x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Virginia | 54-1972729 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. employer identification no.) | |
10 Finderne Avenue, Building 10 | ||
Bridgewater, New Jersey | 08807 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer x | Accelerated filer o | |
Non-accelerated filer o (Do not check if a smaller reporting company) | Smaller reporting company o | |
Emerging growth company o |
As of | As of | ||||||
June 30, 2018 | December 31, 2017 | ||||||
(unaudited) | |||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 634,329 | $ | 381,165 | |||
Prepaid expenses and other current assets | 10,929 | 8,279 | |||||
Total current assets | 645,258 | 389,444 | |||||
In-process research and development | 58,200 | 58,200 | |||||
Fixed assets, net | 17,881 | 12,432 | |||||
Other assets | 2,905 | 1,971 | |||||
Total assets | $ | 724,244 | $ | 462,047 | |||
Liabilities and shareholders’ equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 15,966 | $ | 14,671 | |||
Accrued expenses | 29,046 | 29,339 | |||||
Other current liabilities | 630 | 646 | |||||
Total current liabilities | 45,642 | 44,656 | |||||
Long-term debt, net | 307,156 | 55,567 | |||||
Other long-term liabilities | 805 | 765 | |||||
Total liabilities | 353,603 | 100,988 | |||||
Shareholders’ equity: | |||||||
Common stock, $0.01 par value; 500,000,000 authorized shares, 77,038,788 and 76,610,508 issued and outstanding shares at June 30, 2018 and December 31, 2017, respectively | 770 | 766 | |||||
Additional paid-in capital | 1,472,699 | 1,318,181 | |||||
Accumulated deficit | (1,102,846 | ) | (957,885 | ) | |||
Accumulated other comprehensive income (loss) | 18 | (3 | ) | ||||
Total shareholders’ equity | 370,641 | 361,059 | |||||
Total liabilities and shareholders’ equity | $ | 724,244 | $ | 462,047 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Revenues | $ | — | $ | — | $ | — | $ | — | |||||||
Operating expenses: | |||||||||||||||
Research and development | 35,722 | 26,871 | 65,820 | 49,125 | |||||||||||
General and administrative | 37,160 | 16,644 | 69,813 | 30,359 | |||||||||||
Total operating expenses | 72,882 | 43,515 | 135,633 | 79,484 | |||||||||||
Operating loss | (72,882 | ) | (43,515 | ) | (135,633 | ) | (79,484 | ) | |||||||
Investment income | 2,729 | 169 | 4,769 | 323 | |||||||||||
Interest expense | (6,488 | ) | (1,489 | ) | (12,130 | ) | (2,963 | ) | |||||||
Loss on extinguishment of debt | — | — | (2,209 | ) | — | ||||||||||
Other income, net | 244 | 200 | 330 | 105 | |||||||||||
Loss before income taxes | (76,397 | ) | (44,635 | ) | (144,873 | ) | (82,019 | ) | |||||||
Provision for income taxes | 40 | 37 | 88 | 67 | |||||||||||
Net loss | $ | (76,437 | ) | $ | (44,672 | ) | $ | (144,961 | ) | $ | (82,086 | ) | |||
Basic and diluted net loss per share | $ | (1.00 | ) | $ | (0.72 | ) | $ | (1.89 | ) | $ | (1.32 | ) | |||
Weighted average basic and diluted common shares outstanding | 76,767 | 62,209 | 76,693 | 62,126 | |||||||||||
Net loss | $ | (76,437 | ) | $ | (44,672 | ) | $ | (144,961 | ) | $ | (82,086 | ) | |||
Other comprehensive (loss) income: | |||||||||||||||
Foreign currency translation (losses) gains | (21 | ) | 5 | 21 | 23 | ||||||||||
Total comprehensive loss | $ | (76,458 | ) | $ | (44,667 | ) | $ | (144,940 | ) | $ | (82,063 | ) |
Six Months Ended June 30, | |||||||
2018 | 2017 | ||||||
Operating activities | |||||||
Net loss | $ | (144,961 | ) | $ | (82,086 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||
Depreciation | 1,698 | 1,454 | |||||
Stock-based compensation expense | 12,303 | 8,591 | |||||
Amortization of debt issuance costs | 585 | 61 | |||||
Accretion of debt discount | 7,252 | — | |||||
Accretion of back-end fee on debt | 50 | 342 | |||||
Changes in operating assets and liabilities: | |||||||
Prepaid expenses and other assets | (3,653 | ) | 128 | ||||
Accounts payable | 1,981 | 767 | |||||
Accrued expenses and other | 1,794 | (2,415 | ) | ||||
Net cash used in operating activities | (122,951 | ) | (73,158 | ) | |||
Investing activities | |||||||
Purchase of fixed assets | (8,212 | ) | (854 | ) | |||
Net cash used in investing activities | (8,212 | ) | (854 | ) | |||
Financing activities | |||||||
Proceeds from exercise of stock options | 5,785 | 2,434 | |||||
Loss on extinguishment of debt | (2,209 | ) | — | ||||
Payment of debt | (55,000 | ) | — | ||||
Proceeds from issuance of 1.75% convertible senior notes due 2025 | 450,000 | — | |||||
Payment of debt issuance costs | (14,235 | ) | — | ||||
Net cash provided by financing activities | 384,341 | 2,434 | |||||
Effect of exchange rates on cash and cash equivalents | (14 | ) | 51 | ||||
Net increase (decrease) in cash and cash equivalents | 253,164 | (71,527 | ) | ||||
Cash and cash equivalents at beginning of period | 381,165 | 162,591 | |||||
Cash and cash equivalents at end of period | $ | 634,329 | $ | 91,064 | |||
Supplemental disclosures of cash flow information: | |||||||
Cash paid for interest | $ | 1,276 | $ | 2,574 | |||
Cash paid for income taxes | $ | 93 | $ | 41 |
• | Level 1 — Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. |
• | Level 2 — Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable for the assets or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life. |
• | Level 3 — Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. |
As of June 30, 2018 | |||||||
Carrying Value | Fair Value | ||||||
(in millions) | |||||||
Level 1 | |||||||
Cash and cash equivalents | $ | 634.3 | $ | 634.3 | |||
Level 2 | |||||||
Convertible Notes ($450.0 face value) | $ | 307.2 | * | $ | 411.1 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(in thousands, except per share amounts) | |||||||||||||||
Numerator: | |||||||||||||||
Net loss | $ | (76,437 | ) | $ | (44,672 | ) | $ | (144,961 | ) | $ | (82,086 | ) | |||
Denominator: | |||||||||||||||
Weighted average common shares used in calculation of basic net loss per share: | 76,767 | 62,209 | 76,693 | 62,126 | |||||||||||
Effect of dilutive securities: | |||||||||||||||
Common stock options | — | — | — | — | |||||||||||
RSUs | — | — | — | — | |||||||||||
Convertible debt securities | — | — | — | — | |||||||||||
Weighted average common shares outstanding used in calculation of diluted net loss per share | 76,767 | 62,209 | 76,693 | 62,126 | |||||||||||
Net loss per share: | |||||||||||||||
Basic and Diluted | $ | (1.00 | ) | $ | (0.72 | ) | $ | (1.89 | ) | $ | (1.32 | ) |
As of June 30, | |||||
2018 | 2017 | ||||
Stock options to purchase common stock | 9,578 | 8,621 | |||
Unvested RSUs | 236 | 47 | |||
Convertible debt securities | 11,492 | — |
As of June 30, 2018 | As of December 31, 2017 | ||||||
(in thousands) | |||||||
Accrued clinical trial expenses | $ | 5,772 | $ | 7,837 | |||
Accrued compensation | 7,371 | 12,197 | |||||
Accrued professional fees | 6,743 | 4,500 | |||||
Accrued technical operation expenses | 3,324 | 2,182 | |||||
Accrued interest payable | 3,391 | 423 | |||||
Accrued construction costs | 1,336 | 1,719 | |||||
Other accrued expenses | 1,109 | 481 | |||||
$ | 29,046 | $ | 29,339 |
1.75% convertible senior notes due 2025 | $ | 450,000 | |
Debt issuance costs, unamortized | (9,206 | ) | |
Discount on debt | (133,638 | ) | |
Long-term debt, net | $ | 307,156 |
Year Ending December 31: | |||
2018 | $ | — | |
2019 | — | ||
2020 | — | ||
2021 | — | ||
2022 | — | ||
2023 and thereafter | 450,000 | ||
$ | 450,000 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Contractual interest expense | $ | 1,971 | $ | 1,288 | $ | 4,243 | $ | 2,560 | |||||||
Amortization of debt issuance costs | 286 | 30 | 585 | 61 | |||||||||||
Accretion of back-end fee on debt | — | 171 | 50 | 342 | |||||||||||
Accretion of debt discount | 4,231 | — | 7,252 | — | |||||||||||
Total interest expense | $ | 6,488 | $ | 1,489 | $ | 12,130 | $ | 2,963 |
Balance at December 31, 2017 | $ | 361,059 | |
Net loss for the period | (144,961 | ) | |
Proceeds from exercise of stock options | 5,785 | ||
Equity component of Convertible Notes | 136,434 | ||
Stock-based compensation expense | 12,303 | ||
Change in cumulative translation adjustment | 21 | ||
Balance at June 30, 2018 | $ | 370,641 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
2018 | 2017 | 2018 | 2017 | ||||
Volatility | 67%-68% | 73% | 67%-68% | 73%-74% | |||
Risk-free interest rate | 2.55%-2.82% | 1.74%-1.88% | 2.25%-2.82% | 1.74%-1.99% | |||
Dividend yield | 0.0% | 0.0% | 0.0% | 0.0% | |||
Expected option term (in years) | 5.19 | 6.25 | 5.08 | 6.25 | |||
Weighted average fair value of stock options granted | $15.18 | $11.02 | $16.93 | $10.20 |
Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life in Years | Aggregate Intrinsic Value (in thousands) | |||||||||
Options outstanding at December 31, 2017 | 8,608,921 | $ | 14.08 | |||||||||
Granted | 1,430,200 | $ | 29.22 | |||||||||
Exercised | (381,366 | ) | $ | 15.17 | ||||||||
Forfeited or expired | (79,930 | ) | $ | 17.30 | ||||||||
Options outstanding at June 30, 2018 | 9,577,825 | $ | 16.27 | 7.27 | $ | 79,204 | ||||||
Vested and expected to vest at June 30, 2018 | 8,598,142 | $ | 15.75 | 7.10 | $ | 74,151 | ||||||
Exercisable at June 30, 2018 | 4,905,928 | $ | 13.16 | 6.15 | $ | 51,474 |
Outstanding as of June 30, 2018 | Exercisable as of June 30, 2018 | |||||||||||||||||||||
Range of Exercise Prices ($) | Number of Options | Weighted Average Remaining Contractual Term (in years) | Weighted Average Exercise Price ($) | Number of Options | Weighted Average Exercise Price ($) | |||||||||||||||||
$ | 3.03 | $ | 4.55 | 960,038 | 4.13 | $ | 3.60 | 960,038 | $ | 3.60 | ||||||||||||
$ | 6.90 | $ | 6.90 | 127,903 | 4.64 | $ | 6.90 | 90,403 | $ | 6.90 | ||||||||||||
$ | 6.96 | $ | 10.85 | 998,827 | 7.81 | $ | 10.77 | 481,411 | $ | 10.68 | ||||||||||||
