R | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
q | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 76-0474169 |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification Number) |
Yes | þ | No |
Yes | þ | No |
Yes | No | þ |
Page | ||
Item 1. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 1. | ||
Item 1A. | ||
Item 6. | ||
As of June 30, | As of December 31, | |||||||
2013 | 2012 | |||||||
Assets | (unaudited) | |||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 23,254 | $ | 30,423 | ||||
Short-term investments, including restricted investments of $430 | 152,124 | 192,785 | ||||||
Accounts receivable, net of allowances of $35 | 1,014 | 1,378 | ||||||
Prepaid expenses and other current assets | 6,684 | 6,349 | ||||||
Total current assets | 183,076 | 230,935 | ||||||
Property and equipment, net of accumulated depreciation and amortization of $81,034 and $83,416, respectively | 42,152 | 42,634 | ||||||
Goodwill | 44,543 | 44,543 | ||||||
Other intangible assets | 53,557 | 53,557 | ||||||
Other assets | 65 | 109 | ||||||
Total assets | $ | 323,393 | $ | 371,778 | ||||
Liabilities and Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 6,281 | $ | 7,661 | ||||
Accrued liabilities | 11,321 | 8,922 | ||||||
Current portion of deferred revenue | 623 | 128 | ||||||
Current portion of long-term debt | 22,678 | 1,574 | ||||||
Total current liabilities | 40,903 | 18,285 | ||||||
Deferred revenue, net of current portion | 13,405 | 13,910 | ||||||
Long-term debt | — | 21,877 | ||||||
Deferred tax liabilities | 18,745 | 18,745 | ||||||
Other long-term liabilities | 35,256 | 32,283 | ||||||
Total liabilities | 108,309 | 105,100 | ||||||
Commitments and contingencies | ||||||||
Equity: | ||||||||
Preferred stock, $.01 par value; 5,000 shares authorized; no shares issued and outstanding | — | — | ||||||
Common stock, $.001 par value; 900,000 shares authorized; 513,972 and 512,375 shares issued, respectively | 514 | 512 | ||||||
Additional paid-in capital | 1,170,928 | 1,166,605 | ||||||
Accumulated deficit | (954,886 | ) | (899,832 | ) | ||||
Accumulated other comprehensive gain | 31 | 23 | ||||||
Treasury stock, at cost, 814 and 380 shares, respectively | (1,503 | ) | (630 | ) | ||||
Total equity | 215,084 | 266,678 | ||||||
Total liabilities and equity | $ | 323,393 | $ | 371,778 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Revenues: | ||||||||||||||||
Collaborative research | $ | 211 | $ | 199 | $ | 495 | $ | 351 | ||||||||
Subscription and license fees | 3 | — | 79 | 148 | ||||||||||||
Total revenues | 214 | 199 | 574 | 499 | ||||||||||||
Operating expenses: | ||||||||||||||||
Research and development, including stock-based compensation of $1,022, $915, $2,352 and $1,952, respectively | 23,692 | 19,355 | 44,019 | 42,392 | ||||||||||||
Increase in fair value of Symphony Icon, Inc. purchase liability | 477 | 2,162 | 1,741 | 4,243 | ||||||||||||
General and administrative, including stock-based compensation of $847, $680, $1,626 and $1,361, respectively | 4,669 | 4,162 | 8,993 | 8,727 | ||||||||||||
Total operating expenses | 28,838 | 25,679 | 54,753 | 55,362 | ||||||||||||
Loss from operations | (28,624 | ) | (25,480 | ) | (54,179 | ) | (54,863 | ) | ||||||||
Interest income | 44 | 58 | 97 | 114 | ||||||||||||
Interest expense | (496 | ) | (530 | ) | (1,002 | ) | (1,067 | ) | ||||||||
Other income (expense), net | (4 | ) | 21 | 30 | 17 | |||||||||||
Consolidated net loss | $ | (29,080 | ) | $ | (25,931 | ) | $ | (55,054 | ) | $ | (55,799 | ) | ||||
Consolidated net loss per common share, basic and diluted | $ | (0.06 | ) | $ | (0.05 | ) | $ | (0.11 | ) | $ | (0.12 | ) | ||||
Shares used in computing consolidated net loss per common share, basic and diluted | 513,083 | 480,634 | 512,757 | 480,479 | ||||||||||||
Other comprehensive loss: | ||||||||||||||||
Unrealized gain (loss) on investments | (11 | ) | 37 | 8 | (41 | ) | ||||||||||
Comprehensive loss | $ | (29,091 | ) | $ | (25,894 | ) | $ | (55,046 | ) | $ | (55,840 | ) |
Common Stock | Additional | Accumulated Other | |||||||||||||||||||||||||
Shares | Par Value | Paid-In Capital | Accumulated Deficit | Comprehensive Gain (Loss) | Treasury Stock | Total | |||||||||||||||||||||
Balance at December 31, 2011 | 480,389 | $ | 480 | $ | 1,087,033 | $ | (789,621 | ) | $ | 21 | $ | (345 | ) | $ | 297,568 | ||||||||||||
Stock-based compensation | — | — | 3,313 | — | — | — | 3,313 | ||||||||||||||||||||
Issuance of common stock under Equity Incentive Plans | 779 | 1 | 275 | — | — | — | 276 | ||||||||||||||||||||
Other | — | — | (136 | ) | — | — | — | (136 | ) | ||||||||||||||||||
