the carrying amount. If the Company determines that it is more likely than not that the fair value of a reporting unit is less than the carrying amount, the Company must then proceed with performing the quantitative goodwill impairment test. The Company may choose not to perform the qualitative assessment to test goodwill for impairment and proceed directly to the quantitative impairment test; however, the Company may revert to the qualitative assessment to test goodwill for impairment in any subsequent period. The quantitative goodwill impairment test compares the fair value of each reporting unit with its respective carrying amount, including goodwill. The Company has determined that it operates in one reporting unit and estimates the fair value of its one reporting unit using the enterprise approach under which it considers the quoted market capitalization of the Company as reported on the Nasdaq Global Market. The Company considers quoted market prices that are available in active markets to be the best evidence of fair value. The Company also considers other factors, which include future forecasted results, the economic environment and overall market conditions. If the fair value of the reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired. If the carrying amount of the reporting unit’s goodwill exceeds the

implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess, limited to the carrying amount of goodwill in the Company’s one reporting unit.

The Company performs an impairment test on its intangible assets if certain events or changes in circumstances occur which indicate that the carrying amounts of its intangible assets may not be recoverable. If the intangible assets are not recoverable, an impairment loss would be recognized by the Company based on the excess amount of the carrying value of the intangible assets over its fair value. During the year ended December 31, 2019, 2018 and 2017, there were no impairment charges recognized related to the acquired intangible assets.

Long-lived Assets

The Company evaluates its long-lived assets for impairment by continually monitoring events and changes in circumstances that could indicate carrying amounts of its long-lived assets may not be recoverable. When such events or changes in circumstances occur, the Company assesses recoverability by determining whether the carrying value of such assets will be recovered through the undiscounted expected future cash flows. If the expected undiscounted future cash flows are less than the carrying amount of these assets, the Company then measures the amount of the impairment loss based on the excess of the carrying amount over the fair value of the assets.

Foreign Currency Remeasurement

The functional currency of the Company’s foreign subsidiary is the U.S. dollar. Monetary assets and liabilities denominated in foreign currencies are remeasured in U.S. dollars using the exchange rates at the balance sheet date. Non-monetary assets and liabilities denominated in foreign currencies are remeasured in U.S. dollars using historical exchange rates. Product revenues and expenses are remeasured using average exchange rates prevailing during the period. Remeasurements are recorded in the Company’s consolidated statements of operations.

Stock-Based Compensation

Stock-based compensation expense is measured at the grant-date based on the fair value of the award and is recognized as expense on a straight-line basis over the requisite service period, which is the vesting period, and is adjusted for estimated forfeitures. To the extent that stock options contain performance criteria for vesting, stock-based compensation is recognized once the performance criteria are probable of being achieved.

For stock-based awards issued to non-employees, the Company recognizes stock-based compensation expense for the grant date fair value of the vested portion of the awards in its consolidated statements of operations.

See Note 11 for further information regarding the Company’s stock-based compensation assumptions and expenses.

Income Taxes

The provision for income taxes is accounted for using an asset and liability approach, under which deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company does not recognize tax positions that do not have a greater than 50% likelihood of being recognized upon review by a taxing authority having full knowledge of all relevant information. Use of a valuation allowance is not an appropriate substitute for derecognition of a tax position. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in its income tax expense. To date, the Company has not recognized any interest and penalties in its consolidated statements of operations, nor has it accrued for or made payments for interest and penalties. Although the Company believes it more likely than not that a taxing authority would agree with its current tax positions, there can be no assurance that the tax positions the Company has taken will be substantiated by a taxing authority if reviewed. The Company’s U.S. federal tax returns for years 1999 through 2018, California tax returns for years through 2018, and Netherlands tax returns for years 2015 through 2018 remain subject to examination by the taxing jurisdictions due to unutilized net operating losses and research credits. The Company continues to carry a valuation allowance on substantially all of its net deferred tax assets.

