10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended March 31, 2019
	Or
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from ___________ to ___________

Commission File No. 000-23143

PROGENICS PHARMACEUTICALS, INC.

(Exact name of registrant as specified in its charter)

Delaware	13-3379479
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

One World Trade Center, 47^th Floor
New York, NY 10007
(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code: (646) 975-2500

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.0013	PGNX	The Nasdaq Global Select Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer  ☐	Accelerated filer   ☒
Non-accelerated filer    ☐	Smaller reporting company   ☐
	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes ☐ No ☒

As of May 6, 2019, a total of 84,542,514 shares of common stock, par value $0.0013 per share, were outstanding.

1

PROGENICS PHARMACEUTICALS, INC.

INDEX

		Page No.
Part I	FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Operations	4
	Condensed Consolidated Statements of Comprehensive Loss	5
	Condensed Consolidated Statement of Stockholders’ Equity	6
	Condensed Consolidated Statements of Cash Flows	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	33
Item 4.	Controls and Procedures	33
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	33
Item 1A.	Risk Factors	34
Item 6.	Exhibits	35
	Signatures	36

2

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

PROGENICS PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data)

	March 31,			December 31,
	2019			2018
	(unaudited)			(audited)
ASSETS
Current assets:
Cash and cash equivalents	$	109,587		$	137,686
Accounts receivable, net		4,935			3,803
Other current assets		3,125			2,640
Total current assets		117,647			144,129
Property and equipment, net		6,062			3,944
Intangible assets, net		7,651			6,666
Goodwill		17,847			13,074
Operating right-of-use lease assets		13,293			-
Other assets		1,704			1,684
Total assets	$	164,204		$	169,497
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	564		$	444
Accrued expenses		9,504			10,533
Contingent consideration liability		7,900			7,050
Current portion of debt, net		6,064			5,419
Operating lease liabilities		414			-
Total current liabilities		24,446			23,446
Long-term debt, net		37,568			39,180
Operating lease liabilities		14,787			-
Contingent consideration liability		4,000			3,950
Deferred tax liability		28			28
Other liabilities		-			1,818
Total liabilities		80,829			68,422
Commitments and Contingencies
Stockholders’ equity:
Preferred stock, $0.001 par value Authorized - 20,000 shares; issued and outstanding - none		-			-
Common stock, $0.0013 par value Authorized - 160,000 shares; issued - 84,742 shares in 2019 and 2018		110			110
Additional paid-in capital		714,096			713,019
Treasury stock at cost, 200 shares of common stock		(2,741	)		(2,741	)
Accumulated other comprehensive loss		(147	)		(105	)
Accumulated deficit		(627,943	)		(609,208	)
Total stockholders’ equity		83,375			101,075
Total liabilities and stockholders’ equity	$	164,204		$	169,497

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

PROGENICS PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 

(In thousands, except per share data)

(Unaudited)

	Three Months Ended
	March 31,
	2019			2018
Revenue:
Royalty income	$	4,161		$	3,058
Other revenue		120			131
Total revenue		4,281			3,189
Operating expenses:
Research and development		12,392			8,110
Selling, general and administrative		9,224			6,697
Change in contingent consideration liability		900			800
Total operating expenses		22,516			15,607
Operating loss		(18,235	)		(12,418	)
Other (expense) income:
Interest (expense) income and other income, net		(500	)		(1,006	)
Total other (expense) income		(500	)		(1,006	)
Net loss	$	(18,735	)	$	(13,424	)
Net loss per share - basic and diluted	$	(0.22	)	$	(0.19	)
Weighted-average shares - basic and diluted		84,542			72,517

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

PROGENICS PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands)

(Unaudited)

	Three Months Ended
	March 31,
	2019			2018
Net loss	$	(18,735	)	$	(13,424	)
Other comprehensive loss:
Foreign currency translation adjustments		(42	)		(18	)
Comprehensive loss	$	(18,777	)	$	(13,442	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

PROGENICS PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY 

(In thousands)

(Unaudited)

									Accumulated
	Common Stock			Additional					Other			Treasury Stock					Total
	Number			Paid-in		Accumulated			Comprehensive			Number					Stockholders’
	of Shares	Par Value		Capital		Deficit			Loss			of Shares		Cost			Equity
Balance at December 31, 2018	84,742	$	110	$	713,019	$	(609,208	)	$	(105	)	(200	)	$	(2,741	)	$	101,075
Net loss	-		-		-		(18,735	)		-		-			-			(18,735	)
Foreign currency translation adjustments	-		-		-		-			(42	)	-			-			(42	)
Stock-based compensation expense	-		-		1,077		-			-		-			-			1,077
Balance at March 31, 2019	84,742	$	110	$	714,096	$	(627,943	)	$	(147	)	(200	)	$	(2,741	)	$	83,375

					Common Stock										Accumulated
	Common Stock				Subscribed					Additional					Other						Treasury Stock						Total
	Number				Number					Paid-in		Accumulated			Comprehensive			Subscription			Number						Stockholders’
	of Shares		Par Value		of Shares			Par Value		Capital		Deficit			Loss			Receivable			of Shares			Cost			Equity
Balance at December 31, 2017		71,325	$	93		320		$	-	$	609,829	$	(541,586	)	$	(33	)	$	(2,109	)		(200	)	$	(2,741	)	$	63,453
Net loss		-		-		-			-		-		(13,424	)		-			-			-			-			(13,424	)
Foreign currency translation adjustments		-		-		-			-		-		-			(18	)		-			-			-			(18	)
Stock-based compensation expense		-		-		-			-		1,048		-			-			-			-			-			1,048
Cumulative effect of ASU 2014-09 adoption		-		-		-			-		-		35			-			-			-			-			35
Issuance of common stock in connection with at-the-market offering, net of commissions and issuance costs		1,537		2		(320	)		-		7,414		-			-			2,109			-			-			9,525
Subscription of common stock in connection with at-the-market offering, net of commissions		-		-		103			-		750		-			-			(750	)		-			-			-
Balance at March 31, 2018		72,862	$	95		103		$	-	$	619,041	$	(554,975	)	$	(51	)	$	(750	)		(200	)	$	(2,741	)	$	60,619

The accompanying notes are an integral part of these condensed consolidated financial statements.

6

PROGENICS PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 

(In thousands)

(Unaudited)

	Three Months Ended
	March 31,
	2019			2018
Cash flows from operating activities:
Net loss	$	(18,735	)	$	(13,424	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense		1,077			1,048
Depreciation and amortization		557			286
Non-cash interest expense		71			63
Other		11			-
Change in fair value of contingent consideration liability		900			800
Changes in assets and liabilities:
Accounts receivable		(1,136	)		491
Other current assets		(447	)		(204	)
Other assets		146			-
Accounts payable		124			(1,757	)
Accrued expenses		(991	)		(1,632	)
Other current liabilities		18			-
Other liabilities		(114	)		73
Net cash used in operating activities		(18,519	)		(14,256	)
Cash flows from investing activities:
Acquisition of AZEDRA manufacturing assets		(8,000	)		-
Purchases of property and equipment		(491	)		(16	)
Net cash used in investing activities		(8,491	)		(16	)
Cash flows from financing activities:
Net proceeds from issuance of common stock in connection with at-the-market offering		-			9,524
Repayment of debt		(1,037	)		-
Net cash (used in) provided by financing activities		(1,037	)		9,524
Effect of currency rate changes on cash, cash equivalents and restricted cash		(46	)		(17	)
Net decrease in cash, cash equivalents, and restricted cash		(28,093	)		(4,765	)
Cash, cash equivalents, and restricted cash at beginning of period		139,220			92,164
Cash, cash equivalents, and restricted cash at end of period	$	111,127		$	87,399
Supplemental disclosure of cash flow information
Cash paid for interest	$	1,077		$	1,205
Noncash financing activity
Subscription receivable	$	-		$	(1,359	)

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets to the total of the same such amounts shown above for the three months ended March 31, 2019 and 2018:

Cash, cash equivalents and restricted cash information
Cash and cash equivalents at beginning of period		137,686		90,642
Restricted cash included in long-term assets at the beginning of period		1,534		1,522
Cash, cash equivalents and restricted cash at beginning of period	$	139,220	$	92,164
Cash and cash equivalents at end of period		109,587		83,431
Restricted cash included in current assets at the end of period		-		2,444
Restricted cash included in long-term assets at the end of period		1,540		1,524
Cash, cash equivalents, and restricted cash at end of period	$	111,127	$	87,399

The accompanying notes are an integral part of these condensed consolidated financial statements.

7

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Note 1. Summary of Significant Accounting Policies

Business

Progenics Pharmaceuticals, Inc. (and its subsidiaries collectively the “Company,” “Progenics”, “we”, or “us”) is an oncology company focused on the development and commercialization of innovative targeted medicines and artificial intelligence to find, fight and follow cancer. Highlights of our recent progress include the approval, launch and manufacturing of AZEDRA^®. Our pipeline includes therapeutic agents designed to precisely target cancer (1095 and PSMA TTC), as well as a prostate-specific membrane antigen (“PSMA”) targeted imaging agent for prostate cancer (PyL™).

Recent Progress:

● AZEDRA^® Launch. A field-based team of Nuclear Medicine Technologists, Sales Representatives, Medical Science Liaisons and Access Specialists have been in the field since approval assisting centers of excellence and payers in the preparation for utilizing and reimbursing AZEDRA. As a result of this effort, treatment requests have been received and sites are now ready to administer AZEDRA.

● AZEDRA^® Manufacturing. In February 2019, we acquired the AZEDRA manufacturing assets for $8.0 million cash consideration and entered into a sublease agreement for the radiopharmaceutical manufacturing facility located in Somerset, New Jersey. The Somerset site serves as the launch facility for AZEDRA and will also provide manufacturing support for our development stage radiopharmaceuticals, including 1095. We also secured the long-term supply of iodine necessary for the production of both AZEDRA and 1095 and entered into an agreement with a contract manufacturing organization for additional capacity and supply of iodine products. The production of AZEDRA uses a proprietary Ultratrace^® process which concentrates the MIBG targeted radiolytic activity by eliminating non-therapeutic “cold” MIBG molecules, giving AZEDRA a uniquely high specific activity.

Continued Progress Across Entire Pipeline:

● We initiated a multicenter, randomized, controlled Phase 2 trial of 1095 to evaluate the efficacy and safety of 1095 in combination with enzalutamide in chemotherapy-naïve patients with metastatic castration-resistant prostate cancer (mCRPC) and will begin enrolling patients within the quarter. Progenics’1095 is a small molecule radiotherapeutic designed to selectively bind to the extracellular domain of prostate specific membrane antigen (“PSMA”), a protein that is highly expressed on prostate cancer cells.

● Data from an ongoing investigator-initiated study of PyL in 130 men with biochemical recurrence of prostate cancer was published in The Journal of Nuclear Medicine. The study of PyL is being conducted by the University of British Columbia and British Columbia Cancer Agency. Physician post-scan assessments indicated that imaging results improved physician decision-making in 89.1% of patients and changed management plans in 87.3% of patients. The investigators concluded that PyL was “safe and sensitive for the localization of biochemical recurrence of prostate cancer.”

● Stanford University presented data from its investigator-initiated prospective study of PyL in patients with biochemical recurrent prostate cancer at the American Urological Association (“AUA”) Annual Meeting. Results demonstrated PyL’s overall positivity rate in this cohort of 84%. Data from the investigator-sponsored study showed PyL imaging has the potential to change clinical management in nearly two thirds of biochemically recurrent prostate cancer patients.

● Enrollment continues in a pivotal multi-center, open label Phase 3 CONDOR trial evaluating the diagnostic performance and clinical impact of PyL in men with biochemical recurrence of prostate cancer. The primary endpoint is based on positive predictive value and will assess the correct localization rate (“CLR”). We expect enrollment to complete by year end 2019.

● We presented the results of the Phase 2/3 OSPREY trial of PyL, the Company’s PSMA-targeted small molecule PET/CT imaging agent designed to visualize prostate cancer at the AUA Annual Meeting. The positive data from the OSPREY trial helped design the Company’s Phase 3 CONDOR trial of PyL that was initiated in November 2018.

● We continue to pursue our life cycle management plans for AZEDRA. In February 2019, an advisory board with Key Opinion Leaders (“KOLs”) concluded that there would likely be strong interest in using AZEDRA in multiple MIBG-avid tumors, including gastroenteropancreatic neuroendocrine tumors (“GEP-NETS”) and other neuroendocrine tumors (“NETS”). There was strong interest in a clinical study to research the use of AZEDRA in these indications since patients often have very high unmet needs for new treatments. The Company plans to meet with the U.S. Food and Drug Administration (“FDA”) in a life cycle management meeting to discuss a trial to support an expanded label in these tumors.

● Using our PSMA-targeted imaging data from previous trials, we completed a prospectively planned retrospective analysis using our deep convolutional neural network algorithms (“PSMA AI”) to automatically assess the PSMA images. The reads with PSMA AI demonstrated a statistically significant improvement over manual assessment in terms of increased diagnostic accuracy, precision, speed, and reproducibility. The results from this analysis are expected to be presented at a scientific conference in June 2019.

8

Corporate:

● We enhanced our leadership team with the appointment of Asha Das, M.D. as Chief Medical Officer. Dr. Das most recently served as Tocagen’s Chief Medical Officer, where she led the development of the company’s cancer-selective gene therapy platform. Previous to that Dr. Das was at Genentech, where she worked in positions of increasing responsibility, initially as Associate Medical Director and ultimately as Group Medical Director and was responsible for leading activities related to the approval and launch of Avastin in recurrent glioblastoma, expansion into platinum-resistant ovarian cancer and metastatic cervical cancer as well as clinical activities related to TECENTRIQ^®. Prior to moving to the pharmaceutical industry, Dr. Das was head of the neuro-oncology program at Cedars-Sinai Medical Center. Dr. Das is certified in neurology by the American Board of Psychiatry and Neurology and in the sub-specialty of neuro-oncology by the United Council for Neurologic Subspecialties and previously served as a clinical fellow in neuro-oncology at Massachusetts General Hospital. Dr. Das completed her residency in neurology at Cornell Medical Center and has held academic appointments at the University of California, Los Angeles; University of California, San Francisco; and National University of Singapore. Dr. Das obtained her medical degree and bachelor’s degree from Cornell University.

Strategic partnerships:

● RELISTOR^® (methylnaltrexone bromide) is licensed to Salix Pharmaceuticals, Inc., a wholly-owned subsidiary of Bausch Health Companies Inc. (“Bausch”, which is the predecessor of Valeant Pharmaceuticals International, Inc.). RELISTOR subcutaneous injection and RELISTOR Tablets are approved by the FDA for the treatment of opioid-induced constipation in adults with chronic non-cancer pain.

● Bayer AG (“Bayer”) has exclusive worldwide rights to develop and commercialize products using our PSMA antibody technology, in combination with Bayer’s alpha-emitting radionuclides. Bayer is developing PSMA TTC, a thorium-227 labeled PSMA-targeted antibody therapeutic. Bayer initiated a Phase 1 trial of PSMA TTC in patients with metastatic castration-resistant prostate cancer.

● CytoDyn Inc. (“CytoDyn”) acquired leronlimab (PRO 140), which acquisition included milestone and royalty payment obligations to us. Leronlimab is a fully humanized monoclonal antibody which is a cellular targeting CCR5 entry antagonist and is currently in development for the treatment of HIV. CytoDyn announced in March 2019 that it filed its first of three sections of its Biologics License Application (BLA) to the FDA for leronlimab for the treatment of HIV under the Rolling Review process.

● Curium has exclusive rights to develop, manufacture and commercialize PyL (18F-DCFPyL) in Europe. Under the terms of the collaboration, Curium is responsible for the development, regulatory approvals and commercialization of PyL in Europe. We understand from Curium that it plans to meet with the European Medicines Agency to agree upon the regulatory path forward for PyL in 2019. Under this agreement, Progenics is entitled to royalties on net sales of PyL.

Our current principal sources of revenue from operations are royalty, development and commercial milestones from Bausch and Bayer. Royalty and further milestone payments from Bausch or Bayer depend on success in development and commercialization of RELISTOR and our PSMA antibody technology, respectively, which is dependent on many factors, such as Bausch or Bayer’s respective efforts, decisions by the FDA and other regulatory bodies, competition from drugs for the same or similar indications, and the outcome of clinical and other testing of the licensed products.

We commenced principal operations in 1988, became publicly traded in 1997, and throughout have been engaged primarily in research and development efforts, establishing corporate collaborations, launching AZEDRA and other related business activities. Certain of our intellectual property rights are held by wholly-owned subsidiaries. Our U.S. operations are presently conducted at our headquarters in New York and our manufacturing facility in Somerset, New Jersey. The operations of our wholly-owned foreign subsidiary, EXINI Diagnostics A.B. (“EXINI”), are conducted at our facility in Lund, Sweden. We operate under a single operating segment, which includes development, manufacturing and commercialization of pharmaceutical products and other technologies to target, diagnose and treat cancer. Our operating segment is regularly evaluated for financial performance by our chief operating decision maker, who is our Chief Executive Officer.

9

Liquidity

At March 31, 2019, we had $109.6 million of cash and cash equivalents, a decrease of $28.1 million from $137.7 million at December 31, 2018. We expect that this amount will be sufficient to fund operations as currently anticipated beyond one year from the filing date of this Quarterly Report on Form 10-Q. We have historically funded our operations to a significant extent from capital-raising and we expect to require additional funding in the future, the availability of which is never guaranteed and may be uncertain. We expect that we may continue to incur operating losses.

Basis of Presentation

Our unaudited condensed consolidated financial statements have been prepared in accordance with applicable presentation requirements, and accordingly, do not include all information and disclosures necessary for a presentation of our financial position, results of operations, and cash flows in conformity with accounting principles generally accepted in the U.S. (“GAAP”). In the opinion of management, these financial statements reflect all adjustments, consisting primarily of normal recurring accruals necessary for a fair statement of results for the periods presented. The results of operations for interim periods are not necessarily indicative of the results for the full year.

Our unaudited condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2018. The year-end consolidated balance sheet data in these financial statements were derived from audited financial statements but do not include all disclosures required by GAAP.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of Progenics as well as its wholly-owned subsidiaries. All material intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results may differ from those estimates.

Revenue Recognition

We recognize revenue when our customers obtain control of the promised goods or services, in an amount that reflects the consideration which we expect to receive in exchange for those goods or services. To account for our revenue arrangements, we perform the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price, including variable consideration, if any; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) we satisfy our performance obligations.

For contracts determined to be within the scope of ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09” or the “Topic 606”), we assess the goods or services promised within each contract for the purpose of identifying them as performance obligations. We must apply judgement in assessing whether each promised good or service is distinct. If a promised good or service is not distinct, we will combine that good or service with other promised goods or services until it identifies a bundle of goods or services that is distinct.

10

The transaction price is then determined and allocated to the identified performance obligations in proportion to their estimated fair value, which requires significant judgment. Variable consideration, which is estimated using the expected value method or the most likely amount method, is included in the transaction price only if, in our judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur.

For arrangements that include development, regulatory or sales milestone payments, we evaluate whether the milestones are probable of being reached and estimate the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within our control or the licensee’s control, such as regulatory approvals, are generally not considered probable of being achieved until those approvals are received.

We then recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

The following table summarizes our revenue streams from contracts with customers for the three months ended March 31, 2019 and 2018 (in thousands):

	Three Months Ended
	March 31,
Source	2019		2018
Royalty income	$	4,161	$	3,058
Other revenue		120		131
Total revenue	$	4,281	$	3,189

Royalty income - represents revenue from the sales-based royalties under our intellectual property licensing arrangements and is recognized upon net sales of the licensed products.

Other revenue – represents revenue from upfront payments (fixed consideration) and development and sales milestones, sublicense payments, support and service payments and sales-based bonus payments (variable consideration) under our licensing or software arrangements. The fixed consideration will be recognized as revenue at the time when the transfer of know-how is completed. The variable consideration will be estimated using the most likely amount method and recognized only when we have “a high degree of confidence” that revenue will not be reversed in a subsequent reporting period. The other revenue also includes revenue from product sales of research reagents, that is recognized upon shipment to the end customer (i.e. control of the product is deemed to be transferred).

We had receivable contract balances of $4.9 million and $3.8 million as of March 31, 2019 and December 31, 2018, respectively, primarily related to the royalty revenue stream (see Note 5. Accounts Receivable).

Restricted Cash

Restricted cash included in long-term assets of $1.5 million at March 31, 2019 and December 31, 2018, represents collateral for a letter of credit securing a lease obligation. We believe the carrying value of this asset approximates fair value.

Foreign Currency Translation

Our international subsidiaries generally consider their respective local currency to be their functional currency. Assets and liabilities of these international subsidiaries are translated into U.S. dollars at quarter-end exchange rates and revenues and expenses are translated at average exchange rates during the quarter and year-to-date period. Foreign currency translation adjustments for the reported periods are included in accumulated other comprehensive loss in our condensed consolidated statements of comprehensive loss, and the cumulative effect is included in the stockholders’ equity section of our condensed consolidated balance sheets. Realized gains and losses denominated in foreign currencies are recorded in operating expenses in our condensed consolidated statements of operations and were not material to our consolidated results of operations for the three months ended March 31, 2019 or 2018.

11

Leases

We determine whether an arrangement is or contains a lease at its inception. We recognize lease liabilities based on the present value of the minimum lease payments not yet paid by using the lease term and discount rate determined at lease commencement. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate to determine the present value of our lease payments. Our leases may include options to extend or terminate a lease when it is reasonably certain that we will exercise that option. We recognize the operating right-of-use (“ROU”) lease assets at an amount equal to the lease liability adjusted for prepaid or accrued rent, remaining balance of any lease incentives and unamortized initial direct costs.

The operating lease liabilities are reported in other current liabilities and other noncurrent liabilities and the related ROU lease assets are reported in other noncurrent assets on our condensed consolidated balance sheet. Lease expense for our operating leases is calculated on a straight-line basis over the lease term and is reported in research and development and selling, general and administrative expenses on our condensed consolidated statements of operations. We do not recognize a lease liability or ROU lease assets for leases whose lease terms, at commencement, are twelve months or less, or for leases which are below the capitalization threshold established for lease assets and liabilities.

Property and Equipment

Property and equipment is recorded at historical cost, net of accumulated depreciation and amortization of $2.8 million and $2.7 million as of March 31, 2019 and December 31, 2018, respectively. The following table summarizes our property and equipment (in thousands):

	March 31,			December 31,
	2019			2018
Machinery and equipment	$	3,887		$	2,992
Leasehold improvements		3,034			1,734
Computer equipment		621			721
Furniture and fixtures		878			878
Construction in progress		455			317
Property and equipment, gross		8,875			6,642
Less - accumulated depreciation		(2,813	)		(2,698	)
Property and equipment, net	$	6,062		$	3,944

Note 2. New Accounting Pronouncements

Recently Adopted

In February 2016, the FASB issued ASU 2016-02 (“ASU 2016-02”), Leases (Topic 842). This standard established a right-of-use model that requires all lessees to recognize right-of-use assets and liabilities on their balance sheet that arise from leases with terms longer than 12 months as well as provide disclosures with respect to certain qualitative and quantitative information related to their leasing arrangements.

