Collaboration Agreements (Tables)

12 Months Ended

Dec. 31, 2017

Revenue Recognition and Deferred Revenue [Abstract]

Schedule of Milestone-Based Payments Associated With 2016 Agreement

We are eligible to receive the following milestone-based payments associated with the 2016 Agreement:

Program	Milestone	Amount
65/35 program in IO field	Specified clinical development event	$25.0 million
65/35 program in IO field	Specified regulatory milestone events	Up to $183.8 million
50/50 program in IO field	Specified clinical development event	$20.0 million
50/50 program in IO field	Specified regulatory milestone events	Up to $148.8 million
I&I field	Specified clinical development event	$25.0 million
I&I field	Specified regulatory milestone events	Up to $236.3 million
I&I field	Specified commercial milestone events	Up to $125.0 million

Summary of Multiple-deliverable Arrangements Revenue

For the years ended December 31, 2017, 2016 and 2015, we recognized the following collaboration revenue and reduction of research and development expenses related to such expenses (in thousands):

	Years Ended December 31,
	2017		2016		2015
Collaboration revenue - related party
Development activities	$	—	$	1,192	$	2,076
Commercial activities	2,954		170		—
Reduction of research and development expenses
Development activities	14		6,596		8,051

During the years ended December 31, 2017, 2016 and 2015, we recognized as a reduction of research and development expenses the following non-contingent consideration allocated to each undelivered element (in thousands):

	Modification Period	Years Ended December 31,
Undelivered Element		2017		2016		2015
On-going development services (agent)	April 2015	$	—	$	7,456	$	17,122
On-going development services (agent)	May 2016	7,797		5,662		—
Total reduction of research and development expenses			$7,797		$13,118		$17,122

During the years ended December 31, 2017, 2016 and 2015, we recognized as collaboration revenue the following non-contingent consideration allocated to each undelivered element (in thousands):

	Years Ended December 31,
Undelivered Element	2017		2016		2015
July 2014 modification
Ivosidenib program license	$	—	$	—	$	15,808
On-going development services (principal)	—		—		14,711
On-going research and development	—		—		4,992
Committee participations	—		—		80
April 2015 modification
AG-881 program licenses	—		1,356		11,968
On-going development services (principal)	—		1,656		1,719
On-going research and development	—		4,584		7,644
Committee participations	—		89		121
May 2016 modification
On-going development services (principal)	11,827		21,308		—
On-going research and development	26,126		14,445		—
Committee participations	167		92		—
Total collaboration revenue - related party		$38,120		$43,530		$57,043

The undelivered elements at the time of the modification, which are each considered by us to have stand-alone value and therefore were determined to be separate units of accounting, the related BESP, the method of recognizing the allocated consideration, and the period through which it is expected to be recognized at the time of each modification are as follows:

Undelivered Element	BESP			Unit(s) of Accounting	Principal/ Agent	Recognition Method
July 2014 modification
Ivosidenib program license (1)		$21.2	million	1	Principal	Upon delivery of the licenses to Celgene, which occurred in January 2015
On-going development services (2) (3)		$50.8	million	5	Principal	Proportionally as services are delivered over the performance period, expected to be through June 2016
On-going research and development (2)		$13.6	million	1	Principal	Ratably over the performance period, expected to be through June 2016
Committee participations (4)		$0.2	million	1	Principal	Ratably over the performance period, expected to be through June 2016
April 2015 modification (supplants undelivered elements of July 2014 modification)
AG-881 program licenses (1)		$33.2	million	2	Principal	Upon delivery of the licenses to Celgene, which occurred immediately upon the execution of the AG-881 Agreements
On-going development services (2) (3)		$12.7	million	4	Principal	Proportionally as services are delivered over the performance period, expected to be through September 2017
On-going development services (2) (3)		$97.3	million	4	Agent	Proportionally as services are delivered over the performance period, expected to be through December 2017
On-going research and development (2)		$30.5	million	1	Principal	Ratably over the performance period, expected to be through April 2016
Committee participations (4)		$0.8	million	1	Principal	Ratably over the performance period, expected to be through December 2016
May 2016 modification (supplants undelivered elements of April 2015 modification)
On-going development services (2) (3)		$67.8	million	3	Principal	Proportionally as services are delivered over the performance period, expected to be through December 2019
On-going development services (2) (3)		$22.4	million	3	Agent	Proportionally as services are delivered over the performance period, expected to be through December 2019
On-going research and development (2)		$207.0	million	1	Principal	Ratably over the performance period, expected to be through May 2022
Committee participations (4)		$1.5	million	1	Principal	Ratably over the performance period, expected to be through December 2022
Additional development services		$48.7	million	1	Principal	Proportionally as services are delivered over the performance period, expected to begin in September 2020

(1) The BESP was developed by probability weighting multiple cash flow scenarios using the income approach. Our management estimates within the models include the expected, probability-weighted net profits from estimated future sales, an estimate of the direct cost incurred to generate future cash flows, a discount rate and other business forecast factors. There are significant judgments and estimates inherent in the determination of the BESP of these units of accounting. These judgments and estimates include assumptions regarding future operating performance, the timelines of the clinical trials and regulatory approvals, and other factors. If different reasonable assumptions are utilized, the BESP and revenue recognized would vary.

(2) The BESP was developed using our management’s best estimate of the cost of obtaining these services at arm’s length from a third-party provider.

(3) The BESP was developed using internal full time equivalent costs to support the development services.

(4) The BESP was developed using our management’s best estimate of the anticipated participation hours and the market rate for comparable participants.

For the years ended December 31, 2017, 2016 and 2015, we recognized the following totals of collaboration revenue and reduction of research and development expenses (in thousands):

	Years Ended December 31,
	2017		2016		2015
Collaboration revenue - related party	$	41,074	$	44,892	$	59,119
Reduction of research and development expenses	7,811		19,714		25,173