$ | 11.14 | $ | 12.58 | 1,035,336 | 5.59 | $ | 12.16 | 795,493 | $ | 12.17 | ||||||||||||
$ | 12.66 | $ | 13.67 | 1,007,519 | 8.14 | $ | 13.60 | 317,446 | $ | 13.53 | ||||||||||||
$ | 13.94 | $ | 16.07 | 1,139,846 | 7.07 | $ | 15.26 | 711,531 | $ | 15.11 | ||||||||||||
$ | 16.09 | $ | 17.16 | 1,458,791 | 8.17 | $ | 16.70 | 523,127 | $ | 16.53 | ||||||||||||
$ | 17.24 | $ | 22.76 | 1,318,770 | 6.72 | $ | 21.23 | 992,480 | $ | 21.32 | ||||||||||||
$ | 22.84 | $ | 28.51 | 381,245 | 9.31 | $ | 25.00 | 33,999 | $ | 23.72 | ||||||||||||
$ | 30.46 | $ | 32.46 | 1,149,550 | 9.42 | $ | 30.58 | — | $ | — |
Number of RSUs | Weighted Average Grant Price ($) | |||||
Outstanding at December 31, 2017 | 46,914 | $ | 17.16 | |||
Granted | 236,077 | 29.79 | ||||
Released | (46,914 | ) | 17.16 | |||
Forfeited | (262 | ) | 30.46 | |||
Outstanding at June 30, 2018 | 235,815 | $ | 29.79 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(in millions) | |||||||||||||||
Research and development expenses | $ | 2.7 | $ | 1.5 | $ | 4.6 | $ | 3.0 | |||||||
General and administrative expenses | 3.9 | 3.1 | 7.7 | 5.6 | |||||||||||
Total | $ | 6.6 | $ | 4.6 | $ | 12.3 | $ | 8.6 |
Year Ending December 31: | |||
2018 (remaining) | $ | 768 | |
2019 | 1,421 | ||
2020 | 477 | ||
2021 | 498 | ||
2022 | — | ||
2023 | — | ||
$ | 3,164 |
• | risks that data from the remainder of the treatment and off-treatment phases of the CONVERT study (the CONVERT study or the 212 study) will not be consistent with the six-month results of the study; |
• | uncertainties in the research and development of our existing product candidates, including due to delays in data readouts, such as the full data from the CONVERT study, patient enrollment and retention or failure of our preclinical studies or clinical trials to satisfy pre-established endpoints, including secondary endpoints in the CONVERT study and endpoints in the CONVERT extension study (the 312 study); |
• | risks that subsequent data from the 312 study will not be consistent with the interim results; |
• | failure to obtain, or delays in obtaining, regulatory approval from the US Food and Drug Administration (FDA), Japan’s Ministry of Health, Labour and Welfare (MHLW) and Pharmaceuticals and Medical Devices Agency (PMDA), |
• | imposition of significant post-approval regulatory requirements on our product candidates or failure to maintain regulatory approval for our product candidates, if received, due to a failure to satisfy post-approval regulatory requirements, such as the submission of sufficient data from confirmatory clinical studies; |
• | safety and efficacy concerns related to our product candidates; |
• | lack of experience in conducting and managing preclinical development activities and clinical trials necessary for regulatory approval, including the regulatory filing and review process; |
• | uncertainties in the rate and degree of market acceptance of product candidates, if approved; |
• | inability to create an effective direct sales and marketing infrastructure or to partner with third parties that offer such an infrastructure for distribution of our product candidates, if approved; |
• | inaccuracies in our estimates of the size of the potential markets for our product candidates or limitations by regulators on the proposed treatment population for our product candidates; |
• | failure of third parties on which we are dependent to conduct our clinical trials, to manufacture sufficient quantities of our product candidates for clinical or commercial needs, including our raw materials suppliers, or to comply with our agreements or laws and regulations that impact our business; |
• | inaccurate estimates regarding our future capital requirements, including those necessary to fund our ongoing clinical development, regulatory and commercialization efforts as well as milestone payments or royalties owed to third parties; |
• | failure to develop, or to license for development, additional product candidates, including a failure to attract experienced third-party collaborators; |
• | uncertainties in the timing, scope and rate of reimbursement for our product candidates; |
• | changes in laws and regulations applicable to our business and failure to comply with such laws and regulations; |
• | inability to repay our existing indebtedness or to obtain additional capital when needed on desirable terms or at all; |
• | failure to obtain, protect and enforce our patents and other intellectual property and costs associated with litigation or other proceedings related to such matters; |
• | restrictions imposed on us by license agreements that are critical for our product development, including our license agreements with PARI Pharma GmbH (PARI) and AstraZeneca AB (AstraZeneca), and failure to comply with our obligations under such agreements; |
• | competitive developments affecting our product candidates and potential exclusivity related thereto; |
• | the cost and potential reputational damage resulting from litigation to which we are or may be a party; |
• | loss of key personnel; and |
• | lack of experience operating internationally. |
Product Candidate/Target Indications | Status | Next Expected Milestones | ||
ALIS for NTM lung infections | • We announced top-line data for the CONVERT study in September 2017. The CONVERT study met its primary endpoint of culture conversion, which we defined as three consecutive negative monthly sputum cultures by month six with statistical and clinical significance, with 29% of patients in the ALIS plus current guideline-based therapy (GBT) arm achieving culture conversion, compared to 9% of patients in the GBT-only arm (p<0.0001). • We announced interim data from the CONVERT study and the 312 extension study in January 2018, which we view as consistent with the six-month results of the CONVERT study. The data included interim long-term durability data for the CONVERT study and interim efficacy data for the 312 study. • We filed a new drug application (NDA) for approval of ALIS with the FDA at the end of March 2018, and the FDA accepted the filing for priority review, pursuant to Section 506(c) of the Federal Food Drug and Cosmetic Act and 21 C.F.R. Part 314 Subpart H (Accelerated Approval of New Drugs for Serious or Life-Threatening Illnesses) (Subpart H) based on the six-month data from the CONVERT study. • The FDA has designated ALIS as an orphan drug, a breakthrough therapy, and a qualified infectious disease product (QIDP), and the European Commission has granted an orphan designation for ALIS for the treatment of NTM lung disease. | • We are preparing for an FDA advisory committee meeting to review data supporting our NDA for ALIS. The advisory committee meeting is scheduled for August 7, 2018. • The FDA set a PDUFA action date of September 28, 2018 for our NDA for ALIS for adult patients with NTM lung disease caused by MAC. • We also intend to seek marketing approvals for ALIS outside the US, such as in Japan and Europe, when sufficient data are available. If approved, we expect ALIS would be the first inhaled therapy specifically indicated for the treatment of NTM lung disease caused by MAC in North America, Japan and Europe. • If approved, we plan to commercialize ALIS in the US, Japan, certain countries in Europe, and certain other countries. | ||
INS1007 (oral reversible inhibitor of DPP1) for non-CF bronchiectasis and other rare diseases | • We are enrolling patients in the WILLOW study, a global phase 2, randomized, double-blind, placebo-controlled, parallel-group, multi-center clinical study to assess the efficacy, safety and tolerability, and pharmacokinetics of INS1007 administered once daily for 24 weeks in subjects with non-CF bronchiectasis. • We are currently assessing regulatory strategies which could expedite the development and regulatory reviews of INS1007 in the US and the EU. | • We expect to continue to advance enrollment in the WILLOW clinical study of INS1007 during 2018. • We are exploring the potential of INS1007 in various neutrophil-driven inflammatory conditions. | ||
INS1009 (inhaled nanoparticle formulation of a treprostinil prodrug) for rare pulmonary disorders | • The results of our phase 1 study of INS1009 were presented at the European Respiratory Society international congress in September 2016. | • We believe INS1009 may offer a differentiated product profile for rare pulmonary disorders, including PAH, and we are currently evaluating our options to advance its development including exploring its use as an inhaled dry powder formulation. |
• | Completing the CONVERT study and the 312 study; |
• | Securing approval for the ALIS NDA from the FDA, under Subpart H, based on the six-month data from the CONVERT study; |
• | Ensuring our product supply chain will support the commercialization, if approved, and potential future life cycle management programs of ALIS; |
• | Preparing for potential commercialization of ALIS in the US, Japan, certain countries in Europe, and certain other countries; |
• | Developing the core value dossier to support the global reimbursement of ALIS; |
• | Supporting further research and lifecycle management strategies for ALIS, including exploring the potential use of ALIS as part of a front-line, multi-drug regimen and as maintenance monotherapy to prevent recurrence (defined as true relapse or reinfection) of NTM lung disease; |
• | Enrolling patients in the WILLOW phase 2 study of INS1007 in non-CF bronchiectasis; |
• | Exploring INS1009 for use as an inhaled dry powder formulation and generating preclinical findings from our earlier-stage programs; and |
• | Expanding our rare disease pipeline through corporate development. |
2:1 Randomization | ||||
Patients Reporting STEAEs >3% in Either Arm | ALIS + GBT (n=223) | GBT (n=112) | ||
