PUMA BIOTECHNOLOGY, INC., 10-K filed on 3/3/2022
Annual Report
v3.22.0.1
Document And Entity Information - USD ($)
 12 Months Ended
Dec. 31, 2021
Feb. 25, 2022
Jun. 30, 2021
Document Information [Line Items]      
Entity Central Index Key 0001401667    
Entity Registrant Name PUMA BIOTECHNOLOGY, INC.    
Amendment Flag false    
Current Fiscal Year End Date --12-31    
Document Fiscal Period Focus FY    
Document Fiscal Year Focus 2021    
Document Type 10-K    
Document Annual Report true    
Document Period End Date Dec. 31, 2021    
Document Transition Report false    
Entity File Number 001-35703    
Entity Incorporation, State or Country Code DE    
Entity Tax Identification Number 77-0683487    
Entity Address, Address Line One 10880 Wilshire Boulevard, Suite 2150    
Entity Address, City or Town Los Angeles    
Entity Address, State or Province CA    
Entity Address, Postal Zip Code 90024    
City Area Code 424    
Local Phone Number 248-6500    
Title of 12(b) Security Common Stock, par value $0.0001 per share    
Trading Symbol PBYI    
Security Exchange Name NASDAQ    
Entity Well-known Seasoned Issuer No    
Entity Voluntary Filers No    
Entity Current Reporting Status Yes    
Entity Interactive Data Current Yes    
Entity Filer Category Accelerated Filer    
Entity Small Business false    
Entity Emerging Growth Company false    
Entity Shell Company false    
Entity Public Float     $ 373,900,000
Entity Common Stock, Shares Outstanding   41,332,920  
Auditor Name KPMG LLP    
Auditor Location Los Angeles, CA    
Auditor Firm ID 185    
ICFR Auditor Attestation Flag true    
v3.22.0.1
Consolidated Balance Sheets - USD ($)
$ in Thousands
Dec. 31, 2021
Dec. 31, 2020
Current assets:    
Cash and cash equivalents $ 63,131 $ 85,293
Marketable securities 18,975 8,096
Accounts receivable, net of allowance for credit loss of $0 and $1,000 32,526 25,543
Inventory, net 7,109 3,454
Prepaid expenses, current 8,984 11,262
Restricted cash, current 8,850 8,850
Other current assets 447 3,641
Total current assets 140,022 146,139
Lease right-of-use assets, net 14,017 16,404
Property and equipment, net 1,756 2,481
Intangible assets, net 66,125 74,140
Restricted cash, long-term 3,311 3,311
Prepaid expenses and other, long-term 1,354 1,745
Total assets 226,585 244,220
Current liabilities:    
Accounts payable 11,174 12,076
Accrued expenses, current 92,575 61,325
Accrued in-licensed rights, current 0 20,993
Post-marketing commitment liability, current 2,263 2,481
Lease liabilities, current 3,574 3,094
Current portion of long-term debt 0 14,286
Total current liabilities 109,586 114,255
Accrued expenses, long-term 915 25,963
Lease liabilities, long-term 15,975 19,549
Post-marketing commitment liability, long-term 5,463 6,379
Total long-term debt, net 97,092 84,025
Total liabilities 229,031 250,171
Commitments and contingencies (Note 14)
Stockholders' deficit:    
Common stock - $.0001 par value per share; 100,000,000 shares authorized; 41,175,507 shares issued and outstanding at December 31, 2021 and 40,086,387 issued and outstanding at December 31, 2020 4 4
Additional paid-in capital 1,364,309 1,331,676
Accumulated other comprehensive income (2) 0
Accumulated deficit (1,366,757) (1,337,631)
Total stockholders' deficit (2,446) (5,951)
Total liabilities and stockholders' deficit $ 226,585 $ 244,220
v3.22.0.1
Consolidated Balance Sheets (Parentheticals) - USD ($)
$ in Thousands
Dec. 31, 2021
Dec. 31, 2020
Allowance for credit loss $ 0 $ 1,000
Common stock, par value (in dollars per share) $ 0.0001 $ 0.0001
Common stock, shares authorized (in shares) 100,000,000 100,000,000
Common stock, shares issued (in shares) 41,175,507 41,175,507
Common stock, shares outstanding (in shares) 40,086,387 40,086,387
v3.22.0.1
Consolidated Statements of Operations - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Revenue:      
Total revenue $ 253,155 $ 225,110 $ 272,260
Operating costs and expenses:      
Cost of sales 63,701 39,374 36,815
Selling, general and administrative 116,294 118,488 141,639
Research and development 71,870 97,650 132,851
Total operating costs and expenses 251,865 255,512 311,305
Income (1oss) from operations 1,290 (30,402) (39,045)
Other income (expenses):      
Interest income 160 489 2,847
Interest expense (12,807) (14,046) (15,019)
Legal verdict expense (9,591) (16,196) (16,350)
Loss on debt extinguishment (8,146) 0 (8,103)
Other income 292 367 128
Total other expenses (30,092) (29,386) (36,497)
Loss before income taxes (28,802) (59,788) (75,542)
Income tax expense (324) (207) (53)
Net loss $ (29,126) $ (59,995) $ (75,595)
Net loss applicable to common stockholders (in dollars per share) $ (29,126) $ (59,995) $ (75,595)
Net loss per share of common stock—basic and diluted (in dollars per share) $ (0.72) $ (1.52) $ (1.95)
Weighted-average shares of common stock outstanding—basic and diluted (in shares) 40,638,852 39,576,107 38,768,653
Product [Member]      
Revenue:      
Total revenue $ 189,064 $ 196,728 $ 211,619
License [Member]      
Revenue:      
Total revenue 51,750 22,700 60,250
Royalty [Member]      
Revenue:      
Total revenue $ 12,341 $ 5,682 $ 391
v3.22.0.1
Consolidated Statements of Comprehensive Loss - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Net loss $ (29,126) $ (59,995) $ (75,595)
Other comprehensive (loss) income:      
Unrealized (loss) gain on available-for-sale securities, net of tax of $0, $0, and $0 (2) (65) 72
Reclassifications of gain on available-for-sale securities, included in “Other income (expenses)," net of tax of $0, $0, and $0 0 3 2
Comprehensive loss $ (29,128) $ (60,057) $ (75,521)
v3.22.0.1
Consolidated Statements of Comprehensive Loss (Parentheticals) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Unrealized loss on available-for-sale securities, tax $ 0 $ 0 $ 0
Reclassifications of gain on available-for-sale securities, included in “Other income (expense)”, tax $ 0 $ 0 $ 0
v3.22.0.1
Consolidated Statements of Stockholders' Deficit - USD ($)
$ in Thousands
Common Stock [Member]
Additional Paid-in Capital [Member]
AOCI Attributable to Parent [Member]
Retained Earnings [Member]
Total
Balance (in shares) at Dec. 31, 2018 38,325,037        
Balance at Dec. 31, 2018 $ 4 $ 1,236,355 $ (12) $ (1,202,041) $ 34,306
Stock-based compensation $ 0 57,327 0 0 57,327
Shares issued or restricted stock units vested under employee stock plans (in shares) 878,267        
Shares issued or restricted stock units vested under employee stock plans $ 0 1,351 0 0 1,351
Reclassifications of gain on available-for-sale securities, included in “Other income (expenses)," net of tax of $0, $0, and $0 0 0 2 0 2
Unrealized (loss) gain on available-for-sale securities, net of tax of $0, $0, and $0 0 0 72 0 72
Net loss $ 0 0 0 (75,595) (75,595)
Balance (in shares) at Dec. 31, 2019 39,203,304        
Balance at Dec. 31, 2019 $ 4 1,295,033 62 (1,277,636) 17,463
Stock-based compensation $ 0 36,575 0 0 36,575
Shares issued or restricted stock units vested under employee stock plans (in shares) 883,083        
Shares issued or restricted stock units vested under employee stock plans $ 0 68 0 0 68
Reclassifications of gain on available-for-sale securities, included in “Other income (expenses)," net of tax of $0, $0, and $0 0 0 3 0 3
Unrealized (loss) gain on available-for-sale securities, net of tax of $0, $0, and $0 0 0 (65) 0 (65)
Net loss $ 0 0 0 (59,995) $ (59,995)
Balance (in shares) at Dec. 31, 2020 40,086,387       40,086,387
Balance at Dec. 31, 2020 $ 4 1,331,676 0 (1,337,631) $ (5,951)
Stock-based compensation $ 0 32,633 0 0 32,633
Shares issued or restricted stock units vested under employee stock plans (in shares) 1,089,120        
Shares issued or restricted stock units vested under employee stock plans $ 0 0 0 0 0
Reclassifications of gain on available-for-sale securities, included in “Other income (expenses)," net of tax of $0, $0, and $0         0
Unrealized (loss) gain on available-for-sale securities, net of tax of $0, $0, and $0 0 0 (2) 0 (2)
Net loss $ 0 0 0 (29,126) $ (29,126)
Balance (in shares) at Dec. 31, 2021 41,175,507       40,086,387
Balance at Dec. 31, 2021 $ 4 $ 1,364,309 $ (2) $ (1,366,757) $ (2,446)
v3.22.0.1
Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Operating activities:      
Net loss $ (29,126) $ (59,995) $ (75,595)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:      
Depreciation and amortization 10,598 10,033 8,077
Stock-based compensation 32,633 36,575 57,327
Provision for credit loss recovery (1,000)    
Provision for credit loss expense 0 1,000 0
Disposal of property and equipment 1 0 54
Loss on impairment of asset 0 0 1,183
Loss on debt extinguishment 8,146 0 8,047
Changes in operating assets and liabilities:      
Accounts receivable, net (5,983) 2,353 (8,123)
Inventory, net (3,655) (284) (545)
Prepaid expenses and other 2,669 2,207 414
Other current assets 3,194 (3,120) 1,464
Accounts payable (902) (7,107) (1,526)
Accrued expenses and other 5,209 19,251 22,599
Post-marketing commitment liability (1,134) (140) 9,000
Net cash provided by operating activities 20,650 773 22,376
Investing activities:      
Purchase of property and equipment 0 (46) (306)
Purchase of available-for-sale securities (38,073) (29,826) (127,198)
Sale of available-for-sale securities 0 0 28,135
Maturity of available-for-sale securities 27,192 73,275 104,532
Purchase of intangible assets 0 (10,000) 0
Net cash provided by (used in) investing activities (10,881) 33,403 5,163
Financing activities:      
Net proceeds from shares issued under employee stock plans 0 68 1,351
Proceeds from debt 98,500 8,444 25,000
Payment of debt (100,000) (8,444) (80,000)
Payment of prepayment costs, end of loan payment and other extinguishment costs (8,521) 0 (7,793)
Payment of debt issuance costs (1,910) 0 (5,625)
Installment payment for purchase of intangible asset (20,000) (10,000) 0
Net cash used in financing activities (31,931) (9,932) (67,067)
Net increase (decrease) in cash, cash equivalents and restricted cash (22,162) 24,244 (39,528)
Cash, cash equivalents and restricted cash, beginning of period 97,454 73,210 112,738
Cash, cash equivalents and restricted cash, end of period 75,292 97,454 73,210
Supplemental disclosures of non-cash investing and financing activities:      
Intangibles in accrued expenses 0 20,000 0
Property and equipment purchases in accounts payable 0 0 25
Supplemental disclosure of cash flow information:      
Interest paid 10,342 9,703 11,739
Income taxes paid $ 324 $ 207 $ 53
v3.22.0.1
Note 1 - Business and Basis of Presentation
 12 Months Ended
Dec. 31, 2021
Notes to Financial Statements  
Business Description and Basis of Presentation [Text Block]

 

Note 1—Business and Basis of Presentation

 

Puma Biotechnology, Inc. (the "Company") is a biopharmaceutical company based in Los Angeles, California with a focus on the development and commercialization of innovative products to enhance cancer care. The Company in-licenses from Pfizer Inc. ("Pfizer") the global development and commercialization rights to PB272 (neratinib (oral)), PB272 (neratinib (intravenous)) and PB357. Neratinib is a potent irreversible tyrosine kinase inhibitor that blocks signal transduction through the epidermal growth factor receptors HER1, HER2 and HER4. Currently, the Company is primarily focused on the development and commercialization of the oral version of neratinib, and its most advanced drug candidates are directed at the treatment of HER2-positive breast cancer and HER2 mutated cancers. The Company believes neratinib has clinical application in the treatment of several other cancers as well, including other tumor types that over-express or have a mutation in HER2, such as breast cancer, cervical cancer, lung cancer or other solid tumors.

 

The Company has two subsidiaries, Puma Biotechnology Ltd., a United Kingdom company, and Puma Biotechnology, B.V., a Netherlands company. These subsidiaries were established for the purpose of legal representation in the United Kingdom and the European Union. The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated.

 

The accompanying consolidated financial statements of the Company and its subsidiaries have been prepared in accordance with U.S. generally accepted accounting principles ("US GAAP").

 

The Company has incurred significant operating losses since its inception. The Company believes that it will continue to incur net losses and may incur negative net cash flows from operating activities through the drug development process and global commercialization. In 2017, the Company received U.S. Food and Drug Administration ("FDA") approval for its first product, NERLYNX® (neratinib)("NERLYNX"), formerly known as PB272 (neratinib, oral), for the extended adjuvant treatment of adult patients with early stage HER2-overexpressed/amplified breast cancer following adjuvant trastuzumab-based therapy.  Following FDA approval in July 2017, NERLYNX became available by prescription in the United States, and the Company commenced commercialization.

 

In February 2020, NERLYNX was also approved by the FDA in combination with capecitabine for the treatment of adult patients with advanced or metastatic HER2-positive breast cancer who have received two or more prior anti-HER2-based regimens in the metastatic setting.

 

In 2018, the European Commission ("EC") granted marketing authorization for NERLYNX in the European Union ("EU") for the extended adjuvant treatment of adult patients with early stage hormone receptor positive HER2-overexpressed/amplified breast cancer and who are less than one year from the completion of prior adjuvant trastuzumab-based therapy.

 

The Company is required to make substantial payments to Pfizer upon the achievement of certain milestones and has contractual obligations for clinical trial contracts.

 

The Company has entered into other exclusive sub-license agreements with various parties to pursue regulatory approval, if necessary, and commercialize NERLYNX, if approved, in many regions outside the United States, including Europe (excluding Russia and Ukraine), Australia, Canada, China, Southeast Asia, Israel, South Korea, and various countries and territories in Central and South America. The Company plans to continue to pursue commercialization of NERLYNX in other countries outside the United States, if approved.

 

The Company has reported a net loss of approximately $29.1 million and cash flows from operations of approximately $20.7 million for the year ended December 31, 2021. The Company’s commercialization, research and development or marketing efforts may require funding in addition to the cash and cash equivalents and marketable securities totaling approximately $82.1 million at December 31, 2021. The Company believes that its existing cash and cash equivalents and marketable securities as of December 31, 2021 and proceeds that will become available to the Company through product sales and sub-license payments are sufficient to satisfy its operating cash needs for at least one year after the filing of the Annual Report on Form 10-K in which these financial statements are included. The Company continues to remain dependent on its ability to obtain sufficient funding to sustain operations and continue to successfully commercialize neratinib in the United States. While the Company has been successful in raising capital in the past, there can be no assurance that it will be able to do so in the future. The Company’s ability to obtain funding may be adversely impacted by uncertain market conditions, including the global COVID-19 pandemic, the Company’s success in commercializing neratinib, unfavorable decisions of regulatory authorities or adverse clinical trial results. The outcome of these matters cannot be predicted at this time. Additionally, the terms of the Company’s note purchase agreement place restrictions on the Company’s ability to operate the business and on the Company’s financial flexibility, and the Company may be unable to achieve the revenue necessary to satisfy the minimum revenue and cash balance covenants as specified in the agreement.

 

Since its inception through December 31, 2021, the Company’s financing has primarily been proceeds from product, royalty, and license revenue, public offerings of its common stock, private equity placements, and various debt instruments.

 
v3.22.0.1
Note 2 - Significant Accounting Policies
 12 Months Ended
Dec. 31, 2021
Notes to Financial Statements  
Significant Accounting Policies [Text Block]

Note 2—Significant Accounting Policies

 

The significant accounting policies followed in the preparation of these consolidated financial statements are as follows:

 

Principles of Consolidation

 

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Reclassifications

 

In preparing the 2021 consolidated statement of cash flows, the Company determined that $10.0 million paid for the purchase of intangible assets was incorrectly presented as cash used in investing activities for the year ended December 31, 2020. This error was not considered material to the Company’s consolidated financial statements and the payment has been correctly presented as cash used in financing activities in the accompanying comparative financial statements.

 

Segment Reporting

 

Management has determined that the Company operates in one business segment, which is the development and commercialization of innovative products to enhance cancer care.

 

Use of Estimates

 

The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the balance sheet, and reported amounts of revenues and expenses for the period presented. Accordingly, actual results could differ from those estimates.

 

Significant estimates include estimates for variable consideration for which reserves were established. These estimates are included in the calculation of net revenues and include trade discounts and allowances, product returns, provider chargebacks and discounts, government rebates, payor rebates, and other incentives, such as voluntary patient assistance, and other allowances that are offered within contracts between the Company and its customers, payors, and other indirect customers relating to the Company’s sale of its products. Other significant estimates also include those related to legal and other expense accruals. 

 

Net Loss per Share of Common Stock

 

Basic net loss per share of common stock is computed by dividing net loss applicable to common stockholders by the weighted average number of shares of common stock outstanding during the periods presented, as required by ASC 260 Earnings per Share. For purposes of calculating diluted loss per share of common stock, the denominator includes both the weighted average number of shares of common stock outstanding and the number of dilutive common stock equivalents, such as stock options, restricted stock units ("RSUs") and warrants. A common stock equivalent is not included in the denominator when calculating diluted earnings per common share if the effect of such common stock equivalent would be anti-dilutive. The following potentially dilutive outstanding common stock equivalents were excluded from diluted net loss per share because of their anti-dilutive effect:

 

  

For the Years Ended December 31,

 
  

2021

  

2020

  

2019

 

Options outstanding

  4,595,247   5,009,342   5,042,325 

Warrant outstanding

  2,116,250   2,116,250   2,116,250 

Unvested restricted stock units

  1,399,317   1,854,205   1,991,125 

Totals

  8,110,814   8,979,797   9,149,700 

 

Revenue Recognition

 

Under ASC Topic 606, Revenue from Contracts with Customers ("ASC 606") the Company recognizes revenue when its customer obtains control of the promised goods or services, in an amount that reflects the consideration which the entity expects to be entitled in exchange for those goods or services. The Company had no contracts with customers until the FDA approved NERLYNX on July 17, 2017. Subsequent to receiving FDA approval, the Company entered into a limited number of arrangements with specialty pharmacies and specialty distributors in the United States to distribute NERLYNX. These arrangements are the Company’s initial contracts with customers. The Company has determined that these sales channels with customers are similar.

 

Product Revenue, Net

 

The Company sells NERLYNX to a limited number of specialty pharmacies and specialty distributors in the United States. These customers subsequently resell the Company’s products to patients and certain medical centers or hospitals. In addition to distribution agreements with these customers, the Company enters into arrangements with health care providers and payors that provide for government mandated and/or privately negotiated rebates, chargebacks and discounts with respect to the purchase of the Company’s products.

 

The Company recognizes revenue on product sales when the specialty pharmacy or specialty distributor, as applicable, obtains control of the Company's product, which occurs at a point in time (upon delivery). Product revenue is recorded net of applicable reserves for variable consideration, including discounts and allowances. The Company’s payment terms range between 10 and 68 days.

 

Shipping and handling costs for product shipments occur prior to the customer obtaining control of the goods and are recorded in cost of sales.

 

If taxes should be collected from customers relating to product sales and remitted to governmental authorities, they will be excluded from revenue. The Company expenses incremental costs of obtaining a contract when incurred, if the expected amortization period of the asset that the Company would have recognized is one year or less. However, no such costs were incurred during the year ended December 31, 2021.

 

For the period ended December 31, 2021, two major customers represented approximately 31% and 22%, respectively, of the Company’s total product revenue. For the period ended December 31, 2020, two major customers accounted for approximately 33% and 21%, respectively, of the Company’s total product revenue. For the period ended December 31, 2019, two major customers accounted for approximately 34% and 22%, respectively, of the Company’s total product revenue.

 

Reserves for Variable Consideration

 

Revenue from product sales is recorded at the net sales price (transaction price), which includes estimates of variable consideration for which reserves are established. Components of variable consideration include trade discounts and allowances, product returns, provider chargebacks and discounts, government rebates, payor rebates, and other incentives, such as voluntary patient assistance, and other allowances that are offered within contracts between the Company and its customers, payors, and other indirect customers relating to the Company’s sale of its products. These reserves, as detailed below, are based on the related sales, and are classified as reductions of accounts receivable, net when the right of offset exists in accordance with ASU 2013-1, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities, or as a current liability. These estimates take into consideration a range of possible outcomes that are probability-weighted in accordance with the expected value method in ASC 606 for relevant factors such as current contractual and statutory requirements, specific known market events and trends, industry data, and forecasted customer buying and payment patterns. Overall, these reserves reflect the Company’s best estimates of the amount of consideration to which it is entitled based on the terms of the respective underlying contracts.

 

The amount of variable consideration that is included in the transaction price may be constrained, and is included in the net sales price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized under the contract will not occur in a future period. The Company’s analyses also contemplated application of the constraint in accordance with the guidance, under which it determined a significant reversal of revenue would not occur in a future period for the estimates detailed below as of December 31, 2021 and, therefore, the transaction price was not reduced further during the year ended December 31, 2021. 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.

 

Trade Discounts and Allowances

 

The Company generally provides customers with discounts, which include incentive fees that are explicitly stated in the Company’s contracts and are recorded as a reduction of revenue in the period the related product revenue is recognized. The reserve for discounts is established in the same period that the related revenue is recognized, together with reductions to accounts receivables, net on the consolidated balance sheets. In addition, the Company compensates its customers for sales order management, data, and distribution services. The Company has determined such services received to date are not distinct from the Company’s sale of products to its customers and, therefore, these payments have been recorded as a reduction of revenue within the statement of operations.

 

Product Returns

 

Consistent with industry practice, the Company offers the specialty pharmacies and specialty distributors that are its customers limited product return rights for damaged and expiring product, provided it is within a specified period around the product expiration date as set forth in the applicable individual distribution agreement. 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, as well as a reduction to accounts receivables, net on the consolidated balance sheets. The Company currently estimates product returns using its own sales information, including its visibility into the inventory remaining in the distribution channel. The Company has an insignificant amount of returns to date and believes that returns of its products will continue to be minimal.

 

Provider Chargebacks and Discounts

 

Chargebacks for fees and discounts to providers represent the estimated obligations resulting from contractual commitments to sell products to qualified healthcare providers at prices lower than the list prices charged to its customers who directly purchase the product from the Company. Customers charge the Company for the difference between what they pay for the product and the ultimate selling price to the qualified healthcare providers. The reserve for chargebacks is established in the same period that the related revenue is recognized, resulting in a reduction of product revenue and a reduction to accounts receivable, net on the consolidated balance sheets. Chargeback amounts are generally determined at the time of resale to the qualified healthcare provider by customers, and the Company generally issues credits for such amounts within a few weeks of the customer’s notification to the Company of the resale. Chargebacks consist of credits the Company expects to issue for units that remain in the distribution channel at each reporting period end that the Company expects will be sold to qualified healthcare providers and chargebacks that customers have claimed, but for which the Company has not yet issued a payment.

