QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Alberta, | |||||
(State or other jurisdiction of incorporation or organization) | |||||
(Address of principal executive offices) | (I.R.S. Employer Identification Number) |
☒ | Accelerated filer | ☐ | ||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||
Emerging growth company |
Title of each class | Trading Symbol | Name of exchange on which registered | ||||||
Page | ||||||||||||||
September 30, 2021 | December 31, 2020 | |||||||||||||
(unaudited) | ||||||||||||||
ASSETS | ||||||||||||||
Current assets | ||||||||||||||
Cash and cash equivalents | $ | $ | ||||||||||||
Short-term investments | ||||||||||||||
Accounts receivable, net | ||||||||||||||
Inventories, net | ||||||||||||||
Prepaid expenses and other current assets | ||||||||||||||
Total current assets | ||||||||||||||
Non-current assets | ||||||||||||||
Long-term investments | ||||||||||||||
Other non-current assets | ||||||||||||||
Property and equipment, net | ||||||||||||||
Acquired intellectual property and other intangible assets, net | ||||||||||||||
Right-of-use assets | ||||||||||||||
Total assets | ||||||||||||||
LIABILITIES | ||||||||||||||
Current liabilities | ||||||||||||||
Accounts payable and accrued liabilities | ||||||||||||||
Other current liabilities (of which $ | ||||||||||||||
Operating lease liabilities | ||||||||||||||
Total current liabilities | ||||||||||||||
Non-current liabilities | ||||||||||||||
Other non-current liabilities | ||||||||||||||
Operating lease liabilities | ||||||||||||||
Total liabilities | ||||||||||||||
Commitments and contingencies (Note 18) | ||||||||||||||
SHAREHOLDER’S EQUITY | ||||||||||||||
Common shares - no par value, unlimited shares authorized, | ||||||||||||||
Additional paid-in capital | ||||||||||||||
Accumulated other comprehensive loss | ( | ( | ||||||||||||
Accumulated deficit | ( | ( | ||||||||||||
Total shareholder’s equity | ||||||||||||||
Total liabilities and shareholders’ equity | $ | $ |
Three months ended | Nine months ended | |||||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
(unaudited) | (unaudited) | |||||||||||||||||||||||||
Revenue | ||||||||||||||||||||||||||
Product revenue, net | $ | $ | $ | $ | ||||||||||||||||||||||
License revenue | ||||||||||||||||||||||||||
Total revenue | ||||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||
Cost of sales | ||||||||||||||||||||||||||
Selling, general and administrative | ||||||||||||||||||||||||||
Research and development | ||||||||||||||||||||||||||
Amortization of intangible assets | ||||||||||||||||||||||||||
Other (income) expense, net | ( | |||||||||||||||||||||||||
Total cost of sales and operating expenses | ||||||||||||||||||||||||||
Loss from operations | ( | ( | ( | ( | ||||||||||||||||||||||
Interest income | ||||||||||||||||||||||||||
Net loss before income taxes | ( | ( | ( | ( | ||||||||||||||||||||||
Income tax expense (benefit) | ( | ( | ||||||||||||||||||||||||
Net loss | ( | ( | ( | ( | ||||||||||||||||||||||
Other comprehensive loss: | ||||||||||||||||||||||||||
Unrealized (loss) gain on available-for-sale securities, net of tax of | ( | |||||||||||||||||||||||||
Comprehensive loss | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
Basic and diluted loss per share | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
Weighted-average common shares outstanding used in computation of basic and diluted loss per share |
Common Shares | ||||||||||||||||||||||||||||||||||||||
Three Months Ended September 30, 2021 | Shares | Amount | Additional paid in capital | Accumulated Other Comprehensive (Loss) Income | Accumulated Deficit | Total Shareholders' Equity | ||||||||||||||||||||||||||||||||
Balance at June 30, 2021 | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||
Shares issued on exercise of stock options | ( | — | — | |||||||||||||||||||||||||||||||||||
Exercise of warrants | ( | — | — | |||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | ||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
Balance at September 30, 2021 | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||
Common Shares | ||||||||||||||||||||||||||||||||||||||
Three Months Ended September 30, 2020 | Shares | Amount | Additional paid in capital | Accumulated Other Comprehensive (Loss) Income | Accumulated Deficit | Total Shareholders' Equity | ||||||||||||||||||||||||||||||||
Balance at June 30, 2020 | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||
Issue of common shares | — | — | — | |||||||||||||||||||||||||||||||||||
Shares issued on exercise of stock options | ( | — | — | |||||||||||||||||||||||||||||||||||
Share issue costs | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||
Shared-based compensation | — | — | — | — | ||||||||||||||||||||||||||||||||||
Net loss | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||
Balance at September 30, 2020 | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||
Common Shares | ||||||||||||||||||||||||||||||||||||||
Nine Months Ended September 30, 2021 | Shares | Amount | Additional paid in capital | Accumulated Other Comprehensive (Loss) Income | Accumulated Deficit | Total Shareholders' Equity | ||||||||||||||||||||||||||||||||
Balance at December 31, 2020 | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||
Shares issued on exercise of stock options | ( | — | — | |||||||||||||||||||||||||||||||||||
Exercise of warrants | ( | — | — | |||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | ||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | ||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
Balance at September 30, 2021 | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||
Common Shares | ||||||||||||||||||||||||||||||||||||||
Nine Months Ended September 30, 2020 | Shares | Amount | Additional paid in capital | Accumulated Other Comprehensive (Loss) Income | Accumulated Deficit | Total Shareholders' Equity | ||||||||||||||||||||||||||||||||
Balance at December 31, 2019 | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||
Shares issued on exercise of stock options | ( | — | — | |||||||||||||||||||||||||||||||||||
Issue of common shares | — | — | — | |||||||||||||||||||||||||||||||||||
Share issue costs | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||
Exercise of warrants | ( | — | — | |||||||||||||||||||||||||||||||||||
Shared-based compensation | — | — | — | — | ||||||||||||||||||||||||||||||||||
Net loss | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||
Balance at September 30, 2020 | $ | $ | $ | ( | $ | ( | $ |
Nine Months Ended | ||||||||||||||
September 30, | ||||||||||||||
2021 | 2020 | |||||||||||||
(unaudited) | ||||||||||||||
Cash flows used in operating activities: | ||||||||||||||
Net loss | $ | ( | $ | ( | ||||||||||
Adjustments to reconcile net loss to net cash used in operating activities | ||||||||||||||
Depreciation of property and equipment | ||||||||||||||
Amortization of intangible assets | ||||||||||||||
Upfront license and milestone expense | ||||||||||||||
Share-based compensation expense | ||||||||||||||
Other, net | ||||||||||||||
Net changes in operating assets and liabilities | ||||||||||||||
Accounts receivable | ( | |||||||||||||
Inventories | ( | ( | ||||||||||||
Prepaid expenses and other current assets | ( | ( | ||||||||||||
Non-current assets | ||||||||||||||
Right of use assets | ( | ( | ||||||||||||
Accounts payable, accrued and other liabilities | ||||||||||||||
Lease liabilities | ||||||||||||||
Net cash used in operating activities | ( | ( | ||||||||||||
Cash flows used in investing activities: | ||||||||||||||
Purchase of investments | ( | ( | ||||||||||||
Proceeds from investments | ||||||||||||||
Upfront lease payment | ( | |||||||||||||
Upfront license payment | ( | |||||||||||||
Purchase of long-lived assets | ( | ( | ||||||||||||
Additions to internal use-software implementation costs | ( | ( | ||||||||||||
Capitalized patent costs | ( | ( | ||||||||||||
Net cash used in investing activities | ( | ( | ||||||||||||
Cash flows from financing activities | ||||||||||||||
Proceeds from exercise of stock options | ||||||||||||||
Proceeds from exercise of warrants | ||||||||||||||
Net proceeds from issuance of common shares | ||||||||||||||
Cash provided by financing activities | ||||||||||||||
Net decrease in cash and cash equivalents | ( | ( | ||||||||||||
Cash and cash equivalents, beginning of period | ||||||||||||||
Cash and cash equivalents, end of period | $ | $ | ||||||||||||
Supplemental cash flow information | ||||||||||||||
Cash received for interest | $ | $ | ||||||||||||
Cash paid for taxes | $ | ( | $ | ( | ||||||||||
Cash paid for amounts included in the measurement of lease liabilities | $ | ( | $ | ( | ||||||||||
Supplemental disclosure of noncash transactions | ||||||||||||||
Initial recognition of operating lease right-of-use asset | $ | $ |
(in thousands) | September 30, 2021 | December 31, 2020 | ||||||||||||
Cashable Guaranteed Investment Certificate | $ | $ | ||||||||||||
Corporate Bond | ||||||||||||||
Commercial Paper | ||||||||||||||
Treasury Bill | ||||||||||||||
Treasury Bond | ||||||||||||||
Yankee Bond | ||||||||||||||
Total short-term investments | ||||||||||||||
Corporate Bonds - total long-term investments | ||||||||||||||
Total investments | $ | $ |
(in thousands) | September 30, 2021 | December 31, 2020 | ||||||||||||
Raw materials | $ | $ | ||||||||||||
Work in process | ||||||||||||||
Finished goods | ||||||||||||||
Total inventories | $ | $ |
(in thousands) | September 30, 2021 | December 31, 2020 | ||||||||||||
Prepaid assets | $ | $ | ||||||||||||
Prepaid insurance | ||||||||||||||
Other current assets | ||||||||||||||
Prepaid deposits | ||||||||||||||
Total prepaid expenses and other current assets | $ | $ |
September 30, 2021 | ||||||||||||||||||||
(in thousands) | Gross Carrying Value | Accumulated Amortization | Net Carrying Amount | |||||||||||||||||
Patents | $ | $ | ( | $ | ||||||||||||||||
Acquired intellectual property and reacquired rights | ( | |||||||||||||||||||
Internal-use software implementation costs | ( | |||||||||||||||||||
$ | $ | ( | $ |
December 31, 2020 | ||||||||||||||||||||
(in thousands) | Gross Carrying Value | Accumulated Amortization | Net Carrying Amount | |||||||||||||||||
Patents | $ | $ | ( | $ | ||||||||||||||||
Acquired intellectual property and reacquired rights | ( | |||||||||||||||||||
Internal-use software implementation costs | ( | |||||||||||||||||||
$ | $ | ( | $ |
(in thousands) | September 30, 2021 | December 31, 2020 | ||||||||||||
Construction in progress | $ | $ | ||||||||||||
Leasehold improvements | ||||||||||||||
Office equipment and furniture | ||||||||||||||
Computer equipment | ||||||||||||||
Less accumulated depreciation | ( | ( | ||||||||||||
Property and equipment, net | $ | $ |
(in thousands) | Balance Sheet Classification | September 30, 2021 | December 31, 2020 | |||||||||||||||||
Assets | ||||||||||||||||||||
Operating lease right of-use assets | Right-of-use assets | $ | $ | |||||||||||||||||
Liabilities | ||||||||||||||||||||
Current operating lease liabilities | Current operating lease liabilities | |||||||||||||||||||
Non-current operating lease liabilities | Non-current operating lease liabilities | |||||||||||||||||||
Total lease liabilities | $ | $ |
Three months ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||
(in thousands) | Consolidated Statement of Operations | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||||||
Operating lease costs | ||||||||||||||||||||||||||||||||
Operating lease costs | Selling, general and administrative | $ | $ | $ | $ | |||||||||||||||||||||||||||