The FASB has subsequently issued the following amendments to ASU 2016-02, which have the same effective date and transition date of January 1, 2019, and which we collectively refer to as the new leasing standards:

● ASU No. 2018-01, Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842, which permits an entity to elect an optional transition practical expedient to not evaluate under Topic 842 land easements that exist or expired prior to adoption of Topic 842 and that were not previously accounted for as leases under the prior standard, ASC 840, Leases.

● ASU No. 2018-10, Codification Improvements to Topic 842, Leases, which amends certain narrow aspects of the guidance issued in ASU 2016-02.

● ASU No. 2018-11, Leases (Topic 842): Targeted Improvements, which allows for a transition approach to initially apply ASU 2016-02 at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption as well as an additional practical expedient for lessors to not separate non-lease components from the associated lease component.

● ASU No. 2018-20, Narrow-Scope Improvements for Lessors, which contains certain narrow scope improvements to the guidance issued in ASU 2016-02.

● ASU No. 2019-01, Leases (Topic 842): Codification Improvements.

We adopted the new leasing standards on January 1, 2019, using a modified retrospective transition approach to be applied to leases existing as of, or entered into after, January 1, 2019 and did not adjust comparative periods. We also elected the package of practical expedients permitted under this standard, which among other things, allowed us to carry forward the lease classification for our existing leases. In preparation for the adoption of this standard and to enable preparation of the required financial information, we implemented new internal controls and processes.

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The adoption of this standard impacted our 2019 opening consolidated balance sheet as we recorded operating lease liabilities of $15.3 million and ROU lease assets of $13.5 million, which equals the lease liabilities net of deferred rent and lease incentives previously recorded on our balance sheet under the old guidance. The adoption of this standard did not have an impact on our consolidated statements of operations or cash flows.

Recently Issued 

In August 2018, the FASB issued ASU 2018-13 (“ASU 2018-13”), Fair Value Measurement - Disclosure Framework (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement. The updated guidance improves the disclosure requirements on fair value measurements. ASU 2018-13 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted for any removed or modified disclosures. We are currently assessing the timing of adopting the updated provisions and the impact of the updated provisions on our consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. In November 2018, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments-Credit Losses and in April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, which amend the scope and transition requirements of ASU 2016-13. The standard requires a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount. The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. We are currently evaluating the impact this guidance will have on our consolidated financial statements.

Note 3. Net Loss Per Share

Our basic net loss per share amounts have been computed by dividing net loss by the weighted-average number of common shares outstanding during the period. For the three months ended March 31, 2019 and 2018, we reported net losses and, accordingly, potential common shares were not included since such inclusion would have been anti-dilutive.

The calculations of net loss per share, basic and diluted, are as follows (amounts in thousands, except per share data):

				Weighted-Average
				Shares
	Net Loss			Outstanding		Per Share
	(Numerator)			(Denominator)		Amount
Three months ended March 31, 2019
Basic and diluted	$	(18,735	)		84,542	$	(0.22	)
Three months ended March 31, 2018
Basic and diluted	$	(13,424	)		72,517	$	(0.19	)

The following table summarizes anti-dilutive common shares or common shares where performance conditions have not been met, that were excluded from the calculation of diluted net loss per share (in thousands):

	Three Months Ended March 31,
	2019		2018
Stock options		6,522		3,483
Contingent consideration liability (1)		2,565		2,359
Total securities excluded		9,087		5,842

⁽¹⁾ Calculated as follows: (a) the contingent consideration liability balance divided by (b) the closing stock price of our common stock.

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Note 4. Fair Value Measurements

To estimate the fair values of our financial assets and liabilities, we use valuation approaches within a hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of us. Unobservable inputs are inputs that reflect our assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances. The fair value hierarchy is divided into three levels based on the source of inputs as follows:

● Level 1 – Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to access

● Level 2 – Valuations for which all significant inputs are observable, either directly or indirectly, other than Level 1 inputs

● Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement

The availability of observable inputs can vary among the various types of financial assets and liabilities. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used for measuring fair value may fall into different levels of the fair value hierarchy. In such cases, for financial statement disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is categorized is based on the lowest level of input used that is significant to the overall fair value measurement.

We believe the carrying amounts of our cash equivalents, restricted cash, accounts receivable, other current assets, other assets, accounts payable and accrued expenses approximated their fair values as of March 31, 2019 and December 31, 2018.

We record the contingent consideration liability resulting from our acquisition of Molecular Insight Pharmaceuticals, Inc. (“MIP”) at fair value in accordance with Accounting Standards Codification (“ASC”) 820 (Topic 820, Fair Value Measurement).

The following tables summarize each major class of our financial assets and liabilities measured at fair value on a recurring basis as of the dates indicated, classified by valuation hierarchy (in thousands):

			Fair Value Measurements at March 31, 2019
			Quoted Prices in		Significant Other		Significant
			Active Markets for		Observable		Unobservable
	Balance at		Identical Assets		Inputs		Inputs
	March 31, 2019		(Level 1)		(Level 2)		(Level 3)
Assets:
Money market funds	$	104,875	$	104,875	$	-	$	-
Total assets	$	104,875	$	104,875	$	-	$	-
Liabilities:
Contingent consideration liability	$	11,900	$	-	$	-	$	11,900
Total liabilities	$	11,900	$	-	$	-	$	11,900

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			Fair Value Measurements at December 31, 2018
			Quoted Prices in		Significant Other		Significant
			Active Markets for		Observable		Unobservable
	Balance at		Identical Assets		Inputs		Inputs
	December 31, 2018		(Level 1)		(Level 2)		(Level 3)
Assets:
Money market funds	$	136,052	$	136,052	$	-	$	-
Total assets	$	136,052	$	136,052	$	-	$	-
Liabilities:
Contingent consideration liability	$	11,000	$	-	$	-	$	11,000
Total liabilities	$	11,000	$	-	$	-	$	11,000

The contingent consideration liability of $11.9 million as of March 31, 2019 represents the estimated fair value of the future potential milestone payments to former MIP stockholders (shown in the tables below).

Milestone payments due upon first commercial sale (in thousands):

Program	Consideration		Form of Payment at Progenics' Option
AZEDRA	$	8,000	Cash or Progenics common stock
1404		10,000	Cash or Progenics common stock
1095		5,000	Cash or Progenics common stock
	$	23,000

Net sales milestone payments due upon first achievement of specified net sales target in any single calendar year across all MIP-related programs (in thousands):

	Consideration		Form of Payment at Progenics' Option
$30 million	$	5,000	Cash or Progenics common stock
$60 million		5,000	Cash or Progenics common stock
$100 million		10,000	Cash or Progenics common stock
$250 million		20,000	Cash or Progenics common stock
$500 million		30,000	Cash or Progenics common stock
	$	70,000

We consider this liability a Level 3 instrument (one with significant unobservable inputs) in the fair value hierarchy. The estimated fair value was determined based on probability adjusted discounted cash flow and Monte Carlo simulation models that included significant estimates and assumptions pertaining to commercialization events and sales targets. The most significant unobservable inputs are the probabilities of achieving regulatory approval of the development projects and subsequent commercial success.

Significant changes in any of the probabilities of success or the probabilities as to the periods in which milestones will be achieved, would result in a significantly higher or lower fair value measurement. We record the contingent consideration liability at fair value with changes in estimated fair values recorded in change in contingent consideration liability in our condensed consolidated statements of operations.

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The following table summarizes quantitative information and assumptions pertaining to the fair value measurement of the Level 3 inputs at March 31, 2019 and December 31, 2018 (in thousands). The increase in the contingent consideration liability of $0.9 million during the three months ended March 31, 2019, was primarily attributable to an increase in the probability of success for the AZEDRA commercialization milestone and a decrease in the discount period used to calculate the present value of the contingent consideration liability.

	Fair Value at
	March 31,
	2019		Valuation Technique	Unobservable Input	Assumption
Contingent Consideration Liability:
AZEDRA commercialization	$	7,900	Probability adjusted discounted	Probability of success			100%
			cash flow model	Period of expected milestone achievement			2019
				Discount rate			10%
1095 commercialization		450	Probability adjusted discounted	Probability of success			18%
			cash flow model	Period of expected milestone achievement			2026
				Discount rate			10%
Net sales targets		3,550	Monte-Carlo simulation	Probability of success		18%	-	90%
				Discount rate			10%
Total	$	11,900

	Fair Value at
	December 31,
	2018		Valuation Technique	Unobservable Input	Assumption
Contingent Consideration Liability:
AZEDRA commercialization	$	7,050	Probability adjusted discounted	Probability of success			90%
			cash flow model	Period of expected milestone achievement			2019
				Discount rate			10%
1095 commercialization		450	Probability adjusted discounted	Probability of success			18%
			cash flow model	Period of expected milestone achievement			2026
				Discount rate			10%
Net sales targets		3,500	Monte-Carlo simulation	Probability of success		18%	-	90%
				Discount rate			10%
Total	$	11,000

For those financial instruments with significant Level 3 inputs, the following table summarizes the activities for the periods indicated (in thousands):

	Liability - Contingent Consideration
	Fair Value Measurements Using
	Significant Unobservable Inputs
	(Level 3)
	Three Months Ended March 31,
	2019		2018
Balance at beginning of period	$	11,000	$	16,800
Fair value change included in net loss		900		800
Balance at end of period	$	11,900	$	17,600
Changes in unrealized gains or losses for the period included in earnings (or changes in net assets) for liabilities held at the end of the reporting period	$	900	$	800

Note 5. Accounts Receivable

Our accounts receivable represent amounts due to us from royalties, collaborators, and, to a small extent, sales of research reagents, and consisted of the following at March 31, 2019 and December 31, 2018 (in thousands):

	March 31,		December 31,
	2019		2018
Royalties	$	4,161	$	3,151
Other		774		652
Accounts receivable, net	$	4,935	$	3,803

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Note 6. Recent Acquisition, Goodwill, In-Process Research and Development and Other Intangible Assets

Recent Acquisition

In February 2019, we acquired the AZEDRA manufacturing assets for $8.0 million cash consideration and entered into a sublease agreement for the radiopharmaceutical manufacturing facility located in Somerset, New Jersey. The Somerset site serves as the launch facility for AZEDRA and will also provide manufacturing support for the Company’s development stage radiopharmaceuticals, including 1095. The production of AZEDRA uses a proprietary Ultratrace® process which concentrates the MIBG targeted radiolytic activity by eliminating non-therapeutic “cold” MIBG molecules, giving AZEDRA a uniquely high specific activity.

Purchase Price Allocation: We accounted for this acquisition as a business combination by preliminarily allocating the consideration we paid to the fair values of the assets acquired at the effective date of the acquisition, as summarized below. The difference between the fair value of the acquisition consideration and the estimated fair value of the identifiable assets represents potential future economic benefits arising from the acquisition, and has been recorded as goodwill. This preliminary allocation may change if, as and when additional information, becomes available. Under applicable accounting requirements, we must make the final determination within one year of the acquisition date.

The following table summarizes the preliminary allocation of the consideration paid to the estimated fair values of the assets acquired as of the acquisition date (in thousands):

	Amount
Cash consideration	$	8,000
Tangible assets acquired:
Machinery and equipment		682
Leasehold improvements		1,300
Total tangible assets acquired		1,982
Intangible assets - Somerset		1,245
Total tangible and intangible assets acquired		3,227
Goodwill	$	4,773

The replacement cost method, a variation of the cost approach, was applied to assess the value of the assets acquired by Progenics. The principle behind this method is that the value represents the current cost of a similar new asset having the nearest equivalent utility as the asset being valued. It generally represents the maximum amount that a prudent investor will pay for a comparable asset. The cost approach provides a systematic framework for estimating the value of tangible or intangible assets based on the economic principle of substitution, and that no prudent investor will purchase an existing asset for more than it will cost to create a comparable asset. Under this approach, value is estimated by developing the cost to either replace or reproduce (replicate) the asset of similar utility.

The acquired Somerset intangible assets represent manufacturing know-how asset, which is comprised of documented technical date and information, formulae, standards, specifications, processes, methods, code books, as well as all information, knowledge, trade practices and secrets utilized by the Somerset facility in manufacturing of the AZEDRA. We estimate the remaining useful life of the Somerset intangible to be approximately 6 years.

Goodwill, In-Process Research and Development and Other Intangible Assets

The fair values of in-process research and development (“IPR&D”) and other identified intangible assets acquired in business combinations are capitalized. We utilize the “income method,” which applies a probability weighting that considers the risk of development and commercialization to the estimated future net cash flows that are derived from projected sales revenues and estimated costs or “replacement costs”, whichever is greater. These projections are based on factors such as relevant market size, patent protection, historical pricing of similar products and expected industry trends. The estimated future net cash flows are then discounted to the present value using an appropriate discount rate. This analysis is performed for each IPR&D project and other identified intangible assets, independently. IPR&D assets are treated as indefinite-lived intangible assets until completion or abandonment of the projects, at which time the assets are amortized over the remaining useful life or written off, as appropriate. Other identified intangible assets, which include the technology asset acquired as part of the EXINI business combination, AZEDRA product rights intangible and Somerset intangible, are amortized over the relevant estimated useful lives. The IPR&D assets are tested for impairment at least annually or when a triggering event occurs that could indicate a potential impairment and any impairment loss is recognized in our condensed consolidated statements of operations.

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Goodwill represents excess consideration in a business combination over the fair value of identifiable net assets acquired. Goodwill is not amortized but is subject to impairment testing at least annually or when a triggering event occurs that could indicate a potential impairment. We determine whether goodwill may be impaired by comparing the fair value of the reporting unit (we have determined that we have only one reporting unit for this purpose), calculated as the product of shares outstanding and the share price as of the end of a period, to its carrying value (for this purpose, our total stockholders’ equity). No goodwill impairment has been recognized as of March 31, 2019 or 2018.

The following tables summarize the activity related to our goodwill and intangible assets (in thousands):

					Other
					Intangible
	Goodwill		IPR&D		Assets
Balance at January 1, 2019	$	13,074	$	600	$	6,066
Increase related to Somerset acquisition	$	4,773	$	-	$	1,245
Amortization expense		-		-		(260	)
Balance at March 31, 2019	$	17,847	$	600	$	7,051

					Other
					Intangible
	Goodwill		IPR&D		Assets
Balance at January 1, 2018	$	13,074	$	28,700	$	1,669
Amortization expense		-		-		(53	)
Balance at March 31, 2018	$	13,074	$	28,700	$	1,616

The following table reflects the components of the finite-lived intangible assets as of March 31, 2019 (in thousands):

	Gross Amount		Accumulated Amortization		Net Carrying Value
Intangible assets - AZEDRA product rights	$	4,900	$	467	$	4,433
Intangible assets - Somerset	$	1,245	$	32		1,213
Intangible assets - EXINI technology		2,120		715		1,405
Total	$	8,265	$	1,214	$	7,051

Note 7. Accrued Expenses

The carrying value of our accrued expenses approximates fair value, as it represents amounts that will be satisfied within one year. Accrued expenses consisted of the following at March 31, 2019 and December 31, 2018 (in thousands):

	March 31,		December 31,
	2019		2018
Accrued contract manufacturing costs	$	2,946	$	2,516
Accrued clinical trial costs		1,817		2,318
Accrued payroll and related costs		1,411		2,871
Accrued consulting and service fee expenses		847		1,229
Accrued legal and professional fees		1,529		1,191
Other		954		408
Accrued expenses	$	9,504	$	10,533

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Note 8. Commitments and Contingencies

We are or may be involved in disputes, governmental and/or regulatory inspections, inquiries, investigations, and proceedings that could result in litigation, and other litigation matters that arise from time to time. The process of resolving matters through litigation or other means is inherently uncertain and it is possible that an unfavorable resolution of these matters will adversely affect us, our results of operations, financial condition, and cash flows. While it is not possible to accurately predict or determine the eventual outcomes of these items, an adverse determination in one or more of these items currently pending could have a material adverse effect on our consolidated results of operations, financial position, or cash flows.

Abbreviated New Drug Application Litigations

RELISTOR Subcutaneous Injection - Mylan

Paragraph IV Certifications

On or about October 6, 2015, November 20, 2015, December 22, 2015, and December 23, 2015, Progenics, Salix Pharmaceuticals, Inc. (“Salix”) and Wyeth LLC (“Wyeth”) received four separate notifications of a Paragraph IV certification for RELISTOR (methylnaltrexone bromide) subcutaneous injection, for certain patents that are listed in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations, also known as “the Orange Book.” The certifications resulted from the filing by Mylan Pharmaceuticals Inc. of an Abbreviated New Drug Application (“ANDA”) with the FDA, challenging such patents for RELISTOR subcutaneous injection and seeking to obtain approval to market a generic version of RELISTOR subcutaneous injection before some or all of these patents expire.

District Court Actions

Progenics, Salix, Valeant (now Bausch Health Companies Inc., “Bausch”), and Wyeth filed suit against Mylan Pharmaceuticals, Inc. and Mylan Inc. in the District of New Jersey on November 19, 2015 (2:15-cv-8180-SRC-CLW) seeking declaratory judgment of infringement of U.S. Patent Nos. 8,247,425, 8,420,663, 8,552,025, and 8,822,490 based upon Mylan Pharmaceutical Inc.’s filing of its ANDA seeking to obtain approval to market a generic version of RELISTOR vials before some or all of these patents expire. On February 4, 2016, Progenics, Salix, Bausch, and Wyeth filed an amended complaint, identifying Mylan Laboratories Ltd. as an additional Defendant, and further seeking declaratory judgment of infringement of U.S. Patent No. 9,180,125. Progenics, Salix, Bausch, and Wyeth filed suit against Mylan Pharmaceuticals, Inc., Mylan Laboratories Ltd., and Mylan Inc. in the District of New Jersey on January 4, 2016 (2:16-cv-00035-SRC-CLW) seeking declaratory judgment of infringement of U.S. Patent Nos. 8,247,425, 8,420,663, 8,552,025, and 8,822,490 based upon Mylan Pharmaceutical Inc.’s filing of its ANDA seeking to obtain approval to market a generic version of RELISTOR prefilled syringes before some or all of these patents expire. On January 25, 2016, Progenics, Salix, Bausch, and Wyeth filed an amended complaint, further seeking declaratory judgment of infringement of U.S. Patent No. 9,180,125. Progenics, Salix, Bausch, and Wyeth filed suit against Mylan Pharmaceuticals, Inc., Mylan Laboratories Ltd., and Mylan Inc. in the District of New Jersey on September 1, 2017 (2:17-cv-06714-SRC-CLW) seeking declaratory judgment of infringement of U.S. Patent No. 9,669,096 based upon Mylan Pharmaceutical Inc.’s filing of ANDAs seeking to obtain approval to market generic versions of RELISTOR vials and prefilled syringes before the patents expires. On September 18, 2017, Progenics, Salix, Bausch, and Wyeth filed an amended complaint, further seeking declaratory judgment of infringement of U.S. Patent No. 9,492,445.

The 2:15-cv-8180-SRC-CLW, 2:16-cv-00035-SRC-CLW, 2:15-cv-08353-SRC-CLW, and 2:16-cv-00889-SRC-CLW actions were consolidated into a single action in the District of New Jersey (2:15-cv-08180-SRC-CLW). On May 1, 2018, the Court granted Plaintiffs’ motion for partial summary judgment as to the validity of claim 8 of U.S. Patent No. 8,552,025. On May 23, 2018, the Court entered an order for final judgment under Fed. R. Civ. P. 54(b) in favor of Plaintiffs and against Mylan as to claim 8 of the ’025 patent.

Litigation in the 2:17-cv-06714-SRC-CLW action is underway. Fact discovery in this action has closed and expert discovery deadlines have not yet been set. This action has been consolidated for purposes of trial only with the 2:15-cv-8180 action.

Federal Circuit Appeal

On May 25, 2018, Mylan filed a Notice of Appeal to the United States Court of Appeals for the Federal Circuit. The matter is currently pending on appeal at the Federal Circuit.

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On July 9, 2018, Bausch and Salix filed a motion to disqualify Katten Muchin Rosenman LLP as counsel for Mylan. On July 17, 2018, an order was issued stating the briefing on the merits of Mylan’s appeal pending the disposition of the motion to disqualify. Oral argument was held on September 12, 2018. A decision disqualifying Katten Muchin Rosenman LLP as counsel for Mylan was issued on February 8, 2019, by the Federal Circuit. Merits briefing is currently underway. Mylan submitted its opening brief on April 9, 2019. The deadline for submission of Plaintiffs’ reply brief is June 18, 2019.

RELISTOR Tablets - Actavis

Paragraph IV Certifications

On or about October 24, 2016 and October 24, 2017, Progenics, Salix, Bausch and Wyeth received two separate notifications of a Paragraph IV certification for RELISTOR (methylnaltrexone bromide) tablets, for certain patents that are listed in the FDA’s Orange Book. The certification resulted from the filing by Actavis Laboratories Fl., Inc. (“Actavis”) of an ANDA with the FDA, challenging such patents for RELISTOR tablets and seeking to obtain approval to market a generic version of RELISTOR tablets before some or all of these patents expire.

District Court Actions

Progenics, Salix, Bausch, and Wyeth filed suit against Actavis Laboratories FL, Inc., Actavis LLC, Teva Pharmaceuticals USA, Inc., and Teva Pharmaceuticals Industries Ltd. in the District of New Jersey on December 6, 2016 (2:16-cv-09038-SRC-CLW) seeking declaratory judgment of infringement of U.S. Patent Nos. 8,420,663, 8,524,276, 8,956,651, 9,180,125, and 9,314,461 based upon Actavis’s filing of an ANDA seeking to obtain approval to market a generic version of RELISTOR tablets before some or all of these patents expire.

Progenics, Salix, Bausch, and Wyeth filed suit against Actavis Laboratories FL, Inc., Actavis LLC, Teva Pharmaceuticals USA, Inc., and Teva Pharmaceuticals Industries Ltd. in the District of New Jersey on December 8, 2017 (2:17-cv-12857-SRC-CLW) seeking declaratory judgment of infringement of U.S. Patent Nos. 9,724,343 and 9,492,445 based upon Actavis’s filing of an ANDA seeking to obtain approval to market a generic version of RELISTOR tablets before some or all of these patents expire.

The 2:16-cv-09038-SRC-CLW and 2:17-cv-12857-SRC-CLW actions were consolidated into a single action in the District of New Jersey (2:16-cv-09038-SRC-CLW). Litigation is underway and expert discovery is complete. On April 4, 2019, the Court issued an order scheduling trial for the week of May 6, 2019.

European Opposition Proceedings

In addition to the above described ANDA notifications, in October 2015, Progenics received notices of opposition to three European patents relating to methylnaltrexone. Notices of opposition against EP1615646 were filed on September 24, 2015 separately by each of Actavis Group PTC ehf and Fresenius Kabi Deutschland GmbH. Notices of opposition against EP2368553 were filed on September 29, 2015 and September 30, 2015 by Fresenius Kabi Deutschland GmbH and Actavis Group PTC ehf, respectively. Notices of opposition against EP2368554 were filed on September 24, 2015 separately by each of Actavis Group PTC ehf and Fresenius Kabi Deutschland GmbH. On May 11, 2017, the opposition division provided notice that EP2368553 will be revoked. On June 28, 2017, the opposition division provided notice that EP1615646 will be revoked. On July 4, 2017, the opposition division provided notice that EP2368554 will be revoked. Each of these matters are on appeal with the European Patent Office.

