3. Financial Statement Details

Prepaid Expenses and Other Current Assets

As of March 31, 2018 and December 31, 2017, prepaid expenses and other current assets consisted of (in thousands):

	March 31, 2018		December 31, 2017
	(Unaudited)
Insurance claim receivable	$	1,576	$	340
Prepaid license fees		843		597
Interest receivable - marketable debt securities		615		764
Equipment deposits		442		482
Prepaid insurance		381		572
Prepaid rent		373		373
Prepaid supplies		243		210
Prepaid services		157		416
Other		328		398
	$	4,958	$	4,152

Property, Plant and Equipment, Net

As of March 31, 2018 and December 31, 2017, property, plant and equipment, net consisted of (in thousands):

	March 31, 2018			December 31, 2017
	(Unaudited)
Construction in progress	$	43,339		$	42,281
Buildings		23,811			23,811
Equipment		9,702			9,625
Leasehold improvements		3,967			3,918
Software		1,095			1,092
Furniture & fixtures		279			302
		82,193			81,029
Accumulated depreciation		(5,367	)		(4,303	)
	$	76,826		$	76,726

Depreciation expense related to property, plant and equipment was $1.1 million and $0.6 million for the three months ended March 31, 2018 and 2017, respectively.

Buildings of $23.8 million are comprised of $19.5 million related to the purchased warehouse and distribution facility in El Segundo, California, originally accounted for as a capital lease and $4.3 million under a financing lease representing the estimated fair market value of the building in Culver City, California, for which the Company is the “deemed owner” for accounting purposes only, and related non-normal tenant improvements. See Note 8 section Financing Lease Obligation.

Construction in progress as of March 31, 2018 includes the estimated fair value of $5.1 million for the Company’s build-to-suit lease related to its facility in El Segundo, California, for which the Company is the “deemed owner” for accounting purposes only. See Note 8 – Build-to-suit Lease.

Intangible Assets, Net

As of March 31, 2018 and December 31, 2017, intangible assets consisted of (in thousands):

	March 31, 2018			December 31, 2017
	(Unaudited)
Technology license	$	9,042		$	9,042
Less accumulated amortization		(6,782	)		(6,216	)
	$	2,260		$	2,826

Amortization expense was $0.6 million for both the three months ended March 31, 2018 and 2017. Amortization for the Company’s technology license is included in research and development expense on the condensed consolidated statement of operations.

Other Assets

As of March 31, 2018 and December 31, 2017, other assets consisted of (in thousands):

	March 31, 2018		December 31, 2017
	(Unaudited)
Restricted cash	$	179	$	179
Security deposits		127		127
Other		60		24
	$	366	$	330

Restricted cash is a certificate of deposit that is collateral for the letter of credit required as a security deposit for the Company’s San Diego, California, facility by the Company’s landlord.

Accrued Expenses

As of March 31, 2018 and December 31, 2017, accrued expenses consisted of (in thousands):

	March 31, 2018		December 31, 2017
	(Unaudited)
Accrued construction costs	$	5,019	$	6,212
Accrued bonus		2,476		1,930
Accrued professional and service fees		1,471		1,048
Accrued compensation		1,396		944
Accrued preclinical and clinical trial costs		938		521
Accrued laboratory equipment and supplies		467		—
Other		310		612
	$	12,077	$	11,267

Other Current Liabilities

As of March 31, 2018 and December 31, 2017, other current liabilities were made up of (in thousands):

	March 31, 2018		December 31, 2017
	(Unaudited)
Deferred rent - current portion	$	539	$	520
Financing obligation - current portion		292		284
Build-to-suit lease liability - current portion		271		334
Other		197		235
	$	1,299	$	1,373

Investment Income, Net

Net investment income includes interest income from all bank accounts as well as marketable debt securities, net realized gains or losses on sales of investments and the amortization of the premiums and discounts of the investments and is as follows for the three months ended March 31, 2018 and 2017 (in thousands):

	Three Months Ended March 31,
	(Unaudited)
	2018			2017
Interest income	$	704		$	1,354
Investment amortization accretion expense, net		(201	)		(572	)
Net realized gains (losses) on investments		2			(3	)
	$	505		$	779

Interest income includes interest from the Company’s bank deposits. The Company did not recognize an impairment loss on any investments for the three months ended March 31, 2018 and 2017.