Patients Reporting At Least One STEAE | 20.2% (45) | 17.9% (20) | ||
System Organ Class | Preferred Term | |||
Respiratory, Thoracic, Mediastinal Disorders | 11.7% (26) | 9.8% (11) | ||
Hemoptysis | 2.7% (6) | 4.5% (5) | ||
COPD (exacerbation) | 3.1% (7) | 0.9% (1) | ||
Infections and Infestations | 9.0% (20) | 5.4% (6) | ||
Pneumonia | 3.6% (8) | 1.8% (2) | ||
Cardiac Disorders | 0.4% (1) | 4.5% (5) | ||
Patient Deaths | 2.7% (6) | 4.5% (5) |
Evaluable Number of Patients as of December 2017 (At Least Three Months Post Treatment)* | Percent with Durable Culture Conversion Three Months After Completion of All Treatment | |
Converters in the ALIS + GBT arm (n=65) | 46 | 60.9% (28/46) |
Converters in the GBT‑only arm (n=10) | 7 | 0.0% (0/7) |
Number of Patients Completing Six Months of Treatment in the 312 study as of December 2017 ** | Percent Achieving Sputum Culture Conversion by Month 6 in the 312 study | |
Patients who received GBT only in the 212 study and crossed over to receive six months of treatment with ALIS + GBT (n=90) | 67 | 28.4% (19/67) |
Patients who received ALIS + GBT in the 212 study and crossed over to continue treatment in the 312 study, to receive a combined total of 14 months of ALIS + GBT treatment in both studies (n=73) | 57 | 12.3% (7/57) |
Potential Market | Estimated Number of Patients with Diagnosed NTM Lung Disease | Estimated Number of Patients Treated for NTM Lung Disease Caused by MAC | Estimated Number of Patients Refractory to Treatment | |
United States | 75,000-105,000 | 40,000-50,000 | 10,000-15,000 | |
Japan | 125,000-145,000 | 60,000-70,000 | 15,000-18,000 | |
EU5 | 14,000 | 4,400 | 1,400 |
• | Increased R&D expenses of $8.9 million, primarily resulting from an increase in external manufacturing expenses and higher compensation and related expenses due to an increase in headcount; and |
• | Increased general and administrative expenses of $20.5 million, resulting from higher compensation and related expenses due to an increase in headcount, and an increase in consulting fees relating to pre-commercial planning activities. |
Quarters Ended June 30, | Increase (decrease) | |||||||||||||
2018 | 2017 | $ | % | |||||||||||
External Expenses | ||||||||||||||
Clinical development & research | $ | 6,920 | $ | 9,845 | $ | (2,925 | ) | (29.7 | )% | |||||
Manufacturing | 10,946 | 4,862 | 6,084 | 125.1 | % | |||||||||
Regulatory and quality assurance | 3,529 | 2,525 | 1,004 | 39.8 | % | |||||||||
Subtotal—external expenses | $ | 21,395 | $ | 17,232 | $ | 4,163 | 24.2 | % | ||||||
Internal Expenses | ||||||||||||||
Compensation and related expenses | $ | 11,593 | $ | 8,047 | $ | 3,546 | 44.1 | % | ||||||
Other internal operating expenses | 2,734 | 1,592 | 1,142 | 71.7 | % | |||||||||
Subtotal—internal expenses | $ | 14,327 | $ | 9,639 | $ | 4,688 | 48.6 | % | ||||||
Total | $ | 35,722 | $ | 26,871 | $ | 8,851 | 32.9 | % |
Quarters Ended June 30, | Increase (decrease) | |||||||||||||
2018 | 2017 | $ | % | |||||||||||
General & administrative | $ | 13,455 | $ | 9,355 | $ | 4,100 | 43.8 | % | ||||||
Pre-commercial expenses | 23,705 | 7,289 | 16,416 | 225.2 | % | |||||||||
Total general & administrative expenses | $ | 37,160 | $ | 16,644 | $ | 20,516 | 123.3 | % |
• | Increased R&D expenses of $16.7 million, primarily resulting from an increase in external manufacturing expenses and higher compensation and related expenses due to an increase in headcount; and |
• | Increased general and administrative expenses of $39.5 million, resulting from higher compensation and related expenses due to an increase in headcount, and an increase in consulting fees relating to pre-commercial planning activities for ALIS. |
Six Months Ended June 30, | Increase (decrease) | |||||||||||||
2018 | 2017 | $ | % | |||||||||||
External Expenses | ||||||||||||||
Clinical development & research | $ | 14,738 | $ | 18,320 | $ | (3,582 | ) | (19.6 | )% | |||||
Manufacturing | 18,880 | 7,606 | 11,274 | 148.2 | % | |||||||||
Regulatory and quality assurance | 5,159 | 3,493 | 1,666 | 47.7 | % | |||||||||
Subtotal—external expenses | $ | 38,777 | $ | 29,419 | $ | 9,358 | 31.8 | % | ||||||
Internal Expenses | ||||||||||||||
Compensation and related expenses | $ | 21,476 | $ | 15,698 | $ | 5,778 | 36.8 | % | ||||||
Other internal operating expenses | 5,567 | 4,008 | 1,559 | 38.9 | % | |||||||||
Subtotal—internal expenses | $ | 27,043 | $ | 19,706 | $ | 7,337 | 37.2 | % | ||||||
Total | $ | 65,820 | $ | 49,125 | $ | 16,695 | 34.0 | % |
Six Months Ended June 30, | Increase (decrease) | |||||||||||||
2018 | 2017 | $ | % | |||||||||||
General & administrative | $ | 26,974 | $ | 18,009 | $ | 8,965 | 49.8 | % | ||||||
Pre-commercial expenses | 42,839 | 12,350 | 30,489 | 246.9 | % | |||||||||
Total general & administrative expenses | $ | 69,813 | $ | 30,359 | $ | 39,454 | 130.0 | % |
Articles of Incorporation of Insmed Incorporated, as amended through June 14, 2012 (incorporated by reference from Exhibit 3.1 to Insmed Incorporated’s Annual Report on Form 10-K filed on March 18, 2013). | ||
Amended and Restated Bylaws of Insmed Incorporated (incorporated by reference from Exhibit 3.1 to Insmed Incorporated’s Quarterly Report on Form 10-Q filed on August 6, 2015). | ||
Certification of William H. Lewis, Chief Executive Officer of Insmed Incorporated, pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002. | ||
Certification of Paolo Tombesi, Chief Financial Officer (Principal Financial and Accounting Officer) of Insmed Incorporated, pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002. | ||
Certification of William H. Lewis, Chief Executive Officer of Insmed Incorporated, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002. | ||
Certification of Paolo Tombesi, Chief Financial Officer (Principal Financial and Accounting Officer) of Insmed Incorporated, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002. | ||
101 | The following materials from Insmed Incorporated’s quarterly report on Form 10-Q for the quarter ended June 30, 2018 formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as of June 30, 2018 and December 31, 2017, (ii) Consolidated Statements of Comprehensive Loss for the three and six months ended June 30, 2018 and 2017, (iii) Consolidated Statements of Cash Flows for the six months ended June 30, 2018 and 2017, and (iv) Notes to the Unaudited Consolidated Financial Statements. |
INSMED INCORPORATED | ||
Date: August 2, 2018 | By | /s/ Paolo Tombesi |
Paolo Tombesi | ||
Chief Financial Officer | ||
(Principal Financial and Accounting Officer) |
/s/ William H. Lewis |
William H. Lewis |
Chief Executive Officer |
(Principal Executive Officer) |
/s/ Paolo Tombesi |
Paolo Tombesi |
Chief Financial Officer |
(Principal Financial and Accounting Officer) |
(1) | the Quarterly Report on Form 10-Q of the Company for the quarter ended June 30, 2018 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ William H. Lewis |
William H. Lewis |
Chief Executive Officer |
(Principal Executive Officer) |
(1) | the Quarterly Report on Form 10-Q of the Company for the quarter ended June 30, 2018 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Paolo Tombesi |
Paolo Tombesi |
Chief Financial Officer |
(Principal Financial and Accounting Officer) |
Document and Entity Information - shares |
6 Months Ended | |
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Jun. 30, 2018 |
Jul. 31, 2018 |
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Document and Entity Information | ||
Entity Registrant Name | INSMED INC | |
Entity Central Index Key | 0001104506 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 77,040,858 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q2 |
Consolidated Balance Sheets (unaudited) (Parenthetical) - $ / shares |
Jun. 30, 2018 |
Dec. 31, 2017 |
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Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized shares (in shares) | 500,000,000 | 500,000,000 |
Common stock, issued shares (in shares) | 77,038,788 | 76,610,508 |
Common stock, outstanding shares (in shares) | 77,038,788 | 76,610,508 |
Consolidated Statements of Comprehensive Loss (unaudited) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Statement of Comprehensive Income [Abstract] | ||||
Revenues | $ 0 | $ 0 | $ 0 | $ 0 |
Operating expenses: | ||||
Research and development | 35,722 | 26,871 | 65,820 | 49,125 |
General and administrative | 37,160 | 16,644 | 69,813 | 30,359 |
Total operating expenses | 72,882 | 43,515 | 135,633 | 79,484 |
Operating loss | (72,882) | (43,515) | (135,633) | (79,484) |
Investment income | 2,729 | 169 | 4,769 | 323 |
Interest expense | (6,488) | (1,489) | (12,130) | (2,963) |
Loss on extinguishment of debt | 0 | 0 | (2,209) | 0 |
Other income, net | 244 | 200 | 330 | 105 |
Loss before income taxes | (76,397) | (44,635) | (144,873) | (82,019) |
Provision for income taxes | 40 | 37 | 88 | 67 |
Net loss | $ (76,437) | $ (44,672) | $ (144,961) | $ (82,086) |
Basic and diluted net loss per share (in dollars per share) | $ (1.00) | $ (0.72) | $ (1.89) | $ (1.32) |
Weighted average basic and diluted common shares outstanding | 76,767 | 62,209 | 76,693 | 62,126 |
Net loss | $ (76,437) | $ (44,672) | $ (144,961) | $ (82,086) |
Other comprehensive (loss) income: | ||||
Foreign currency translation (losses) gains | (21) | 5 | 21 | 23 |
Total comprehensive loss | $ (76,458) | $ (44,667) | $ (144,940) | $ (82,063) |
Consolidated Statements of Cash Flows (unaudited) (Parenthetical) |
Jun. 30, 2018 |
Jan. 31, 2018 |
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Convertible Notes | 1.75 convertible senior notes due 2025 | ||
Interest rate (as a percent) | 1.75% | 1.75% |
The Company and Basis of Presentation |
6 Months Ended |