For each of the above-described proceedings, we and Bausch continue to cooperate closely to vigorously defend and enforce RELISTOR intellectual property rights. Pursuant to the RELISTOR license agreement between Progenics and Bausch, Bausch has the first right to enforce the intellectual property rights at issue and is responsible for the costs of such enforcement.

We are or may be from time to time involved in various other disputes, governmental and/or regulatory inspections, inquires, investigations and proceedings that could result in litigation, and other litigation matters that arise from time to time. The process of resolving matters through litigation or other means is inherently uncertain and it is possible that an unfavorable resolution of these matters will adversely affect us, our results of operations, financial condition, and cash flows.

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PSMA-617

German District Court Litigation

We announced a lawsuit and associated worldwide patent ownership dispute based on our claims to certain inventions related to PSMA-617, a PSMA-targeted radiopharmaceutical compound under development for the treatment of prostate cancer that is the subject of certain European Patent Applications filed by the University of Heidelberg (“the University”).

On November 8, 2018, MIP filed a complaint against the University in the District Court of Mannheim in Germany. In this Complaint, the Company claims that the discovery and development of PSMA-617 was related to work performed under a research collaboration sponsored by MIP. MIP alleged that the University breached certain contracts with MIP and that MIP is the co-owner of inventions embodied in certain worldwide patent filings related to PSMA-617, currently pending in Europe and the United States that were filed by the University in its own name. On February 27, 2019, Endocyte, Inc., a wholly owned subsidiary of Novartis AG, filed a motion to intervene in the German litigation. Endocyte is the exclusive licensee of the patent rights that are the subject of the German proceedings.

On November 27, 2018, MIP requested that the European Patent Office (“EPO”) stay the examination of European Patent (EP) 3 038 996 A1 (EP 14 799 340.6) and of the Divisional Applications EP 18 172 716.5, EP18 184 296.4, and EP 18 203 547.7 pending a decision from the German District court on MIP’s Complaint. On December 10, 2018, the EPO granted MIP’s request and stayed the examination of the patent and patent applications effective November 27, 2018. Likewise, on December 20, 2018, MIP filed a Confirmation of Ownership with the United States Patent and Trademark Office (“USPTO”) in the corresponding US patent applications (US Serial Nos. 15/131,118; 16/038,729 and 16/114988). MIP’s filing with the USPTO takes the position that, in light of the collaboration and contracts between MIP and the University, MIP is the co-owner of these pending U.S. patent applications.

On February 27, 2019, the German District Court entered two orders in the litigation. First, the Court set €416, 000 as the amount MIP must deposit with the Court as security in the event of an unfavorable final decision on the merits of the dispute. Second, the Court set a hearing date of August 6, 2019 during which it will consider the various arguments of the parties and determine the next steps of the litigation.

Note 9. Operating Leases

We lease office and manufacturing space and certain office equipment under noncancelable operating leases. We determine whether an arrangement is or contains a lease at its inception. We recognize lease liabilities based on the present value of the minimum lease payments not yet paid, by using the lease term and discount rate determined at lease commencement. As our leases do not provide an implicit rate, we use our incremental borrowing rate of 9.5% commensurate with the underlying lease terms to determine the present value of our lease payments. Rental payments are recognized as rent expense on a straight-line basis over the term of the lease and for the three months ended March 31, 2019 we recognized rent expense in the amount of $0.5 million. Our leases have remaining lease terms of 1 year to 11.5 years, one of which includes an option to extend the lease for 5 years. For the three months ended March 31, 2019 cash payments against operating lease liabilities totaled $0.5 million.

The information related to our leases is as follows (in thousands):

	March 31,
Operating leases	2019
Operating ROU lease assets, noncurrent	$	13,293
Operating lease liabilities, current		414
Operating lease liabilities, noncurrent		14,787

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At March 31, 2019, future lease payments for noncancelable operating leases are as follows (in thousands):

2019 (excluding the three months ending March 31, 2019)	$	1,364
2020		1,852
2021		1,886
2022		2,133
2023		2,173
Thereafter		16,375
Total future minimum lease payments		25,783
Less imputed interest		(10,582	)
Total lease liabilities	$	15,201

Note 10. Non-Recourse Long-Term Debt, Net

On November 4, 2016, through a new wholly-owned subsidiary MNTX Royalties Sub LLC (“MNTX Royalties”), we entered into a $50.0 million loan agreement (the “Royalty-Backed Loan”) with a fund managed by HealthCare Royalty Partners III, L.P. (“HCRP”). Under the terms of the Royalty-Backed Loan, the lenders have no recourse to us or to any of our assets other than the right to receive royalty payments from the commercial sales of RELISTOR products owed under our agreement with Bausch. The RELISTOR royalty payments will be used to repay the principal and interest on the loan. The Royalty-Backed Loan bears interest at a per annum rate of 9.5%.

Under the terms of the loan agreement, payments of interest and principal, if any, are made on the last day of each calendar quarter out of RELISTOR royalty payments received since the immediately-preceding payment date. On each payment date prior to March 31, 2018, RELISTOR royalty payments received since the immediately preceding payment date were applied solely to the payment of interest on the loan, with any royalties in excess of the interest amount retained by us. Beginning on March 31, 2018, 50% of RELISTOR royalty payments received since the immediately-preceding payment date in excess of accrued interest on the loan are used to repay the principal of the loan, with the balance retained by us. Starting on September 30, 2021, all of the RELISTOR royalties received since the immediately-preceding payment date will be used to repay the interest and outstanding principal balance until the balance is fully repaid. The loan has a maturity date of June 30, 2025. Upon the occurrence of certain triggers in the loan agreement and if HCRP so elects, all of the RELISTOR royalty payments received after the immediately-preceding payment date shall be applied to the payment of interest and repayment of principal until the principal of the loan is fully repaid. In the event of such an election by HCRP, we have the right to repay the loan without any prepayment penalty.

In connection with the Royalty-Backed Loan, the debt issuance costs have been recorded as a debt discount in our consolidated balance sheets and are being amortized and recorded as interest expense throughout the life of the loan using the effective interest method.

The following tables summarize the components of the Royalty-Backed Loan in our condensed consolidated financial statements for the periods presented (in thousands):

	March 31,			December 31,
Condensed Consolidated Balance Sheets	2019			2018
Outstanding principal balance, current portion	$	6,326		$	5,688
Unamortized debt discount, current portion		(262	)		(269	)
Current portion of debt, net	$	6,064		$	5,419
Outstanding principal balance, long-term portion	$	37,999		$	39,674
Unamortized debt discount, long-term portion		(431	)		(494	)
Long-term debt, net	$	37,568		$	39,180

	Three Months Ended
	March 31,
Condensed Consolidated Statements of Operations	2019		2018
Interest expense	$	1,077	$	1,205
Non-cash interest expense		71		63
Total interest expense included in interest (expense) income, net	$	1,148	$	1,268

As of March 31, 2019, we were in compliance with all material covenants under the Royalty-Backed Loan and there was no material adverse change in our business, operations, or financial conditions, as defined in the loan agreement.

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Note 11. Stockholders’ Equity

Common Stock and Preferred Stock

We are authorized to issue 160.0 million shares of our common stock, par value $0.0013, and 20.0 million shares of preferred stock, par value $0.001. The Board of Directors (the “Board”) has the authority to issue common and preferred shares, in series, with rights and privileges as determined by the Board.

Shelf Registration 

During the first quarter of 2017, we filed a shelf registration statement that permitted: (a) the offering, issuance and sale of up to a maximum aggregate offering price of $250.0 million of our common stock, preferred stock, debt securities, warrants, rights and/or units; and (b) as part of the $250.0 million, the offering, issuance and sale by us of up to a maximum aggregate offering price of $75.0 million of our common stock under our sales agreement with Cantor Fitzgerald & Co. (“Cantor”) in one or more at-the-market (“ATM”) offerings (the “2017 Sales Agreement”).

In October 2018, we filed a new shelf registration statement. The new shelf registration replaced our prior shelf registration statement, pursuant to which no additional securities will be offered or sold. The new shelf registration statement permits: (a) the offering, issuance and sale of up to a maximum aggregate offering price of $250.0 million of our common stock, preferred stock, debt securities, warrants, rights and/or units; and (b) as part of the $250.0 million, the offering, issuance and sale by us of up to a maximum aggregate offering price of $75.0 million of our common stock under our sales agreement with Cantor in one or more ATM offerings.

In addition, in October 2018 we entered into a new sales agreement with Cantor, as sales agent, which replaced the 2017 Sales Agreement (the “2018 Sales Agreement”). Pursuant to the 2018 Sales Agreement, we may offer and sell through Cantor, from time to time, shares of our common stock up to an aggregate offering price of $75.0 million. The 2018 Sales Agreement may be terminated by Cantor or us at any time upon ten days’ notice, or by Cantor at any time in certain circumstances, including the occurrence of a material adverse change in our business or financial condition.

Note 12. Stock-Based Compensation

Equity Incentive Plans

We adopted the following stockholder-approved equity incentive plans:

●     The 2005 Stock Incentive Plan (the “2005 Plan”), which authorized the issuance of up to 11,450,000 shares of common stock covering several different types of awards, including stock options, restricted shares, stock appreciation rights, performance shares, and phantom stock. The 2005 Plan was terminated in June 2018 at the time the 2018 Stock Incentive Plan was approved. Shares available for new awards under the 2005 Plan at the time of termination became available for awards under the 2018 Stock Incentive Plan. Options granted before termination of the 2005 Plan will continue to remain outstanding until exercised, cancelled or expired.

●     The 2018 Stock Incentive Plan (the “2018 Plan”), pursuant to which we are authorized to issue up to 4,800,000 shares of common stock covering several different types of awards, including stock options, restricted shares, stock appreciation rights, performance shares, and phantom stock. The 2018 Plan will terminate on March 27, 2028.

The stock option plans provide that options may be granted at an exercise price of 100% of fair market value of our common stock on the date of grant, may be exercised in full or in installments, at the discretion of the Board or its Compensation Committee, and must be exercised within ten years from date of grant. Stock options generally vest pro rata over three to five years. We recognize stock-based compensation expense on a straight-line basis over the requisite service (vesting) period based on fair values. We use historical data to estimate expected employee behaviors related to option exercises and forfeitures and included these expected forfeitures as a part of the estimate of stock-based compensation expense as of the grant date. We adjust the total amount of stock-based compensation expense recognized for each award, in the period in which each award vests, to reflect the actual forfeitures related to that award. Changes in our estimated forfeiture rate will result in changes in the rate at which compensation cost for an award is recognized over its vesting period.

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Stock Options

The following table summarizes stock options activity for the three months ended March 31, 2019 (in thousands, except per share data or as otherwise noted):

						Weighted
				Weighted		Average
	Number			Average		Remaining
	of Shares			Exercise Price		Contractual Life
Outstanding at January 1, 2019		6,264		$	6.79		6.02
Granted		1,373		$	4.52
Cancelled		(105	)	$	7.02
Expired		(28	)	$	7.79
Outstanding at March 31, 2019		7,504		$	6.36		6.53
Exercisable at March 31, 2019		4,860		$	6.58		5.05
Vested and expected to vest at March 31, 2019		6,749		$	6.44		6.21

The weighted-average fair value of options granted during the three months ended March 31, 2019 and 2018 was $2.87 and $4.34 per share, respectively.

The total intrinsic value (the excess of the market price over the exercise price) was approximately $0.2 million for stock options outstanding, $0.1 million for stock options exercisable, and $0.2 million for stock options vested and expected to vest as of March 31, 2019. No stock options were exercised during the three months ended March 31, 2019 and 2018.

Stock-Based Compensation Expense

We account for stock-based awards issued to employees in accordance with the provisions of ASC 718 (Topic 718, Compensation – Stock Compensation). We recognize stock-based compensation expense on a straight-line basis over the service period of the award, which is generally three to five years. Stock-based awards issued to consultants are accounted for in accordance with the provisions of ASC 718 and ASC 505-50 (Subtopic 50 “Equity-Based Payments to Non-Employees” of Topic 505, Equity). Options granted to consultants are periodically revalued as the options vest and are recognized as an expense over the related period of service or the vesting period, whichever is longer. Under the provisions of ASC 718, members of the Board are considered employees for calculation of stock-based compensation expense.

We estimated the fair value of the stock options granted on the date of grant using a Black-Scholes valuation model that used the weighted-average assumptions noted in the following table. The risk-free interest rate assumption we use is based upon United States Treasury interest rates appropriate for the expected life of the awards. The expected life (estimated period of time that we expect employees, directors, and consultants to hold their stock options) was estimated based on historical rates for three group classifications, (i) employees, (ii) outside directors and officers, and (iii) consultants. Expected volatility was based on historical volatility of our stock price for a period equal to the stock option’s expected life and calculated on a daily basis. The expected dividend rate is zero since we do not currently pay cash dividends on our common stock and do not anticipate doing so in the foreseeable future.

	Three Months Ended
	March 31,
	2019			2018
Risk-free interest rate		2.62	%		2.68	%
Expected life (in years)		6.54			6.66
Expected volatility		66	%		69	%
Expected dividend yield		--			--

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Stock-based compensation expense for the three months ended March 31, 2019 and 2018 was recorded in our condensed consolidated statement of operations as follows (in thousands):

	Three Months Ended
	March 31,
	2019		2018
Research and development expenses	$	450	$	525
Selling, general and administrative expenses		627		523
Total stock-based compensation expense	$	1,077	$	1,048

At March 31, 2019, unrecognized stock-based compensation expense related to stock options was approximately $7.1 million and is expected to be recognized over a weighted-average period of approximately 2.4 years.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to assist the reader in understanding the business of Progenics Pharmaceuticals, Inc. and its subsidiaries (the “Company”, “Progenics”, “we”, or “us”). MD&A is provided as a supplement to, and should be read in conjunction with, our Annual Report on Form 10-K for the year ended December 31, 2018. Our results of operations discussed in MD&A are presented in conformity with accounting principles generally accepted in the U.S. (“GAAP”). We operate under a single research and development business segment. Therefore, our results of operations are discussed on a consolidated basis.

Note Regarding Forward-Looking Statements

This document and other public statements we make may contain statements that do not relate strictly to historical fact, any of which may be forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Statements contained in this communication that refer to our estimated or anticipated future results or other non-historical facts are forward-looking statements that reflect our current perception of existing trends and information as of the date of this communication. Forward looking statements generally will be accompanied by words such as “anticipate”, “believe”, “plan”, “could”, “should”, “estimate”, “expect”, “forecast”, “outlook”, “guidance”, “intend”, “may”, “might”, “will”, “possible”, “potential”, “predict”, “project”, or other similar words, phrases or expressions. In evaluating such statements, we urge you to specifically consider the various risk factors identified under Part I, Item 1A. “Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2018, which could cause actual events or results to differ materially from those indicated by forward-looking statements. Forward-looking statements involve known and unknown risks and uncertainties which may cause our actual results, performance or achievements to be materially different from those expressed or implied by such statements. While it is impossible to identify or predict all such matters, these differences between forward-looking statements and our actual results, performance or achievement may result from, among other things, the inherent uncertainty of the timing and success of, and expense associated with, research, development, regulatory approval and commercialization of our products and product candidates, including the risks that clinical trials will not commence or proceed as planned; products which appear to be promising in early trials will not demonstrate efficacy or safety in larger-scale trials; clinical trial data on our products and product candidates will be unfavorable; our products will not receive marketing approval from regulators or, if approved, do not gain sufficient market acceptance to justify development and commercialization costs; the sales of RELISTOR^® and other products by our partners and the revenue and income generated for us thereby may not meet expectations; our commercial launch of AZEDRA^® may not meet revenue and income expectations; competing products currently on the market or in development might reduce the commercial potential of our products; we, our collaborators or others might identify side effects after the product is on the market; or efficacy or safety concerns regarding marketed products, whether or not originating from subsequent testing or other activities by us, governmental regulators, other entities or organizations or otherwise, and whether or not scientifically justified, may lead to product recalls, withdrawals of marketing approval, reformulation of the product, additional pre-clinical testing or clinical trials, changes in labeling of the product, the need for additional marketing applications, declining sales, or other adverse events.

We are also subject to risks and uncertainties associated with the actions of our corporate, academic and other collaborators and government regulatory agencies, including risks from market forces and trends; potential product liability; intellectual property, litigation and other dispute resolution, environmental and other risks; a potential inability to obtain sufficient capital, recruit and retain employees, enter into favorable collaborations, transactions, or other relationships, or the risk that existing or future relationships or transactions may not proceed as planned; the potential for cybersecurity breaches of our systems and information technology; the risk that current and pending patent protection for our products may be invalid, unenforceable or challenged, or fail to provide adequate market exclusivity, or that our rights to in-licensed intellectual property may be terminated for our failure to satisfy performance milestones; the risk of difficulties in, and regulatory compliance relating to, manufacturing products; and the uncertainty of our future profitability.

Risks and uncertainties to which we are subject also include general economic conditions, including interest and currency exchange-rate fluctuations and the availability of capital; changes in generally accepted accounting principles; the impact of legislation and regulatory compliance; the highly regulated nature of our business, including government cost-containment initiatives and restrictions on third-party payments for our products; trade buying patterns; the competitive climate of our industry; and other factors set forth in this document and other reports filed with the U.S. Securities and Exchange Commission (“SEC”). In particular, we cannot assure you that AZEDRA^® or RELISTOR^® will be commercially successful or be approved in the future in other formulations, indications or jurisdictions, that any of our other programs will result in a commercial product.

We do not have a policy of updating or revising forward-looking statements and, except as expressly required by law, we disclaim any intent or obligation to update or revise any statements as a result of new information or future events or developments. It should not be assumed that our silence over time means that actual events are bearing out as expressed or implied in forward-looking statements.

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Overview

Business

We are an oncology company focused on the development and commercialization of innovative targeted medicines and artificial intelligence to find, fight and follow cancer. Highlights of our recent progress include the establishment of manufacturing capabilities, approval and launch of AZEDRA^®. Our pipeline includes therapeutic agents designed to precisely target cancer (1095 and PSMA TTC), as well as a prostate-specific membrane antigen (“PSMA”) targeted imaging agent for prostate cancer (PyL^TM).

Our business strategy requires us to manage our business to provide for the continued development, manufacturing and potential commercialization of our proprietary and partnered product candidates. This includes identifying and advancing a pipeline of product candidates by identifying product candidates, technologies and businesses for acquisition and in-licensing that we believe are a strategic fit with our existing business.

Our strategy also calls for us to undertake increased research and development activities and to manage an increasing number of relationships with partners and other third parties, while simultaneously managing the capital necessary to support this strategy. An element of our research and development strategy has been to in-license technology and product candidates.

We may consider opportunities to out-license our development and clinical programs. We may also in-license or acquire additional oncology compounds and/or programs.

Product / Candidate	Description	Status	Market	Rights
Ultra-Orphan Theranostic
AZEDRA (iobenguane I 131)  555 MBq/mL injection	Unresectable, locally advanced or metastatic pheochromocytoma or paraganglioma	Approved	U.S	Progenics
Prostate Cancer Theranostics
PyL (18F-DCFPyL)	PSMA-targeted PET/CT imaging agent for prostate cancer	Phase 3	U.S. & Canada	Progenics
PyL (18F-DCFPyL)	PSMA-targeted PET/CT imaging agent for prostate cancer	Meeting with EMA	Europe	Curium
1095 (I 131 1095)	PSMA-targeted small molecule therapeutic for treatment of metastatic prostate cancer	Phase 2	Worldwide	Progenics
PSMA-TTC (BAY 2315497)	PSMA-targeted antibody conjugate therapeutic for treatment of metastatic prostate cancer	Phase 1	Worldwide	Bayer
Digital Technology
PSMA AI	Imaging analysis technology that uses artificial intelligence and machine learning to quantify and automate the reading of PSMA targeted imaging	Investigational Use Only	Worldwide	Progenics
Automated Bone Scan Index (aBSI)	Automated reading and quantification of bone scans of prostate cancer patients using artificial intelligence and deep learning	CE MARK (EU countries)  Investigational Use Only (USA)	Worldwide (ex. Japan)	Progenics
Automated Bone Scan Index (BONENAVI)	Automated reading and quantification of bone scans of prostate cancer patients using artificial intelligence and deep learning	Approved	Japan	Fuji
Other Programs
RELISTOR Subcutaneous Injection (methylnaltrexone bromide)	OIC in adults with chronic non-cancer pain or advanced-illness adult patients	Approved	U.S. & Canada	Bausch
RELISTOR Tablets    (methylnaltrexone bromide)	OIC in adults with chronic non-cancer pain	Approved	U.S.	Bausch
Leronlimab (PRO 140)	HIV Infection	Rolling BLA Submission	U.S.	CytoDyn

Ultra-Orphan Theranostic: 

● AZEDRA^® (iobenguane I 131) is a radiotherapeutic, approved for the treatment of adult and pediatric patients 12 years and older with iobenguane scan positive, unresectable, locally advanced or metastatic pheochromocytoma or paraganglioma who require systemic anticancer therapy. AZEDRA is the first and only FDA-approved therapy for this indication. We anticipate opportunities for growth of AZEDRA beyond its existing label through the development of new indications.

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Prostate Cancer Theranostics:

● PyL™ (also known as 18F-DCFPyL) is a fluorinated PSMA-targeted PET imaging agent that enables visualization of both bone and soft tissue metastases to determine the presence or absence of recurrent and/or metastatic prostate cancer. In the US, we are conducting a pivotal Phase 3 trial evaluating the diagnostic performance and clinical impact of PyL in men with biochemical recurrence of prostate cancer. Curium has licensed exclusive rights to develop and commercialize PyL in Europe. Curium plans to meet with the EMA to agree upon the regulatory path forward for PyL in 2019.

● 1095 (also known as I-131-1095) is a PSMA-targeted Iodine-131 labeled small molecule that is designed to deliver a dose of beta radiation directly to prostate cancer cells with minimal impact on the surrounding healthy tissues. We are conducting a Phase 2 clinical trial in combination with enzalutamide in chemotherapy-naïve patients with metastatic castration-resistant prostate cancer (mCRPC).

● PSMA TTC is a thorium-227 labeled PSMA-targeted antibody therapeutic. PSMA-TTC is designed to deliver a dose of alpha radiation directly to prostate cancer cells with minimal impact on the surrounding healthy tissues. Bayer AG (“Bayer”) has exclusive worldwide rights to develop and commercialize products using our PSMA antibody technology in combination with Bayer’s alpha-emitting radionuclides. Bayer is developing PSMA TTC, a thorium-227 labeled PSMA-targeted antibody therapeutic. Bayer initiated a Phase 1 trial of PSMA TTC in patients with metastatic castration-resistant prostate cancer.