Net Loss Per Share

Basic net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding for the period. Diluted net loss per share gives effect to all potentially dilutive common shares outstanding for the period. The potentially dilutive securities include stock options, employee stock purchase plan rights and restricted stock units, which are calculated using the treasury stock method.

For the years ended December 31, 2019, 2018 and 2017, all potentially dilutive securities outstanding have been excluded from the computation of dilutive weighted average shares outstanding because such securities have an antidilutive impact due to losses reported.

The following table sets forth the reconciliation of the numerator and denominator used in the computation of basic and diluted net loss per share for the years ended December 31, 2019, 2018 and 2017 (in thousands, except per share amounts):

 

 

 

Year Ended December 31,

 

 

 

2019

 

 

2018

 

 

2017

 

Numerator for Basic and Diluted:

 

 

 

 

 

 

 

 

 

 

 

 

Net loss used for basic calculation

 

$

(71,244

)

 

$

(57,564

)

 

$

(60,585

)

Denominator:

 

 

 

 

 

 

 

 

 

 

 

 

Basic weighted average number of shares outstanding

 

 

139,831

 

 

 

131,663

 

 

 

108,221

 

Effect of dilutive potential shares

 

 

 

 

 

 

 

 

 

Diluted weighted average number of shares outstanding

 

 

139,831

 

 

 

131,663

 

 

 

108,221

 

Net loss per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

$

(0.51

)

 

$

(0.44

)

 

$

(0.56

)

 

The table below presents potential shares that were excluded from the calculation of the weighted average number of shares outstanding used for the calculation of diluted net loss per share. These are excluded from the calculation due to their anti-dilutive effect for the years ended December 31, 2019, 2018 and 2017 (shares in thousands):

 

 

 

 

2019

 

 

2018

 

 

2017

 

Weighted average number of anti-dilutive potential shares:

 

 

 

 

 

 

 

 

 

 

 

 

Stock options

 

 

17,401

 

 

 

18,031

 

 

 

17,373

 

Restricted stock units

 

 

3,361

 

 

 

1,902

 

 

 

1,225

 

Employee stock purchase plan rights

 

 

72

 

 

 

20

 

 

 

21

 

Total

 

 

20,834

 

 

 

19,953

 

 

 

18,619

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Leases

 

The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets and operating lease liabilities in the Company’s consolidated balance sheets. As of December 31, 2019 and December 31, 2018, the Company did not have finance leases.

 

ROU assets and operating lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The ROU asset also includes any lease payments made and excludes lease incentives. The lease terms may include options to extend or terminate the lease when it is reasonably certain to be exercised. Operating leases are recognized on a straight-line basis over the lease term.

 

Guarantee and Indemnification Arrangements

The Company recognizes the fair value for guarantee and indemnification arrangements issued or modified by the Company. In addition, the Company monitors the conditions that are subject to the guarantees and indemnifications in order to identify if a loss has occurred. If the Company determines it is probable that a loss has occurred, then any such estimable loss would be recognized under those guarantees and indemnifications. Some of the agreements that the Company is a party to contain provisions that indemnify the counter party from damages and costs resulting from claims that the Company’s technology infringes the intellectual property rights of a third-party or claims that the sale or use of the Company’s products have caused personal injury or other damage or loss. The Company has not received any such requests for indemnification under these provisions and has not been required to make material payments pursuant to these provisions.

The Company generally provides for a one-year warranty on certain of its INTERCEPT blood-safety products covering defects in materials and workmanship. The Company accrues costs associated with warranty obligations when claims become known and are estimable. The Company has not experienced significant or systemic warranty claims nor is it aware of any existing current warranty claims. Accordingly, the Company had not accrued for any future warranty costs for its products at December 31, 2019 and December 31, 2018.