 

Government Rebates

 

The Company is subject to discount obligations under state Medicaid programs and Medicare. These reserves are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability, which is included in accrued expenses on the consolidated balance sheets. 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 estimates of future claims that will be made for product that has been recognized as revenue, but which remains in the distribution channel at the end of each reporting period.

 

Payor Rebates

 

The Company contracts with certain private payor organizations, primarily insurance companies and pharmacy benefit managers, for the payment of rebates with respect to utilization of its products. The Company estimates these rebates and records such estimates in the same period the related revenue is recognized, resulting in a reduction of product revenue, net and the establishment of a current liability, which is included in accrued expenses on the consolidated balance sheets.

 

Other Incentives

 

Other incentives the Company offers include voluntary patient assistance programs, such as the co-pay assistance program, which are intended to provide financial assistance to qualified commercially-insured patients with prescription drug co-payments required by payors. The calculation of the accrual for co-pay assistance is based on an estimate of claims and the cost per claim that the Company expects to receive associated with product that has been recognized as revenue, but remains in the distribution channel at the end of each reporting period. The adjustments are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability, which is included as a component of accrued expenses on the consolidated balance sheets.

 

License Revenue

 

The Company also recognizes license revenue under certain of the Company’s sub-license agreements that are within the scope of ASC 606. The terms of these agreements may contain multiple performance obligations, which may include licenses and research and development activities. The Company evaluates these agreements under ASC 606 to determine the distinct performance obligations. Non-refundable, upfront fees that are not contingent on any future performance and require no consequential continuing involvement by the Company, are recognized as revenue when the license term commences and the licensed data, technology or product is delivered. The Company defers recognition of non-refundable upfront license fees if the performance obligations are not satisfied. The Company’s payment terms range between the execution date of the sub-license agreement and 45 days.

 

Prior to recognizing revenue, the Company makes estimates of the transaction price, including variable consideration that is subject to a constraint. Amounts of variable consideration are included in the transaction price to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur and when the uncertainty associated with the variable consideration is subsequently resolved.

 

If there are multiple distinct performance obligations, the Company allocates the transaction price to each distinct performance obligation based on its relative standalone selling price. The standalone selling price is generally determined based on the prices charged to customers or using expected cost-plus margin. Revenue is recognized by measuring the progress toward complete satisfaction of the performance obligations using an input measure.

 

Since 2018, the Company has entered into sub-license agreements with certain sub-licensees in territories outside of the United States. These sub-licensing agreements grant certain intellectual property rights and set forth various respective obligations with respect to actions such as development, pursuit and maintenance of regulatory approvals, commercialization and supply of NERLYNX in the sub-licensees’ respective territories.

 

License fees under the sub-license agreements include one-time upfront payments when each sub-license agreement was executed and potential additional one-time milestone payments due to the Company upon successful completion of certain performance obligations, such as achieving regulatory approvals or sales target thresholds, and potential double-digit royalties on sales of the licensed product, calculated as a percentage of net sales of the licensed product throughout each sub-licensee’s respective territory. As of December 31, 2021, the total potential milestone payments that would be due to the Company upon achievement of all respective performance obligations under the sub-license agreements is approximately $579.8 million. At this time, the Company cannot estimate if or when these milestone-related performance obligations might be achieved.

 

Royalty Revenue

 

For sub-license agreements that are within the scope of ASC 606, the Company recognizes revenue when the related sales occur in accordance with the sales-based royalty exception under ASC 606-10-55-65. Royalty revenue consists of consideration earned related to international sales of NERLYNX made by the Company’s sub-licensees in their respective territories. The Company recognizes royalty revenue when the performance obligations have been satisfied. The Company’s payment terms range between 30 and 90 days.

 

Legal Contingencies and Expense

 

For legal contingencies, the Company accrues a liability for an estimated loss if the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated. Legal fees and expenses are expensed as incurred based on invoices or estimates provided by legal counsel. The Company periodically evaluates available information, both internal and external, relative to such contingencies and adjusts the accrual as necessary. The Company determines whether a contingency should be disclosed by assessing whether a material loss is deemed reasonably possible. In determining whether a loss should be accrued, the Company evaluates, among other factors, the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of the loss (see Note 14-Commitments and Contingencies).

 

Royalty Expenses

 

Royalties incurred in connection with the Company’s license agreement with Pfizer, as disclosed in Note 14-Commitments and Contingencies, are expensed to cost of sales as revenue from product sales is recognized.

 

Research and Development Expenses

 

Research and development ("R&D") expenses are charged to operations as incurred. The major components of research and development costs include clinical manufacturing costs, clinical trial expenses, consulting and other third-party costs, salaries and employee benefits, stock-based compensation expense, supplies and materials, and allocations of various overhead costs. Clinical trial expenses include, but are not limited to, investigator fees, site costs, comparator drug costs, and clinical research organization ("CRO") costs. In the normal course of business, the Company contracts with third parties to perform various clinical trial activities in the ongoing development of potential products. The financial terms of these agreements are subject to negotiation and variations from contract to contract and may result in uneven payment flows. Payments under the contracts depend on factors such as the achievement of certain events, the successful enrollment of patients and the completion of portions of the clinical trial or similar conditions. The Company’s accruals for clinical trials are based on estimates of the services received and efforts expended pursuant to contracts with numerous clinical trial sites, cooperative groups and CROs. As actual costs become known, the Company adjusts its accruals in that period.

 

In instances where the Company enters into agreements with third parties for clinical trials and other consulting activities, upfront amounts are recorded to prepaid expenses and other in the accompanying consolidated balance sheets and expensed as services are performed or as the underlying goods are delivered. If the Company does not expect the services to be rendered or goods to be delivered, any remaining capitalized amounts for non-refundable upfront payments are charged to expense immediately. Amounts due under such arrangements may be either fixed fee or fee for service, and may include upfront payments, monthly payments and payments upon the completion of milestones or receipt of deliverables.

 

Costs related to the acquisition of technology rights and patents for which development work is still in process are charged to operations as incurred and considered a component of research and development costs.

 

Stock-Based Compensation

 

Stock option awards

 

ASC Topic 718, Compensation-Stock Compensation ("ASC 718") requires the fair value of all share-based payments to employees and non-employees, including grants of stock options, to be recognized in the statement of operations over the requisite service period. Under ASC 718, employee and non-employee option grants are generally valued at the grant date and those valuations do not change once they have been established. The fair value of each option award is estimated on the grant date using the Black-Scholes Option Pricing Method. As allowed by ASC 718, the Company’s estimate of expected volatility is based on its average volatilities using its expected life, or approximately the past six years of publicly traded history. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant valuation. Option forfeitures are estimated when the option is granted to reduce the option expense to be recognized over the life of the award. The estimated forfeiture rate considers historical employee turnover rates stratified into employee pools, actual forfeiture experience and other factors. The option expense is adjusted upon the actual forfeiture of a stock option grant and the Company periodically revises the estimated forfeiture rate in subsequent periods if actual forfeitures differ from those estimates. Due to its limited history of stock option exercises, the Company uses the simplified method to determine the expected life of the option grants. Compensation expense related to modified stock options is measured based on the fair value for the awards as of the modification date. Any incremental compensation expense arising from the excess of the fair value of the awards on the modification date compared to the fair value of the awards immediately before the modification date is recognized at the modification date or ratably over the requisite service period, as appropriate.

 

Restricted stock units

 

RSUs are valued on the grant date and the fair value of the RSUs is equal to the market price of the Company’s common stock on the grant date. The RSU expense is recognized over the requisite service period in the statement of operations. When the requisite service period begins prior to the grant date (because the service inception date occurs prior to the grant date), the Company is required to begin recognizing compensation cost before there is a measurement date (i.e., the grant date). The service inception date is the beginning of the requisite service period. If the service inception date precedes the grant date, accrual of compensation cost for periods before the grant date shall be based on the fair value of the award at the reporting date. In the period in which the grant date occurs, cumulative compensation cost shall be adjusted to reflect the cumulative effect of measuring compensation cost based on fair value at the grant date rather than the fair value previously used at the service inception date (or any subsequent reporting date). RSU forfeitures are estimated when the RSU is granted to reduce the RSU expense to be recognized over the life of the award. The estimated forfeiture rate considers historical employee turnover rates stratified into employee pools, actual forfeiture experience and other factors. The RSU expense is “trued-up” upon the actual forfeiture of a RSU grant and the Company periodically revises the estimated forfeiture rate in subsequent periods if actual forfeitures differ from those estimates. Compensation expense related to modified restricted stock units is measured based on the fair value for the awards as of the modification date. Any incremental compensation expense arising from the excess of the fair value of the awards on the modification date compared to the fair value of the awards immediately before the modification date is recognized at the modification date or ratably over the requisite service period, as appropriate.

 

Warrants

 

Warrants (see Note 11-Stockholders’ (Deficit) Equity for further details) granted to employees and non-employees are normally valued at the fair value of the instrument on the grant date and are recognized in the statement of operations over the requisite service period. When the requisite service period precedes the grant date and a market condition exists in the warrant, the Company values the warrant using the Monte Carlo Simulation Method. When the terms of the warrant become fixed, the Company values the warrant using the Black-Scholes Option Pricing Method. As allowed by ASC 718, the Company’s estimate of expected volatility is based on its average volatilities using its past nine years of publicly traded history. The risk-free rate for periods within the contractual life of the warrant is based on the U.S. Treasury yield curve in effect at the time of grant valuation. In determining the value of the warrant until the terms are fixed, the Company factors in the probability of the market condition occurring and several possible scenarios. When the requisite service period precedes the grant date and is deemed to be complete, the Company records the fair value of the warrant at the time of issuance as an equity stock-based compensation transaction. The grant date is determined when all pertinent information, such as exercise price and quantity are known.

 

Income Taxes

 

The Company follows ASC Topic 740, Income Taxes ("ASC 740") which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the consolidated financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the asset will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

 

The standard addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the consolidated financial statements. Under ASC 740, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the tax authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. ASC 740 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. As of December 31, 2021, the Company’s uncertain tax position includes a reserve for its R&D credits.

 

Financial Instruments

 

The carrying value of financial instruments, such as cash equivalents, accounts receivable and accounts payable, approximate their fair value because of their short-term nature. The carrying value of long-term debt approximates its fair value as the principal amounts outstanding are subject to variable interest rates that are based on market rates which are regularly reset.

 

Cash and Cash Equivalents

 

The Company classifies all highly liquid instruments with an original maturity of three months or less as cash equivalents.

 

Restricted Cash

 

Restricted cash represents cash held at financial institutions that are pledged as collateral for stand-by letters of credit for lease and legal verdict commitments. The lease related letters of credit will lapse at the end of the respective lease terms through 2026. At December 31, 2021 and 2020, the Company had restricted cash in the amount of $12.2 million for both years ended 2021 and 2020.

 

Investment Securities

 

The Company classifies all investment securities (short-term and long-term) as available-for-sale, as the sale of such securities may be required prior to maturity to implement management’s strategies. These securities are carried at fair value, with the unrealized gains and losses, reported as a component of accumulated other comprehensive income (loss) in stockholders’ (deficit) equity until realized. Realized gains and losses from the sale of available-for-sale securities, if any, are determined on a specific identification basis. In accordance with ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, credit losses on available-for-sale securities are reported using an expected loss model and recorded to an allowance. No material credit losses on available-for-sale securities were recognized in the years ending December 31, 2021 Premiums and discounts are amortized or accreted over the life of the related security as an adjustment to yield using the straight-line method. Interest income is recognized when earned.

 

Assets Measured at Fair Value on a Recurring Basis

 

ASC Topic 820, Fair Value Measurement ("ASC 820") provides a single definition of fair value and a common framework for measuring fair value as well as disclosure requirements for fair value measurements used in financial statements. Under ASC 820, fair value is determined based upon the exit price that would be received by a company to sell an asset or paid by a company to transfer a liability in an orderly transaction between market participants, exclusive of any transaction costs. Fair value measurements are determined by either the principal market or the most advantageous market. The principal market is the market with the greatest level of activity and volume for the asset or liability. Absent a principal market to measure fair value, the Company uses the most advantageous market, which is the market from which the Company would receive the highest selling price for the asset or pay the lowest price to settle the liability, after considering transaction costs. However, when using the most advantageous market, transaction costs are only considered to determine which market is the most advantageous and these costs are then excluded when applying a fair value measurement. ASC 820 creates a three-level hierarchy to prioritize the inputs used in the valuation techniques to derive fair values. The basis for fair value measurements for each level within the hierarchy is described below, with Level 1 having the highest priority and Level 3 having the lowest.

 

Level 1:

Quoted prices in active markets for identical assets or liabilities.

  

Level 2:

Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets.

  

Level 3:

Valuations derived from valuation techniques in which one or more significant inputs are unobservable.

 

Following are the major categories of assets measured at fair value on a recurring basis as of December 31, 2021 and 2020, using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3) (in thousands):

 

December 31, 2021

 

Level 1

  

Level 2

  

Level 3

  

Total

 

Cash equivalents

 $50,872  $—  $—  $50,872 

Commercial paper

  —   14,589   —   14,589 

Corporate bonds

  —   4,386   —   4,386 

Totals

 $50,872  $18,975  $—  $69,847 

 

December 31, 2020

 

Level 1

  

Level 2

  

Level 3

  

Total

 

Cash equivalents

 $59,919  $11,798  $—  $71,717 

Commercial paper

  —   8,096   —   8,096 

Totals

 $59,919  $19,894  $—  $79,813 

 

The Company’s investments in commercial paper, corporate bonds and U.S. government securities are exposed to price fluctuations. The fair value measurements for commercial paper, corporate bonds and U.S. government securities are based upon the quoted prices of similar items in active markets multiplied by the number of securities owned.

 

The following tables summarize the Company’s short-term investments (in thousands):

 

 

Maturity

 

Amortized

  

Unrealized

  

Estimated

 

December 31, 2021

(in years)

 

cost

  

Gains

  

Losses

  

fair value

 

Cash equivalents

 $50,872  $—  $—  $50,872 

Commercial paper

Less than 1

  14,590   —   (1)  14,589 

Corporate bonds

  4,387   -   (1)  4,386 

Totals

 $69,849  $—  $(2) $69,847 

 

 

Maturity

 

Amortized

  

Unrealized

  

Estimated

 

December 31, 2020

(in years)

 

cost

  

Gains

  

Losses

  

fair value

 

Cash equivalents

 $71,717  $—  $—  $71,717 

Commercial paper

Less than 1

  8,096   —   —   8,096 

Totals

 $79,813  $—  $—  $79,813 

 

Concentration of Risk

 

Financial instruments, which potentially subject the Company to concentrations of credit risk, principally consist of cash and cash equivalents, marketable securities, and accounts receivable, net. The Company’s cash and cash equivalents and restricted cash in excess of the Federal Deposit Insurance Corporation and the Securities Investor Protection Corporation insured limits at December 31, 2021, were approximately $75.0 million. The Company does not believe it is exposed to any significant credit risk due to the quality nature of the financial instruments in which the money is held. Pursuant to the Company’s internal investment policy, investments must be rated A-1/P-1 or better by Standard and Poor’s Rating Service and Moody’s Investors Service at the time of purchase.

 

The Company sells its products in the United States primarily through specialty pharmacies and specialty distributors. Therefore, wholesale distributors and large pharmacy chains account for a large portion of its accounts receivables, net and product revenues, net. The creditworthiness of its customers is continuously monitored, and the Company has internal policies regarding customer credit limits. The Company estimates an allowance for credit loss primarily based on the credit worthiness of its customers, historical payment patterns, aging of receivable balances and general economic conditions. The Company recorded credit loss expense of $1.0 million during 2020 and a recovery of credit loss expense in 2021.

 

The Company’s success depends on its ability to successfully commercialize NERLYNX. The Company currently has a single product with limited commercial sales experience, which makes it difficult to evaluate its current business, predict its future prospects and forecast financial performance and growth. The Company has invested a significant portion of its efforts and financial resources in the development and commercialization of the lead product, NERLYNX, and expects NERLYNX to constitute the vast majority of product revenue for the foreseeable future.

 

The Company relies exclusively on third parties to formulate and manufacture NERLYNX and its drug candidates. The commercialization of NERLYNX and any other drug candidates, if approved, could be stopped, delayed or made less profitable if those third parties fail to provide sufficient quantities of product or fail to do so at acceptable quality levels or prices. The Company has no experience in drug formulation or manufacturing and does not intend to establish its own manufacturing facilities. The Company lacks the resources and expertise to formulate or manufacture NERLYNX and other drug candidates. While the drug candidates were being developed by Pfizer, both the drug substance and drug product were manufactured by third-party contractors. The Company is using the same third-party contractors to manufacture, supply, store and distribute drug supplies for clinical trials and the commercialization of NERLYNX. If the Company is unable to continue its relationships with one or more of these third-party contractors, it could experience delays in the development or commercialization efforts as it locates and qualifies new manufacturers. The Company intends to rely on one or more third-party contractors to manufacture the commercial supply of drugs.

 

Inventory

 

The Company values its inventories at the lower of cost and estimated net realizable value. The Company determines the cost of its inventories, which includes amounts related to materials and manufacturing overhead, on a first-in, first-out basis. The Company performs an assessment of the recoverability of capitalized inventory during each reporting period, and it writes down any excess and obsolete inventories to their estimated realizable value in the period in which the impairment is first identified. Such impairment charges, should they occur, are recorded within the cost of sales in the consolidated statements of operations. The determination of whether inventory costs will be realizable requires estimates by management. If actual market conditions are less favorable than projected by management, additional write-downs of inventory may be required, which would be recorded as a cost of sales in the consolidated statements of operations.

 

The Company capitalizes inventory costs associated with the Company’s products after regulatory approval, if any, when, based on management’s judgment, future commercialization is considered probable and the future economic benefit is expected to be realized. Inventory that can be used in either the production of clinical or commercial product is recorded as research and development expense when selected for use in a clinical trial. Starter kits, provided to patients prior to insurance approval, are expensed by the Company to selling, general and administrative expense as incurred.

 

The Company’s inventory balances are as follows: 

 

  

December 31, 2021

  

December 31, 2020

 

Raw materials

 $4,569  $1,431 

Work-in-process (materials, labor and overhead)

  1,385   1,258 

Finished goods (materials, labor and overhead)

  1,155   765 

Total Inventories

 $7,109  $3,454 

 

Property and Equipment, Net

 

Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the useful lives of the assets, which is generally three years for computer hardware and software, three years for phone equipment, and seven years for furniture and fixtures. Leasehold improvements are amortized using the straight-line method over the lesser of the useful life or the lease term. Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation are eliminated from the accounts and any resulting gain or loss is credited or charged to operations. Repairs and maintenance costs are expensed as incurred.

 

The Company reviews its long-lived assets used in operations for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable, as required by ASC Topic 360, Property, Plant, and Equipment ("ASC 360"). The Company performs a recoverability test by comparing the sum of the estimated undiscounted cash flows over the life of the asset to its carrying value on the consolidated balance sheet. If the undiscounted cash flows used in the recoverability test are less than the carrying value, the Company would then determine the fair value of the long-lived asset and recognize an impairment loss for the amount in excess of the carrying value.

 

Leases

 

ASC Topic 842, Leases, as adopted in the first quarter of 2019, requires lessees to recognize most leases on the balance sheet with a corresponding right-of-use asset ("ROU asset"). ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. The assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of fixed lease payments over the lease term. ROU assets are evaluated for impairment using the long-lived assets impairment guidance, as required by ASC 360. A significant indication of impairment of an ROU asset would include a change in the extent or manner in which the asset is being used. The Company must make assumptions which underlie the most significant and subjective estimates in determining whether any impairment exists. Those estimates, and the underlying assumptions, include estimates of future cash flow utilizing market lease rates and determination of fair value. If an ROU asset related to an operating lease is impaired, the carrying value of the ROU asset post-impairment should be amortized on a straight-line basis through the earlier of the end of the useful life of the ROU asset or the end of the lease term. Post impairment, a lessee must calculate the amortization of the ROU asset and interest expense on the lease liability separately, although the sum of the two continues to be presented as a single lease cost. If a lease is planned to be abandoned with no intention of subleasing, the ROU asset should be assessed for impairment.

 

Leases are classified as financing or operating, which will drive the expense recognition pattern. The Company elects to exclude short-term leases if and when the Company has them. For additional information, see Note 7-Leases.

 

The Company leases office space and copy machines, all of which are operating leases. Most leases include the option to renew and the exercise of the renewal options is at the Company’s sole discretion. Options to extend or terminate a lease are considered in the lease term to the extent that the option is reasonably certain of exercise. The leases do not include options to purchase the leased property. The depreciable life of assets and leasehold improvements is limited by the expected lease term. Covenants imposed by the leases include letters of credit required to be obtained by the lessee.

 

The incremental borrowing rate ("IBR") represents the rate of interest the Company would expect to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. When determinable, the Company uses the rate implicit in the lease to determine the present value of lease payments. As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The Company’s average IBR for existing leases as of December 31, 2021 was 10.9%.

 

The Company decided to cease the use of a portion of its leased office space in 2019. In connection with the decreased need for the right to use the ROU asset, the Company entered into a sublease for the underlying asset, in which the sublease income is less than the original lease payments, indicating impairment. In performing the recoverability test on the effective date, the undiscounted future estimated cash flows and carrying value were identified for the subleased portion of the leased building, as an individual asset group, defined under ASC 360. A reduction to the carrying value of the ROU asset of approximately $1.2 million was recorded, representing the fair value amount in excess of the carrying value, with a corresponding impairment charge recorded as selling, general and administration expense, in the consolidated statements of operations for the year ended  December 31, 2019.  There were no indications of impairment or any related charge recorded during the year ended December 31, 2021.

 

License Fees and Intangible Assets

 

The Company expenses amounts paid to acquire licenses associated with products under development when the ultimate recoverability of the amounts paid is uncertain and the technology has no alternative future use when acquired. Acquisitions of technology licenses are charged to expense or capitalized based upon the asset achieving technological feasibility in accordance with management’s assessment regarding the ultimate recoverability of the amounts paid and the potential for alternative future use. The Company has determined that technological feasibility for its product candidates is reached when the requisite regulatory approvals are obtained to make the product available for sale. The Company capitalizes technology licenses upon reaching technological feasibility.

 

The Company maintains definite-lived intangible assets related to the license agreement with Pfizer. These assets are amortized over their remaining useful lives, which are estimated based on the shorter of the remaining patent life or the estimated useful life of the underlying product. Intangible assets are amortized using the economic consumption method if anticipated future revenues can be reasonably estimated. The straight-line method is used when future revenues cannot be reasonably estimated. Amortization costs are recorded as part of cost of sales.