Repurchase of common stock | — | — | — | — | — | (285 | ) | (285 | ) | ||||||||||||||||||
Net loss | — | — | — | (55,799 | ) | — | — | (55,799 | ) | ||||||||||||||||||
Unrealized loss on investments | — | — | — | — | (41 | ) | — | (41 | ) | ||||||||||||||||||
Balance at June 30, 2012 | 481,168 | $ | 481 | $ | 1,090,485 | $ | (845,420 | ) | $ | (20 | ) | $ | (630 | ) | $ | 244,896 | |||||||||||
Balance at December 31, 2012 | 512,375 | $ | 512 | $ | 1,166,605 | $ | (899,832 | ) | $ | 23 | $ | (630 | ) | $ | 266,678 | ||||||||||||
Stock-based compensation | — | — | 3,978 | — | — | — | 3,978 | ||||||||||||||||||||
Issuance of common stock under Equity Incentive Plans | 1,597 | 2 | 345 | — | — | — | 347 | ||||||||||||||||||||
Repurchase of common stock | — | — | — | — | — | (873 | ) | (873 | ) | ||||||||||||||||||
Net loss | — | — | — | (55,054 | ) | — | — | (55,054 | ) | ||||||||||||||||||
Unrealized gain on investments | — | — | — | — | 8 | — | 8 | ||||||||||||||||||||
Balance at June 30, 2013 | 513,972 | $ | 514 | $ | 1,170,928 | $ | (954,886 | ) | $ | 31 | $ | (1,503 | ) | $ | 215,084 |
Six Months Ended June 30, | ||||||||
2013 | 2012 | |||||||
Cash flows from operating activities: | ||||||||
Consolidated net loss | $ | (55,054 | ) | $ | (55,799 | ) | ||
Adjustments to reconcile consolidated net loss to net cash used in operating activities: | ||||||||
Depreciation | 1,618 | 2,219 | ||||||
Increase in fair value of Symphony Icon, Inc. purchase liability | 1,741 | 4,243 | ||||||
Stock-based compensation | 3,978 | 3,313 | ||||||
Changes in operating assets and liabilities: | ||||||||
Decrease in accounts receivable | 364 | 168 | ||||||
Increase in prepaid expenses and other current assets | (335 | ) | (2,834 | ) | ||||
Decrease in other assets | 44 | 48 | ||||||
Increase (decrease) in accounts payable and other liabilities | 2,251 | (317 | ) | |||||
Decrease in deferred revenue | (10 | ) | — | |||||
Net cash used in operating activities | (45,403 | ) | (48,959 | ) | ||||
Cash flows from investing activities: | ||||||||
Purchases of property and equipment | (1,238 | ) | (329 | ) | ||||
Proceeds from disposal of property and equipment | 102 | 1 | ||||||
Purchases of investments | (80,954 | ) | (151,776 | ) | ||||
Maturities of investments | 121,623 | 49,384 | ||||||
Net cash provided by (used in) investing activities | 39,533 | (102,720 | ) | |||||
Cash flows from financing activities: | ||||||||
Proceeds from issuance of common stock | 347 | 276 | ||||||
Repurchase of common stock | (873 | ) | (285 | ) | ||||
Repayment of debt borrowings | (773 | ) | (706 | ) | ||||
Other financing activities | — | (136 | ) | |||||
Net cash used in financing activities | (1,299 | ) | (851 | ) | ||||
Net decrease in cash and cash equivalents | (7,169 | ) | (152,530 | ) | ||||
Cash and cash equivalents at beginning of period | 30,423 | 186,309 | ||||||
Cash and cash equivalents at end of period | $ | 23,254 | $ | 33,779 | ||||
Supplemental disclosure of cash flow information: | ||||||||
Cash paid for interest | $ | 962 | $ | 1,029 | ||||
Supplemental disclosure of non-cash investing and financing activities: | ||||||||
Unrealized gain (loss) on investments | $ | 8 | $ | (41 | ) |
Expected Volatility | Risk-free Interest Rate | Expected Term | Dividend Rate | ||||||||
June 30, 2013: | |||||||||||
Employees | 90 | % | 0.8 | % | 5 | — | % | ||||
Officers and non-employee directors | 81 | % | 1.6 | % | 8 | — | % | ||||
June 30, 2012: | |||||||||||
Employees | 92 | % | 0.8 | % | 5 | — | % | ||||
Officers and non-employee directors | 80 | % | 1.6 | % | 8 | — | % |
Options | Weighted Average Exercise Price | ||||||
(in thousands) | |||||||
Outstanding at December 31, 2012 | 21,525 | $ | 2.51 | ||||
Granted | 3,396 | 2.12 | |||||
Exercised | (196 | ) | 1.77 | ||||
Expired | (815 | ) | 3.87 | ||||
Forfeited | (95 | ) | 1.86 | ||||
Outstanding at June 30, 2013 | 23,815 | 2.42 | |||||
Exercisable at June 30, 2013 | 16,575 | $ | 2.61 |
Shares | Weighted Average Grant Date Fair Value | ||||||
(in thousands) | |||||||
Outstanding at December 31, 2012 | 3,543 | $ | 1.80 | ||||
Granted | 1,969 | 2.09 | |||||
Vested | (992 | ) | 1.80 | ||||
Forfeited | (138 | ) | 1.87 | ||||
Nonvested at June 30, 2013 | 4,382 | $ | 1.93 |
Shares | Weighted Average Grant Date Fair Value | ||||||
(in thousands) | |||||||
Outstanding at December 31, 2012 | 329 | $ | 1.90 | ||||
Vested | (329 | ) | 1.90 | ||||
Nonvested at June 30, 2013 | — | $ | — |
As of June 30, 2013 | ||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | |||||||||||||
(in thousands) | ||||||||||||||||