Digital Technology:

● PSMA AI is an imaging analysis technology that uses artificial intelligence and machine learning to quantify and automate the reading of PSMA-targeted imaging. We recently completed a prospectively planned retrospective analysis using our deep convolutional neural network algorithms to automatically assess a set of the PSMA images from prior trials. The results from this analysis will be presented at an upcoming scientific conference in June 2019.

● Automated Bone Scan Index (aBSI) calculates the disease burden of prostate cancer by quantifying the hotspots on bone scans and automatically calculating the bone scan index value, representing the disease burden of prostate cancer shown on the bone scan. This quantifiable and reproducible calculation of the bone scan index value is intended to aid in the diagnosis and treatment of men with prostate cancer and may have utility in monitoring the course of the disease. aBSI is licensed as a standalone software to FUJIFILM RI Pharma Co., Ltd. (“Fuji”) in Japan and is sold under the name BONENAVI^®. aBSI is also available as a cloud-based software for research only purposes with the United States.

Other Programs:

● RELISTOR^® is a treatment for opioid-induced constipation (“OIC”) that addresses its underlying mechanism of OIC and decreases the constipating side effects induced by opioid pain medications such as morphine and codeine without diminishing their ability to relieve pain. RELISTOR is approved in two forms a subcutaneous injection (12 mg and 8 mg) and an oral tablet (450 mg once daily). Any references herein to RELISTOR do not imply that any other form or possible use of the drug has received approval. RELISTOR subcutaneous injection is being sold in the U.S., European Union (“E.U.”), and Canada, and RELISTOR tablets are being sold in the U.S. RELISTOR’s approved U.S. label and full U.S. prescribing information is available at www.RELISTOR.com. Other approved labels for RELISTOR apply in ex-U.S. markets.

● Leronlimab (PRO 140) is a fully humanized monoclonal antibody which is a cellular targeting CCR5 entry antagonist and is currently in Phase 3 development for the treatment of HIV infection. It is owned by CytoDyn and, pursuant to our agreement with CytoDyn, we have the right to receive certain milestone and royalty payments. CytoDyn announced in March 2019 that it filed its first of three sections of its its Biologics License Application (“BLA”) to the FDA for leronlimab for the treatment of HIV under the Rolling Review process.

We may consider opportunities to out-license our development and clinical programs. We may also in-license or acquire additional oncology compounds and/or programs.

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Bausch Agreement

Under our agreement with Bausch, we received a development milestone of $40.0 million upon U.S. marketing approval for subcutaneous RELISTOR in non-cancer pain patients in 2014, and a development milestone of $50.0 million for the U.S. marketing approval of an oral formulation of RELISTOR in 2016. We are also eligible to receive up to $200.0 million of commercialization milestone payments upon first achievement of specified U.S. net sales targets in any single calendar year. The following table summarizes the commercialization milestones:

U.S. Net Sales Levels in any Single Calendar Year	Payment
	(In thousands)
In excess of $100 million	$	10,000
In excess of $150 million		15,000
In excess of $200 million		20,000
In excess of $300 million		30,000
In excess of $750 million		50,000
In excess of $1 billion		75,000
	$	200,000

Each commercialization milestone payment is payable one time only, regardless of the number of times the condition is satisfied, and all six payments could be made within the same calendar year. We are also eligible to receive royalties from Bausch and its affiliates based on the following royalty scale: 15% on worldwide net sales up to $100 million, 17% on the next $400 million in worldwide net sales, and 19% on worldwide net sales over $500 million each calendar year, and 60% of any upfront, milestone, reimbursement or other revenue (net of costs of goods sold, as defined, and territory-specific research and development expense reimbursement) Bausch receives from sublicensees outside the U.S.

Bausch has also entered into license and distribution agreements to expand its sales channels outside of the U.S. for RELISTOR.

Bayer Agreement 

Under our April 2016 agreement with a subsidiary of Bayer AG (“Bayer”) granting Bayer exclusive worldwide rights to develop and commercialize products using our PSMA antibody technology, we received an upfront payment of $4.0 million and milestone payments totaling $3.0 million and could receive up to an additional $46.0 million in potential clinical and regulatory development milestones. We are also entitled to single-digit royalties on net sales, and potential net sales milestone payments up to an aggregate total of $130.0 million as well as royalty payments.

CytoDyn Agreement

We sold Leronlimab (PRO 140) to CytoDyn Inc. (“CytoDyn”) in 2012, which sale included milestone and royalty payment obligations to us. Leronlimab is a fully humanized monoclonal antibody which is a cellular targeting CCR5 entry antagonist and is currently in development for the treatment of HIV. CytoDyn has announced plans to submit on a rolling basis its BLA to the FDA during 2019.

Under our 2012 agreement with CytoDyn, CytoDyn is responsible for all development, manufacturing and commercialization efforts. Pursuant to such agreement, we have received $5.0 million in upfront and milestone payments, together with rights to receive an additional $5.0 million upon the first U.S. or E.U. approval for the sale of the drug, and a 5% royalty on the net sales of approved product(s).

Results of Operations

The following table is an overview of our results of operations (in thousands, except percentages):

	Three Months Ended
	March 31,
	2019			2018			Change
Total revenue	$	4,281		$	3,189			34	%
Operating expenses	$	22,516		$	15,607			(44%	)
Operating loss	$	(18,235	)	$	(12,418	)		(47%	)
Net loss	$	(18,735	)	$	(13,424	)		(40%	)

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Revenue

Our sources of revenue include royalties and license fees from Bausch and other collaborators and, to a small extent, sale of research reagents. The following table is a summary of our worldwide revenue (in thousands, except percentages):

	Three Months Ended
	March 31,
Source	2019		2018		Change
Royalty income	$	4,161	$	3,058		36	%
Other revenue		120		131		(8%	)
Total revenue	$	4,281	$	3,189		34	%

Royalty income. We recognized royalty income primarily based on the below net sales of RELISTOR as reported to us by Bausch (in thousands, except percentages).

	Three Months Ended
	March 31,
	2019		2018		Change
U.S.	$	26,400	$	20,300		30	%
Outside U.S.		1,300		100		1200	%
Worldwide net sales of RELISTOR	$	27,700	$	20,400		36	%

Royalty income increased by $1.1 million, or 36%, during the three months ended March 31, 2019, compared to the same period in 2018, due primarily to higher net sales.

Other revenue. The other revenue remained flat at $0.1 million during the three months ended March 31, 2019, compared to the same period in 2018.

Operating Expenses

The following table is a summary of our operating expenses (in thousands, except percentages):

	Three Months Ended
	March 31,
Operating Expenses	2019		2018		Change
Research and development	$	12,392	$	8,110		(53%	)
Selling, general and administrative		9,224		6,697		(38%	)
Change in contingent consideration liability		900		800		(13%	)
Total operating expenses	$	22,516	$	15,607		(44%	)

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Research and Development (“R&D”)

We do not track fully burdened research and development costs separately for each of our product candidates. We review our research and development expenses by focusing on external and internal development costs. External development costs consist of costs associated with our clinical trials, including pharmaceutical development and manufacturing of clinical trial materials. Included in other costs are external corporate overhead costs that are not specific or allocated to any one program. Internal costs consist of salaries and wages, share-based compensation and benefits, which are not tracked by program as several of our departments support multiple development programs. The following table summarizes the external costs attributable to each program and internal costs (in thousands):

	Three Months Ended March 31,
	2019		2018
External Costs
PyL	$	3,152	$	1,590
AZEDRA		3,711		1,170
1404		127		1,285
1095		878		383
PSMA AI		307		170
Other		645		162
Total External Costs	$	8,820	$	4,760
Internal Costs		3,572		3,350
Total R&D Costs	$	12,392	$	8,110

R&D expenses increased by $4.3 million, or 53%, during the three months ended March 31, 2019, compared to the same period in 2018. The increase resulted primarily from one-time transition costs for the AZEDRA manufacturing site and higher clinical and contract manufacturing costs for PyL.

Selling, General and Administrative (“SG&A”)

SG&A expenses increased by $2.5 million, or 38%, during the three months ended March 31, 2019, compared to the same period in 2018. The increase was primarily attributable to higher costs associated with the buildout of commercial infrastructure to support the launch and distribution of AZEDRA and higher legal fees.

Change in Contingent Consideration Liability

The increase in the contingent consideration liability of $0.9 million and $0.8 million during the three months ended March 31, 2019 and 2018, respectively, was primarily attributable to an increase in the probability of success for the AZEDRA commercialization milestone and a decrease in the discount period used to calculate the potential milestone payments to former Molecular Insight stockholders.

Other (Expense) Income

The following table is a summary of our other (expense) income (in thousands, except percentages):

	Three Months Ended
	March 31,
	2019			2018			Change
Interest (expense) income, net	$	(429	)	$	(943	)		55	%
Other (expense) income, net		(71	)		(63	)		(13%	)
Other (expense) income	$	(500	)	$	(1,006	)		50	%

Total other (expense) income, net decreased by $0.5 million, or 50%, during the three months ended March 31, 2019, compared to the same period in 2018.

Liquidity and Capital Resources

The following table is a summary of selected financial data (in thousands):

	March 31,		December 31,
	2019		2018
Cash and cash equivalents	$	109,587	$	137,686
Accounts receivable, net	$	4,935	$	3,803
Total assets	$	164,204	$	169,497
Working capital	$	93,201	$	120,683

31

Our current principal sources of revenue from operations are royalties and development and commercial milestones. Our principal sources of liquidity are our existing cash and cash equivalents. As of March 31, 2019, we had cash and cash equivalents of approximately $109.6 million, a decrease of $28.1 million from $137.7 million at December 31, 2018, reflecting primarily cash used for operating expenses and for the acquisition, transition and start-up costs of the Somerset manufacturing site for the AZEDRA launch. We expect to continue to have significant cash requirements to support product development activities and the commercial launch of AZEDRA. The amount and timing of our cash requirements will depend on the progress and success of our clinical development programs, regulatory and market acceptance, and the resources we devote to research and commercialization activities. The amount of cash on-hand will depend on the progress of various clinical programs, potential sales from the launch of AZEDRA, and the achievement of various milestones and royalties under our existing license agreements.

We believe that our current cash and cash equivalents will be sufficient to fund our operations for at least the next twelve months. We expect to fund our operations going forward with existing cash resources, anticipated revenues from our existing license agreements, sales of AZEDRA, and cash that we may raise through future capital raising and other financing transactions.

If we do not realize sufficient royalty or milestone revenue from our license agreements, sales of AZEDRA, or are unable to enter into favorable collaboration, license, asset sale, additional capital raising, or other financing transactions, we will have to reduce, delay, or eliminate spending on certain programs, and/or take other economic measures.

Cash Flows

The following table is a summary of our cash flow activities (in thousands):

	Three Months Ended
	March 31,
	2019			2018
Net cash used in operating activities	$	(18,519	)	$	(14,256	)
Net cash used in investing activities	$	(8,491	)	$	(16	)
Net cash (used in) provided by financing activities	$	(1,037	)	$	9,524

Operating Activities

 Net cash used in operating activities during the three months ended March 31, 2019 was primarily attributable to operating expenses, net of non-cash items including the change in fair value of contingent consideration liability.

Investing Activities

Net cash used in investing activities during the three months ended March 31, 2019 was primarily related to acquisition of AZEDRA manufacturing assets in Somerset, New Jersey and capital expenditures.

Financing Activities

Net cash used in financing activities during the three months ended March 31, 2019 was primarily attributable to repayment of debt under the Royalty-Backed Loan with HCRP.

Off-Balance Sheet Arrangements and Guarantees

We have no obligations under off-balance sheet arrangements and do not guarantee the obligations of any other unconsolidated entity.

Critical Accounting Policies

We prepare our financial statements in conformity with accounting principles generally accepted in the U.S. Our significant accounting policies are disclosed in Note 2. Summary of Significant Accounting Policies to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2018. The selection and application of these accounting principles and methods requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, as well as certain financial statement disclosures. We evaluate these estimates on an ongoing basis. We base these estimates on historical experience and on various other assumptions that we believe reasonable under the circumstances. The results of these evaluations form the basis for making judgments about the carrying values of assets and liabilities that are not otherwise readily apparent. While we believe that the estimates and assumptions we use in preparing the financial statements are appropriate, they are subject to a number of factors and uncertainties regarding their ultimate outcome and, therefore, actual results could differ from these estimates.

32

There have been no changes to our critical accounting policies and estimates as of and for the three months ended March 31, 2019 as noted in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2018.

Recent Accounting Developments

Refer to our discussion of recently adopted accounting pronouncements and other recent accounting pronouncements in Note 2. New Accounting Pronouncements to the accompanying unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Our primary investment objective is to preserve principal. Our money market funds have variable interest rates and totaled $104.9 million at March 31, 2019. As a result, we do not believe that these investment balances have a material exposure to interest-rate risk.

The majority of our business is conducted in U.S. dollars. However, we do conduct certain transactions in other currencies, including Euros, British Pounds, Swiss Francs, and Swedish Krona. Historically, fluctuations in foreign currency exchange rates have not materially affected our condensed consolidated results of operations, and during the three months ended March 31, 2019 and 2018, our consolidated results of operations were not materially affected by fluctuations in foreign currency exchange rates.

Item 4. Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports, is recorded, processed, summarized and reported within the timelines specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required disclosures. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving the desired control objectives, and in reaching a reasonable level of assurance, management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. We have a Disclosure Committee consisting of certain members of our senior management which monitors and implements our policy of disclosing material information concerning the Company in accordance with applicable law.

As required by SEC Rule 13a-15(e), we carried out an evaluation, under the supervision and with the participation of senior management, including our CEO and CFO, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based upon the foregoing, our CEO and CFO concluded that our current disclosure controls and procedures, as designed and implemented, were effective at the reasonable assurance level.

There have been no changes in our internal control over financial reporting, as such term is defined in the Exchange Act Rules 13a-15(f) and 15d-15(f), during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

There have been no material changes from the information discussed in Part I, Item 3. Legal Proceedings of our Annual Report on Form 10-K for the year ended December 31, 2018. We are or may be from time to time involved in various other disputes, governmental, and/or regulatory inspections, inquiries, investigations, and proceedings that could result in litigation, and other litigation matters that arise from time to time. The process of resolving matters through litigation or other means is inherently uncertain and it is possible that an unfavorable resolution of these matters will adversely affect us, our results of operations, financial condition, and cash flows. Refer to our discussion in Note 8. Commitments and Contingencies to the accompanying unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

33

Item 1A. Risk Factors

The following risk factor and other information included in this Quarterly Report on Form 10-Q should be carefully considered. Other than the risk factor below, there have been no material changes from the information discussed in Part I, Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2018. You should carefully consider the risks and uncertainties we discussed below and in our Form 10-K before deciding to invest in, or retain, shares of our common stock. These are not the only risks and uncertainties that we face. Additional risks and uncertainties that we do not currently know about or that we currently believe are immaterial, or that we have not predicted, may also harm our business operations or adversely affect us. If any of these risks or uncertainties actually occur, our business, financial condition, operating results, or liquidity could be materially harmed.

Our business could be negatively affected as a result of actions of activist stockholders, which could cause uncertainty about the strategic direction of our business and negatively impact the trading value of our securities.

Activist stockholders may, from time to time, attempt to effect changes in our strategic direction and how our company is governed or may seek to acquire control over our company. Activist stockholders may seek to increase short-term stockholder value by advocating corporate actions such as financial restructuring, increased borrowing, special dividends, stock repurchases, or even sales of assets or the entire company. Activist campaigns can also seek to change the composition of our board of directors, and campaigns that contest or conflict with our strategic direction could have an adverse effect on our results of operations and financial condition. We may not be able to successfully defend against activist stockholders, which could be disruptive to our business. Even if we successfully defend against a proxy contest or activist campaign, responding to activist stockholders can be costly and time-consuming, and can divert significant time and attention of our board of directors and management from pursuing our business strategies.

On May 7, 2019, Velan Capital, L.P., Altiva Management Inc., Balaji Venkataraman, Virinder Nohria, LTE Partners, LLC, LTE Management, LLC, Melkonian Capital Management, LLC, Ryan Melkonian, Terence Cooke and Deepak Sarpangal filed a preliminary proxy statement with the SEC seeking stockholder support to vote against, or abstain from voting on (i.e., a “withhold campaign”), the re-election of certain directors of the Company at the 2019 annual meeting of stockholders. Such a “withhold campaign” cannot result in persons unsupported by the Company being elected to the board of directors. However, such a “withhold campaign” may result in unanticipated perceived uncertainties as to our future direction, control, and ability to execute on our strategy, which could lead to the perception of instability or a change in the direction of our business, as well as a belief that the board of directors might decide to implement changes to its composition or management. Such perceptions and beliefs may result in the loss of potential business opportunities, make it more difficult to pursue our strategic initiatives, or limit our ability to attract and retain qualified personnel and business partners, any of which could adversely affect our business and operating results.

If directors ultimately fail to be elected to our board of directors as a result of the “withhold campaign,” it may adversely affect our ability to effectively implement our business strategy and to create additional value for our stockholders.

We may choose to initiate, or may become subject to, litigation as a result of the “withhold campaign,” a proxy contest or matters arising from the “withhold campaign” or proxy contest, which would serve as a further distraction to our board of directors and management and could require us to incur significant additional costs.

Actions such as those described above could cause significant fluctuations in our stock price based upon temporary or speculative market perceptions or other factors that do not necessarily reflect the underlying fundamentals and prospects of our business.

34

Item 6. Exhibits

(a)  Exhibits

Exhibit Number *	Description
3.1(1)	Amended and Restated Certificate of Incorporation of the Registrant.
3.2(2)	Amended and Restated By-laws of the Registrant.
4.1(3)	Specimen Certificate for Common Stock, $0.0013 par value per share, of the Registrant.
10.1(4)	Progenics Pharmaceuticals, Inc. 2018 Performance Incentive Plan.
10.2(5)	Settlement and License Agreement by and among Progenics Pharmaceuticals, Inc., Valeant Pharmaceuticals International, Inc., Salix Pharmaceuticals, Inc., Wyeth LLC, and Actavis LLC., entered into as of May 25, 2018.
10.3(6)	Settlement and License Agreement by and among Progenics Pharmaceuticals, Inc., Valeant Pharmaceuticals International, Inc., Salix Pharmaceuticals, Inc., Wyeth LLC, and Par Sterile Products, LLC and Par Pharmaceutical, Inc., dated May 10, 2018.
31.1	Certification of Mark R. Baker, Chief Executive Officer of the Registrant, pursuant to Rule 13a-14(a) and Rule 15d-14(a) under the Securities Exchange Act of 1934, as amended.
31.2	Certification of Patrick Fabbio, Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) of the Registrant, pursuant to Rule 13a-14(a) and Rule 15d-14(a) under the Securities Exchange Act of 1934, as amended.
32	Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	Interactive Data Files:
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.LAB	XBRL Taxonomy Extension Label Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase
101.DEF	XBRL Taxonomy Extension Definition Document

*      Exhibits footnoted as previously filed have been filed as an exhibit to the document of the Registrant or other registrant referenced in the footnote below, and are incorporated by reference herein.

⁽¹⁾  Previously filed in Current Report on Form 8-K filed on June 13, 2013.

⁽²⁾  Previously filed in Current Report on Form 8-K filed on April 1, 2019.

⁽³⁾  Previously filed in Registration Statement on Form S-1, Commission File No. 333-13627.

⁽⁴⁾  Previously filed in Current Report on Form 8-K filed on June 14, 2018.

⁽⁵⁾  Previously filed in Current Report on Form 8-K filed on May 31, 2018.

⁽⁶⁾  Previously filed in Current Report on Form 8-K filed on May 11, 2018.

35

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	PROGENICS PHARMACEUTICALS, INC.
Date: May 9, 2019	By:	/s/ Patrick Fabbio
		Patrick Fabbio Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)

36

EX-31.1

Exhibit 31.1

CERTIFICATION

PURSUANT TO RULE 13a-14(a) AND RULE 15d-14(a) UNDER THE

SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Mark R. Baker, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Progenics Pharmaceuticals, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	/s/ Mark R. Baker
Date: May 9, 2019	Mark R. Baker Chief Executive Officer (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

PURSUANT TO RULE 13a-14(a) AND RULE 15d-14(a) UNDER THE

SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Patrick Fabbio, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Progenics Pharmaceuticals, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	/s/ Patrick Fabbio
Date: May 9, 2019	Patrick Fabbio Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)

EX-32

Exhibit 32

CERTIFICATION PURSUANT 

TO 18 U.S.C. SECTION 1350, 

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 Each of the undersigned hereby certifies, in his capacity as an officer of Progenics Pharmaceuticals, Inc. (the “Company”), for the purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

(1) The Quarterly Report of the Company on Form 10-Q for the period ended March 31, 2019 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 9, 2019	/s/ Mark R. Baker
	Mark R. Baker Chief Executive Officer (Principal Executive Officer)
	/s/ Patrick Fabbio
	Patrick Fabbio Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Progenics Pharmaceuticals, Inc. and will be retained by Progenics Pharmaceuticals, Inc. and furnished to the Securities and Exchange Commission or its staff upon request. 

