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Equity Investment
3 Months Ended
Mar. 31, 2018
Inventory Disclosure [Abstract]  
Equity Investment

Note 4: Equity Investment

In September 2016, the Company purchased approximately 3.6 million shares of common stock of PACT Pharma, Inc. (PACT Pharma), a privately funded, early-stage biopharmaceutical company focused on adoptive cell therapy. The Company determined the fair value of such investment to be insignificant to the Company’s 2016 financial statements given the start-up nature of operations of PACT Pharma, and it was recorded at a nominal amount. In December 2016, the Company and PACT Pharma entered into a Master Services Agreement (the PACT Agreement) under which the Company provides PACT Pharma with general administrative support, including finance, human resources, legal, and other operational support. The Company also received certain warrants to purchase PACT Pharma common stock exercisable upon PACT Pharma’s achievement of certain valuation thresholds pursuant to the PACT Agreement. The PACT Agreement will terminate no later than December 31, 2018. Also, in December 2016, the Company purchased 1.0 million shares of Series A preferred stock of PACT Pharma for $1.0 million. The Company determined PACT Pharma to be a variable interest entity, and that the Company has a variable interest in PACT. However, because the Company is not the primary beneficiary of PACT Pharma, it is not consolidating the results of operations of PACT Pharma in its condensed consolidated financial statements.

The Company’s investment in PACT Pharma is accounted for as an equity method investment, and as a result the Company records its share of PACT Pharma’s operating results in interest and other income, net, in its condensed consolidated statement of operations and comprehensive loss.

For the three-month periods ended March 31, 2018 and 2017, the Company recorded $0.2 million and $70,000, respectively relating to its share of PACT Pharma’s operating loss. The Company monitors the investment for events or circumstances indicative of potential other-than-temporary impairment, and makes appropriate reductions in carrying values if it is determined that an impairment charge is required. As of March 31, 2018 and 2017, no impairment charge was recorded. The Company also determined the fair value of the warrants to be insignificant to the Company’s March 31, 2018 and December 31, 2017 condensed consolidated financial statements. As of March 31, 2018 and December 31, 2017, the Company had a $54,000 and $25,000 receivable from PACT Pharma, respectively, for expenses the Company paid for on its behalf.