Cash and cash equivalents | $ | 23,254 | $ | — | $ | — | $ | 23,254 | ||||||||
Securities maturing within one year: | ||||||||||||||||
Certificates of deposit | 551 | — | — | 551 | ||||||||||||
U.S. treasury securities | 151,542 | 31 | — | 151,573 | ||||||||||||
Total short-term investments | $ | 152,093 | $ | 31 | $ | — | $ | 152,124 | ||||||||
Total cash and cash equivalents and investments | $ | 175,347 | $ | 31 | $ | — | $ | 175,378 | ||||||||
As of December 31, 2012 | ||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | |||||||||||||
(in thousands) | ||||||||||||||||
Cash and cash equivalents | $ | 30,423 | $ | — | $ | — | $ | 30,423 | ||||||||
Securities maturing within one year: | ||||||||||||||||
Certificates of deposit | 551 | — | — | 551 | ||||||||||||
U.S. treasury securities | 192,211 | 24 | (1 | ) | 192,234 | |||||||||||
Total short-term investments | $ | 192,762 | $ | 24 | $ | (1 | ) | $ | 192,785 | |||||||
Total cash and cash equivalents and investments | $ | 223,185 | $ | 24 | $ | (1 | ) | $ | 223,208 |
• | Level 1 - quoted prices in active markets for identical investments |
• | Level 2 - other significant observable inputs (including quoted prices for similar investments, market corroborated inputs, etc.) |
• | Level 3 - significant unobservable inputs (including the Company's own assumptions in determining the fair value of investments) |
Assets and Liabilities at Fair Value as of June 30, 2013 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
(in thousands) | ||||||||||||||||
Assets | ||||||||||||||||
Cash and cash equivalents | $ | 23,254 | $ | — | $ | — | $ | 23,254 | ||||||||
Short-term investments | 152,124 | — | — | 152,124 | ||||||||||||
Total cash and cash equivalents and investments | $ | 175,378 | $ | — | $ | — | $ | 175,378 | ||||||||
Liabilities | ||||||||||||||||
Other long-term liabilities | $ | — | $ | — | $ | 31,661 | $ | 31,661 | ||||||||
Total liabilities | $ | — | $ | — | $ | 31,661 | $ | 31,661 |
Assets and Liabilities at Fair Value as of December 31, 2012 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
(in thousands) | ||||||||||||||||
Assets | ||||||||||||||||
Cash and cash equivalents | $ | 30,423 | $ | — | $ | — | $ | 30,423 | ||||||||
Short-term investments | 192,785 | — | — | 192,785 | ||||||||||||
Total cash and cash equivalents and investments | $ | 223,208 | $ | — | $ | — | $ | 223,208 | ||||||||
Liabilities | ||||||||||||||||
Other long-term liabilities | $ | — | $ | — | $ | 29,920 | $ | 29,920 | ||||||||
Total liabilities | $ | — | $ | — | $ | 29,920 | $ | 29,920 |
Other Long-term Liabilities | ||||
(in thousands) | ||||
Balance at December 31, 2012 | $ | 29,920 | ||
Change in valuation of purchase consideration payable to former Symphony Icon stockholders | 1,741 | |||
Balance at June 30, 2013 | $ | 31,661 | ||
Balance at December 31, 2011 | $ | 55,033 | ||
Change in valuation of purchase consideration payable to former Symphony Icon stockholders | 4,243 | |||
Balance at June 30, 2012 | $ | 59,276 |
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Total revenues | $ | 0.2 | $ | 0.2 | $ | 0.6 | $ | 0.5 | |||||||
Dollar increase | $ | — | $ | 0.1 | |||||||||||
Percentage increase | 8 | % | 15 | % |
• | Collaborative research – Revenue from collaborative research for the three months ended June 30, 2013 was$0.2 million, consistent with the corresponding period in 2012, and for the six months ended June 30, 2013 increased 41% to $0.5 million, as compared to the corresponding period in 2012, primarily due to increased revenues under our alliance with Taconic Farms. |
• | Subscription and license fees – Revenue from subscriptions and license fees for the three months ended June 30, 2013 increased to $3,000, and for the six months ended June 30, 2013 decreased 47% to $0.1 million, as compared to the corresponding periods in 2012, primarily due to changes in technology license fees. |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Total research and development expense | $ | 23.7 | $ | 19.4 | $ | 44.0 | $ | 42.4 | ||||||||
Dollar increase | $ | 4.3 | $ | 1.6 | ||||||||||||
Percentage increase | 22 | % | 4 | % |
• | Third-party and other services – Third-party and other services for the three months ended June 30, 2013 increased 59% to $11.5 million, and for the six months ended June 30, 2013 increased 16% to $18.7 million, as compared to the corresponding periods in 2012, primarily due to increases in external preclinical and clinical research and development costs. Third-party and other services relate principally to our clinical trial and related development activities, such as preclinical and clinical studies and contract manufacturing. |