XML

Document And Entity Information - shares	3 Months Ended
	Mar. 31, 2019	May 06, 2019
Document Information [Line Items]
Entity Registrant Name	Progenics Pharmaceuticals Inc
Entity Central Index Key	0000835887
Trading Symbol	pgnx
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Current Reporting Status	Yes
Entity Emerging Growth Company	false
Entity Small Business	false
Entity Common Stock, Shares Outstanding (in shares)		84,542,514
Document Type	10-Q
Document Period End Date	Mar. 31, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1
Amendment Flag	false

XML

Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
ASSETS
Cash and cash equivalents	$ 109,587	$ 137,686
Accounts receivable, net	4,935	3,803
Other current assets	3,125	2,640
Total current assets	117,647	144,129
Property and equipment, net	6,062	3,944
Intangible assets, net	7,651	6,666
Goodwill	17,847	13,074
Operating right-of-use lease assets	13,293
Other assets	1,704	1,684
Total assets	164,204	169,497
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable	564	444
Accrued expenses	9,504	10,533
Contingent consideration liability	7,900	7,050
Current portion of debt, net	6,064	5,419
Operating lease liabilities	414
Total current liabilities	24,446	23,446
Long-term debt, net	37,568	39,180
Operating lease liabilities	14,787
Contingent consideration liability	4,000	3,950
Deferred tax liability	28	28
Other liabilities		1,818
Total liabilities	80,829	68,422
Commitments and Contingencies
Stockholders’ equity:
Preferred stock, $0.001 par value Authorized - 20,000 shares; issued and outstanding - none	0	0
Common stock, $0.0013 par value Authorized - 160,000 shares; issued - 84,742 shares in 2019 and 2018	110	110
Additional paid-in capital	714,096	713,019
Treasury stock at cost, 200 shares of common stock	(2,741)	(2,741)
Accumulated other comprehensive loss	(147)	(105)
Accumulated deficit	(627,943)	(609,208)
Total stockholders’ equity	83,375	101,075
Total liabilities and stockholders’ equity	$ 164,204	$ 169,497

XML

Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - $ / shares shares in Thousands	Mar. 31, 2019	Dec. 31, 2018
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	20,000	20,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.0013	$ 0.0013
Common stock, shares authorized (in shares)	160,000	160,000
Common stock, shares issued (in shares)	84,742	84,742
Treasury stock at cost, shares (in shares)	200	200

XML

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Revenue:
Revenue	$ 4,281	$ 3,189
Operating expenses:
Research and development	12,392	8,110
Selling, general and administrative	9,224	6,697
Change in contingent consideration liability	900	800
Total operating expenses	22,516	15,607
Operating loss	(18,235)	(12,418)
Other (expense) income:
Interest (expense) income and other income, net	(500)	(1,006)
Total other (expense) income	(500)	(1,006)
Net loss	$ (18,735)	$ (13,424)
Net loss per share - basic and diluted (in dollars per share)	$ (0.22)	$ (0.19)
Weighted-average shares - basic and diluted (in shares)	84,542	72,517
Royalty [Member]
Revenue:
Revenue	$ 4,161	$ 3,058
Product and Service, Other [Member]
Revenue:
Revenue	$ 120	$ 131

XML

Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Net loss	$ (18,735)	$ (13,424)
Other comprehensive loss:
Foreign currency translation adjustments	(42)	(18)
Comprehensive loss	$ (18,777)	$ (13,442)

XML

Condensed Consolidated Statement of Stockholders' Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands	Common Stock [Member]	Common Stock Subscribed [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]	Subscription Receivable [Member]	Treasury Stock [Member]	Total
Balance (in shares) at Dec. 31, 2017	71,325	320					(200)
Balance at Dec. 31, 2017	$ 93		$ 609,829	$ (541,586)	$ (33)	$ (2,109)	$ (2,741)	$ 63,453
Net loss				(13,424)				(13,424)
Foreign currency translation adjustments					(18)			(18)
Stock-based compensation expense			1,048					1,048
Balance (in shares) at Mar. 31, 2018	72,862	103					(200)
Balance at Mar. 31, 2018	$ 95		619,041	(554,975)	(51)	(750)	$ (2,741)	60,619
Cumulative effect of ASU 2014-09 adoption				35				35
Issuance of common stock in connection with at-the-market offering, net of commissions and issuance costs (in shares)	1,537	(320)
Issuance of common stock in connection with at-the-market offering, net of commissions and issuance costs	$ 2		7,414			2,109		9,525
Subscription of common stock in connection with at-the-market offering, net of commissions (in shares)		103
Subscription of common stock in connection with at-the-market offering, net of commissions			750			$ (750)
Balance (in shares) at Dec. 31, 2018	84,742						(200)
Balance at Dec. 31, 2018	$ 110		713,019	(609,208)	(105)		$ (2,741)	101,075
Net loss				(18,735)				(18,735)
Foreign currency translation adjustments					(42)			(42)
Stock-based compensation expense			1,077					1,077
Balance (in shares) at Mar. 31, 2019	84,742						(200)
Balance at Mar. 31, 2019	$ 110		$ 714,096	$ (627,943)	$ (147)		$ (2,741)	$ 83,375

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Cash flows from operating activities:
Net loss	$ (18,735)	$ (13,424)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense	1,077	1,048
Depreciation and amortization	557	286
Non-cash interest expense	71	63
Other	11
Change in fair value of contingent consideration liability	900	800
Changes in assets and liabilities:
Accounts receivable	(1,136)	491
Other current assets	(447)	(204)
Other assets	146
Accounts payable	124	(1,757)
Accrued expenses	(991)	(1,632)
Other current liabilities	18
Other liabilities	(114)	73
Net cash used in operating activities	(18,519)	(14,256)
Cash flows from investing activities:
Acquisition of AZEDRA manufacturing assets	(8,000)
Purchases of property and equipment	(491)	(16)
Net cash used in investing activities	(8,491)	(16)
Cash flows from financing activities:
Net proceeds from issuance of common stock in connection with at-the-market offering		9,524
Repayment of debt	(1,037)
Net cash (used in) provided by financing activities	(1,037)	9,524
Effect of currency rate changes on cash, cash equivalents and restricted cash	(46)	(17)
Net decrease in cash, cash equivalents, and restricted cash	(28,093)	(4,765)
Cash, cash equivalents, and restricted cash at beginning of period	139,220	92,164
Cash, cash equivalents, and restricted cash at end of period	111,127	87,399
Supplemental disclosure of cash flow information
Cash paid for interest	1,077	1,205
Noncash financing activity
Subscription receivable		(1,359)
Cash, cash equivalents and restricted cash information
Cash and cash equivalents at beginning of period	137,686	90,642
Restricted cash included in long-term assets at the beginning of period	1,534	1,522
Cash, cash equivalents, and restricted cash at beginning of period	139,220	92,164
Cash and cash equivalents at end of period	109,587	83,431
Restricted cash included in current assets at the end of period		2,444
Restricted cash included in long-term assets at the end of period	1,540	1,524
Cash, cash equivalents, and restricted cash at end of period	$ 111,127	$ 87,399

XML

Note 1 - Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Business Description and Accounting Policies [Text Block]

Note

1.

Summary of Significant Accounting Policies

Business

Progenics Pharmaceuticals, Inc. (and its subsidiaries collectively the “Company,” “Progenics”, “we”, or “us”) is an oncology company focused on the development and commercialization of innovative targeted medicines and artificial intelligence to find, fight and follow cancer. Highlights of our recent progress include the approval, launch and manufacturing of AZEDRA

®

. Our pipeline includes therapeutic agents designed to precisely target cancer (

1095

and PSMA TTC), as well as a prostate-specific membrane antigen (“PSMA”) targeted imaging agent for prostate cancer (PyL™).

Recent Progress

:

● AZEDRA ® Launch. A field-based team of Nuclear Medicine Technologists, Sales Representatives, Medical Science Liaisons and Access Specialists have been in the field since approval assisting centers of excellence and payers in the preparation for utilizing and reimbursing AZEDRA. As a result of this effort, treatment requests have been received and sites are now ready to administer AZEDRA.

● AZEDRA ® Manufacturing. In February 2019, we acquired the AZEDRA manufacturing assets for $8.0 million cash consideration and entered into a sublease agreement for the radiopharmaceutical manufacturing facility located in Somerset, New Jersey. The Somerset site serves as the launch facility for AZEDRA and will also provide manufacturing support for our development stage radiopharmaceuticals, including 1095. We also secured the long-term supply of iodine necessary for the production of both AZEDRA and 1095 and entered into an agreement with a contract manufacturing organization for additional capacity and supply of iodine products. The production of AZEDRA uses a proprietary Ultratrace ® process which concentrates the MIBG targeted radiolytic activity by eliminating non-therapeutic “cold” MIBG molecules, giving AZEDRA a uniquely high specific activity.

Continued Progress Across Entire Pipeline:

● We initiated a multicenter, randomized, controlled Phase 2 trial of 1095 to evaluate the efficacy and safety of 1095 in combination with enzalutamide in chemotherapy-naïve patients with metastatic castration-resistant prostate cancer (mCRPC) and will begin enrolling patients within the quarter. Progenics’1095 is a small molecule radiotherapeutic designed to selectively bind to the extracellular domain of prostate specific membrane antigen (“PSMA”), a protein that is highly expressed on prostate cancer cells.

● Data from an ongoing investigator-initiated study of PyL in 130 men with biochemical recurrence of prostate cancer was published in The Journal of Nuclear Medicine . The study of PyL is being conducted by the University of British Columbia and British Columbia Cancer Agency. Physician post-scan assessments indicated that imaging results improved physician decision-making in 89.1% of patients and changed management plans in 87.3% of patients. The investigators concluded that PyL was “safe and sensitive for the localization of biochemical recurrence of prostate cancer.”

● Stanford University presented data from its investigator-initiated prospective study of PyL in patients with biochemical recurrent prostate cancer at the American Urological Association (“AUA”) Annual Meeting. Results demonstrated PyL’s overall positivity rate in this cohort of 84%. Data from the investigator-sponsored study showed PyL imaging has the potential to change clinical management in nearly two thirds of biochemically recurrent prostate cancer patients.

● Enrollment continues in a pivotal multi-center, open label Phase 3 CONDOR trial evaluating the diagnostic performance and clinical impact of PyL in men with biochemical recurrence of prostate cancer. The primary endpoint is based on positive predictive value and will assess the correct localization rate (“CLR”). We expect enrollment to complete by year end 2019.

● We presented the results of the Phase 2/3 OSPREY trial of PyL, the Company’s PSMA-targeted small molecule PET/CT imaging agent designed to visualize prostate cancer at the AUA Annual Meeting. The positive data from the OSPREY trial helped design the Company’s Phase 3 CONDOR trial of PyL that was initiated in November 2018.

● We continue to pursue our life cycle management plans for AZEDRA. In February 2019, an advisory board with Key Opinion Leaders (“KOLs”) concluded that there would likely be strong interest in using AZEDRA in multiple MIBG-avid tumors, including gastroenteropancreatic neuroendocrine tumors (“GEP-NETS”) and other neuroendocrine tumors (“NETS”). There was strong interest in a clinical study to research the use of AZEDRA in these indications since patients often have very high unmet needs for new treatments. The Company plans to meet with the U.S. Food and Drug Administration (“FDA”) in a life cycle management meeting to discuss a trial to support an expanded label in these tumors.

● Using our PSMA-targeted imaging data from previous trials, we completed a prospectively planned retrospective analysis using our deep convolutional neural network algorithms (“PSMA AI”) to automatically assess the PSMA images. The reads with PSMA AI demonstrated a statistically significant improvement over manual assessment in terms of increased diagnostic accuracy, precision, speed, and reproducibility. The results from this analysis are expected to be presented at a scientific conference in June 2019.

Corporate:

● We enhanced our leadership team with the appointment of Asha Das, M.D. as Chief Medical Officer. Dr. Das most recently served as Tocagen’s Chief Medical Officer, where she led the development of the company’s cancer-selective gene therapy platform. Previous to that Dr. Das was at Genentech, where she worked in positions of increasing responsibility, initially as Associate Medical Director and ultimately as Group Medical Director and was responsible for leading activities related to the approval and launch of Avastin in recurrent glioblastoma, expansion into platinum-resistant ovarian cancer and metastatic cervical cancer as well as clinical activities related to TECENTRIQ ® . Prior to moving to the pharmaceutical industry, Dr. Das was head of the neuro-oncology program at Cedars-Sinai Medical Center. Dr. Das is certified in neurology by the American Board of Psychiatry and Neurology and in the sub-specialty of neuro-oncology by the United Council for Neurologic Subspecialties and previously served as a clinical fellow in neuro-oncology at Massachusetts General Hospital. Dr. Das completed her residency in neurology at Cornell Medical Center and has held academic appointments at the University of California, Los Angeles; University of California, San Francisco; and National University of Singapore. Dr. Das obtained her medical degree and bachelor’s degree from Cornell University.

Strategic partnerships

:

● RELISTOR ® (methylnaltrexone bromide) is licensed to Salix Pharmaceuticals, Inc., a wholly-owned subsidiary of Bausch Health Companies Inc. (“Bausch”, which is the predecessor of Valeant Pharmaceuticals International, Inc.). RELISTOR subcutaneous injection and RELISTOR Tablets are approved by the FDA for the treatment of opioid-induced constipation in adults with chronic non-cancer pain.

● Bayer AG (“Bayer”) has exclusive worldwide rights to develop and commercialize products using our PSMA antibody technology, in combination with Bayer’s alpha-emitting radionuclides. Bayer is developing PSMA TTC, a thorium- 227 labeled PSMA-targeted antibody therapeutic. Bayer initiated a Phase 1 trial of PSMA TTC in patients with metastatic castration-resistant prostate cancer.

● CytoDyn Inc. (“CytoDyn”) acquired leronlimab (PRO 140 ), which acquisition included milestone and royalty payment obligations to us. Leronlimab is a fully humanized monoclonal antibody which is a cellular targeting CCR5 entry antagonist and is currently in development for the treatment of HIV. CytoDyn announced in March 2019 that it filed its first of three sections of its Biologics License Application (BLA) to the FDA for leronlimab for the treatment of HIV under the Rolling Review process.

● Curium has exclusive rights to develop, manufacture and commercialize PyL ( 18F -DCFPyL) in Europe. Under the terms of the collaboration, Curium is responsible for the development, regulatory approvals and commercialization of PyL in Europe. We understand from Curium that it plans to meet with the European Medicines Agency to agree upon the regulatory path forward for PyL in 2019. Under this agreement, Progenics is entitled to royalties on net sales of PyL.

Our current principal sources of revenue from operations are royalty, development and commercial milestones from Bausch and Bayer. Royalty and further milestone payments from Bausch or Bayer depend on success in development and commercialization of RELISTOR and our PSMA antibody technology, respectively, which is dependent on many factors, such as Bausch or Bayer’s respective efforts, decisions by the FDA and other regulatory bodies, competition from drugs for the same or similar indications, and the outcome of clinical and other testing of the licensed products.

We commenced principal operations in

1988,

became publicly traded in

1997,

and throughout have been engaged primarily in research and development efforts, establishing corporate collaborations, launching AZEDRA and other related business activities. Certain of our intellectual property rights are held by wholly-owned subsidiaries. Our U.S. operations are presently conducted at our headquarters in New York and our manufacturing facility in Somerset, New Jersey. The operations of our wholly-owned foreign subsidiary, EXINI Diagnostics A.B. (“EXINI”), are conducted at our facility in Lund, Sweden. We operate under a single operating segment, which includes development, manufacturing and commercialization of pharmaceutical products and other technologies to target, diagnose and treat cancer. Our operating segment is regularly evaluated for financial performance by our chief operating decision maker, who is our Chief Executive Officer.

Liquidity

At

March 31, 2019,

we had

$109.6

million of cash and cash equivalents, a decrease of

$28.1

million from

$137.7

million at

December 31, 2018.

We expect that this amount will be sufficient to fund operations as currently anticipated beyond

one

year from the filing date of this Quarterly Report on Form

10

-Q. We have historically funded our operations to a significant extent from capital-raising and we expect to require additional funding in the future, the availability of which is never guaranteed and

may

be uncertain. We expect that we

may

continue to incur operating losses.

Basis of Presentation

Our unaudited condensed consolidated financial statements have been prepared in accordance with applicable presentation requirements, and accordingly, do

not

include all information and disclosures necessary for a presentation of our financial position, results of operations, and cash flows in conformity with accounting principles generally accepted in the U.S. (“GAAP”). In the opinion of management, these financial statements reflect all adjustments, consisting primarily of normal recurring accruals necessary for a fair statement of results for the periods presented. The results of operations for interim periods are

not

necessarily indicative of the results for the full year.

Our unaudited condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto contained in our Annual Report on Form

10

-K for the year ended

December 31, 2018.

The year-end consolidated balance sheet data in these financial statements were derived from audited financial statements but do

not

include all disclosures required by GAAP.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of Progenics as well as its wholly-owned subsidiaries. All material intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results

may

differ from those estimates.

Revenue Recognition

We recognize revenue when our customers obtain control of the promised goods or services, in an amount that reflects the consideration which we expect to receive in exchange for those goods or services. To account for our revenue arrangements, we perform the following

five

steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price, including variable consideration, if any; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) we satisfy our performance obligations.

For contracts determined to be within the scope of ASU

2014

-

09,

Revenue from Contracts with Customers (Topic

606

)

(“ASU

2014

-

09”

or the “Topic

606”

), we assess the goods or services promised within each contract for the purpose of identifying them as performance obligations. We must apply judgement in assessing whether each promised good or service is distinct. If a promised good or service is

not

distinct, we will combine that good or service with other promised goods or services until it identifies a bundle of goods or services that is distinct.

The transaction price is then determined and allocated to the identified performance obligations in proportion to their estimated fair value, which requires significant judgment. Variable consideration, which is estimated using the expected value method or the most likely amount method, is included in the transaction price only if, in our judgment, it is probable that a significant future reversal of cumulative revenue under the contract will

not

occur.

For arrangements that include development, regulatory or sales milestone payments, we evaluate whether the milestones are probable of being reached and estimate the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would

not

occur, the associated milestone value is included in the transaction price. Milestone payments that are

not

within our control or the licensee’s control, such as regulatory approvals, are generally

not

considered probable of being achieved until those approvals are received.

We then recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

The following table summarizes our revenue streams from contracts with customers for the

three

months ended

March 31, 2019

and

2018

(in thousands):

	Three Months Ended
	March 31,
Source	2019		2018
Royalty income	$	4,161	$	3,058
Other revenue		120		131
Total revenue	$	4,281	$	3,189

Royalty income

- represents revenue from the sales-based royalties under our intellectual property licensing arrangements and is recognized upon net sales of the licensed products.

Other revenue

– represents revenue from upfront payments (fixed consideration) and development and sales milestones, sublicense payments, support and service payments and sales-based bonus payments (variable consideration) under our licensing or software arrangements. The fixed consideration will be recognized as revenue at the time when the transfer of know-how is completed. The variable consideration will be estimated using the most likely amount method and recognized only when we have “a high degree of confidence” that revenue will

not

be reversed in a subsequent reporting period. The other revenue also includes revenue from product sales of research reagents, that is recognized upon shipment to the end customer (i.e. control of the product is deemed to be transferred).

We had receivable contract balances of

$4.9

million and

$3.8

million as of

March 31, 2019

and

December 31, 2018,

respectively, primarily related to the royalty revenue stream (see

Note

5

.

Accounts Receivable

).

Restricted Cash

Restricted cash included in long-term assets of

$1.5

million at

March 31, 2019

and

December 31, 2018,

represents collateral for a letter of credit securing a lease obligation. We believe the carrying value of this asset approximates fair value.

Foreign Currency Translation

Our international subsidiaries generally consider their respective local currency to be their functional currency. Assets and liabilities of these international subsidiaries are translated into U.S. dollars at quarter-end exchange rates and revenues and expenses are translated at average exchange rates during the quarter and year-to-date period. Foreign currency translation adjustments for the reported periods are included in accumulated other comprehensive loss in our condensed consolidated statements of comprehensive loss, and the cumulative effect is included in the stockholders’ equity section of our condensed consolidated balance sheets. Realized gains and losses denominated in foreign currencies are recorded in operating expenses in our condensed consolidated statements of operations and were

not

material to our consolidated results of operations for the

three

months ended

March 31, 2019

or

2018.

Leases

We determine whether an arrangement is or contains a lease at its inception. We recognize lease liabilities based on the present value of the minimum lease payments

not

yet paid by using the lease term and discount rate determined at lease commencement. As most of our leases do

not

provide an implicit rate, we use our incremental borrowing rate to determine the present value of our lease payments. Our leases

may

include options to extend or terminate a lease when it is reasonably certain that we will exercise that option. We recognize the operating right-of-use (“ROU”) lease assets at an amount equal to the lease liability adjusted for prepaid or accrued rent, remaining balance of any lease incentives and unamortized initial direct costs.

The operating lease liabilities are reported in other current liabilities and other noncurrent liabilities and the related ROU lease assets are reported in other noncurrent assets on our condensed consolidated balance sheet. Lease expense for our operating leases is calculated on a straight-line basis over the lease term and is reported in research and development and selling, general and administrative expenses on our condensed consolidated statements of operations. We do

not

recognize a lease liability or ROU lease assets for leases whose lease terms, at commencement, are

twelve

months or less, or for leases which are below the capitalization threshold established for lease assets and liabilities.

Property and Equipment

Property and equipment is recorded at historical cost, net of accumulated depreciation and amortization of

$2.8

million and

$2.7

million as of

March 31, 2019

and

December 31, 2018,

respectively. The following table summarizes our property and equipment (in thousands):

	March 31,			December 31,
	2019			2018
Machinery and equipment	$	3,887		$	2,992
Leasehold improvements		3,034			1,734
Computer equipment		621			721
Furniture and fixtures		878			878
Construction in progress		455			317
Property and equipment, gross		8,875			6,642
Less - accumulated depreciation		(2,813	)		(2,698	)
Property and equipment, net	$	6,062		$	3,944

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Note 2 - New Accounting Pronouncements

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Description of New Accounting Pronouncements Not yet Adopted [Text Block]

Note

2.

New Accounting Pronouncements

Recently Adopted

In

February 2016,

the FASB issued ASU

2016

-

02

(“ASU

2016

-

02”

),

Leases (Topic

842

)

. This standard established a right-of-use model that requires all lessees to recognize right-of-use assets and liabilities on their balance sheet that arise from leases with terms longer than

12

months as well as provide disclosures with respect to certain qualitative and quantitative information related to their leasing arrangements.

The FASB has subsequently issued the following amendments to ASU

2016

-

02,

which have the same effective date and transition date of

January 1, 2019,

and which we collectively refer to as the new leasing standards:

● ASU No. 2018 - 01, Leases (Topic 842 ): Land Easement Practical Expedient for Transition to Topic 842, which permits an entity to elect an optional transition practical expedient to not evaluate under Topic 842 land easements that exist or expired prior to adoption of Topic 842 and that were not previously accounted for as leases under the prior standard, ASC 840, Leases .

● ASU No. 2018 - 10, Codification Improvements to Topic 842, Leases , which amends certain narrow aspects of the guidance issued in ASU 2016 - 02.

● ASU No. 2018 - 11, Leases (Topic 842 ): Targeted Improvements , which allows for a transition approach to initially apply ASU 2016 - 02 at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption as well as an additional practical expedient for lessors to not separate non-lease components from the associated lease component.

● ASU No. 2018 - 20, Narrow-Scope Improvements for Lessors , which contains certain narrow scope improvements to the guidance issued in ASU 2016 - 02.

● ASU No. 2019 - 01, Leases (Topic 842 ): Codification Improvements .

We adopted the new leasing standards on

January 1, 2019,

using a modified retrospective transition approach to be applied to leases existing as of, or entered into after,

January 1, 2019

and did

not

adjust comparative periods. We also elected the package of practical expedients permitted under this standard, which among other things, allowed us to carry forward the lease classification for our existing leases. In preparation for the adoption of this standard and to enable preparation of the required financial information, we implemented new internal controls and processes.

The adoption of this standard impacted our

2019

opening consolidated balance sheet as we recorded operating lease liabilities of

$15.3

million and ROU lease assets of

$13.5

million, which equals the lease liabilities net of deferred rent and lease incentives previously recorded on our balance sheet under the old guidance. The adoption of this standard did

not

have an impact on our consolidated statements of operations or cash flows.

Recently Issued

In

August 2018,

the FASB issued ASU

2018

-

13

(“ASU

2018

-

13”

),

Fair Value Measurement - Disclosure Framework (Topic

820

): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement

. The updated guidance improves the disclosure requirements on fair value measurements. ASU

2018

-

13

is effective for fiscal years, and interim periods within those fiscal years, beginning after

December 15, 2019.

Early adoption is permitted for any removed or modified disclosures. We are currently assessing the timing of adopting the updated provisions and the impact of the updated provisions on our consolidated financial statements.

In

June 2016,

the FASB issued ASU

2016

-

13,

Financial Instruments - Credit Losses (Topic

326

): Measurement of Credit Losses on Financial Instruments

. In

November 2018,

the FASB issued ASU

2018

-

19,

Codification Improvements to Topic

326,

Financial Instruments-Credit Losses

and in

April 2019,

the FASB issued ASU

2019

-

04,

Codification Improvements to Topic

326,

Financial Instruments—Credit Losses,

Topic

815,

Derivatives and Hedging, and

Topic

825,

Financial

Instruments

, which amend the scope and transition requirements of ASU

2016

-

13.