Short-term lease costs | ||||||||||||||||||||||||||||||||
Office Building | Selling, general and administrative | |||||||||||||||||||||||||||||||
Variable lease costs | ||||||||||||||||||||||||||||||||
Office building | Selling, general and administrative | |||||||||||||||||||||||||||||||
Total rent expense | $ | $ | $ | $ |
As of September 30, 2021 | ||||||||||||||
Weighted Average Remaining Lease Term (years) | Weighted Average Discount Rate | |||||||||||||
Operating leases |
(in thousands) | Operating Lease Payments | |||||||
Remainder of 2021 | $ | |||||||
2022 | ||||||||
2023 | ||||||||
2024 | ||||||||
2025 | ||||||||
Thereafter | ||||||||
Total future minimum lease payments | ||||||||
Less: lease imputed interest | ( | |||||||
Total future minimum lease payments | $ |
(in thousands) | September 30, 2021 | December 31, 2020 | ||||||||||||
Trade payables | $ | $ | ||||||||||||
Other accrued liabilities | ||||||||||||||
Accrued R&D projects | ||||||||||||||
Employee accruals | ||||||||||||||
Total accounts payable and accrued liabilities | $ | $ |
September 30, 2021 | ||||||||||||||||||||||||||
(in thousands) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||
Cash and cash equivalents: | ||||||||||||||||||||||||||
Deposits held with banks | $ | $ | $ | $ | ||||||||||||||||||||||
Short-term highly liquid investments | ||||||||||||||||||||||||||
Investments | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ | ||||||||||||||||||||||
December 31, 2020 | ||||||||||||||||||||||||||
(in thousands) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||
Cash and cash equivalents: | ||||||||||||||||||||||||||
Deposits held with banks | $ | $ | $ | $ | ||||||||||||||||||||||
Short-term highly liquid investments | ||||||||||||||||||||||||||
Investments | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ | ||||||||||||||||||||||
Three months ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
(in thousands, except per share data) | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||
Net loss | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
Weighted average common shares outstanding | ||||||||||||||||||||||||||
Net loss per common share (expressed in $ per share) | $ | ( | $ | ( | $ | ( | $ | ( |
Nine months ended September 30, | ||||||||||||||
(in thousands) | 2021 | 2020 | ||||||||||||
Stock options | ||||||||||||||
Unvested performance awards | ||||||||||||||
Unvested restricted units | ||||||||||||||
Warrants | ||||||||||||||
September 30, 2021 | September 30, 2020 | |||||||||||||
Annualized volatility | % | |||||||||||||
Risk-free interest rate | % | % | ||||||||||||
Expected life of options in years | ||||||||||||||
Estimated forfeiture rate | % | % | ||||||||||||
Dividend rate | % | |||||||||||||
Fair value per common share option | $ | $ |
September 30, 2021 | ||||||||||||||
Number of shares (in thousands) | Weighted average exercise price $ | |||||||||||||
Outstanding - Beginning of Period | ||||||||||||||
Granted | ||||||||||||||
Exercised | ( | |||||||||||||
Cancelled/Forfeited | ( | |||||||||||||
Outstanding - End of Period | ||||||||||||||
Vested and expected to vest - End of Period | ||||||||||||||
Options exercisable - End of Period |
Three months ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
(in thousands) | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||
Research and development | $ | $ | $ | $ | ||||||||||||||||||||||
Selling, general and administrative | ||||||||||||||||||||||||||
Capitalized under inventories | ||||||||||||||||||||||||||
Share-based compensation expense | $ | $ | $ | $ |
Three months ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||
2021 | 2020 | Change | 2021 | 2020 | Change | |||||||||||||||||||||||||||||||||
(in thousands) | (in thousands) | |||||||||||||||||||||||||||||||||||||
Revenue | ||||||||||||||||||||||||||||||||||||||
Product revenue, net | $ | 14,638 | $ | — | $ | 14,638 | $ | 22,113 | $ | — | $ | 22,113 | ||||||||||||||||||||||||||
License revenue | 29 | 29 | — | 88 | 88 | — | ||||||||||||||||||||||||||||||||
Total revenue | 14,667 | 29 | 14,638 | 22,201 | 88 | 22,113 | ||||||||||||||||||||||||||||||||
Operating expenses: | — | — | ||||||||||||||||||||||||||||||||||||
Cost of sales | 254 | — | 254 | 610 | — | 610 | ||||||||||||||||||||||||||||||||
Selling, general and administrative | 44,128 | 30,702 | 13,426 | 127,196 | 57,204 | 69,992 | ||||||||||||||||||||||||||||||||
Research and development | 20,066 | 12,243 | 7,823 | 39,990 | 37,154 | 2,836 | ||||||||||||||||||||||||||||||||
Amortization of intangible assets | 517 | 316 | 201 | 1,576 | 902 | 674 | ||||||||||||||||||||||||||||||||
Other (income) expense, net | 55 | (917) | 972 | 859 | 1,066 | (207) | ||||||||||||||||||||||||||||||||
Total cost of sales and operating expenses | 65,020 | 42,344 | 22,676 | 170,231 | 96,326 | 73,905 | ||||||||||||||||||||||||||||||||
Loss from operations | (50,353) | (42,315) | (8,038) | (148,030) | (96,238) | (51,792) | ||||||||||||||||||||||||||||||||
Interest income | 106 | 170 | (64) | 420 | 1,381 | (961) | ||||||||||||||||||||||||||||||||
Net loss before income taxes | (50,247) | (42,145) | (8,102) | (147,610) | (94,857) | (52,753) | ||||||||||||||||||||||||||||||||
Income tax expense (benefit) | 8 | (15) | 23 | 34 | (251) | 285 | ||||||||||||||||||||||||||||||||
Net loss | $ | (50,255) | $ | (42,130) | $ | (8,125) | $ | (147,644) | $ | (94,606) | $ | (53,038) |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
(in thousands) | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||
Salaries, incentive pay and employee benefits | $ | 19,981 | $ | 13,795 | $ | 58,723 | $ | 22,375 | ||||||||||||||||||
Professional fees and services | 13,110 | 8,668 | 34,536 | 18,229 | ||||||||||||||||||||||
Share-based compensation expense | 6,000 | 3,750 | 19,189 | 9,151 | ||||||||||||||||||||||
Other public company costs, facility costs, insurance, information technology, amortization of property and equipment | 3,304 | 4,030 | 9,579 | 6,548 | ||||||||||||||||||||||
Travel, trade shows and sponsorships | 1,733 | 459 | 5,169 | 901 | ||||||||||||||||||||||
$ | 44,128 | $ | 30,702 | $ | 127,196 | $ | 57,204 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
(in thousands) | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||
Contract research organizations (CRO) and developmental expenses | $ | 15,873 | $ | 5,581 | $ | 25,579 | $ | 18,928 | ||||||||||||||||||
Clinical supply and distribution | 872 | 2,502 | 3,242 | 6,882 | ||||||||||||||||||||||
Salaries, incentive pay and employee benefits | 2,070 | 2,976 | 7,807 | 7,351 | ||||||||||||||||||||||
Share-based compensation expense | 1,038 | 814 | 3,201 | 3,111 | ||||||||||||||||||||||
Travel, insurance, patent annuity fees, legal fees and other | 213 | 370 | 161 | 882 | ||||||||||||||||||||||
$ | 20,066 | $ | 12,243 | $ | 39,990 | $ | 37,154 |
Nine months ended September 30, | ||||||||||||||
(in thousands) | 2021 | 2020 | ||||||||||||
Net cash (used in) provided by: | ||||||||||||||
Operating activities | $ | (131,770) | $ | (73,062) | ||||||||||
Investing activities | (98,383) | (177,332) | ||||||||||||
Financing activities | 15,390 | 193,133 | ||||||||||||
Net decrease in cash and cash equivalents | $ | (214,763) | $ | (57,261) |
Exhibit Number | Description | |||||||
3.1 | ||||||||
3.2 | ||||||||
3.3 | ||||||||
31.1* | ||||||||
31.2* | ||||||||
32.1** | ||||||||
32.2** | ||||||||
101.INS* | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | |||||||
101.SCH* | Inline XBRL Taxonomy Extension Schema Document | |||||||
101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | |||||||
101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document | |||||||
101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | |||||||
* | Filed herewith. | |||||||
** | Furnished herewith. Exhibits 32.1 and 32.2 are being furnished and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liability of that section, nor shall such exhibit be deemed to be incorporated by reference in any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as otherwise specifically stated in such filing. |
AURINIA PHARMACEUTICALS INC. | ||||||||
November 3, 2021 | By: | /s/ Peter Greenleaf | ||||||
Peter Greenleaf | ||||||||
Chief Executive Officer, Director (Principal Executive Officer) | ||||||||
November 3, 2021 | By: | /s/ Joseph Miller | ||||||
Joseph Miller | ||||||||
Chief Financial Officer (Principal Financial and Accounting Officer) |
Date: | November 3, 2021 | By: | /s/ Peter Greenleaf | ||||||||
Peter Greenleaf | |||||||||||
Chief Executive Officer | |||||||||||
(Principal Executive Officer) |
Date: | November 3, 2021 | By: | /s/ Joseph Miller | ||||||||
Joseph Miller | |||||||||||
Chief Financial Officer | |||||||||||
(Principal Financial and Accounting Officer) |
Date: | November 3, 2021 | By: | /s/ Peter Greenleaf | ||||||||
Peter Greenleaf | |||||||||||
Chief Executive Officer | |||||||||||
(Principal Executive Officer) |
Date: | November 3, 2021 | By: | /s/ Joseph Miller | ||||||||
Joseph Miller | |||||||||||
Chief Financial Officer | |||||||||||
(Principal Financial and Accounting Officer) |
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Due to related party, current | $ 2,000 | $ 6,000 |
Common stock, issued (shares) | 129,570,000 | 126,725,000 |
Common stock, outstanding (shares) | 129,570,000 | 126,725,000 |
Condensed Consolidated Statements of Operations and Comprehensive Loss (Parenthetical) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
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Sep. 30, 2020 |
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Income Statement [Abstract] | ||||
Unrealized gain on available-for-sale securities, tax | $ 0.0 | $ 0.0 | $ 0.0 | $ 0.0 |
Organization and Description of Business |
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Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | Organization and Description of Business Aurinia Pharmaceuticals Inc. is a commercial-stage biopharmaceutical company focused on developing and commercializing therapies to treat targeted patient populations that are suffering from serious diseases with a high unmet medical need. The Company has developed LUPKYNISTM, for the treatment of adult patients with active lupus nephritis (LN) and continues to conduct pre-clinical, clinical, and regulatory advancement to support the voclosporin development program. On January 22, 2021, the U.S. Food and Drug Administration (FDA) approved LUPKYNIS in combination with a background immunosuppressive therapy regimen to treat adult patients with active LN. On August 17, 2021, the Company announced the addition of two novel assets AUR200 and AUR300. AUR200 is currently undergoing pre-clinical development with projected submission of an Investigational New Drug Application (IND) to the FDA by the end of 2022. It is anticipated that an IND for AUR300 is expected during the first half of 2023. Aurinia's head office is located at #1203-4464 Markham Street, Victoria, British Columbia, Canada and its registered office is located at #201, 17873-106 A Avenue, Edmonton, Alberta. Aurinia also has a U.S. commercial office located at 77 Upper Rock Circle, Rockville, Maryland, United States. Aurinia is incorporated pursuant to the Business Corporations Act (Alberta). The Company’s common shares traded on both the Nasdaq Global Market (Nasdaq) under the symbol AUPH and on the Toronto Stock Exchange (TSX) under the symbol AUP until July 30, 2021. As of July 30, 2021, the Company's common shares no longer trade on the TSX following the voluntary delisting by the Company and are solely traded on the Nasdaq.