• | Personnel – Personnel costs for the three months ended June 30, 2013 increased 13% to $7.0 million, and for the six months ended June 30, 2013 increased 1% to $14.3 million, as compared to the corresponding periods in 2012, primarily due to increased medical insurance and salary costs. Salaries, bonuses, employee benefits, payroll taxes, recruiting and relocation costs are included in personnel costs. |
• | Facilities and equipment – Facilities and equipment costs for the three months ended June 30, 2013 decreased 28% to $2.1 million, and for the six months ended June 30, 2013 decreased 26% to $4.4 million, as compared to the corresponding periods in 2012, primarily due to decreases in rent costs and depreciation expense. Effective December |
• | Stock-based compensation – Stock-based compensation expense for the three months ended June 30, 2013 increased 12% to $1.0 million, and for the six months ended June 30, 2013 increased 20% to $2.4 million, as compared to the corresponding periods in 2012. |
• | Laboratory supplies – Laboratory supplies expense for the three months ended June 30, 2013 increased 16% to |
• | Other – Other costs for the three months ended June 30, 2013 decreased 16% to $1.0 million, as compared to the corresponding period in 2012, and for the six months ended June 30, 2013 were $2.5 million, consistent with the corresponding period in 2012. |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Total general and administrative expense | $ | 4.7 | $ | 4.2 | $ | 9.0 | $ | 8.7 | ||||||||
Dollar increase | $ | 0.5 | $ | 0.3 | ||||||||||||
Percentage increase | 12 | % | 3 | % |
• | Personnel – Personnel costs for the three months ended June 30, 2013 increased 16% to $2.3 million, as compared to the corresponding period in 2012, primarily due to increased medical insurance and salary costs. Personnel costs for the six months ended June 30, 2013 were $4.4 million, consistent with the corresponding period in 2012. Salaries, bonuses, employee benefits, payroll taxes, recruiting and relocation costs are included in personnel costs. |
• | Stock-based compensation – Stock-based compensation expense for the three months ended June 30, 2013 increased 25% to $0.8 million, and for the six months ended June 30, 2013 increased 20% to $1.6 million, as compared to the corresponding periods in 2012. |
• | Professional fees – Professional fees for the three months ended June 30, 2013 increased 22% to $0.8 million, and for the six months ended June 30, 2013 increased 11% to $1.4 million, as compared to the corresponding periods in 2012. |
• | Facilities and equipment – Facilities and equipment costs for the three months ended June 30, 2013 decreased 16% to $0.4 million, and for the six months ended June 30, 2013 decreased 16% to $0.8 million, as compared to the corresponding periods in 2012. |
• | Other – Other costs for the three months ended June 30, 2013 were $0.4 million, and for the six months ended June 30, 2013 were $0.7 million, consistent with the corresponding periods in 2012. |
Item 1. | Legal Proceedings |
Item 1A. | Risk Factors |
• | We will need additional capital in the future and, if it is unavailable, we will be forced to significantly curtail or cease our operations. If it is not available on reasonable terms, we will be forced to obtain funds by entering into financing agreements on unattractive terms. |
• | We have a history of net losses, and we expect to continue to incur net losses and may not achieve or maintain profitability. |
• | Our operating results have been and likely will continue to fluctuate, and we believe that period-to-period comparisons of our operating results are not a good indication of our future performance. |
• | We have not proven our ability to successfully develop and commercialize drug candidates based on our drug target discoveries. |
• | Clinical testing of our drug candidates in humans is an inherently risky and time-consuming process that may fail to demonstrate safety and efficacy, which could result in the delay, limitation or prevention of regulatory approval. |
• | Our drug candidates are subject to a lengthy and uncertain regulatory process that may not result in the necessary regulatory approvals, which could adversely affect our ability to commercialize products. |
• | If our potential products receive regulatory approval, we or our collaborators will remain subject to extensive and rigorous ongoing regulation. |