Fair Value of Financial Instruments

The Company applies the provisions of fair value relating to its financial assets and liabilities. The carrying amounts of accounts receivables, accounts payable, and other accrued liabilities approximate their fair value due to the relative short-term maturities. Based on the borrowing rates currently available to the Company for loans with similar terms, the Company believes the fair value of its debt approximates their carrying amounts. The Company measures and records certain financial assets and liabilities at fair value on a recurring basis, including its available-for-sale securities. The Company classifies instruments within Level 1 if quoted prices are available in active markets for identical assets, which include the Company’s cash accounts and money market funds. The Company classifies instruments in Level 2 if the instruments are valued using observable inputs to quoted market prices, benchmark yields, reported trades, broker/dealer quotes or alternative pricing sources with reasonable levels of price transparency. These instruments include the Company’s corporate debt and U.S. government agency securities holdings. The available-for-sale securities are held by a custodian who obtains investment prices from a third-party pricing provider that uses standard inputs (observable in the market) to models which vary by asset class. The Company classifies instruments in Level 3 if one or more significant inputs or significant value drivers are unobservable. The Company assesses any transfers among fair value measurement levels at the end of each reporting period.

See Note 3 for further information regarding the Company’s valuation of financial instruments.

New Accounting Pronouncements

Recently adopted accounting pronouncements

In February 2016, the FASB issued ASU No. 2016-02, Leases, which, for operating leases, requires a lessee to recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, in its consolidated balance sheet. The standard also requires a lessee to recognize a single lease cost, calculated so that the cost of the lease is allocated over the lease term, on a generally straight-line basis. In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements, which provides for certain practical expedient when implementing the new leases standard. The Company adopted the new accounting standard on January 1, 2019, using the modified retrospective method and elected the package of practical expedients for expired or existing contracts, which allowed the Company not to reassess (1) whether contracts are or contain leases, (2) lease classification and (3) initial direct costs. The Company recorded right-of-use assets of $2.4 million in “Operating lease right-of-use assets” in the Company's consolidated balance sheets, and lease liabilities of $2.4 million in aggregate in “Operating lease liabilities – current” and “Operating lease liabilities – non-current” in the Company’s consolidated balance sheets on the adoption date. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods.

In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes, which eliminates certain exceptions to the guidance in ASC 740 related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The new guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The standard is effective for annual periods beginning after December 15, 2020, and interim periods thereafter, with early application permitted. The Company elected to early adopt the new standard prospectively at the beginning of the fourth quarter of 2019. The adoption of this ASU had no material impact on the Company’s consolidated financial statements.

Recently issued accounting pronouncements not yet adopted

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires measurement and recognition of expected credit losses for financial assets held. The standard is effective for annual periods beginning after December 15, 2019, and interim periods thereafter, with early application permitted. The Company plans to adopt this ASU on January 1, 2020, using the modified retrospective method. The adoption of this ASU is not expected to have a material impact on the Company’s consolidated financial statements.

v3.19.3.a.u2
Available-for-sale Securities and Fair Value on Financial Instruments
12 Months Ended
Dec. 31, 2019
Fair Value Disclosures [Abstract]  
Available-for-sale Securities and Fair Value on Financial Instruments

Note 3. Available-for-sale Securities and Fair Value on Financial Instruments

Available-for-sale Securities

The following is a summary of available-for-sale securities at December 31, 2019 (in thousands):

 

 

 

December 31, 2019

 

 

 

Amortized Cost

 

 

Gross

Unrealized Gain

 

 

Gross

Unrealized Loss

 

 

Fair Value

 

Money market funds

 

$

8,860

 

 

$

 

 

$

 

 

$

8,860

 

United States government agency securities

 

 

15,545

 

 

 

16

 

 

 

 

 

 

15,561

 

Corporate debt securities

 

 

35,073

 

 

 

98

 

 

 

 

 

 

35,171

 

Total available-for-sale securities

 

$

59,478

 

 

$

114

 

 

$

 

 

$

59,592

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The following is a summary of available-for-sale securities at December 31, 2018 (in thousands):

 

 

December 31, 2018

 

 

 

Amortized Cost

 

 

Gross

Unrealized Gain

 

 

Gross

Unrealized Loss

 

 

Fair Value

 