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Basis of Presentation |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments considered necessary for fair presentation in accordance with U.S. GAAP. The condensed consolidated balance sheet as of December 31, 2020 was derived from audited annual financial statements but does not include all annual disclosures required by U.S. GAAP. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2020. The results of operations for the nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for the full year or any other future periods. These unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Aurinia Pharma U.S., Inc. (Delaware incorporated) and Aurinia Pharma Limited (UK incorporated). All intercompany balances and transactions have been eliminated in consolidation. The Company operates as one operating segment in accordance with the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 280, Segment Reporting. The Company operates in one operating segment engaged in the research, development and commercialization of therapeutic drugs in which revenues are derived from license, contract and product revenues. The Company's chief executive officer makes decisions for the Company and its subsidiaries as a whole. Accordingly, the Company operates and makes decisions as one reporting unit. These unaudited condensed consolidated financial statements are presented in U.S. dollars which is the Company's functional currency therefore there is no currency translation adjustment upon consolidation as the remeasurement of gains or losses are recorded in the condensed consolidated statement of operations. All assets and liabilities denominated in a foreign currency are remeasured into U.S. dollars at the exchange rate on the balance sheet date. Revenues and expenses are remeasured at the average exchange rate during the period. Foreign exchange gains and losses arising on translation or settlement of a foreign currency denominated monetary item are included in the condensed consolidated statements of operations. We are devoting the majority of our operational efforts and financial resources towards the commercialization and post approval commitments of our approved drug, LUPKYNIS. We are also expending efforts towards our newly acquired assets AUR200 and AUR300. Taking into consideration the Company's cash and cash equivalents and investments of $286.4 million as of September 30, 2021, the Company believes that it has sufficient resources to fund its operations at least one year beyond the date that the unaudited condensed consolidated financial statements are issued.
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Summary of Significant Accounting Policies |
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Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | mary of Significant Accounting Policies Other than as described below, the Company's significant accounting policies have not changed from those previously described in the Company's Annual Report on Form 10-K for the year ended December 31, 2020. Critical Accounting Estimates: The preparation of our condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP, requires us to make estimates, judgments and assumptions that may affect the reported amounts of assets, liabilities, revenues, expenses and related disclosure of contingent assets and liabilities in our condensed consolidated financial statements. We believe the most complex judgments result primarily from the need to make estimates about the effects of matters that are inherently uncertain and are significant to our condensed consolidated financial statements. We base our estimates on historical experience and on various other assumptions that we believe are reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. We evaluate our estimates, judgments and assumptions on an ongoing basis. Actual results may differ from these estimates under different assumptions or conditions and such differences may be material. The most significant areas involving estimates, judgments and assumptions used in the preparation of our condensed consolidated financial statements are as follows: •Revenue recognition; •Cost of sales; •Inventory; •Royalty obligation; •Contingent accruals; •Clinical trial expenditures; •Share-based compensation; •Intangible assets; •Leases; and •Income taxes. Concentration of Credit Risk: Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist primarily of cash and cash equivalents, investments and accounts receivable. The Company attempts to minimize the risks related to cash and cash equivalents and investments by investing in a broad and diverse range of financial instruments. The Company established guidelines related to credit ratings and maturities intended to safeguard principal balances, earn a return on investments and to maintain liquidity. The Company's investment portfolio is maintained in accordance with its investment policy, which defines allowable investments, specifies credit quality standards and limits the credit exposure of any single issuer. The Company does not enter into any investment transaction for trading or speculative purposes. The Company’s investment policy limits investments to certain types of instruments such as certificates of deposit, money market instruments, obligations issued by the U.S. government and U.S. government agencies as well as corporate debt securities, and places restrictions on maturities and concentration by type and issuer. The Company may at times maintain cash balances in excess of amounts insured by the Federal Deposit Insurance Corporation and Canada Deposit Insurance Corporation and concentrated within a limited number of financial institutions. The accounts are monitored by management to mitigate the risk. The Company is exposed to financial risk related to the fluctuation of foreign currency exchange rates which could have a material effect on its future operating results or cash flows. Foreign currency risk is the risk that variations in exchange rates between the United States dollar and foreign currencies, primarily with the Canadian dollar, will affect the Company's operating and financial results. The Company holds the majority of its cash and cash equivalents in U.S. dollars and the majority of its expenses are also denominated in U.S. dollars, which limits the risk of material foreign exchange fluctuations. The Company currently has three main customers for U.S. commercial sales of LUPKYNIS and one customer for sales of voclosporin in the European Union, Japan, as well as the United Kingdom, Russia, Switzerland, Norway, Belarus, Iceland, Liechtenstein and Ukraine. Revenues from two customers accounted for approximately 59% and 40% of the Company's total revenues for the three and nine months ended September 30, 2021. The Company monitors economic conditions, the creditworthiness of customers and government regulations and funding, both domestically and abroad. The Company regularly communicates with its customers regarding the status of receivable balances, including their payment plans and obtains positive confirmation of the validity of the receivables. An allowance against accounts receivable is established, if needed, using an expected credit loss model. Global economic conditions and customer specific factors may require the Company to periodically re-evaluate the collectability of its receivables and the Company could potentially incur credit losses. Investments: The Company classifies its debt securities at acquisition as either held to maturity or available-for-sale in accordance with the FASB ASC Topic 320, Investments — Debt Securities. Investments classified as held to maturity are carried at amortized cost when management has the positive intent and ability to hold them to maturity. Investments classified as available-for-sale are carried at fair value with unrealized gains and losses reported in other comprehensive income/loss within shareholders’ equity. Realized gains and losses on held to maturity and available-for-sale securities are recorded in other income (expense), net. Interest income is recorded separately on the consolidated statements of operations. The cost of securities sold is based on the specific-identification method. Revenue Recognition: Pursuant to ASC Topic 606, Revenue from Contracts with Customers (ASC 606), the Company recognizes revenue when a customer obtains control of promised goods or services. The Company records the amount of revenue that reflects the consideration that it expects to receive in exchange for those goods or services. Revenue is recognized through a five-step process: (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) a performance obligation is satisfied. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, the Company assesses the goods or services promised within each contract and determines those that are performance obligations. Revenue is recognized for the applicable performance element when each distinct performance obligation is satisfied. Product Revenues In the United States (and territories), the Company sells LUPKYNIS primarily to two specialty pharmacies and a specialty distributor. These customers subsequently resell the Company's products to health care providers and patients. Revenues from product sales are recognized when the customer obtains control of our product, which occurs at a point in time, typically upon delivery to the customer. Reserves for discounts and allowances: Product sales are recorded at the net sales price (transaction price), which includes estimates of variable consideration for which reserves are established. These reserves are based on estimates of the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable (if the amount is payable to our customer) or a liability (if the amount is payable to a party other than our customer). The Company's estimates of reserves established for variable consideration are generally calculated based upon utilizing the expected value method. The transaction price, which includes variable consideration reflecting the impact of discounts and allowances, may be subject to constraint and is included in the net sales price only to the extent that it is probable that a significant reversal of the amount of the cumulative revenues recognized will not occur in a future period. Actual amounts may ultimately differ from the Company's estimates. If actual results vary, the Company adjusts these estimates, which could have an effect on earnings in the period of adjustment. More specifically, these adjustments include the following: Prompt pay discounts: The Company generally provides invoice discounts on product sales to its customers for prompt payment. The Company estimates that its customers will earn these discounts and fees, and deducts the full amount of these discounts and fees from its gross product revenues and accounts receivable at the time such revenues are recognized. Customer fees: The Company pays certain customer fees, such as fees for certain data that customers provide to the Company. The Company records fees paid to its customers as a reduction of revenue, unless the payment is for a distinct good or service from the customer and the Company can reasonably estimate the fair value of the goods or services received. If both conditions are met, the Company records the consideration paid to the customer as a selling, general and administrative (SG&A) expense. Government rebates: The Company estimates its government rebates, primarily Medicaid and Medicare rebates based upon a range of possible outcomes that are probability-weighted for the estimated payor mix. These reserves are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability that is included in accrued expenses on the consolidated balance sheet. Medicaid rebates relate to the Company's estimated obligations to states under established reimbursement arrangements. Rebate accruals are recorded in the same period that the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a liability, which is included in other current liabilities. The Company's liability for Medicaid rebates consists of estimates for claims that a state will make for the current quarter, claims for prior quarters that have been estimated for which an invoice has not been received, invoices received for claims from the prior quarters that have not been paid and an estimate of potential future claims that will be made for product that has been recognized as revenue, but remains in the distribution channel inventories at the end of each reporting period. For Medicare, the Company also estimates the number of patients in the prescription drug coverage gap for whom the Company will owe an additional liability under the Medicare Part D program. The Company’s liability for these rebates consists of invoices received for