• | The commercial success of any products that we may develop will depend upon the degree of market acceptance of our products among physicians, patients, health care payors, private health insurers and the medical community. |
• | If we are unable to establish sales and marketing capabilities or enter into agreements with third parties to market and sell our drug candidates, we may be unable to generate product revenues. |
• | If we are unable to obtain adequate coverage and reimbursement from third-party payors for any products that we may develop, our revenues and prospects for profitability will suffer. |
• | Current and future healthcare laws and regulations may negatively affect our revenues and prospects for profitability. |
• | Our competitors may develop products that make our products obsolete. |
• | We may not be able to manufacture our drug candidates in commercial quantities, which would prevent us from commercializing our drug candidates. |
• | We are dependent in many ways upon our collaborations with major pharmaceutical companies. If we are unable to establish new collaborations, if milestones are not achieved under our collaborations or if our collaborators' efforts fail to yield pharmaceutical products on a timely basis, our opportunities to generate revenues and earn royalties will be reduced. |
• | Conflicts with our collaborators could jeopardize the success of our collaborative agreements and harm our product development efforts. |
• | We rely on third parties to carry out drug development activities. |
• | We lack the capability to manufacture materials for preclinical studies, clinical trials or commercial sales and rely on third parties to manufacture our drug candidates, which may harm or delay our product development and commercialization efforts. |
• | If we are unable to adequately protect our intellectual property, third parties may be able to use our products and technologies, which could adversely affect our ability to compete in the market. |
• | We may be involved in patent litigation and other disputes regarding intellectual property rights and may require licenses from third parties for our discovery and development and planned commercialization activities. We may not prevail in any such litigation or other dispute or be able to obtain required licenses. |
• | We use intellectual property that we license from third parties. If we do not comply with these licenses, we could lose our rights under them. |
• | We have not sought patent protection outside of the United States for some of our inventions, and some of our licensed patents only provide coverage in the United States. As a result, our international competitors could be granted foreign patent protection with respect to our discoveries. |
• | We may be subject to damages resulting from claims that we, our employees or independent contractors have wrongfully used or disclosed alleged trade secrets of their former employers. |
• | The loss of key personnel or the inability to attract and retain additional personnel could impair our ability to expand our operations. |
• | Our collaborations with outside scientists may be subject to restriction and change. |
• | Because most of our operations are located at a limited number of locations, the occurrence of a disaster could significantly disrupt our business. |
• | We use hazardous chemicals and radioactive and biological materials in our business. Any claims relating to improper handling, storage or disposal of these materials could be time consuming and costly. |
• | We may be sued for product liability. |
• | Invus, L.P., Invus C.V. and their affiliates own a controlling interest in our outstanding common stock and may have interests which conflict with those of our other stockholders. |
• | Invus has additional rights under our stockholders' agreement with Invus, L.P. which provides Invus with substantial influence over certain significant corporate matters. |
• | Our stock price may be extremely volatile. |
• | We may engage in future acquisitions, which may be expensive and time consuming and from which we may not realize anticipated benefits. |
• | Future sales of our common stock may depress our stock price. |
• | If we are unable to meet Nasdaq continued listing requirements, Nasdaq may take action to delist our common stock. |
Item 6. | Exhibits |
Exhibit No. | Description | |
31.1 | — | Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
31.2 | — | Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
32.1 | — | Certification of Principal Executive and Principal Financial Officers Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