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Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
The Company and Basis of Presentation | The Company and Basis of Presentation Insmed is a global biopharmaceutical company focused on the unmet needs of patients with rare diseases. The Company's lead product candidate is amikacin liposome inhalation suspension (ALIS), which is in late-stage development for adult patients with treatment refractory nontuberculous mycobacteria (NTM) lung disease caused by Mycobacterium avium complex (MAC), a rare and often chronic infection that can cause irreversible lung damage and can be fatal. Our earlier clinical-stage pipeline includes INS1007 and INS1009. INS1007 is a novel oral, reversible inhibitor of dipeptidyl peptidase 1 (DPP1), an enzyme responsible for activating neutrophil serine proteases, which are implicated in the pathology of chronic inflammatory lung diseases, such as non-cystic fibrosis (non-CF) bronchiectasis. INS1009 is an inhaled nanoparticle formulation of a treprostinil prodrug that may offer a differentiated product profile for rare pulmonary disorders, including pulmonary arterial hypertension (PAH). The Company was incorporated in the Commonwealth of Virginia on November 29, 1999 and its principal executive offices are in Bridgewater, New Jersey. The Company has legal entities in the United States (US), Ireland, Germany, France, the United Kingdom (UK), the Netherlands, and Japan. All intercompany transactions and balances have been eliminated in consolidation. The accompanying unaudited interim consolidated financial statements have been prepared pursuant to the rules and regulations for reporting on Form 10-Q. Accordingly, certain information and disclosures required by accounting principles generally accepted in the US for complete consolidated financial statements are not included herein. The unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. The results of operations of any interim period are not necessarily indicative of the results of operations for the full year. The unaudited interim consolidated financial information presented herein reflects all normal adjustments that are, in the opinion of management, necessary for a fair statement of the financial position, results of operations and cash flows for the periods presented. The Company had $634.3 million in cash and cash equivalents as of June 30, 2018 and reported a net loss of $145.0 million for the six months ended June 30, 2018. Historically, the Company has funded its operations through public offerings of equity securities and debt financings. To date, the Company has not generated material revenue from ALIS. The Company does not expect to generate material revenue unless or until marketing approval is received for ALIS. Accordingly, the Company expects to continue to incur losses while funding research and development (R&D) activities, regulatory submissions, potential commercial launch activities and general and administrative expenses. The Company expects its future cash requirements to be substantial, and the Company may need to raise additional capital to fund operations, to develop and commercialize ALIS, to develop INS1007 and INS1009 and to develop, acquire, in-license or co-promote other products that address orphan or rare diseases. The source, timing and availability of any future financing or other transaction will depend principally upon continued progress in the Company’s regulatory, development and pre-commercial activities. Any equity or debt financing will also be contingent upon equity and debt market conditions and interest rates at the time. If the Company is unable to obtain sufficient additional funds when required, the Company may be forced to delay, restrict or eliminate all or a portion of its R&D programs, pre-commercialization activities, or dispose of assets or technology. |
Summary of Significant Accounting Policies |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies The following are the required interim disclosure updates to the Company's significant accounting policies described in Note 2 of the notes to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017: Fair Value Measurements - The Company categorizes its financial assets and liabilities measured and reported at fair value in the financial statements on a recurring basis based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels, which are directly related to the amount of subjectivity associated with the inputs used to determine the fair value of financial assets and liabilities, are as follows:
Each major category of financial assets and liabilities measured at fair value on a recurring basis is categorized based upon the lowest level of significant input to the valuations. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Financial instruments in Level 1 generally include US treasuries and mutual funds listed in active markets. The Company’s only financial assets and liabilities which were measured at fair value as of June 30, 2018 and December 31, 2017 were Level 1 assets comprised of cash and cash equivalents of $634.3 million and $381.2 million, respectively. The estimated fair value of the liability component of the 1.75% convertible senior notes due 2025 (the Convertible Notes) (categorized as a Level 2 liability for fair value measurement purposes) was determined using current market factors and the ability of the Company to obtain debt at comparable terms to those that are currently in place. The following table shows certain assets and liabilities and their carrying values and fair values:
* The carrying value of the Convertible Notes excludes $133.6 million of the unamortized portion of the debt discount. The Company’s cash and cash equivalents permit daily redemption and the fair values of these investments are based upon the quoted prices in active markets provided by the holding financial institutions. Cash equivalents consist of liquid investments with an original maturity of three months or less from the date of purchase. As of June 30, 2018, the Company's cash and cash equivalents balance included US treasury bills of $399.9 million. The Company recognizes transfers between levels within the fair value hierarchy, if any, at the end of each quarter. There were no transfers in or out of Level 1, Level 2 or Level 3 during the six months ended June 30, 2018 and 2017, respectively. As of June 30, 2018 and December 31, 2017, the Company held no securities that were in an unrealized gain or loss position. The Company reviews the status of each security quarterly to determine whether an other-than-temporary impairment has occurred. In making its determination, the Company considers a number of factors, including: (1) the significance of the decline; (2) whether the securities were rated below investment grade; (3) how long the securities have been in an unrealized loss position; and (4) the Company’s ability and intent to retain the investment for a sufficient period of time for it to recover. Net Loss Per Share - Basic net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted average number of common shares and other dilutive securities outstanding during the period. Potentially dilutive securities from stock options, restricted stock units (RSUs) and convertible debt securities would be anti-dilutive as the Company incurred a net loss. Potentially dilutive common shares resulting from the assumed exercise of outstanding stock options are determined based on the treasury stock method. The following table sets forth the reconciliation of the weighted average number of common shares used to compute basic and diluted net loss per share for the three and six months ended June 30, 2018 and 2017:
The following potentially dilutive securities have been excluded from the computations of diluted weighted average common shares outstanding as of June 30, 2018 and 2017 as their effect would have been anti-dilutive (in thousands):
Recently Adopted Accounting Pronouncements - In August 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which addressed eight specific cash flow issues with the objective of reducing the existing diversity in practice. Among the updates, the standard requires debt extinguishment costs to be classified as cash outflows for financing activities. This standard update is effective as of the first quarter of 2018. As a result of the adoption of the standard, in the first quarter of 2018, the Company reported a $2.2 million loss on extinguishment of debt in the financing activities section of its consolidated statement of cash flows. The Company had no material debt extinguishment costs prior to the first quarter of 2018. There were no other significant impacts as a result of adopting this standard. In May 2014, the FASB issued ASU 2014-9, Revenue from Contracts with Customers (Topic 606) which amended the existing accounting standards for revenue recognition. ASU 2014-9 establishes principles for recognizing revenue upon the transfer of promised goods or services to customers, in an amount that reflects the expected consideration received in exchange for those goods or services. In July 2015, the FASB deferred the effective date for annual reporting periods beginning after December 15, 2017. The Company adopted ASU 2014-9 in the first quarter of 2018 and the impact of adoption is not material to its consolidated financial statements. New Accounting Pronouncements (Not Yet Adopted)—In February 2016, the FASB issued ASU 2016-2, Leases (Topic 842) in order to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under previous generally accepted accounting principles. ASU 2016-2 requires a lessee to recognize a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term on the balance sheet. ASU 2016-2 is effective for fiscal years beginning after December 15, 2018 (including interim periods within those periods) and early adoption is permitted. The standard requires a modified retroactive approach, but use of certain practical expedients is permitted. The Company expects to use the package of practical expedients that allows it to not reassess: (1) whether any expired or existing contracts are or contain leases, (2) lease classification for any expired or existing leases, and (3) initial direct costs for any expired or existing leases. The Company additionally expects to use the practical expedient that allows it to treat the lease and non-lease components of its leases as a single component. The Company expects to adopt ASU 2016-2 in the first quarter of 2019 and is in the process of evaluating the impact of adoption on its consolidated financial statements. |