Money market funds

 

$

6,167

 

 

$

 

 

$

 

 

$

6,167

 

United States government agency securities

 

 

15,971

 

 

 

 

 

 

(23

)

 

 

15,948

 

Corporate debt securities

 

 

73,028

 

 

 

2

 

 

 

(260

)

 

 

72,770

 

Total available-for-sale securities

 

$

95,166

 

 

$

2

 

 

$

(283

)

 

$

94,885

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available-for-sale securities at December 31, 2019 and 2018, consisted of the following by contractual maturity (in thousands):

 

 

 

December 31, 2019

 

 

December 31, 2018

 

 

 

Amortized Cost

 

 

Fair Value

 

 

Amortized Cost

 

 

Fair Value

 

One year or less

 

$

43,822

 

 

$

43,907

 

 

$

85,227

 

 

$

84,957

 

Greater than one year and less than five years

 

 

15,656

 

 

 

15,685

 

 

 

9,939

 

 

 

9,928

 

Total available-for-sale securities

 

$

59,478

 

 

$

59,592

 

 

$

95,166

 

 

$

94,885

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of December 31, 2019, the Company did not have any available-for-sale securities in an unrealized net loss position. The following tables show all available-for-sale marketable securities in an unrealized loss position for which an other-than-temporary impairment has not been recognized and the related gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position (in thousands):

 

 

December 31, 2018

 

 

Less than 12 Months

 

 

12 Months or Greater

 

 

Total

 

 

Fair Value

 

 

Unrealized Loss

 

 

Fair Value

 

 

Unrealized Loss

 

 

Fair Value

 

 

Unrealized Loss

 

United States government agency securities

$

14,948

 

 

$

(22

)

 

$

999

 

 

$

(1

)

 

$

15,947

 

 

$

(23

)

Corporate debt securities

 

60,813

 

 

 

(231

)

 

 

9,976

 

 

 

(29

)

 

 

70,789

 

 

 

(260

)

Total available-for-sale securities

$

75,761

 

 

$

(253

)

 

$

10,975

 

 

$

(30

)

 

$

86,736

 

 

$

(283

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 The Company typically invests in highly-rated securities, and its investment policy limits the amount of credit exposure to any one issuer. The policy generally requires investments to be investment grade, with the primary objective of minimizing the potential risk of principal loss. Fair values were determined for each individual security in the investment portfolio. When evaluating an investment for other-than-temporary impairment, the Company reviews factors such as the length of time and extent to which fair value has been below its cost basis, the financial condition of the issuer and any changes thereto, changes in market interest rates, and the Company’s intent to sell, or whether it is more likely than not it will be required to sell, the investment before recovery of the investment’s cost basis. During the years ended December 31, 2019, 2018 and 2017, the Company did not recognize any other-than-temporary impairment loss. The Company has no current requirement or intent to sell the securities in an unrealized loss position. The Company expects to recover up to (or beyond) the initial cost of investment for securities held.

During the years ended December 31, 2019, 2018 and 2017, the Company sold zero, zero and 346,700 shares of Aduro Biotech, Inc., or Aduro, common stock, respectively, and recognized zero, zero, and $3.5 million gross realized gains, respectively, which were

reclassified out of accumulated other comprehensive income into “Other income, net” on the Company’s consolidated statements of operations. As of December 31, 2019 and 2018, the Company had no remaining investment in Aduro’s common stock. The Company did not record any gross realized losses during the years ended December 31, 2019, 2018 and 2017.

Fair Value Disclosures

The Company uses certain assumptions that market participants would use to determine the fair value of an asset or liability in pricing the asset or liability in an orderly transaction between market participants at the measurement date. The identification of market participant assumptions provides a basis for determining what inputs are to be used for pricing each asset or liability. A fair value hierarchy has been established which gives precedence to fair value measurements calculated using observable inputs over those using unobservable inputs. This hierarchy prioritized the inputs into three broad levels as follows:

 

Level 1:  Quoted prices in active markets for identical instruments

 

Level 2:  Other significant observable inputs (including quoted prices in active markets for similar instruments)

 

Level 3:  Significant unobservable inputs (including assumptions in determining the fair value of certain investments)

Money market funds are highly liquid investments and are actively traded. The pricing information on these investment instruments are readily available and can be independently validated as of the measurement date. This approach results in the classification of these securities as Level 1 of the fair value hierarchy.