claims from prior quarters that have not been paid or for which an invoice has not yet been received, estimates of claims for the current quarter, and estimated potential future claims that will be made for product that has been recognized as revenue, but remains in the distribution channel inventories at the end of each reporting period. Co-payment assistance: Co-payment assistance represents financial assistance to qualified patients, assisting them with prescription drug co-payments required by insurance. The program is administered by the specialty pharmacies. The calculation of the accrual adjustment for co-payment assistance is based on the co-payments made on the Company's behalf by the specialty pharmacies; and estimated potential future claims that will be made for product that has been recognized as revenue but remains in the distribution channel inventories at the end of each reporting period. License, Collaboration and Other Revenues The Company enters into out-licensing agreements that are within the scope of ASC 606, under which it licenses certain rights to its product candidates to third parties. The terms of these arrangements typically include payment to the Company of one or more of the following: non-refundable, up-front license fees, development, regulatory and commercial milestone payments, payments for manufacturing supply services and pass-through costs that the Company provides through its contract manufacturers, and royalties on net sales of licensed products. Each of these payments results in license, collaboration and other revenues, except for revenues from royalties on net sales of licensed products, which are classified as royalty revenues. In determining the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. As part of the accounting for these arrangements, the Company must develop assumptions that require judgment to determine the stand-alone selling price for each performance obligation identified in the contract. The Company uses key assumptions to determine the stand-alone selling price, which may include forecasted revenues, development timelines, reimbursement rates for personnel costs, discount rates and probabilities of technical and regulatory success. Licenses of intellectual property: If the license to the Company’s intellectual property (IP) is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues from non-refundable, up-front fees allocated to the license when the license is transferred to the licensee and the licensee is able to use and benefit from the license. For licenses that are bundled with other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is 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, up-front fees. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. Manufacturing supply services: Arrangements that include a promise for future supply of drug substance or drug product for either clinical development or commercial supply at the licensee’s discretion are generally considered as options. The Company assesses if these options provide a material right to the licensee and if so, they are accounted for as separate performance obligations. Milestone payments: At the inception of each arrangement that includes development or commercial sales milestone payments, the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. 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 subsequent reporting period, the Company re- evaluates the probability of achievement of such development milestones and any related constraint, 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 license, collaboration and other revenues and earnings in the period of adjustment. Any consideration related to sales-based royalties (and sales-based milestones) will be recognized when the related sales occur. Research, Development and/or Manufacturing Services. The Company’s agreements may include research and development (R&D) or manufacturing services to be performed by the Company on behalf of the counterparty. If these services are determined to be distinct from the other promises or performance obligations identified in the arrangement, the Company recognizes the transaction price allocated to these services as revenue over time based on an appropriate measure of progress when the performance by the Company does not create an asset with an alternative use and the Company has an enforceable right to payment for the performance completed to date. If these services are determined not to be distinct from the other promises or performance obligations identified in the arrangement, the Company recognizes the transaction price allocated to the combined performance obligation as the related performance obligations are satisfied. Cost of sales: Cost of sales consist primarily of cost of inventories for LUPKYNIS, which mainly includes third party manufacturing costs, transportation, storage, insurance and allocated internal labor and depreciation. Research and development expenses: R&D expenses are accounted for in accordance with ASC Topic 730, Research and Development, and are expensed as incurred. R&D costs consist primarily of the cost of salaries, share-based compensation expenses, payroll taxes and other employee benefits, acquired licenses, subcontractors (such as contract research organizations) and materials used for R&D activities, including nonclinical studies, clinical trials, clinical manufacturing costs and professional services. The costs of services performed by others in connection with the R&D activities of the Company, including R&D conducted by others on behalf of the Company, shall be included in R&D costs and expensed as the contracted work is performed. The Company accrues for costs incurred as the services are being provided by monitoring the status of the trial or project and the invoices received from its external service providers. Selling, general and administrative expenses: The Company's SG&A expenses include commercial and allocated administrative personnel, corporate facility and external costs required to support the marketing and sales of LUPKYNIS. These SG&A costs include corporate facility operating expenses and allocated depreciation; commercial, marketing, pharmacovigilance, publications, tradeshows, advisory boards, samples and operations in support of LUPKYNIS; patient assistance program costs; human resources; finance, legal, information technology and support personnel expenses; and other corporate costs such as telecommunications, insurance, audit and government affairs. We expense SG&A expenses as they are incurred. The Company uses a third-party logistics provider to perform a full order to cash service, which includes warehousing and shipping directly to two specialty pharmacies and receiving orders from a specialty distributor for shipping to hospitals, on our behalf. As such, since these costs are not integral to bringing the inventories to a salable condition, we elected not to treat shipping and handling costs as a fulfillment activity. Shipping and handling costs related to order fulfillment are recorded in SG&A expenses. Accounts receivable, net: Accounts receivable are stated at their net realizable value. As of September 30, 2021, accounts receivable, net are $9.8 million. Estimates of the Company's allowance for doubtful accounts are determined based on existing contractual payment terms, historical payment patterns of our customers and individual customer circumstances. The allowance for doubtful accounts was $nil as of September 30, 2021 and as of December 31, 2020Recently adopted accounting pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The standard requires that credit losses be reported using an expected losses model rather than the incurred losses model that is currently used, and establishes additional disclosures related to credit risks. For available-for-sale debt securities with unrealized losses, these standards now require allowances to be recorded instead of reducing the amortized cost of the investment. These standards limit the amount of credit losses to be recognized for available-for-sale debt securities to the amount by which carrying value exceeds fair value and requires the reversal of previously recognized credit losses if fair value increases. The Company adopted the standard as of January 1, 2020 and did not have a material impact on the Company’s consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirement for Fair Value Measurement. Topic 820 requires to disclose transfers into and out of Level 3 of the fair value hierarchy and purchases and issues of Level 3 assets and liabilities. For investments in certain entities that calculate net asset value, an entity is required to disclose the timing of liquidation of an investee’s assets and the date when the restrictions from redemptions might lapse only if the investee has communicated the timing to the entity or announced the timing publicly. The new standard also amends that the measurement uncertainty disclosure is to communicate information about the uncertainty in measurement as of the reporting date. The new standard is effective for fiscal years beginning after December 15, 2019. The standard should be applied retrospectively to the date of initial application of ASU 2014-09, Revenue from Contracts with Customers (Topic 606). The Company elected to adopt the amendment as of January 1, 2020, which did not have a material impact on the consolidated 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, which aligns the accounting for implementation costs incurred in a hosting arrangement that is a service contract with the accounting for implementation costs incurred to develop or obtain internal-use software under ASC 350-40, in order to determine which costs to capitalize and recognize as an asset and which costs to expense. ASU 2018-15 is effective for annual reporting periods, and interim periods within those years, beginning after December 15, 2019, and can be applied either prospectively to implementation costs incurred after the date of adoption or retrospectively to all arrangements. The Company adopted ASU 2018-15 effective January 1, 2020 and applied the standard prospectively to implementation costs incurred in its cloud computing arrangements. In November 2018, the FASB issued ASU No. 2018-18, Collaborative Arrangement (Topic 808): Clarifying the Integration between Topic 808 and Topic 606. The new standard clarifies that certain transactions between collaborative arrangement participants should be accounted for as revenue under Topic 606 when the collaborative arrangement participant is a customer in the context of a unit of account. Further, the new standard adds unit-of-account guidance to Topic 808 to align with the guidance in Topic 606 when an entity is assessing whether the collaborative arrangement or part of the arrangement is within the scope of Topic 606. The new standard requires that in transactions with a collaborative arrangement participant that is not directly related to sales to third parties, presenting under Topic 606 is precluded if the collaborative arrangement participant is not a customer. The new standard is effective for fiscal years beginning after December 15, 2019. The standard should be applied retrospectively to the date of initial application of ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). The Company elected to adopt the amendment as of January 1, 2020, which did not have a material impact on the consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which clarifies and simplifies certain aspects of the accounting for income taxes. The standard is effective for years beginning after December 15, 2020, and interim periods within annual periods beginning after December 15, 2020. The Company elected to adopt the amendment as of January 1, 2021, which did not have a material impact on the consolidated financial statements.
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Investments |
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Investments, Debt and Equity Securities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments | Investments As of September 30, 2021 and December 31, 2020, the Company had $228.8 million and $nil and $126.0 million and $24.4 million of short and long-term investments, respectively, mainly consisting of commercial paper and bonds as summarized below. As of September 30, 2021, the Company classifies its investments as debt securities of which $21.5 million are held to maturity debt securities which are carried at amortized cost and are approximately equal to fair market value. As of September 30, 2021, $207.3 million are available-for-sale debt securities which are carried at fair market value and are approximately equal to amortized cost. As of December 31, 2020, $150.4 million were classified as held to maturity and $nil were available-for-sale.