Identifiable Intangible Asset |
6 Months Ended |
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Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Identifiable Intangible Asset | Identifiable Intangible Asset The Company believes there are no indicators of impairment relating to its in-process research and development intangible asset as of June 30, 2018. The Company will begin to amortize the intangible asset upon US Food and Drug Administration (FDA) approval of ALIS, if received, and include the expense in the Company's consolidated statement of comprehensive loss. |
Accrued Expenses |
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Expenses | Accrued Expenses Accrued expenses consist of the following:
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt In January 2018, the Company completed an underwritten public offering of the Convertible Notes, in which the Company sold $450.0 million aggregate principal amount of Convertible Notes, including the exercise in full of the underwriters' option to purchase additional Convertible Notes of $50.0 million. The Company's net proceeds from the offering, after deducting underwriting discounts and commissions and other offering expenses of $14.2 million, were approximately $435.8 million. The Convertible Notes bear interest payable semiannually in arrears on January 15 and July 15 of each year, beginning on July 15, 2018. The Convertible Notes mature on January 15, 2025, unless earlier converted, redeemed, or repurchased. On or after October 15, 2024, until the close of business on the second scheduled trading day immediately preceding January 15, 2025, holders may convert their Convertible Notes at any time. Upon conversion, holders may receive cash, shares of the Company's common stock or a combination of cash and shares of the Company's common stock, at the Company's option. The initial conversion rate is 25.5384 shares of common stock per $1,000 principal amount of Convertible Notes (equivalent to an initial conversion price of approximately $39.16 per share of common stock). The conversion rate will be subject to adjustment in some events but will not be adjusted for any accrued and unpaid interest. Holders may convert their Convertible Notes prior to October 15, 2024, only under the following circumstances, subject to the conditions set forth in an indenture, dated as of January 26, 2018, between the Company and Wells Fargo Bank, National Association (Wells Fargo), as trustee, as supplemented by the first supplemental indenture, dated January 26, 2018, between the Company and Wells Fargo (as supplemented, the Indenture): (i) during the five business day period immediately after any five consecutive trading day period (the measurement period) in which the trading price per $1,000 principal amount of convertible notes, as determined following a request by a holder of the convertible notes, for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the common stock and the conversion rate on such trading day, (ii) the Company elects to distribute to all or substantially all holders of the common stock (a) any rights, options or warrants (other than in connection with a stockholder rights plan for so long as the rights issued under such plan have not detached from the associated shares of common stock) entitling them, for a period of not more than 45 days from the declaration date for such distribution, to subscribe for or purchase shares of common stock at a price per share that is less than the average of the last reported sale prices of the common stock for the 10 consecutive trading day period ending on, and including, the trading day immediately preceding the declaration date for such distribution, or (b) the Company’s assets, debt securities or rights to purchase securities of the Company, which distribution has a per share value, as reasonably determined by the board of directors, exceeding 10% of the last reported sale price of the common stock on the trading day immediately preceding the declaration date for such distribution, (iii) if a transaction or event that constitutes a fundamental change or a make-whole fundamental change occurs, or if the Company is a party to (a) a consolidation, merger, combination, statutory or binding share exchange or similar transaction, pursuant to which the common stock would be converted into, or exchanged for, cash, securities or other property or assets, or (b) any sale, conveyance, lease or other transfer or similar transaction in one transaction or a series of transactions of all or substantially all of the consolidated assets of the Company and its subsidiaries, taken as a whole, all or any portion of the Convertible Notes may be surrendered by a holder for conversion at any time from or after the date that is 30 scheduled trading days prior to the anticipated effective date of the transaction, (iv) if during any calendar quarter commencing after the calendar quarter ending on March 31, 2018 (and only during such calendar quarter), the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day, or, (v) if the Company sends a notice of redemption, a holder may surrender all or any portion of its Convertible Notes, to which the notice of redemption relates, for conversion at any time on or after the date the applicable notice of redemption was sent until the close of business on (a) the second business day immediately preceding the related redemption date or (b) if the Company fails to pay the redemption price on the redemption date as specified in such notice of redemption, such later date on which the redemption price is paid. The Convertible Notes can be settled in cash, common stock, or a combination of cash and common stock at the Company's option, and thus, the Company determined the embedded conversion options in the convertible notes are not required to be separately accounted for as a derivative. However, since the Convertible Notes are within the scope of the accounting guidance for cash convertible instruments, the Company is required to separate the Convertible Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated equity component. The fair value was based on data from readily available pricing sources which utilize market observable inputs and other characteristics for similar types of instruments. The carrying amount of the equity component representing the embedded conversion option was determined by deducting the fair value of the liability component from the gross proceeds of the Convertible Notes. The excess of the principal amount of the liability component over its carrying amount is amortized to interest expense over the expected life of a similar liability that does not have an associated equity component using the effective interest method. The equity component is not remeasured as long as it continues to meet the conditions for equity classification in the accounting guidance for contracts in an entity’s own equity. The fair value of the liability component of the Convertible Notes on the date of issuance was estimated at $309.1 million using an effective interest rate of 7.6%, and accordingly, the residual equity component on the date of issuance was $140.9 million. The discount is being amortized to interest expense over the term of the Convertible Notes and has a remaining period of approximately 6.5 years. For the three and six months ended June 30, 2018, total interest expense related to the Convertible Notes was $6.5 million and $11.2 million, respectively, which includes the contractual interest coupon payable semi-annually in cash, the amortization of the issuance costs, and accretion of debt discount, as described in the table below. The following table presents the components of the Company’s debt balance as of June 30, 2018 (in thousands):
As of June 30, 2018, future principal repayments of the debt for each of the fiscal years through maturity were as follows (in thousands):
In February 2018, the Company used part of the net proceeds from the issuance of the Convertible Notes to pay off its outstanding debt to Hercules Capital (Hercules). The payments to Hercules consisted of $55.0 million for the principal amount and an additional $3.2 million in back-end fees, outstanding interest, and prepayment penalty fees, which resulted in a $2.2 million loss on extinguishment of debt in the quarter ended March 31, 2018. Interest Expense The following table sets forth the total interest expense recognized in the periods presented (in thousands):
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||