To estimate the fair value of Level 2 debt securities as of December 31, 2019, the Company’s primary pricing service relies on inputs from multiple industry-recognized pricing sources to determine the price for each investment. Corporate debt and U.S. government agency securities are systematically priced by this service as of the close of business each business day. If the primary pricing service does not price a specific asset a secondary pricing service is utilized.

The fair values of the Company’s financial assets and liabilities were determined using the following inputs at December 31, 2019 (in thousands):

 

 

 

Balance sheet

 

 

 

 

 

Quoted Prices

in Active

Markets for

Identical Assets

 

 

Significant

Other

Observable

Inputs

 

 

Significant

Unobservable

Inputs

 

 

 

classification

 

Total

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

Money market funds

 

Cash and cash equivalents

 

$

8,860

 

 

$

8,860

 

 

$

 

 

$

 

United States government agency securities

 

Short-term investments

 

 

15,561

 

 

 

 

 

 

15,561

 

 

 

 

Corporate debt securities

 

Short-term investments

 

 

35,171

 

 

 

 

 

 

35,171

 

 

 

 

Total financial assets

 

 

 

$

59,592

 

 

$

8,860

 

 

$

50,732

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The fair values of the Company’s financial assets and liabilities were determined using the following inputs at December 31, 2018 (in thousands):

 

 

 

Balance sheet

 

 

 

 

 

Quoted Prices

in Active

Markets for

Identical Assets

 

 

Significant

Other

Observable

Inputs

 

 

Significant

Unobservable

Inputs

 

 

 

classification

 

Total

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

Money market funds

 

Cash and cash equivalents

 

$

6,167

 

 

$

6,167

 

 

$

 

 

$

 

United States government agency securities

 

Short-term investments

 

 

15,948

 

 

 

 

 

 

15,948

 

 

 

 

Corporate debt securities

 

Short-term investments

 

 

72,770

 

 

 

 

 

 

72,770

 

 

 

 

Total financial assets

 

 

 

$

94,885

 

 

$

6,167

 

 

$

88,718

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 The Company did not have any transfers among fair value measurement levels during the years ended December 31, 2019 and 2018.

v3.19.3.a.u2
Inventories
12 Months Ended
Dec. 31, 2019
Inventory Disclosure [Abstract]  
Inventories

 

Note 4. Inventories

Inventories at December 31, 2019 and 2018, consisted of the following (in thousands):

 

 

 

December 31,

 

 

 

2019

 

 

2018

 

Work-in-process

 

$

5,160

 

 

$

3,075

 

Finished goods

 

 

14,330

 

 

 

10,464

 

Total inventories

 

$

19,490

 

 

$

13,539

 

 

 

 

 

 

 

 

 

 

v3.19.3.a.u2
Property and Equipment, net
12 Months Ended
Dec. 31, 2019
Property Plant And Equipment [Abstract]  
Property and Equipment, net

Note 5. Property and Equipment, net

Property and equipment, net at December 31, 2019 and 2018, consisted of the following (in thousands):

 

 

 

December 31,

 

 

 

2019

 

 

2018

 

Construction-in-progress

 

$

74

 

 

$

6,864

 

Machinery and equipment

 

 

2,833

 

 

 

1,945

 

Computer equipment and software

 

 

3,306

 

 

 

2,915

 

Furniture and fixtures

 

 

2,061

 

 

 

901

 

Leasehold improvements

 

 

12,881

 

 

 

5,715

 

Consigned equipment

 

 

1,373

 

 

 

1,299

 

Total property and equipment, gross

 

 

22,528

 