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Inventories |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories Inventories are valued under a standard costing methodology on a first-in, first-out basis and are stated at the lower of cost or net realizable value. The Company capitalizes inventory costs related to products to be sold in the ordinary course of business. The Company makes a determination of capitalizing inventory costs for a product based on, among other factors, status of regulatory approval, information regarding safety, efficacy and expectations relating to commercial sales and recoverability of costs. For our product LUPKYNIS, the Company commenced capitalization of inventory once FDA approval was deemed to be probable, which occurred during the third quarter of 2020. Capitalized costs of inventories for LUPKYNIS mainly include third party manufacturing costs, transportation, storage, insurance, depreciation and allocated internal labor. The components of inventory as of September 30, 2021 and December 31, 2020 are as follows:
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Prepaid Expenses and Other Current Assets |
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Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets The following table summarizes prepaid expenses and other current assets.
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Intangible Assets |
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Intangible Assets | Intangible Assets The following table summarizes the carrying amount of intangible assets, net of accumulated amortization.
Amortization expense for the three months ended September 30, 2021 and 2020 was $0.5 million and $0.3 million, respectively, and for the nine months ended September 30, 2021 and 2020 was $1.6 million and $0.9 million, respectively.
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Property, Plant and Equipment, net |
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Property, Plant and Equipment, net | Property and Equipment, net Property and equipment as of September 30, 2021 and December 31, 2020 are as follows:
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Lease Obligations |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease Obligations | Lease Obligations The Company has the following lease obligations: Victoria, British Columbia During the fourth quarter of 2020, the Company entered into facility and furniture leases for its head office located in Victoria, British Columbia for a total space of 13,206 square feet of office space for the facility lease. The lease terms commenced on January 1, 2021 for the facility and furniture leases. As of September 30, 2021, the Company had $0.2 million right-of-use assets (ROU assets) and $0.2 million lease liabilities related to the leases. The Company recognized operating lease costs that are included in SG&A expense in the condensed consolidated statement of operations. The incremental borrowing rate applied to the lease liabilities was 4.08% based on financial position, geographical region and terms of leases. During August 2020, the Company signed a lease for commercial office space in Victoria, British Columbia. The lease term is expected to begin in 2022. The present value of the minimum lease payments for this lease are $2.7 million. As of September 30, 2021, the lease has not commenced and as a result there has been no accounting recognition associated with the lease. Rockville, Maryland During March 2020, the Company entered into a lease for its commercial office in Rockville, Maryland. The lease has a remaining term of approximately 11 years and has an option to extend for two five-year periods after the 11 years has elapsed and has an option to terminate after seven years. As of September 30, 2021, the Company had a right-of-use asset of $5.3 million and lease liability of $8.7 million included in the condensed consolidated balance sheets. As of December 31, 2020, the Company had a right of use asset of $5.5 million and lease liability of $8.4 million included in the condensed consolidated balance sheets. During 2020, the Company received reimbursements for tenant leasehold improvements by the landlord in the amount of $2.3 million for the Maryland lease. The Company recorded these leasehold improvement incentives as additions to the lease liability. The lease term commenced on March 12, 2020. When measuring the lease liability, the Company discounted lease payments using its incremental borrowing rate at March 12, 2020. The incremental borrowing rate applied to the lease liability on March 12, 2020 was 5.2% based on the financial position of the Company, geographical region and term of lease. Edmonton, Alberta During the fourth quarter of 2020, the Company entered into an agreement to lease premises in Edmonton, Alberta, commencing on October 1, 2020 and ending September 30, 2021. During the third quarter of 2021, the lease was extended until September 30, 2022. The Company recognizes short-term leases on a straight-line basis and did not record a related lease asset or liability for the Edmonton lease. The Company recognized short-term rent expense for this lease, which is included in SG&A expense in the condensed consolidated statement of operations. The following table provides supplemental balance sheet information related to the operating lease ROU assets and lease liabilities:
Beginning January 1, 2021, the Company began to incur variable lease costs under the existing Victoria and Rockville leases. These costs include operation and maintenance costs for the three and nine month periods ended September 30, 2021. The following provides a summary of the components of leasing costs and rent for the three and nine month periods ended September 30, 2021 and September 30, 2020.
The following table represents the weighted-average remaining lease term and discount rate as of September 30, 2021:
The following table provides a summary of operating lease liabilities maturities for the next five years and thereafter:
Finance Lease On December 15, 2020, the Company entered into a collaborative agreement with Lonza to build a dedicated manufacturing facility within Lonza’s existing small molecule facility in Visp, Switzerland. The dedicated facility (also referred to as "monoplant") will be equipped with state-of-the-art manufacturing equipment to provide cost and production efficiency for the manufacture of voclosporin, while expanding existing capacity and providing supply security to meet future commercial demand. The first capital expenditure payment was made in February 2021 of $11.8 million which was treated as an upfront lease payment and recorded under other non-current assets on the condensed consolidated balance sheets. The second payment is not due until the facility fulfills the required operational qualifications which is estimated to be during 2023. Upon completion of the monoplant, the Company will have the right to maintain sole dedicated use of the monoplant by paying a quarterly fixed facility fee. The Company expects to account for the arrangement as a finance lease under ASC 842. The present value of the minimum lease payments total approximately $84.0 million, beginning April 2023 and expiring in 2030, and are not included in the above table.
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Accounts Payable and Accrued Liabilities |
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Payables and Accruals [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Payable and Accrued Liabilities | Accounts Payable and Accrued Liabilities The following table summarizes the Company's accounts payable and accrued liabilities.
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Non-current Liabilities |
9 Months Ended |
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Sep. 30, 2021 | |
Payables and Accruals [Abstract] | |
Non-current Liabilities | Non-current LiabilitiesThe Company recorded other non-current liabilities of $16.6 million and $16.3 million as of September 30, 2021 and December 31, 2020, respectively. The balance as of September 30, 2021 and December 31, 2020 primarily included obligations that are the result of a resolution of the board of directors of the Company dated March 8, 2012 whereby certain executive officers at that time were provided with future potential employee benefit obligations for remaining with the Company, for a certain period of time. These obligations were also contingent on the occurrence of uncertain future events. |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements The Company's financial instruments consist primarily of cash and cash equivalents, investments, accounts receivable, accounts payable and accrued liabilities. The carrying value of accounts receivable, accounts payable and accrued liabilities approximate their fair value because of their short-term nature. Estimated fair values of held to maturity and available-for-sale debt securities are generally based on prices obtained from commercial pricing services. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from sources independent from the Company) and to minimize the use of unobservable inputs (the Company’s assumptions about how market participants would price assets and liabilities). As a basis for considering such assumptions, a three-tier fair value hierarchy has been established, which prioritizes the inputs used in measuring fair value as follows: •Level 1 - Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. •Level 2 - Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. •Level 3 - Unobservable inputs that reflect the reporting entity’s own assumptions. The Company's Level 1 instruments include deposits held with banks and short-term investments that are valued using quoted market prices. Level 2 instruments include the Company's short and long-term investments that are valued through third-party pricing services that use verifiable observable market data. The Company has no Level 3 instruments as of September 30, 2021 and December 31, 2020. There were no transfers between Level 1, Level 2 and Level 3 instruments in the periods presented. The following tables present the financial assets measured at fair value on a recurring basis:
Refer to Note 4, “Investments,” for the carrying amount and related unrealized gains (losses) by type of investment.
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License and Collaboration Agreement |
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Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
License and Collaboration Agreement | License and Collaboration Agreements Riptide License On August 17, 2021, AUR300 (M2 macrophage modulation via CD206 binding) was secured through a global licensing and research agreement with Riptide Bioscience, Inc. (Riptide), a private company. As part of the agreement, the Company paid Riptide an upfront license fee of $6.0 million which was expensed as research and development on the condensed consolidated statement of operations. Additional milestone payments are due upon certain development, clinical and regulatory milestones, and royalties will be payable upon commercialization. It is anticipated that clinical development for AUR300 will commence during the first half of 2023. Otsuka Contract On December 17, 2020, the Company entered into a collaboration and license agreement with Otsuka Pharmaceutical Co., Ltd. (Otsuka) for the development and commercialization of oral LUPKYNIS for the treatment of patients with active LN in the EU, Japan, as well as the United Kingdom, Russia, Switzerland, Norway, Belarus, Iceland, Liechtenstein and Ukraine. As part of the agreement, Aurinia received an upfront cash payment of $50.0 million for the license agreement and has the potential to receive up to $50.0 million in regulatory milestones. Aurinia will receive tiered royalties on future sales ranging from 10 to 20 percent (dependent on achievement of sale thresholds) on net sales upon commercialization, along with additional milestone payments based on the attainment of certain annual sales by Otsuka. In addition, voclosporin will be provided to Otsuka under a cost-plus supply agreement. The Company evaluated the Otsuka Agreement under ASC 606. Based on that evaluation, the license transferred was determined to be functional IP that has significant standalone functionality. That is, the treatment of LN and other diseases provides significant benefit to Otsuka at the point of transfer, and it is not expected that the utility of the IP will substantively change as a result of any remaining clinical trials or ongoing activities of Aurinia. The Company determined the upfront fee of $50.0 million was fixed consideration for the transfer of the license and was recognized upon transfer of the license in December 2020. The remaining forms of consideration are variable because they are dependent on achieving milestones or are based on aggregate future net sales for the regions. None of the regulatory milestones have been included in the transaction price, as all milestone amounts were fully constrained. As part of its evaluation of the constraint, the Company considered numerous factors, including the magnitude of a potential reversal of revenue, uncertainty about if or when the milestone related performance obligations might be achieved, and that receipt of the milestones are outside the control of the Company since they are dependent on efforts to be undertaken by Otsuka and regulatory approval by various foreign government agencies. Any consideration related to sales-based royalties (and sales-based thresholds) will be recognized when the related sales occur. As of September 30, 2021, there has been no additional consideration earned or received since the upfront payment of $50.0 million during the fourth quarter of 2020.