Shareholders' Equity | Shareholders’ Equity Common Stock — As of June 30, 2018, the Company had 500,000,000 shares of common stock authorized with a par value of $0.01 per share and 77,038,788 shares of common stock issued and outstanding. In addition, as of June 30, 2018, the Company had reserved 9,577,825 shares of common stock for issuance upon the exercise of outstanding stock options and 235,815 shares of common stock for issuance upon the vesting of RSUs. The Company has also reserved 11,492,280 shares of common stock for issuance upon conversion of the Convertible Notes, subject to adjustment in accordance with the Indenture. In January 2018, the Company completed an underwritten public offering of $450.0 million aggregate principal amount of Convertible Notes, including the exercise in full of the underwriter's option to purchase additional Convertible Notes. The fair value of the liability component of the Convertible Notes on the date of issuance was estimated at $309.1 million, and accordingly, the equity component (included in additional paid-in capital) on the date of issuance was calculated as $140.9 million using the residual method, as further described in Note 5 Debt. In September 2017, the Company completed an underwritten public offering of 14,123,150 shares of the Company’s common stock, which included the underwriter’s exercise in full of its over-allotment option of 1,842,150 shares, at a price to the public of $28.50 per share. The Company’s net proceeds from the sale of the shares, after deducting the underwriter’s discount and offering expenses of $24.8 million, were $377.7 million. Preferred Stock — As of June 30, 2018, the Company had 200,000,000 shares of preferred stock authorized with a par value of $0.01 per share and no shares of preferred stock were issued and outstanding. The following table summarizes the changes in total shareholders' equity for the six months ended June 30, 2018 (in thousands):
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Stock-Based Compensation |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation The Company’s current equity compensation plan, the 2017 Incentive Plan, was approved by shareholders at the Company’s Annual Meeting of Shareholders on May 18, 2017. The 2017 Incentive Plan is administered by the Compensation Committee and the Board of Directors of the Company. Under the terms of the 2017 Incentive Plan, the Company is authorized to grant a variety of incentive awards based on its common stock, including stock options (both incentive stock options and non-qualified stock options), RSUs, performance options/shares and other stock awards, as well as pay incentive bonuses to eligible employees and non-employee directors. On May 18, 2017, upon the approval of the 2017 Incentive Plan by shareholders, 5,000,000 shares were authorized for issuance thereunder, plus any shares subject to then-outstanding awards under the 2015 Incentive Plan and the 2013 Incentive Plan that subsequently were canceled, terminated unearned, expired, were forfeited, lapsed for any reason or were settled in cash without the delivery of shares. As of June 30, 2018, 3,501,366 shares remained for future issuance under the 2017 Incentive Plan. The 2017 Incentive Plan will terminate on April 3, 2027 unless it is extended or terminated earlier pursuant to its terms. In addition, from time to time, the Company makes inducement grants of stock options to new hires, which awards are made pursuant to the NASDAQ inducement grant exception. During the six months ended June 30, 2018, the Company granted inducement stock options covering 236,730 shares of the Company's common stock to new employees. Stock Options - The Company calculates the fair value of stock options granted using the Black-Scholes valuation model. The following table summarizes the Company’s grant date fair value and assumptions used in determining the fair value of all stock options granted during the periods presented:
For each period presented, the volatility factor was based on the Company’s historical volatility during the expected option term. Estimated forfeitures are based on the actual percentage of option forfeitures since the closing of the Company’s merger with Transave, Inc. in December 2010. The expected option term for these grants was determined using the Company’s historical exercise behavior. From time to time, the Company grants performance-condition options to certain of its employees. Vesting of these options is subject to the Company achieving certain performance criteria established at the date of grant and the grantees fulfilling a service condition (continued employment). As of June 30, 2018, the Company had performance-condition options totaling 133,334 shares outstanding which had not yet met the recognition criteria. The following table summarizes the Company’s aggregate stock option activity for the six months ended June 30, 2018:
The total intrinsic value of stock options exercised during the three months ended June 30, 2018 and 2017 was $4.7 million and $1.6 million, respectively, and during the six months ended June 30, 2018 and 2017 was $4.9 million and $2.1 million, respectively. As of June 30, 2018, there was $38.1 million of unrecognized compensation expense related to unvested stock options which is expected to be recognized over a weighted average period of 2.6 years. Included in unrecognized compensation expense was $1.1 million related to outstanding performance-condition options. These performance-condition options will vest, and compensation expense will be recognized, in the period in which FDA approval of ALIS is received in the US. The following table summarizes the range of exercise prices and the number of stock options outstanding and exercisable as of June 30, 2018:
Restricted Stock and Restricted Stock Units — The Company may grant restricted stock (RS) and RSUs to eligible employees, including its executives, and non-employee directors. Each share of RS vests, and each RSU represents a right to receive one share of the Company’s common stock, upon the completion of a specific period of continued service or achievement of a certain milestone. RS and RSU awards are valued at the market price of the Company’s common stock on the date of grant. The Company recognizes noncash compensation expense for the fair values of these RS and RSU awards on a straight-line basis over the requisite service period of these awards. As of June 30, 2018, there was $4.6 million of unrecognized compensation expense related to unvested RSU awards which is expected to be recognized over a weighted average period of 3.0 years. The following table summarizes the Company’s RSU award activity during the six months ended June 30, 2018:
The following table summarizes the aggregate stock-based compensation expense recorded in the consolidated statements of comprehensive loss related to stock options and RSUs during the three and six months ended June 30, 2018 and 2017, respectively:
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Income Taxes |
6 Months Ended |
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Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company’s provision for income taxes was $40,000 and $88,000 for the three and six months ended June 30, 2018, respectively, and $37,000 and $67,000 for the three and six months ended June 30, 2017, respectively. The provision for income taxes in all periods was a result of certain of the Company’s subsidiaries in Europe, which had taxable income during the three and six months ended June 30, 2018 and 2017. In jurisdictions where the Company has net losses, there was a full valuation allowance recorded against the Company’s deferred tax assets and therefore no tax benefit was recorded. Following adoption of the Tax Cuts and Jobs Act during the fourth quarter of 2017, the Company remeasured certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%. The Company recorded a provisional amount of $94.0 million as of December 31, 2017 related to the re-measurement of certain deferred tax balances, which was completely offset by a full valuation allowance. Upon further analyses of certain aspects of the Tax Cuts and Jobs Act and refinement of the Company's calculations during the six months ended June 30, 2018, the Company determined that the provisional amount would not need to be adjusted. In addition to local taxes in foreign jurisdictions, the Company is subject to US federal, US state, and US tax on foreign earnings. In regard to the US tax on foreign earnings, the Company was subject to a one-time transition tax based on its total earnings and profits, which were generally deferred from US income taxes under previous US law. Due to the aggregate loss position of the Company's foreign subsidiaries, the Company did not record any provisional amount for the one-time transition tax liability at December 31, 2017. Additionally, the global intangible low-taxed income tax and base erosion provisions in the Tax Cuts and Jobs Act are effective for taxable years beginning after December 31, 2017. The Company does not currently expect these provisions to have a material impact (i) due to the aggregate loss position of its foreign subsidiaries and (ii) because the Company currently expects to be below the gross receipts threshold for purposes of the base erosion provisions. The Company is subject to US federal and state income taxes and the statute of limitations for tax audit is open for the Company's federal tax returns for the years ended 2014 and later, and is generally open for certain states for the years 2013 and later. The Company has incurred net operating losses since inception, except for the year ended December 31, 2009. Such loss carryforwards would be subject to audit in any tax year in which those losses are utilized, notwithstanding the year of origin. As of June 30, 2018 and December 31, 2017, the Company had recorded no reserves for unrecognized income tax benefits, nor had it recorded any accrued interest or penalties related to uncertain tax positions. The Company does not anticipate any material changes in the amount of unrecognized tax positions over the next 12 months. |
