Delaware | 04-3561634 | |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) |
301 Binney Street, Cambridge, MA | 02142 | |
(Address of Principal Executive Offices) | (Zip Code) |
Large accelerated filer x | Accelerated filer ¨ | |
Non-accelerated filer ¨ | Smaller reporting company ¨ | |
Emerging growth company ¨ |
Page | ||
September 30, 2018 | December 31, 2017 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 65,202 | $ | 73,651 | |||
Marketable securities | 209,881 | 269,017 | |||||
Collaboration receivable | 13,835 | 15,048 | |||||
Prepaid expenses and other current assets | 5,256 | 6,798 | |||||
Restricted cash | — | 2,412 | |||||
Total current assets | 294,174 | 366,926 | |||||
Marketable securities, long-term | 6,490 | 37,222 | |||||
Property and equipment, net | 29,451 | 29,916 | |||||
Restricted cash, long-term | 19,349 | 20,620 | |||||
Intangible assets, net | 3,171 | 4,036 | |||||
Other long-term assets | 649 | 711 | |||||
Total assets | $ | 353,284 | $ | 459,431 | |||
Liabilities and Stockholders’ Equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 4,629 | $ | 11,456 | |||
Accrued expenses | 18,115 | 20,528 | |||||
Accrued restructuring | 8,674 | — | |||||
Collaboration liabilities | 3,186 | 9,258 | |||||
Deferred revenue | 3,705 | 2,866 | |||||
Other current liabilities | 16,136 | 379 | |||||
Total current liabilities | 54,445 | 44,487 | |||||
Deferred revenue, net of current portion | 33,527 | 30,751 | |||||
Other long-term liabilities | 16,555 | 10,039 | |||||
Total liabilities | 104,527 | 85,277 | |||||
Commitments and contingencies (Note 8) | |||||||
Stockholders’ Equity: | |||||||
Common stock, $0.0001 par value per share; 100,000 shares authorized, 78,608 shares issued and 78,378 shares outstanding at September 30, 2018 and 76,584 shares issued and 76,355 shares outstanding at December 31, 2017 | 8 | 8 | |||||
Additional paid-in capital | 987,608 | 939,654 | |||||
Accumulated other comprehensive loss | (164 | ) | (140 | ) | |||
Accumulated deficit | (735,581 | ) | (562,254 | ) | |||
Treasury stock, at cost, 229 shares | (3,114 | ) | (3,114 | ) | |||
Total stockholders’ equity | 248,757 | 374,154 | |||||
Total liabilities and stockholders’ equity | $ | 353,284 | $ | 459,431 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Collaboration revenue: | |||||||||||||||
Product revenue | $ | 13,621 | $ | 10,890 | $ | 28,921 | $ | 53,434 | |||||||
Research and development revenue | 1,263 | 13,200 | 3,846 | 20,840 | |||||||||||
Total collaboration revenue | 14,884 | 24,090 | 32,767 | 74,274 | |||||||||||
Operating expenses: | |||||||||||||||
Research and development | 30,727 | 37,914 | 95,309 | 113,078 | |||||||||||
General and administrative | 20,437 | 20,703 | 63,580 | 66,380 | |||||||||||
Restructuring | 15,535 | — | 15,535 | — | |||||||||||
Other operating expense | — | — | 30,000 | — | |||||||||||
Total operating expenses | 66,699 | 58,617 | 204,424 | 179,458 | |||||||||||
Operating loss | (51,815 | ) | (34,527 | ) | (171,657 | ) | (105,184 | ) | |||||||
Other income, net | 1,515 | 1,339 | 3,841 | 3,329 | |||||||||||
Net loss | $ | (50,300 | ) | $ | (33,188 | ) | $ | (167,816 | ) | $ | (101,855 | ) | |||
Basic and diluted net loss per share | $ | (0.65 | ) | $ | (0.44 | ) | $ | (2.20 | ) | $ | (1.40 | ) | |||
Weighted average shares used in computing basic and diluted net loss per share | 77,229 | 74,611 | 76,415 | 72,585 | |||||||||||
Comprehensive loss: | |||||||||||||||
Net loss | $ | (50,300 | ) | $ | (33,188 | ) | $ | (167,816 | ) | $ | (101,855 | ) | |||
Net unrealized holding (loss) gain on available-for-sale marketable securities | 137 | 52 | (24 | ) | (39 | ) | |||||||||
Comprehensive loss | $ | (50,163 | ) | $ | (33,136 | ) | $ | (167,840 | ) | $ | (101,894 | ) |
Nine Months Ended September 30, | |||||||
2018 | 2017 | ||||||
Cash Flows from Operating Activities: | |||||||
Net loss | $ | (167,816 | ) | $ | (101,855 | ) | |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | |||||||
Depreciation and amortization of property and equipment | 5,575 | 4,719 | |||||
Impairment of equipment | 1,605 | — | |||||
Share-based compensation expense | 20,172 | 16,309 | |||||
Amortization of premium on investments | (175 | ) | 248 | ||||
Amortization of intangibles | 865 | 865 | |||||
Loss on disposal of assets | 623 | — | |||||
Changes in operating assets and liabilities: | |||||||
Collaboration receivable | 1,213 | 55,909 | |||||
Prepaid expenses and other current assets | 1,573 | (1,734 | ) | ||||
Other long-term assets | 62 | 1,071 | |||||
Accounts payable | (5,893 | ) | 8,081 | ||||
Accrued expenses | (2,175 | ) | (3,382 | ) | |||
Accrued restructuring | 8,674 | — | |||||
Collaboration liabilities | (6,072 | ) | (19,007 | ) | |||
Deferred revenue | (1,896 | ) | 45,700 | ||||
Deferred rent | 4,835 | 662 | |||||
Other liabilities | 17,438 | 1,538 | |||||
Net cash (used in) provided by operating activities | (121,392 | ) | 9,124 | ||||
Cash Flows from Investing Activities: | |||||||
Purchases of property and equipment | (8,594 | ) | (11,213 | ) | |||
Proceeds from disposal of equipment | 84 | — | |||||
Purchases of marketable securities | (117,440 | ) | (366,292 | ) | |||
Proceeds from maturities of marketable securities | 207,459 | 318,178 | |||||
Net cash provided by (used in) investing activities | 81,509 | (59,327 | ) | ||||
Cash Flows from Financing Activities: | |||||||
Net proceeds from issuance of common stock under ATM facility | — | 64,090 | |||||
Proceeds from issuance of common stock under stock plans | 27,751 | 9,484 | |||||
Net cash provided by financing activities | 27,751 | 73,574 | |||||
Net (decrease) increase in cash, cash equivalents and restricted cash | (12,132 | ) | 23,371 | ||||
Cash, cash equivalents and restricted cash, beginning of period | 96,683 | 172,499 | |||||
Cash, cash equivalents and restricted cash, end of period | $ | 84,551 | $ | 195,870 | |||
Non-Cash Activities: | |||||||
Purchases of property and equipment included in accounts payable and accrued expenses | $ | 1,228 | $ | 3,542 | |||
Receivable due from stock option exercises | $ | 124 | $ | 617 | |||
Impact of adopting ASU 2016-09 | $ | — | $ | 783 | |||
Impact of adopting ASC 606 | $ | 5,511 | $ | — |
For the Three Months Ended September 30, 2018 | |||||||||||
Topic 606 | Topic 605 | Change | |||||||||
Research and development revenue | $ | 1,263 | $ | 1,336 | $ | (73 | ) | ||||
Loss from operations | $ | 51,815 | $ | 51,742 | $ | 73 | |||||
Net loss | $ | 50,300 | $ | 50,227 | $ | 73 | |||||
Comprehensive loss | $ | 50,163 | $ | 50,090 | $ | 73 |
For the Nine Months Ended September 30, 2018 | |||||||||||
Topic 606 | Topic 605 | Change | |||||||||
Research and development revenue | $ | 3,846 | $ | 4,075 | $ | (229 | ) | ||||
Loss from operations | $ | 171,657 | $ | 171,428 | $ | 229 | |||||
Net loss | $ | 167,816 | $ | 167,587 | $ | 229 | |||||
Comprehensive loss | $ | 167,840 | $ | 167,611 | $ | 229 |
Balance as of September 30, 2018 | |||||||||||
Topic 606 | Topic 605 | Change | |||||||||
Deferred revenue, current | $ | 3,705 | $ | 2,816 | $ | 889 | |||||
Deferred revenue, non-current | $ | 33,527 | $ | 28,676 | $ | 4,851 | |||||
Accumulated deficit | $ | 735,581 | $ | 729,841 | $ | 5,740 |
For the Nine Months Ended September 30, 2018 | |||||||||||
Topic 606 | Topic 605 | Change | |||||||||
Net loss | $ | 167,816 | $ | 167,587 | $ | 229 | |||||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||
Deferred revenue | $ | 1,896 | $ | 2,125 | $ | (229 | ) |
• | Amounts due to the Company for its contractual profit share on Sandoz Inc.’s, or Sandoz', and sales of GLATOPA; |
• | Amounts due to the Company for reimbursement of research and development services and certain external costs primarily under the collaborations with Sandoz; and |
• | Amounts due from Mylan for its 50% share of certain collaboration expenses under the cost-sharing provisions of the agreement with Mylan, as described in Note 5, "License Agreements and Collaborative Agreements", that are not funded through the continuation payments. |
• | Advance payments received from Mylan that will be applied to amounts due from Mylan in future periods for the funding of Mylan's 50% share of certain collaboration expenses under the cost-sharing provisions of the agreement with Mylan; and |
• | Net payable to CSL for the Company's 50% share of collaboration expenses under the cost-sharing provisions of the agreement with CSL. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||
Weighted-average anti-dilutive shares related to: | |||||||||||
Outstanding stock options | 2,091 | 3,649 | 2,841 | 4,064 | |||||||
Restricted stock awards and units | 1,025 | 1,474 | 860 | 1,519 |
Description | Balance as of September 30, 2018 | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Other Unobservable Inputs (Level 3) | ||||||||||||
Assets: | ||||||||||||||||
Cash equivalents: | ||||||||||||||||
Money market funds | $ | 41,173 | $ | 41,173 | $ | — | $ | — | ||||||||
Overnight repurchase agreements | 1,000 | — | 1,000 | — | ||||||||||||
Marketable securities: | ||||||||||||||||
U.S. government-sponsored enterprise securities | 31,688 | — | 31,688 | — | ||||||||||||
Corporate debt securities | 104,236 | — | 104,236 | — | ||||||||||||
Certificates of deposit | 7,200 | — | 7,200 | — | ||||||||||||
Commercial paper obligations | 55,958 | — | 55,958 | — | ||||||||||||
Asset-backed securities | 17,289 | — | 17,289 | — | ||||||||||||
Total | $ | 258,544 | $ | 41,173 | $ | 217,371 | $ | — |
Description | Balance as of December 31, 2017 | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Other Unobservable Inputs (Level 3) | ||||||||||||
Assets: | ||||||||||||||||
Cash equivalents: | ||||||||||||||||
Money market funds | $ | 49,204 | $ | 49,204 | $ | — | $ | — | ||||||||
Overnight repurchase agreements | 11,250 | — | 11,250 | — | ||||||||||||
Marketable securities: | ||||||||||||||||
U.S. government-sponsored enterprise securities | 18,181 | — | 18,181 | — | ||||||||||||
Corporate debt securities | 148,874 | — | 148,874 | — | ||||||||||||
Certificates of deposit | 7,794 | — | 7,794 | — | ||||||||||||
Commercial paper obligations | 108,630 | — | 108,630 | — | ||||||||||||
Asset-backed securities | 22,760 | — | 22,760 | — | ||||||||||||
Total | $ | 366,693 | $ | 49,204 | $ | 317,489 | $ | — |
As of September 30, 2018 | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||
Cash, money market funds and overnight repurchase agreements | $ | 65,202 | $ | — | $ | — | $ | 65,202 | ||||||||
U.S. government-sponsored enterprise securities due in one year or less | 31,697 | — | (9 | ) | 31,688 | |||||||||||
Corporate debt securities due in one year or less | 100,205 | 4 | (123 | ) | 100,086 | |||||||||||
Corporate debt securities due in more than one year | 4,175 | 1 | (26 | ) | 4,150 | |||||||||||
Certificates of deposit due in one year or less | 6,900 | — | — | 6,900 | ||||||||||||
Certificates of deposit due in more than one year | 300 | — | — | $ | 300 | |||||||||||
Commercial paper obligations due in one year or less | 55,954 | 12 | (8 | ) | 55,958 | |||||||||||
Asset-backed securities due in one year or less | 15,257 | — | (10 | ) | 15,247 | |||||||||||
Asset-backed securities due in more than one year | 2,047 | — | (5 | ) | 2,042 | |||||||||||
Total | $ | 281,737 | $ | 17 | $ | (181 | ) | $ | 281,573 | |||||||
Reported as: | ||||||||||||||||
Cash and cash equivalents | $ | 65,202 | $ | — | $ | — | $ | 65,202 | ||||||||
Marketable securities | 216,535 | 17 | (181 | ) | 216,371 | |||||||||||
Total | $ | 281,737 | $ | 17 | $ | (181 | ) | $ | 281,573 |
As of December 31, 2017 | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||
Cash, money market funds and overnight repurchase agreements | $ | 73,651 | $ | — | $ | — | $ | 73,651 | ||||||||
U.S. government-sponsored enterprise securities due in one year or less | 18,186 | — | (5 | ) | 18,181 | |||||||||||
Corporate debt securities due in one year or less | 118,541 | 3 | (115 | ) | 118,429 | |||||||||||
Corporate debt securities due in more than one year | 30,487 | 1 | (43 | ) | 30,445 | |||||||||||
Certificates of deposit due in one year or less | 6,501 | — | — | 6,501 | ||||||||||||
Certificates of deposit due in more than one year | 1,297 | — | (4 | ) | 1,293 | |||||||||||
Commercial paper obligations due in one year or less | 108,573 | 65 | (8 | ) | 108,630 | |||||||||||
Asset-backed securities due in one year or less | 17,307 | — | (30 | ) | 17,277 | |||||||||||
Asset-backed securities due in more than one year | 5,487 | — | (4 | ) | 5,483 | |||||||||||
Total | $ | 380,030 | $ | 69 | $ | (209 | ) | $ | 379,890 | |||||||
Reported as: | ||||||||||||||||
Cash and cash equivalents | $ | 73,651 | $ | — | $ | — | $ | 73,651 | ||||||||
Marketable securities | 306,379 | 69 | (209 | ) | 306,239 | |||||||||||
Total | $ | 380,030 | $ | 69 | $ | (209 | ) | $ | 379,890 |
As of September 30, 2018 | As of September 30, 2017 | ||||||
Cash and cash equivalents | $ | 65,202 | $ | 172,838 | |||
Restricted cash, current portion | — | 2,412 | |||||
Restricted cash, long-term | 19,349 | 20,620 | |||||
Total | $ | 84,551 | $ | 195,870 |
Property Location | Approximate Square Footage | Lease Expiration Date | Letter of Credit Amount | Balance Sheet Classification | |||
320 Bent Street | 105,000 | 2/28/2027 | $ | 748 | Non-Current Asset | ||
301 Binney Street, Fifth Floor | 80,000 | 6/29/2025 | 1,101 | Non-Current Asset | |||
Total | $ | 1,849 |
As of September 30, 2018 | As of December 31, 2017 | ||||||
Accrued liability | $ | 15,000 | $ | — | |||
Lease incentive, current portion | 996 | 379 | |||||
Deferred rent, current | 12 | — | |||||
Lease termination fee, current | 128 | — | |||||
Total other current liabilities | $ | 16,136 | $ | 379 |
As of September 30, 2018 | As of December 31, 2017 | ||||||
Lease incentive, long-term | $ | 7,249 | $ | 3,541 | |||
Deferred rent, long-term | 8,358 | 6,498 | |||||
Lease termination fee, long-term | 948 | — | |||||
Total other long-term liabilities | $ | 16,555 | $ | 10,039 |
2003 Sandoz Agreement | 2006 Sandoz Agreement | Mylan Collaboration Agreement | CSL Collaboration Agreement | Total | ||||||||||||||||
Contract assets | ||||||||||||||||||||
Collaboration receivables: | ||||||||||||||||||||
Opening balance - January 1, 2018 | $ | 406 | $ | 14,219 | $ | 423 | $ | — | $ | 15,048 | ||||||||||
Revenue / cost recovery | 7 | 30,864 | 460 | — | 31,331 | |||||||||||||||
Cash receipts | (413 | ) | (31,412 | ) | (719 | ) | — | (32,544 | ) | |||||||||||
Ending balance - September 30, 2018 | $ | — | $ | 13,671 | $ | 164 | $ | — | $ | 13,835 | ||||||||||
Contract liabilities | ||||||||||||||||||||
Deferred revenue: | ||||||||||||||||||||
Opening balance - January 1, 2018 | $ | — | $ | — | $ | 39,128 | $ | — | $ | 39,128 | ||||||||||
Revenue recognition | — | — | (1,896 | ) | — | (1,896 | ) | |||||||||||||
Ending balance - September 30, 2018 | — | — | 37,232 | — | 37,232 | |||||||||||||||
Less: current portion | — | — | (3,705 | ) | — | (3,705 | ) | |||||||||||||
Deferred revenue, net of current portion - September 30, 2018 | $ | — | $ | — | $ | 33,527 | $ | — | $ | 33,527 | ||||||||||
Collaboration liabilities: | ||||||||||||||||||||
Opening balance - January 1, 2018 | $ | — | $ | — | $ | 8,245 | $ | 1,013 | $ | 9,258 | ||||||||||
Payments | — | — | — | (5,146 | ) | (5,146 | ) | |||||||||||||
Net collaboration costs incurred in the period | — | — | (7,282 | ) | 6,356 | (926 | ) | |||||||||||||
Ending balance - September 30, 2018 | $ | — | $ | — | $ | 963 | $ | 2,223 | $ | 3,186 |
For the Three Months Ended September 30, 2018 | ||||||||||||||||||||
2003 Sandoz Agreement | 2006 Sandoz Agreement | Mylan Collaboration Agreement | CSL Collaboration Agreement | Total | ||||||||||||||||
Product revenue | $ | — | $ | 13,621 | $ | — | $ | — | $ | 13,621 | ||||||||||
Research and development revenue | — | 632 | 631 | — | 1,263 | |||||||||||||||
Total collaboration revenue | $ | — | $ | 14,253 | $ | 631 | $ | — | $ | 14,884 | ||||||||||
Operating expenses: | ||||||||||||||||||||
Research and development expense | — | 448 | 5,929 | 189 | 6,566 | |||||||||||||||
General and administrative expense | 3,282 | 22 | 571 | 7 | 3,882 | |||||||||||||||
Net amount (recovered from) / payable to collaborators | — | — | (2,890 | ) | 2,223 | (667 | ) | |||||||||||||
Total operating expenses | $ | 3,282 | $ | 470 | $ | 3,610 | $ | 2,419 | $ | 9,781 |
For the Three Months Ended September 30, 2017 | ||||||||||||||||||||
2003 Sandoz Agreement | 2006 Sandoz Agreement | Mylan Collaboration Agreement | CSL Collaboration Agreement | Total | ||||||||||||||||
Product revenue | $ | — | $ | 10,890 | $ | — | $ | — | $ | 10,890 | ||||||||||
Research and development revenue | 60 | 10,673 | 1,122 | 1,345 | 13,200 | |||||||||||||||
Total collaboration revenue | $ | 60 | $ | 21,563 | $ | 1,122 | $ | 1,345 | $ | 24,090 | ||||||||||
Operating expenses: | ||||||||||||||||||||
Research and development expense | $ | 21 | $ | 422 | $ | 14,709 | $ | 2,544 | $ | 17,696 | ||||||||||