The standard requires a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount. The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after

December 15, 2019.

We are currently evaluating the impact this guidance will have on our consolidated financial statements.

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Note 3 - Net Loss Per Share

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Earnings Per Share [Text Block]

Note

3

. Net

Loss

Per Share

Our basic net loss per share amounts have been computed by dividing net loss by the weighted-average number of common shares outstanding during the period. For the

three

months ended

March 31, 2019

and

2018,

we reported net losses and, accordingly, potential common shares were

not

included since such inclusion would have been anti-dilutive.

The calculations of net loss per share, basic and diluted, are as follows (amounts in thousands, except per share data):

				Weighted-Average
				Shares
	Net Loss			Outstanding		Per Share
	(Numerator)			(Denominator)		Amount
Three months ended March 31, 2019
Basic and diluted	$	(18,735	)		84,542	$	(0.22	)
Three months ended March 31, 2018
Basic and diluted	$	(13,424	)		72,517	$	(0.19	)

The following table summarizes anti-dilutive common shares or common shares where performance conditions have

not

been met, that were excluded from the calculation of diluted net loss per share (in thousands):

	Three Months Ended March 31,
	2019		2018
Stock options		6,522		3,483
Contingent consideration liability (1)		2,565		2,359
Total securities excluded		9,087		5,842

(

1

)

Calculated as follows: (a) the contingent consideration liability balance divided by (b) the closing stock price of our common stock.

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Note 4 - Fair Value Measurements

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Fair Value Disclosures [Text Block]

Note

4

. Fair Value Measurements

To estimate the fair values of our financial assets and liabilities, we use valuation approaches within a hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of us. Unobservable inputs are inputs that reflect our assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances. The fair value hierarchy is divided into

three

levels based on the source of inputs as follows:

● Level 1 – Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to access

● Level 2 – Valuations for which all significant inputs are observable, either directly or indirectly, other than Level 1 inputs

● Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement

The availability of observable inputs can vary among the various types of financial assets and liabilities. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used for measuring fair value

may

fall into different levels of the fair value hierarchy. In such cases, for financial statement disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is categorized is based on the lowest level of input used that is significant to the overall fair value measurement.

We believe the carrying amounts of our cash equivalents, restricted cash, accounts receivable, other current assets, other assets, accounts payable and accrued expenses approximated their fair values as of

March 31, 2019

and

December 31, 2018.

We record the contingent consideration liability resulting from our acquisition of Molecular Insight Pharmaceuticals, Inc. (“MIP”) at fair value in accordance with Accounting Standards Codification (“ASC”)

820

(Topic

820,

Fair Value Measurement

).

The following tables summarize each major class of our financial assets and liabilities measured at fair value on a recurring basis as of the dates indicated, classified by valuation hierarchy (in thousands):

			Fair Value Measurements at March 31, 2019
			Quoted Prices in		Significant Other		Significant
			Active Markets for		Observable		Unobservable
	Balance at		Identical Assets		Inputs		Inputs
	March 31, 2019		(Level 1)		(Level 2)		(Level 3)
Assets:
Money market funds	$	104,875	$	104,875	$	-	$	-
Total assets	$	104,875	$	104,875	$	-	$	-
Liabilities:
Contingent consideration liability	$	11,900	$	-	$	-	$	11,900
Total liabilities	$	11,900	$	-	$	-	$	11,900

			Fair Value Measurements at December 31, 2018
			Quoted Prices in		Significant Other		Significant
			Active Markets for		Observable		Unobservable
	Balance at		Identical Assets		Inputs		Inputs
	December 31, 2018		(Level 1)		(Level 2)		(Level 3)
Assets:
Money market funds	$	136,052	$	136,052	$	-	$	-
Total assets	$	136,052	$	136,052	$	-	$	-
Liabilities:
Contingent consideration liability	$	11,000	$	-	$	-	$	11,000
Total liabilities	$	11,000	$	-	$	-	$	11,000

The contingent consideration liability of

$11.9

million as of

March 31, 2019

represents the estimated fair value of the future potential milestone payments to former MIP stockholders (shown in the tables below).

Milestone payments due upon

first

commercial sale (in thousands):

Program	Consideration		Form of Payment at Progenics' Option
AZEDRA	$	8,000	Cash or Progenics common stock
1404		10,000	Cash or Progenics common stock
1095		5,000	Cash or Progenics common stock
	$	23,000

Net sales milestone payments due upon

first

achievement of specified net sales target in any single calendar year across all MIP-related programs (in thousands):

	Consideration		Form of Payment at Progenics' Option
$30 million	$	5,000	Cash or Progenics common stock
$60 million		5,000	Cash or Progenics common stock
$100 million		10,000	Cash or Progenics common stock
$250 million		20,000	Cash or Progenics common stock
$500 million		30,000	Cash or Progenics common stock
	$	70,000

We consider this liability a Level

3

instrument (

one

with significant unobservable inputs) in the fair value hierarchy. The estimated fair value was determined based on probability adjusted discounted cash flow and Monte Carlo simulation models that included significant estimates and assumptions pertaining to commercialization events and sales targets. The most significant unobservable inputs are the probabilities of achieving regulatory approval of the development projects and subsequent commercial success.

Significant changes in any of the probabilities of success or the probabilities as to the periods in which milestones will be achieved, would result in a significantly higher or lower fair value measurement. We record the contingent consideration liability at fair value with changes in estimated fair values recorded in change in contingent consideration liability in our condensed consolidated statements of operations.

The following table summarizes quantitative information and assumptions pertaining to the fair value measurement of the Level

3

inputs at

March 31, 2019

and

December 31, 2018 (

in thousands). The increase in the contingent consideration liability of

$0.9

million during the

three

months ended

March 31, 2019,

was primarily attributable to an increase in the probability of success for the AZEDRA commercialization milestone and a decrease in the discount period used to calculate the present value of the contingent consideration liability.

	Fair Value at
	March 31,
	2019		Valuation Technique	Unobservable Input	Assumption
Contingent Consideration Liability:
AZEDRA commercialization	$	7,900	Probability adjusted discounted	Probability of success			100%
			cash flow model	Period of expected milestone achievement			2019
				Discount rate			10%
1095 commercialization		450	Probability adjusted discounted	Probability of success			18%
			cash flow model	Period of expected milestone achievement			2026
				Discount rate			10%
Net sales targets		3,550	Monte-Carlo simulation	Probability of success		18%	-	90%
				Discount rate			10%
Total	$	11,900

	Fair Value at
	December 31,
	2018		Valuation Technique	Unobservable Input	Assumption
Contingent Consideration Liability:
AZEDRA commercialization	$	7,050	Probability adjusted discounted	Probability of success			90%
			cash flow model	Period of expected milestone achievement			2019
				Discount rate			10%
1095 commercialization		450	Probability adjusted discounted	Probability of success			18%
			cash flow model	Period of expected milestone achievement			2026
				Discount rate			10%
Net sales targets		3,500	Monte-Carlo simulation	Probability of success		18%	-	90%
				Discount rate			10%
Total	$	11,000

For those financial instruments with significant Level

3

inputs, the following table summarizes the activities for the periods indicated (in thousands):

	Liability - Contingent Consideration
	Fair Value Measurements Using
	Significant Unobservable Inputs
	(Level 3)
	Three Months Ended March 31,
	2019		2018
Balance at beginning of period	$	11,000	$	16,800
Fair value change included in net loss		900		800
Balance at end of period	$	11,900	$	17,600
Changes in unrealized gains or losses for the period included in earnings (or changes in net assets) for liabilities held at the end of the reporting period	$	900	$	800

XML

Note 5 - Accounts Receivable

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

Note

5

. Accounts Receivable

Our accounts receivable represent amounts due to us from royalties, collaborators, and, to a small extent, sales of research reagents, and consisted of the following at

March 31, 2019

and

December 31, 2018 (

in thousands):

	March 31,		December 31,
	2019		2018
Royalties	$	4,161	$	3,151
Other		774		652
Accounts receivable, net	$	4,935	$	3,803

XML

Note 6 -Recent Acquisition, Goodwill, In-process Research and Development and Other Intangible Assets

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Intangible Assets Disclosure [Text Block]

Note

6

.

Recent Acquisition,

Goodwill, In-Process Research and Development and Other Intangible Assets

Recent

Acquisition

In

February 2019,

we acquired the AZEDRA manufacturing assets for

$8.0

million cash consideration and entered into a sublease agreement for the radiopharmaceutical manufacturing facility located in Somerset, New Jersey. The Somerset site serves as the launch facility for AZEDRA and will also provide manufacturing support for the Company’s development stage radiopharmaceuticals, including

1095.

The production of AZEDRA uses a proprietary Ultratrace® process which concentrates the MIBG targeted radiolytic activity by eliminating non-therapeutic “cold” MIBG molecules, giving AZEDRA a uniquely high specific activity.

Purchase Price Allocation

: We accounted for this acquisition as a business combination by preliminarily allocating the consideration we paid to the fair values of the assets acquired at the effective date of the acquisition, as summarized below. The difference between the fair value of the acquisition consideration and the estimated fair value of the identifiable assets represents potential future economic benefits arising from the acquisition, and has been recorded as goodwill. This preliminary allocation

may

change if, as and when additional information, becomes available. Under applicable accounting requirements, we must make the final determination within

one

year of the acquisition date.

The following table summarizes the preliminary allocation of the consideration paid to the estimated fair values of the assets acquired as of the acquisition date (in thousands):

	Amount
Cash consideration	$	8,000
Tangible assets acquired:
Machinery and equipment		682
Leasehold improvements		1,300
Total tangible assets acquired		1,982
Intangible assets - Somerset		1,245
Total tangible and intangible assets acquired		3,227
Goodwill	$	4,773

The replacement cost method, a variation of the cost approach, was applied to assess the value of the assets acquired by Progenics. The principle behind this method is that the value represents the current cost of a similar new asset having the nearest equivalent utility as the asset being valued. It generally represents the maximum amount that a prudent investor will pay for a comparable asset. The cost approach provides a systematic framework for estimating the value of tangible or intangible assets based on the economic principle of substitution, and that

no

prudent investor will purchase an existing asset for more than it will cost to create a comparable asset. Under this approach, value is estimated by developing the cost to either replace or reproduce (replicate) the asset of similar utility.

The acquired Somerset intangible assets represent manufacturing know-how asset, which is comprised of documented technical date and information, formulae, standards, specifications, processes, methods, code books, as well as all information, knowledge, trade practices and secrets utilized by the Somerset facility in manufacturing of the AZEDRA. We estimate the remaining useful life of the Somerset intangible to be approximately

6

years.

Goodwill, In-Process Research and Development and Other Intangible Assets

The fair values of in-process research and development (“IPR&D”) and other identified intangible assets acquired in business combinations are capitalized. We utilize the “income method,” which applies a probability weighting that considers the risk of development and commercialization to the estimated future net cash flows that are derived from projected sales revenues and estimated costs or “replacement costs”, whichever is greater. These projections are based on factors such as relevant market size, patent protection, historical pricing of similar products and expected industry trends. The estimated future net cash flows are then discounted to the present value using an appropriate discount rate. This analysis is performed for each IPR&D project and other identified intangible assets, independently. IPR&D assets are treated as indefinite-lived intangible assets until completion or abandonment of the projects, at which time the assets are amortized over the remaining useful life or written off, as appropriate. Other identified intangible assets, which include the technology asset acquired as part of the EXINI business combination, AZEDRA product rights intangible and Somerset intangible, are amortized over the relevant estimated useful lives. The IPR&D assets are tested for impairment at least annually or when a triggering event occurs that could indicate a potential impairment and any impairment loss is recognized in our condensed consolidated statements of operations.

Goodwill represents excess consideration in a business combination over the fair value of identifiable net assets acquired. Goodwill is

not

amortized but is subject to impairment testing at least annually or when a triggering event occurs that could indicate a potential impairment. We determine whether goodwill

may

be impaired by comparing the fair value of the reporting unit (we have determined that we have only

one

reporting unit for this purpose), calculated as the product of shares outstanding and the share price as of the end of a period, to its carrying value (for this purpose, our total stockholders’ equity).

No

goodwill impairment has been recognized as of

March 31, 2019

or

2018.

The following tables summarize the activity related to our goodwill and intangible assets (in thousands):

					Other
					Intangible
	Goodwill		IPR&D		Assets
Balance at January 1, 2019	$	13,074	$	600	$	6,066
Increase related to Somerset acquisition	$	4,773	$	-	$	1,245
Amortization expense		-		-		(260	)
Balance at March 31, 2019	$	17,847	$	600	$	7,051

					Other
					Intangible
	Goodwill		IPR&D		Assets
Balance at January 1, 2018	$	13,074	$	28,700	$	1,669
Amortization expense		-		-		(53	)
Balance at March 31, 2018	$	13,074	$	28,700	$	1,616

The following table reflects the components of the finite-lived intangible assets as of

March 31, 2019 (

in thousands):

	Gross Amount		Accumulated Amortization		Net Carrying Value
Intangible assets - AZEDRA product rights	$	4,900	$	467	$	4,433
Intangible assets - Somerset	$	1,245	$	32		1,213
Intangible assets - EXINI technology		2,120		715		1,405
Total	$	8,265	$	1,214	$	7,051

XML

Note 7 - Accrued Expenses

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Accounts Payable and Accrued Liabilities Disclosure [Text Block]

Note

7

. Accrued Expenses

The carrying value of our accrued expenses approximates fair value, as it represents amounts that will be satisfied within

one

year. Accrued expenses consisted of the following at

March 31, 2019

and

December 31, 2018 (

in thousands):

	March 31,		December 31,
	2019		2018
Accrued contract manufacturing costs	$	2,946	$	2,516
Accrued clinical trial costs		1,817		2,318
Accrued payroll and related costs		1,411		2,871
Accrued consulting and service fee expenses		847		1,229
Accrued legal and professional fees		1,529		1,191
Other		954		408
Accrued expenses	$	9,504	$	10,533

XML

Note 8 - Commitments and Contingencies

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

Note

8

. Commitments and Contingencies

We are or

may

be involved in disputes, governmental and/or regulatory inspections, inquiries, investigations, and proceedings that could result in litigation, and other litigation matters that arise from time to time. The process of resolving matters through litigation or other means is inherently uncertain and it is possible that an unfavorable resolution of these matters will adversely affect us, our results of operations, financial condition, and cash flows. While it is

not

possible to accurately predict or determine the eventual outcomes of these items, an adverse determination in

one

or more of these items currently pending could have a material adverse effect on our consolidated results of operations, financial position, or cash flows.

Abbreviated New Drug Application Litigations

RELISTOR Subcutaneous Injection - Mylan

Paragraph IV Certifications

On or about

October 6, 2015,

November 20, 2015,

December 22, 2015,

and

December 23, 2015,

Progenics, Salix Pharmaceuticals, Inc. (“Salix”) and Wyeth LLC (“Wyeth”) received

four

separate notifications of a Paragraph IV certification for RELISTOR (methylnaltrexone bromide) subcutaneous injection, for certain patents that are listed in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations, also known as “the Orange Book.” The certifications resulted from the filing by Mylan Pharmaceuticals Inc. of an Abbreviated New Drug Application (“ANDA”) with the FDA, challenging such patents for RELISTOR subcutaneous injection and seeking to obtain approval to market a generic version of RELISTOR subcutaneous injection before some or all of these patents expire.

District Court Actions

Progenics, Salix, Valeant (now Bausch Health Companies Inc., “Bausch”), and Wyeth filed suit against Mylan Pharmaceuticals, Inc. and Mylan Inc. in the District of New Jersey on

November 19, 2015 (

2:15

-cv-

8180

-SRC-CLW) seeking declaratory judgment of infringement of U.S. Patent Nos.

8,247,425,

8,420,663,

8,552,025,

and

8,822,490

based upon Mylan Pharmaceutical Inc.’s filing of its ANDA seeking to obtain approval to market a generic version of RELISTOR vials before some or all of these patents expire. On

February 4, 2016,

Progenics, Salix, Bausch, and Wyeth filed an amended complaint, identifying Mylan Laboratories Ltd. as an additional Defendant, and further seeking declaratory judgment of infringement of U.S. Patent

No.

9,180,125.

Progenics, Salix, Bausch, and Wyeth filed suit against Mylan Pharmaceuticals, Inc., Mylan Laboratories Ltd., and Mylan Inc. in the District of New Jersey on

January 4, 2016 (

2:16

-cv-

00035

-SRC-CLW) seeking declaratory judgment of infringement of U.S. Patent Nos.

8,247,425,

8,420,663,

8,552,025,

and

8,822,490

based upon Mylan Pharmaceutical Inc.’s filing of its ANDA seeking to obtain approval to market a generic version of RELISTOR prefilled syringes before some or all of these patents expire. On

January 25, 2016,

Progenics, Salix, Bausch, and Wyeth filed an amended complaint, further seeking declaratory judgment of infringement of U.S. Patent

No.

9,180,125.

Progenics, Salix, Bausch, and Wyeth filed suit against Mylan Pharmaceuticals, Inc., Mylan Laboratories Ltd., and Mylan Inc. in the District of New Jersey on

September 1, 2017 (

2:17

-cv-

06714

-SRC-CLW) seeking declaratory judgment of infringement of U.S. Patent

No.

9,669,096

based upon Mylan Pharmaceutical Inc.’s filing of ANDAs seeking to obtain approval to market generic versions of RELISTOR vials and prefilled syringes before the patents expires. On

September 18, 2017,

Progenics, Salix, Bausch, and Wyeth filed an amended complaint, further seeking declaratory judgment of infringement of U.S. Patent

No.

9,492,445.

The

2:15

-cv-

8180

-SRC-CLW,

2:16

-cv-

00035

-SRC-CLW,

2:15

-cv-

08353

-SRC-CLW, and

2:16

-cv-

00889

-SRC-CLW actions were consolidated into a single action in the District of New Jersey (

2:15

-cv-

08180

-SRC-CLW). On

May 1, 2018,

the Court granted Plaintiffs’ motion for partial summary judgment as to the validity of claim

8

of U.S. Patent

No.

8,552,025.

On

May 23, 2018,

the Court entered an order for final judgment under Fed. R. Civ. P.

54

(b) in favor of Plaintiffs and against Mylan as to claim

8

of the

’025

patent.

Litigation in the

2:17

-cv-

06714

-SRC-CLW action is underway. Fact discovery in this action has closed and expert discovery deadlines have

not

yet been set. This action has been consolidated for purposes of trial only with the

2:15

-cv-

8180

action.

Federal Circuit Appeal

On

May 25, 2018,

Mylan filed a Notice of Appeal to the United States Court of Appeals for the Federal Circuit. The matter is currently pending on appeal at the Federal Circuit.

On

July 9, 2018,

Bausch and Salix filed a motion to disqualify Katten Muchin Rosenman LLP as counsel for Mylan. On

July 17, 2018,

an order was issued stating the briefing on the merits of Mylan’s appeal pending the disposition of the motion to disqualify. Oral argument was held on

September 12, 2018.

A decision disqualifying Katten Muchin Rosenman LLP as counsel for Mylan was issued on

February 8, 2019,

by the Federal Circuit. Merits briefing is currently underway. Mylan submitted its opening brief on

April 9, 2019.

The deadline for submission of Plaintiffs’ reply brief is

June 18, 2019.

RELISTOR Tablets - Actavis

Paragraph IV Certifications

On or about

October 24, 2016

and

October 24, 2017,

Progenics, Salix, Bausch and Wyeth received

two

separate notifications of a Paragraph IV certification for RELISTOR (methylnaltrexone bromide) tablets, for certain patents that are listed in the FDA’s Orange Book. The certification resulted from the filing by Actavis Laboratories Fl., Inc. (“Actavis”) of an ANDA with the FDA, challenging such patents for RELISTOR tablets and seeking to obtain approval to market a generic version of RELISTOR tablets before some or all of these patents expire.

District Court Actions

Progenics, Salix, Bausch, and Wyeth filed suit against Actavis Laboratories FL, Inc., Actavis LLC, Teva Pharmaceuticals USA, Inc., and Teva Pharmaceuticals Industries Ltd. in the District of New Jersey on

December 6, 2016 (

2:16

-cv-

09038

-SRC-CLW) seeking declaratory judgment of infringement of U.S. Patent Nos.

8,420,663,

8,524,276,

8,956,651,

9,180,125,

and

9,314,461

based upon Actavis’s filing of an ANDA seeking to obtain approval to market a generic version of RELISTOR tablets before some or all of these patents expire.

Progenics, Salix, Bausch, and Wyeth filed suit against Actavis Laboratories FL, Inc., Actavis LLC, Teva Pharmaceuticals USA, Inc., and Teva Pharmaceuticals Industries Ltd. in the District of New Jersey on

December 8, 2017 (

2:17

-cv-

12857

-SRC-CLW) seeking declaratory judgment of infringement of U.S. Patent Nos.

9,724,343

and

9,492,445

based upon Actavis’s filing of an ANDA seeking to obtain approval to market a generic version of RELISTOR tablets before some or all of these patents expire.

The

2:16

-cv-

09038

-SRC-CLW and

2:17

-cv-

12857

-SRC-CLW actions were consolidated into a single action in the District of New Jersey (

2:16

-cv-

09038

-SRC-CLW). Litigation is underway and expert discovery is complete. On

April 4, 2019,

the Court issued an order scheduling trial for the week of

May 6, 2019.

European Opposition Proceedings

In addition to the above described ANDA notifications, in

October 2015,

Progenics received notices of opposition to

three

European patents relating to methylnaltrexone. Notices of opposition against

EP1615646

were filed on

September 24, 2015

separately by each of Actavis Group PTC ehf and Fresenius Kabi Deutschland GmbH. Notices of opposition against

EP2368553

were filed on

September 29, 2015

and

September 30, 2015

by Fresenius Kabi Deutschland GmbH and Actavis Group PTC ehf, respectively. Notices of opposition against

EP2368554

were filed on

September 24, 2015

separately by each of Actavis Group PTC ehf and Fresenius Kabi Deutschland GmbH. On

May 11, 2017,

the opposition division provided notice that

EP2368553

will be revoked. On

June 28, 2017,

the opposition division provided notice that

EP1615646

will be revoked. On

July 4, 2017,

the opposition division provided notice that

EP2368554

will be revoked. Each of these matters are on appeal with the European Patent Office.

For each of the above-described proceedings, we and Bausch continue to cooperate closely to vigorously defend and enforce RELISTOR intellectual property rights. Pursuant to the RELISTOR license agreement between Progenics and Bausch, Bausch has the

first

right to enforce the intellectual property rights at issue and is responsible for the costs of such enforcement.

We are or

may

be from time to time involved in various other disputes, governmental and/or regulatory inspections, inquires, investigations and proceedings that could result in litigation, and other litigation matters that arise from time to time. The process of resolving matters through litigation or other means is inherently uncertain and it is possible that an unfavorable resolution of these matters will adversely affect us, our results of operations, financial condition, and cash flows.