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Net Loss per Common Share |
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Net Loss per Common Share | Net Loss per Common Share Basic and diluted net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding. The numerator and denominator used in the calculation of basic and diluted net loss per common share are as follows:
The Company did not include the securities in the following table in the computation of the net income per common share because the effect would have been anti-dilutive during each period:
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Share-based Compensation |
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Share-based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation | Share-based Compensation The Company's Amended and Restated Equity Incentive Plan (the Plan), which was adopted and approved by the Company's shareholders in June 2021, allows for an issuance of up to an aggregate of 23.8 million shares (inclusive of outstanding awards). Also in June 2021, the Company's shareholders adopted and approved the Company's Employee Stock Purchase Plan (2021 ESPP), which allows for the issuance of up to 2.5 million shares. The 2021 ESPP is intended to qualify as an “employee stock purchase plan” under Section 423 of the Internal Revenue Code (the “Code”) but also permits the Company to include the employees, including non-United States employees, in offerings not intended to qualify under Section 423. The purpose of the 2021 ESPP is to provide eligible employees with opportunities to purchase the Company’s common shares at a discounted price. As of September 30, 2021 and December 31, 2020, 129.6 million and 126.7 million, common shares were issued and outstanding. Stock Options The Plan requires the exercise price of each option not to be less than the closing market price of the Company’s common shares on the day immediately prior to the date of grant. The board of directors approves the vesting criteria and periods at its discretion. The options issued under the plan are accounted for as equity-settled share-based payments. The Company used the Black-Scholes option pricing model to estimate the fair value of the options granted. The Company considers historical volatility of its common shares in estimating its future stock price volatility. The risk-free interest rate for the expected life of the options was based on the yield available on government benchmark bonds with an approximate equivalent remaining term at the time of the grant. The expected life is based upon the contractual term, taking into account expected employee exercise and expected post-vesting employment termination behavior. The following weighted average assumptions were used to estimate the fair value of the options granted during the nine month periods ended September 30, 2021 and September 30, 2020:
The following table summarizes the option award activity during the nine months ended September 30, 2021:
Performance Awards and Restricted Stock Units On October 23, 2020, the Company issued 439,000 performance awards (PAs) to executive management of the Company whose vesting is contingent upon meeting specific performance metrics based on the results for the year ended December 31, 2021. Each PA which vests entitles the participant to receive common shares on the basis of the performance metrics set. On March 18, 2021 performance metrics were set and formally communicated. Therefore, March 18, 2021 was the grant date and the fair value on the grant date was $13.56. On August 6, 2021, the Company granted approximately 619,000 PAs and restricted stock units (RSUs). The grant date for the PAs and RSUs was August 6, 2021 and the fair value on the grant date was $14.42 as this was the date performance measures were set and communicated to employees. The PAs vest on the employee's first anniversary of the grant date and the employee must achieve at least one of the performance metrics to obtain the portion of the award associated with the metric. The RSUs have no performance metrics and will vest on the one year anniversary of the grant. The Company recorded approximately $0.7 million and $1.1 million of share-based compensation expense related to PAs and RSUs during the three and nine month periods ended September 30, 2021. Compensation Expense The Company recognized share-based compensation expense for the three and nine month periods ended September 30, 2021 and September 30, 2020 as follows:
As of September 30, 2021, there was $16.9 million of unrecognized share-based compensation expense related to unvested awards granted which is expected to be recognized over a weighted-average period of approximately 1.1 years.
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Income Taxes |
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Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income TaxesThe effective tax rates for the three and nine months ended September 30, 2021 and September 30, 2020 differed from the federal statutory rate applied to losses before income taxes primarily as a result of the mix of income, losses and valuation allowances. The Company recognized an income tax expense of $8 thousand and $34 thousand for the three and nine months ended September 30, 2021, respectively, and an income tax benefit of $15 thousand and $251 thousand for the three and nine months ended September 30, 2020, respectively. The expense recognized for the three and nine months ended September 30, 2021 was a result of income in certain jurisdictions. This tax expense is not offset by a tax benefit as the Company has losses which are fully offset by a valuation allowance in its significant jurisdictions. The tax benefit recognized for the three and nine months ended September 30, 2020 was a result of a discrete tax benefit recorded in the U.S. pursuant to certain tax provisions provided under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) enacted in the United States on March 27, 2020. The CARES Act permits the Company to carry back net operating losses to offset taxable income generated in the five preceding years, some of which were taxed at a federal income tax rate higher than the current enacted rate.
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Related-Party Transactions |
9 Months Ended |
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Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | Related Party Transactions ILJIN is considered to be a related party due to their equity ownership of over 5%. The outstanding related party amount payable to ILJIN is the result of a settlement completed on September 20, 2013 between ILJIN and the Company. During the first quarter of 2021, Aurinia paid $4.0 million upon achievement of specific milestones. The amount payable to ILJIN of $2.0 million and $6.0 million as of September 30, 2021 and December 31, 2020 was recorded in other current liabilities, respectively. The final $2.0 million outstanding amount payable has been achieved and will be paid during the fourth quarter 2021. Stephen P. Robertson was a partner at Borden Ladner Gervais LLP (BLG) and acted as our corporate secretary through October 2020. We incurred legal fees in the normal course of business to BLG of $0.1 million and $0.3 million for the three and nine months ended September 30, 2020. We had no ongoing contractual or other commitments as a result of engaging Mr. Robertson to act as our corporate secretary and Mr. Robertson received no additional compensation for acting as the corporate secretary. On November 2, 2020 we announced the appointment of Stephen Robertson as our Executive Vice President, General Counsel, Corporate Secretary and Chief Compliance Officer.
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Commitment and Contingencies |
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Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies The Company may, from time to time, be subject to claims and legal proceedings brought against it in the normal course of business. Such matters are subject to many uncertainties. Management believes the ultimate resolution of such contingencies will not have a material adverse effect on the consolidated financial position of the Company. The Company's commitments and contingencies have not changed from those previously described in the Company's Annual Report on Form 10-K for the year ended December 31, 2020. Manufacturing Commitments The Company has various manufacturing agreements to support our commercial and clinical product supply requirements. We rely on Lonza, a third party manufacturer, to produce a portion of commercial and clinical quantities of our commercial and clinical drug substance requirements. We have firm orders with Lonza, with remaining total non-cancellable future commitments of approximately $25.4 million through 2023 of which $3.5 million was paid during the second quarter of 2021. If we terminate certain firm orders with Lonza without cause, we will be required to pay for drug substance scheduled for manufacture under our arrangement.
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Summary of Significant Accounting Policies (Policies) |
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Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Critical Accounting Estimates | Critical Accounting Estimates: The preparation of our condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP, requires us to make estimates, judgments and assumptions that may affect the reported amounts of assets, liabilities, revenues, expenses and related disclosure of contingent assets and liabilities in our condensed consolidated financial statements. We believe the most complex judgments result primarily from the need to make estimates about the effects of matters that are inherently uncertain and are significant to our condensed consolidated financial statements. We base our estimates on historical experience and on various other assumptions that we believe are reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. We evaluate our estimates, judgments and assumptions on an ongoing basis. Actual results may differ from these estimates under different assumptions or conditions and such differences may be material. The most significant areas involving estimates, judgments and assumptions used in the preparation of our condensed consolidated financial statements are as follows: •Revenue recognition; •Cost of sales; •Inventory; •Royalty obligation; •Contingent accruals; •Clinical trial expenditures; •Share-based compensation; •Intangible assets; •Leases; and •Income taxes.
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Concentration of Credit Risk | Concentration of Credit Risk: Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist primarily of cash and cash equivalents, investments and accounts receivable. The Company attempts to minimize the risks related to cash and cash equivalents and investments by investing in a broad and diverse range of financial instruments. The Company established guidelines related to credit ratings and maturities intended to safeguard principal balances, earn a return on investments and to maintain liquidity. The Company's investment portfolio is maintained in accordance with its investment policy, which defines allowable investments, specifies credit quality standards and limits the credit exposure of any single issuer. The Company does not enter into any investment transaction for trading or speculative purposes. The Company’s investment policy limits investments to certain types of instruments such as certificates of deposit, money market instruments, obligations issued by the U.S. government and U.S. government agencies as well as corporate debt securities, and places restrictions on maturities and concentration by type and issuer. The Company may at times maintain cash balances in excess of amounts insured by the Federal Deposit Insurance Corporation and Canada Deposit Insurance Corporation and concentrated within a limited number of financial institutions. The accounts are monitored by management to mitigate the risk. The Company is exposed to financial risk related to the fluctuation of foreign currency exchange rates which could have a material effect on its future operating results or cash flows. Foreign currency risk is the risk that variations in exchange rates between the United States dollar and foreign currencies, primarily with the Canadian dollar, will affect the Company's operating and financial results. The Company holds the majority of its cash and cash equivalents in U.S. dollars and the majority of its expenses are also denominated in U.S. dollars, which limits the risk of material foreign exchange fluctuations. The Company currently has three main customers for U.S. commercial sales of LUPKYNIS and one customer for sales of voclosporin in the European Union, Japan, as well as the United Kingdom, Russia, Switzerland, Norway, Belarus, Iceland, Liechtenstein and Ukraine. Revenues from two customers accounted for approximately 59% and 40% of the Company's total revenues for the three and nine months ended September 30, 2021. The Company monitors economic conditions, the creditworthiness of customers and government regulations and funding, both domestically and abroad. The Company regularly communicates with its customers regarding the status of receivable balances, including their payment plans and obtains positive confirmation of the validity of the receivables. An allowance against accounts receivable is established, if needed, using an expected credit loss model. Global economic conditions and customer specific factors may require the Company to periodically re-evaluate the collectability of its receivables and the Company could potentially incur credit losses.