101.INS | — | XBRL Instance Document |
101.SCH | — | XBRL Taxonomy Extension Schema Document |
101.CAL | — | XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF | — | XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB | — | XBRL Taxonomy Extension Label Linkbase Document |
101.PRE | — | XBRL Taxonomy Extension Presentation Linkbase Document |
Lexicon Pharmaceuticals, Inc. | |||
Date: | July 31, 2013 | By: | /s/ Arthur T. Sands |
Arthur T. Sands, M.D., Ph.D. | |||
President and Chief Executive Officer |
Date: | July 31, 2013 | By: | /s/ Jeffrey L. Wade |
Jeffrey L. Wade | |||
Executive Vice President, Corporate Development and Chief Financial Officer |
Exhibit No. | Description | |
31.1 | — | Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
31.2 | — | Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
32.1 | — | Certification of Principal Executive and Principal Financial Officers Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
101.INS | — | XBRL Instance Document |
101.SCH | — | XBRL Taxonomy Extension Schema Document |
101.CAL | — | XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF | — | XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB | — | XBRL Taxonomy Extension Label Linkbase Document |
101.PRE | — | XBRL Taxonomy Extension Presentation Linkbase Document |
1. | I have reviewed this Quarterly Report on Form 10-Q of Lexicon Pharmaceuticals, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ Arthur T. Sands | |
Arthur T. Sands, M.D., Ph.D. | |
President and Chief Executive Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q of Lexicon Pharmaceuticals, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ Jeffrey L. Wade |
Jeffrey L. Wade |
Executive Vice President, Corporate Development and Chief Financial Officer |
1. | Lexicon's Quarterly Report on Form 10-Q for the period ended June 30, 2013, and to which this Certification is attached as Exhibit 32.1 (the “Periodic Report”), fully complies with the requirements of section 13(a) or section 15(d) of the Securities Exchange Act of 1934, and |
2. | The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of Lexicon. |
By: | /s/ Arthur T. Sands |
Arthur T. Sands, M.D., Ph.D. | |
President and Chief Executive Officer |
By: | /s/ Jeffrey L. Wade |
Jeffrey L. Wade | |
Executive Vice President, Corporate Development and Chief Financial Officer |
Net Loss Per Share Accounting Policies (Policies)
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6 Months Ended |
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Jun. 30, 2013
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Net Loss Per Share [Abstract] | |
Earnings Per Share, Policy | Net loss per share is computed using the weighted average number of shares of common stock outstanding during the applicable period and excludes shares underlying stock options and restricted stock units because they are antidilutive. |
Stock-Based Compensation
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Jun. 30, 2013
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Stock-Based Compensation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award | Stock-Based Compensation The Company recorded $1.9 million and $1.6 million of stock-based compensation expense for the three months ended June 30, 2013 and 2012, respectively, and $4.0 million and $3.3 million of stock-based compensation expense for the six months ended June 30, 2013 and 2012, respectively. The Company utilized the Black-Scholes valuation model for estimating the fair value of the stock compensation granted, with the following weighted-average assumptions for options granted in the six months ended June 30, 2013 and 2012:
The following is a summary of option activity under Lexicon’s stock-based compensation plans for the six months ended June 30, 2013:
During the six months ended June 30, 2013, Lexicon also granted its employees annual restricted stock units. These restricted stock units vest in four annual installments. The following is a summary of restricted stock units activity under Lexicon’s stock-based compensation plans for the six months ended June 30, 2013:
During 2010, Lexicon granted certain employees restricted stock units with a performance condition. The shares subject to the restricted stock units granted in 2010 vested upon the dosing of the first patient in a pivotal human clinical trial in any country, the results of which could be used to establish safety and efficacy of a pharmaceutical product discovered or developed by Lexicon as a basis for a New Drug Application. This performance condition occurred during the six months ended June 30, 2013, and therefore all outstanding restricted stock units with this performance condition vested. Stock-based compensation expense for awards with performance conditions is recognized over the period from the date the performance condition is determined to be probable of occurring through the time the applicable condition is met. The following is a summary of performance-based restricted stock units activity under Lexicon's stock-based compensation plans for the six months ended June 30, 2013:
During the six months ended June 30, 2013, Lexicon granted its non-employee directors 80,808 shares of restricted stock awards. The restricted stock awards had a weighted average grant date fair value of $1.98 per share and vested |
Stock-Based Compensation (Details 4) (Restricted Stock Units (RSUs) [Member], USD $)
In Thousands, except Per Share data, unless otherwise specified |
6 Months Ended | |
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Jun. 30, 2013
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Dec. 31, 2012
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Restricted Stock Units (RSUs) [Member]
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||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock units | 4,382 | 3,543 |
Restricted stock units, weighted-average grant date fair value | $ 1.93 | $ 1.80 |
Restricted stock units granted | 1,969 | |
Restricted stock units granted, weighted-average grant date fair value | $ 2.09 | |
Restricted stock units vested | (992) | |
Restricted stock units vested, weighted-average grant date fair value | $ 1.80 | |
Restricted stock units forfeited | (138) | |
Restricted stock units forfeited, weighted-average grant date fair value | $ 1.87 |
Stock-Based Compensation (Tables)
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Jun. 30, 2013
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Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] |
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Schedule of Share-based Compensation, Restricted Stock Units Award Activity [Table Text Block] |
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Schedule of Share-based Compnesation, Performance-based Restricted Stock Units [Table Text Block] |
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Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] |
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Cash and Cash Equivalents and Investments (Details) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2013
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Dec. 31, 2012
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Cash and Cash Equivalents
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Fair Value | ||
Amortized Cost | $ 23,254 | $ 30,423 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | 23,254 | 30,423 |
Certificates of Deposit
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Fair Value | ||
Amortized Cost | 551 | 551 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | 551 | 551 |
U.S. Treasury Securities
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Fair Value | ||
Amortized Cost | 151,542 | 192,211 |
Gross Unrealized Gains | 31 | 24 |
Gross Unrealized Losses | 0 | (1) |
Estimated Fair Value | 151,573 | 192,234 |
Total Short-term Investments
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Fair Value | ||
Amortized Cost | 152,093 | 192,762 |
Gross Unrealized Gains | 31 | 24 |
Gross Unrealized Losses | 0 | (1) |
Estimated Fair Value | 152,124 | 192,785 |
Total Cash and Cash Equivalents and Investments
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Fair Value | ||
Amortized Cost | 175,347 | 223,185 |
Gross Unrealized Gains | 31 | 24 |
Gross Unrealized Losses | 0 | (1) |
Estimated Fair Value | $ 175,378 | $ 223,208 |
Stock-Based Compensation (Details 6) (USD $)
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6 Months Ended |
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Jun. 30, 2013
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Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share-based Compensation Arrangement by Share-based Payment Award, Stock Bonus and Restricted Stock, Grants in Period | 80,808 |
Share-based Compensation Arrangement by Share-based Payment Award, Stock Bonus and Restricted Stock, Grants in Period, Weighted Average Grant Date Fair Value | $ 1.98 |
Commitments and Contingencies (Details) (USD $)
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Jun. 30, 2013
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Dec. 31, 2012