General and administrative expense | 3,780 | 119 | 1,004 | 36 | 4,939 | |||||||||||||||
Net amount (recovered from) / payable to collaborators | — | — | (7,046 | ) | (837 | ) | (7,883 | ) | ||||||||||||
Total operating expenses | $ | 3,801 | $ | 541 | $ | 8,667 | $ | 1,743 | $ | 14,752 |
For the Nine Months Ended September 30, 2018 | ||||||||||||||||||||
2003 Sandoz Agreement | 2006 Sandoz Agreement | Mylan Collaboration Agreement | CSL Collaboration Agreement | Total | ||||||||||||||||
Product revenue | $ | — | $ | 28,921 | $ | — | $ | — | $ | 28,921 | ||||||||||
Research and development revenue | 7 | 1,943 | 1,896 | — | 3,846 | |||||||||||||||
Total collaboration revenue | $ | 7 | $ | 30,864 | $ | 1,896 | $ | — | $ | 32,767 | ||||||||||
Operating expenses: | ||||||||||||||||||||
Research and development expense | $ | — | $ | 698 | $ | 22,438 | $ | 778 | $ | 23,914 | ||||||||||
General and administrative expense | 8,901 | 103 | 1,691 | 28 | 10,723 | |||||||||||||||
Net amount (recovered from) / payable to collaborators | — | — | (7,742 | ) | 6,356 | (1,386 | ) | |||||||||||||
Total operating expenses | $ | 8,901 | $ | 801 | $ | 16,387 | $ | 7,162 | $ | 33,251 |
For the Nine Months Ended September 30, 2017 | ||||||||||||||||||||
2003 Sandoz Agreement | 2006 Sandoz Agreement | Mylan Collaboration Agreement | CSL Collaboration Agreement | Total | ||||||||||||||||
Product revenue | $ | — | $ | 53,434 | $ | — | $ | — | $ | 53,434 | ||||||||||
Research and development revenue | 2,822 | 11,653 | 4,299 | 2,066 | 20,840 | |||||||||||||||
Total collaboration revenue | $ | 2,822 | $ | 65,087 | $ | 4,299 | $ | 2,066 | $ | 74,274 | ||||||||||
Operating expenses: | ||||||||||||||||||||
Research and development expense | $ | 1,958 | $ | 1,575 | $ | 44,381 | $ | 7,115 | $ | 55,029 | ||||||||||
General and administrative expense | 13,410 | 356 | 2,496 | 98 | 16,360 | |||||||||||||||
Net amount (recovered from) collaborators | — | — | (19,982 | ) | (4,333 | ) | (24,315 | ) | ||||||||||||
Total operating expenses | $ | 15,368 | $ | 1,931 | $ | 26,895 | $ | 2,880 | $ | 47,074 |
For the Three Months Ended September 30, 2018 | For the Three Months Ended September 30, 2017 | For the Nine Months Ended September 30, 2018 | For the Nine Months Ended September 30, 2017 | |||||||||||||
Research and development | $ | 1,870 | $ | 1,860 | $ | 5,933 | $ | 6,083 | ||||||||
General and administrative | 3,000 | 3,056 | 8,983 | 10,226 | ||||||||||||
Restructuring | $ | 5,256 | $ | — | $ | 5,256 | $ | — | ||||||||
Total share-based compensation expense | $ | 10,126 | $ | 4,916 | $ | 20,172 | $ | 16,309 |
For the Three Months Ended September 30, 2018 | For the Three Months Ended September 30, 2017 | For the Nine Months Ended September 30, 2018 | For the Nine Months Ended September 30, 2017 | |||||||||||||
Stock options | $ | 1,819 | $ | 2,494 | $ | 5,720 | $ | 7,819 | ||||||||
Restricted stock awards and restricted stock units | 2,951 | 2,289 | 8,914 | 8,120 | ||||||||||||
Employee stock purchase plan | 100 | 133 | 282 | 370 | ||||||||||||
Restructuring | 5,256 | — | 5,256 | — | ||||||||||||
Total share-based compensation expense | $ | 10,126 | $ | 4,916 | $ | 20,172 | $ | 16,309 |
Weighted Average Assumptions | ||||||||||||
Stock Options | Employee Stock Purchase Plan | |||||||||||
For the Three Months Ended September 30, 2018 | For the Three Months Ended September 30, 2017 | For the Three Months Ended September 30, 2018 | For the Three Months Ended September 30, 2017 | |||||||||
Expected volatility | 48 | % | 50 | % | 48 | % | 52 | % | ||||
Expected dividends | — | — | — | — | ||||||||
Expected life (years) | 5.9 | 6.2 | 0.5 | 0.5 | ||||||||
Risk-free interest rate | 3.0 | % | 2.0 | % | 1.9 | % | 0.9 | % |
Weighted Average Assumptions | ||||||||||||
Stock Options | Employee Stock Purchase Plan | |||||||||||
For the Nine Months Ended September 30, 2018 | For the Nine Months Ended September 30, 2017 | For the Nine Months Ended September 30, 2018 | For the Nine Months Ended September 30, 2017 | |||||||||
Expected volatility | 48 | % | 53 | % | 49 | % | 55 | % | ||||
Expected dividends | — | — | — | — | ||||||||
Expected life (years) | 6.1 | 5.8 | 0.5 | 0.5 | ||||||||
Risk-free interest rate | 2.8 | % | 2.1 | % | 1.6 | % | 0.7 | % |
Charges incurred during the period ended September 30, 2018 | Amount paid through September 30, 2018 | Less: non-cash charges during the period ended September 30, 2018 | Remaining liability at September 30, 2018 | |||||||||||||
Employee severance, bonus and other | $ | 8,674 | $ | — | $ | — | $ | 8,674 | ||||||||
Acceleration of stock-based compensation | 5,256 | — | (5,256 | ) | — | |||||||||||
Impairment of equipment | 1,605 | — | (1,605 | ) | — | |||||||||||
Total restructuring charges | $ | 15,535 | $ | — | $ | (6,861 | ) | $ | 8,674 |
October 1 to December 31, 2018 | $ | 3,787 | |
2019 | 15,418 | ||
2020 | 15,872 | ||
2021 | 16,266 | ||
2022 | 16,644 | ||
2023 and beyond | 60,896 | ||
Total future minimum lease payments | $ | 128,883 |
Three Months Ended September 30, | |||||||
2018 | 2017 | ||||||
Collaboration revenue: | (in thousands) | (in thousands) | |||||
Product revenue | $ | 13,621 | $ | 10,890 | |||
Research and development revenue | 1,263 | 13,200 | |||||
Total collaboration revenue | $ | 14,884 | $ | 24,090 |
Three Months Ended September 30, | Change period over period | |||||||||||||
2018 | 2017 | 2018 compared to 2017 | ||||||||||||
(in thousands) | (in thousands) | (in thousands) | (%) | |||||||||||
GLATOPA | $ | 13,621 | $ | 10,890 | $ | 2,731 | 25 | % |
Three Months Ended September 30, | Change period over period | ||||||||||||||||||
2018 | % of Total Operating Expenses | 2017 | % of Total Operating Expenses | 2018 compared to 2017 | |||||||||||||||
(in thousands) | (%) | (in thousands) | (%) | (in thousands) | (%) | ||||||||||||||
Operating expenses: | |||||||||||||||||||
Research and development | $ | 30,727 | 46 | % | $ | 37,914 | 65 | % | $ | (7,187 | ) | (19 | )% | ||||||
General and administrative | 20,437 | 31 | % | 20,703 | 35 | % | (266 | ) | 1 | % | |||||||||
Restructuring | 15,535 | 23 | % | — | — | % | 15,535 | 100 | % | ||||||||||
Total operating expenses | $ | 66,699 | 100 | % | $ | 58,617 | 100 | % | $ | 8,082 | 14 | % |
• | expenses incurred under agreements with consultants, third-party contract research organizations, or CROs, and investigative sites where all of our nonclinical studies and clinical trials are conducted; |
• | costs of acquiring reference comparator materials and manufacturing nonclinical study and clinical trial supplies and other materials from contract manufacturing organizations, or CMOs, and related costs associated with release and stability testing; and |
• | costs associated with process development activities. |
• | personnel-related expenses, which include salaries, benefits and share-based compensation; and |
• | facilities and other allocated expenses, which include direct and allocated expenses for rent and maintenance of facilities, depreciation and amortization of leasehold improvements and equipment and laboratory and other supplies. |
Phase of Development as of | Three Months Ended September 30, | ||||||||
September 30, 2018 | 2018 | 2017 | |||||||
(in thousands) | (in thousands) | ||||||||
External Costs Incurred by Product Area: | |||||||||
Complex Generics(1) | (1) | $ | 448 | $ | 443 | ||||
Biosimilars | Various(2) | 632 | 14,581 | ||||||
Novel Therapeutics | Various(3) | 11,676 | 2,995 | ||||||
Internal Costs | 17,971 | 19,895 | |||||||
Total Research and Development Expenses | $ | 30,727 | $ | 37,914 |
(1) | Includes external costs for GLATOPA and Enoxaparin Sodium Injection. In July 2010, the first ANDA for Enoxaparin Sodium Injection was approved by the FDA, and Sandoz launched the product. In April 2015, the FDA approved the ANDA for once-daily GLATOPA 20 mg/mL. Sandoz launched GLATOPA 20 mg/mL in June 2015. In February 2018, the FDA approved the ANDA for three-times-weekly GLATOPA 40 mg/mL, and Sandoz launched the product. For more information on GLATOPA 40 mg/mL, see "—Overview—Complex Generics—GLATOPA® 40 mg/mL—Generic Three-times-weekly COPAXONE® (glatiramer acetate injection) 40 mg/mL." |
(2) | Biosimilars are M923, a biosimilar candidate of HUMIRA® (adalimumab), M834, a biosimilar candidate of ORENCIA® (abatacept), M710, a biosimilar candidate of EYLEA® (aflibercept)., as well as four other biosimilar candidates. We intend to submit a biologics license application for M923 with the FDA in the fourth quarter of 2018. For M710, Mylan initiated a pivotal clinical trial in patients in the United States in August 2018. On October 1, 2018, we announced we have initiated discussions with Mylan to exit our participation in the development of our biosimilar programs other than M923 and M710. |
(3) | Our novel therapeutic programs include M281, for which we are planning to commence two proof of concept clinical trials in the fourth quarter of 2018; M230, for which our licensee's, CSL's, Phase I study in healthy volunteers to evaluate safety and tolerability of M230 is ongoing and is targeted for completion in 2019; M254, for which we have completed our IND-enabling toxicology study and intend to initiate a Phase 1/2 clinical study in early 2019; as well as other discovery and nonclinical stage programs. |
Nine Months Ended September 30, | |||||||
2018 | 2017 | ||||||
Collaboration revenue: | (in thousands) | (in thousands) | |||||
Product revenue | $ | 28,921 | $ | 53,434 | |||
Research and development revenue | 3,846 | 20,840 | |||||
Total collaboration revenue | $ | 32,767 | $ | 74,274 |
Nine Months Ended September 30, | Change period over period | |||||||||||||
2018 | 2017 | 2018 compared to 2017 | ||||||||||||
(in thousands) | (in thousands) | (in thousands) | (%) | |||||||||||
GLATOPA | $ | 28,921 | $ | 53,434 | $ | (24,513 | ) | (46 | )% |
Nine Months Ended September 30, | Change period over period | ||||||||||||||||||
2018 | % of Total Operating Expenses | 2017 | % of Total Operating Expenses | 2018 compared to 2017 | |||||||||||||||
(in thousands) | (%) | (in thousands) | (%) | (in thousands) | (%) | ||||||||||||||
Operating expenses: | |||||||||||||||||||
Research and development | $ | 95,309 | 47 | % | $ | 113,078 | 63 | % | $ | (17,769 | ) | (16 | )% | ||||||
General and administrative | 63,580 | 31 | % | 66,380 | 37 | % | (2,800 | ) | (4 | )% | |||||||||
Restructuring | 15,535 | 7 | % | — | — | % | 15,535 | 100 | % | ||||||||||
Other operating expense | 30,000 | 15 | % | — | — | % | 30,000 | 100 | % | ||||||||||
Total operating expenses | $ | 204,424 | 100 | % | $ | 179,458 | 100 | % | $ | 24,966 | 14 | % |
Phase of Development as of | Nine Months Ended September 30, | ||||||||
September 30, 2018 | 2018 | 2017 | |||||||
(in thousands) | (in thousands) | ||||||||
External Costs Incurred by Product Area: | |||||||||
Complex Generics(1) | (1) | $ | 698 | $ | 3,533 | ||||
Biosimilars | Various(2) | 5,658 | 41,091 | ||||||
Novel Therapeutics | Various(3) | 26,276 | 9,106 | ||||||
Internal Costs | 62,677 | 59,348 | |||||||
Total Research and Development Expenses | $ | 95,309 | $ | 113,078 |
(1) | Includes external costs for GLATOPA and Enoxaparin Sodium Injection. In July 2010, the first ANDA for Enoxaparin Sodium Injection was approved by the FDA, and Sandoz launched the product. In April 2015, the FDA approved the ANDA for once-daily GLATOPA 20 mg/mL. Sandoz launched GLATOPA 20 mg/mL in June 2015. In February 2018, the FDA approved the ANDA for three-times-weekly GLATOPA 40 mg/mL, and Sandoz launched the product. For more information on GLATOPA 40 mg/mL, see "—Overview—Complex Generics—GLATOPA® 40 mg/mL—Generic Three-times-weekly COPAXONE® (glatiramer acetate injection) 40 mg/mL." |
(2) | Biosimilars are M923, a biosimilar candidate of HUMIRA® (adalimumab), M834, a biosimilar candidate of ORENCIA® (abatacept), M710, a biosimilar candidate of EYLEA® (aflibercept), as well as four other biosimilar candidates. We intend to submit a biologics license application for M923 with the FDA in the fourth quarter of 2018. |
(3) | Our novel therapeutic programs include M281, for which are planning to commence two proof of concept clinical trials in the fourth quarter of 2018; M230, for which our licensee's, CSL's, Phase I study in healthy volunteers to evaluate safety and tolerability of M230 is ongoing and is targeted for completion in 2019; M254, for which we have completed our IND-enabling toxicology study and intend to initiate a Phase 1/2 clinical study in early 2019; as well as other discovery and nonclinical stage programs. |
Nine Months Ended September 30, | ||||||||
2018 | 2017 | |||||||
(in thousands) | ||||||||
Net cash (used in) provided by operating activities | $ | (121,392 | ) | $ | 9,124 | |||
Net cash provided by (used in) investing activities | $ | 81,509 | $ | (59,327 | ) | |||
Net cash provided by financing activities | $ | 27,751 | $ | 73,574 | ||||
Net (decrease) increase in cash, cash equivalents, and restricted cash | $ | (12,132 | ) | $ | 23,371 |
• | settling patent lawsuits with generic or biosimilar companies, resulting in such patents remaining an obstacle for generic or biosimilar approval by others; |
• | seeking to restrict biosimilar commercialization options by seeking to delay the right to adjudicate patent rights under Section 351(l) of the Biologics Price, Competition and Innovation Act or restricting access by biosimilar and generic |
• | settling paragraph IV patent litigation with generic companies to prevent the expiration of the 180-day generic marketing exclusivity period or to delay the triggering of such exclusivity period; |
• | submitting Citizen Petitions to request the FDA Commissioner to take administrative action with respect to prospective and submitted generic drug or biosimilar applications or to influence the adoption of policy with regard to the submission of biosimilar applications; |
• | appealing denials of Citizen Petitions in United States federal district courts and seeking injunctive relief to reverse approval of generic drug or biosimilar applications; |
• | restricting access to reference products for equivalence and biosimilarity testing that interfere with timely generic and biosimilar development plans, respectively; |
• | conducting medical education with physicians, payers and regulators that claim that generic or biosimilar products are too complex for generic or biosimilar approval and influence potential market share; |
• | seeking state law restrictions on the substitution of generic and biosimilar products at the pharmacy without the intervention of a physician or through other restrictive means such as excessive recordkeeping requirements or patient and physician notification; |
• | seeking federal or state regulatory restrictions on the use of the same non-proprietary name as the reference brand product for a biosimilar or interchangeable biologic; |
• | seeking federal reimbursement policies that do not promote adoption of biosimilars and interchangeable biologics; |
• | seeking changes to the United States Pharmacopeia, an industry recognized compilation of drug and biologic standards; |
• | pursuing new patents for existing products or processes which could extend patent protection for a number of years or otherwise delay the launch of generic drugs or biosimilars; and |
• | influencing legislatures so that they attach special regulatory exclusivity or patent extension amendments to unrelated federal legislation. |
• | significantly greater financial, technical and human resources than we have at every stage of the discovery, development, manufacturing and commercialization process; |
• | more extensive experience in commercializing generic drugs, biosimilars and novel therapeutics, conducting nonclinical studies, conducting clinical trials, obtaining regulatory approvals, challenging patents and manufacturing and marketing pharmaceutical products; |
• | products that have been approved or are in late stages of development; and |
• | collaborative arrangements in our target markets with leading companies and/or research institutions. |
• | the safety and effectiveness of our products; |
• | with regard to our generic products and our generic and biosimilar product candidates, the differential availability of clinical data and experience and willingness of physicians, payers and formularies to rely on biosimilarity data; |
• | the timing and scope of regulatory approvals for these products and regulatory opposition to any product approvals; |
• | the availability and cost of manufacturing, marketing, distribution and sales capabilities; |
• | the effectiveness of our marketing, distribution and sales capabilities; |
• | the price of our products; |
• | the availability and amount of discounts, rebates and third-party reimbursement for our products; and |
• | the strength of our patent positions. |
• | the timing of our receipt of any marketing approvals, the terms of any approval and the countries in which approvals are obtained; |