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Investments | Investments: The Company classifies its debt securities at acquisition as either held to maturity or available-for-sale in accordance with the FASB ASC Topic 320, Investments — Debt Securities. Investments classified as held to maturity are carried at amortized cost when management has the positive intent and ability to hold them to maturity. Investments classified as available-for-sale are carried at fair value with unrealized gains and losses reported in other comprehensive income/loss within shareholders’ equity. Realized gains and losses on held to maturity and available-for-sale securities are recorded in other income (expense), net. Interest income is recorded separately on the consolidated statements of operations. The cost of securities sold is based on the specific-identification method. |
Revenue Recognition | Revenue Recognition: Pursuant to ASC Topic 606, Revenue from Contracts with Customers (ASC 606), the Company recognizes revenue when a customer obtains control of promised goods or services. The Company records the amount of revenue that reflects the consideration that it expects to receive in exchange for those goods or services. Revenue is recognized through a five-step process: (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) a performance obligation is satisfied. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, the Company assesses the goods or services promised within each contract and determines those that are performance obligations. Revenue is recognized for the applicable performance element when each distinct performance obligation is satisfied. Product Revenues In the United States (and territories), the Company sells LUPKYNIS primarily to two specialty pharmacies and a specialty distributor. These customers subsequently resell the Company's products to health care providers and patients. Revenues from product sales are recognized when the customer obtains control of our product, which occurs at a point in time, typically upon delivery to the customer. Reserves for discounts and allowances: Product sales are recorded at the net sales price (transaction price), which includes estimates of variable consideration for which reserves are established. These reserves are based on estimates of the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable (if the amount is payable to our customer) or a liability (if the amount is payable to a party other than our customer). The Company's estimates of reserves established for variable consideration are generally calculated based upon utilizing the expected value method. The transaction price, which includes variable consideration reflecting the impact of discounts and allowances, may be subject to constraint and is included in the net sales price only to the extent that it is probable that a significant reversal of the amount of the cumulative revenues recognized will not occur in a future period. Actual amounts may ultimately differ from the Company's estimates. If actual results vary, the Company adjusts these estimates, which could have an effect on earnings in the period of adjustment. More specifically, these adjustments include the following: Prompt pay discounts: The Company generally provides invoice discounts on product sales to its customers for prompt payment. The Company estimates that its customers will earn these discounts and fees, and deducts the full amount of these discounts and fees from its gross product revenues and accounts receivable at the time such revenues are recognized. Customer fees: The Company pays certain customer fees, such as fees for certain data that customers provide to the Company. The Company records fees paid to its customers as a reduction of revenue, unless the payment is for a distinct good or service from the customer and the Company can reasonably estimate the fair value of the goods or services received. If both conditions are met, the Company records the consideration paid to the customer as a selling, general and administrative (SG&A) expense. Government rebates: The Company estimates its government rebates, primarily Medicaid and Medicare rebates based upon a range of possible outcomes that are probability-weighted for the estimated payor mix. These reserves are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability that is included in accrued expenses on the consolidated balance sheet. Medicaid rebates relate to the Company's estimated obligations to states under established reimbursement arrangements. Rebate accruals are recorded in the same period that the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a liability, which is included in other current liabilities. The Company's liability for Medicaid rebates consists of estimates for claims that a state will make for the current quarter, claims for prior quarters that have been estimated for which an invoice has not been received, invoices received for claims from the prior quarters that have not been paid and an estimate of potential future claims that will be made for product that has been recognized as revenue, but remains in the distribution channel inventories at the end of each reporting period. For Medicare, the Company also estimates the number of patients in the prescription drug coverage gap for whom the Company will owe an additional liability under the Medicare Part D program. The Company’s liability for these rebates consists of invoices received for claims from prior quarters that have not been paid or for which an invoice has not yet been received, estimates of claims for the current quarter, and estimated potential future claims that will be made for product that has been recognized as revenue, but remains in the distribution channel inventories at the end of each reporting period. Co-payment assistance: Co-payment assistance represents financial assistance to qualified patients, assisting them with prescription drug co-payments required by insurance. The program is administered by the specialty pharmacies. The calculation of the accrual adjustment for co-payment assistance is based on the co-payments made on the Company's behalf by the specialty pharmacies; and estimated potential future claims that will be made for product that has been recognized as revenue but remains in the distribution channel inventories at the end of each reporting period. License, Collaboration and Other Revenues The Company enters into out-licensing agreements that are within the scope of ASC 606, under which it licenses certain rights to its product candidates to third parties. The terms of these arrangements typically include payment to the Company of one or more of the following: non-refundable, up-front license fees, development, regulatory and commercial milestone payments, payments for manufacturing supply services and pass-through costs that the Company provides through its contract manufacturers, and royalties on net sales of licensed products. Each of these payments results in license, collaboration and other revenues, except for revenues from royalties on net sales of licensed products, which are classified as royalty revenues. In determining the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. As part of the accounting for these arrangements, the Company must develop assumptions that require judgment to determine the stand-alone selling price for each performance obligation identified in the contract. The Company uses key assumptions to determine the stand-alone selling price, which may include forecasted revenues, development timelines, reimbursement rates for personnel costs, discount rates and probabilities of technical and regulatory success. Licenses of intellectual property: If the license to the Company’s intellectual property (IP) is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues from non-refundable, up-front fees allocated to the license when the license is transferred to the licensee and the licensee is able to use and benefit from the license. For licenses that are bundled with other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is 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, up-front fees. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. Manufacturing supply services: Arrangements that include a promise for future supply of drug substance or drug product for either clinical development or commercial supply at the licensee’s discretion are generally considered as options. The Company assesses if these options provide a material right to the licensee and if so, they are accounted for as separate performance obligations. Milestone payments: At the inception of each arrangement that includes development or commercial sales milestone payments, the Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. 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 subsequent reporting period, the Company re- evaluates the probability of achievement of such development milestones and any related constraint, 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 license, collaboration and other revenues and earnings in the period of adjustment. Any consideration related to sales-based royalties (and sales-based milestones) will be recognized when the related sales occur. Research, Development and/or Manufacturing Services. The Company’s agreements may include research and development (R&D) or manufacturing services to be performed by the Company on behalf of the counterparty. If these services are determined to be distinct from the other promises or performance obligations identified in the arrangement, the Company recognizes the transaction price allocated to these services as revenue over time based on an appropriate measure of progress when the performance by the Company does not create an asset with an alternative use and the Company has an enforceable right to payment for the performance completed to date. If these services are determined not to be distinct from the other promises or performance obligations identified in the arrangement, the Company recognizes the transaction price allocated to the combined performance obligation as the related performance obligations are satisfied.
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Cost of sales | Cost of sales: Cost of sales consist primarily of cost of inventories for LUPKYNIS, which mainly includes third party manufacturing costs, transportation, storage, insurance and allocated internal labor and depreciation. |
Research and development costs | Research and development expenses: R&D expenses are accounted for in accordance with ASC Topic 730, Research and Development, and are expensed as incurred. R&D costs consist primarily of the cost of salaries, share-based compensation expenses, payroll taxes and other employee benefits, acquired licenses, subcontractors (such as contract research organizations) and materials used for R&D activities, including nonclinical studies, clinical trials, clinical manufacturing costs and professional services. The costs of services performed by others in connection with the R&D activities of the Company, including R&D conducted by others on behalf of the Company, shall be included in R&D costs and expensed as the contracted work is performed. The Company accrues for costs incurred as the services are being provided by monitoring the status of the trial or project and the invoices received from its external service providers. |
Selling, general and administrative expenses | Selling, general and administrative expenses: The Company's SG&A expenses include commercial and allocated administrative personnel, corporate facility and external costs required to support the marketing and sales of LUPKYNIS. These SG&A costs include corporate facility operating expenses and allocated depreciation; commercial, marketing, pharmacovigilance, publications, tradeshows, advisory boards, samples and operations in support of LUPKYNIS; patient assistance program costs; human resources; finance, legal, information technology and support personnel expenses; and other corporate costs such as telecommunications, insurance, audit and government affairs. We expense SG&A expenses as they are incurred.The Company uses a third-party logistics provider to perform a full order to cash service, which includes warehousing and shipping directly to two specialty pharmacies and receiving orders from a specialty distributor for shipping to hospitals, on our behalf. As such, since these costs are not integral to bringing the inventories to a salable condition, we elected not to treat shipping and handling costs as a fulfillment activity. Shipping and handling costs related to order fulfillment are recorded in SG&A expenses. |
Accounts receivable, net | Accounts receivable, net: Accounts receivable are stated at their net realizable value. As of September 30, 2021, accounts receivable, net are $9.8 million. Estimates of the Company's allowance for doubtful accounts are determined based on existing contractual payment terms, historical payment patterns of our customers and individual customer circumstances. The allowance for doubtful accounts was $nil as of September 30, 2021 and as of December 31, 2020 |
Recently adopted accounting pronouncements | Recently adopted accounting pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The standard requires that credit losses be reported using an expected losses model rather than the incurred losses model that is currently used, and establishes additional disclosures related to credit risks. For available-for-sale debt securities with unrealized losses, these standards now require allowances to be recorded instead of reducing the amortized cost of the investment. These standards limit the amount of credit losses to be recognized for available-for-sale debt securities to the amount by which carrying value exceeds fair value and requires the reversal of previously recognized credit losses if fair value increases. The Company adopted the standard as of January 1, 2020 and did not have a material impact on the Company’s consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirement for Fair Value Measurement. Topic 820 requires to disclose transfers into and out of Level 3 of the fair value hierarchy and purchases and issues of Level 3 assets and liabilities. For investments in certain entities that calculate net asset value, an entity is required to disclose the timing of liquidation of an investee’s assets and the date when the restrictions from redemptions might lapse only if the investee has communicated the timing to the entity or announced the timing publicly. The new standard also amends that the measurement uncertainty disclosure is to communicate information about the uncertainty in measurement as of the reporting date. The new standard is effective for fiscal years beginning after December 15, 2019. The standard should be applied retrospectively to the date of initial application of ASU 2014-09, Revenue from Contracts with Customers (Topic 606). The Company elected to adopt the amendment as of January 1, 2020, which did not have a material impact on the consolidated 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, which aligns the accounting for implementation costs incurred in a hosting arrangement that is a service contract with the accounting for implementation costs incurred to develop or obtain internal-use software under ASC 350-40, in order to determine which costs to capitalize and recognize as an asset and which costs to expense. ASU 2018-15 is effective for annual reporting periods, and interim periods within those years, beginning after December 15, 2019, and can be applied either prospectively to implementation costs incurred after the date of adoption or retrospectively to all arrangements. The Company adopted ASU 2018-15 effective January 1, 2020 and applied the standard prospectively to implementation costs incurred in its cloud computing arrangements. In November 2018, the FASB issued ASU No. 2018-18, Collaborative Arrangement (Topic 808): Clarifying the Integration between Topic 808 and Topic 606. The new standard clarifies that certain transactions between collaborative arrangement participants should be accounted for as revenue under Topic 606 when the collaborative arrangement participant is a customer in the context of a unit of account. Further, the new standard adds unit-of-account guidance to Topic 808 to align with the guidance in Topic 606 when an entity is assessing whether the collaborative arrangement or part of the arrangement is within the scope of Topic 606. The new standard requires that in transactions with a collaborative arrangement participant that is not directly related to sales to third parties, presenting under Topic 606 is precluded if the collaborative arrangement participant is not a customer. The new standard is effective for fiscal years beginning after December 15, 2019. The standard should be applied retrospectively to the date of initial application of ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). The Company elected to adopt the amendment as of January 1, 2020, which did not have a material impact on the consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which clarifies and simplifies certain aspects of the accounting for income taxes. The standard is effective for years beginning after December 15, 2020, and interim periods within annual periods beginning after December 15, 2020. The Company elected to adopt the amendment as of January 1, 2021, which did not have a material impact on the consolidated financial statements.
