Balance Sheet Account Detail

6 Months Ended

Jun. 30, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

BALANCE SHEET ACCOUNT DETAIL

The composition of selected financial statement captions that comprise the accompanying Condensed Consolidated Balance Sheets are summarized below:

(a) Cash and Cash Equivalents and Marketable Securities

As of June 30, 2019 and December 31, 2018, our “cash and cash equivalents” were held with major financial institutions. As of June 30, 2019, our “marketable securities” include our equity holdings in CASI Pharmaceuticals, Inc. (“CASI”), mutual funds, government-related debt securities, corporate debt securities, and bank certificates of deposits (“bank CDs”).

We maintain cash balances in excess of federally insured limits with select financial institutions. To a limited degree, the Federal Deposit Insurance Corporation and other third parties insure these deposits. However, these cash deposits are not insured against the possibility of a complete loss of principal and are inherently subject to the credit risk of the corresponding financial institution.

Our investment policy requires that purchased investments may only be in highly-rated and liquid financial instruments and limits our holdings of any single issuer (excluding any debt or equity securities received from our strategic partners in connection with licensing arrangements, as discussed in Note 7).

The carrying amount of our equity securities, money market funds, and Bank CDs approximates their fair value (utilizing “Level 1” or “Level 2” inputs – see Note 2(x)) because of our ability to immediately convert these instruments into cash with minimal expected change in value. As of June 30, 2019, none of the securities that we hold were in an unrealized loss position with respect to our cost basis.

The following is a summary of our presented composition of “cash and cash equivalents” and “marketable securities”:




	Historical or Amortized Cost		Foreign Currency Translation			Unrealized Gains		Fair Value		Cash and Cash Equivalents		Marketable Securities
June 30, 2019
Equity securities* (see Note 7)	$	8,710	$	(4,678	)	$	28,121	$	32,153	$	—	$	32,153
Money market funds	72,384		—			—		72,384		72,384		—
Government-related debt securities**	104,440					95		104,535		7,497		97,038
Corporate debt securities**	39,818		—			25		39,843		15,484		24,359
Bank deposits	22,886		—			—		22,886		22,886		—
Bank CDs	6,571		—			13		6,584		—		6,584
Total cash and cash equivalents and marketable securities	$	254,809	$	(4,678	)	$	28,254	$	278,385	$	118,251	$	160,134
December 31, 2018
Equity securities* (see Note 7)	$	8,710	$	(2,168	)	$	39,880	$	46,422	$	—	$	46,422
Money market funds	142,745		—			—		142,745		142,745		—
Bank deposits	14,735		—			—		14,735		14,735		—
Bank CDs	86		—			—		86		—		86
Total cash and cash equivalents and marketable securities	$	166,276	$	(2,168	)	$	39,880	$	203,988	$	157,480	$	46,508

* Beginning January 1, 2018, under the requirements of ASU 2016-01, Recognition and Measurement of Financial Assets and Liabilities, the unrealized gain (loss) on our CASI equity securities are recognized as an increase (decrease) to “other income (expense), net” on the Condensed Consolidated Statements of Operations (rather than through “other comprehensive income (loss)” on the Condensed Consolidated Statements of Comprehensive (Loss) Income). Our adoption of ASU 2016-01 on January 1, 2018 resulted in a $17.2 million cumulative-effect adjustment, net of income tax, reported as a decrease to “accumulated other comprehensive loss” and a decrease to “accumulated deficit” on the accompanying Condensed Consolidated Balance Sheets. Our unrealized gain (loss) on these equity securities for the three and six months ended June 30, 2019 was $0.4 million and $(11.8) million, respectively, as reported in “other income (expense), net” on the accompanying Condensed Consolidated Statements of Operations.

** Beginning in the second quarter of 2019, we purchased government and corporate debt securities. We have classified these as “available-for-sale” since we may redeem or sell these investments before their stated maturity to fund our operations. Under the requirements of ASC 320, Investments - Debt and Equity Securities: (i) we record these securities at initial “book value” and then amortize, through maturity, the determined “discount” or “premium” within “interest income” on the accompanying Condensed Consolidated Statements of Operations, and (ii) we recognize the “unrealized gains” of these securities (i.e., June 30, 2019 fair value versus amortized book value) as a separate component of “accumulated other comprehensive income (loss)” on the accompanying Condensed Consolidated Statements of Comprehensive (Loss) Income for the three and six months ended June 30, 2019.