 

The Company assesses its intangible assets for impairment if indicators are present or changes in circumstance suggest that impairment may exist. Events that could result in an impairment, or trigger an interim impairment assessment, include the receipt of additional clinical or non-clinical data regarding one of the Company’s drug candidates or a potentially competitive drug candidate, changes in the clinical development program for a drug candidate, or new information regarding potential sales for the drug. If impairment indicators are present or changes in circumstance suggest that impairment may exist, the Company performs a recoverability test by comparing the sum of the estimated undiscounted cash flows of each asset group to its carrying value on the consolidated balance sheet. If the undiscounted cash flows used in the recoverability test are less than the carrying value, the Company would determine the fair value of the intangible asset and recognize an impairment loss if the carrying value of the intangible asset exceeds its fair value. In connection with the FDA approval of NERLYNX in July 2017, the Company triggered a one-time milestone payment pursuant to its license agreement with Pfizer. In June 2020, the Company entered into a letter agreement with Pfizer relating to the method of payment associated with a milestone payment under the Company’s license agreement with Pfizer (see Note 14-Commitments and Contingencies). The Company capitalized the milestone payments as an intangible asset and is amortizing the asset to cost of sales on a straight-line basis over the estimated useful life of the licensed patent through 2030. The Company recorded amortization expense related to its intangible asset of $8.0 million, $6.3 million, $3.9 million for the years ended December 31, 2021, 2020 and 2019, respectively. As of December 31, 2021, estimated future amortization expense related to the Company’s intangible asset was approximately $8.0 million for each year starting 2022 through 2029, and $2.0 million for 2030.

 

Recently Issued Accounting Standards

 

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU-2016-13"). ASU 2016-13 requires that credit losses be reported using an expected losses model rather than the incurred losses model that is currently used, and establishes additional disclosures related to credit risks. For trade accounts receivable, the Company recognizes credit losses based on lifetime expected losses. For available-for-sale debt securities with unrealized losses, this standard now requires allowances to be recorded instead of reducing the amortized cost of the investment. These amendments under ASU 2016-13 are effective for interim and annual fiscal periods beginning after December 15, 2019. The Company adopted ASU 2016-13 as of January 1, 2020, and the adoption did not have a material effect on the Company’s current financial position, results of operations or financial statement disclosures.  

 

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement ("ASU 2018-13"). As of January 1, 2020, the Company adopted the amendments in ASU 2018-13, which modifies the disclosure requirements on fair value measurements. The removed and modified disclosures were adopted on a retrospective basis and the new disclosures were adopted on a prospective basis. The adoption of ASU 2018-13 did not have a material effect on the Company’s current financial position, results of operations or financial statement disclosures.

 

In December 2019, the FASB issued ASU No 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ("ASU 2019-12"), as part of its Simplification Initiative to reduce the cost and complexity in accounting for income taxes. The amendments in ASU 2019-12 remove certain exceptions 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. ASU 2019-12 also amends other aspects of the guidance to help simplify and promote consistent application of GAAP. The guidance is effective for interim and annual periods beginning after December 15, 2020, with early adoption permitted. The Company adopted ASU 2019-12 on January 1, 2021 and it did not have a material effect on the Company’s current financial position, results of operations or financial statement disclosures.
v3.22.0.1
Note 3 - Accounts Receivable, Net
 12 Months Ended
Dec. 31, 2021
Notes to Financial Statements  
Accounts Receivable [Text Block]

Note 3—Accounts Receivable, Net

 

Accounts receivable, net consisted of the following (in thousands):

 

  

December 31, 2021

  

December 31, 2020

 

Trade accounts receivable

 $29,646  $21,515 

License revenue receivable

  —   2,500 

Royalty revenue receivable

  2,880   2,528 

Total accounts receivable

 $32,526  $26,543 
         

Allowance for credit losses

  —   (1,000)

Total accounts receivable, net

 $32,526  $25,543 

 

Trade accounts receivable consist entirely of amounts owed from the Company’s customers related to product sales. License revenue receivable represents an amount owed from a sub-licensee under a sub-license agreement. Royalty revenue receivable represents amounts owed related to royalty revenue recognized based on the Company’s sub-licensees’ sales in their respective territories in the years ended December 31, 2021 and 2020.

 

For all accounts receivable, the Company recognized credit losses based on lifetime expected losses. In determining estimated credit losses, the Company evaluated its historical loss rates, current economic conditions and reasonable and supportable forecasts of future economic conditions. The Company recorded a recovery of credit loss expense of $1.0 million and $1.0 million as a credit loss expense in the years ended December 31, 2021 and 2020, respectively. The rollforward of the allowance for credit losses is as follows:

 

Allowance for credit losses (in thousands):

    

Beginning balance at January 1, 2020

 $(1,000)

Provision for credit loss expense

  — 

Accounts receivable written-off

  — 

Recoveries

  1,000 

Total ending allowance balance as December 31, 2021

 $— 

 
v3.22.0.1
Note 4 - Prepaid Expenses and Other
 12 Months Ended
Dec. 31, 2021
Notes to Financial Statements  
Prepaid Expense and Other Assets [Text Block]

Note 4—Prepaid Expenses and Other

 

Prepaid expenses and other consisted of the following at December 31 (in thousands):

 

  

December 31, 2021

  

December 31, 2020

 

Current:

        

CRO services

 $340  $1,550 

Other clinical development

  2,933   2,718 

Insurance

  3,178   3,708 

Professional fees

  398   651 

Other

  2,135   2,635 
   8,984   11,262 

Long-term:

        

CRO services

  166   518 

Other clinical development

  577   437 

Other

  611   790 
   1,354   1,745 

Totals

 $10,338  $13,007 

 

Other current prepaid amounts consist primarily of deposits, signing bonuses, licenses, subscriptions and software. Other long-term prepaid amounts consist primarily of deposits, signing bonuses, licenses, subscriptions, software, a capitalized sublease commission and a sublease tenant improvement allowance, net of amortization.

 
v3.22.0.1
Note 5 - Other Current Assets
 12 Months Ended
Dec. 31, 2021
Notes to Financial Statements  
Other Current Assets [Text Block]

Note 5—Other Current Assets

 

Other current assets consisted of the following at December 31 (in thousands):

 

  

December 31, 2021

  

December 31, 2020

 

Deposit for manufacturing costs

 $-  $3,376 

Other

  447   265 

Totals

 $447  $3,641 

 

Other current asset amounts consist primarily of capitalized sublease commission and a sublease tenant improvement allowances, net of amortization.

 
v3.22.0.1
Note 6 - Property and Equipment
 12 Months Ended
Dec. 31, 2021
Notes to Financial Statements  
Property, Plant and Equipment Disclosure [Text Block]

Note 6—Property and Equipment

 

Property and equipment consisted of the following at December 31 (in thousands):

 

  

December 31, 2021

  

December 31, 2020

 

Leasehold improvements

 $3,779  $3,779 

Computer equipment

  2,177   2,192 

Telephone equipment

  302   302 

Furniture and fixtures

  2,359   2,359 
   8,617   8,632 

Less: accumulated depreciation

  (6,861)  (6,151)

Totals

 $1,756  $2,481 

 

For the years ended December 31, 2021, 2020, and 2019, the Company incurred depreciation expense of $0.7 million, $0.9 million, and $0.9 million, respectively.

 
v3.22.0.1
Note 7 - Leases
 12 Months Ended
Dec. 31, 2021
Notes to Financial Statements  
Lessee, Operating Leases [Text Block]

Note 7—Leases

 

In December 2011, the Company entered into a non-cancelable operating lease for office space in Los Angeles, California, which lease was subsequently amended in November 2012, December 2013, March 2014, July 2015, and December 2017. The initial term of the lease was for seven years and commenced on December 10, 2011. As amended, the Company rents approximately 65,656 square feet. The term of the lease runs until March 2026, and rent amounts payable by the Company increase approximately 3% per year. Concurrent with the execution of the lease, the Company provided the landlord an automatically renewable stand-by letter of credit in the amount of $2.0 million. The stand-by letter of credit is collateralized by a high-yield savings account, which is classified as restricted cash, long-term on the accompanying consolidated balance sheets.

 

In June 2012, the Company entered into a long-term lease agreement for office space in South San Francisco, California, which was subsequently amended in May 2014 and July 2015. As amended, the Company rents approximately 29,470 square feet. The term of this lease runs until March 2026, with the option to extend for an additional five-year term, and rents payable by the Company increase approximately 3% per year. The Company provided the landlord an automatically renewable stand-by letter of credit in the amount of $1.1 million. The stand-by letter of credit is collateralized by a high-yield savings account, which is classified as restricted cash, long-term on the accompanying consolidated balance sheets.

 

The Company also leases copier equipment for use in the office spaces. Components of copier lease expense include both fixed and variable lease expenses. Total rent expense for each of the respective years ended December 31, 2021 , 2020 and 2019 was approximately $5.1 million. For purposes of determining straight-line rent expense, the lease term is calculated from the date the Company first takes possession of the facility, including any periods of free rent and any renewal option periods that the Company is reasonably certain of exercising. The Company’s office and equipment leases generally have contractually specified minimum rent and annual rent increases are included in the measurement of the ROU asset and related lease liability. Additionally, under these lease arrangements, the Company may be required to pay directly, or reimburse the lessors, for real estate taxes, insurance, utilities, maintenance and other operating costs. Such amounts are generally variable and therefore not included in the measurement of the ROU asset and related lease liability but are instead recognized as variable lease expense in selling, general and administrative costs in the consolidated statements of operations when they are incurred.

 

The future minimum lease payments under ASC 842 as of December 31, 2021 were as follows (in thousands):

 

  

Amount

 

2022

 $5,483 

2023

  5,631 

2024

  5,805 

2025

  5,983 

2026

  1,508 

Total minimum lease payments

 $24,410 

Less: imputed interest

  (4,861)

Total lease liabilities

 $19,549 

 

In February 2019, the Company entered into a long-term sublease agreement for 12,429 square feet of the office space in Los Angeles, California. The term of the lease runs until March 2026, and rent amounts payable to the Company increase approximately 3% per year. The Company recorded operating sublease income of $0.5 million, $0.4 million and $0.2 million for the years ended December 31, 2021, 2020 and 2019, respectively, in other income (expenses) in the consolidated statements of operations.

 

The future minimum lease payments to be received as of December 31, 2021 were as follows (in thousands):

 

  

Amount

 

2022

 $481 

2023

  495 

2024

  510 

2025

  525 

2026

  133 

Total

 $2,144 

 

Supplemental cash flow information related to leases for the year ended December 31, 2021:

 

Operating cash flows used for operating leases (in thousands)

 $5,731 

Right-of-use assets obtained in exchange for new operating lease liabilities

  — 

Weighted average remaining lease term (in years)

  4.2 

Weighted average discount rate

  10.9%

 
v3.22.0.1
Note 8 - Intangible Assets
 12 Months Ended
Dec. 31, 2021
Notes to Financial Statements  
Intangible Assets Disclosure [Text Block]

Note 8—Intangible Assets

 

Intangible assets consisted of the following at December 31 (in thousands):

 

  

December 31, 2021

  

December 31, 2020

 

Acquired and in-licensed rights

 $90,000  $90,000 

Less: accumulated amortization

  (23,875)  (15,860)

Total intangible asset, net

 $66,125  $74,140 

 

Estimated future intangible amortization expense as of  December 31, 2021 is as follows (in thousands):

 

2022

 $8,015 

2023

  8,015 

2024

  8,015 

2025

  8,015 

2026

  8,015 

Thereafter

  26,050 

Totals

 $66,125 

 
v3.22.0.1
Note 9 - Accrued Expenses
 12 Months Ended
Dec. 31, 2021
Notes to Financial Statements  
Accounts Payable and Accrued Liabilities Disclosure [Text Block]

Note 9—Accrued Expenses

 

Accrued expenses consisted of the following at December 31 (in thousands):

 

  

December 31, 2021

  

December 31, 2020

 

Current:

        

Accrued legal verdict expense

 $57,137  $22,724 

Accrued royalties

  8,829   8,604 

Accrued CRO services

  2,663   3,474 

Accrued variable consideration

  11,406   9,014 

Accrued bonus

  5,083   7,788 

Accrued compensation

  3,878   4,820 

Accrued other clinical development

  911   1,904 

Accrued professional fees

  672   1,420 

Accrued legal fees

  674   383 

Accrued manufacturing costs

  690   752 

Other

  632   442 
   92,575   61,325 

Long-term:

        

Accrued legal verdict expense

  —   24,822 

Accrued CRO services

  878   908 

Accrued other

  37   233 
   915   25,963 

Totals

 $93,490  $87,288 

 

On October 29, 2021, the parties to the Company's class action lawsuit, Hsu v. Puma Biotechnology, Inc. et al, informed the court that they had reached a settlement in principle, and the court entered judgement in the amount of claimed damages and prejudgement interest totaling approximately $54.2 million. On November 2, 2021, the court dismissed the case in light of the parties' settlement, retaining jurisdiction only for settlement approval. The parties' settlement in principle provides that there will be no judgment for liability entered against the Company or its chief executive officer, Alan Auerbach, and provides for payment by the Company of approximately $54.2 million. The first payment of $27.2 million was made in January of 2022 with the balance remaining due in June of 2022. 

 

Also included in accrued legal verdict expense is approximately $2.9 million that may be owed to the plaintiff as a result of the jury verdict in Eshelman v. Puma Biotechnology, Inc., et al. The Company estimates the high end of potential damages in the matter could be approximately $2.9 million which also represents the estimate as the most likely outcome; however, the actual amount of damages payable by the Company is still uncertain and will be ascertained only after the completion of the appeal process and subsequent proceedings on remand, and such amount could be greater than the amount of expense already recognized or high end of the estimate. The Company continues to classify the accrual as a current liability due to the uncertainty of timing and amount of the payment. 

 

Accrued variable consideration represents estimates of adjustments to product revenue, net for which reserves are established.  Accrued royalties represent royalties incurred in connection with the Company’s license agreement with Pfizer.  Accrued CRO services, accrued other clinical development expenses, and accrued legal fees represent the Company’s estimates of such costs and are recognized as incurred. Accrued compensation includes commissions, vacation and restructuring costs.

 

Other long-term accrued expenses consists primarily of business license fees, one half of the portion of employer Social Security payroll taxes deferred under the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") and other taxes, insurance, and marketing fees.

 

Restructuring Costs

 

On November 2, 2021, the Company implemented a restructuring of the organization in part due to the impact of COVID-19 on the Company's sales. The restructuring included a reduction in headcount of approximately 13%, consisting primarily of the commercial and research personnel. The Company incurred approximately $1.2 million in severance related expense which included salary, health insurance and sales commissions. As of December 31, 2021, approximately $0.1million had not yet been paid. The Company anticipates all restructuring related amounts will be paid by the end of the first quarter of 2022. 
v3.22.0.1
Note 10 - Debt
 12 Months Ended
Dec. 31, 2021
Notes to Financial Statements  
Debt Disclosure [Text Block]

Note 10—Debt

 

Long-term debt consisted of the following at December 31, 2021 (in thousands):

 

  

December 31, 2021

 

Maturity Date

Total debt, inclusive of $2.0 million exit payment

 $102,000 

July 23, 2026

Less: deferred issuance costs and discounts

  (4,908) 

Total long-term debt, net

 $97,092  

 

Oxford Loan and Security Agreement

 

In October 2017, the Company entered into a loan and security agreement with Silicon Valley Bank ("SVB"), as administrative agent, and the lenders party thereto from time to time, or the Original Lenders, including Oxford Finance LLC, ("Oxford"), and SVB. Pursuant to the terms of the credit facility provided for by the loan and security agreement, or the Original Credit Facility, the Company borrowed $50.0 million. In May 2018, the Company entered into an amendment to the loan and security agreement, which provided for an amended credit facility, or the Amended Credit Facility. Under the Amended Credit Facility, the Original Lenders agreed to make term loans available to the Company in an aggregate amount of $155.0 million, consisting of (i) an aggregate amount of $125.0 million, the proceeds of which, in part, were used to repay the $50.0 million outstanding under the Original Credit Facility, and (ii) an aggregate amount of $30.0 million that was drawn in December 2018, which was available under the Amended Credit Facility as a result of achieving a specified minimum revenue milestone. 

 

The term loans under the Amended Credit Facility bore interest at an annual rate equal to the greater of (i) 8.25% and (ii) the sum of (a) the “prime rate,” as reported in The Wall Street Journal on the last business day of the month that immediately preceded the month in which the interest accrued, plus (b) 3.5%. The Company was required to make monthly interest-only payments on each term loan commencing on the first calendar day of the calendar month following the funding date of such term loan, and continuing on the first calendar day of each calendar month thereafter through July 1, 2020. Commencing on July 1, 2020, and continuing on the first calendar day of each calendar month thereafter, the Company would have been required to make consecutive equal monthly payments of principal, together with applicable interest, in arrears to each original lender, calculated pursuant to the Amended Credit Facility. All unpaid principal and accrued and unpaid interest with respect to each term loan would have been due and payable in full on May 1, 2023. Upon repayment of the term loans, the Company was also required to make a final payment to the Original Lenders equal to 7.5% of the original principal amount of term loans funded.

 

On June 28, 2019, or the Effective Date, the Company entered into an amendment and restatement of the loan and security agreement, which provided for a new credit facility, or the New Credit Facility, with Oxford, as collateral agent, and the lenders party thereto from time to time, including Oxford, pursuant to which the Company repaid the $155.0 million outstanding under the Amended Credit Facility, as well as applicable exit and prepayment fees, owed to the Original Lenders under the Amended Credit Facility, using cash on hand and $100.0 million in new borrowings from the New Credit Facility. Under the New Credit Facility, the Company issued to Oxford new and/or replacement secured promissory notes in an aggregate principal amount for all such promissory notes of $100.0 million evidencing the New Credit Facility.

 

The New Credit Facility was secured by substantially all of the Company's personal property other than intellectual property. The Company also pledged 65% of the issued and outstanding capital stock of its subsidiaries, Puma Biotechnology Ltd. and Puma Biotechnology B.V. The New Credit Facility limited the Company's ability to grant any interest in intellectual property to certain permitted licenses and permitted encumbrances set forth in the agreement. 

 

The term loans under the New Credit Facility bore interest at an annual rate equal to the greater of (i) 9.0% and (ii) the sum of (a) the "primate rate" as reported in The Wall Street Journal on the last business day of the month that immediately preceded the month in which the interest will accrue, plus (b) 3.5%. The Company was required to make monthly interest-only payments on each term loan under the New Credit Facility commencing on the first calendar day of the calendar month following the funding date of such term loan, and continuing on the first calendar day of each calendar month thereafter through August 1, 2021, or the Amortization Date. Commencing on the Amortization Date, and continuing on the first calendar day of each calendar month thereafter, the Company was required to make consecutive equal monthly payments of principal, together with applicable interest, in arrears to each lender under the New Credit Facility, calculated pursuant to the New Credit Facility. All unpaid principal and accrued and unpaid interest with respect to each term loan under the New Credit Facility was due and payable in full on June 1, 2024, or the Maturity Date. Upon repayment of such term loans, the Company was also required to make a final payment to the lenders equal to 7.5% of the aggregate principal amount of such term loans outstanding as of the Effective Date. As of December 31, 2020, the effective interest rate for the loan was 12.75%.

 

The Company had the option to prepay the outstanding principal balance of any term loan in whole but not part, subject to the prepayment fee of 3.0% of any prepaid if the prepayment occurred through and including the first anniversary of the funding date of such term loan, 2.0% of the amount prepaid if the prepayment occurred after the first anniversary of the funding date of such term loan through and including the second anniversary of the funding date of such term loan, and 1.0% of the amount prepaid if the prepayment occurred after the second anniversary of the funding date of such term loan and prior to the Maturity Date. 

 

The New Credit Facility included affirmative and negative covenants applicable to the Company, its current subsidiaries and any subsidiaries the Company created in the future. The affirmative covenants included, among others, covenants requiring the Company to maintain its legal existence and governmental approvals, to deliver certain financial reports, to maintain insurance coverage and to satisfy certain requirements regarding deposit accounts. The Company was also required to achieve certain product revenue targets, measured as of the last day of each fiscal quarter on a trailing year to date basis. New minimum revenue levels were to be established for each subsequent fiscal year by mutual agreement of the Company, Oxford, as collateral agent, and the new lenders. The negative covenants included, among others, restrictions on the Company’s transferring of collateral, incurring additional indebtedness, engaging in mergers or acquisitions, paying dividends or making other distributions, making investments, creating liens, selling assets and suffering a change in control, in each case subject to certain exceptions.

 

On February 27, 2020, the Company and Oxford amended the New Credit Facility to establish the Company’s minimum revenue thresholds for the trailing year-to-date periods ending March 31, June 30, September 30 and December 31, 2020 and the fiscal year 2021. On August 5, 2020 the Company and Oxford amended the New Credit Facility to amend the minimum revenue thresholds for the trailing year-to-date periods ending September 30 and December 31, 2020. On February 3, 2021, the Company and Oxford amended the New Credit Facility to establish the Company’s minimum revenue thresholds for the trailing year-to-date periods ending March 31, June 30, September 30 and December 31, 2021.

 

The New Credit Facility also included events of default, the occurrence and continuation of which could cause interest to be charged at the rate that is otherwise applicable plus 5.0% and would have provided Oxford, as collateral agent, with the right to exercise remedies against the Company and the collateral securing the New Credit Facility, including foreclosure against the property securing the New Credit Facility, including the Company’s cash. These events of default included, among other things, the Company’s failure to pay principal or interest due under the New Credit Facility, a breach of certain covenants under the New Credit Facility, the Company’s insolvency, a material adverse change, the occurrence of any default under certain other indebtedness in an amount greater than $500,000 and one or more judgments against the Company in an amount greater than $500,000 individually or in the aggregate that remains unsatisfied, unvacated, or unstayed for a period of 10 days after its entry.

 

On July 23, 2021, the Company used proceeds from the Athyrium Note Purchase Agreement to repay the amounts outstanding under the New Credit Facility, together with applicable exit and prepayment fees, and terminated the New Credit Facility. 

 

Athyrium Note Purchase Agreement

 

The Company issued senior notes for an aggregate principal amount of $100.0 million pursuant to the note purchase agreement dated July 23, 2021, by and among the Company, its subsidiaries, Athyrium Opportunities IV Co-Invest 1 LP (“Athyrium”), as Administrative Agent, and certain other investor parties (the “Note Purchase Agreement”), with an initial maturity date of July 23, 2026 (the “Athyrium Notes”). The Athyrium Notes were issued for face amount of $100.0 million net of an original issue discount of $1.5 million. The Athyrium Notes also require a 2.0% exit payment to be made on each payment of principal. The borrowings under the Athyrium Notes, together with cash on hand, were used to repay the Company’s outstanding indebtedness, including the applicable exit and prepayment fees owed to lenders under its Oxford Credit Facility. The Company can borrow up to an additional $25.0 million under the Note Purchase Agreement. The Athyrium Notes are secured by substantially all the Company’s assets. The Company incurred $1.9 million of deferred financing costs with the borrowing.

 

The Athyrium Notes bear interest at an annual rate equal to the sum of (i) 8.0% and (ii) three-month London Interbank Offering Rate (LIBOR) rate where the three-month LIBOR rate cannot be less than 1.5% or greater than 3.5%. (or a comparable or successor rate that gives due consideration to the then prevailing rate used by commercial banks in the United States which rate is reasonably determined by Athyrium).  Interest is payable quarterly on the last business day of March, June, September and December each year. Beginning June 30, 2024, principal payments are required to be made quarterly at 11.11% of the original face amount with the remaining balance paid at maturity. Each principal payment will also include a 2.0% exit payment. As of December 31, 2021, the effective interest rate for the loan is 10.98%.