PSMA-

617

German District Court Litigation

We announced a lawsuit and associated worldwide patent ownership dispute based on our claims to certain inventions related to PSMA-

617,

a PSMA-targeted radiopharmaceutical compound under development for the treatment of prostate cancer that is the subject of certain European Patent Applications filed by the University of Heidelberg (“the University”).

On

November 8, 2018,

MIP filed a complaint against the University in the District Court of Mannheim in Germany. In this Complaint, the Company claims that the discovery and development of PSMA-

617

was related to work performed under a research collaboration sponsored by MIP. MIP alleged that the University breached certain contracts with MIP and that MIP is the co-owner of inventions embodied in certain worldwide patent filings related to PSMA-

617,

currently pending in Europe and the United States that were filed by the University in its own name. On

February 27, 2019,

Endocyte, Inc., a wholly owned subsidiary of Novartis AG, filed a motion to intervene in the German litigation. Endocyte is the exclusive licensee of the patent rights that are the subject of the German proceedings.

On

November 27, 2018,

MIP requested that the European Patent Office (“EPO”) stay the examination of European Patent (EP)

3

038

996

A1

(EP

14

799

340.6

) and of the Divisional Applications EP

18

172

716.5,

EP18

184

296.4,

and EP

18

203

547.7

pending a decision from the German District court on MIP’s Complaint. On

December 10, 2018,

the EPO granted MIP’s request and stayed the examination of the patent and patent applications effective

November 27, 2018.

Likewise, on

December 20, 2018,

MIP filed a Confirmation of Ownership with the United States Patent and Trademark Office (“USPTO”) in the corresponding US patent applications (US Serial Nos.

15/131,118;

16/038,729

and

16/114988

). MIP’s filing with the USPTO takes the position that, in light of the collaboration and contracts between MIP and the University, MIP is the co-owner of these pending U.S. patent applications.

On

February 27, 2019,

the German District Court entered

two

orders in the litigation. First, the Court set

€416,

000

as the amount MIP must deposit with the Court as security in the event of an unfavorable final decision on the merits of the dispute. Second, the Court set a hearing date of

August 6, 2019

during which it will consider the various arguments of the parties and determine the next steps of the litigation.

XML

Note 9 - Operating Leases

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

Note

9.

Operating

Leases

We lease office and manufacturing space and certain office equipment under noncancelable operating leases. We determine whether an arrangement is or contains a lease at its inception. We recognize lease liabilities based on the present value of the minimum lease payments

not

yet paid, by using the lease term and discount rate determined at lease commencement. As our leases do

not

provide an implicit rate, we use our incremental borrowing rate of

9.5%

commensurate with the underlying lease terms to determine the present value of our lease payments. Rental payments are recognized as rent expense on a straight-line basis over the term of the lease and for the

three

months ended

March 31, 2019

we recognized rent expense in the amount of

$0.5

million. Our leases have remaining lease terms of

1

year to

11.5

years,

one

of which includes an option to extend the lease for

5

years. For the

three

months ended

March 31, 2019

cash payments against operating lease liabilities totaled

$0.5

million.

The information related to our leases is as follows (in thousands):

	March 31,
Operating leases	2019
Operating ROU lease assets, noncurrent	$	13,293
Operating lease liabilities, current		414
Operating lease liabilities, noncurrent		14,787

At

March 31, 2019,

future lease payments for noncancelable operating leases are as follows (in thousands):

2019 (excluding the three months ending March 31, 2019)	$	1,364
2020		1,852
2021		1,886
2022		2,133
2023		2,173
Thereafter		16,375
Total future minimum lease payments		25,783
Less imputed interest		(10,582	)
Total lease liabilities	$	15,201

XML

Note 10 - Non-recourse Long-term Debt, Net

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Debt Disclosure [Text Block]

Note

10

. Non-Recourse Long-Term Debt, Net

On

November 4, 2016,

through a new wholly-owned subsidiary MNTX Royalties Sub LLC (“MNTX Royalties”), we entered into a

$50.0

million loan agreement (the “Royalty-Backed Loan”) with a fund managed by HealthCare Royalty Partners III, L.P. (“HCRP”). Under the terms of the Royalty-Backed Loan, the lenders have

no

recourse to us or to any of our assets other than the right to receive royalty payments from the commercial sales of RELISTOR products owed under our agreement with Bausch. The RELISTOR royalty payments will be used to repay the principal and interest on the loan. The Royalty-Backed Loan bears interest at a per annum rate of

9.5%.

Under the terms of the loan agreement, payments of interest and principal, if any, are made on the last day of each calendar quarter out of RELISTOR royalty payments received since the immediately-preceding payment date. On each payment date prior to

March 31, 2018,

RELISTOR royalty payments received since the immediately preceding payment date were applied solely to the payment of interest on the loan, with any royalties in excess of the interest amount retained by us. Beginning on

March 31, 2018,

50%

of RELISTOR royalty payments received since the immediately-preceding payment date in excess of accrued interest on the loan are used to repay the principal of the loan, with the balance retained by us. Starting on

September 30, 2021,

all of the RELISTOR royalties received since the immediately-preceding payment date will be used to repay the interest and outstanding principal balance until the balance is fully repaid. The loan has a maturity date of

June 30, 2025.

Upon the occurrence of certain triggers in the loan agreement and if HCRP so elects, all of the RELISTOR royalty payments received after the immediately-preceding payment date shall be applied to the payment of interest and repayment of principal until the principal of the loan is fully repaid. In the event of such an election by HCRP, we have the right to repay the loan without any prepayment penalty.

In connection with the Royalty-Backed Loan, the debt issuance costs have been recorded as a debt discount in our consolidated balance sheets and are being amortized and recorded as interest expense throughout the life of the loan using the effective interest method.

The following tables summarize the components of the Royalty-Backed Loan in our condensed consolidated financial statements for the periods presented (in thousands):

	March 31,			December 31,
Condensed Consolidated Balance Sheets	2019			2018
Outstanding principal balance, current portion	$	6,326		$	5,688
Unamortized debt discount, current portion		(262	)		(269	)
Current portion of debt, net	$	6,064		$	5,419
Outstanding principal balance, long-term portion	$	37,999		$	39,674
Unamortized debt discount, long-term portion		(431	)		(494	)
Long-term debt, net	$	37,568		$	39,180

	Three Months Ended
	March 31,
Condensed Consolidated Statements of Operations	2019		2018
Interest expense	$	1,077	$	1,205
Non-cash interest expense		71		63
Total interest expense included in interest (expense) income, net	$	1,148	$	1,268

As of

March 31, 2019,

we were in compliance with all material covenants under the Royalty-Backed Loan and there was

no

material adverse change in our business, operations, or financial conditions, as defined in the loan agreement.

XML

Note 11 - Stockholders' Equity

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

Note

1

1

. Stockholders

’

Equity

Common Stock and Preferred Stock

We are authorized to issue

160.0

million shares of our common stock, par value

$0.0013,

and

20.0

million shares of preferred stock, par value

$0.001.

The Board of Directors (the “Board”) has the authority to issue common and preferred shares, in series, with rights and privileges as determined by the Board.

Shelf Registration

During the

first

quarter of

2017,

we filed a shelf registration statement that permitted: (a) the offering, issuance and sale of up to a maximum aggregate offering price of

$250.0

million of our common stock, preferred stock, debt securities, warrants, rights and/or units; and (b) as part of the

$250.0

million, the offering, issuance and sale by us of up to a maximum aggregate offering price of

$75.0

million of our common stock under our sales agreement with Cantor Fitzgerald & Co. (“Cantor”) in

one

or more at-the-market (“ATM”) offerings (the

“2017

Sales Agreement”).

In

October 2018,

we filed a new shelf registration statement. The new shelf registration replaced our prior shelf registration statement, pursuant to which

no

additional securities will be offered or sold. The new shelf registration statement permits: (a) the offering, issuance and sale of up to a maximum aggregate offering price of

$250.0

million of our common stock, preferred stock, debt securities, warrants, rights and/or units; and (b) as part of the

$250.0

million, the offering, issuance and sale by us of up to a maximum aggregate offering price of

$75.0

million of our common stock under our sales agreement with Cantor in

one

or more ATM offerings.

In addition, in

October 2018

we entered into a new sales agreement with Cantor, as sales agent, which replaced the

2017

Sales Agreement (the

“2018

Sales Agreement”). Pursuant to the

2018

Sales Agreement, we

may

offer and sell through Cantor, from time to time, shares of our common stock up to an aggregate offering price of

$75.0

million. The

2018

Sales Agreement

may

be terminated by Cantor or us at any time upon

ten

days’ notice, or by Cantor at any time in certain circumstances, including the occurrence of a material adverse change in our business or financial condition.

XML

Note 12 - Stock-based Compensation

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Share-based Payment Arrangement [Text Block]

Note

1

2

. Stock-Based Compensation

Equity Incentive Plans

We adopted the following stockholder-approved equity incentive plans:

●     The

2005

Stock Incentive Plan (the

“2005

Plan”), which authorized the issuance of up to

11,450,000

shares of common stock covering several different types of awards, including stock options, restricted shares, stock appreciation rights, performance shares, and phantom stock. The

2005

Plan was terminated in

June 2018

at the time the

2018

Stock Incentive Plan was approved. Shares available for new awards under the

2005

Plan at the time of termination became available for awards under the

2018

Stock Incentive Plan. Options granted before termination of the

2005

Plan will continue to remain outstanding until exercised, cancelled or expired.

●     The

2018

Stock Incentive Plan (the

“2018

Plan”), pursuant to which we are authorized to issue up to

4,800,000

shares of common stock covering several different types of awards, including stock options, restricted shares, stock appreciation rights, performance shares, and phantom stock. The

2018

Plan will terminate on

March 27, 2028.

The stock option plans provide that options

may

be granted at an exercise price of

100%

of fair market value of our common stock on the date of grant,

may

be exercised in full or in installments, at the discretion of the Board or its Compensation Committee, and must be exercised within

ten

years from date of grant. Stock options generally vest pro rata over

three

to

five

years. We recognize stock-based compensation expense on a straight-line basis over the requisite service (vesting) period based on fair values. We use historical data to estimate expected employee behaviors related to option exercises and forfeitures and included these expected forfeitures as a part of the estimate of stock-based compensation expense as of the grant date. We adjust the total amount of stock-based compensation expense recognized for each award, in the period in which each award vests, to reflect the actual forfeitures related to that award. Changes in our estimated forfeiture rate will result in changes in the rate at which compensation cost for an award is recognized over its vesting period.

Stock Options

The following table summarizes stock options activity for the

three

months ended

March 31, 2019 (

in thousands, except per share data or as otherwise noted):

						Weighted
				Weighted		Average
	Number			Average		Remaining
	of Shares			Exercise Price		Contractual Life
Outstanding at January 1, 2019		6,264		$	6.79		6.02
Granted		1,373		$	4.52
Cancelled		(105	)	$	7.02
Expired		(28	)	$	7.79
Outstanding at March 31, 2019		7,504		$	6.36		6.53
Exercisable at March 31, 2019		4,860		$	6.58		5.05
Vested and expected to vest at March 31, 2019		6,749		$	6.44		6.21

The weighted-average fair value of options granted during the

three

months ended

March 31, 2019

and

2018

was

$2.87

and

$4.34

per share, respectively.

The total intrinsic value (the excess of the market price over the exercise price) was approximately

$0.2

million for stock options outstanding,

$0.1

million for stock options exercisable, and

$0.2

million for stock options vested and expected to vest as of

March 31, 2019.

No

stock options were exercised during the

three

months ended

March 31, 2019

and

2018.

Stock-Based Compensation Expense

We account for stock-based awards issued to employees in accordance with the provisions of ASC

718

(Topic

718,

Compensation – Stock Compensation

). We recognize stock-based compensation expense on a straight-line basis over the service period of the award, which is generally

three

to

five

years. Stock-based awards issued to consultants are accounted for in accordance with the provisions of ASC

718

and ASC

505

-

50

(Subtopic

50

“Equity-Based Payments to Non-Employees” of Topic

505,

Equity

). Options granted to consultants are periodically revalued as the options vest and are recognized as an expense over the related period of service or the vesting period, whichever is longer. Under the provisions of ASC

718,

members of the Board are considered employees for calculation of stock-based compensation expense.

We estimated the fair value of the stock options granted on the date of grant using a Black-Scholes valuation model that used the weighted-average assumptions noted in the following table. The risk-free interest rate assumption we use is based upon United States Treasury interest rates appropriate for the expected life of the awards. The expected life (estimated period of time that we expect employees, directors, and consultants to hold their stock options) was estimated based on historical rates for

three

group classifications, (i) employees, (ii) outside directors and officers, and (iii) consultants. Expected volatility was based on historical volatility of our stock price for a period equal to the stock option’s expected life and calculated on a daily basis. The expected dividend rate is

zero

since we do

not

currently pay cash dividends on our common stock and do

not

anticipate doing so in the foreseeable future.

	Three Months Ended
	March 31,
	2019			2018
Risk-free interest rate		2.62	%		2.68	%
Expected life (in years)		6.54			6.66
Expected volatility		66	%		69	%
Expected dividend yield		--			--

Stock-based compensation expense for the

three

months ended

March 31, 2019

and

2018

was recorded in our condensed consolidated statement of operations as follows (in thousands):

	Three Months Ended
	March 31,
	2019		2018
Research and development expenses	$	450	$	525
Selling, general and administrative expenses		627		523
Total stock-based compensation expense	$	1,077	$	1,048

At

March 31, 2019,

unrecognized stock-based compensation expense related to stock options was approximately

$7.1

million and is expected to be recognized over a weighted-average period of approximately

2.4

years.

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Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2019

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation

Our unaudited condensed consolidated financial statements have been prepared in accordance with applicable presentation requirements, and accordingly, do

not

include all information and disclosures necessary for a presentation of our financial position, results of operations, and cash flows in conformity with accounting principles generally accepted in the U.S. (“GAAP”). In the opinion of management, these financial statements reflect all adjustments, consisting primarily of normal recurring accruals necessary for a fair statement of results for the periods presented. The results of operations for interim periods are

not

necessarily indicative of the results for the full year.

Our unaudited condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto contained in our Annual Report on Form

10

-K for the year ended

December 31, 2018.

The year-end consolidated balance sheet data in these financial statements were derived from audited financial statements but do

not

include all disclosures required by GAAP.

Consolidation, Policy [Policy Text Block]

Principles of Consolidation

The condensed consolidated financial statements include the accounts of Progenics as well as its wholly-owned subsidiaries. All material intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results

may

differ from those estimates.

Revenue [Policy Text Block]

Revenue Recognition

We recognize revenue when our customers obtain control of the promised goods or services, in an amount that reflects the consideration which we expect to receive in exchange for those goods or services. To account for our revenue arrangements, we perform the following

five

steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price, including variable consideration, if any; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) we satisfy our performance obligations.

For contracts determined to be within the scope of ASU

2014

-

09,

Revenue from Contracts with Customers (Topic

606

)

(“ASU

2014

-

09”

or the “Topic

606”

), we assess the goods or services promised within each contract for the purpose of identifying them as performance obligations. We must apply judgement in assessing whether each promised good or service is distinct. If a promised good or service is

not

distinct, we will combine that good or service with other promised goods or services until it identifies a bundle of goods or services that is distinct.

The transaction price is then determined and allocated to the identified performance obligations in proportion to their estimated fair value, which requires significant judgment. Variable consideration, which is estimated using the expected value method or the most likely amount method, is included in the transaction price only if, in our judgment, it is probable that a significant future reversal of cumulative revenue under the contract will

not

occur.

For arrangements that include development, regulatory or sales milestone payments, we evaluate whether the milestones are probable of being reached and estimate the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would

not

occur, the associated milestone value is included in the transaction price. Milestone payments that are

not

within our control or the licensee’s control, such as regulatory approvals, are generally

not

considered probable of being achieved until those approvals are received.

We then recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

The following table summarizes our revenue streams from contracts with customers for the

three

months ended

March 31, 2019

and

2018

(in thousands):

	Three Months Ended
	March 31,
Source	2019		2018
Royalty income	$	4,161	$	3,058
Other revenue		120		131
Total revenue	$	4,281	$	3,189

Royalty income

- represents revenue from the sales-based royalties under our intellectual property licensing arrangements and is recognized upon net sales of the licensed products.

Other revenue

– represents revenue from upfront payments (fixed consideration) and development and sales milestones, sublicense payments, support and service payments and sales-based bonus payments (variable consideration) under our licensing or software arrangements. The fixed consideration will be recognized as revenue at the time when the transfer of know-how is completed. The variable consideration will be estimated using the most likely amount method and recognized only when we have “a high degree of confidence” that revenue will

not

be reversed in a subsequent reporting period. The other revenue also includes revenue from product sales of research reagents, that is recognized upon shipment to the end customer (i.e. control of the product is deemed to be transferred).

We had receivable contract balances of

$4.9

million and

$3.8

million as of

March 31, 2019

and

December 31, 2018,

respectively, primarily related to the royalty revenue stream (see

Note

5

.

Accounts Receivable

).

Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, Policy [Policy Text Block]

Restricted Cash

Restricted cash included in long-term assets of

$1.5

million at

March 31, 2019

and

December 31, 2018,

represents collateral for a letter of credit securing a lease obligation. We believe the carrying value of this asset approximates fair value.

Foreign Currency Transactions and Translations Policy [Policy Text Block]

Foreign Currency Translation

Our international subsidiaries generally consider their respective local currency to be their functional currency. Assets and liabilities of these international subsidiaries are translated into U.S. dollars at quarter-end exchange rates and revenues and expenses are translated at average exchange rates during the quarter and year-to-date period. Foreign currency translation adjustments for the reported periods are included in accumulated other comprehensive loss in our condensed consolidated statements of comprehensive loss, and the cumulative effect is included in the stockholders’ equity section of our condensed consolidated balance sheets. Realized gains and losses denominated in foreign currencies are recorded in operating expenses in our condensed consolidated statements of operations and were

not

material to our consolidated results of operations for the

three

months ended

March 31, 2019

or

2018.

Lessee, Leases [Policy Text Block]

Leases

We determine whether an arrangement is or contains a lease at its inception. We recognize lease liabilities based on the present value of the minimum lease payments

not

yet paid by using the lease term and discount rate determined at lease commencement. As most of our leases do

not

provide an implicit rate, we use our incremental borrowing rate to determine the present value of our lease payments. Our leases

may

include options to extend or terminate a lease when it is reasonably certain that we will exercise that option. We recognize the operating right-of-use (“ROU”) lease assets at an amount equal to the lease liability adjusted for prepaid or accrued rent, remaining balance of any lease incentives and unamortized initial direct costs.

The operating lease liabilities are reported in other current liabilities and other noncurrent liabilities and the related ROU lease assets are reported in other noncurrent assets on our condensed consolidated balance sheet. Lease expense for our operating leases is calculated on a straight-line basis over the lease term and is reported in research and development and selling, general and administrative expenses on our condensed consolidated statements of operations. We do

not

recognize a lease liability or ROU lease assets for leases whose lease terms, at commencement, are

twelve

months or less, or for leases which are below the capitalization threshold established for lease assets and liabilities.

Property, Plant and Equipment, Policy [Policy Text Block]

Property and Equipment

Property and equipment is recorded at historical cost, net of accumulated depreciation and amortization of

$2.8

million and

$2.7

million as of

March 31, 2019

and

December 31, 2018,

respectively. The following table summarizes our property and equipment (in thousands):

	March 31,			December 31,
	2019			2018
Machinery and equipment	$	3,887		$	2,992
Leasehold improvements		3,034			1,734
Computer equipment		621			721
Furniture and fixtures		878			878
Construction in progress		455			317
Property and equipment, gross		8,875			6,642
Less - accumulated depreciation		(2,813	)		(2,698	)
Property and equipment, net	$	6,062		$	3,944

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Note 1 - Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2019

Notes Tables

Disaggregation of Revenue [Table Text Block]

	Three Months Ended
	March 31,
Source	2019		2018
Royalty income	$	4,161	$	3,058
Other revenue		120		131
Total revenue	$	4,281	$	3,189

Property, Plant and Equipment [Table Text Block]

	March 31,			December 31,
	2019			2018
Machinery and equipment	$	3,887		$	2,992
Leasehold improvements		3,034			1,734
Computer equipment		621			721
Furniture and fixtures		878			878
Construction in progress		455			317
Property and equipment, gross		8,875			6,642
Less - accumulated depreciation		(2,813	)		(2,698	)
Property and equipment, net	$	6,062		$	3,944

XML

Note 3 - Net Loss Per Share (Tables)

3 Months Ended

Mar. 31, 2019

Notes Tables

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

				Weighted-Average
				Shares
	Net Loss			Outstanding		Per Share
	(Numerator)			(Denominator)		Amount
Three months ended March 31, 2019
Basic and diluted	$	(18,735	)		84,542	$	(0.22	)
Three months ended March 31, 2018
Basic and diluted	$	(13,424	)		72,517	$	(0.19	)

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]

	Three Months Ended March 31,
	2019		2018
Stock options		6,522		3,483
Contingent consideration liability (1)		2,565		2,359
Total securities excluded		9,087		5,842

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Note 4 - Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2019

Notes Tables

Fair Value, Assets Measured on Recurring Basis [Table Text Block]

			Fair Value Measurements at March 31, 2019
			Quoted Prices in		Significant Other		Significant
			Active Markets for		Observable		Unobservable
	Balance at		Identical Assets		Inputs		Inputs
	March 31, 2019		(Level 1)		(Level 2)		(Level 3)
Assets:
Money market funds	$	104,875	$	104,875	$	-	$	-
Total assets	$	104,875	$	104,875	$	-	$	-
Liabilities:
Contingent consideration liability	$	11,900	$	-	$	-	$	11,900
Total liabilities	$	11,900	$	-	$	-	$	11,900

			Fair Value Measurements at December 31, 2018
			Quoted Prices in		Significant Other		Significant
			Active Markets for		Observable		Unobservable
	Balance at		Identical Assets		Inputs		Inputs
	December 31, 2018		(Level 1)		(Level 2)		(Level 3)
Assets:
Money market funds	$	136,052	$	136,052	$	-	$	-
Total assets	$	136,052	$	136,052	$	-	$	-
Liabilities:
Contingent consideration liability	$	11,000	$	-	$	-	$	11,000
Total liabilities	$	11,000	$	-	$	-	$	11,000

Schedule of Business Acquisitions by Acquisition, Contingent Consideration [Table Text Block]

Program	Consideration		Form of Payment at Progenics' Option
AZEDRA	$	8,000	Cash or Progenics common stock
1404		10,000	Cash or Progenics common stock
1095		5,000	Cash or Progenics common stock
	$	23,000

	Consideration		Form of Payment at Progenics' Option
$30 million	$	5,000	Cash or Progenics common stock
$60 million		5,000	Cash or Progenics common stock
$100 million		10,000	Cash or Progenics common stock
$250 million		20,000	Cash or Progenics common stock
$500 million		30,000	Cash or Progenics common stock
	$	70,000

Fair Value Inputs, Assets and Liabilities, Quantitative Information [Table Text Block]