• | the safety, efficacy and ease of administration of our products; |
• | the competitive pricing of our products; |
• | physician confidence in the safety and efficacy of complex generic products or biosimilars; |
• | the absence of, or limited clinical data available from, sameness testing of our complex generic products and biosimilarity or interchangeability testing of our biosimilar products; |
• | the success and extent of our physician education and marketing programs; |
• | the clinical, medical affairs, sales, distribution and marketing efforts of competitors; and |
• | the availability and amount of government and third-party payer reimbursement. |
• | we may find that the acquired company or assets does not further our business strategy, or that we overpaid for the company or assets, or that economic conditions change, all of which may generate a future impairment charge; |
• | difficulty integrating the operations and personnel of the acquired business, and difficulty retaining the key personnel of the acquired business; |
• | difficulty incorporating the acquired technologies; |
• | difficulties or failures with the performance of the acquired technologies or products; |
• | we may face product liability risks associated with the sale of the acquired company’s products; |
• | disruption or diversion of management’s attention by transition or integration issues and the complexity of managing diverse locations; |
• | difficulty maintaining uniform standards, internal controls, procedures and policies; |
• | the acquisition may result in litigation from terminated employees or third parties; and |
• | we may experience significant problems or liabilities associated with product quality, technology and legal contingencies. |
• | the level of sales of GLATOPA 20 mg/mL and of GLATOPA 40 mg/mL; |
• | the successful commercialization of our other product candidates; |
• | the impact of prior or contemporaneous competition on our products and product candidates, such as Mylan N.V.'s generic equivalents of COPAXONE 20 mg/mL and 40 mg/mL on GLATOPA 20 mg/mL and GLATOPA 40 mg/mL; |
• | the cost of advancing our product candidates and funding our development programs, including the costs of nonclinical and clinical studies, obtaining reference product for nonclinical and clinical studies, manufacturing nonclinical and clinical supply material, and obtaining regulatory approvals; |
• | the receipt of continuation payments under our Mylan Collaboration Agreement; |
• | the receipt of milestone payments under our CSL License Agreement; |
• | the continuation without disruption of development and manufacturing activities of M923; |
• | the timing of FDA approval of the products of our competitors; |
• | the cost of litigation maintaining and enforcing our intellectual property rights and defending intellectual property related claims, including with Amphastar relating to Enoxaparin Sodium Injection, that is not otherwise covered by our collaboration agreements, or potential patent litigation with others, as well as any damages, including possibly treble damages, that may be owed to third parties should we be unsuccessful in such litigation; |
• | the ability to enter into additional strategic alliances for our non-partnered programs, such as M923, as well as the terms and timing of any milestone, royalty or profit share payments thereunder; |
• | the scope, progress, results and costs of our research and development programs, including completion of our nonclinical studies and clinical trials; |
• | the cost of acquiring and/or in-licensing other technologies, products or assets; and |
• | the cost of manufacturing, marketing and sales activities, if any. |
• | regulators or institutional review boards may not authorize us to commence a clinical trial or conduct a clinical trial at a prospective trial site; |
• | our nonclinical studies or clinical trials may produce negative or inconclusive results, and we may be required to conduct additional nonclinical studies or clinical trials or we may abandon projects that we previously expected to be promising; |
• | enrollment in our clinical trials may be slower than we anticipate, resulting in significant delays, and participants may drop out of our clinical trials at a higher rate than we anticipate; |
• | we might have to suspend or terminate our clinical trials if the participants are being exposed to unacceptable health risks; |
• | regulators or institutional review boards may require that we hold, suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements or if, in their opinion, participants are being exposed to unacceptable health risks; |
• | the cost of our clinical trials may be greater than we anticipate; |
• | the effects of our product candidates may not be the desired effects or may include undesirable side effects or our product candidates may have other unexpected characteristics; and |
• | we may decide to modify or expand the clinical trials we are undertaking if new agents are introduced that influence current standard of care and medical practice, warranting a revision to our clinical development plan. |
• | a requirement for the applicant, as a condition to using the pre-approval patent exchange and clearance process, to share, in confidence, the information in its abbreviated pathway application with the reference product company’s and patent owner’s counsel; |
• | the inclusion of multiple potential patent rights in the patent clearance process; and |
• | a grant to each reference product company of 12 years of marketing exclusivity following the reference product approval. |
• | a covered benefit under its health plan; |
• | safe, effective and medically necessary; |
• | appropriate for the specific patient; |
• | cost-effective; and |
• | neither experimental nor investigational. |
• | competition in seeking appropriate collaborators; |
• | restrictions on future strategic alliances in existing strategic alliance agreements; |
• | a reduced number of potential collaborators due to recent business combinations of large pharmaceutical companies; |
• | inability to negotiate strategic alliances on a timely basis; and |
• | inability to negotiate strategic alliances on acceptable terms. |
• | a classified board of directors; |
• | a prohibition on actions by our stockholders by written consent; and |
• | limitations on the removal of directors. |
• | delays in achievement of, or failure to achieve, program milestones that are associated with the valuation of our company or significant milestone revenue; |
• | failure of GLATOPA 20 mg/mL to sustain or GLATOPA 40 mg/mL to achieve profitable sales or market share that meet expectations of securities analysts; |
• | litigation involving our company or our general industry or both; |
• | a decision in favor of, or against, Amphastar in our patent litigation suits, a settlement related to any case; or a decision in favor of third parties in antitrust litigation filed against us; |
• | announcements by other companies regarding the status of their ANDAs for generic versions of COPAXONE; |
• | FDA approval of other companies’ ANDAs for generic versions of COPAXONE; |
• | marketing and/or launch of other companies’ generic versions of COPAXONE, such as Mylan N.V.'s October 2017 launch of its generic equivalents of COPAXONE 20 mg/mL and 40 mg/mL; |
• | adverse FDA decisions regarding the development requirements for one of our biosimilar product candidates or failure of our other product applications to meet the requirements for regulatory review and/or approval; |
• | results or delays in our or our competitors’ clinical trials or regulatory filings; |
• | enactment of legislation that repeals the law enacting the biosimilar regulatory approval pathway or amends the law in a manner that is adverse to our biosimilar development strategy; |
• | failure to demonstrate biosimilarity or interchangeability with respect to our biosimilar product candidates such as M923 or M710; |
• | demonstration of or failure to demonstrate the safety and efficacy for our novel product candidates; |
• | our inability to manufacture any products in conformance with cGMP or in sufficient quantities to meet the requirements for the commercial sale of the product or to meet market demand; |
• | failure of any of our product candidates, if approved, to achieve commercial success; |
• | the discovery of unexpected or increased incidence in patients’ adverse reactions to the use of our products or product candidates or indications of other safety concerns; |
• | developments or disputes concerning our patents or other proprietary rights; |
• | changes in estimates of our financial results or recommendations by securities analysts; |
• | termination of any of our product development and commercialization collaborations; |
• | significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors; |
• | investors’ general perception of our company, our products, the economy and general market conditions; |
• | rapid or disorderly sales of stock by holders of significant amounts of our stock; or |
• | significant fluctuations in the price of securities generally or biotechnology company securities specifically. |
Incorporated by Reference to | ||||||||||
Exhibit Number | Description | Form or Schedule | Exhibit No. | Filing Date with SEC | SEC File Number | |||||
3.1 | S-3 | 3.1 | 4/30/2013 | 333-188227 | ||||||
3.2 | 8-K | 3.1 | 3/17/2017 | 000-50797 | ||||||
*31.1 | ||||||||||
*31.2 | ||||||||||
**32.1 | ||||||||||
*101.INS | XBRL Instance Document. | |||||||||
*101.SCH | XBRL Taxonomy Extension Schema Document. | |||||||||
*101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document. | |||||||||
*101.DEF | XBRL Taxonomy Extension Definition Linkbase Document. | |||||||||
*101.LAB | XBRL Taxonomy Extension Label Linkbase Document. | |||||||||
*101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document. |
* | Filed herewith. |
** | Furnished herewith. |
Momenta Pharmaceuticals, Inc. | ||
Date: November 7, 2018 | By: | /s/ Craig A. Wheeler |
Craig A. Wheeler, President and Chief Executive Officer | ||
(Principal Executive Officer) | ||
Date: November 7, 2018 | By: | /s/ Michelle Robertson |
Michelle Robertson, Senior Vice President and Chief Financial Officer | ||
(Principal Financial and Accounting Officer) | ||
1. | I have reviewed this Quarterly Report on Form 10-Q of Momenta Pharmaceuticals, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
Dated: November 7, 2018 | /s/ Craig A. Wheeler |
Craig A. Wheeler | |
President and Chief Executive Officer | |
1. | I have reviewed this Quarterly Report on Form 10-Q of Momenta Pharmaceuticals, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
Dated: November 7, 2018 | /s/ Michelle Robertson |
Michelle Robertson | |
Senior Vice President and Chief Financial Officer |
Dated: November 7, 2018 | /s/ Craig A. Wheeler |
Craig A. Wheeler | |
President and Chief Executive Officer | |
Dated: November 7, 2018 | /s/ Michelle Robertson |
Michelle Robertson | |
Senior Vice President and Chief Financial Officer | |
Document and Entity Information - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2018 |
Nov. 01, 2018 |
|
Document and Entity Information | ||
Entity Registrant Name | MOMENTA PHARMACEUTICALS INC | |
Entity Central Index Key | 0001235010 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 78,559,960 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Statement of Financial Position [Abstract] | ||
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) | 78,608,000 | 76,584,000 |
Common stock, shares outstanding (in shares) | 78,378,000 | 76,355,000 |
Treasury stock, at cost (in shares) | 229,000 | 229,000 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Collaboration revenue: | ||||
Collaboration revenue | $ 14,884 | $ 24,090 | $ 32,767 | $ 74,274 |
Operating expenses: | ||||
Research and development | 30,727 | 37,914 | 95,309 | 113,078 |
General and administrative | 20,437 | 20,703 | 63,580 | 66,380 |
Restructuring | 15,535 | 0 | 15,535 | 0 |
Other operating expense | 0 | 0 | 30,000 | 0 |
Total operating expenses | 66,699 | 58,617 | 204,424 | 179,458 |
Operating loss | (51,815) | (34,527) | (171,657) | (105,184) |
Other income, net | 1,515 | 1,339 | 3,841 | 3,329 |
Net loss | $ (50,300) | $ (33,188) | $ (167,816) | $ (101,855) |
Basic and diluted net loss per share (in dollars per share) | $ (0.65) | $ (0.44) | $ (2.20) | $ (1.40) |
Weighted average shares used in computing basic and diluted net loss per share (in shares) | 77,229 | 74,611 | 76,415 | 72,585 |
Comprehensive loss: | ||||
Net loss | $ (50,300) | $ (33,188) | $ (167,816) | $ (101,855) |
Net unrealized holding (loss) gain on available-for-sale marketable securities | 137 | 52 | (24) | (39) |
Comprehensive loss | (50,163) | (33,136) | (167,840) | (101,894) |
Product revenue | ||||
Collaboration revenue: | ||||
Collaboration revenue | 13,621 | 10,890 | 28,921 | 53,434 |
Research and development revenue | ||||
Collaboration revenue: | ||||
Collaboration revenue | $ 1,263 | $ 13,200 | $ 3,846 | $ 20,840 |
The Company |
9 Months Ended |
---|---|
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
The Company | The Company Business Overview Momenta Pharmaceuticals, Inc., referred to as Momenta or the Company, was incorporated in the state of Delaware in May 2001 and began operations in early 2002. Its facilities are located in Cambridge, Massachusetts. Momenta is a biotechnology company focused on developing novel therapeutics for autoimmune diseases and biosimilars. The Company presently derives all of its revenue from its collaborations. |
Summary of Significant Accounting Policies |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation In the opinion of management, the accompanying unaudited, condensed consolidated financial statements include all adjustments, consisting of normal recurring accruals, necessary for a fair presentation of the Company's financial statements for interim periods in accordance with accounting principles generally accepted in the United States, or U.S. GAAP. The information included in this quarterly report on Form 10-Q should be read in conjunction with the Company's audited consolidated financial statements and the accompanying notes included in its Annual Report on Form 10-K for the year ended December 31, 2017 filed with the Securities and Exchange Commission, or SEC, on February 26, 2018. The Company's accounting policies are described in the “Notes to Consolidated Financial Statements” in its Annual Report on Form 10-K for the year ended December 31, 2017 and updated, as necessary, in this Form 10-Q. The year-end condensed consolidated balance sheet data presented for comparative purposes was derived from the Company's audited financial statements, but does not include all disclosures required by U.S. GAAP. The results of operations for the three and nine months ended September 30, 2018, are not necessarily indicative of the operating results for the full year or for any other subsequent interim period. Consolidation The accompanying unaudited, condensed consolidated financial statements reflect the operations of the Company and the Company’s wholly-owned subsidiaries, Momenta Pharmaceuticals Securities Corporation and Momenta Ireland Limited. Intercompany balances and transactions are eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that may affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates and judgments, including those related to revenue recognition, accrued expenses, and share-based payments. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates. Revenue Recognition Effective January 1, 2018, the Company adopted Accounting Standards Codification, or ASC, Topic 606, Revenue from Contracts with Customers, using the modified retrospective transition method as permissible for all contracts not yet completed as of January 1, 2018. This standard applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance, collaboration arrangements and financial instruments. Under Topic 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of Topic 606, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. License Agreements The Company has entered into license arrangements with pharmaceutical companies for the development and commercialization of product candidates. The terms of these agreements may include (i) transfer of intellectual property rights (licenses) and (ii) providing research and development services. Payments made by the customers may include non-refundable upfront license fees, payments for research and development activities, payments based upon the achievement of defined collaboration objectives and a share of profits on net sales of licensed products. If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes the transaction price allocated to the license as revenue upon transfer of control of the license. The Company evaluates all other promised goods or services in the license agreement to determine if they are distinct. If they are not distinct, they are combined with other promised goods or services to create a bundle of promised goods or services that is distinct. Optional future services that reflect their standalone selling prices do not provide the customer with a material right and, therefore, are not considered performance obligations. If optional future services reflect a significant or incremental discount, they are material rights, and are accounted for as performance obligations. The Company utilizes judgment to determine the transaction price. The Company evaluates contingent milestones to estimate the amount which is not probable of a material reversal to include in the transaction price using the most likely amount method. Milestone payments that are not within the control of the Company, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. The transaction price is then allocated to each performance obligation on a relative stand-alone selling price basis, for which the Company recognizes revenue as or when the performance obligations under the contract are satisfied. At the end of each reporting period, the Company re-evaluates the probability of achieving development milestone payments which may not be subject to a material reversal, and if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect research and development revenue and earnings in the period of adjustment. The Company then determines whether the performance obligations or combined performance obligations are satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable, upfront fees. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. The Company may earn a contractual percentage of a licensor’s revenues or profits after the successful development and commercialization of a licensed product. A sales or usage-based royalty on a license of intellectual property where the license is the predominant item to which the royalty relates is eligible for an exception to the standard revenue recognition model under Topic 606. Under this exception, an entity is permitted to (i) exclude such amounts from the initial determination of the transaction price (hence no amounts to allocate amongst the performance obligations) and (ii) defer recognition until underlying sales occur. The amount of net sales and contractual profit is determined based on information provided by the licensor and involves the use of estimates and judgments, such as product sales allowances and accruals related to prompt payment discounts, chargebacks, governmental and other rebates, distributor, wholesaler and group purchasing organizations fees, product returns, and co-payment assistance costs, which could be adjusted based on actual results in the future. Net sales and contractual profit may also include or exclude other amounts as defined in an agreement. The Company is highly dependent on the licensor for timely and accurate information regarding any net revenues realized from sales of the licensed products in order to accurately report its results of operations. Sales-based milestones and profit share revenues are recognized as revenue when sales thresholds are met under the sales or usage-based royalty exception under Topic 606. Collaborative Arrangements The Company considers the nature and contractual terms of the arrangement and assesses whether the arrangement involves a joint operating activity pursuant to which the Company is an active participant and is exposed to significant risks and rewards with respect to the arrangement. If the Company is an active participant and is exposed to significant risks and rewards with respect to the arrangement, the Company accounts for the arrangement as a collaboration under Topic 808, Collaborative Arrangements. Topic 808 describes arrangements within its scope and considerations surrounding presentation and disclosure, with recognition matters subjected to other authoritative guidance, in certain cases by analogy. With respect to consideration other than cost sharing payments received from a collaboration partner, the Company has applied an accounting policy to analogize to other accounting guidance concerning revenue recognition, specifically Topic 606. Payments received from a collaboration partner to which this policy applies may include upfront payments in respect of a license of intellectual property, development milestones, profit share payments, and sales-based milestones. The Company classifies the payments received or made under the cost sharing provisions of the arrangement as a component of research and development or general and administrative expense, respectively, to reflect the joint risk sharing nature of the payment received or made. Impact of Adoption Under the modified retrospective transition method, the Company applied Topic 606 to all contracts within its scope as of January 1, 2018. Under the practical expedient concerning contract modifications contained in the transitional provisions of Topic 606, the Company has not retrospectively restated its contracts for modifications prior to the earliest period presented, and instead has reflected the aggregate effect of all modifications when identifying the satisfied and unsatisfied performance obligations, determining the transaction price and allocating the transaction price. Qualitatively, the effect of applying this practical expedient is not material to the periods presented in the consolidated financial statements. As more fully discussed in Note 5, "License Agreements and Collaborative Agreements", only the arrangement with Mylan was determined to have unsatisfied performance obligations as of the adoption date for which the pattern of revenue recognition would change. All other agreements were unaffected by the adoption of Topic 606 in all periods presented in the consolidated financial statements through application of the modified retrospective transition method. As a result of adopting Topic 606, the Company recorded a $5.5 million cumulative transition adjustment to the opening balance of accumulated deficit on January 1, 2018 to reflect the use of a proportional performance method using costs incurred as an input measure of progress in satisfying performance obligations under the Mylan collaboration. The Company previously applied a straight-line method of recognition through the expected date of the Food and Drug Administration's, or FDA, approval for each product candidate. The tables below include the amount by which each financial statement line item was affected as a result of applying or analogizing (with respect to the Company’s collaboration agreements) to Topic 606 as compared to the previous accounting policy. The amounts in the tables below are in thousands. Condensed Consolidated Statement of Operations and Comprehensive Loss
Condensed Consolidated Balance Sheet
Condensed Consolidated Statement of Cash Flows
Collaboration Receivable Collaboration receivable includes:
The Company has not recorded any allowance for uncollectible accounts or bad debt write-offs and it monitors its receivables to facilitate timely payment. Collaboration Liability Collaboration liability includes:
Deferred Revenue Deferred revenue represents a contract liability associated with consideration received from collaborators in advance of achieving certain criteria that must be met for revenue to be recognized in conformity with GAAP. Net Loss Per Common Share Basic net loss per common share is calculated by dividing net loss by the weighted average number of common shares outstanding during the period, which includes common stock issued and outstanding and excludes unvested shares of restricted stock awards and units. Diluted net loss per common share is calculated by dividing net loss by the weighted average number of common shares and potential shares from outstanding stock options and unvested restricted stock awards and units determined by applying the treasury stock method. The following table presents anti-dilutive shares for the three and nine months ended September 30, 2018 and 2017 (in thousands):
Fair Value Measurements The tables below present information about the Company’s assets that are regularly measured and carried at fair value and indicate the level within the fair value hierarchy of the valuation techniques utilized to determine such fair value (in thousands):
The Company held $1.0 million and $11.3 million in overnight repurchase agreements as of September 30, 2018 and December 31, 2017, respectively. The instruments are classified as Level 2 due to the collateral including both U.S. government-sponsored enterprise securities and treasury instruments. There have been no impairments of the Company’s assets measured and carried at fair value during the three and nine months ended September 30, 2018 and 2017. In addition, there were no changes in valuation techniques or transfers between the fair value measurement levels during the three and nine months ended September 30, 2018. The fair value of Level 2 instruments classified as marketable securities were determined through third party pricing services. For a description of the Company’s validation procedures related to prices provided by third party pricing services, refer to Note 2, “Summary of Significant Accounting Policies: Fair Value Measurements”, to the Company’s consolidated financial statements in its Annual Report on Form 10-K for the year ended December 31, 2017. The carrying amounts reflected in the Company’s consolidated balance sheets for cash, collaboration receivable, other current assets, accounts payable and accrued expenses approximate fair value due to their short-term maturities. Cash, Cash Equivalents and Marketable Securities The Company’s cash equivalents are composed of money market funds and overnight repurchase agreements. Money market funds are carried at fair value, which approximate cost at September 30, 2018 and December 31, 2017. Overnight repurchase agreement yields are comparable to money market funds where principal and interest on the instruments is due the next day. The Company classifies U.S. government-sponsored enterprise securities, corporate debt securities, certificates of deposit, commercial paper and asset-backed securities as short-term and long-term marketable securities in its consolidated financial statements. See Note 2, “Summary of Significant Accounting Policies: Cash, Cash Equivalents and Marketable Securities”, in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 for a discussion of the Company’s accounting policies. The following tables summarize the Company’s cash, cash equivalents and marketable securities as of September 30, 2018 and December 31, 2017 (in thousands):
Cash, Cash Equivalents, and Restricted Cash The following tables summarize the Company’s cash, cash equivalents and restricted cash as of September 30, 2018 and September 30, 2017 (in thousands):
Treasury Stock Treasury stock represents common stock currently owned by the Company as a result of shares withheld from the vesting of performance-based restricted common stock to satisfy minimum tax withholding requirements. Comprehensive Loss Comprehensive loss is the change in equity of a company during a period from transactions and other events and circumstances, excluding transactions resulting from investments by owners and distributions to owners. Comprehensive loss includes net loss and the change in accumulated other comprehensive loss for the period. Accumulated other comprehensive loss consists entirely of unrealized gains and losses on available-for-sale marketable securities for all periods presented. Accounting Pronouncements Adopted In November 2016, the FASB issued ASU No. 2016-18, Restricted Cash, or ASU 2016-18. The amendments in ASU 2016-18 require an entity to reconcile and explain the period-over-period change in total cash, cash equivalents and restricted cash within its statements of cash flows. A reporting entity must apply the amendments in ASU 2016-18 using a full retrospective approach. The retrospective adoption of ASU 2016-18 resulted in $23.0 million of restricted cash being included in cash, cash equivalents and restricted cash balances on the statement of cash flows for the period ended September 30, 2017. The Company included the necessary reconciliation above. On December 22, 2017, the SEC staff issued Staff Accounting Bulletin No. 118, or SAB 118, to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Reform Act. The Company has recognized the provisional tax impacts related to the revaluation of the deferred tax assets and liabilities and included these amounts in its consolidated financial statements for the year ended December 31, 2017. The ultimate impact may differ from these provisional amounts due to, among other things, additional analysis, changes in interpretations and assumptions the Company has made, additional regulatory guidance that may be issued, and actions the Company may take as a result of the Tax Reform Act. The accounting was completed when the 2017 U.S. corporate income tax return was filed, and no material differences arose as compared to provisional amounts initially reflected in the consolidated financial statements for the year ended December 31, 2017. New Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board, or FASB, or other standard setting bodies that the Company adopts as of the specified effective date. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The new standard requires that all lessees recognize the assets and liabilities that arise from leases on the balance sheet and disclose qualitative and quantitative information about its leasing arrangements. In July 2018, the FASB issued ASU No. 2018-11, which provides entities with an additional transition method to adopt Topic 842. Under the new transition method, an entity initially applies the new lease requirements at the adoption date, not the earliest period presented, and recognizes a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. The Company expects to elect this transition method at the adoption date of January 1, 2019. The Company also expects to elect a package of practical expedients, under which an entity need not reassess whether any expired or existing contracts are or contain leases, the lease classification for any expired or existing leases, or initial direct costs for any existing leases. The Company continues to evaluate the impact of the guidance on its financial position and results of operations, and anticipates recording additional right-of-use assets and corresponding liabilities on its consolidated balance sheet. In June 2018, the FASB issued ASU No. 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. The new standard largely aligns the accounting for share-based payment awards issued to employees and nonemployees by expanding the scope of ASC 718 to apply to nonemployee share-based transactions, as long as the transaction is not effectively a form of financing. The new guidance will be effective for the Company on January 1, 2019. The Company is currently evaluating the potential impact that this guidance may have on its consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Requirements for Fair Value Measurement. The new standard added, modified or removed disclosure requirements under Topic 820 for clarity and consistency. ASU 2018-13 is effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company does not believe the guidance will have a material impact on its financial statements. In August 2018, the FASB issued ASU No. 2018-15, Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. The amendment updates the accounting for implementation, setup, and other upfront costs for a customer in a hosting arrangement that is a service contract. The amendment is effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption of the amendment is permitted, including adoption in any interim period, for all entities. The amendment may be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company expects to adopt this amendment prospectively when effective, and does not expect the amendment will have a material impact on its financial statements. |
Restricted Cash |
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Restricted Cash | Restricted Cash The Company designated $17.5 million as collateral for a security bond posted in the litigation against Amphastar and International Medical Systems, Ltd., a wholly owned subsidiary of Amphastar Pharmaceuticals, Inc. Additional information regarding the litigation is discussed within Note 8, "Commitments and Contingencies" herein. The $17.5 million is held in an escrow account by Hanover Insurance. The Company classified this restricted cash as long-term as the timing of a final decision in the Enoxaparin Sodium Injection patent litigation is not known. The following table summarizes the amounts designated as collateral for letters of credit related to the lease of office and laboratory space in Cambridge, Massachusetts (collateral amounts are presented in thousands).