 

At the Company’s option, the Company may prepay the outstanding principal balance of the notes in whole or in part, subject to a prepayment fee of 2.0% of the amount prepaid if the prepayment occurs on or prior to the second anniversary of the issuance date of such notes, plus the present value of remaining interest that would have accrued through and including the second anniversary date, and 2.0% of the amount prepaid if the prepayment occurs after the second anniversary but on or prior to the third anniversary of the issuance date of such notes. In addition, under the Note Purchase Agreement, the Company will be subject to mandatory prepayments of the net cash proceeds received in connection with a Disposition or Involuntary Disposition (as defined), an Extraordinary Receipt (as defined) or a Debt Issuance (as defined).

 

The Athyrium Notes include affirmative and negative covenants applicable to the Company. The affirmative covenants include, among others, covenants requiring the Company to maintain its legal existence and governmental approvals, deliver certain financial reports, maintain insurance coverage, and satisfy certain requirements regarding deposit accounts. The negative covenants include, among others, restrictions on the Company’s transferring collateral, incurring additional indebtedness, engaging in mergers or acquisitions, paying dividends or making other distributions, making investments, creating liens, selling assets and suffering a change in control, in each case subject to certain exceptions. Additionally, the Company may not make legal payments in connection with the Eshelman or class action legal matters exceeding a certain threshold without first raising sufficient additional capital above the threshold. The Company is also required to achieve certain minimum product revenue targets, measured as of the last day of each fiscal quarter on a trailing year-to-date basis as well as maintain a minimum cash balance. As of December 31, 2021, the Company was in compliance with such covenants.

 

As of December 31, 2021, the principal balance outstanding under the Athyrium Notes was $100.0 million, representing all of the Company’s long-term debt. 

 

The future minimum principal and exit payments under the Athyrium Notes as of December 31, 2021 were as follows (in thousands):

 

  

Amount

 

2022

 $— 

2023

  — 

2024

  33,997 

2025

  45,329 

2026

  22,674 

Total

 $102,000 

 

Debt Issuance Costs and Discounts

 

Debt issuance costs and discounts consist of the following (in thousands):

 

  

December 31, 2021

  

December 31, 2020

 

Debt issuance costs and discounts (Oxford Credit Facility)

 $-  $8,668 

Debt issuance costs and discounts (Athyrium Notes)

  5,410   - 

Less: accumulated amortization

  (502)  (3,666)

Included in long-term debt

 $4,908  $5,002 

 

Debt issuance costs and discounts are financing costs related to the Company’s outstanding debt. Amortization of debt issuance costs is expensed using the effective interest method and is included in interest expense in the consolidated statements of operations. For the years ended December 31, 2021, 2020 and 2019, the Company recorded approximately $2.6 million, $2.0 million, and $1.5 million, respectively, of interest expense related to the amortization of debt issuance costs, discounts and exit fees in the consolidated statements of operations.

 
v3.22.0.1
Note 11 - Stockholders' Deficit
 12 Months Ended
Dec. 31, 2021
Notes to Financial Statements  
Stockholders' Equity Note Disclosure [Text Block]

Note 11—Stockholders’ Deficit

 

Common Stock   

 

The Company issued 0, 18,202, and 87,625 shares of common stock upon exercise of stock options during the years ended December 31, 2021, 2020 and 2019, respectively. The Company issued 1,089,120, 864,881 and 790,642 shares of common stock upon vesting of RSUs during the years ended December 31, 2021, 2020 and 2019, respectively.

 

Authorized Shares

 

The Company has 100,000,000 shares of stock authorized for issuance, all of which are common stock, par value $0.0001 per share.

 

Warrants

 

In October 2011, the Company issued an anti-dilutive warrant to Alan Auerbach, the Company’s founder and Chief Executive Officer. The warrant was issued to provide Mr. Auerbach with the right to maintain ownership of at least 20% of the Company’s common stock in the event that the Company raised capital through the sale of its securities in the future.

 

In connection with the closing of a public offering in October 2012, the exercise price and number of shares underlying the warrant issued to Mr. Auerbach were established and, accordingly, the final value of the warrant became fixed. Pursuant to the terms of the warrant, Mr. Auerbach was able to exercise the warrant to acquire 2,116,250 shares of the Company’s common stock at $16 per share until October 4, 2021. On April 1, 2021, the Company's Board of Directors approved an amendment to the terms of the warrant by extending the term until October 4, 2026. The amendment was approved by the Company's stockholders on June 15, 2021. 

 

As a result of this amendment, the Company recorded additional stock-based compensation in the amount of $13.6 million which was included in the selling, general and administrative expense for the year ended December 31, 2021. The fair value of the additional stock-based compensation was estimated using the Black-Scholes Option Pricing Method (see Note 2-Significant Accounting Policies) with the following assumptions as of June 15, 2021, the date of the modification. 

 

Dividend yield

  0.0%

Expected volatility

  87.0%

Risk-free interest rate

  0.8%

Expected life in years

  5.31 

 

Stock Options and Restricted Stock Units

 

The Company’s 2011 Incentive Award Plan ("2011 Plan") was adopted by the Company’s Board of Directors on September 15, 2011. Pursuant to the 2011 Plan, the Company may grant incentive stock options and nonqualified stock options, as well as other forms of equity-based compensation. Incentive stock options may be granted only to employees, while consultants, employees, officers and directors are eligible for the grant of nonqualified options under the 2011 Plan. The maximum term of stock options granted under the 2011 Plan is 10 years and the awards generally vest over a three-year period. The exercise price of incentive stock options granted under the 2011 Plan must be at least equal to the fair value of such shares on the date of grant. On April 1, 2021, the Board of Directors adopted an amendment to the 2011 Plan to increase the number of shares of the Company's common stock reserved for issuance thereunder by 2,000,000 shares. The amendment was approved by the Company's stockholders on June 15, 2021. As of December 31, 2021, a total of 14,545,860 shares of the Company’s common stock have been reserved for issuance under the 2011 Plan.

 

As of December 31, 2021, 5,068,592 shares of the Company’s common stock are issuable upon the exercise of outstanding awards granted under the 2011 Plan and 4,159,934 shares of the Company’s common stock are available for future issuance under the 2011 Plan. The Company awarded only “plain vanilla options” as determined by the SEC Staff Accounting Bulletin 107, or Share Based Payment. The fair value of options granted to employees and non-employees was estimated using the Black-Scholes Option Pricing Method (see Note 2-Significant Accounting Policies) with the following weighted-average assumptions used during the years ended December 31:

 

  

2021

  

2020

 

Dividend yield

  0.0%  0.0%

Expected volatility

  86.6%  100.6%

Risk-free interest rate

  0.8%  0.9%

Expected life in years

  5.82   5.81 

 

The Company’s 2017 Employment Inducement Incentive Award Plan ("2017 Plan") was adopted by the Company’s Board of Directors on April 27, 2017. Pursuant to the 2017 Plan, the Company may grant stock options and restricted stock units, as well as other forms of equity-based compensation to employees, as an inducement to join the Company. The maximum term of stock options granted under the 2017 Plan is 10 years and the awards generally vest over a three-year period. The exercise price of stock options granted under the 2017 Plan must be at least equal to the fair market value of such shares on the date of grant. On July 15, 2021, the Board of Directors adopted an amendment to the 2017 Plan to increase the number of shares of the Company's common stock reserved for issuance thereunder by 1,000,000 shares. As of December 31, 2021, a total of 3,000,000 shares of the Company’s common stock have been reserved for issuance under the 2017 Plan. As of December 31, 2021, 925,972 shares of the Company’s common stock are issuable upon the exercise of outstanding stock options and vesting of RSUs granted under the 2017 Plan, and 1,454,340 shares of the Company’s common stock are available for future issuance under the 2017 Plan.

 

Stock-based compensation expense was as follows for the years ended December 31 (in thousands):

 

  

For the Year Ended

 
  

December 31,

 
  

2021

  

2020

  

2019

 

Stock-based compensation:

            

Options -

            

Selling, general, and administrative

 $3,873  $3,937  $9,044 

Research and development

  573   3,018   7,452 

Restricted stock units -

            

Selling, general, and administrative

  8,239   13,841   18,848 

Research and development

  6,361   15,779   21,983 

Warrant Modification -

            

Selling, general, and administrative

  13,587   -   - 

Total stock-based compensation expense

 $32,633  $36,575  $57,327 

 

Activity with respect to options granted under the 2011 and 2017 Plan is summarized as follows:

 

  

Shares

  

Weighted Average Exercise Price

  

Weighted Average Remaining Contractual Term (years)

  

Aggregate Intrinsic Value (in thousands)

 

Outstanding at December 31, 2019

  5,042,325  $82.42   5.2  $1,951 

Granted

  700,853  $10.03   9.2  $- 

Exercised

  (18,202) $3.75      $119 

Expired

  (715,634) $90.51      $- 

Outstanding at December 31, 2020

  5,009,342  $71.42   5.1  $3,458 

Granted

  640,748  $11.12   8.2  $- 

Forfeited

  (186,339) $10.60      $- 

Expired

  (868,504) $87.55      $- 

Outstanding at December 31, 2021

  4,595,247  $62.43   4.5  $- 

Nonvested at December 31, 2021

  835,297  $10.64   8.9  $- 

Exercisable

  3,759,950  $73.93   3.6  $- 

 

At December 31, 2021, total estimated unrecognized compensation cost related to non-vested stock options granted prior to that date was approximately $5.1 million, which is expected to be recognized over a weighted-average period of 1.8 years. At December 31, 2021, the total estimated unrecognized compensation cost related to non-vested RSUs was approximately $11.0 million, which is expected to be recognized over a weighted-average period of 1.6 years. The weighted-average grant date fair value of options granted during the years ended December 31, 2021, 2020 and 2019, was $7.90, $7.81 and $12.08 per share, respectively. The weighted average grant date fair value of RSUs awarded during the year ended  December 31, 2021, 2020 and 2019 was $11.44, $10.47 and $14.72, respectively.

 

Stock Option Rollforward

 

  

Shares

  

Weighted Average Grant-Date Fair Value

 

Nonvested shares at December 31, 2019

  439,194  $19.38 

Granted

  700,853  $7.81 

Vested/Issued

  (240,375) $25.57 

Nonvested shares at December 31, 2020

  899,672  $8.71 

Granted

  640,748  $7.90 

Vested/Issued

  (518,784) $9.51 

Forfeited

  (186,339) $7.96 

Nonvested shares at December 31, 2021

  835,297  $7.76 

 

Restricted Stock Unit Rollforward

 

  

Shares

  

Weighted Average Grant-Date Fair Value

 

Nonvested shares at December 31, 2019

  1,991,125  $27.63 

Granted

  1,234,616  $10.47 

Vested/Issued

  (864,881) $36.86 

Forfeited

  (506,655) $21.72 

Nonvested shares at December 31, 2020

  1,854,205  $13.51 

Granted

  1,409,733  $11.44 

Vested/Issued

  (1,089,120) $14.99 

Forfeited

  (775,501) $12.13 

Nonvested shares at December 31, 2021

  1,399,317  $11.03 

 
v3.22.0.1
Note 12 - 401(k) Savings Plan
 12 Months Ended
Dec. 31, 2021
Notes to Financial Statements  
Compensation and Employee Benefit Plans [Text Block]

Note 12—401(k) Savings Plan

 

During 2012, the Company adopted a 401(k) savings plan for the benefit of its employees. The Company is required to make matching contributions to the 401(k) plan equal to 100% of the first 3% of wages deferred by each participating employee and 50% on the next 2% of wages deferred by each participating employee. The Company incurred expenses for employer matching contributions of approximately $1.5 million, $1.4 million, and $1.5 million for the years ended December 31, 2021, 2020 and 2019, respectively. 

 
v3.22.0.1
Note 13 - Income Taxes
 12 Months Ended
Dec. 31, 2021
Notes to Financial Statements  
Income Tax Disclosure [Text Block]

Note 13—Income Taxes

 

The Company uses the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, Income Taxes. Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. Income tax expense was as follows for the years ended December 31 (in thousands): 

 

 

   

2021

  

2020

  

2019

 

Current:

             

Federal

 $-  $-  $- 

State

  77   124   53 

Foreign

  247   83   - 
    324   207   53 

Deferred:

             

Federal

  -   -   - 

State

  -   -   - 
    -   -   - 

Total

 $324  $207  $53 

 

The provision for income taxes in the accompanying consolidated statements of operations differs from the amount calculated by applying the statutory income tax rate to loss from continuing operations before income taxes. Approximately $22.5 million of tax expense for the year ended December 31, 2021 is due to stock-based compensation expense shortfall and the expiration of vested stock options. Approximately $3.9 million of the tax benefit for the year-ended December 31, 2021 is due to R&D tax credits, net of an approximately $1.0 million reserve related to unrecognized tax benefits for the method of allocation of expenses used in the R&D tax credits calculation. The primary components of such differences are as follows as of December 31 (in thousands):

 

  

2021

  

2020

  

2019

 

Tax computed at the federal statutory rate

 $(6,045) $(12,540) $(15,830)

State taxes

  (1,072)  (2,304)  (2,453)

Foreign taxes

  247   83   — 

Permanent items

  22,689   13,660   21,834 

R&D credits

  (3,941)  (5,231)  (14,946)

Prior year adjustment

  916   (2,116)  (2,792)

Change in valuation allowance

  (12,470)  8,655   14,240 

Total provision

 $324  $207  $53 

 

Temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes give rise to the Company’s deferred income taxes. The components of the Company’s net deferred tax assets are as follows as of December 31 (in thousands):

 

  

2021

  

2020

  

2019

 

Deferred tax assets:

            

Net operating loss carryforwards

 $258,390  $261,472  $260,555 

Business credit carryforwards

  59,514   55,574   50,343 

Compensation

  40,647   58,112   60,967 

Accrued legal verdict

  14,144   11,880   7,624 

Carryforward of disallowed interest

  4,537   3,093   2,839 

Accrued expenses

  104   561   9 

Lease liabilities

  4,839   5,657   6,145 

Other deferred tax assets

  1,306   804   13 

Subtotal

  383,481   397,153   388,495 

Deferred tax liabilities:

            

Lease right-of-use assets

  (3,470)  (4,099)  (4,505)

Inventory

  406   (21)  — 

Other deferred tax liabilities

  (318)  (464)  (76)

Subtotal

  (3,382)  (4,584)  (4,581)

Total deferred tax assets

  380,099   392,569   383,914 

Valuation allowance

  (380,099)  (392,569)  (383,914)

Net deferred tax assets

 $—  $—  $— 

 

As the ultimate realization of the potential benefits of the Company’s deferred tax assets is considered unlikely by management, the Company has offset the deferred tax assets attributable to those potential benefits through valuation allowances. Accordingly, the Company did not recognize any benefit from income taxes in the accompanying consolidated statements of operations to offset its pre-tax losses. The valuation allowance decreased by approximately $12.5 million and increased by approximately $8.7 million for the years ended December 31, 2021 and 2020, respectively. At December 31, 2021, the Company had federal and state net operating loss carryforwards, respectively, of approximately $950.2 million and approximately $871.0 million, which will begin to expire in 2033. At December 31, 2021, the Company also has federal research and development credit carryforwards of approximately $39.7 million. If not utilized, the carryforwards will begin to expire in 2033. The Company has state research and development credit carryforwards of approximately $24.1 million which do not expire. Pursuant to the Internal Revenue Code, Sections 382 and 383, use of the Company’s net operating loss and credit carryforwards could be limited if a cumulative change in ownership of more than 50% occurs within a three-year period. The Company performed an initial assessment of the potential limitation on net operating loss and credit carryforwards, and concluded that there will be no limitation for the tax year 2021. 

 

 

The following is a tabular reconciliation of the total amounts of unrecognized tax benefits at December 31 (in thousands):

 

  

2021

  

2020

  

2019

 

Unrecognized tax benefits - January 1

 $3,276  $1,968  $8,777 

Gross decreases - tax positions in a prior period

  —   —   (8,422)

Gross increases - tax positions in a current period

  985   1,308   1,613 

Unrecognized tax benefits - December 31

 $4,261  $3,276  $1,968 

 

During the year ended December 31, 2019, the Company completed an R&D credit study. As a result of the study, the Company assessed that the Company qualified under safe harbor rules, which when applied consistently results in a more conservative approach of calculating the amount of R&D credit. The Company concluded that a release of uncertain tax benefits was appropriate and released a portion of previously recorded uncertain tax positions reserve. There were no releases of uncertain tax position reserves in the year ended December 31, 2021. Current year increases in the R&D credit relate to R&D support department costs that were allocated to various research projects based upon a reasonable methodology. The uncertain tax position is related to the method of allocating these costs.

 

The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by the federal and state jurisdictions where applicable. There are currently no pending income tax examinations. The Company’s tax years for 2009 and forward are subject to examination by the federal and California tax authorities due to the carryforward of unutilized net operating losses and research and development credits. 
v3.22.0.1
Note 14 - Commitments and Contingencies
 12 Months Ended
Dec. 31, 2021
Notes to Financial Statements  
Commitments and Contingencies Disclosure [Text Block]

Note 14—Commitments and Contingencies

 

License Agreement

 

In August 2011, the Company entered into an agreement pursuant to which Pfizer agreed to grant it a worldwide license for the development, manufacture and commercialization of PB272 neratinib (oral), PB272 neratinib (intravenous) and PB357, and certain related compounds. The license is exclusive with respect to certain patent rights owned by or licensed to Pfizer. Under the agreement, the Company is obligated to commence a new clinical trial for a product containing one of these compounds within a specified period of time and to use commercially reasonable efforts to complete clinical trials and to achieve certain milestones as provided in a development plan. From the closing date of the agreement through December 31, 2011, Pfizer continued to conduct the existing clinical trials on behalf of the Company at the Licensor’s sole expense. At the Company’s request, Pfizer agreed to continue to perform certain services in support of the existing clinical trials at the Company’s expense. These services will continue through the completion of the transitioned clinical trials. The license agreement “capped” the out of pocket expense the Company would be responsible to complete the then existing clinical trials. All agreed upon costs incurred by the Company above the “cost cap” would be reimbursed by Pfizer. The Company exceeded the “cost cap” during the fourth quarter of 2012. In accordance with the license agreement, the Company billed Pfizer for agreed upon costs above the “cost cap” until December 31, 2013.

 

On July 18, 2014, the Company entered into an amendment to the license agreement with Pfizer. The amendment amends the agreement to (i) reduce the royalty rate payable by the Company to Pfizer on sales of licensed products; (ii) release Pfizer from its obligation to pay for certain out-of-pocket costs incurred or accrued on or after January 1, 2014 to complete certain ongoing clinical studies; and (iii) provide that Pfizer and the Company will continue to cooperate to effect the transfer to the Company of certain records, regulatory filings, materials and inventory controlled by Pfizer as promptly as reasonably practicable.

 

As consideration for the license, the Company is required to make substantial payments upon the achievement of certain milestones totaling approximately $187.5 million if all such milestones are achieved, of which $90.0 million have been achieved as of December 31, 2021. In connection with the FDA approval of NERLYNX in July of 2017, the Company triggered a one-time milestone payment pursuant to the agreement. In June 2020, the Company entered into a letter agreement, or the Letter Agreement, with Pfizer relating to the method of payment associated with a one-time milestone payment under the license agreement with Pfizer. The Letter Agreement permitted the Company to make the milestone payment in installments with the remaining amount payable to Pfizer (including interest). The milestone payment accrued interest at 6.25% per annum. The milestone payment including accrued interest of $1.8 million was paid in full in September 2021. The installment payments and accrued interest are included in accrued in-licensed rights on the accompanying consolidated balance sheets. The Company may trigger additional milestone payments in the future. Should the Company commercialize any more of the compounds licensed from Pfizer or any products containing any of these compounds, the Company will be obligated to pay to Pfizer annual royalties at a fixed rate in the low to mid-teens of net sales of all such products, subject to certain reductions and offsets in some circumstances. The Company’s royalty obligation continues, on a product-by-product and country-by-country basis, until the later of (i) the last to expire licensed patent covering the applicable licensed product in such country, or (ii) the earlier of generic competition for such licensed product reaching a certain level in such country or expiration of a certain time period after first commercial sale of such licensed product in such country. In the event that the Company sublicenses the rights granted to the Company under the license agreement with Pfizer to a third party, the same milestone and royalty payments are required. The Company can terminate the license agreement at will, or for safety concerns, in each case upon specified advance notice.

 

Clinical Trial Contracts

 

The Company engages with CROs and contract manufacturing organizations ("CMOs") in addition to engaging in contracts for the management of its ongoing clinical trials and pre-commercialization efforts. The Company may cancel these agreements with a 30 to 45 day written notice to the outside vendor. The Company would be obligated to pay for services rendered up to that point, which amounts to total contractual obligations of approximately $54.8 million within the next twelve months. The contracts also contain variable costs that are hard to predict as they are based on such things as patients enrolled and clinical trial sites, which can vary, and therefore, are not included in the total obligations amount. Included in the total contractual obligations amount above are payments to be made when milestones are reached. As of December 31, 2021, Company obligations for potential milestone payments totaled approximately $17.3 million. This amount will be paid by the Company if all milestones are reached and would reduce the overall contractual obligation if one or more milestone is never reached.

 

Legal Proceedings

 

The Company and certain of its executive officers were named as defendants in the lawsuits detailed below. The Company records a liability in the consolidated financial statements for loss contingencies when a loss is known or considered probable and the amount can be reasonably estimated. If the reasonable estimate of a known or probable loss is a range, and no amount within the range is a better estimate than any other, the minimum amount of the range is accrued. If a loss is reasonably possible but not known or probable, and can be reasonably estimated, the estimated loss or range of loss is disclosed. When determining the estimated loss or range of loss, significant judgment is required to estimate the amount and timing of a loss to be recorded. Currently, the Company has accrued estimated losses of $54.2 million related toHsu v. Puma Biotechnology, Inc., et al., and $2.9 million related to Eshelman v. Puma Biotechnology, Inc., et al. as detailed below. For certain legal expenses related to the verdicts listed below, the Company has received reimbursements from its insurers.

 

Hsu v. Puma Biotechnology, Inc., et al.

 

On June 3, 2015, Hsingching Hsu, individually and on behalf of all others similarly situated, filed a class action lawsuit against the Company and certain of its executive officers in the United States District Court for the Central District of California (Case No. 8:15-cv-00865-AG-JCG). On October 16, 2015, lead plaintiff Norfolk Pension Fund filed a consolidated complaint on behalf of all persons who purchased the Company’s securities between July 22, 2014 and May 29, 2015. A trial on the claims relating to four statements alleged to have been false or misleading was held from January 15, 2019 to January 29, 2019. At trial, the jury found that three of the four challenged statements were not false or misleading, and thus found in the defendants’ favor on those claims. The jury found liability as to one statement and awarded a maximum of $4.50 per share in damages, which represents approximately 5% of the total claimed damages of $87.20 per share. On September 9, 2019, the Court entered an order specifying the rate of prejudgment interest to be awarded on any valid claims at the 52-week Treasury Bill rate. On September 8, 2020, the claims administrator submitted its final claims report to the Court and, on October 9, 2020, the claims administrator submitted its supplemental claims report. The claims report reflects approximately $50.5 million in claimed damages. The Company initially disagreed with the amount of claimed damages. On November 27, 2020, the Court issued an order setting out the process for challenging claims.