Commitments and Contingencies |
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies The Company has an operating lease for office and laboratory space located in Bridgewater, NJ, its corporate headquarters, for which the initial lease term expires in November 2019. Future minimum rental payments under this lease are $1.5 million. In July 2016, the Company signed an operating lease for additional laboratory space located in Bridgewater, NJ for which the initial lease term expires in December 2021. Future minimum rental payments under this lease are $1.7 million. Rent expense charged to operations was $0.4 million and $0.3 million for the three months ended June 30, 2018 and 2017, respectively, and $0.8 million and $0.7 million for the six months ended June 30, 2018 and 2017, respectively. Future minimum rental payments required under the Company’s operating leases for the period from July 1, 2018 to December 31, 2018 and for each of the five years thereafter are as follows (in thousands):
Legal Proceedings From time to time, the Company is a party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of business. While the outcomes of these matters are uncertain, management does not expect that the ultimate costs to resolve these matters will have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. |
Summary of Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements - The Company categorizes its financial assets and liabilities measured and reported at fair value in the financial statements on a recurring basis based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels, which are directly related to the amount of subjectivity associated with the inputs used to determine the fair value of financial assets and liabilities, are as follows:
Each major category of financial assets and liabilities measured at fair value on a recurring basis is categorized based upon the lowest level of significant input to the valuations. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Financial instruments in Level 1 generally include US treasuries and mutual funds listed in active markets. The Company’s only financial assets and liabilities which were measured at fair value as of June 30, 2018 and December 31, 2017 were Level 1 assets comprised of cash and cash equivalents of $634.3 million and $381.2 million, respectively. The estimated fair value of the liability component of the 1.75% convertible senior notes due 2025 (the Convertible Notes) (categorized as a Level 2 liability for fair value measurement purposes) was determined using current market factors and the ability of the Company to obtain debt at comparable terms to those that are currently in place. The following table shows certain assets and liabilities and their carrying values and fair values:
* The carrying value of the Convertible Notes excludes $133.6 million of the unamortized portion of the debt discount. The Company’s cash and cash equivalents permit daily redemption and the fair values of these investments are based upon the quoted prices in active markets provided by the holding financial institutions. Cash equivalents consist of liquid investments with an original maturity of three months or less from the date of purchase. As of June 30, 2018, the Company's cash and cash equivalents balance included US treasury bills of $399.9 million. The Company recognizes transfers between levels within the fair value hierarchy, if any, at the end of each quarter. There were no transfers in or out of Level 1, Level 2 or Level 3 during the six months ended June 30, 2018 and 2017, respectively. As of June 30, 2018 and December 31, 2017, the Company held no securities that were in an unrealized gain or loss position. The Company reviews the status of each security quarterly to determine whether an other-than-temporary impairment has occurred. In making its determination, the Company considers a number of factors, including: (1) the significance of the decline; (2) whether the securities were rated below investment grade; (3) how long the securities have been in an unrealized loss position; and (4) the Company’s ability and intent to retain the investment for a sufficient period of time for it to recover. |
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Net Loss Per Share | Net Loss Per Share - Basic net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted average number of common shares and other dilutive securities outstanding during the period. Potentially dilutive securities from stock options, restricted stock units (RSUs) and convertible debt securities would be anti-dilutive as the Company incurred a net loss. Potentially dilutive common shares resulting from the assumed exercise of outstanding stock options are determined based on the treasury stock method. The following table sets forth the reconciliation of the weighted average number of common shares used to compute basic and diluted net loss per share for the three and six months ended June 30, 2018 and 2017:
The following potentially dilutive securities have been excluded from the computations of diluted weighted average common shares outstanding as of June 30, 2018 and 2017 as their effect would have been anti-dilutive (in thousands):
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Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements - In August 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which addressed eight specific cash flow issues with the objective of reducing the existing diversity in practice. Among the updates, the standard requires debt extinguishment costs to be classified as cash outflows for financing activities. This standard update is effective as of the first quarter of 2018. As a result of the adoption of the standard, in the first quarter of 2018, the Company reported a $2.2 million loss on extinguishment of debt in the financing activities section of its consolidated statement of cash flows. The Company had no material debt extinguishment costs prior to the first quarter of 2018. There were no other significant impacts as a result of adopting this standard. In May 2014, the FASB issued ASU 2014-9, Revenue from Contracts with Customers (Topic 606) which amended the existing accounting standards for revenue recognition. ASU 2014-9 establishes principles for recognizing revenue upon the transfer of promised goods or services to customers, in an amount that reflects the expected consideration received in exchange for those goods or services. In July 2015, the FASB deferred the effective date for annual reporting periods beginning after December 15, 2017. The Company adopted ASU 2014-9 in the first quarter of 2018 and the impact of adoption is not material to its consolidated financial statements. New Accounting Pronouncements (Not Yet Adopted)—In February 2016, the FASB issued ASU 2016-2, Leases (Topic 842) in order to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under previous generally accepted accounting principles. ASU 2016-2 requires a lessee to recognize a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term on the balance sheet. ASU 2016-2 is effective for fiscal years beginning after December 15, 2018 (including interim periods within those periods) and early adoption is permitted. The standard requires a modified retroactive approach, but use of certain practical expedients is permitted. The Company expects to use the package of practical expedients that allows it to not reassess: (1) whether any expired or existing contracts are or contain leases, (2) lease classification for any expired or existing leases, and (3) initial direct costs for any expired or existing leases. The Company additionally expects to use the practical expedient that allows it to treat the lease and non-lease components of its leases as a single component. The Company expects to adopt ASU 2016-2 in the first quarter of 2019 and is in the process of evaluating the impact of adoption on its consolidated financial statements. |
Summary of Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Carrying Value and Fair Value of Assets and Liabilities | The following table shows certain assets and liabilities and their carrying values and fair values:
* The carrying value of the Convertible Notes excludes $133.6 million of the unamortized portion of the debt discount. |
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Reconciliation of the Weighted Average Number of Shares Used to Compute Basic and Diluted Net Loss per Share | The following table sets forth the reconciliation of the weighted average number of common shares used to compute basic and diluted net loss per share for the three and six months ended June 30, 2018 and 2017:
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Potentially Dilutive Securities Excluded from Computations of Diluted Weighted Average Common Shares Outstanding | The following potentially dilutive securities have been excluded from the computations of diluted weighted average common shares outstanding as of June 30, 2018 and 2017 as their effect would have been anti-dilutive (in thousands):
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Accrued Expenses (Tables) |
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued Expenses | Accrued expenses consist of the following:
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Debt (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Debt Balance | The following table presents the components of the Company’s debt balance as of June 30, 2018 (in thousands):