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Schedule of Inventory | The components of inventory as of September 30, 2021 and December 31, 2020 are as follows:
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Prepaid Expenses and Other Current Assets (Tables) |
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Sep. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure | The following table summarizes prepaid expenses and other current assets.
|
Intangible Assets (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Intangible Assets | The following table summarizes the carrying amount of intangible assets, net of accumulated amortization.
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Property, Plant and Equipment, net (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment | Property and equipment as of September 30, 2021 and December 31, 2020 are as follows:
|
Lease Obligations (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Balance Sheet Information | The following table provides supplemental balance sheet information related to the operating lease ROU assets and lease liabilities:
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Lease, Cost |
The following table represents the weighted-average remaining lease term and discount rate as of September 30, 2021:
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Lessee, Operating Lease, Liability, Maturity | The following table provides a summary of operating lease liabilities maturities for the next five years and thereafter:
|
Accounts Payable and Accrued Liabilities (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued Liabilities |
|
Fair Value Measurements (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following tables present the financial assets measured at fair value on a recurring basis:
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Net Loss per Common Share (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | The numerator and denominator used in the calculation of basic and diluted net loss per common share are as follows:
The Company did not include the securities in the following table in the computation of the net income per common share because the effect would have been anti-dilutive during each period:
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Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share |
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Share-based Compensation (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share-based Payment Award Valuation Assumptions | The following weighted average assumptions were used to estimate the fair value of the options granted during the nine month periods ended September 30, 2021 and September 30, 2020:
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Schedule of Performance Shares Activity | The following table summarizes the option award activity during the nine months ended September 30, 2021:
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Allocation of Share-Based Payments | The Company recognized share-based compensation expense for the three and nine month periods ended September 30, 2021 and September 30, 2020 as follows:
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Basis of Presentation (Details) $ in Millions |
9 Months Ended |
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Sep. 30, 2021
USD ($)
reportingUnit
segment
| |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of operating segments | segment | 1 |
Number of reporting units | reportingUnit | 1 |
Cash and cash equivalents and investments | $ | $ 286.4 |
Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |
---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2021 |
Dec. 31, 2020 |
|
Property, Plant and Equipment [Line Items] | |||
Accounts receivable, net | $ 9,814 | $ 9,814 | $ 0 |
Allowance for doubtful accounts | $ 0 | $ 0 | $ 0 |
Customer Concentration Risk | Revenue Benchmark | Specialty Pharmacy One | |||
Property, Plant and Equipment [Line Items] | |||
Concentration risk | 59.00% | ||
Customer Concentration Risk | Revenue Benchmark | Specialty Pharmacy Two | |||
Property, Plant and Equipment [Line Items] | |||
Concentration risk | 40.00% |
Inventories (Details) - USD ($) $ in Thousands |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials | $ 2,217 | $ 0 |
Work in process | 12,074 | 13,927 |
Finished goods | 5,002 | 0 |
Total inventories | $ 19,293 | $ 13,927 |
Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid assets | $ 5,871 | $ 3,701 |
Prepaid insurance | 2,524 | 2,054 |
Other current assets | 728 | 1,018 |
Prepaid deposits | 4,589 | 398 |
Prepaid expenses and other current assets | $ 13,712 | $ 7,171 |
Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 19,469 | $ 18,452 |
Accumulated Amortization | (10,543) | (9,120) |
Net Carrying Amount | 8,926 | 9,332 |
Patents | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 1,471 | 1,651 |
Accumulated Amortization | (1,152) | (1,203) |
Net Carrying Amount | 319 | 448 |
Acquired intellectual property and reacquired rights | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 15,125 | 15,126 |
Accumulated Amortization | (8,545) | (7,770) |
Net Carrying Amount | 6,580 | 7,356 |
Cloud computing arrangements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 2,873 | 1,675 |
Accumulated Amortization | (846) | (147) |
Net Carrying Amount | $ 2,027 | $ 1,528 |
Intangible Assets - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization of intangible assets | $ 517 | $ 316 | $ 1,576 | $ 902 |
Property, Plant and Equipment, net (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
Dec. 31, 2020 |
|
Property, Plant and Equipment [Line Items] | |||||
Property, plant and equipment, gross | $ 5,224 | $ 5,224 | $ 4,965 | ||
Less accumulated depreciation | (673) | (673) | (179) | ||
Property and equipment, net | 4,551 | 4,551 | 4,786 | ||
Depreciation of property and equipment | 200 | $ 0 | 497 | $ 59 | |
Construction in progress | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, plant and equipment, gross | 360 | 360 | 4,467 | ||
Leasehold improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, plant and equipment, gross | 2,978 | 2,978 | 34 | ||
Office equipment and furniture | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, plant and equipment, gross | 1,621 | 1,621 | 83 | ||
Computer equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, plant and equipment, gross | $ 265 | $ 265 | $ 381 |
Lease Obligations - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Assets | ||
Right-of-use assets | $ 5,532 | $ 5,489 |
Current | ||
Current operating lease liabilities | 1,111 | 788 |
Non-current | ||
Non-current operating lease liabilities | 7,795 | 7,619 |
Total lease liabilities | $ 8,906 | $ 8,407 |
Lease Obligations - Summary of Components of Leasing Costs and Rent (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Leases [Abstract] | ||||
Operating lease costs | $ 261 | $ 196 | $ 783 | $ 456 |
Short-term lease costs | 7 | 74 | 21 | 215 |
Variable lease costs | 44 | 1 | 124 | 3 |
Total rent expense | $ 312 | $ 271 | $ 928 | $ 674 |
Weighted average remaining lease term - operating leases (in years) | 9 years 8 months 4 days | 9 years 8 months 4 days | ||
Weighted average discount rate - operating leases | 5.20% | 5.20% |
Lease Obligations - Schedule of Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Leases [Abstract] | ||
Remainder of 2021 | $ 281 | |
2022 | 1,143 | |
2023 | 1,061 | |
2024 | 1,085 | |
2025 | 1,109 | |
Thereafter | 6,773 | |
Total | 11,452 | |
Less: lease imputed interest | (2,546) | |
Total future minimum lease payments | $ 8,906 | $ 8,407 |
Accounts Payable and Accrued Liabilities (Details) - USD ($) $ in Thousands |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Payables and Accruals [Abstract] | ||
Trade payables | $ 3,263 | $ 2,635 |
Other accrued liabilities | 8,322 | 6,616 |
Accrued R&D projects | 3,865 | 4,185 |
Employee accruals | 14,520 | 11,361 |
Total accounts payable and accrued liabilities | $ 29,970 | $ 24,797 |
Non-current Liabilities (Details) - USD ($) $ in Thousands |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Payables and Accruals [Abstract] | ||
Other non-current liabilities | $ 16,562 | $ 16,295 |
Net Loss per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Earnings Per Share [Abstract] | ||||
Net loss | $ (50,255) | $ (42,130) | $ (147,644) | $ (94,606) |
Weighted-average common shares outstanding used in computation of basic loss per share | 128,443 | 122,357 | 128,084 | 115,738 |
Basic loss per share (expressed in $ per share) | $ (0.39) | $ (0.34) | $ (1.15) | $ (0.82) |
Weighted-average common shares outstanding used in computation of diluted loss per share | 128,443 | 122,357 | 128,084 | 115,738 |
Diluted loss per share (expressed in $ per share) | $ (0.39) | $ (0.34) | $ (1.15) | $ (0.82) |
Share-Based Compensation - Weighted Average Assumptions (Details) - USD ($) |
9 Months Ended | |
---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Share-based Payment Arrangement [Abstract] | ||
Annualized volatility | 66.00% | 43.00% |
Risk-free interest rate | 0.38% | 0.70% |
Expected life of options in years | 4 years | 3 years |
Estimated forfeiture rate | 8.90% | 12.00% |
Dividend rate | $ 0.000 | $ 0.000 |
Fair value per common share option (in usd per share) | $ 6.64 | $ 5.05 |
Share-Based Compensation - Allocated Share-Based Compensation Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 7,092 | $ 4,611 | $ 22,666 | $ 12,309 |
Research and development | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | 1,038 | 814 | 3,201 | 3,111 |
Selling, general and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | 6,000 | 3,750 | 19,189 | 9,151 |
Capitalized under inventories | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 54 | $ 47 | $ 276 | $ 47 |
Income Taxes - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Income Tax Disclosure [Abstract] | ||||
Income tax (benefit) expense | $ 8 | $ (15) | $ 34 | $ (251) |
Related-Party Transactions (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Mar. 31, 2021 |
Sep. 30, 2020 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Dec. 31, 2020 |
|
Other Current Liabilities | ILJIN | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties | $ 2.0 | $ 6.0 | |||
Milestone Payment | Affiliated Shareholder | ILJIN | |||||
Related Party Transaction [Line Items] | |||||
Payments to related party | $ 4.0 | ||||
Due to related parties | $ 2.0 | ||||
Legal Fees | Management | |||||
Related Party Transaction [Line Items] | |||||
Expenses from related party | $ 0.1 | $ 0.3 |
Commitment and Contingencies (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |
---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Long-term Purchase Commitment [Line Items] | |||
Payments to Acquire Other Productive Assets | $ 262 | $ 4,095 | |
Lonza | |||
Long-term Purchase Commitment [Line Items] | |||
Non-cancellable future commitments | $ 25,400 | ||
Payments to Acquire Other Productive Assets | $ 3,500 |
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