 

On October 29, 2021, the parties informed the court that they had reach a settlement in principle, and the court entered judgment in the amount of claimed damages and prejudgment interest totaling approximately $54.2 million. On November 2, 2021, the court dismissed the case in light of the parties' settlement, retaining jurisdiction only for settlement approval. The parties' settlement in principle provides that there will be no judgment for liability entered against the Company or its chief executive officer, Alan Auerbach, and provides for payment by the Company of approximately $54.2 million in two installments, to be paid in January and June of 2022. The settlement in principle is subject to execution of a formal settlement agreement to be negotiated among the parties, which agreement will be submitted to the court for approval. 

 

It is reasonably possible that the final total damages awarded will differ from these estimates; however, the amount is not estimable at this time. A final judgment has not yet been entered; however, the Company made the first installment payment in January 2022, see Note 15-Subsequent Events.

 

Eshelman v. Puma Biotechnology, Inc., et al.

 

In February 2016, Fredric N. Eshelman filed a lawsuit against the Company’s Chief Executive Officer and President, Alan H. Auerbach, and the Company in the United States District Court for the Eastern District of North Carolina (Case No. 7:16-cv-00018-D). The complaint generally alleged that Mr. Auerbach and the Company made defamatory statements regarding Dr. Eshelman in connection with a proxy contest. In May 2016, Dr. Eshelman filed a notice of voluntary dismissal of the claims against Mr. Auerbach. A trial on the remaining defamation claims against the Company took place from March 11 to March 15, 2019. At trial, the jury found the Company liable and awarded Dr. Eshelman $15.9 million in compensatory damages and $6.5 million in punitive damages. The Company strongly disagreed with the verdict and, on April 22, 2019, filed a motion for a new trial or, in the alternative, a reduced damages award. The Court denied that motion on March 2, 2020. The Company has appealed that ruling, and the verdict. Additionally, after trial, the plaintiff filed a motion seeking approximately $3.0 million in attorneys’ fees, as well as prejudgment interest. In the Court’s March 2020 ruling, it denied the motion for attorneys’ fees but granted the request for prejudgment interest, bringing the total judgment to $26.3 million. On March 30, 2020, the plaintiff filed a notice of cross-appeal and conditional cross-appeal, appealing the Court’s order denying the plaintiff’s request for attorneys’ fees and conditionally cross-appealing a Court ruling that certain communications between Mr. Auerbach and his attorneys were protected by attorney-client privilege and a related evidentiary ruling. On June 23, 2021, the United States Court of Appeals for the Fourth Circuit affirmed the liability verdict in the Eshelman v. Puma Biotechnology, et al matter but found the $22.4 million damages award, payable by the Company, to be excessive in light of the evidence at trial. The court vacated this award and remanded for a new trial on damages. The Court's judgment will eliminate the damages award, including interest on the judgment, pending further proceedings on remand. On July 7, 2021, the plaintiff filed a petition for panel or en banc rehearing, which was denied on July 20, 2021. On July 26, 2021, the plaintiff filed a motion to stay issuance of the Fourth Circuit's mandate pending the filing and resolution of a petition for certiorari in the Supreme Court. The Fourth Circuit denied that motion on July 29, 2021. On October 18, 2021, the plaintiff filed a petition of certiorari with the Supreme Court seeking review of the Fourth Circuit's ruling, which was denied on December 13, 2021. We estimate the high end of potential damages in the matter could be approximately $2.9 million which also represents our estimate as the most likely outcome.

 

Due to the appeal, the Company secured a bond for the potential damages, which is collateralized by an automatically renewable stand-by letter of credit in the amount of $8.9 million. The stand-by letter of credit is collateralized by a high-yield savings account, which is classified as restricted cash, current on the accompanying consolidated balance sheets.

 

CANbridge Licensing Dispute

 

On July 28, 2020, the Company filed a request for arbitration against CANbridge Biomed Limited ("CANbridge") before the ICC International Court of Arbitration. The Company asserted that CANbridge violated the terms of the Company’s agreement with CANbridge in which it granted CANbridge an exclusive sublicense to develop and commercialize NERLYNX throughout greater China. The Company sought an arbitral award, as well as damages, costs, and attorneys’ fees. On August 26, 2020, CANbridge filed its response to the Company’s request for arbitration and brought counterclaims, seeking damages, costs and attorneys’ fees. On February 24, 2021, the parties resolved their dispute, with each side agreeing to dismiss their respective claims in the arbitration. The settlement is limited to claims asserted in the arbitration, or that are related to the claims asserted in the arbitration.

 

Legal Malpractice Suits

 

On September 17, 2020, the Company filed a lawsuit against Hedrick Gardner Kincheloe & Garofalo, L.L.P. and David L. Levy, the attorneys who previously represented the Company in Eshelman v. Puma Biotechnology, Inc., et al. in the Superior Court of Mecklenburg County, North Carolina. The Company is alleging legal malpractice based on the defendants’ negligent handling of the defense of the Company in Eshelman v. Puma Biotechnology, Inc., et al. as detailed above. The Company is seeking recovery of the entire amount awarded in Eshelman v. Puma Biotechnology, Inc., et al. On November 23, 2020, the defendant filed an answer to the complaint denying the allegations of negligence.

 

On June 23, 2021, the United States Court of Appeals for the Fourth Circuit set aside the damages award in the Eshelman v. Puma Biotechnology, Inc., et al matter and remanded the case to the District Court for a new trial on damages. On October 7, 2021, Judge R. Stuart Albright entered into an Order staying all proceedings in the legal malpractice case for six months to allow time to resolve the damages issues in the Eshelman case. As a result, the amount of any potential damages that may be recovered in the legal malpractice case is uncertain at this time. 

 

Patent-Related Proceedings

 

AstraZeneca Litigation

 

On September 22, 2021, the Company filed suit against AstraZeneca Pharmaceuticals, LP, AstaZeneca AB, and AstraZeneca PLC for infringement of United States Patent Nos. 10,603,314 (“the '314 patent”) and 10,596,162 (“the '162 patent”).  (Puma Biotechnology, Inc. et al. v. AstraZeneca Pharmaceuticals LP et al, 1:21CV01338 (D. Del. Sep. 22, 2021)).  The Company’s complaint alleges that AstraZeneca’s commercial manufacture, use, offer for sale, sale, distribution, and/or importation of Tagrisso® (osimertinib) products for the treatment of gefitinib and/or erlotinib-resistant non-small cell lung cancer infringes the '314 and '162 patents.  The Company is an exclusive licensee of the '314 and '162 patents under the Pfizer Agreement.  Wyeth is a co-plaintiff.  Plaintiffs seek a judgment that AstraZeneca’s product infringes the asserted patents and an award of monetary damages in an amount to be proven at trial. AstraZeneca AB and AstraZeneca Pharmaceuticals LP filed an answer and counterclaims on November 5, 2021, including claims challenging the asserted patents are not infringed and/or invalid, and accusing plaintiffs of patent misuse.  The parties stipulated to dismiss AstraZeneca PLC as a defendant and Pfizer as a Counterclaim Defendant on December 10, 2021, which the Court so ordered on December 13, 2021.  The Company filed its answer to AstraZeneca’s counterclaims on December 17, 2021.  The case was recently reassigned to visiting Judge Matthew Kennelly of the Northern District of Illinois. The parties filed a joint status report about the case and attended a teleconference with the Court on February 9, 2022. The parties submitted a joint discovery plan and proposed schedule for onsideration by the Court on February 15, 2022.  On February 17, 2022, Judge Kennelly entered a schedule for the case, including setting the matter for trial to begin May 13, 2024.  The parties will now proceed to fact discovery.

 

Sandoz Litigation

 

On November 10, 2021, the Company filed suit against Sandoz, Inc. for infringement of U.S. Patent No. 7,399,865 B2 (“the '865 patent”) (Puma Biotechnology, Inc. et al. v. Sandoz Inc., 1:21CV19918 (D.N.J. Nov. 10, 2021)).  The Complaint was filed within 45 days of Sandoz providing notice of its abbreviated new drug application (“ANDA”) seeking approval to market a generic version of Puma’s NERLYNX (neratinib) Tablets, 40 mg prior to the expiration of the '865 patent. Puma and Wyeth seek judgment that Sandoz’s purported ANDA product would, if allowed on the market, infringe the ‘865 patent, and ask that the Court order that, pursuant to 35 U.S.C. 271(e)(4)(A), the FDA’s approval of the Sandoz ANDA can be no earlier than the date the ‘865 patent expires.  Sandoz has stated that, due to Paragraph III certifications filed for other patents listed in the Orange Book in connection with NERLYNX, Sandoz cannot launch its ANDA product until November 21, 2030 at the earliest. The Company’s complaint alleges that Sandoz has infringed the '865 patent by seeking approval to commercially manufacture, use, offer for sale, sell, and/or import a generic version of NERLYNX in the United States prior to the expiration of the '865 patent.  Puma is the exclusive licensee of the '865 patent under the Pfizer Agreement.  Wyeth is a co-plaintiff.  Sandoz submitted its answer to the complaint on January 14, 2022 and asserted counterclaims challenging the ‘865 patent as invalid.  Puma and Wyeth filed an answer to those counterclaims on February 4, 2022.  The parties appeared before the Magistrate Judge on February 15, 2022 for an initial hearing, and submitted a scheduling order on February 18, 2022.  The filing of Puma’s Complaint against Sandoz triggered a 30-month stay of marketing approval for Sandoz’s ANDA.

 

China Litigation

 

On January 18, 2022, a competitor filed an ANDA with the National Medical Products Administration in China (“NMPA”) seeking approval to market a generic version of the Company’s drug NERLYNX in China.  This competitor seeks approval prior to the expiration of three patents listed on the China Patent Information Registration Platform for Marketed Drugs (“Chinese Orange Book”), alleging in a Type 4.2 patent declaration that its generic version of NERLYNX does not fall within the scope of the claims of NERLYNX patents listed on the Chinese Orange Book.  The patent declarations of this competitor were published on the Chinese Orange Book on January 19, 2022.  The Company and/or its commercialization partner in China have 45 days from the publication of the patent declaration to request administrative or judicial determination that this competitor’s generic tablet falls within the scope of the claims of NERLYNX Patents listed on the Chinese Orange Book.  Upon acceptance of the request for administrative or judicial determination, NMPA will institute a stay of this competitor’s ANDA for nine months.  If, during the nine-month stay period, an administrative or judicial determination is made that the generic tablet falls within the scope of the claims of the NERLYNX patents listed on the Chinese Orange Book, NMPA will be prohibited from approving the competitor’s ANDA until the NERLYNX patents expire. 

 
v3.22.0.1
Note 15 - Subsequent Events
 12 Months Ended
Dec. 31, 2021
Notes to Financial Statements  
Subsequent Events [Text Block]

Note 15—Subsequent Events

 

In January 2022, the Company paid the first of two equal installment payments which will total approximately $54.2 million per the terms of the Class Action settlement. See Note 14-Commitments and Contingencies for further details.

 
v3.22.0.1
Significant Accounting Policies (Policies)
 12 Months Ended
Dec. 31, 2021
Accounting Policies [Abstract]  
Consolidation, Policy [Policy Text Block]

Principles of Consolidation

 

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
Reclassification, Comparability Adjustment [Policy Text Block]

Reclassifications

 

In preparing the 2021 consolidated statement of cash flows, the Company determined that $10.0 million paid for the purchase of intangible assets was incorrectly presented as cash used in investing activities for the year ended December 31, 2020. This error was not considered material to the Company’s consolidated financial statements and the payment has been correctly presented as cash used in financing activities in the accompanying comparative financial statements.
Use of Estimates, Policy [Policy Text Block]

Use of Estimates

 

The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the balance sheet, and reported amounts of revenues and expenses for the period presented. Accordingly, actual results could differ from those estimates.

 

Significant estimates include estimates for variable consideration for which reserves were established. These estimates are included in the calculation of net revenues and include trade discounts and allowances, product returns, provider chargebacks and discounts, government rebates, payor rebates, and other incentives, such as voluntary patient assistance, and other allowances that are offered within contracts between the Company and its customers, payors, and other indirect customers relating to the Company’s sale of its products. Other significant estimates also include those related to legal and other expense accruals. 
Earnings Per Share, Policy [Policy Text Block]

Net Loss per Share of Common Stock

 

Basic net loss per share of common stock is computed by dividing net loss applicable to common stockholders by the weighted average number of shares of common stock outstanding during the periods presented, as required by ASC 260 Earnings per Share. For purposes of calculating diluted loss per share of common stock, the denominator includes both the weighted average number of shares of common stock outstanding and the number of dilutive common stock equivalents, such as stock options, restricted stock units ("RSUs") and warrants. A common stock equivalent is not included in the denominator when calculating diluted earnings per common share if the effect of such common stock equivalent would be anti-dilutive. The following potentially dilutive outstanding common stock equivalents were excluded from diluted net loss per share because of their anti-dilutive effect:

 

  

For the Years Ended December 31,

 
  

2021

  

2020

  

2019

 

Options outstanding

  4,595,247   5,009,342   5,042,325 

Warrant outstanding

  2,116,250   2,116,250   2,116,250 

Unvested restricted stock units

  1,399,317   1,854,205   1,991,125 

Totals

  8,110,814   8,979,797   9,149,700 

 
Revenue [Policy Text Block]

Revenue Recognition

 

Under ASC Topic 606, Revenue from Contracts with Customers ("ASC 606") the Company recognizes revenue when its customer obtains control of the promised goods or services, in an amount that reflects the consideration which the entity expects to be entitled in exchange for those goods or services. The Company had no contracts with customers until the FDA approved NERLYNX on July 17, 2017. Subsequent to receiving FDA approval, the Company entered into a limited number of arrangements with specialty pharmacies and specialty distributors in the United States to distribute NERLYNX. These arrangements are the Company’s initial contracts with customers. The Company has determined that these sales channels with customers are similar.

 

Product Revenue, Net

 

The Company sells NERLYNX to a limited number of specialty pharmacies and specialty distributors in the United States. These customers subsequently resell the Company’s products to patients and certain medical centers or hospitals. In addition to distribution agreements with these customers, the Company enters into arrangements with health care providers and payors that provide for government mandated and/or privately negotiated rebates, chargebacks and discounts with respect to the purchase of the Company’s products.

 

The Company recognizes revenue on product sales when the specialty pharmacy or specialty distributor, as applicable, obtains control of the Company's product, which occurs at a point in time (upon delivery). Product revenue is recorded net of applicable reserves for variable consideration, including discounts and allowances. The Company’s payment terms range between 10 and 68 days.

 

Shipping and handling costs for product shipments occur prior to the customer obtaining control of the goods and are recorded in cost of sales.

 

If taxes should be collected from customers relating to product sales and remitted to governmental authorities, they will be excluded from revenue. The Company expenses incremental costs of obtaining a contract when incurred, if the expected amortization period of the asset that the Company would have recognized is one year or less. However, no such costs were incurred during the year ended December 31, 2021.

 

For the period ended December 31, 2021, two major customers represented approximately 31% and 22%, respectively, of the Company’s total product revenue. For the period ended December 31, 2020, two major customers accounted for approximately 33% and 21%, respectively, of the Company’s total product revenue. For the period ended December 31, 2019, two major customers accounted for approximately 34% and 22%, respectively, of the Company’s total product revenue.

 

Reserves for Variable Consideration

 

Revenue from product sales is recorded at the net sales price (transaction price), which includes estimates of variable consideration for which reserves are established. Components of variable consideration include trade discounts and allowances, product returns, provider chargebacks and discounts, government rebates, payor rebates, and other incentives, such as voluntary patient assistance, and other allowances that are offered within contracts between the Company and its customers, payors, and other indirect customers relating to the Company’s sale of its products. These reserves, as detailed below, are based on the related sales, and are classified as reductions of accounts receivable, net when the right of offset exists in accordance with ASU 2013-1, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities, or as a current liability. These estimates take into consideration a range of possible outcomes that are probability-weighted in accordance with the expected value method in ASC 606 for relevant factors such as current contractual and statutory requirements, specific known market events and trends, industry data, and forecasted customer buying and payment patterns. Overall, these reserves reflect the Company’s best estimates of the amount of consideration to which it is entitled based on the terms of the respective underlying contracts.

 

The amount of variable consideration that is included in the transaction price may be constrained, and is included in the net sales price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized under the contract will not occur in a future period. The Company’s analyses also contemplated application of the constraint in accordance with the guidance, under which it determined a significant reversal of revenue would not occur in a future period for the estimates detailed below as of December 31, 2021 and, therefore, the transaction price was not reduced further during the year ended December 31, 2021. 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.

 

Trade Discounts and Allowances

 

The Company generally provides customers with discounts, which include incentive fees that are explicitly stated in the Company’s contracts and are recorded as a reduction of revenue in the period the related product revenue is recognized. The reserve for discounts is established in the same period that the related revenue is recognized, together with reductions to accounts receivables, net on the consolidated balance sheets. In addition, the Company compensates its customers for sales order management, data, and distribution services. The Company has determined such services received to date are not distinct from the Company’s sale of products to its customers and, therefore, these payments have been recorded as a reduction of revenue within the statement of operations.

 

Product Returns

 

Consistent with industry practice, the Company offers the specialty pharmacies and specialty distributors that are its customers limited product return rights for damaged and expiring product, provided it is within a specified period around the product expiration date as set forth in the applicable individual distribution agreement. 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, as well as a reduction to accounts receivables, net on the consolidated balance sheets. The Company currently estimates product returns using its own sales information, including its visibility into the inventory remaining in the distribution channel. The Company has an insignificant amount of returns to date and believes that returns of its products will continue to be minimal.

 

Provider Chargebacks and Discounts

 

Chargebacks for fees and discounts to providers represent the estimated obligations resulting from contractual commitments to sell products to qualified healthcare providers at prices lower than the list prices charged to its customers who directly purchase the product from the Company. Customers charge the Company for the difference between what they pay for the product and the ultimate selling price to the qualified healthcare providers. The reserve for chargebacks is established in the same period that the related revenue is recognized, resulting in a reduction of product revenue and a reduction to accounts receivable, net on the consolidated balance sheets. Chargeback amounts are generally determined at the time of resale to the qualified healthcare provider by customers, and the Company generally issues credits for such amounts within a few weeks of the customer’s notification to the Company of the resale. Chargebacks consist of credits the Company expects to issue for units that remain in the distribution channel at each reporting period end that the Company expects will be sold to qualified healthcare providers and chargebacks that customers have claimed, but for which the Company has not yet issued a payment.

 

Government Rebates

 

The Company is subject to discount obligations under state Medicaid programs and Medicare. These reserves are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability, which is included in accrued expenses on the consolidated balance sheets. 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 estimates of future claims that will be made for product that has been recognized as revenue, but which remains in the distribution channel at the end of each reporting period.

 

Payor Rebates

 

The Company contracts with certain private payor organizations, primarily insurance companies and pharmacy benefit managers, for the payment of rebates with respect to utilization of its products. The Company estimates these rebates and records such estimates in the same period the related revenue is recognized, resulting in a reduction of product revenue, net and the establishment of a current liability, which is included in accrued expenses on the consolidated balance sheets.

 

Other Incentives

 

Other incentives the Company offers include voluntary patient assistance programs, such as the co-pay assistance program, which are intended to provide financial assistance to qualified commercially-insured patients with prescription drug co-payments required by payors. The calculation of the accrual for co-pay assistance is based on an estimate of claims and the cost per claim that the Company expects to receive associated with product that has been recognized as revenue, but remains in the distribution channel at the end of each reporting period. The adjustments are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability, which is included as a component of accrued expenses on the consolidated balance sheets.

 

License Revenue

 

The Company also recognizes license revenue under certain of the Company’s sub-license agreements that are within the scope of ASC 606. The terms of these agreements may contain multiple performance obligations, which may include licenses and research and development activities. The Company evaluates these agreements under ASC 606 to determine the distinct performance obligations. Non-refundable, upfront fees that are not contingent on any future performance and require no consequential continuing involvement by the Company, are recognized as revenue when the license term commences and the licensed data, technology or product is delivered. The Company defers recognition of non-refundable upfront license fees if the performance obligations are not satisfied. The Company’s payment terms range between the execution date of the sub-license agreement and 45 days.

 

Prior to recognizing revenue, the Company makes estimates of the transaction price, including variable consideration that is subject to a constraint. Amounts of variable consideration are included in the transaction price to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur and when the uncertainty associated with the variable consideration is subsequently resolved.

 

If there are multiple distinct performance obligations, the Company allocates the transaction price to each distinct performance obligation based on its relative standalone selling price. The standalone selling price is generally determined based on the prices charged to customers or using expected cost-plus margin. Revenue is recognized by measuring the progress toward complete satisfaction of the performance obligations using an input measure.

 

Since 2018, the Company has entered into sub-license agreements with certain sub-licensees in territories outside of the United States. These sub-licensing agreements grant certain intellectual property rights and set forth various respective obligations with respect to actions such as development, pursuit and maintenance of regulatory approvals, commercialization and supply of NERLYNX in the sub-licensees’ respective territories.

 

License fees under the sub-license agreements include one-time upfront payments when each sub-license agreement was executed and potential additional one-time milestone payments due to the Company upon successful completion of certain performance obligations, such as achieving regulatory approvals or sales target thresholds, and potential double-digit royalties on sales of the licensed product, calculated as a percentage of net sales of the licensed product throughout each sub-licensee’s respective territory. As of December 31, 2021, the total potential milestone payments that would be due to the Company upon achievement of all respective performance obligations under the sub-license agreements is approximately $579.8 million. At this time, the Company cannot estimate if or when these milestone-related performance obligations might be achieved.

 

Royalty Revenue

 

For sub-license agreements that are within the scope of ASC 606, the Company recognizes revenue when the related sales occur in accordance with the sales-based royalty exception under ASC 606-10-55-65. Royalty revenue consists of consideration earned related to international sales of NERLYNX made by the Company’s sub-licensees in their respective territories. The Company recognizes royalty revenue when the performance obligations have been satisfied. The Company’s payment terms range between 30 and 90 days.

 
Segment Reporting, Policy [Policy Text Block]

Segment Reporting

 

Management has determined that the Company operates in one business segment, which is the development and commercialization of innovative products to enhance cancer care.
Legal Costs, Policy [Policy Text Block]

Legal Contingencies and Expense

 

For legal contingencies, the Company accrues a liability for an estimated loss if the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated. Legal fees and expenses are expensed as incurred based on invoices or estimates provided by legal counsel. The Company periodically evaluates available information, both internal and external, relative to such contingencies and adjusts the accrual as necessary. The Company determines whether a contingency should be disclosed by assessing whether a material loss is deemed reasonably possible. In determining whether a loss should be accrued, the Company evaluates, among other factors, the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of the loss (see Note 14-Commitments and Contingencies).
Royalties, Policy [Policy Text Block]

Royalty Expenses

 

Royalties incurred in connection with the Company’s license agreement with Pfizer, as disclosed in Note 14-Commitments and Contingencies, are expensed to cost of sales as revenue from product sales is recognized.
Research and Development Expense, Policy [Policy Text Block]

Research and Development Expenses

 

Research and development ("R&D") expenses are charged to operations as incurred. The major components of research and development costs include clinical manufacturing costs, clinical trial expenses, consulting and other third-party costs, salaries and employee benefits, stock-based compensation expense, supplies and materials, and allocations of various overhead costs. Clinical trial expenses include, but are not limited to, investigator fees, site costs, comparator drug costs, and clinical research organization ("CRO") costs. In the normal course of business, the Company contracts with third parties to perform various clinical trial activities in the ongoing development of potential products. The financial terms of these agreements are subject to negotiation and variations from contract to contract and may result in uneven payment flows. Payments under the contracts depend on factors such as the achievement of certain events, the successful enrollment of patients and the completion of portions of the clinical trial or similar conditions. The Company’s accruals for clinical trials are based on estimates of the services received and efforts expended pursuant to contracts with numerous clinical trial sites, cooperative groups and CROs. As actual costs become known, the Company adjusts its accruals in that period.