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Schedule of Future Principal Repayments of Debt | As of June 30, 2018, future principal repayments of the debt for each of the fiscal years through maturity were as follows (in thousands):
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Summary of Interest Expense | The following table sets forth the total interest expense recognized in the periods presented (in thousands):
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Shareholders' Equity (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||
Schedule of Changes in Shareholders' Equity | The following table summarizes the changes in total shareholders' equity for the six months ended June 30, 2018 (in thousands):
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Stock-Based Compensation (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Fair Value Assumptions for Stock Options | The following table summarizes the Company’s grant date fair value and assumptions used in determining the fair value of all stock options granted during the periods presented:
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Summary of Stock Option Activity | The following table summarizes the Company’s aggregate stock option activity for the six months ended June 30, 2018:
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Summary of Exercise Price and Number of Stock Options Exercisable | The following table summarizes the range of exercise prices and the number of stock options outstanding and exercisable as of June 30, 2018:
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Summary of RSU Activity | The following table summarizes the Company’s RSU award activity during the six months ended June 30, 2018:
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Summary of Allocation of Employee Stock-Based Compensation | The following table summarizes the aggregate stock-based compensation expense recorded in the consolidated statements of comprehensive loss related to stock options and RSUs during the three and six months ended June 30, 2018 and 2017, respectively:
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Commitments and Contingencies (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Schedule of Future Minimum Rental Payments Required Under Operating Leases | Future minimum rental payments required under the Company’s operating leases for the period from July 1, 2018 to December 31, 2018 and for each of the five years thereafter are as follows (in thousands):
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The Company and Basis of Presentation (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||
Cash and cash equivalents | $ 634,329 | $ 91,064 | $ 634,329 | $ 91,064 | $ 381,165 | $ 162,591 |
Net loss | $ 76,437 | $ 44,672 | $ 144,961 | $ 82,086 |
Summary of Significant Accounting Policies Summary of Significant Accounting Policies - Narrative (Details) |
6 Months Ended | |||
---|---|---|---|---|
Jun. 30, 2018
USD ($)
security
|
Jun. 30, 2017
USD ($)
|
Jan. 31, 2018 |
Dec. 31, 2017
USD ($)
security
|
|
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||||
Cash and cash equivalents | $ 634,300,000 | $ 381,200,000 | ||
Fair value transfers in or out of Level 1, Level 2, or Level 3 | $ 0 | $ 0 | ||
Securities in an unrealized gain or loss position | security | 0 | 0 | ||
Convertible Notes | 1.75 convertible senior notes due 2025 | ||||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||||
Interest rate (as a percent) | 1.75% | 1.75% | ||
US treasury bills | ||||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||||
Cash and cash equivalents | $ 399,900,000 |
Summary of Significant Accounting Policies - Net Loss Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Numerator: | ||||
Net loss | $ (76,437) | $ (44,672) | $ (144,961) | $ (82,086) |
Denominator: | ||||
Weighted average common shares used in calculation of basic net loss per share: | 76,767 | 62,209 | 76,693 | 62,126 |
Effect of dilutive securities: | ||||
Dilutive securities, convertible debt (in shares) | 0 | 0 | 0 | 0 |
Weighted average common shares outstanding used in calculation of diluted net loss per share (in shares) | 76,767 | 62,209 | 76,693 | 62,126 |
Net loss per share: | ||||
Basic and Diluted (in dollars per share) | $ (1.00) | $ (0.72) | $ (1.89) | $ (1.32) |
Common stock options | ||||
Effect of dilutive securities: | ||||
Dilutive securities, share-based payment (in shares) | 0 | 0 | 0 | 0 |
RSUs | ||||
Effect of dilutive securities: | ||||
Dilutive securities, share-based payment (in shares) | 0 | 0 | 0 | 0 |
Summary of Significant Accounting Policies - Anti-dilutive Securities (Details) - shares shares in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Stock options to purchase common stock | ||
Anti-dilutive securities excluded from computations of diluted weighted-average common shares outstanding | ||
Potentially dilutive securities excluded from computations of diluted weighted-average shares outstanding | 9,578 | 8,621 |
Unvested RSUs | ||
Anti-dilutive securities excluded from computations of diluted weighted-average common shares outstanding | ||
Potentially dilutive securities excluded from computations of diluted weighted-average shares outstanding | 236 | 47 |
Convertible debt securities | ||
Anti-dilutive securities excluded from computations of diluted weighted-average common shares outstanding | ||
Potentially dilutive securities excluded from computations of diluted weighted-average shares outstanding | 11,492 | 0 |
Summary of Significant Accounting Policies - Recently Adopted Accounting Pronouncements (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |
---|---|---|---|
Mar. 31, 2018 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Debt Instrument [Line Items] | |||
Loss on extinguishment of debt | $ 2,200 | $ 2,209 | $ 0 |
Accrued Expenses (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Payables and Accruals [Abstract] | ||
Accrued clinical trial expenses | $ 5,772 | $ 7,837 |
Accrued compensation | 7,371 | 12,197 |
Accrued professional fees | 6,743 | 4,500 |
Accrued technical operation expenses | 3,324 | 2,182 |
Accrued interest payable | 3,391 | 423 |
Accrued construction costs | 1,336 | 1,719 |
Other accrued expenses | 1,109 | 481 |
Total accrued expenses | $ 29,046 | $ 29,339 |
Debt - Components of Debt (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Jan. 31, 2018 |
Dec. 31, 2017 |
---|---|---|---|
Debt Instrument [Line Items] | |||
1.75% convertible senior notes due 2025 | $ 450,000 | ||
Debt issuance costs, unamortized | (9,206) | ||
Discount on debt | (133,638) | ||
Long-term debt, net | 307,156 | $ 55,567 | |
Convertible Notes | |||
Debt Instrument [Line Items] | |||
Discount on debt | $ (133,600) | ||
Convertible Notes | 1.75 convertible senior notes due 2025 | |||
Debt Instrument [Line Items] | |||
Interest rate (as a percent) | 1.75% | 1.75% | |
Debt issuance costs, unamortized | $ (14,200) |
Debt - Future Principal Repayments of Debt (Details) $ in Thousands |
Jun. 30, 2018
USD ($)
|
---|---|
Year Ending December 31: | |
2018 | $ 0 |
2019 | 0 |
2020 | 0 |
2021 | 0 |
2022 | 0 |
2023 and thereafter | 450,000 |
Total | $ 450,000 |
Debt - Interest Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Debt Disclosure [Abstract] | ||||
Contractual interest expense | $ 1,971 | $ 1,288 | $ 4,243 | $ 2,560 |
Amortization of debt issuance costs | 286 | 30 | 585 | 61 |
Accretion of back-end fee on debt | 0 | 171 | 50 | 342 |
Accretion of debt discount | 4,231 | 0 | 7,252 | 0 |
Total interest expense | $ 6,488 | $ 1,489 | $ 12,130 | $ 2,963 |
Shareholders' Equity Shareholders' Equity - Changes in Shareholders' Equity (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Balance at December 31, 2017 | $ 361,059 | |||
Net loss for the period | $ (76,437) | $ (44,672) | (144,961) | $ (82,086) |
Proceeds from exercise of stock options | 5,785 | |||
Equity component of Convertible Notes | 136,434 | |||
Stock-based compensation expense | 12,303 | |||
Change in cumulative translation adjustment | (21) | $ 5 | 21 | $ 23 |
Balance at June 30, 2018 | $ 370,641 | $ 370,641 |
Stock-Based Compensation - Narrative (Details) - shares |
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2018 |
Dec. 31, 2017 |
May 18, 2017 |
|
Stock-Based Compensation | |||
Shares of common stock, maximum authorized for issuance (in shares) | 5,000,000 | ||
Shares available for grant (in shares) | 3,501,366 | ||
Inducement stock options granted to new employees (in shares) | 236,730 | ||
Options outstanding (in shares) | 9,577,825 | 8,608,921 | |
Performance options | |||
Stock-Based Compensation | |||
Options outstanding (in shares) | 133,334 |
Income Taxes (Details) - USD ($) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Dec. 31, 2017 |
|
Income Tax Disclosure [Abstract] | |||||
Provision for income taxes | $ 40,000 | $ 37,000 | $ 88,000 | $ 67,000 | |
Deferred tax benefit | 0 | ||||
Provisional deferred tax asset offset completely by valuation allowance | $ 94,000,000 | ||||
Unrecognized income tax benefits, interest and penalties accrued | $ 0 | $ 0 | $ 0 |
Commitments and Contingencies - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Commitments | ||||
Future minimum rental payments under lease | $ 3,164 | $ 3,164 | ||
Rent expense charged to operations | 400 | $ 300 | 800 | $ 700 |
Bridgewater, NJ Facility | ||||
Commitments | ||||
Future minimum rental payments under lease | 1,500 | 1,500 | ||
Future minimum rental payments for additional laboratory space | $ 1,700 | $ 1,700 |
Commitments and Contingencies - Minimum Rental Payments (Details) $ in Thousands |
Jun. 30, 2018
USD ($)
|
---|---|
Future minimum rental payments under operating leases | |
2018 (remaining) | $ 768 |
2019 | 1,421 |
2020 | 477 |
2021 | 498 |
2022 | 0 |
2023 | 0 |
Total | $ 3,164 |
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