 

 

19,639

 

Accumulated depreciation and amortization

 

 

(7,630

)

 

 

(11,509

)

Total property and equipment, net

 

$

14,898

 

 

$

8,130

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization expense related to property and equipment, net was $2.2 million, $1.1 million and $1.2 million for the years ended December 31, 2019, 2018 and 2017, respectively. There were no impairments for long-lived assets for the years ended December 31, 2019, 2018 and 2017.

v3.19.3.a.u2
Goodwill and Intangible Assets, net
12 Months Ended
Dec. 31, 2019
Goodwill And Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets, net

Note 6. Goodwill and Intangible Assets, net

Goodwill

During the year ended December 31, 2019, the Company did not dispose of or recognize additional goodwill. On August 31, 2019, the Company performed its impairment test of goodwill. As described in Note 2 above, the Company applied the enterprise approach by reviewing the quoted market capitalization of the Company as reported on the Nasdaq Global Market to calculate the fair value. In addition, the Company considered its future forecasted results, the economic environment and overall market conditions. As a result of the Company’s assessment that its fair value of the reporting unit exceeded its carrying amount, the Company determined that goodwill was not impaired.

Intangible Assets, net

The following is a summary of intangible assets, net at December 31, 2019 (in thousands):

 

 

 

December 31, 2019

 

 

 

Gross

Carrying

Amount

 

 

Accumulated Amortization

 

 

Net

Carrying

Amount

 

Acquisition-related intangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

Reacquired license - INTERCEPT Asia

 

$

2,017

 

 

$

(1,885

)

 

$

132

 

 

The following is a summary of intangible assets, net at December 31, 2018 (in thousands):

 

 

 

December 31, 2018

 

 

 

Gross

Carrying

Amount

 

 

Accumulated Amortization

 

 

Net

Carrying

Amount

 

Acquisition-related intangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

Reacquired license - INTERCEPT Asia

 

$

2,017

 

 

$

(1,683

)

 

$

334

 

 

During the years ended December 31, 2019, 2018 and 2017, there were no impairment charges recognized related to the Company’s intangible assets.

At December 31, 2019, the expected remaining annual amortization expense of the intangible assets, net is $0.1 million for the year ending December 31, 2020.

v3.19.3.a.u2
Accrued Liabilities
12 Months Ended
Dec. 31, 2019
Payables And Accruals [Abstract]  
Accrued Liabilities

Note 7. Accrued Liabilities

Accrued liabilities at December 31, 2019 and 2018, consisted of the following (in thousands):

 

 

 

December 31,

 

 

 

2019

 

 

2018

 

Accrued compensation and related costs

 

$

12,703

 

 

$

10,765

 

Accrued professional services

 

 

3,489

 

 

 

4,544

 

Accrued development costs

 

 

1,468

 

 

 

1,965

 

Other accrued expenses

 

 

3,291

 

 

 

2,526

 

Total accrued liabilities

 

$

20,951

 

 

$

19,800

 

v3.19.3.a.u2
Debt
12 Months Ended
Dec. 31, 2019
Debt Disclosure [Abstract]  
Debt

Note 8. Debt

Debt at December 31, 2019, consisted of the following (in thousands):

 

 

 

December 31, 2019

 

 

 

Principal

 

 

Unamortized

Discount

 

 

Net Carrying

Value

 

Term Loan Credit Agreement

 

$

40,000

 

 

$

(586

)

 

$

39,414

 

Less: debt – current

 

 

 

 

 

 

 

 

 

Debt – non-current

 

$

40,000

 

 

$

(586

)

 

$

39,414

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt at December 31, 2018, consisted of the following (in thousands):

 

 

 

December 31, 2018

 

 

 

Principal

 

 

Unamortized

Discount

 

 

Net Carrying

Value

 

Oxford Term Loan Agreement

 

$

30,000

 

 

$

(130

)

 

$

29,870

 

Less: debt – current

 

 

(7,857

)

 

 

 

 

 

(7,857

)