 

In instances where the Company enters into agreements with third parties for clinical trials and other consulting activities, upfront amounts are recorded to prepaid expenses and other in the accompanying consolidated balance sheets and expensed as services are performed or as the underlying goods are delivered. If the Company does not expect the services to be rendered or goods to be delivered, any remaining capitalized amounts for non-refundable upfront payments are charged to expense immediately. Amounts due under such arrangements may be either fixed fee or fee for service, and may include upfront payments, monthly payments and payments upon the completion of milestones or receipt of deliverables.

 

Costs related to the acquisition of technology rights and patents for which development work is still in process are charged to operations as incurred and considered a component of research and development costs.
Share-based Payment Arrangement [Policy Text Block]

Stock-Based Compensation

 

Stock option awards

 

ASC Topic 718, Compensation-Stock Compensation ("ASC 718") requires the fair value of all share-based payments to employees and non-employees, including grants of stock options, to be recognized in the statement of operations over the requisite service period. Under ASC 718, employee and non-employee option grants are generally valued at the grant date and those valuations do not change once they have been established. The fair value of each option award is estimated on the grant date using the Black-Scholes Option Pricing Method. As allowed by ASC 718, the Company’s estimate of expected volatility is based on its average volatilities using its expected life, or approximately the past six years of publicly traded history. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant valuation. Option forfeitures are estimated when the option is granted to reduce the option expense to be recognized over the life of the award. The estimated forfeiture rate considers historical employee turnover rates stratified into employee pools, actual forfeiture experience and other factors. The option expense is adjusted upon the actual forfeiture of a stock option grant and the Company periodically revises the estimated forfeiture rate in subsequent periods if actual forfeitures differ from those estimates. Due to its limited history of stock option exercises, the Company uses the simplified method to determine the expected life of the option grants. Compensation expense related to modified stock options is measured based on the fair value for the awards as of the modification date. Any incremental compensation expense arising from the excess of the fair value of the awards on the modification date compared to the fair value of the awards immediately before the modification date is recognized at the modification date or ratably over the requisite service period, as appropriate.

 

Restricted stock units

 

RSUs are valued on the grant date and the fair value of the RSUs is equal to the market price of the Company’s common stock on the grant date. The RSU expense is recognized over the requisite service period in the statement of operations. When the requisite service period begins prior to the grant date (because the service inception date occurs prior to the grant date), the Company is required to begin recognizing compensation cost before there is a measurement date (i.e., the grant date). The service inception date is the beginning of the requisite service period. If the service inception date precedes the grant date, accrual of compensation cost for periods before the grant date shall be based on the fair value of the award at the reporting date. In the period in which the grant date occurs, cumulative compensation cost shall be adjusted to reflect the cumulative effect of measuring compensation cost based on fair value at the grant date rather than the fair value previously used at the service inception date (or any subsequent reporting date). RSU forfeitures are estimated when the RSU is granted to reduce the RSU expense to be recognized over the life of the award. The estimated forfeiture rate considers historical employee turnover rates stratified into employee pools, actual forfeiture experience and other factors. The RSU expense is “trued-up” upon the actual forfeiture of a RSU grant and the Company periodically revises the estimated forfeiture rate in subsequent periods if actual forfeitures differ from those estimates. Compensation expense related to modified restricted stock units is measured based on the fair value for the awards as of the modification date. Any incremental compensation expense arising from the excess of the fair value of the awards on the modification date compared to the fair value of the awards immediately before the modification date is recognized at the modification date or ratably over the requisite service period, as appropriate.

 

Warrants

 

Warrants (see Note 11-Stockholders’ (Deficit) Equity for further details) granted to employees and non-employees are normally valued at the fair value of the instrument on the grant date and are recognized in the statement of operations over the requisite service period. When the requisite service period precedes the grant date and a market condition exists in the warrant, the Company values the warrant using the Monte Carlo Simulation Method. When the terms of the warrant become fixed, the Company values the warrant using the Black-Scholes Option Pricing Method. As allowed by ASC 718, the Company’s estimate of expected volatility is based on its average volatilities using its past nine years of publicly traded history. The risk-free rate for periods within the contractual life of the warrant is based on the U.S. Treasury yield curve in effect at the time of grant valuation. In determining the value of the warrant until the terms are fixed, the Company factors in the probability of the market condition occurring and several possible scenarios. When the requisite service period precedes the grant date and is deemed to be complete, the Company records the fair value of the warrant at the time of issuance as an equity stock-based compensation transaction. The grant date is determined when all pertinent information, such as exercise price and quantity are known.
Income Tax, Policy [Policy Text Block]

Income Taxes

 

The Company follows ASC Topic 740, Income Taxes ("ASC 740") which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the consolidated financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the asset will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

 

The standard addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the consolidated financial statements. Under ASC 740, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the tax authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. ASC 740 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. As of December 31, 2021, the Company’s uncertain tax position includes a reserve for its R&D credits.
Financial Instruments [Policy Text Block]

Financial Instruments

 

The carrying value of financial instruments, such as cash equivalents, accounts receivable and accounts payable, approximate their fair value because of their short-term nature. The carrying value of long-term debt approximates its fair value as the principal amounts outstanding are subject to variable interest rates that are based on market rates which are regularly reset.

 
Cash and Cash Equivalents, Policy [Policy Text Block]

Cash and Cash Equivalents

 

The Company classifies all highly liquid instruments with an original maturity of three months or less as cash equivalents.
Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, Policy [Policy Text Block]

Restricted Cash

 

Restricted cash represents cash held at financial institutions that are pledged as collateral for stand-by letters of credit for lease and legal verdict commitments. The lease related letters of credit will lapse at the end of the respective lease terms through 2026. At December 31, 2021 and 2020, the Company had restricted cash in the amount of $12.2 million for both years ended 2021 and 2020.

 
Marketable Securities, Policy [Policy Text Block]

Investment Securities

 

The Company classifies all investment securities (short-term and long-term) as available-for-sale, as the sale of such securities may be required prior to maturity to implement management’s strategies. These securities are carried at fair value, with the unrealized gains and losses, reported as a component of accumulated other comprehensive income (loss) in stockholders’ (deficit) equity until realized. Realized gains and losses from the sale of available-for-sale securities, if any, are determined on a specific identification basis. In accordance with ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, credit losses on available-for-sale securities are reported using an expected loss model and recorded to an allowance. No material credit losses on available-for-sale securities were recognized in the years ending December 31, 2021 Premiums and discounts are amortized or accreted over the life of the related security as an adjustment to yield using the straight-line method. Interest income is recognized when earned.

 
Fair Value of Financial Instruments, Policy [Policy Text Block]

Assets Measured at Fair Value on a Recurring Basis

 

ASC Topic 820, Fair Value Measurement ("ASC 820") provides a single definition of fair value and a common framework for measuring fair value as well as disclosure requirements for fair value measurements used in financial statements. Under ASC 820, fair value is determined based upon the exit price that would be received by a company to sell an asset or paid by a company to transfer a liability in an orderly transaction between market participants, exclusive of any transaction costs. Fair value measurements are determined by either the principal market or the most advantageous market. The principal market is the market with the greatest level of activity and volume for the asset or liability. Absent a principal market to measure fair value, the Company uses the most advantageous market, which is the market from which the Company would receive the highest selling price for the asset or pay the lowest price to settle the liability, after considering transaction costs. However, when using the most advantageous market, transaction costs are only considered to determine which market is the most advantageous and these costs are then excluded when applying a fair value measurement. ASC 820 creates a three-level hierarchy to prioritize the inputs used in the valuation techniques to derive fair values. The basis for fair value measurements for each level within the hierarchy is described below, with Level 1 having the highest priority and Level 3 having the lowest.

 

Level 1:

Quoted prices in active markets for identical assets or liabilities.

  

Level 2:

Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets.

  

Level 3:

Valuations derived from valuation techniques in which one or more significant inputs are unobservable.

 

Following are the major categories of assets measured at fair value on a recurring basis as of December 31, 2021 and 2020, using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3) (in thousands):

 

December 31, 2021

 

Level 1

  

Level 2

  

Level 3

  

Total

 

Cash equivalents

 $50,872  $—  $—  $50,872 

Commercial paper

  —   14,589   —   14,589 

Corporate bonds

  —   4,386   —   4,386 

Totals

 $50,872  $18,975  $—  $69,847 

 

December 31, 2020

 

Level 1

  

Level 2

  

Level 3

  

Total

 

Cash equivalents

 $59,919  $11,798  $—  $71,717 

Commercial paper

  —   8,096   —   8,096 

Totals

 $59,919  $19,894  $—  $79,813 

 

The Company’s investments in commercial paper, corporate bonds and U.S. government securities are exposed to price fluctuations. The fair value measurements for commercial paper, corporate bonds and U.S. government securities are based upon the quoted prices of similar items in active markets multiplied by the number of securities owned.

 

The following tables summarize the Company’s short-term investments (in thousands):

 

 

Maturity

 

Amortized

  

Unrealized

  

Estimated

 

December 31, 2021

(in years)

 

cost

  

Gains

  

Losses

  

fair value

 

Cash equivalents

 $50,872  $—  $—  $50,872 

Commercial paper

Less than 1

  14,590   —   (1)  14,589 

Corporate bonds

  4,387   -   (1)  4,386 

Totals

 $69,849  $—  $(2) $69,847 

 

 

Maturity

 

Amortized

  

Unrealized

  

Estimated

 

December 31, 2020

(in years)

 

cost

  

Gains

  

Losses

  

fair value

 

Cash equivalents

 $71,717  $—  $—  $71,717 

Commercial paper

Less than 1

  8,096   —   —   8,096 

Totals

 $79,813  $—  $—  $79,813 

 
Concentration Risk, Credit Risk, Policy [Policy Text Block]

Concentration of Risk

 

Financial instruments, which potentially subject the Company to concentrations of credit risk, principally consist of cash and cash equivalents, marketable securities, and accounts receivable, net. The Company’s cash and cash equivalents and restricted cash in excess of the Federal Deposit Insurance Corporation and the Securities Investor Protection Corporation insured limits at December 31, 2021, were approximately $75.0 million. The Company does not believe it is exposed to any significant credit risk due to the quality nature of the financial instruments in which the money is held. Pursuant to the Company’s internal investment policy, investments must be rated A-1/P-1 or better by Standard and Poor’s Rating Service and Moody’s Investors Service at the time of purchase.

 

The Company sells its products in the United States primarily through specialty pharmacies and specialty distributors. Therefore, wholesale distributors and large pharmacy chains account for a large portion of its accounts receivables, net and product revenues, net. The creditworthiness of its customers is continuously monitored, and the Company has internal policies regarding customer credit limits. The Company estimates an allowance for credit loss primarily based on the credit worthiness of its customers, historical payment patterns, aging of receivable balances and general economic conditions. The Company recorded credit loss expense of $1.0 million during 2020 and a recovery of credit loss expense in 2021.

 

The Company’s success depends on its ability to successfully commercialize NERLYNX. The Company currently has a single product with limited commercial sales experience, which makes it difficult to evaluate its current business, predict its future prospects and forecast financial performance and growth. The Company has invested a significant portion of its efforts and financial resources in the development and commercialization of the lead product, NERLYNX, and expects NERLYNX to constitute the vast majority of product revenue for the foreseeable future.

 

The Company relies exclusively on third parties to formulate and manufacture NERLYNX and its drug candidates. The commercialization of NERLYNX and any other drug candidates, if approved, could be stopped, delayed or made less profitable if those third parties fail to provide sufficient quantities of product or fail to do so at acceptable quality levels or prices. The Company has no experience in drug formulation or manufacturing and does not intend to establish its own manufacturing facilities. The Company lacks the resources and expertise to formulate or manufacture NERLYNX and other drug candidates. While the drug candidates were being developed by Pfizer, both the drug substance and drug product were manufactured by third-party contractors. The Company is using the same third-party contractors to manufacture, supply, store and distribute drug supplies for clinical trials and the commercialization of NERLYNX. If the Company is unable to continue its relationships with one or more of these third-party contractors, it could experience delays in the development or commercialization efforts as it locates and qualifies new manufacturers. The Company intends to rely on one or more third-party contractors to manufacture the commercial supply of drugs.

 
Inventory, Policy [Policy Text Block]

Inventory

 

The Company values its inventories at the lower of cost and estimated net realizable value. The Company determines the cost of its inventories, which includes amounts related to materials and manufacturing overhead, on a first-in, first-out basis. The Company performs an assessment of the recoverability of capitalized inventory during each reporting period, and it writes down any excess and obsolete inventories to their estimated realizable value in the period in which the impairment is first identified. Such impairment charges, should they occur, are recorded within the cost of sales in the consolidated statements of operations. The determination of whether inventory costs will be realizable requires estimates by management. If actual market conditions are less favorable than projected by management, additional write-downs of inventory may be required, which would be recorded as a cost of sales in the consolidated statements of operations.

 

The Company capitalizes inventory costs associated with the Company’s products after regulatory approval, if any, when, based on management’s judgment, future commercialization is considered probable and the future economic benefit is expected to be realized. Inventory that can be used in either the production of clinical or commercial product is recorded as research and development expense when selected for use in a clinical trial. Starter kits, provided to patients prior to insurance approval, are expensed by the Company to selling, general and administrative expense as incurred.

 

The Company’s inventory balances are as follows: 

 

  

December 31, 2021

  

December 31, 2020

 

Raw materials

 $4,569  $1,431 

Work-in-process (materials, labor and overhead)

  1,385   1,258 

Finished goods (materials, labor and overhead)

  1,155   765 

Total Inventories

 $7,109  $3,454 

 
Property, Plant and Equipment, Policy [Policy Text Block]

Property and Equipment, Net

 

Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the useful lives of the assets, which is generally three years for computer hardware and software, three years for phone equipment, and seven years for furniture and fixtures. Leasehold improvements are amortized using the straight-line method over the lesser of the useful life or the lease term. Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation are eliminated from the accounts and any resulting gain or loss is credited or charged to operations. Repairs and maintenance costs are expensed as incurred.

 

The Company reviews its long-lived assets used in operations for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable, as required by ASC Topic 360, Property, Plant, and Equipment ("ASC 360"). The Company performs a recoverability test by comparing the sum of the estimated undiscounted cash flows over the life of the asset to its carrying value on the consolidated balance sheet. If the undiscounted cash flows used in the recoverability test are less than the carrying value, the Company would then determine the fair value of the long-lived asset and recognize an impairment loss for the amount in excess of the carrying value.
Lessee, Leases [Policy Text Block]

Leases

 

ASC Topic 842, Leases, as adopted in the first quarter of 2019, requires lessees to recognize most leases on the balance sheet with a corresponding right-of-use asset ("ROU asset"). ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. The assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of fixed lease payments over the lease term. ROU assets are evaluated for impairment using the long-lived assets impairment guidance, as required by ASC 360. A significant indication of impairment of an ROU asset would include a change in the extent or manner in which the asset is being used. The Company must make assumptions which underlie the most significant and subjective estimates in determining whether any impairment exists. Those estimates, and the underlying assumptions, include estimates of future cash flow utilizing market lease rates and determination of fair value. If an ROU asset related to an operating lease is impaired, the carrying value of the ROU asset post-impairment should be amortized on a straight-line basis through the earlier of the end of the useful life of the ROU asset or the end of the lease term. Post impairment, a lessee must calculate the amortization of the ROU asset and interest expense on the lease liability separately, although the sum of the two continues to be presented as a single lease cost. If a lease is planned to be abandoned with no intention of subleasing, the ROU asset should be assessed for impairment.

 

Leases are classified as financing or operating, which will drive the expense recognition pattern. The Company elects to exclude short-term leases if and when the Company has them. For additional information, see Note 7-Leases.

 

The Company leases office space and copy machines, all of which are operating leases. Most leases include the option to renew and the exercise of the renewal options is at the Company’s sole discretion. Options to extend or terminate a lease are considered in the lease term to the extent that the option is reasonably certain of exercise. The leases do not include options to purchase the leased property. The depreciable life of assets and leasehold improvements is limited by the expected lease term. Covenants imposed by the leases include letters of credit required to be obtained by the lessee.

 

The incremental borrowing rate ("IBR") represents the rate of interest the Company would expect to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. When determinable, the Company uses the rate implicit in the lease to determine the present value of lease payments. As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The Company’s average IBR for existing leases as of December 31, 2021 was 10.9%.

 

The Company decided to cease the use of a portion of its leased office space in 2019. In connection with the decreased need for the right to use the ROU asset, the Company entered into a sublease for the underlying asset, in which the sublease income is less than the original lease payments, indicating impairment. In performing the recoverability test on the effective date, the undiscounted future estimated cash flows and carrying value were identified for the subleased portion of the leased building, as an individual asset group, defined under ASC 360. A reduction to the carrying value of the ROU asset of approximately $1.2 million was recorded, representing the fair value amount in excess of the carrying value, with a corresponding impairment charge recorded as selling, general and administration expense, in the consolidated statements of operations for the year ended  December 31, 2019.  There were no indications of impairment or any related charge recorded during the year ended December 31, 2021.

 
License Fees and Intangible Assets [Policy Text Block]

License Fees and Intangible Assets

 

The Company expenses amounts paid to acquire licenses associated with products under development when the ultimate recoverability of the amounts paid is uncertain and the technology has no alternative future use when acquired. Acquisitions of technology licenses are charged to expense or capitalized based upon the asset achieving technological feasibility in accordance with management’s assessment regarding the ultimate recoverability of the amounts paid and the potential for alternative future use. The Company has determined that technological feasibility for its product candidates is reached when the requisite regulatory approvals are obtained to make the product available for sale. The Company capitalizes technology licenses upon reaching technological feasibility.

 

The Company maintains definite-lived intangible assets related to the license agreement with Pfizer. These assets are amortized over their remaining useful lives, which are estimated based on the shorter of the remaining patent life or the estimated useful life of the underlying product. Intangible assets are amortized using the economic consumption method if anticipated future revenues can be reasonably estimated. The straight-line method is used when future revenues cannot be reasonably estimated. Amortization costs are recorded as part of cost of sales.

 

The Company assesses its intangible assets for impairment if indicators are present or changes in circumstance suggest that impairment may exist. Events that could result in an impairment, or trigger an interim impairment assessment, include the receipt of additional clinical or non-clinical data regarding one of the Company’s drug candidates or a potentially competitive drug candidate, changes in the clinical development program for a drug candidate, or new information regarding potential sales for the drug. If impairment indicators are present or changes in circumstance suggest that impairment may exist, the Company performs a recoverability test by comparing the sum of the estimated undiscounted cash flows of each asset group to its carrying value on the consolidated balance sheet. If the undiscounted cash flows used in the recoverability test are less than the carrying value, the Company would determine the fair value of the intangible asset and recognize an impairment loss if the carrying value of the intangible asset exceeds its fair value. In connection with the FDA approval of NERLYNX in July 2017, the Company triggered a one-time milestone payment pursuant to its license agreement with Pfizer. In June 2020, the Company entered into a letter agreement with Pfizer relating to the method of payment associated with a milestone payment under the Company’s license agreement with Pfizer (see Note 14-Commitments and Contingencies). The Company capitalized the milestone payments as an intangible asset and is amortizing the asset to cost of sales on a straight-line basis over the estimated useful life of the licensed patent through 2030. The Company recorded amortization expense related to its intangible asset of $8.0 million, $6.3 million, $3.9 million for the years ended December 31, 2021, 2020 and 2019, respectively. As of December 31, 2021, estimated future amortization expense related to the Company’s intangible asset was approximately $8.0 million for each year starting 2022 through 2029, and $2.0 million for 2030.
New Accounting Pronouncements, Policy [Policy Text Block]

Recently Issued Accounting Standards

 

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU-2016-13"). ASU 2016-13 requires that credit losses be reported using an expected losses model rather than the incurred losses model that is currently used, and establishes additional disclosures related to credit risks. For trade accounts receivable, the Company recognizes credit losses based on lifetime expected losses. For available-for-sale debt securities with unrealized losses, this standard now requires allowances to be recorded instead of reducing the amortized cost of the investment. These amendments under ASU 2016-13 are effective for interim and annual fiscal periods beginning after December 15, 2019. The Company adopted ASU 2016-13 as of January 1, 2020, and the adoption did not have a material effect on the Company’s current financial position, results of operations or financial statement disclosures.  

 

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement ("ASU 2018-13"). As of January 1, 2020, the Company adopted the amendments in ASU 2018-13, which modifies the disclosure requirements on fair value measurements. The removed and modified disclosures were adopted on a retrospective basis and the new disclosures were adopted on a prospective basis. The adoption of ASU 2018-13 did not have a material effect on the Company’s current financial position, results of operations or financial statement disclosures.