(b) Property and Equipment, net of Accumulated Depreciation

“Property and equipment, net of accumulated depreciation” consists of the following:



	June 30, 2019			December 31, 2018
Manufacturing equipment*	$	3,654		$	—
Computer hardware and software	3,449			3,079
Laboratory equipment	670			635
Office furniture	335			212
Leasehold improvements	2,957			2,957
Property and equipment, at cost	11,065			6,883
(Less): Accumulated depreciation	(6,531		)	(6,498		)
Property and equipment, net of accumulated depreciation	$	4,534		$	385

*This new account was created for our current period and future equipment purchases for ROLONTIS production through our contract manufacturer.

Depreciation expense (included within “total operating costs and expenses” in the accompanying Condensed Consolidated Statements of Operations) for the three and six months ended June 30, 2019 and 2018, was $0.1 million, $0.1 million, $0.1 million and $0.1 million respectively.

“Prepaid expenses and other assets” consists of the following:



	June 30, 2019		December 31, 2018
Deposits	$	10,549	$	6,792
Prepaid insurance	290		782
Prepaid expenses and other assets	$	10,839	$	7,574

(d) Other Receivables

“Other receivables” consists of the following:



	June 30, 2019		December 31, 2018
Insurance receivable*	$	5,674	$	206
Other miscellaneous receivables (including Medicaid rebate credits and royalty receivables from licensees)	1,926		1,189
Secured promissory note (see Note 7)	1,528		1,525
Income tax receivable - current portion	632		643
Interest receivable from marketable securities (see Note 3(a))	414		—
Reimbursements due from development partners for incurred research and development expenses	55		135
Other receivables	$	10,229	$	3,698

*This insurance receivable balance represents legal fees and pending settlement offers that are expected to be reimbursed by our insurance carriers.

(e) Other Assets

“Other assets” consists of the following:



	June 30, 2019		December 31, 2018
Key employee life insurance – cash surrender value associated with deferred compensation plan (Note 9(f))	$	7,410	$	6,274
Income tax receivable - non-current portion*	668		668
Research & development supplies and other	199		246
Other assets	$	8,277	$	7,188

* This value represents the non-current portion of the refundable alternative minimum tax credit that is expected to be received over the next few years (see Note 10).

(f) Facility and Equipment Under Lease

“Facility and equipment under lease” consists of the following:



	June 30, 2019		December 31, 2018
Office and research facilities	$	3,379	$	—
Office equipment	463		—
Facility and equipment under lease (Note 9(a))	$	3,842	$	—

(g) Accounts Payable and Other Accrued Liabilities

“Accounts payable and other accrued liabilities” consists of the following:



	June 30, 2019		December 31, 2018
Trade accounts payable and other	$	33,593	$	44,919
Lease liability - current portion (Note 9(a))	642		—
Accrued commercial/Medicaid rebates	3,526		8,371
Accrued product royalty due to licensors	235		4,337
Allowance for product returns	5,309		5,171
Accrued data and distribution fees	753		3,248
Accrued GPO administrative fees	29		296
Accrued inventory management fees	368		388
Allowance for government chargebacks	—		2,730
Accounts payable and other accrued liabilities	$	44,455	$	69,460

Amounts presented within “accounts payable and other accrued liabilities” in the accompanying Condensed Consolidated Balance Sheets for our categories of GTN estimates (see Note 2(i)) were as follows:



	Commercial/Medicaid Rebates and Government Chargebacks			Distribution, Data, Inventory and GPO Administrative Fees			Product Return Allowances
Balance as of December 31, 2017	$	10,358		$	5,727		$	4,045
Add: GTN accruals recorded for product sales	65,751			13,962			1,700
(Less): Payments made and credits against GTN accruals	(65,008		)	(15,757		)	(574		)
Balance as of December 31, 2018	$	11,101		$	3,932		$	5,171
Add: GTN accruals recorded for product sales	7,252			1,197			250
(Less): Payments made and credits against GTN accruals	(14,827		)	(3,979		)	(112		)
Balance as of June 30, 2019	$	3,526		$	1,150		$	5,309

(h) Contract Liabilities

“Contract liabilities” consists of the following:



	June 30, 2019		December 31, 2018
Customer deposit for EVOMELA supply in China territory (see Note 7)	$	7,245	$	4,850
Contract liabilities	$	7,245	$	4,850

(i) Other Long-Term Liabilities

“Other long-term liabilities” consists of the following:



	June 30, 2019		December 31, 2018
Deferred compensation liability (Note 9(f))	$	7,318	$	5,474
Lease liability - non-current portion (Note 9(a))	3,429		—
Other tax liabilities	176		176
Other long-term liabilities	$	10,923	$	5,650