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Other Liabilities |
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Other Liabilities | Other Liabilities As of September 30, 2018 and December 31, 2017, other current and long-term liabilities consisted of the following (in thousands): Other Current Liabilities
Other Long-Term Liabilities
As of September 30, 2018, the Company included $15.0 million in other current liabilities in connection with the renegotiation with Human Genome Sciences, Inc. ("GSK") of certain remaining contractual obligations under a manufacturing services agreement. |
License Agreements and Collaborative Agreements |
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License Agreements and Collaborative Agreements | License Agreements and Collaborative Agreements Contracts with Customers 2003 Sandoz Agreement In 2003, the Company entered into a license agreement with Sandoz, or the 2003 Sandoz Agreement, to jointly develop, manufacture and commercialize enoxaparin sodium injection, a generic version of LOVENOX® (enoxaparin), in the United States, the licensed product. The Company and Sandoz agreed to exclusively work with each other to develop and commercialize the enoxaparin sodium injection for any and all medical indications within the United States. In addition, the Company granted Sandoz an exclusive license under its intellectual property rights to develop and commercialize injectable enoxaparin for all medical indications within the United States. The term of the agreement extends throughout the development and commercialization of the products until the last sale of the products, unless earlier terminated by either party. Either party may terminate the agreement if the other party breaches the agreement or files for bankruptcy. Additionally, Sandoz may terminate the agreement for commercial viability reasons. Sandoz has agreed to indemnify the Company for various claims, and a certain portion of such costs may be offset against certain future payments received by the Company. Sandoz began selling the licensed product in July 2010. In June 2015, the Company and Sandoz amended the agreement to provide that Sandoz would pay the Company 50% of contractually defined profits on sales. Due to increased generic competition and resulting decreased market pricing for the licensed product, Sandoz did not record any profit on sales of the licensed product in the three and nine months ended September 30, 2018 and 2017, and therefore the Company did not record product revenue for the licensed product in those periods. The Company is no longer eligible to receive milestones under the agreement. The Company concluded that the license agreement is within the scope of Topic 606. As of January 1, 2018, the Company has completed its performance obligations under the contract. The Company continues to be eligible to receive contractual profit share on Sandoz’ sales of the licensed product, which is recorded as product revenue. The Company recognizes revenue for profit share in the period the related sales occur. The Company recognizes research and development revenue related to on-going commercial services under the contract as those services are delivered, as they represent customer options for future services that reflect their standalone selling price. The adoption of Topic 606 had no impact on the accounting for this license agreement. In July 2018, Sandoz notified its customers and the FDA that it will discontinue supplying the licensed product. We expect any future revenues from Sandoz' sales of the licensed product, if any, to be minimal. 2006 Sandoz Agreement In 2006 and 2007, the Company entered into a series of agreements with Sandoz, or the 2006 Sandoz Agreement, where the Company and Sandoz agreed to exclusively collaborate on the development and commercialization of GLATOPA 20 mg/mL and 40 mg/mL, collectively GLATOPA, a generic version of COPAXONE, among other potential products. Costs, including development costs and the costs of clinical studies, will be borne by the parties in varying proportions depending on the type of expense. For GLATOPA, the Company is generally responsible for all of the development costs in the United States. For GLATOPA outside of the United States, the Company shares development costs in proportion to its profit sharing interest. The Company is reimbursed for personnel costs and external costs incurred in the development of products to the extent development costs are borne by Sandoz, as described above. All commercialization costs are borne by Sandoz. With respect to GLATOPA, Sandoz is responsible for funding legal expenses, except for personnel costs with respect to certain legal activities for GLATOPA; however 50% of legal expenses, including any patent infringement damages, can be offset against the profit-sharing amounts. Development costs, commercialization costs and legal costs have defined meanings under the agreement. The term of the agreement extends throughout the development and commercialization of the products until the last sale of the products, unless earlier terminated by either party. The agreement may be terminated if either party breaches the agreement or files for bankruptcy, or, on a region-by-region basis, in the event clinical studies are needed in order to obtain marketing approval. Sandoz has agreed to indemnify the Company for various claims, and a certain portion of such costs may be offset against certain future payments received by the Company. Sandoz commenced sales of GLATOPA 20 mg/mL in the United States in June 2015 and of GLATOPA 40 mg/mL in the United States in February 2018. Under the agreement, the Company earns 50% of contractually defined profits on Sandoz' worldwide net sales of GLATOPA. Profits on net sales of GLATOPA are calculated by deducting from net sales the costs of goods sold and an allowance for selling, general and administrative costs, which is a contractual percentage of GLATOPA net sales, and post-launch commercial milestones achieved. Following FDA approval of Mylan N.V.'s generic equivalents of COPAXONE 20 mg/mL and 40 mg/mL, which Mylan N.V. announced in October 2017, the Company is no longer eligible to earn $80 million in future post-launch commercial milestone payments. The Company is still eligible to receive up to $30 million in performance-based milestone payments for GLATOPA in the United States, although the Company believes it is not likely that the performance-based milestones will be achieved. None of these payments, once received, is refundable and there are no general rights of return. On October 4, 2017, the Company and Sandoz entered into a letter agreement, pursuant to which the Company agreed to reduce its 50% share of contractually defined profits on worldwide net sales of GLATOPA by up to an aggregate of approximately $9.8 million, commencing in the first quarter of 2018, representing 50% of GLATOPA 40 mg/mL pre-launch inventory costs. In the first quarter of 2018, the Company's product revenue was reduced by $9.8 million for the Company’s 50% share of GLATOPA 40 mg/mL inventory written off by Sandoz. The Company concluded that the license agreement is within the scope of Topic 606. As of January 1, 2018, the Company has completed its performance obligations under the contract. The Company continues to be eligible to receive contractual profit share on Sandoz’ sales of GLATOPA, which is recorded as product revenue. The Company recognizes revenue for profit share in the period the related sales occur. The Company recognizes research and development revenue related to on-going commercial services under the agreement as those services are delivered, as they represent customer options for future services that reflect their standalone selling price. The adoption of Topic 606 had no impact on the accounting for this license agreement. Collaborative Arrangements Mylan Collaboration Agreement The Company and Mylan entered into a collaboration agreement, or the Mylan Collaboration Agreement, effective February 9, 2016, pursuant to which the Company and Mylan agreed to collaborate exclusively, on a worldwide basis, to develop, manufacture and commercialize six of the Company’s biosimilar candidates. Under the agreement, the Company granted Mylan an exclusive license under the Company’s intellectual property rights to develop, manufacture and commercialize the product candidates for all therapeutic indications, and Mylan granted the Company a co-exclusive license under Mylan’s intellectual property rights for the Company to perform its development and manufacturing activities under the product work plans agreed by the parties, and to perform certain commercialization activities to be agreed by the joint steering committee for such product candidates if the Company exercises its co-commercialization option described below. Under the terms of the Mylan Collaboration Agreement, Mylan paid the Company a non-refundable upfront payment of $45 million. In addition, the Company and Mylan equally share costs (including development, manufacturing, commercialization and certain legal expenses) and profits (losses) with respect to such product candidates, with Mylan funding its share of collaboration expenses incurred by the Company, in part, through up to six contingent milestone payments, totaling up to $200 million across the six product candidates, two of which, totaling $60 million, the Company received in 2016. For each product candidate other than M834, at a specified stage of early development, the Company and Mylan will each decide, based on the product candidate’s development progress and commercial considerations, whether to continue the development, manufacture and commercialization of such product candidate under the collaboration or to terminate the collaboration with respect to such product candidate. The Company and Mylan established a joint steering committee consisting of an equal number of members from the Company and Mylan to oversee and manage the development, manufacture and commercialization of product candidates under the collaboration. Unless otherwise determined by the joint steering committee, it is anticipated that, in collaboration with the other party, (a) the Company will be primarily responsible for nonclinical development activities and initial clinical development activities for product candidates; and regulatory activities for product candidates in the United States through regulatory approval; and (b) Mylan will be primarily responsible for additional (pivotal or Phase 3 equivalent) clinical development activities for product candidates other than M834; regulatory activities for the product candidates outside the United States; and regulatory activities for products in the United States after regulatory approval, when all marketing authorizations for the products in the United States will be transferred to Mylan. Mylan will commercialize any approved products, with the Company having an option to co-commercialize, in a supporting commercial role, any approved products in the United States. The joint steering committee is responsible for allocating responsibilities for other activities under the collaboration. The term of the collaboration will continue throughout the development and commercialization of the product candidates, on a product-by-product and country-by-country basis, until development and commercialization by or on behalf of the Company and Mylan pursuant to the agreement has ceased for a continuous period of two years for a given product candidate in a given country, unless earlier terminated by either party pursuant to the terms of the agreement. The agreement may be terminated by either party for breach by, or bankruptcy of, the other party; for its convenience; or for certain activities involving competing products or the challenge of certain patents. Other than in the case of a termination for convenience, the terminating party will have the right to continue the development, manufacture and commercialization of the terminated products in the terminated countries. In the case of a termination for convenience, the other party will have the right to continue. If a termination occurs, the licenses granted to the non-continuing party for the applicable product will terminate for the terminated country. Subject to certain terms and conditions, the party that has the right to continue the development or commercialization of a given product candidate may retain royalty-bearing licenses to certain intellectual property rights, and rights to certain data, for the continued development and sale of the applicable product in the country or countries for which termination applies. The Mylan agreement is accounted for as a collaboration arrangement pursuant to Topic 808. The Company’s accounting policy for collaborations analogizes to Topic 606, primarily in determining the appropriate recognition for the upfront license fee and other consideration. Upfront Payments for License of Intellectual Property The Company identified the following material promises under the contract: (i) licenses to develop, manufacture and commercialize the named product candidates (six product candidates in total) and (ii) research and development services through FDA approval for each of the six product candidates. The Company’s participation in the joint steering committee was assessed as immaterial in the context of the contract. As the licenses for each of the products and the related research and development services for each of the product candidates are not capable of being distinct and are not distinct within the context of the contract, the Company concluded that each of the six bundles of a product license and the related research and development services through FDA approval should be combined as performance obligations. The Company next assessed whether each of the six bundles of a particular product license and the related research and development services is distinct from each other. The Company concluded that each of the six license and research and development services bundles is capable of being distinct, as Mylan can obtain benefit from each separately, and each is distinct within the context of the contract. Therefore, each of the six license and service bundles individually represent distinct performance obligations. The Company determined that the upfront payment constituted the entirety of the consideration to be included in the transaction price to be allocated to the performance obligations at contract inception based on the stand-alone selling prices for each of the six license and service performance obligations. For the licenses, the relative stand-alone selling prices were based on an analysis of its existing license arrangements and other available data, with consideration given to the products’ stage of development at the time the licenses were delivered. The stand-alone selling prices of the research and development services were based on the nature and extent of the research and development services to be performed. Changes in the key assumptions used to determine the relative stand-alone selling prices would not have a significant effect on the allocation of the transaction price to the performance obligations. Of the $45 million upfront payment, $8.2 million was allocated to M834, $7.1 million was allocated to M710, and between $5.7 million and $9.0 million was allocated to the four additional performance obligations. The Company considered both input and output methods to determine a method that depicts its performance in transferring control of the goods and services promised. The Company concluded that costs incurred to date, as a proportion of the total estimated costs to bring each product candidate through FDA approval, depict the performance of the research and development services. As of September 30, 2018, $37.2 million of the transaction price remains allocated to unsatisfied performance obligations. The license and related research and development services performance obligations are expected to be delivered over a period through estimated FDA approval of each product candidate. The pattern of recognition differs from the Company’s previous accounting policy. Refer to Note 2, "Summary of Significant Accounting Policies", for disclosure of the quantification and impact of this change as a result of adopting Topic 606. Development milestones, sales-based milestones, and profit share related to the license of intellectual property will be recognized by analogy to the Company’s revenue accounting policies. Collaboration Costs and Reimbursements Collaboration costs incurred by the parties are subject to quarterly reconciliation such that the final amount of expense included in the Company's statement of operations is equal to its 50% share of the total collaboration costs. The Company classifies the payments received or made under the cost sharing provisions of the arrangement as a component of research and development or general and administrative expense accordingly to reflect the joint risk sharing nature of the arrangement. Mylan funds its 50% share of development-related collaboration costs through contingent milestone payments of up to $200 million across the six product candidates, while other shared collaboration costs are reconciled by the parties with the owing party reimbursing the other party by making quarterly payments. The Company records a contract asset to reflect a receivable due from Mylan for Mylan’s 50% share of other shared collaboration costs and a contract liability to reflect the balance of any advance payment from Mylan to be applied towards Mylan’s 50% share of future development-related collaboration costs. CSL License and Option Agreement The Company and CSL, a wholly owned indirect subsidiary of CSL Limited, entered into a License and Option Agreement, or the CSL License Agreement, effective February 17, 2017, pursuant to which the Company granted CSL an exclusive worldwide license to research, develop, manufacture and commercialize the M230 pre-clinical product candidate, an Fc multimer protein that is a selective immunomodulator of the Fc receptor. The agreement also provides, on an exclusive basis, for the Company and CSL to conduct research on other Fc multimer proteins, and provides CSL the right to develop, manufacture and commercialize these additional research products globally. CSL's obligations under the agreement are guaranteed by its parent company, CSL Limited. Pursuant to the terms of the agreement, CSL paid the Company a non-refundable upfront payment of $50 million. For the development and commercialization of M230, the Company is eligible to receive up to $550 million in contingent development, regulatory and sales milestone payments, and additional negotiated milestone payments for a named research stage product should that enter development. The Company is also entitled to sales-based royalty payments in percentages ranging from a mid-single digit to low-double digits for M230 and a named research stage product should that enter development and be commercialized, and royalties and development milestone payments to be negotiated for any other products developed under the agreement. Sales milestones are based on aggregated sales across M230 and any other products developed under the agreement. The Company also had the option to participate in a cost-and-profit sharing arrangement, or a co-funding option, under which the Company would fund 50% of global research and development costs and 50% of U.S. commercialization costs for all products developed pursuant to the agreement in exchange for either a 50% share of U.S. profits, or 30% share of U.S. profits, determined by the stage of development at which the Company makes such election. The Company also has the option to participate in the promotion of products under the agreement in the United States, subject to a co-promotion agreement to be negotiated with CSL. On August 28, 2017, the Company exercised its co-funding option for a 50% share of U.S. profits. As a result, royalties remain payable for territories outside of the United States, and the milestone payments for which the Company is eligible are reduced from up to $550 million to up to $297.5 million. The Company also has the right to opt-out of such arrangement at its sole discretion, which would result in milestone payments and royalties reverting to their pre-co-funded arrangement amounts. Under the agreement, the Company granted CSL an exclusive license under its intellectual property to research, develop, manufacture and commercialize product candidates for all therapeutic indications. CSL granted the Company a non-exclusive, royalty-free license under CSL’s intellectual property for the Company's research and development activities pursuant to the agreement and the Company's commercialization activities under any co-promotion agreement with CSL. The Company and CSL formed a joint steering committee consisting of an equal number of members from the Company and CSL, to facilitate the research, development, and commercialization of product candidates. Unless earlier terminated, the term of the agreement commences on the Effective Date, as defined in the agreement, and continues until the later of (i) the expiration of all payment obligations with respect to products under the agreement, (ii) the Company is no longer co-funding development or commercialization of any products and (iii) the Company and CSL are not otherwise collaborating on the development and commercialization of products or product candidates. CSL may terminate the agreement on a product-by-product basis subject to notice periods and certain circumstances related to clinical development. The Company may terminate the agreement under certain circumstances related to the development of M230 and if no activities are being conducted under the agreement. Either party may terminate the agreement (i) on a product-by-product basis if certain patent challenges are made, (ii) on a product-by-product basis for material breaches, or (iii) due to the other party’s bankruptcy. Upon termination of the agreement, subject to certain exceptions, the licenses granted under the agreement terminate. In addition, dependent upon the circumstances under which the agreement is terminated, the Company or CSL has the right to continue the research, development, and commercialization of terminated products, including rights to certain data, for the continued development and sale of terminated products and, subject to certain limitations, obligations to make sales-based royalty payments to the other party. After the Company exercised its co-funding option for a 50% share of U.S. profits, the Company has accounted for the CSL agreement as a collaboration arrangement pursuant to Topic 808. The Company’s accounting policy for collaborations analogizes to Topic 606, primarily in determining the appropriate recognition for the upfront license fee and other consideration. Upfront Payments for License of Intellectual Property The Company identified the following material promises under the contract: (i) license to research, develop, manufacture and commercialize M230 and (ii) to perform a technology transfer to CSL. The Company’s participation in the joint steering committee and other promises were assessed as immaterial in the context of the contract. As the licenses and technology transfer are not capable of being distinct and are not distinct within the context of the contract, the Company concluded that the bundle of the licenses and technology transfer should be combined as one performance obligation. The combined performance obligation was delivered in 2017. As the $50 million upfront payment reflected the transaction price at contract inception, all revenue related to the single performance obligation was recognized prior to the date of adoption of Topic 606. Development milestones, sales-based milestones, and profit share related to the license of intellectual property will be recognized by analogy to the Company’s revenue accounting policies. No transition adjustment was recognized as a result of adopting Topic 606. Co-funding Costs and Reimbursements The co-funding arrangement with CSL is a cost-sharing arrangement. Reimbursement by CSL for its share of the development effort is presented as a reduction of operating expenses, and reimbursement by the Company for its share of the development effort is recorded as an incremental operating expense, consistent with the Company’s accounting policy for collaboration arrangements. Such amounts are settled quarterly amongst the parties. License Agreement Summary The following tables provide amounts by year indicated and by line item included in the Company's accompanying consolidated financial statements attributable to transactions arising from its license arrangements. The dollar amounts in the tables below are in thousands.