 

In December 2019, the FASB issued ASU No 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ("ASU 2019-12"), as part of its Simplification Initiative to reduce the cost and complexity in accounting for income taxes. The amendments in ASU 2019-12 remove certain exceptions 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. ASU 2019-12 also amends other aspects of the guidance to help simplify and promote consistent application of GAAP. The guidance is effective for interim and annual periods beginning after December 15, 2020, with early adoption permitted. The Company adopted ASU 2019-12 on January 1, 2021 and it did not have a material effect on the Company’s current financial position, results of operations or financial statement disclosures.
v3.22.0.1
Note 2 - Significant Accounting Policies (Tables)
 12 Months Ended
Dec. 31, 2021
Notes Tables  
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]
  

For the Years Ended December 31,

 
  

2021

  

2020

  

2019

 

Options outstanding

  4,595,247   5,009,342   5,042,325 

Warrant outstanding

  2,116,250   2,116,250   2,116,250 

Unvested restricted stock units

  1,399,317   1,854,205   1,991,125 

Totals

  8,110,814   8,979,797   9,149,700 
Fair Value, Assets Measured on Recurring Basis [Table Text Block]

December 31, 2021

 

Level 1

  

Level 2

  

Level 3

  

Total

 

Cash equivalents

 $50,872  $—  $—  $50,872 

Commercial paper

  —   14,589   —   14,589 

Corporate bonds

  —   4,386   —   4,386 

Totals

 $50,872  $18,975  $—  $69,847 

December 31, 2020

 

Level 1

  

Level 2

  

Level 3

  

Total

 

Cash equivalents

 $59,919  $11,798  $—  $71,717 

Commercial paper

  —   8,096   —   8,096 

Totals

 $59,919  $19,894  $—  $79,813 
Cash, Cash Equivalents and Investments [Table Text Block]
 

Maturity

 

Amortized

  

Unrealized

  

Estimated

 

December 31, 2021

(in years)

 

cost

  

Gains

  

Losses

  

fair value

 

Cash equivalents

 $50,872  $—  $—  $50,872 

Commercial paper

Less than 1

  14,590   —   (1)  14,589 

Corporate bonds

  4,387   -   (1)  4,386 

Totals

 $69,849  $—  $(2) $69,847 
 

Maturity

 

Amortized

  

Unrealized

  

Estimated

 

December 31, 2020

(in years)

 

cost

  

Gains

  

Losses

  

fair value

 

Cash equivalents

 $71,717  $—  $—  $71,717 

Commercial paper

Less than 1

  8,096   —   —   8,096 

Totals

 $79,813  $—  $—  $79,813 
Schedule of Inventory, Current [Table Text Block]
  

December 31, 2021

  

December 31, 2020

 

Raw materials

 $4,569  $1,431 

Work-in-process (materials, labor and overhead)

  1,385   1,258 

Finished goods (materials, labor and overhead)

  1,155   765 

Total Inventories

 $7,109  $3,454 
v3.22.0.1
Note 3 - Accounts Receivable, Net (Tables)
 12 Months Ended
Dec. 31, 2021
Notes Tables  
Schedule of Accounts Receivable [Table Text Block]
  

December 31, 2021

  

December 31, 2020

 

Trade accounts receivable

 $29,646  $21,515 

License revenue receivable

  —   2,500 

Royalty revenue receivable

  2,880   2,528 

Total accounts receivable

 $32,526  $26,543 
         

Allowance for credit losses

  —   (1,000)

Total accounts receivable, net

 $32,526  $25,543 
Accounts Receivable, Allowance for Credit Loss [Table Text Block]

Allowance for credit losses (in thousands):

    

Beginning balance at January 1, 2020

 $(1,000)

Provision for credit loss expense

  — 

Accounts receivable written-off

  — 

Recoveries

  1,000 

Total ending allowance balance as December 31, 2021

 $— 
v3.22.0.1
Note 4 - Prepaid Expenses and Other (Tables)
 12 Months Ended
Dec. 31, 2021
Notes Tables  
Prepaid Expense and Other Assets [TableText Block]
  

December 31, 2021

  

December 31, 2020

 

Current:

        

CRO services

 $340  $1,550 

Other clinical development

  2,933   2,718 

Insurance

  3,178   3,708 

Professional fees

  398   651 

Other

  2,135   2,635 
   8,984   11,262 

Long-term:

        

CRO services

  166   518 

Other clinical development

  577   437 

Other

  611   790 
   1,354   1,745 

Totals

 $10,338  $13,007 
v3.22.0.1
Note 5 - Other Current Assets (Tables)
 12 Months Ended
Dec. 31, 2021
Notes Tables  
Schedule of Other Current Assets [Table Text Block]
  

December 31, 2021

  

December 31, 2020

 

Deposit for manufacturing costs

 $-  $3,376 

Other

  447   265 

Totals

 $447  $3,641 
v3.22.0.1
Note 6 - Property and Equipment (Tables)
 12 Months Ended
Dec. 31, 2021
Notes Tables  
Property, Plant and Equipment [Table Text Block]
  

December 31, 2021

  

December 31, 2020

 

Leasehold improvements

 $3,779  $3,779 

Computer equipment

  2,177   2,192 

Telephone equipment

  302   302 

Furniture and fixtures

  2,359   2,359 
   8,617   8,632 

Less: accumulated depreciation

  (6,861)  (6,151)

Totals

 $1,756  $2,481 
v3.22.0.1
Note 7 - Leases (Tables)
 12 Months Ended
Dec. 31, 2021
Notes Tables  
Lessee, Operating Lease, Liability, Maturity [Table Text Block]
  

Amount

 

2022

 $5,483 

2023

  5,631 

2024

  5,805 

2025

  5,983 

2026

  1,508 

Total minimum lease payments

 $24,410 

Less: imputed interest

  (4,861)

Total lease liabilities

 $19,549 
Lessor, Operating Lease, Payment to be Received, Fiscal Year Maturity [Table Text Block]
  

Amount

 

2022

 $481 

2023

  495 

2024

  510 

2025

  525 

2026

  133 

Total

 $2,144 
Lessee, Operating Leases Related To Supplemental Cash Flow Information [Table Text Block]

Operating cash flows used for operating leases (in thousands)

 $5,731 

Right-of-use assets obtained in exchange for new operating lease liabilities

  — 

Weighted average remaining lease term (in years)

  4.2 

Weighted average discount rate

  10.9%
v3.22.0.1
Note 8 - Intangible Assets (Tables)
 12 Months Ended
Dec. 31, 2021
Notes Tables  
Schedule of Finite-Lived Intangible Assets [Table Text Block]
  

December 31, 2021

  

December 31, 2020

 

Acquired and in-licensed rights

 $90,000  $90,000 

Less: accumulated amortization

  (23,875)  (15,860)

Total intangible asset, net

 $66,125  $74,140 
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]

2022

 $8,015 

2023

  8,015 

2024

  8,015 

2025

  8,015 

2026

  8,015 

Thereafter

  26,050 

Totals

 $66,125 
v3.22.0.1
Note 9 - Accrued Expenses (Tables)
 12 Months Ended
Dec. 31, 2021
Notes Tables  
Schedule of Accrued Liabilities [Table Text Block]
  

December 31, 2021

  

December 31, 2020

 

Current:

        

Accrued legal verdict expense

 $57,137  $22,724 

Accrued royalties

  8,829   8,604 

Accrued CRO services

  2,663   3,474 

Accrued variable consideration

  11,406   9,014 

Accrued bonus

  5,083   7,788 

Accrued compensation

  3,878   4,820 

Accrued other clinical development

  911   1,904 

Accrued professional fees

  672   1,420 

Accrued legal fees

  674   383 

Accrued manufacturing costs

  690   752 

Other

  632   442 
   92,575   61,325 

Long-term:

        

Accrued legal verdict expense

  —   24,822 

Accrued CRO services

  878   908 

Accrued other

  37   233 
   915   25,963 

Totals

 $93,490  $87,288 
v3.22.0.1
Note 10 - Debt (Tables)
 12 Months Ended
Dec. 31, 2021
Notes Tables  
Schedule of Debt [Table Text Block]
  

December 31, 2021

 

Maturity Date

Total debt, inclusive of $2.0 million exit payment

 $102,000 

July 23, 2026

Less: deferred issuance costs and discounts

  (4,908) 

Total long-term debt, net

 $97,092  
Schedule of Maturities of Long-term Debt [Table Text Block]
  

Amount

 

2022

 $— 

2023

  — 

2024

  33,997 

2025

  45,329 

2026

  22,674 

Total

 $102,000 
Schedule of Deferred Financing Costs [Table Text Block]
  

December 31, 2021

  

December 31, 2020

 

Debt issuance costs and discounts (Oxford Credit Facility)

 $-  $8,668 

Debt issuance costs and discounts (Athyrium Notes)

  5,410   - 

Less: accumulated amortization

  (502)  (3,666)

Included in long-term debt

 $4,908  $5,002 
v3.22.0.1
Note 11 - Stockholders' Deficit (Tables)
 12 Months Ended
Dec. 31, 2021
Notes Tables  
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]
  

2021

  

2020

 

Dividend yield

  0.0%  0.0%

Expected volatility

  86.6%  100.6%

Risk-free interest rate

  0.8%  0.9%

Expected life in years

  5.82   5.81 
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Table Text Block]
  

For the Year Ended

 
  

December 31,

 
  

2021

  

2020

  

2019

 

Stock-based compensation:

            

Options -

            

Selling, general, and administrative

 $3,873  $3,937  $9,044 

Research and development

  573   3,018   7,452 

Restricted stock units -

            

Selling, general, and administrative

  8,239   13,841   18,848 

Research and development

  6,361   15,779   21,983 

Warrant Modification -

            

Selling, general, and administrative

  13,587   -   - 

Total stock-based compensation expense

 $32,633  $36,575  $57,327 
Share-based Payment Arrangement, Activity [Table Text Block]
  

Shares

  

Weighted Average Exercise Price

  

Weighted Average Remaining Contractual Term (years)

  

Aggregate Intrinsic Value (in thousands)

 

Outstanding at December 31, 2019

  5,042,325  $82.42   5.2  $1,951 

Granted

  700,853  $10.03   9.2  $- 

Exercised

  (18,202) $3.75      $119 

Expired

  (715,634) $90.51      $- 

Outstanding at December 31, 2020

  5,009,342  $71.42   5.1  $3,458 

Granted

  640,748  $11.12   8.2  $- 

Forfeited

  (186,339) $10.60      $- 

Expired

  (868,504) $87.55      $- 

Outstanding at December 31, 2021

  4,595,247  $62.43   4.5  $- 

Nonvested at December 31, 2021

  835,297  $10.64   8.9  $- 

Exercisable

  3,759,950  $73.93   3.6  $- 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value [Table Text Block]
  

Shares

  

Weighted Average Grant-Date Fair Value

 

Nonvested shares at December 31, 2019

  439,194  $19.38 

Granted

  700,853  $7.81 

Vested/Issued

  (240,375) $25.57 

Nonvested shares at December 31, 2020

  899,672  $8.71 

Granted

  640,748  $7.90 

Vested/Issued

  (518,784) $9.51 

Forfeited

  (186,339) $7.96 

Nonvested shares at December 31, 2021

  835,297  $7.76 
Share-based Payment Arrangement, Restricted Stock Unit, Activity [Table Text Block]
  

Shares

  

Weighted Average Grant-Date Fair Value

 

Nonvested shares at December 31, 2019

  1,991,125  $27.63 

Granted

  1,234,616  $10.47 

Vested/Issued

  (864,881) $36.86 

Forfeited

  (506,655) $21.72 

Nonvested shares at December 31, 2020

  1,854,205  $13.51 

Granted

  1,409,733  $11.44 

Vested/Issued

  (1,089,120) $14.99 

Forfeited

  (775,501) $12.13 

Nonvested shares at December 31, 2021

  1,399,317  $11.03 
Warrant [Member]  
Notes Tables  
Fair Value Measurement Inputs and Valuation Techniques [Table Text Block]

Dividend yield

  0.0%

Expected volatility

  87.0%

Risk-free interest rate

  0.8%

Expected life in years

  5.31 
v3.22.0.1
Note 13 - Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2021
Notes Tables  
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]
   

2021

  

2020

  

2019

 

Current:

             

Federal

 $-  $-  $- 

State

  77   124   53 

Foreign

  247   83   - 
    324   207   53 

Deferred:

             

Federal

  -   -   - 

State

  -   -   - 
    -   -   - 

Total

 $324  $207  $53 
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]
  

2021

  

2020

  

2019

 

Tax computed at the federal statutory rate

 $(6,045) $(12,540) $(15,830)

State taxes

  (1,072)  (2,304)  (2,453)

Foreign taxes

  247   83   — 

Permanent items

  22,689   13,660   21,834 

R&D credits

  (3,941)  (5,231)  (14,946)

Prior year adjustment

  916   (2,116)  (2,792)

Change in valuation allowance

  (12,470)  8,655   14,240 

Total provision

 $324  $207  $53 
Schedule of Deferred Tax Assets and Liabilities [Table Text Block]
  

2021

  

2020

  

2019

 

Deferred tax assets:

            

Net operating loss carryforwards

 $258,390  $261,472  $260,555 

Business credit carryforwards

  59,514   55,574   50,343 

Compensation

  40,647   58,112   60,967 

Accrued legal verdict

  14,144   11,880   7,624 

Carryforward of disallowed interest

  4,537   3,093   2,839 

Accrued expenses

  104   561   9 

Lease liabilities

  4,839   5,657   6,145 

Other deferred tax assets

  1,306   804   13 

Subtotal

  383,481   397,153   388,495 

Deferred tax liabilities:

            

Lease right-of-use assets

  (3,470)  (4,099)  (4,505)

Inventory

  406   (21)  — 

Other deferred tax liabilities

  (318)  (464)  (76)

Subtotal

  (3,382)  (4,584)  (4,581)

Total deferred tax assets

  380,099   392,569   383,914 

Valuation allowance

  (380,099)  (392,569)  (383,914)

Net deferred tax assets

 $—  $—  $— 
Schedule of Unrecognized Tax Benefits Roll Forward [Table Text Block]
  

2021

  

2020

  

2019

 

Unrecognized tax benefits - January 1

 $3,276  $1,968  $8,777 

Gross decreases - tax positions in a prior period

  —   —   (8,422)