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Operating Leased Assets [Line Items] | ||
Guarantor Obligations, Maximum Exposure, Undiscounted | $ 5,100,000 | |
Restricted investments | $ 430,000 | $ 430,000 |
Fair Value Measurements (Details 3) (USD $)
In Millions, except Share data, unless otherwise specified |
Jul. 30, 2012
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Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Symphony base payment in shares | 13,237,519 |
Symphony base payment obligation | $ 35 |
Stock-Based Compensation (Details 5) (Performance Stock Units (PSUs) [Member], USD $)
In Thousands, except Per Share data, unless otherwise specified |
6 Months Ended | |
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Jun. 30, 2013
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Dec. 31, 2012
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Performance Stock Units (PSUs) [Member]
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Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Performance stock units | 0 | 329 |
Performance stock units, weighted-average grant date fair value | $ 0.00 | $ 1.90 |
Performance stock units vested | (329) | |
Performance stock units vested, weighted-average grant date fair value | $ 1.90 |
Basis of Presentation
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6 Months Ended |
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Jun. 30, 2013
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Basis of Presentation [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure | Basis of Presentation The accompanying unaudited consolidated financial statements of Lexicon Pharmaceuticals, Inc. (“Lexicon” or the “Company”) have been prepared in accordance with generally accepted accounting principles for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the six-month period ended June 30, 2013 are not necessarily indicative of the results that may be expected for the year ended December 31, 2013. The accompanying consolidated financial statements include the accounts of Lexicon and its wholly-owned subsidiaries. Intercompany transactions and balances are eliminated in consolidation. For further information, refer to the financial statements and footnotes thereto included in Lexicon’s annual report on Form 10-K for the year ended December 31, 2012, as filed with the SEC. |
Cash and Cash Equivalents and Investments
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Jun. 30, 2013
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Cash and Cash Equivalents and Investments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash and Cash Equivalents Disclosure | Cash and Cash Equivalents and Investments The fair value of cash and cash equivalents and investments held at June 30, 2013 and December 31, 2012 are as follows:
There were no realized gains or losses for the six months ended June 30, 2013, and no realized gains or losses for the six months ended June 30, 2012. The cost of securities sold is based on the specific identification method. |
Net Loss Per Share
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
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Net Loss Per Share [Abstract] | |
Earnings Per Share [Text Block] | Net Loss Per Share Net loss per share is computed using the weighted average number of shares of common stock outstanding during the applicable period and excludes shares underlying stock options and restricted stock units because they are antidilutive. There are no differences between basic and diluted net loss per share for all periods presented. |
Earnings Per Share, Policy | Net loss per share is computed using the weighted average number of shares of common stock outstanding during the applicable period and excludes shares underlying stock options and restricted stock units because they are antidilutive. |
Cash and Cash Equivalents and Investments (Details 2) (USD $)
|
6 Months Ended | |
---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
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Schedule of Investments [Line Items] | ||
Realized Investment Gains (Losses) | $ 0 | $ 0 |
Debt Obligations (Details) (USD $)
In Millions, unless otherwise specified |
1 Months Ended | ||
---|---|---|---|
Apr. 30, 2004
|
Apr. 30, 2014
|
Jun. 30, 2013
|
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Debt Instrument [Line Items] | |||
Mortgage Loans on Real Estate, New Mortgage Loans | $ 34.0 | ||
Debt Instrument, Interest Rate, Stated Percentage | 8.23% | ||
Secured Debt | 22.7 | ||
Mortgage Loans on Real Estate, Periodic Payment Terms, Balloon Payment Amount | $ 21.4 |