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payments | Share-Based Payments Equity Award Plans On March 7, 2018, the Company's Board of Directors approved the amendment and restatement of the Company’s 2013 Incentive Award Plan, or the Amended and Restated 2013 Plan, subject to and effective upon stockholder approval. At the Company’s 2018 Annual Meeting of Stockholders, held on June 20, 2018, stockholders approved the Amended and Restated 2013 Plan. The Amended and Restated 2013 Plan, among other things, increases the number of shares of common stock available for issuance under the plan by 1,000,000 shares. Share-Based Compensation The table below presents share-based compensation expense for research and development, general and administrative expense, and restructuring, all of which are included in operating expenses, in the three and nine months ended September 30, 2018 and 2017 (in thousands):
The following table summarizes share-based compensation expense recorded in each of the three and nine months ended September 30, 2018 and 2017 (in thousands):
During the nine months ended September 30, 2018, the Company granted 372,690 options to its employees and board members. The average grant date fair value of options granted was calculated using the Black-Scholes-Merton option-pricing model and the weighted average assumptions are noted in the table below. The weighted average grant date fair value of option awards granted during the three months ended September 30, 2018 and 2017 was $13.08 per option and $8.58 per option, respectively. The weighted average grant date fair value of option awards granted during the nine months ended September 30, 2018 and 2017 was $9.66 per option and $9.17 per option, respectively. The following tables summarize the weighted average assumptions the Company used in its fair value calculations at the date of grant:
Since April 13, 2016, the Company has awarded 1,785,600 shares of performance-based restricted stock to its employees. The vesting of the shares is subject to the Company achieving up to two of three possible performance milestones on or before April 13, 2019. Upon achieving each of the first and second milestones, 25% of the shares will vest on the later of the milestone achievement date and the first anniversary of the grant date, and an additional 25% of the shares will vest on the one year anniversary of such achievement date, subject to a requirement that recipients remain employees through each applicable vesting date. Each quarter, the Company evaluates the probability of achieving the milestones on or before April 13, 2019, and its estimate of the implicit service period over which the fair value of the awards will be recognized and expensed. As a result of discontinuing its necuparanib program in 2016, the Company determined that only two of the three performance milestones are possible to achieve prior to April 13, 2019. In the first quarter of 2018, one of the two available performance milestones was met and approximately 25% of the awards vested. The Company is expensing the fair value of the shares expected to vest over the implicit service period using the accelerated attribution method. For the three and nine months ended September 30, 2018, the Company recognized approximately $0.2 million and $1.2 million of stock-based compensation costs related to these awards. In the nine months ended September 30, 2018, the Company awarded 1,033,505 shares of time-based restricted stock units to its employees. The time-based restricted stock units vest as to 50% on the one year anniversary of the grant date and as to 50% on the second anniversary of the grant date. Time-based awards are generally forfeited if the employment relationship terminates with the Company prior to vesting, except as provided in the Company's Equity Award Retirement Policy. |
Restructuring |
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Restructuring and Related Activities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring | Restructuring On September 26, 2018, following the completion of a strategic review of its business, the Company's Board of Directors approved a plan, or the Workforce Reduction, to reduce its workforce headcount by approximately 50%. The Company evaluated the related employee severance and other benefits to employees in connection with the Workforce Reduction to determine whether the benefits were within the scope ASC 712, Compensation - Non-retirement Post-employment Benefits, or within the scope of ASC 420, Exit or Disposal Cost Obligations, depending on the nature of the benefit and whether it is part of an on-going benefit arrangement under ASC 712 or a one-time termination benefit unique to the Workforce Reduction. The Company recorded restructuring expense of $8.7 million in the three and nine months ended September 30, 2018 pursuant to ASC 712. The Company also recorded incremental stock-based compensation charges associated with the accelerated vesting of certain awards previously issued to the Company’s executives that were part of the Workforce Reduction. In addition, the Company recorded certain asset impairments in accordance with ASC 360 Property, Plant and Equipment, primarily associated with lab equipment. The fair value of lab equipment for the purposes of measuring the asset impairment was determined by reference to prices of comparable equipment. The Company expects to record additional restructuring charges associated with one-time termination benefits of approximately $1.9 million in future periods when it meets the recognition requirements of ASC 420. The Company also expects to reverse $1.8 million of the accelerated stock-based compensation expense recorded through September 30, 2018 for awards that were forfeited by employees in October 2018 as a result of the Company’s accounting policy to record forfeitures as they occur. The following table outlines the components of the restructuring charges during the three and nine months ended September 30, 2018 included in the consolidated statement of operations, and ending liability recorded in the balance sheet as at September 30, 2018:
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Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies Operating Leases The Company leases office space and equipment under various operating lease agreements. See Note 14 “Commitments and Contingencies” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 for a discussion of the Company’s operating lease agreements. On August 2, 2018, the Company amended its lease agreement to partially terminate the lease with respect to the premises located on the 4th floor of 301 Binney St., effective as of August 6, 2018. Total operating lease commitments as of September 30, 2018 are as follows (in thousands):
. Purchase Obligations In June 2018, the Company amended a supply manufacturing agreement with GSK to provide for minimum purchase obligations of approximately $22.5 million during calendar years 2019 and 2020 and $28.3 million during calendar years 2021 and 2022. Legal Contingencies The Company is involved in various litigation matters that arise from time to time in the ordinary course of business. The process of resolving matters through litigation or other means is inherently uncertain and it is possible that an unfavorable resolution of these matters will adversely affect the Company, its results of operations, financial condition and cash flows. The Company's general practice is to expense legal fees as services are rendered in connection with legal matters, and to accrue for liabilities when losses are probable and reasonably estimable. The Company evaluates, on a quarterly basis, developments in legal proceedings and other matters that could cause an increase or decrease in the amount of any accrual on its consolidated balance sheets. GLATOPA 40 mg/mL-Related Litigation On September 10, 2014, Teva Pharmaceuticals Industries Ltd. and related entities, or Teva, and Yeda Research and Development Co., Ltd., or Yeda, filed a suit against the Company and Sandoz in the United States District Court for the District of Delaware in response to the filing by Sandoz of the Abbreviated New Drug Application, or ANDA, with a Paragraph IV certification for GLATOPA 40 mg/mL. The suit initially alleged infringement related to two Orange Book-listed patents for COPAXONE 40 mg/mL, each expiring in 2030, and sought declaratory and injunctive relief prohibiting the launch of the Company's product until the last to expire of these patents. In April 2015, Teva and Yeda filed an additional suit against the Company and Sandoz in the United States District Court for the District of Delaware alleging infringement related to a third Orange Book-listed patent for COPAXONE 40 mg/mL, which issued in March 2015 and expires in 2030. In May 2015, this suit was consolidated with the initial suit that was filed in September 2014. In November 2015, Teva and Yeda filed a suit against the Company and Sandoz in the United States District Court for the District of Delaware alleging infringement related to a fourth Orange Book-listed patent for COPAXONE 40 mg/mL, which issued in October 2015 and expires in 2030. In December 2015, this suit was also consolidated with the initial suit that was filed in September 2014. Teva and Yeda seek declaratory and injunctive relief prohibiting the launch of GLATOPA 40 mg/mL until the expiration of the patents at issue. On January 30, 2017, the District Court found the four patents to be invalid due to obviousness. In February 2017, Teva and Yeda appealed the District Court's January 30, 2017, decision to the U.S. Court of Appeals for the Federal Circuit, or CAFC. On October 12, 2018, the CAFC affirmed the District Court's decision that the four patents were invalid. Teva and Yeda may appeal the decision. On January 31, 2017, Teva filed a suit against the Company and Sandoz in the United States District Court for the District of New Jersey alleging infringement related to an additional patent for COPAXONE 40 mg/mL, U.S. Patent No. 9,155,775, which issued in October 2015 and expires in October 2035. The Company and Sandoz filed a motion to dismiss and a motion to transfer the suit to the United States District Court for the District of Delaware. On January 31, 2017, Teva voluntarily dismissed the Company from the New Jersey suit for U.S. Patent No. 9,155,775, maintaining the suit against Sandoz. On May 23, 2017, the United States District Court for the District of New Jersey granted the motion to transfer the suit to the United States District Court for the District of Delaware. A claim construction hearing was held on November 2, 2017, and a claim construction opinion issued on December 1, 2017. On October 17, 2018, the United States District Court for the District of Delaware entered a revised schedule for the trial. Pursuant to the Court's amended schedule, a trial is scheduled to commence before the United States District Court for the District of Delaware on May 6, 2019. On February 2, 2017, the Company filed a complaint in the United States District Court for the District of Delaware seeking a declaration that U.S. Patent No. 9,155,775 is invalid, not infringed or not enforceable against the Company. In March 2017, Teva filed a motion, which is currently pending, to stay further proceedings in the Delaware action. Enoxaparin Sodium Injection-related Litigation On September 21, 2011, the Company and Sandoz sued Amphastar and Actavis in the United States District Court for the District of Massachusetts for patent infringement. Also in September 2011, the Company filed a request for a temporary restraining order and preliminary injunction to prevent Amphastar and Actavis from selling their Enoxaparin product in the United States. In October 2011, the District Court granted the Company's motion for a preliminary injunction and entered an order enjoining Amphastar and Actavis from advertising, offering for sale or selling their Enoxaparin product in the United States until the conclusion of a trial on the merits and required the Company and Sandoz to post a security bond of $100 million in connection with the litigation. Amphastar and Actavis appealed the decision to the CAFC, and in January 2012, the CAFC stayed the preliminary injunction. In August 2012, the CAFC vacated the preliminary injunction and remanded the case to the District Court. In September 2012, the Company filed a petition with the CAFC for a rehearing by the full court en banc, which was denied. In February 2013, the Company filed a petition for a writ of certiorari for review of the CAFC decision by the United States Supreme Court which was denied in June 2013. In July 2013, the District Court granted a motion by Amphastar and Actavis for summary judgment. The Company filed a notice of appeal of that decision to the CAFC. In February 2014, Amphastar filed a motion to the CAFC for summary affirmance of the District Court ruling, which the CAFC denied in May 2014. On November 10, 2015, the CAFC affirmed the District Court summary judgment decision with respect to Actavis, reversed the District Court summary judgment decision with respect to Amphastar, and remanded the case against Amphastar to the District Court. On January 11, 2016, Amphastar filed a petition for rehearing by the CAFC, which was denied on February 17, 2016. On May 17, 2016, Amphastar filed a petition for writ of certiorari for review of the CAFC decision by the United States Supreme Court, which was denied on October 3, 2016. In April 2017, the Company, Sandoz and Actavis, or the Settling Parties, settled and signed reciprocal releases of all claims, and filed a voluntary stipulation with the District Court, pursuant to which the Settling Parties stipulated and agreed to dismiss with prejudice all claims and counterclaims among the Settling Parties, without fees or costs to any party, and with the Settling Parties waiving any and all right of appeal. The District Court trial was held in July 2017, and the jury verdict found the Company's patent to be infringed, but invalid and unenforceable. In February 2018, the District Court confirmed the jury’s opinion that the patent was infringed but invalid, and narrowed the jury’s recommendation on unenforceability by finding the patent to be unenforceable against only one of the two infringing methods used by Amphastar. On March 20, 2018, the District Court entered its final judgment affirming its February 2018 rulings. On March 27, 2018, the Company and Sandoz filed a notice of appeal of the final judgment with the CAFC. The appeal has been docketed and opening briefs were filed July 30, 2018. In the event that the Company is not successful in further appeal or prosecution or settlement of this action against Amphastar, and Amphastar is able to prove they suffered damages as a result of the preliminary injunction, the Company could be liable for damages for up to $35 million of the security bond. The Company posted $17.5 million as collateral for the security bond and classified the collateral as restricted cash in its consolidated balance sheet. On March 23, 2018, Amphastar filed a motion to enforce liability on the security bond with the District Court. On April 3, 2018, the Company and Sandoz filed an emergency motion to defer consideration of Amphastar's motion to enforce liability on the security bond pending exhaustion of appeals. On July 16, 2018, the District Court denied Amphastar's motion to enforce liability on the security bond and allowed the Company's and Sandoz' motion to defer consideration. Litigation involves many risks and uncertainties, and there is no assurance that the Company or Sandoz will prevail in this patent enforcement suit. On September 17, 2015, Amphastar filed a complaint against the Company and Sandoz in the United States District Court for the Central District of California. The complaint alleges that, in connection with filing the September 2011 patent infringement suit against Amphastar and Actavis, the Company and Sandoz sought to prevent Amphastar from selling generic Enoxaparin Sodium Injection and thereby exclude competition for generic Enoxaparin Sodium Injection in violation of federal and California anti-trust laws and California unfair business laws. Amphastar is seeking unspecified damages and fees. In December 2015, the Company and Sandoz filed a motion to dismiss and a motion to transfer the case. In January 2016, the case was transferred to the United States District Court for the District of Massachusetts. In February 2016, Amphastar filed a writ of mandamus with the United States Court of Appeals for the Ninth Circuit requesting that the court reverse and review the District Court's grant of transfer and in May 2016, the writ requested by Amphastar was denied. On July 27, 2016, the Company's and Sandoz' motion to dismiss was granted by the District Court, and the case was dismissed. On August 25, 2016, Amphastar filed a notice of appeal from the dismissal with the United States Court of Appeals for the First Circuit. Briefing was completed in December 2016, and oral argument was held on February 9, 2017. On March 6, 2017, the United States Court of Appeals for the First Circuit reversed the District Court’s dismissal and remanded the case to the District Court for further proceedings. On April 6, 2017, the District Court held a scheduling conference to provide dates for the remanded case, and on April 20, 2017, the Company and Sandoz filed a renewed motion to dismiss which was denied by the District Court on March 20, 2018. A trial is scheduled for September 2019. On October 14, 2015, The Hospital Authority of Metropolitan Government of Nashville and Davidson County, Tennessee, d/b/a Nashville General Hospital, or NGH, filed a class action suit against the Company and Sandoz in the United States District Court for the Middle District of Tennessee on behalf of certain purchasers of LOVENOX or generic Enoxaparin Sodium Injection. The complaint alleges that, in connection with filing the September 2011 patent infringement suit against Amphastar and Actavis, the Company and Sandoz sought to prevent Amphastar from selling generic Enoxaparin Sodium Injection and thereby exclude competition for generic Enoxaparin Sodium Injection in violation of federal anti-trust laws. NGH is seeking injunctive relief, disgorgement of profits and unspecified damages and fees. In December 2015, the Company and Sandoz filed a motion to dismiss and a motion to transfer the case to the United States District Court for the District of Massachusetts. On March 21, 2017, the United States District Court for the Middle District of Tennessee dismissed NGH’s claim for damages against the Company and Sandoz, but allowed the case to move forward, in part, for NGH’s claims for injunctive and declaratory relief. In the same opinion, the United States District Court for the Middle District of Tennessee denied the Company's motion to transfer. On June 9, 2017, NGH filed a motion to amend its complaint to add a new named plaintiff, the American Federation of State, County and Municipal Employees District Council 37 Health & Security Plan, or DC37. NGH and DC37 seek to assert claims for damages under the laws of more than 30 different states, on behalf of a putative class of indirect purchasers of Lovenox or generic enoxaparin. On June 30, 2017, the Company and Sandoz filed a brief opposing the motion to amend the complaint. On December 14, 2017, the Court granted NGH's motion to amend. In January 2018, the Company and Sandoz filed three motions to dismiss the amended complaint. Those briefs remain pending before the Court. While the outcome of litigation is inherently uncertain, the Company believes this suit is without merit, and intends to vigorously defend itself in this litigation. |
Subsequent Events |
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Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On November 2, 2018, the Company entered into a $35.0 million letter of credit secured by a cash deposit of $36.0 million to replace the existing $17.5 million cash deposit collateral for the security bond described in Note 3 concerning the Enoxaparin Sodium Injection-related litigation, in connection with the renewal of the bond in November 2018. |