Gross increases - tax positions in a current period

  985   1,308   1,613 

Unrecognized tax benefits - December 31

 $4,261  $3,276  $1,968 
v3.22.0.1
Note 1 - Business and Basis of Presentation (Details Textual)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
USD ($)
Dec. 31, 2020
USD ($)
Dec. 31, 2019
USD ($)
Number of Subsidiaries 2    
Net Income (Loss) Attributable to Parent, Total $ (29,126) $ (59,995) $ (75,595)
Net Cash Provided by (Used in) Operating Activities, Total 20,650 $ 773 $ 22,376
Cash, Cash Equivalents, and Marketable Securities $ 82,100    
v3.22.0.1
Note 2 - Significant Accounting Policies (Details Textual)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
USD ($)
Dec. 31, 2020
USD ($)
Dec. 31, 2019
USD ($)
Jan. 21, 2021
USD ($)
Payments to Acquire Intangible Assets $ (0) $ 10,000 $ (0)  
Net Cash Provided by (Used in) Investing Activities, Total (10,881) 33,403 5,163  
Sublease Agreement, Potential Milestone Payments       $ 579,800
Restricted Cash, Total 12,200 12,200    
Cash and Cash Equivalents, and Restricted Cash In Excess of Insured Limits 75,000      
Accounts Receivable, Credit Loss Expense (Reversal) 0 1,000 0  
Accounts Receivable, Allowance for Credit Loss, Recovery $ 1,000      
Average Incremental Borrowing Rate 10.90%      
Operating Lease, Impairment Loss $ 0      
Amortization of Intangible Assets, Total 8,000 $ 6,300 3,900  
Finite-Lived Intangible Asset, Expected Amortization, Year One 8,015      
Finite-Lived Intangible Asset, Expected Amortization, Year Two 8,015      
Finite-Lived Intangible Asset, Expected Amortization, Year Three 8,015      
Finite-Lived Intangible Asset, Expected Amortization, Year Nine 2,000      
Finite-Lived Intangible Asset, Expected Amortization, Year Four 8,015      
Finite-Lived Intangible Asset, Expected Amortization, Year Five 8,015      
Finite-Lived Intangible Asset, Expected Amortization, Year Six 8,000      
Finite-Lived Intangible Asset, Expected Amortization, Year Seven 8,000      
Finite-Lived Intangible Asset, Expected Amortization, Year Eight $ 8,000      
Selling, General and Administrative Expenses [Member]        
Operating Lease, Impairment Loss     $ 1,200  
Computer Equipment [Member]        
Property, Plant and Equipment, Useful Life (Year) 3 years      
Telephone Equipment [Member]        
Property, Plant and Equipment, Useful Life (Year) 3 years      
Furniture and Fixtures [Member]        
Property, Plant and Equipment, Useful Life (Year) 7 years      
Customer Concentration Risk [Member] | Revenue Benchmark [Member]        
Number of Major Customers 2 2 2  
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Customer 1 [Member]        
Concentration Risk, Percentage 31.00% 33.00% 34.00%  
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Customer 2 [Member]        
Concentration Risk, Percentage 22.00% 21.00% 22.00%  
Revision of Prior Period, Adjustment [Member]        
Payments to Acquire Intangible Assets $ 10,000      
Previously Reported [Member]        
Net Cash Provided by (Used in) Investing Activities, Total $ (10,000)      
v3.22.0.1
Note 2 - Significant Accounting Policies - Potentially Dilutive Securities Not Included in Calculation Of Diluted Net Loss Per Share (Details) - shares
shares in Thousands
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Anti-dilutive securities not included in calculation of diluted net loss per share (in shares) 8,110,814 8,979,797 9,149,700
Share-based Payment Arrangement, Option [Member]      
Anti-dilutive securities not included in calculation of diluted net loss per share (in shares) 4,595,247 5,009,342 5,042,325
Warrant [Member]      
Anti-dilutive securities not included in calculation of diluted net loss per share (in shares) 2,116,250 2,116,250 2,116,250
Unvested Restricted Stock Units [Member]      
Anti-dilutive securities not included in calculation of diluted net loss per share (in shares) 1,399,317 1,854,205 1,991,125
v3.22.0.1
Note 2 - Significant Accounting Policies - Assets Measured at Fair Value on Recurring Basis (Details) - Fair Value, Recurring [Member] - USD ($)
$ in Thousands
Dec. 31, 2021
Dec. 31, 2020
Totals $ 69,847 $ 79,813
Commercial Paper [Member]    
Investments 14,589  
Corporate Bond Securities [Member]    
Investments 4,386 8,096
Fair Value, Inputs, Level 1 [Member]    
Totals 50,872 59,919
Fair Value, Inputs, Level 1 [Member] | Commercial Paper [Member]    
Investments 0  
Fair Value, Inputs, Level 1 [Member] | Corporate Bond Securities [Member]    
Investments 0 0
Fair Value, Inputs, Level 2 [Member]    
Totals 18,975 19,894
Fair Value, Inputs, Level 2 [Member] | Commercial Paper [Member]    
Investments 14,589  
Fair Value, Inputs, Level 2 [Member] | Corporate Bond Securities [Member]    
Investments 4,386 8,096
Fair Value, Inputs, Level 3 [Member]    
Totals 0 0
Fair Value, Inputs, Level 3 [Member] | Commercial Paper [Member]    
Investments 0  
Fair Value, Inputs, Level 3 [Member] | Corporate Bond Securities [Member]    
Investments 0 0
Cash Equivalents [Member]    
Cash equivalents 50,872 71,717
Cash Equivalents [Member] | Fair Value, Inputs, Level 1 [Member]    
Cash equivalents 50,872 59,919
Cash Equivalents [Member] | Fair Value, Inputs, Level 2 [Member]    
Cash equivalents 0 11,798
Cash Equivalents [Member] | Fair Value, Inputs, Level 3 [Member]    
Cash equivalents $ 0 $ 0
v3.22.0.1
Note 2 - Significant Accounting Policies - Summary of Cash Equivalents and Short-term Investment (Details) - USD ($)
$ in Thousands
Dec. 31, 2021
Dec. 31, 2020
Cash and cash equivalents $ 63,131 $ 85,293
Unrealized gains 0 0
Unrealized losses (2) 0
Totals, amortized cost 69,849 79,813
Totals, fair value 69,847 79,813
Commercial Paper [Member]    
Investments, amortized cost 14,590  
Unrealized gains 0  
Unrealized losses (1)  
Investments, fair value 14,589  
Corporate Bond Securities [Member]    
Investments, amortized cost 4,387 8,096
Unrealized gains   0
Unrealized losses (1) 0
Investments, fair value 4,386 8,096
Cash Equivalents [Member]    
Cash and cash equivalents $ 50,872 $ 71,717
v3.22.0.1
Note 2 - Significant Accounting Policies - Inventory Balance (Details) - USD ($)
$ in Thousands
Dec. 31, 2021
Dec. 31, 2020
Raw materials $ 4,569 $ 1,431
Work-in-process (materials, labor and overhead) 1,385 1,258
Finished goods (materials, labor and overhead) 1,155 765
Total Inventories $ 7,109 $ 3,454
v3.22.0.1
Note 3 - Accounts Receivable, Net (Details Textual) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Accounts Receivable, Allowance for Credit Loss, Recovery $ 1,000    
Accounts Receivable, Credit Loss Expense (Reversal) $ 0 $ 1,000 $ 0
v3.22.0.1
Note 3 - Accounts Receivable, Net - Schedule of Accounts Receivable, Net (Details) - USD ($)
$ in Thousands
Dec. 31, 2021
Dec. 31, 2020
Trade accounts receivable $ 29,646 $ 21,515
License revenue receivable 0 2,500
Royalty revenue receivable 2,880 2,528
Total accounts receivable 32,526 26,543
Allowance for credit losses 0 (1,000)
Total accounts receivable, net $ 32,526 $ 25,543
v3.22.0.1
Note 3 - Accounts Receivable, Net - Schedule of Allowance for Credit Losses (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Balance $ (1,000)    
Provision for credit loss expense 0 $ 1,000 $ 0
Accounts receivable written-off 0    
Recoveries 1,000    
Balance $ (0) $ 1,000  
v3.22.0.1
Note 4 - Prepaid Expenses and Other - Prepaid Expenses and Other (Details) - USD ($)
$ in Thousands
Dec. 31, 2021
Dec. 31, 2020
CRO services $ 340 $ 1,550
Other clinical development 2,933 2,718
Insurance 3,178 3,708
Professional fees 398 651
Other 2,135 2,635
Total, long-term 8,984 11,262
CRO services 166 518
Other clinical development 577 437
Other 611 790
Prepaid Expense and Other Assets, Noncurrent 1,354 1,745
Totals $ 10,338 $ 13,007
v3.22.0.1
Note 5 - Other Current Assets - Other Current Assets (Details) - USD ($)
$ in Thousands
Dec. 31, 2021
Dec. 31, 2020
Deposit for manufacturing costs $ 0 $ 3,376
Other 447 265
Totals $ 447 $ 3,641
v3.22.0.1
Note 6 - Property and Equipment (Details Textual) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Depreciation, Total $ 0.7 $ 0.9 $ 0.9
v3.22.0.1
Note 6 - Property and Equipment - Property and Equipment, Net (Details) - USD ($)
$ in Thousands
Dec. 31, 2021
Dec. 31, 2020
Property, Plant and Equipment, Gross $ 8,617 $ 8,632
Less: accumulated depreciation (6,861) (6,151)
Totals 1,756 2,481
Leasehold Improvements [Member]    
Property, Plant and Equipment, Gross 3,779 3,779
Computer Equipment [Member]    
Property, Plant and Equipment, Gross 2,177 2,192
Telephone Equipment [Member]    
Property, Plant and Equipment, Gross 302 302
Furniture and Fixtures [Member]    
Property, Plant and Equipment, Gross $ 2,359 $ 2,359
v3.22.0.1
Note 7 - Leases (Details Textual)
$ in Millions
 1 Months Ended 12 Months Ended
Dec. 31, 2011
USD ($)
ft²
Feb. 28, 2019
ft²
Jun. 30, 2012
USD ($)
ft²
Dec. 31, 2021
USD ($)
Dec. 31, 2020
USD ($)
Dec. 31, 2019
USD ($)
Operating Lease, Expense       $ 5.1 $ 5.1 $ 5.1
Sublease Income       $ 0.5 $ 0.4 $ 0.2
CALIFORNIA            
Percentage of Annual Rent Increment   3.00%        
Area of Subleased Property (Square Foot) | ft²   12,429        
Lease Agreement One [Member]            
Area of Leased Property (Square Foot) | ft² 65,656          
Percentage of Annual Rent Increment 3.00%          
Letters of Credit Outstanding, Amount $ 2.0          
Lease Agreement Two [Member]            
Area of Leased Property (Square Foot) | ft²     29,470      
Percentage of Annual Rent Increment     3.00%      
Letters of Credit Outstanding, Amount     $ 1.1      
Lease Option To Extend Term (Year)     5 years      
v3.22.0.1
Note 7 - Leases - Future Minimum Lease Payments Under ASC 842 (Details)
$ in Thousands
Dec. 31, 2021
USD ($)
2022 $ 5,483
2023 5,631
2024 5,805
2025 5,983
2026 1,508
Total minimum lease payments 24,410
Less: imputed interest (4,861)
Total lease liabilities $ 19,549
v3.22.0.1
Note 7 - Leases - Future Minimum Lease Payments to be Receive (Details)
$ in Thousands
Dec. 31, 2021
USD ($)
2022 $ 481
2023 495
2024 510
2025 525
2026 133
Total $ 2,144
v3.22.0.1
Note 7 - Leases - Supplemental Cash Flow Information Related to Leases (Details)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
USD ($)
Operating cash flows used for operating leases (in thousands) $ 5,731
Right-of-use assets obtained in exchange for new operating lease liabilities $ 0
Weighted average remaining lease term (in years) (Year) 4 years 2 months 12 days
Weighted average discount rate 10.90%
v3.22.0.1
Note 8 - Intangible Assets - Intangible Assets, Net (Details) - USD ($)
$ in Thousands
Dec. 31, 2021
Dec. 31, 2020
Acquired and in-licensed rights $ 90,000 $ 90,000
Less: accumulated amortization (23,875) (15,860)
Total intangible asset, net $ 66,125 $ 74,140
v3.22.0.1
Note 8 - Intangible Assets - Future Amortization Expense Maturity (Details)
$ in Thousands
Dec. 31, 2021
USD ($)
Finite-Lived Intangible Asset, Expected Amortization, Year One $ 8,015
Finite-Lived Intangible Asset, Expected Amortization, Year Two 8,015
Finite-Lived Intangible Asset, Expected Amortization, Year Three 8,015
Finite-Lived Intangible Asset, Expected Amortization, Year Four 8,015
Finite-Lived Intangible Asset, Expected Amortization, Year Five 8,015
Thereafter 26,050
Totals $ 66,125
v3.22.0.1
Note 9 - Accrued Expenses (Details Textual) - USD ($)
$ in Thousands
 1 Months Ended
Nov. 02, 2021
Oct. 29, 2021
Jan. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Accrued Legal Verdict Expense, Noncurrent       $ 0 $ 24,822
Restructuring, Percentage of Reduction in Headcount 13.00%        
Employee Severance [Member]          
Restructuring and Related Cost, Cost Incurred to Date $ 1,200     100  
Hsu v. Puma Biotechnology, Inc., [Member]          
Litigation Settlement, Amount Awarded to Other Party $ 54,200 $ 54,200      
Accrued Legal Verdict Expense, Noncurrent       $ 2,900  
Hsu v. Puma Biotechnology, Inc., [Member] | Subsequent Event [Member]          
Litigation Settlement, Amount Awarded to Other Party     $ 54,200    
Payments for Legal Settlements     $ 27,200    
v3.22.0.1
Note 9 - Accrued Expenses - Composition of Current and Long-term Accrued Expenses (Details) - USD ($)
$ in Thousands
Dec. 31, 2021
Dec. 31, 2020
Accrued legal verdict expense $ 57,137 $ 22,724
Accrued royalties 8,829 8,604
Accrued CRO services 2,663 3,474
Accrued variable consideration 11,406 9,014
Accrued bonus 5,083 7,788
Accrued compensation 3,878 4,820
Accrued other clinical development 911 1,904
Accrued professional fees 672 1,420
Accrued legal fees 674 383
Accrued manufacturing costs 690 752
Other 632 442
Total, long-term 92,575 61,325
Accrued Legal Verdict Expense, Noncurrent 0 24,822
Accrued CRO services 878 908
Accrued other 37 233
Accrued Liabilities, Noncurrent 915 25,963
Totals $ 93,490 $ 87,288
v3.22.0.1
Note 10 - Debt (Details Textual) - USD ($)
 1 Months Ended 12 Months Ended
Jul. 23, 2021
Jun. 28, 2019
May 31, 2018
Dec. 31, 2018
May 31, 2018
Oct. 31, 2017
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Proceeds from Issuance of Debt             $ 98,500,000 $ 8,444,000 $ 25,000,000
Repayments of Debt             100,000,000 8,444,000 80,000,000
Long-term Debt, Total             102,000,000    
Amortization of Debt Issuance Costs             2,600,000 $ 2,000,000.0 $ 1,500,000
Note Purchase Agreement [Member]                  
Debt Instrument, Face Amount $ 100,000,000.0                
Debt Instrument, Interest Rate, Stated Percentage 8.00%                
Debt Instrument, Interest Rate, Effective Percentage 10.98%                
Debt Instrument, Prepayment Fee Percentage 2.00%                
Debt Instrument, Unamortized Discount, Total $ 1,500,000                
Debt Instrument, Periodic Payment, Exit Payment, Percent 2.00%                
Debt Instrument, Unused Borrowing Capacity, Amount $ 25,000,000.0                
Debt Issuance Costs, Gross $ 1,900,000                
Debt Instrument, Periodic Payment, Percent 11.11%                
Long-term Debt, Total             $ 100,000,000.0    
Note Purchase Agreement [Member] | London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member]                  
Debt Instrument, Basis Spread on Variable Rate 1.50%                
Note Purchase Agreement [Member] | London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member]                  
Debt Instrument, Basis Spread on Variable Rate 3.50%                
Oxford Finance Limited Liability Company [Member] | Secured Promissory Notes [Member]                  
Debt Instrument, Face Amount   $ 100,000,000.0              
Debt Instrument, Interest Rate, Stated Percentage   9.00%              
Debt Instrument, Basis Spread on Variable Rate   3.50%              
Debt instrument, Percentage of Original Principal Amount Payable in Final Payment   7.50%              
Line of Credit Facility, Maximum Borrowing Capacity   $ 100,000,000.0              
Percentage of Issued and Outstanding Capital Stock of Subsidiary Pledged   65.00%              
Debt Instrument, Interest Rate, Effective Percentage               12.75%  
Debt Instrument, Debt Default, Additional Interest, Percent   5.00%              
Debt Instrument, Debt Default, Amount   $ 500,000              
Loss Contingency, Damages Sought, Value   $ 500,000              
Oxford Finance Limited Liability Company [Member] | Secured Promissory Notes [Member] | Debt Instrument, Redemption, Period One [Member]                  
Debt Instrument, Prepayment Fee Percentage   3.00%              
Oxford Finance Limited Liability Company [Member] | Secured Promissory Notes [Member] | Debt Instrument, Redemption, Period Two [Member]                  
Debt Instrument, Prepayment Fee Percentage   2.00%              
Oxford Finance Limited Liability Company [Member] | Secured Promissory Notes [Member] | Debt Instrument, Redemption, Period Three [Member]                  
Debt Instrument, Prepayment Fee Percentage   1.00%              
Silicon Valley Bank and Oxford Finance [Member]                  
Proceeds from Lines of Credit, Total           $ 50,000,000.0      
Debt Instrument, Face Amount     $ 155,000,000.0   $ 155,000,000.0        
Proceeds from Issuance of Debt       $ 30,000,000.0 125,000,000.0        
Repayments of Debt   $ 155,000,000.0     $ 50,000,000.0        
Debt Instrument, Interest Rate, Stated Percentage     8.25%   8.25%        
Debt Instrument, Basis Spread on Variable Rate     3.50%            
Debt instrument, Percentage of Original Principal Amount Payable in Final Payment     7.50%   7.50%        
v3.22.0.1
Note 10 - Debt - Schedule of Long Term Debt (Details) - USD ($)
$ in Thousands
Dec. 31, 2021
Dec. 31, 2020
Total debt, inclusive of $2.0 million exit payment $ 102,000  
Less: deferred issuance costs and discounts (4,908) $ (5,002)
Total long-term debt, net $ 97,092 $ 84,025
v3.22.0.1
Note 10 - Debt - Schedule of Long Term Debt (Details) (Parentheticals)
$ in Millions
 12 Months Ended
Dec. 31, 2021
USD ($)
Exit payment $ 2
v3.22.0.1
Note 10 - Debt - Future Minimum Principal Payments (Details)
$ in Thousands
Dec. 31, 2021
USD ($)
2022 $ 0
2023 0
2024 33,997
2025 45,329
2026 22,674
Total $ 102,000
v3.22.0.1
Note 10 - Debt - Schedule of Debt Issuance Costs and Discounts (Details) - USD ($)
$ in Thousands
Dec. 31, 2021
Dec. 31, 2020
Deferred issuance costs and discounts $ 5,410 $ 0
Debt issuance costs and discounts (Athyrium Notes) 5,410 0
Less: accumulated amortization (502) (3,666)
Included in long-term debt 4,908 5,002
Note Purchase Agreement [Member]    
Deferred issuance costs and discounts 0  
Debt issuance costs and discounts (Athyrium Notes) $ 0  
Silicon Valley Bank and Oxford Finance [Member]    
Deferred issuance costs and discounts   8,668
Debt issuance costs and discounts (Athyrium Notes)   $ 8,668
v3.22.0.1
Note 11 - Stockholders' Deficit (Details Textual) - USD ($)
$ / shares in Units, $ in Thousands
 12 Months Ended
Jul. 15, 2021
Apr. 01, 2021
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Oct. 31, 2011
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period (in shares)     0 18,202 87,625  
Common Stock, Shares Authorized (in shares)     100,000,000 100,000,000    
Common Stock, Par or Stated Value Per Share (in dollars per share)     $ 0.0001 $ 0.0001    
Ordinary Shares Ownership Percentage           20.00%
Share-based Payment Arrangement, Expense     $ 32,633 $ 36,575 $ 57,327  
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value (in dollars per share)     $ 7.90 $ 7.81 $ 12.08  
Equity Incentive Plan Twenty Eleven [Member]            
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized (in shares)   2,000,000        
Common Stock, Capital Shares Reserved for Future Issuance (in shares)     14,545,860      
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Ending Balance (in shares)     5,068,592      
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant (in shares)     4,159,934      
Employment Inducement Incentive Award Plan Twenty Seventeen [Member]            
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized (in shares) 1,000,000          
Common Stock, Capital Shares Reserved for Future Issuance (in shares)     3,000,000      
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Ending Balance (in shares)     925,972      
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant (in shares)     1,454,340      
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (Year)     3 years      
Employment Inducement Incentive Award Plan Twenty Seventeen [Member] | Maximum [Member]            
Share-based Compensation Arrangement By Share-based Payment Award, Options Initial Contractual Term (Year)     10 years      
Selling, General and Administrative Expenses [Member]            
Share-based Payment Arrangement, Expense     $ 13,587 $ 0 $ 0  
Common Stock [Member]            
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)     2,116,250      
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)     $ 16      
Restricted Stock Units (RSUs) [Member]            
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period (in shares)     1,089,120 864,881 790,642  
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total     $ 11,000      
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition (Year)     1 year 7 months 6 days      
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value (in dollars per share)     $ 11.44 $ 10.47 $ 14.72  
Restricted Stock Units (RSUs) [Member] | Selling, General and Administrative Expenses [Member]            
Share-based Payment Arrangement, Expense     $ 8,239 $ 13,841 $ 18,848  
Non-vested Stock Options [Member]            
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total     $ 5,100      
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition (Year)     1 year 9 months 18 days      
v3.22.0.1
Note 11 - Stockholders' Deficit - Fair Value Options Weighted-Average Assumptions (Details) - Warrant To Acquire Common Stock [Member]
Dec. 31, 2021
Measurement Input, Expected Dividend Rate [Member]  
Warrant measurement Input 0.000
Measurement Input, Price Volatility [Member]  
Warrant measurement Input 0.870
Measurement Input, Risk Free Interest Rate [Member]  
Warrant measurement Input 0.008
Measurement Input, Expected Term [Member]  
Warrant measurement Input 5.31
v3.22.0.1
Note 11 - Stockholders' Deficit - Options Award Assumptions (Details) - Employee and Nonemployee Stock Option [Member]
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dividend yield 0.00% 0.00%
Expected volatility 86.60% 100.60%
Risk-free interest rate 0.80% 0.90%
Expected life in years (Year) 5 years 9 months 25 days 5 years 9 months 21 days
v3.22.0.1
Note 11 - Stockholders' Deficit - Stock-based Compensation Expense (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Share-based Payment Arrangement, Expense $ 32,633 $ 36,575 $ 57,327
Selling, General and Administrative Expenses [Member]      
Share-based Payment Arrangement, Expense 13,587 0 0
Selling, General and Administrative Expenses [Member] | Share-based Payment Arrangement, Option [Member]      
Share-based Payment Arrangement, Expense 3,873 3,937 9,044
Selling, General and Administrative Expenses [Member] | Restricted Stock Units (RSUs) [Member]      
Share-based Payment Arrangement, Expense 8,239 13,841 18,848
Research and Development Expense [Member] | Share-based Payment Arrangement, Option [Member]      
Share-based Payment Arrangement, Expense 573 3,018 7,452
Research and Development Expense [Member] | Restricted Stock Units (RSUs) [Member]      
Share-based Payment Arrangement, Expense $ 6,361 $ 15,779 $ 21,983
v3.22.0.1
Note 11 - Stockholders' Deficit - Stock Option Activity (Details) - USD ($)
$ / shares in Units, $ in Thousands
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Granted, shares (in shares) 640,748 700,853  
Exercised, shares (in shares) 0 (18,202) (87,625)
Forfeited, shares (in shares) (186,339)    
Nonvested, shares (in shares) 835,297 899,672 439,194
The 2011 and 2017 Plans [Member]      
Balance, shares (in shares) 5,009,342 5,042,325  
Balance, weighted average exercise price (in dollars per share) $ 71.42 $ 82.42  
Outstanding, weighted average remaining contractual term (Year) 4 years 6 months 5 years 1 month 6 days 5 years 2 months 12 days
Outstanding, aggregate intrinsic value $ 0 $ 3,458 $ 1,951
Granted, shares (in shares) 640,748 700,853  
Granted, weighted average exercise price (in dollars per share) $ 11.12 $ 10.03  
Granted, weighted average remaining contractual term (Year) 8 years 2 months 12 days 9 years 2 months 12 days  
Exercised, shares (in shares)   (18,202)  
Exercised, weighted average exercise price (in dollars per share)   $ 3.75  
Exercised, aggregate intrinsic value   $ 119  
Expired, shares (in shares) (868,504) (715,634)  
Expired, weighted average exercise price (in dollars per share) $ 87.55 $ 90.51  
Forfeited, shares (in shares) (186,339)    
Forfeited, weighted average exercise price (in dollars per share) $ 10.60    
Balance, shares (in shares) 4,595,247 5,009,342 5,042,325
Balance, weighted average exercise price (in dollars per share) $ 62.43 $ 71.42 $ 82.42
Nonvested, shares (in shares) 835,297    
Nonvested, weighted average exercise price (in dollars per share) $ 10.64    
Nonvested, weighted average remaining contractual term (Year) 8 years 10 months 24 days    
Nonvested, aggregate intrinsic value $ 0    
Exercisable, shares (in shares) 3,759,950    
Exercisable, weighted average exercise price (in dollars per share) $ 73.93    
Exercisable, weighted average remaining contractual term (Year) 3 years 7 months 6 days    
Exercisable, aggregate intrinsic value $ 0    
v3.22.0.1
Note 11 - Stockholders' Deficit - Stock Options Rollforward (Details) - $ / shares
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Nonvested shares (in shares) 899,672 439,194  
Nonvested, Beginning balance, Weighted Average Grant-Date Fair Value (in dollars per share) $ 8.71 $ 19.38  
Granted, shares (in shares) 640,748 700,853  
Granted, Weighted Average Grant-Date Fair Value (in dollars per share) $ 7.90 $ 7.81 $ 12.08
Vested/Issued, shares (in shares) (518,784) (240,375)  
Vested/Issued, Weighted Average Grant-Date Fair Value (in dollars per share) $ 9.51 $ 25.57  
Forfeited, shares (in shares) (186,339)    
ForfeitedForfeited, Weighted Average Grant-Date Fair Value (in dollars per share) $ 7.96    
Nonvested shares (in shares) 835,297 899,672 439,194
Nonvested, Beginning balance, Weighted Average Grant-Date Fair Value (in dollars per share) $ 7.76 $ 8.71 $ 19.38
v3.22.0.1
Note 11 - Stockholders' Deficit - Restricted Stock Units (Details) - Restricted Stock Units (RSUs) [Member] - $ / shares
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Nonvested shares (in shares) 1,854,205 1,991,125  
Nonvested, Beginning balance, Weighted Average Grant-Date Fair Value (in dollars per share) $ 13.51 $ 27.63  
Granted shares (in shares) 1,409,733 1,234,616  
Granted, Weighted Average Grant-Date Fair Value (in dollars per share) $ 11.44 $ 10.47 $ 14.72
Vested/Issued shares (in shares) (1,089,120) (864,881) (790,642)
Vested/Issued, Weighted Average Grant-Date Fair Value (in dollars per share) $ 14.99 $ 36.86  
Forfeited shares (in shares) (775,501) (506,655)  
Forfeited, Weighted Average Grant-Date Fair Value (in dollars per share) $ 12.13 $ 21.72  
Nonvested shares (in shares) 1,399,317 1,854,205 1,991,125
Nonvested, Beginning balance, Weighted Average Grant-Date Fair Value (in dollars per share) $ 11.03 $ 13.51 $ 27.63
v3.22.0.1
Note 12 - 401(k) Savings Plan (Details Textual) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Defined Contribution Plan, Cost $ 1.5 $ 1.4 $ 1.5
First 3% of Each Participant's Contributions [Member]      
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay 100.00%    
Second Two Percent Of Each Participants Contributions [Member]      
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay 50.00%    
v3.22.0.1
Note 13 - Income Taxes (Details Textual) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Effective Income Tax Rate Reconciliation, Tax Expense (Benefit), Share-based Payment Arrangement, Amount $ 22,500    
Income Tax Benefit Due to Research and Development Tax Credits 3,900    
Unrecognized Tax Benefits, Increase Resulting from Current Period Tax Positions 985 $ 1,308 $ 1,613
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount 12,500 $ 8,700  
Domestic Tax Authority [Member]      
Operating Loss Carryforwards, Total 950,200    
Domestic Tax Authority [Member] | Research Tax Credit Carryforward [Member]      
Tax Credit Carryforward, Amount 39,700    
State and Local Jurisdiction [Member]      
Operating Loss Carryforwards, Total 871,000    
State and Local Jurisdiction [Member] | Research Tax Credit Carryforward [Member]      
Tax Credit Carryforward, Amount $ 24,100    
v3.22.0.1
Note 13 - Income Taxes - Schedule of Income Tax Expense (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Federal $ 0 $ 0 $ 0
State 77 124 53
Foreign 247 83 0
Current Income Tax Expense (Benefit), Total 324 207 53
Federal 0 0 0
State 0 0 0
Total provision $ 324 $ 207 $ 53
v3.22.0.1
Note 13 - Income Taxes - Schedule of Income Tax Reconciliation (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Tax computed at the federal statutory rate $ (6,045) $ (12,540) $ (15,830)
State taxes (1,072) (2,304) (2,453)
Foreign taxes 247 83 0
Permanent items 22,689 13,660 21,834
R&D credits (3,941) (5,231) (14,946)
Prior year adjustment 916 (2,116) (2,792)
Change in valuation allowance (12,470) 8,655 14,240
Total provision $ 324 $ 207 $ 53
v3.22.0.1
Note 13 - Income Taxes - Components of Net Deferred Tax Assets (Details) - USD ($)
$ in Thousands
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Deferred tax assets:      
Net operating loss carryforwards $ 258,390 $ 261,472 $ 260,555
Business credit carryforwards 59,514 55,574 50,343
Compensation 40,647 58,112 60,967
Accrued legal verdict 14,144 11,880 7,624
Carryforward of disallowed interest 4,537 3,093 2,839
Accrued expenses 104 561 9
Lease liabilities 4,839 5,657 6,145
Other deferred tax assets 1,306 804 13
Subtotal 383,481 397,153 388,495
Deferred tax liabilities:      
Lease right-of-use assets (3,470) (4,099) (4,505)
Inventory 406 (21) 0
Other deferred tax liabilities (318) (464) (76)
Subtotal (3,382) (4,584) (4,581)
Total deferred tax assets 380,099 392,569 383,914
Valuation allowance (380,099) (392,569) (383,914)
Net deferred tax assets $ 0 $ 0 $ 0
v3.22.0.1
Note 13 - Income Taxes - Reconciliation of Unrecognized Tax Benefits (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Unrecognized tax benefits - January 1 $ 3,276 $ 1,968 $ 8,777
Gross decreases - tax positions in a prior period 0 0 (8,422)
Gross increases - tax positions in a current period 985 1,308 1,613
Unrecognized tax benefits - December 31 $ 4,261 $ 3,276 $ 1,968
v3.22.0.1
Note 14 - Commitments and Contingencies (Details Textual)
$ / shares in Units, $ in Millions
 1 Months Ended 12 Months Ended
Nov. 02, 2021
USD ($)
Oct. 29, 2021
USD ($)
Jun. 23, 2021
USD ($)
Mar. 02, 2020
USD ($)
Mar. 15, 2019
USD ($)
Jan. 29, 2019
$ / shares
Sep. 30, 2021
USD ($)
Dec. 31, 2021
USD ($)
Oct. 09, 2020
USD ($)
Milestone Payments Maximum Amount             $ 187.5    
Potential Milestone Payments               $ 90.0  
Percentage of Unpaid Portion of Milestone Payments Interest Rate               6.25%  
Milestone Payment             $ 1.8    
Hsu v. Puma Biotechnology, Inc., [Member]                  
Loss Contingency, Estimate of Possible Loss               $ 54.2  
Loss Contingency, Damages Awarded Per Share (in dollars per share) | $ / shares           $ 4.50      
Loss Contingency, Damages Awarded Percent of Total Claim           5.00%      
Loss Contingency, Claimed Damages Awarded Per Share (in dollars per share) | $ / shares           $ 87.20      
Loss Contingency, Claimed Damages, Amount                 $ 50.5
Litigation Settlement, Amount Awarded to Other Party $ 54.2 $ 54.2              
Legal Settlements Payments, Number of Installments 2                
Eshelman v. Puma Biotechnology, Inc. [Member]                  
Loss Contingency, Estimate of Possible Loss               2.9  
Litigation Settlement, Amount Awarded to Other Party       $ 26.3          
Litigation Settlement, Expense       $ 3.0          
Loss Contingency Accrual, Period Increase (Decrease), Total     $ (22.4)            
Letters of Credit Outstanding, Amount               8.9  
Eshelman v. Puma Biotechnology, Inc. [Member] | Compensatory Damages [Member]                  
Loss Contingency, Damages Awarded, Value         $ 15.9        
Eshelman v. Puma Biotechnology, Inc. [Member] | Punitive Damages [Member]                  
Loss Contingency, Damages Awarded, Value         $ 6.5        
Clinical Trial Contracts [Member]                  
Potential Milestone Payments               17.3  
Contractual Obligation, Total               $ 54.8  
Minimum [Member] | Clinical Trial Contracts [Member]                  
Termination Notice Period (Day)               30 days  
Maximum [Member] | Eshelman v. Puma Biotechnology, Inc. [Member]                  
Loss Contingency, Damages Sought, Value               $ 2.9  
Maximum [Member] | Clinical Trial Contracts [Member]                  
Termination Notice Period (Day)               45 days  
v3.22.0.1
Note 15 - Subsequent Events (Details Textual) - Hsu v. Puma Biotechnology, Inc., [Member] - USD ($)
$ in Millions
 1 Months Ended
Nov. 02, 2021
Oct. 29, 2021
Jan. 31, 2022
Litigation Settlement, Amount Awarded to Other Party $ 54.2 $ 54.2  
Subsequent Event [Member]      
Litigation Settlement, Amount Awarded to Other Party     $ 54.2