	Fair Value at
	March 31,
	2019		Valuation Technique	Unobservable Input	Assumption
Contingent Consideration Liability:
AZEDRA commercialization	$	7,900	Probability adjusted discounted	Probability of success			100%
			cash flow model	Period of expected milestone achievement			2019
				Discount rate			10%
1095 commercialization		450	Probability adjusted discounted	Probability of success			18%
			cash flow model	Period of expected milestone achievement			2026
				Discount rate			10%
Net sales targets		3,550	Monte-Carlo simulation	Probability of success		18%	-	90%
				Discount rate			10%
Total	$	11,900

	Fair Value at
	December 31,
	2018		Valuation Technique	Unobservable Input	Assumption
Contingent Consideration Liability:
AZEDRA commercialization	$	7,050	Probability adjusted discounted	Probability of success			90%
			cash flow model	Period of expected milestone achievement			2019
				Discount rate			10%
1095 commercialization		450	Probability adjusted discounted	Probability of success			18%
			cash flow model	Period of expected milestone achievement			2026
				Discount rate			10%
Net sales targets		3,500	Monte-Carlo simulation	Probability of success		18%	-	90%
				Discount rate			10%
Total	$	11,000

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

	Liability - Contingent Consideration
	Fair Value Measurements Using
	Significant Unobservable Inputs
	(Level 3)
	Three Months Ended March 31,
	2019		2018
Balance at beginning of period	$	11,000	$	16,800
Fair value change included in net loss		900		800
Balance at end of period	$	11,900	$	17,600
Changes in unrealized gains or losses for the period included in earnings (or changes in net assets) for liabilities held at the end of the reporting period	$	900	$	800

XML

Note 5 - Accounts Receivable (Tables)

3 Months Ended

Mar. 31, 2019

Notes Tables

Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]

	March 31,		December 31,
	2019		2018
Royalties	$	4,161	$	3,151
Other		774		652
Accounts receivable, net	$	4,935	$	3,803

XML

Note 6 -Recent Acquisition, Goodwill, In-process Research and Development and Other Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2019

Notes Tables

Schedule of Business Acquisitions, by Acquisition [Table Text Block]

	Amount
Cash consideration	$	8,000
Tangible assets acquired:
Machinery and equipment		682
Leasehold improvements		1,300
Total tangible assets acquired		1,982
Intangible assets - Somerset		1,245
Total tangible and intangible assets acquired		3,227
Goodwill	$	4,773

Schedule of Intangible Assets and Goodwill [Table Text Block]

					Other
					Intangible
	Goodwill		IPR&D		Assets
Balance at January 1, 2019	$	13,074	$	600	$	6,066
Increase related to Somerset acquisition	$	4,773	$	-	$	1,245
Amortization expense		-		-		(260	)
Balance at March 31, 2019	$	17,847	$	600	$	7,051

					Other
					Intangible
	Goodwill		IPR&D		Assets
Balance at January 1, 2018	$	13,074	$	28,700	$	1,669
Amortization expense		-		-		(53	)
Balance at March 31, 2018	$	13,074	$	28,700	$	1,616

Components of Finite Lived Intangible Assets [Table Text Block]

	Gross Amount		Accumulated Amortization		Net Carrying Value
Intangible assets - AZEDRA product rights	$	4,900	$	467	$	4,433
Intangible assets - Somerset	$	1,245	$	32		1,213
Intangible assets - EXINI technology		2,120		715		1,405
Total	$	8,265	$	1,214	$	7,051

XML

Note 7 - Accrued Expenses (Tables)

3 Months Ended

Mar. 31, 2019

Notes Tables

Schedule of Accounts Payable and Accrued Liabilities [Table Text Block]

	March 31,		December 31,
	2019		2018
Accrued contract manufacturing costs	$	2,946	$	2,516
Accrued clinical trial costs		1,817		2,318
Accrued payroll and related costs		1,411		2,871
Accrued consulting and service fee expenses		847		1,229
Accrued legal and professional fees		1,529		1,191
Other		954		408
Accrued expenses	$	9,504	$	10,533

XML

Note 9 - Operating Leases (Tables)

3 Months Ended

Mar. 31, 2019

Notes Tables

Lease, Cost [Table Text Block]

	March 31,
Operating leases	2019
Operating ROU lease assets, noncurrent	$	13,293
Operating lease liabilities, current		414
Operating lease liabilities, noncurrent		14,787

Lessee, Operating Lease, Liability, Maturity [Table Text Block]

2019 (excluding the three months ending March 31, 2019)	$	1,364
2020		1,852
2021		1,886
2022		2,133
2023		2,173
Thereafter		16,375
Total future minimum lease payments		25,783
Less imputed interest		(10,582	)
Total lease liabilities	$	15,201

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Note 10 - Non-recourse Long-term Debt, Net (Tables)

3 Months Ended

Mar. 31, 2019

Notes Tables

Schedule of Long-term Debt Instruments [Table Text Block]

	March 31,			December 31,
Condensed Consolidated Balance Sheets	2019			2018
Outstanding principal balance, current portion	$	6,326		$	5,688
Unamortized debt discount, current portion		(262	)		(269	)
Current portion of debt, net	$	6,064		$	5,419
Outstanding principal balance, long-term portion	$	37,999		$	39,674
Unamortized debt discount, long-term portion		(431	)		(494	)
Long-term debt, net	$	37,568		$	39,180

	Three Months Ended
	March 31,
Condensed Consolidated Statements of Operations	2019		2018
Interest expense	$	1,077	$	1,205
Non-cash interest expense		71		63
Total interest expense included in interest (expense) income, net	$	1,148	$	1,268

XML

Note 12 - Stock-based Compensation (Tables)

3 Months Ended

Mar. 31, 2019

Notes Tables

Share-based Payment Arrangement, Option, Activity [Table Text Block]

						Weighted
				Weighted		Average
	Number			Average		Remaining
	of Shares			Exercise Price		Contractual Life
Outstanding at January 1, 2019		6,264		$	6.79		6.02
Granted		1,373		$	4.52
Cancelled		(105	)	$	7.02
Expired		(28	)	$	7.79
Outstanding at March 31, 2019		7,504		$	6.36		6.53
Exercisable at March 31, 2019		4,860		$	6.58		5.05
Vested and expected to vest at March 31, 2019		6,749		$	6.44		6.21

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

	Three Months Ended
	March 31,
	2019			2018
Risk-free interest rate		2.62	%		2.68	%
Expected life (in years)		6.54			6.66
Expected volatility		66	%		69	%
Expected dividend yield		--			--

Share-based Payment Arrangement, Expensed and Capitalized, Amount [Table Text Block]

	Three Months Ended
	March 31,
	2019		2018
Research and development expenses	$	450	$	525
Selling, general and administrative expenses		627		523
Total stock-based compensation expense	$	1,077	$	1,048

XML

Note 1 - Summary of Significant Accounting Policies (Details Textual) $ in Thousands	1 Months Ended	3 Months Ended
	Feb. 28, 2019 USD ($)	Mar. 31, 2019 USD ($)	Mar. 31, 2018 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)
Payments to Acquire Businesses, Gross		$ 8,000
Cash and Cash Equivalents, at Carrying Value, Ending Balance		109,587	83,431	$ 137,686	$ 90,642
Cash and Cash Equivalents, Period Increase (Decrease), Total		(28,100)
Accounts Receivable, after Allowance for Credit Loss, Current, Total		4,935		3,803
Restricted Cash and Cash Equivalents, Noncurrent, Total		1,540	1,524	1,534	$ 1,522
Foreign Currency Transaction Gain (Loss), Realized		0	$ 0
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment, Ending Balance		$ 2,813		$ 2,698
Number of Operating Segments		1
AZEDRA [Member]
Payments to Acquire Businesses, Gross	$ 8,000

XML

Note 1 - Summary of Significant Accounting Policies - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Revenue	$ 4,281	$ 3,189
Royalty [Member]
Revenue	4,161	3,058
Product and Service, Other [Member]
Revenue	$ 120	$ 131

XML

Note 1 - Summary of Significant Accounting Policies - Property and Equipment (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Property and equipment, gross	$ 8,875	$ 6,642
Less - accumulated depreciation	(2,813)	(2,698)
Property and equipment, net	6,062	3,944
Machinery and Equipment [Member]
Property and equipment, gross	3,887	2,992
Leasehold Improvements [Member]
Property and equipment, gross	3,034	1,734
Computer Equipment [Member]
Property and equipment, gross	621	721
Furniture and Fixtures [Member]
Property and equipment, gross	878	878
Construction in Progress [Member]
Property and equipment, gross	$ 455	$ 317

XML

Note 2 - New Accounting Pronouncements (Details Textual) - USD ($) $ in Thousands	Mar. 31, 2019	Jan. 01, 2019	Dec. 31, 2018
Operating Lease, Liability, Total	$ 15,201
Operating Lease, Right-of-Use Asset	$ 13,293
Accounting Standards Update 2016-02 [Member]
Operating Lease, Liability, Total		$ 15,300
Operating Lease, Right-of-Use Asset		$ 13,500

XML

Note 3 - Net Loss Per Share - Calculations of Net (Loss) Income Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Basic and diluted, net loss attributable to Progenics	$ (18,735)	$ (13,424)
Basic and diluted, weighted average shares outstanding (in shares)	84,542	72,517
Basic and diluted, per share amount (in dollars per share)	$ (0.22)	$ (0.19)

XML

Note 3 - Net Loss Per Share - Common Shares Excluded from Calculation of Diluted Net (Loss) Income Per Share (Details) - shares shares in Thousands		3 Months Ended
		Mar. 31, 2019	Mar. 31, 2018
Antidilutive securities (in shares)		9,087	5,842
Share-based Payment Arrangement, Option [Member]
Antidilutive securities (in shares)		6,522	3,483
Contingent Consideration Liability [Member]
Antidilutive securities (in shares)	[1]	2,565	2,359

[1] Calculated as follows: (a) the contingent consideration liability balance divided by (b) the closing stock price of our common stock.

XML

Note 4 - Fair Value Measurements (Details Textual) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Business Combination, Contingent Consideration, Liability, Total	$ 11,900		$ 11,000
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, Liability	$ 900	$ 800

XML

Note 4 - Fair Value Measurements - Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Money market funds	$ 104,875	$ 136,052
Total assets	104,875	136,052
Fair value	11,900	11,000
Total liabilities	11,900	11,000
Fair Value, Inputs, Level 1 [Member]
Money market funds	104,875	136,052
Total assets	104,875	136,052
Fair value
Total liabilities
Fair Value, Inputs, Level 2 [Member]
Money market funds
Total assets
Fair value
Total liabilities
Fair Value, Inputs, Level 3 [Member]
Money market funds
Total assets
Fair value	11,900	11,000
Total liabilities	$ 11,900	$ 11,000

XML

Note 4 - Fair Value Measurements - Contingent Consideration Liabilities (Details) $ in Millions	Mar. 31, 2019 USD ($)
Molecular Insight Pharmaceuticals, Inc. [Member] | Milestone Payment upon First Commercial Sale [Member]
Contingent Consideration	$ 23
Molecular Insight Pharmaceuticals, Inc. [Member] | Milestone Payment upon Achievement of All Levels of Net Sales [Member]
Contingent Consideration	70
Molecular Insight Pharmaceuticals, Inc. [Member] | Milestone Payment upon Achievement of Net Sales Level 2 [Member]
Contingent Consideration	5
Molecular Insight Pharmaceuticals, Inc. [Member] | Milestone Payment upon Achievement of Net Sales Level 3 [Member]
Contingent Consideration	10
Molecular Insight Pharmaceuticals, Inc. [Member] | Milestone Payment upon Achievement of Net Sales Level 4 [Member]
Contingent Consideration	20
Molecular Insight Pharmaceuticals, Inc. [Member] | Milestone Payment upon Achievement of Net Sales Level 5 [Member]
Contingent Consideration	30
Milestone Payment upon Achievement of Net Sales Level 1 [Member] | Milestone Payment upon Achievement of All Levels of Net Sales [Member]
Contingent Consideration	5
AZEDRA Program [Member] | Molecular Insight Pharmaceuticals, Inc. [Member] | Milestone Payment upon First Commercial Sale [Member]
Contingent Consideration	8
The 1404 Program [Member] | Molecular Insight Pharmaceuticals, Inc. [Member] | Milestone Payment upon First Commercial Sale [Member]
Contingent Consideration	10
The 1095 Program[Member] | Molecular Insight Pharmaceuticals, Inc. [Member] | Milestone Payment upon First Commercial Sale [Member]
Contingent Consideration	$ 5

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Note 4 - Fair Value Measurements - Quantitative Information for Fair Value Measurement of Level 3 (Details) $ in Thousands	Mar. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Fair value	$ 11,900	$ 11,000
AZEDRA Commercialization [Member]
Fair value	$ 7,900	$ 7,050
AZEDRA Commercialization [Member] | Measurement Input, Probability of Success [Member]
Measurement input	1	0.9
AZEDRA Commercialization [Member] | Measurement Input, Period of Expected Milestone Achievement [Member]
Measurement input	2,019	2,019
AZEDRA Commercialization [Member] | Measurement Input, Discount Rate [Member]
Measurement input	0.1	0.1
MIP-1095 Commercialization [Member]
Fair value	$ 450	$ 450
MIP-1095 Commercialization [Member] | Measurement Input, Probability of Success [Member]
Measurement input	0.18	0.18
MIP-1095 Commercialization [Member] | Measurement Input, Period of Expected Milestone Achievement [Member]
Measurement input	2,026	2,026
MIP-1095 Commercialization [Member] | Measurement Input, Discount Rate [Member]
Measurement input	0.1	0.1
Net sales targets [Member]
Fair value	$ 3,550	$ 3,500
Net sales targets [Member] | Measurement Input, Probability of Success [Member] | Minimum [Member]
Measurement input	0.18	0.18
Net sales targets [Member] | Measurement Input, Probability of Success [Member] | Maximum [Member]
Measurement input	0.9	0.9
Net sales targets [Member] | Measurement Input, Discount Rate [Member]
Measurement input	0.1	0.1

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Note 4 - Fair Value Measurements - Summary of Activities in Financial Instruments With Level 3 Inputs (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Balance	$ 11.0	$ 16.8
Fair value change included in net loss	0.9	0.8
Balance	11.9	17.6
Changes in unrealized gains or losses for the period included in earnings (or changes in net assets) for liabilities held at the end of the reporting period	$ 0.9	$ 0.8

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Note 5 - Accounts Receivable - Summary of Accounts Receivable (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Accounts receivable, net	$ 4,935	$ 3,803
Royalties [Member]
Accounts receivable, net	4,161	3,151
Other [Member]
Accounts receivable, net	$ 774	$ 652

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Note 6 -Recent Acquisition, Goodwill, In-process Research and Development and Other Intangible Assets (Details Textual) $ in Thousands	1 Months Ended	3 Months Ended
	Feb. 28, 2019 USD ($)	Mar. 31, 2019 USD ($)	Mar. 31, 2018 USD ($)
Finite-Lived Intangible Asset, Useful Life		6 years
Payments to Acquire Businesses, Gross		$ 8,000
Number of Reporting Units		1
Goodwill, Impairment Loss		$ 0	$ 0
AZEDRA [Member]
Payments to Acquire Businesses, Gross	$ 8,000

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Note 6 - Recent Acquisition, Goodwill, In-process Research and Development and Other Intangible Assets - Consideration and Assets Acquired (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended
	Feb. 28, 2019	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018	Dec. 31, 2017
Cash consideration		$ 8,000
Goodwill		$ 17,847	$ 13,074	$ 13,074	$ 13,074
AZEDRA [Member]
Cash consideration	$ 8,000
Machinery and equipment	682
Leasehold improvements	1,300
Total tangible assets acquired	1,982
Intangible assets - Somerset	1,245
Total tangible and intangible assets acquired	3,227
Goodwill	$ 4,773

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Note 6 - Recent Acquisition, Goodwill, In-process Research and Development and Other Intangible Assets - Summary of Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Balance, Goodwill	$ 13,074	$ 13,074
Increase related to Somerset acquisition	4,773
Amortization expense
Balance, Goodwill	17,847	13,074
Balance, Finite-lived Intangible Assets	7,051
In Process Research and Development [Member]
Balance, Finite-lived Intangible Assets	600	28,700
Increase related to Somerset acquisition
Amortization expense, Finite-lived Intangible Assets
Balance, Finite-lived Intangible Assets	600	28,700
Other Intangible Assets [Member]
Balance, Finite-lived Intangible Assets	6,066	1,669
Increase related to Somerset acquisition	1,245
Amortization expense, Finite-lived Intangible Assets	(260)	(53)
Balance, Finite-lived Intangible Assets	$ 7,051	$ 1,616

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Note 6 - Recent Acquisition, Goodwill, In-process Research and Development and Other Intangible Assets - Components of Finite-lived Intangible Assets (Details) $ in Thousands	Mar. 31, 2019 USD ($)
Gross amount	$ 8,265
Accumulated amortization	1,214
Net carrying value	7,051
AZEDRA Product Rights [Member]
Gross amount	4,900
Accumulated amortization	467
Net carrying value	4,433
Somerset [Member]
Gross amount	1,245
Accumulated amortization	32
Net carrying value	1,213
EXINI Technology [Member]
Gross amount	2,120
Accumulated amortization	715
Net carrying value	$ 1,405

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Note 7 - Accrued Expenses - Summary of Accrued Expenses (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Accrued contract manufacturing costs	$ 2,946	$ 2,516
Accrued clinical trial costs	1,817	2,318
Accrued payroll and related costs	1,411	2,871
Accrued consulting and service fee expenses	847	1,229
Accrued legal and professional fees	1,529	1,191
Other	954	408
Accrued expenses	$ 9,504	$ 10,533

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Note 8 - Commitments and Contingencies (Details Textual)	Feb. 27, 2019 EUR (€)
Deposit With Court as Security [Member] | Pending Litigation [Member]
Estimated Litigation Liability	€ 416,000

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Note 9 - Operating Leases (Details Textual) $ in Millions	3 Months Ended
	Mar. 31, 2019 USD ($)
Operating Lease, Weighted Average Discount Rate, Percent	9.50%
Operating Lease, Expense	$ 0.5
Lessee, Operating Lease, Renewal Term	5 years
Operating Lease, Payments	$ 0.5
Minimum [Member]
Lessee, Operating Lease, Remaining Lease Term	1 year
Maximum [Member]
Lessee, Operating Lease, Remaining Lease Term	11 years 182 days

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Note 9 - Operating Leases - Lease Information (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Operating ROU lease assets, noncurrent	$ 13,293
Operating lease liabilities, current	414
Operating lease liabilities, noncurrent	$ 14,787

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Note 9 - Operating Leases - Future Lease Payments (Details) $ in Thousands	Mar. 31, 2019 USD ($)
2019 (excluding the three months ending March 31, 2019)	$ 1,364
2020	1,852
2021	1,886
2022	2,133
2023	2,173
Thereafter	16,375
Total future minimum lease payments	25,783
Less imputed interest	(10,582)
Total lease liabilities	$ 15,201

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Note 10 - Non-recourse Long-term Debt, Net (Details Textual) - Royalty-backed Loan [Member] - USD ($) $ in Millions		12 Months Ended
	Nov. 04, 2016	Mar. 31, 2019
Proceeds from Issuance of Long-term Debt, Total	$ 50
Debt Instrument, Interest Rate, Stated Percentage	9.50%
Percentage of Royalty Payments in Excess of Accrued Loan Interest to be Applied to Principal		50.00%

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Note 10 - Non-recourse Long-term Debt, Net - Summary of Royalty-backed Loan (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Current portion of debt, net	$ 6,064		$ 5,419
Long-term debt, net	37,568		39,180
Royalty-backed Loan [Member]
Outstanding principal balance, current portion	6,326		5,688
Unamortized debt discount, current portion	(262)		(269)
Current portion of debt, net	6,064		5,419
Outstanding principal balance, long-term portion	37,999		39,674
Unamortized debt discount, long-term portion	(431)		(494)
Long-term debt, net	37,568		$ 39,180
Interest expense	1,077	$ 1,205
Non-cash interest expense	71	63
Total interest expense included in interest (expense) income, net	$ 1,148	$ 1,268

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Note 11 - Stockholders' Equity (Details Textual) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions	1 Months Ended	3 Months Ended
	Oct. 31, 2018	Mar. 31, 2017	Mar. 31, 2019	Dec. 31, 2018
Common Stock, Shares Authorized			160,000	160,000
Common Stock, Par or Stated Value Per Share			$ 0.0013	$ 0.0013
Preferred Stock, Shares Authorized			20,000	20,000
Preferred Stock, Par or Stated Value Per Share			$ 0.001	$ 0.001
Replacement Shelf Registration	$ 250	$ 250
Common Stock Sales Agreement with Agent, Maximum Aggregate Offering Price	$ 75	$ 75

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Note 12 - Stock-based Compensation (Details Textual) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 2.87	$ 4.34
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value	$ 200
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value	100
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Aggregate Intrinsic Value	200
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value	$ 0	$ 0
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate	0.00%	0.00%
Share-based Payment Arrangement, Nonvested Award, Option, Cost Not yet Recognized, Amount	$ 7,100
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition	2 years 146 days
Share-based Payment Arrangement, Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period	10 years
Share-based Payment Arrangement, Option [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	3 years
Share-based Payment Arrangement, Option [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	5 years
The 2005 Stock Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	11,450,000
The 2018 Stock Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	4,800,000

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Note 12 - Stock-based Compensation - Summary of Option Activity Under the Plans (Details) - $ / shares shares in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Outstanding, shares (in shares)	6,264
Outstanding, Weighted Average Exercise Price (in dollars per share)	$ 6.36	$ 6.79
Outstanding, Weighted Average Remaining Contractual Life (Year)	6 years 193 days	6 years 7 days
Granted, shares (in shares)	1,373
Granted, Weighted Average Exercise Price (in dollars per share)	$ 4.52
Cancelled, shares (in shares)	(105)
Cancelled, Weighted Average Exercise Price (in dollars per share)	$ 7.02
Expired, shares (in shares)	(28)
Expired, Weighted Average Exercise Price (in dollars per share)	$ 7.79
Outstanding, shares (in shares)	7,504	6,264
Exercisable, shares (in shares)	4,860
Exercisable, Weighted Average Exercise Price (in dollars per share)	$ 6.58
Exercisable, Weighted Average Remaining Contractual Life (Year)	5 years 18 days
Vested and expected to vest, shares (in shares)	6,749
Vested and expected to vest, Weighted Average Exercise Price (in dollars per share)	$ 6.44
Vested and expected to vest, Weighted Average Remaining Contractual Life (Year)	6 years 76 days

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Note 12 - Stock-based Compensation - Assumptions Used in Computing the Fair Value of Option Grants (Details)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Risk-free interest rate	2.62%	2.68%
Expected life (in years) (Year)	6 years 197 days	6 years 240 days
Expected volatility	66.00%	69.00%
Expected dividend yield	0.00%	0.00%

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Note 12 - Stock-based Compensation - Allocation of Recognized Period Costs (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Total compensation expense recognized	$ 1,077	$ 1,048
Research and Development Expense [Member]
Total compensation expense recognized	450	525
Selling, General and Administrative Expenses [Member]
Total compensation expense recognized	$ 627	$ 523