Summary of Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation | In the opinion of management, the accompanying unaudited, condensed consolidated financial statements include all adjustments, consisting of normal recurring accruals, necessary for a fair presentation of the Company's financial statements for interim periods in accordance with accounting principles generally accepted in the United States, or U.S. GAAP. The information included in this quarterly report on Form 10-Q should be read in conjunction with the Company's audited consolidated financial statements and the accompanying notes included in its Annual Report on Form 10-K for the year ended December 31, 2017 filed with the Securities and Exchange Commission, or SEC, on February 26, 2018. The Company's accounting policies are described in the “Notes to Consolidated Financial Statements” in its Annual Report on Form 10-K for the year ended December 31, 2017 and updated, as necessary, in this Form 10-Q. The year-end condensed consolidated balance sheet data presented for comparative purposes was derived from the Company's audited financial statements, but does not include all disclosures required by U.S. GAAP. The results of operations for the three and nine months ended September 30, 2018, are not necessarily indicative of the operating results for the full year or for any other subsequent interim period. |
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Consolidation | The accompanying unaudited, condensed consolidated financial statements reflect the operations of the Company and the Company’s wholly-owned subsidiaries, Momenta Pharmaceuticals Securities Corporation and Momenta Ireland Limited. Intercompany balances and transactions are eliminated in consolidation. |
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Use of Estimates | The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that may affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates and judgments, including those related to revenue recognition, accrued expenses, and share-based payments. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates. |
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Revenue Recognition | Revenue Recognition Effective January 1, 2018, the Company adopted Accounting Standards Codification, or ASC, Topic 606, Revenue from Contracts with Customers, using the modified retrospective transition method as permissible for all contracts not yet completed as of January 1, 2018. This standard applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance, collaboration arrangements and financial instruments. Under Topic 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of Topic 606, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. License Agreements The Company has entered into license arrangements with pharmaceutical companies for the development and commercialization of product candidates. The terms of these agreements may include (i) transfer of intellectual property rights (licenses) and (ii) providing research and development services. Payments made by the customers may include non-refundable upfront license fees, payments for research and development activities, payments based upon the achievement of defined collaboration objectives and a share of profits on net sales of licensed products. If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes the transaction price allocated to the license as revenue upon transfer of control of the license. The Company evaluates all other promised goods or services in the license agreement to determine if they are distinct. If they are not distinct, they are combined with other promised goods or services to create a bundle of promised goods or services that is distinct. Optional future services that reflect their standalone selling prices do not provide the customer with a material right and, therefore, are not considered performance obligations. If optional future services reflect a significant or incremental discount, they are material rights, and are accounted for as performance obligations. The Company utilizes judgment to determine the transaction price. The Company evaluates contingent milestones to estimate the amount which is not probable of a material reversal to include in the transaction price using the most likely amount method. Milestone payments that are not within the control of the Company, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. The transaction price is then allocated to each performance obligation on a relative stand-alone selling price basis, for which the Company recognizes revenue as or when the performance obligations under the contract are satisfied. At the end of each reporting period, the Company re-evaluates the probability of achieving development milestone payments which may not be subject to a material reversal, and if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect research and development revenue and earnings in the period of adjustment. The Company then determines whether the performance obligations or combined performance obligations are satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable, upfront fees. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. The Company may earn a contractual percentage of a licensor’s revenues or profits after the successful development and commercialization of a licensed product. A sales or usage-based royalty on a license of intellectual property where the license is the predominant item to which the royalty relates is eligible for an exception to the standard revenue recognition model under Topic 606. Under this exception, an entity is permitted to (i) exclude such amounts from the initial determination of the transaction price (hence no amounts to allocate amongst the performance obligations) and (ii) defer recognition until underlying sales occur. The amount of net sales and contractual profit is determined based on information provided by the licensor and involves the use of estimates and judgments, such as product sales allowances and accruals related to prompt payment discounts, chargebacks, governmental and other rebates, distributor, wholesaler and group purchasing organizations fees, product returns, and co-payment assistance costs, which could be adjusted based on actual results in the future. Net sales and contractual profit may also include or exclude other amounts as defined in an agreement. The Company is highly dependent on the licensor for timely and accurate information regarding any net revenues realized from sales of the licensed products in order to accurately report its results of operations. Sales-based milestones and profit share revenues are recognized as revenue when sales thresholds are met under the sales or usage-based royalty exception under Topic 606. Collaborative Arrangements The Company considers the nature and contractual terms of the arrangement and assesses whether the arrangement involves a joint operating activity pursuant to which the Company is an active participant and is exposed to significant risks and rewards with respect to the arrangement. If the Company is an active participant and is exposed to significant risks and rewards with respect to the arrangement, the Company accounts for the arrangement as a collaboration under Topic 808, Collaborative Arrangements. Topic 808 describes arrangements within its scope and considerations surrounding presentation and disclosure, with recognition matters subjected to other authoritative guidance, in certain cases by analogy. With respect to consideration other than cost sharing payments received from a collaboration partner, the Company has applied an accounting policy to analogize to other accounting guidance concerning revenue recognition, specifically Topic 606. Payments received from a collaboration partner to which this policy applies may include upfront payments in respect of a license of intellectual property, development milestones, profit share payments, and sales-based milestones. The Company classifies the payments received or made under the cost sharing provisions of the arrangement as a component of research and development or general and administrative expense, respectively, to reflect the joint risk sharing nature of the payment received or made. Impact of Adoption Under the modified retrospective transition method, the Company applied Topic 606 to all contracts within its scope as of January 1, 2018. Under the practical expedient concerning contract modifications contained in the transitional provisions of Topic 606, the Company has not retrospectively restated its contracts for modifications prior to the earliest period presented, and instead has reflected the aggregate effect of all modifications when identifying the satisfied and unsatisfied performance obligations, determining the transaction price and allocating the transaction price. Qualitatively, the effect of applying this practical expedient is not material to the periods presented in the consolidated financial statements. As more fully discussed in Note 5, "License Agreements and Collaborative Agreements", only the arrangement with Mylan was determined to have unsatisfied performance obligations as of the adoption date for which the pattern of revenue recognition would change. All other agreements were unaffected by the adoption of Topic 606 in all periods presented in the consolidated financial statements through application of the modified retrospective transition method. As a result of adopting Topic 606, the Company recorded a $5.5 million cumulative transition adjustment to the opening balance of accumulated deficit on January 1, 2018 to reflect the use of a proportional performance method using costs incurred as an input measure of progress in satisfying performance obligations under the Mylan collaboration. The Company previously applied a straight-line method of recognition through the expected date of the Food and Drug Administration's, or FDA, approval for each product candidate. The tables below include the amount by which each financial statement line item was affected as a result of applying or analogizing (with respect to the Company’s collaboration agreements) to Topic 606 as compared to the previous accounting policy. The amounts in the tables below are in thousands. Condensed Consolidated Statement of Operations and Comprehensive Loss
Condensed Consolidated Balance Sheet
Condensed Consolidated Statement of Cash Flows
Collaboration Receivable Collaboration receivable includes:
The Company has not recorded any allowance for uncollectible accounts or bad debt write-offs and it monitors its receivables to facilitate timely payment. Collaboration Liability Collaboration liability includes:
Deferred Revenue Deferred revenue represents a contract liability associated with consideration received from collaborators in advance of achieving certain criteria that must be met for revenue to be recognized in conformity with GAAP. |
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Net Loss Per Common Share | Net Loss Per Common Share Basic net loss per common share is calculated by dividing net loss by the weighted average number of common shares outstanding during the period, which includes common stock issued and outstanding and excludes unvested shares of restricted stock awards and units. Diluted net loss per common share is calculated by dividing net loss by the weighted average number of common shares and potential shares from outstanding stock options and unvested restricted stock awards and units determined by applying the treasury stock method. |
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Fair Value Measurements | Fair Value Measurements The tables below present information about the Company’s assets that are regularly measured and carried at fair value and indicate the level within the fair value hierarchy of the valuation techniques utilized to determine such fair value (in thousands):
The Company held $1.0 million and $11.3 million in overnight repurchase agreements as of September 30, 2018 and December 31, 2017, respectively. The instruments are classified as Level 2 due to the collateral including both U.S. government-sponsored enterprise securities and treasury instruments. There have been no impairments of the Company’s assets measured and carried at fair value during the three and nine months ended September 30, 2018 and 2017. In addition, there were no changes in valuation techniques or transfers between the fair value measurement levels during the three and nine months ended September 30, 2018. The fair value of Level 2 instruments classified as marketable securities were determined through third party pricing services. For a description of the Company’s validation procedures related to prices provided by third party pricing services, refer to Note 2, “Summary of Significant Accounting Policies: Fair Value Measurements”, to the Company’s consolidated financial statements in its Annual Report on Form 10-K for the year ended December 31, 2017. The carrying amounts reflected in the Company’s consolidated balance sheets for cash, collaboration receivable, other current assets, accounts payable and accrued expenses approximate fair value due to their short-term maturities. |
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Cash, Cash Equivalents and Marketable Securities | Cash, Cash Equivalents and Marketable Securities The Company’s cash equivalents are composed of money market funds and overnight repurchase agreements. Money market funds are carried at fair value, which approximate cost at September 30, 2018 and December 31, 2017. Overnight repurchase agreement yields are comparable to money market funds where principal and interest on the instruments is due the next day. The Company classifies U.S. government-sponsored enterprise securities, corporate debt securities, certificates of deposit, commercial paper and asset-backed securities as short-term and long-term marketable securities in its consolidated financial statements. See Note 2, “Summary of Significant Accounting Policies: Cash, Cash Equivalents and Marketable Securities”, in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 for a discussion of the Company’s accounting policies. |
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Treasury Stock | Treasury Stock Treasury stock represents common stock currently owned by the Company as a result of shares withheld from the vesting of performance-based restricted common stock to satisfy minimum tax withholding requirements |
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Comprehensive Loss | Comprehensive Loss Comprehensive loss is the change in equity of a company during a period from transactions and other events and circumstances, excluding transactions resulting from investments by owners and distributions to owners. Comprehensive loss includes net loss and the change in accumulated other comprehensive loss for the period. Accumulated other comprehensive loss consists entirely of unrealized gains and losses on available-for-sale marketable securities for all periods presented. |
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New Accounting Pronouncements | Accounting Pronouncements Adopted In November 2016, the FASB issued ASU No. 2016-18, Restricted Cash, or ASU 2016-18. The amendments in ASU 2016-18 require an entity to reconcile and explain the period-over-period change in total cash, cash equivalents and restricted cash within its statements of cash flows. A reporting entity must apply the amendments in ASU 2016-18 using a full retrospective approach. The retrospective adoption of ASU 2016-18 resulted in $23.0 million of restricted cash being included in cash, cash equivalents and restricted cash balances on the statement of cash flows for the period ended September 30, 2017. The Company included the necessary reconciliation above. On December 22, 2017, the SEC staff issued Staff Accounting Bulletin No. 118, or SAB 118, to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Reform Act. The Company has recognized the provisional tax impacts related to the revaluation of the deferred tax assets and liabilities and included these amounts in its consolidated financial statements for the year ended December 31, 2017. The ultimate impact may differ from these provisional amounts due to, among other things, additional analysis, changes in interpretations and assumptions the Company has made, additional regulatory guidance that may be issued, and actions the Company may take as a result of the Tax Reform Act. The accounting was completed when the 2017 U.S. corporate income tax return was filed, and no material differences arose as compared to provisional amounts initially reflected in the consolidated financial statements for the year ended December 31, 2017. New Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board, or FASB, or other standard setting bodies that the Company adopts as of the specified effective date. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The new standard requires that all lessees recognize the assets and liabilities that arise from leases on the balance sheet and disclose qualitative and quantitative information about its leasing arrangements. In July 2018, the FASB issued ASU No. 2018-11, which provides entities with an additional transition method to adopt Topic 842. Under the new transition method, an entity initially applies the new lease requirements at the adoption date, not the earliest period presented, and recognizes a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. The Company expects to elect this transition method at the adoption date of January 1, 2019. The Company also expects to elect a package of practical expedients, under which an entity need not reassess whether any expired or existing contracts are or contain leases, the lease classification for any expired or existing leases, or initial direct costs for any existing leases. The Company continues to evaluate the impact of the guidance on its financial position and results of operations, and anticipates recording additional right-of-use assets and corresponding liabilities on its consolidated balance sheet. In June 2018, the FASB issued ASU No. 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. The new standard largely aligns the accounting for share-based payment awards issued to employees and nonemployees by expanding the scope of ASC 718 to apply to nonemployee share-based transactions, as long as the transaction is not effectively a form of financing. The new guidance will be effective for the Company on January 1, 2019. The Company is currently evaluating the potential impact that this guidance may have on its consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Requirements for Fair Value Measurement. The new standard added, modified or removed disclosure requirements under Topic 820 for clarity and consistency. ASU 2018-13 is effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company does not believe the guidance will have a material impact on its financial statements. In August 2018, the FASB issued ASU No. 2018-15, Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. The amendment updates the accounting for implementation, setup, and other upfront costs for a customer in a hosting arrangement that is a service contract. The amendment is effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption of the amendment is permitted, including adoption in any interim period, for all entities. The amendment may be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company expects to adopt this amendment prospectively when effective, and does not expect the amendment will have a material impact on its financial statements. |
Summary of Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | The tables below include the amount by which each financial statement line item was affected as a result of applying or analogizing (with respect to the Company’s collaboration agreements) to Topic 606 as compared to the previous accounting policy. The amounts in the tables below are in thousands. Condensed Consolidated Statement of Operations and Comprehensive Loss
Condensed Consolidated Balance Sheet
Condensed Consolidated Statement of Cash Flows
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Schedule of anti-dilutive shares | The following table presents anti-dilutive shares for the three and nine months ended September 30, 2018 and 2017 (in thousands):
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Schedule of assets measured at fair value on a recurring basis | The tables below present information about the Company’s assets that are regularly measured and carried at fair value and indicate the level within the fair value hierarchy of the valuation techniques utilized to determine such fair value (in thousands):
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Schedule of reconciliation of cash, cash equivalents and marketable securities from amortized cost to fair value | The following tables summarize the Company’s cash, cash equivalents and marketable securities as of September 30, 2018 and December 31, 2017 (in thousands):
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Restrictions on Cash and Cash Equivalents | The following tables summarize the Company’s cash, cash equivalents and restricted cash as of September 30, 2018 and September 30, 2017 (in thousands):
The following table summarizes the amounts designated as collateral for letters of credit related to the lease of office and laboratory space in Cambridge, Massachusetts (collateral amounts are presented in thousands).
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Schedule of Cash and Cash Equivalents | The following tables summarize the Company’s cash, cash equivalents and restricted cash as of September 30, 2018 and September 30, 2017 (in thousands):
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Restricted Cash (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted Cash and Investments, Noncurrent [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restrictions on Cash and Cash Equivalents | The following tables summarize the Company’s cash, cash equivalents and restricted cash as of September 30, 2018 and September 30, 2017 (in thousands):
The following table summarizes the amounts designated as collateral for letters of credit related to the lease of office and laboratory space in Cambridge, Massachusetts (collateral amounts are presented in thousands).
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Other Liabilities (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Current Liabilities | Other Current Liabilities
|
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Other Long-Term Liabilities | Other Long-Term Liabilities
|
License Agreements and Collaborative Agreements (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedules of tables providing amounts included in the company's condensed consolidated statements of operations and comprehensive loss attributable to transactions arising from its collaborative arrangements | The following tables provide amounts by year indicated and by line item included in the Company's accompanying consolidated financial statements attributable to transactions arising from its license arrangements. The dollar amounts in the tables below are in thousands.
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Share-Based Payments (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of share-based compensation expense (income) | The following table summarizes share-based compensation expense recorded in each of the three and nine months ended September 30, 2018 and 2017 (in thousands):
The table below presents share-based compensation expense for research and development, general and administrative expense, and restructuring, all of which are included in operating expenses, in the three and nine months ended September 30, 2018 and 2017 (in thousands):
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Schedule of weighted average assumptions | The following tables summarize the weighted average assumptions the Company used in its fair value calculations at the date of grant:
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Restructuring (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Costs | The following table outlines the components of the restructuring charges during the three and nine months ended September 30, 2018 included in the consolidated statement of operations, and ending liability recorded in the balance sheet as at September 30, 2018:
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Commitments and Contingencies (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Schedule of Future Minimum Rental Payments for Operating Leases | Total operating lease commitments as of September 30, 2018 are as follows (in thousands):
|
Summary of Significant Accounting Policies - Collaboration Receivable and Liability (Details) |
9 Months Ended | ||
---|---|---|---|
Aug. 28, 2017 |
Jan. 05, 2017 |
Sep. 30, 2018 |
|
Mylan Agreement | |||
Collaboration and License Agreements | |||
Percentage of cost sharing arrangement under collaborative and license agreements | 50.00% | ||
CSL License Agreement | |||
Collaboration and License Agreements | |||
Percentage of cost sharing arrangement under collaborative and license agreements | 50.00% | 50.00% | 50.00% |
Summary of Significant Accounting Policies - Net Loss per Common Share (Details) - shares shares in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Outstanding Stock options | ||||
Weighted-average anti-dilutive shares related to: | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 2,091 | 3,649 | 2,841 | 4,064 |
Restricted stock awards | ||||
Weighted-average anti-dilutive shares related to: | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 1,025 | 1,474 | 860 | 1,519 |
Summary of Significant Accounting Policies - Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands |
Sep. 30, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|---|---|
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 65,202 | $ 73,651 | $ 172,838 | |
Restricted cash | 0 | 2,412 | 2,412 | |
Restricted cash, long-term | 19,349 | 20,620 | 20,620 | |
Total | $ 84,551 | $ 96,683 | 195,870 | $ 172,499 |
Restricted cash | $ 23,000 |
Restricted Cash - Narrative (Details) $ in Millions |
Sep. 30, 2018
USD ($)
|
---|---|
Restricted Cash and Investments, Noncurrent [Abstract] | |
Collateral for security bond | $ 17.5 |
Restricted Cash - Summary of Letter of Credit Collateral (Details) $ in Thousands |
Sep. 30, 2018
USD ($)
ft²
|
Sep. 30, 2017
USD ($)
|
---|---|---|
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Letter of Credit Amount | $ 23,000 | |
Lease Collateral | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Letter of Credit Amount | $ 1,849 | |
320 Bent Street | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Approximate Square Footage | ft² | 105,000 | |
320 Bent Street | Lease Collateral | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash, long-term | $ 748 | |
301 Binney Street, Fifth Floor | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Approximate Square Footage | ft² | 80,000 | |
301 Binney Street, Fifth Floor | Lease Collateral | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash, long-term | $ 1,101 |
Other Liabilities - Schedule of Other Current Liabilities (Details) - USD ($) $ in Thousands |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Other Liabilities Disclosure [Abstract] | ||
Accrued liability | $ 15,000 | $ 0 |
Lease incentive, current portion | 996 | 379 |
Deferred rent, current | 12 | 0 |
Lease termination fee, current | 128 | 0 |
Total other current liabilities | $ 16,136 | $ 379 |
Other Liabilities - Schedule of Other Long-Term Liabilities (Details) - USD ($) $ in Thousands |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Other Liabilities Disclosure [Abstract] | ||
Lease incentive, long-term | $ 7,249 | $ 3,541 |
Deferred rent, long-term | 8,358 | 6,498 |
Lease Termination Fee, Noncurrent | 948 | 0 |
Total other long-term liabilities | $ 16,555 | $ 10,039 |
Other Liabilities - Narrative (Details) - USD ($) $ in Thousands |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Other Liabilities Disclosure [Abstract] | ||
Accrued liability, current | $ 15,000 | $ 0 |
License Agreements and Collaborative Agreements - 2003 Sandoz Collaboration Agreement (Details) |
1 Months Ended |
---|---|
Jun. 30, 2015 | |
2003 Sandoz Collaboration | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Percentage of royalty based on contractually defined profits on sales | 50.00% |
License Agreements and Collaborative Agreements - 2006 Sandoz Collaboration Agreement (Details) - Second Sandoz Collaboration Agreement - USD ($) |
9 Months Ended | ||
---|---|---|---|
Sep. 30, 2018 |
Oct. 31, 2017 |
Oct. 04, 2017 |
|
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Percentage of royalty based on contractually defined profits on sales | 50.00% | ||
Collaborative Arrangement, Milestone Payments, No Longer Eligible To Earn, Commercial Milestone | $ 80,000,000 | ||
Novartis Pharma AG | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Percentage of contractual profits earned under collaborative arrangement | 50.00% | ||
Maximum | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Collaborative Arrangement, Amount Of Cost Of Goods To Be Deducted From Share Of Defined Profits Due To Milestone Not Being Met | $ 9,800,000 | ||
Collaborative Arrangement, Milestone Payments, Possible | $ 30,000,000 |
License Agreements and Collaborative Agreements - CSL License and Option Agreement (Details) - CSL License Agreement - USD ($) $ in Millions |
9 Months Ended | ||
---|---|---|---|
Aug. 28, 2017 |
Jan. 05, 2017 |
Sep. 30, 2018 |
|
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Non-Refundable upfront payment received | $ 50.0 | ||
Milestone payment on collaboration agreement | $ 297.5 | $ 550.0 | |
Percentage of cost sharing arrangement under collaborative and license agreements | 50.00% | 50.00% | 50.00% |
Maximum | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Percentage of contractual profits earned under collaborative arrangement | 50.00% | ||
Minimum | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Percentage of contractual profits earned under collaborative arrangement | 30.00% |
Share-Based Payments - Equity Award Plans, Narrative (Details) |
Jun. 20, 2018
shares
|
---|---|
Amended and Restated 2013 Incentive Award Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Increase in number of shares of common stock available for issuance (in shares) | 1,000,000 |
Share-Based Payments - Non-Cash Share-Based Compensation Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated share-based compensation expense | $ 10,126 | $ 4,916 | $ 20,172 | $ 16,309 |
Research and Development Expense | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated share-based compensation expense | 1,870 | 1,860 | 5,933 | 6,083 |
General and Administrative Expense | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated share-based compensation expense | 3,000 | 3,056 | 8,983 | 10,226 |
Restructuring Charges | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated share-based compensation expense | $ 5,256 | $ 0 | $ 5,256 | $ 0 |
Share-Based Payments - Summary of Compensation Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Share-Based Payments | ||||
Allocated share-based compensation expense | $ 10,126 | $ 4,916 | $ 20,172 | $ 16,309 |
Outstanding Stock options | ||||
Share-Based Payments | ||||
Allocated share-based compensation expense | 1,819 | 2,494 | 5,720 | 7,819 |
Restricted stock awards and restricted stock units | ||||
Share-Based Payments | ||||
Allocated share-based compensation expense | 2,951 | 2,289 | 8,914 | 8,120 |
Employee Stock Purchase Plan | ||||
Share-Based Payments | ||||
Allocated share-based compensation expense | 100 | 133 | 282 | 370 |
Awards Relating To Restructuring | ||||
Share-Based Payments | ||||
Allocated share-based compensation expense | $ 5,256 | $ 0 | $ 5,256 | $ 0 |
Share-Based Payments - Share-Based Compensation, Narrative (Details) - Stock options - $ / shares |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted (in shares) | 372,690 | |||
Weighted average grant date fair value of options granted (in dollars per share) | $ 13.08 | $ 8.58 | $ 9.66 | $ 9.17 |
Share-Based Payments - Summary of Weighted Average Assumptions (Details) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected volatility (as a percent) | 48.00% | 50.00% | 48.00% | 53.00% |
Expected dividends | 0.00% | 0.00% | 0.00% | 0.00% |
Expected life (years) | 5 years 10 months 24 days | 6 years 2 months 12 days | 6 years 1 month 6 days | 5 years 9 months 18 days |
Risk-free interest rate (as a percent) | 3.00% | 2.00% | 2.80% | 2.10% |
Employee Stock Purchase Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected volatility (as a percent) | 48.00% | 52.00% | 49.00% | 55.00% |
Expected dividends | 0.00% | 0.00% | 0.00% | 0.00% |
Expected life (years) | 6 months | 6 months | 6 months | 6 months |
Risk-free interest rate (as a percent) | 1.90% | 0.90% | 1.60% | 0.70% |
Restructuring - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |
---|---|---|---|
Sep. 26, 2018 |
Sep. 30, 2018 |
Sep. 30, 2018 |
|
Restructuring Cost and Reserve [Line Items] | |||
Percent reduction in headcount expected | 50.00% | ||
Restructuring expense | $ 8.7 | $ 8.7 | |
Expected reverse of stock-based compensation from awards forfeited | 1.8 | 1.8 | |
Acceleration of stock-based compensation | |||
Restructuring Cost and Reserve [Line Items] | |||
Additional restructuring charges expected to be recorded | $ 1.9 | $ 1.9 |
Commitments and Contingencies - Schedule of Minimum Lease Payments (Details) $ in Thousands |
Sep. 30, 2018
USD ($)
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
October 1 to December 31, 2018 | $ 3,787 |
2019 | 15,418 |
2020 | 15,872 |
2021 | 16,266 |
2022 | 16,644 |
2023 and beyond | 60,896 |
Total future minimum lease payments | $ 128,883 |
Commitments and Contingencies - Operating Leases and Purchase Obligations (Details) $ in Millions |
Sep. 30, 2018
USD ($)
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
Minimum purchase obligation, 2019 | $ 22.5 |
Minimum purchase obligation, 2020 | 22.5 |
Minimum purchase obligation, 2021 | 28.3 |
Minimum purchase obligation, 2022 | $ 28.3 |
Commitments and Contingencies - Legal Contingencies (Details) $ in Millions |
1 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jan. 30, 2017
patent
|
Sep. 10, 2014
patent
|
Oct. 31, 2011
USD ($)
|
Sep. 30, 2018
USD ($)
|
|
Legal Contingencies | ||||
Orange Book-listed patents for 40 mg/ml Copaxone | patent | 2 | |||
Number of patents invalid due to obviousness | patent | 4 | |||
Amount of security bond required to be posted by company and Sandoz in connection with the litigation | $ 100.0 | |||
Maximum amount of security bond for which the entity shall be responsible in the event of loss of case | $ 35.0 | |||
Collateral for security bond | $ 17.5 |
Subsequent Events (Details) - USD ($) $ in Millions |
Nov. 02, 2018 |
Sep. 30, 2018 |
---|---|---|
Subsequent Event [Line Items] | ||
Collateral for security bond | $ 17.5 | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Letter of credit | $ 35.0 | |
Collateral for security bond | $ 36.0 |
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