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 x No
¨
Indicate by check mark whether the registrant has submitted electronically and posted
on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of
Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit
and post such files). Yes x No
¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated
filer, or a non- accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 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
x
The number of shares of Common Stock, par value $0.01, of the Registrant outstanding
as of October 31, 2015 was 73,336,871.
See accompanying notes to consolidated financial statements.
See accompanying notes to consolidated financial statements.
See accompanying notes to consolidated financial statements.
Note 1 — Significant Accounting Policies
The Company
BioCryst Pharmaceuticals, Inc. (the “Company”) is a biotechnology
company that designs, optimizes and develops novel small molecule drugs that block key enzymes involved in the pathogenesis of
diseases. The Company focuses on the treatment of rare diseases in which significant unmet medical needs exist and align with its
capabilities and expertise. The Company was incorporated in Delaware in 1986 and its headquarters is located in Durham, North Carolina.
The Company integrates the disciplines of biology, crystallography, medicinal chemistry and computer modeling to discover and develop
small molecule pharmaceuticals through the process known as structure-guided drug design. BioCryst has incurred losses and negative
cash flows from operations since inception.
Based on its current operating plans, the Company expects it has sufficient
liquidity, with its existing cash and investments of $119,736, to continue its planned operations into 2017. The Company’s
liquidity needs, and ability to address those needs, will largely be determined by the success of its product candidates and key
development and regulatory events in the future. In order to continue its operations substantially beyond 2017 it will need to:
(1) successfully secure or increase U.S. Government funding of its programs, including procurement contracts; (2) out-license
rights to certain of its products or product candidates, pursuant to which the Company would receive cash milestones; (3) raise
additional capital through equity or debt financings or from other sources; (4) obtain additional product candidate regulatory
approvals, which would generate revenue and cash flow; (5) reduce spending on one or more research and development programs;
and/or (6) restructure operations. The Company retains the ability to offer for sale approximately $150,000 of securities,
including common stock, preferred stock, depositary shares, stock purchase contracts, warrants, and units from its effective shelf
S-3 registration statement, which it filed with the Securities and Exchange Commission on March 3, 2015. Additionally,
the Company retains the ability to offer for sale approximately $10,000 of securities, including common stock, preferred stock,
depositary shares, stock purchase contracts, warrants and units from its effective shelf S-3 registration statement, which it filed
with the Securities and Exchange Commission on November 6, 2013. The Company will continue to incur operating losses and negative
cash flows until revenues reach a level sufficient to support ongoing operations.
Basis of Presentation
The consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiary, JPR Royalty Sub LLC (“Royalty Sub”). Royalty Sub was formed in connection
with a $30,000 financing transaction the Company completed on March 9, 2011. See Note 4, Royalty Monetization, for a
further description of this transaction. All intercompany transactions and balances have been eliminated.
The Company’s consolidated financial statements have been prepared
in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial
reporting and the instructions to Form 10-Q and do not include all of the information and footnotes required by U.S. GAAP for complete
financial statements. Such financial statements reflect all adjustments that are, in management’s opinion, necessary to present
fairly, in all material respects, the Company’s consolidated financial position, results of operations, and cash flows. There
were no adjustments other than normal recurring adjustments.
These financial statements should be read in conjunction with the
financial statements for the year ended December 31, 2014 and the notes thereto included in the Company’s 2014 Annual
Report on Form 10-K. Interim operating results are not necessarily indicative of operating results for the full year. The balance
sheet as of December 31, 2014 has been derived from the audited consolidated financial statements included in the Company’s
most recent Annual Report on Form 10-K.
Reclassifications
Certain balance sheet amounts as of December 31, 2014 have been reclassified
to conform to the 2015 presentation.
Cash and Cash Equivalents
The Company generally considers cash equivalents to be all cash held
in commercial checking accounts, certificates of deposit, money market accounts or investments in debt instruments with maturities
of three months or less at the time of purchase. The carrying value of cash and cash equivalents approximates fair value due to
the short-term nature of these items.
Restricted Cash
Restricted cash as of September 30, 2015 reflects $150 the Company
is required to maintain in an interest bearing certificate of deposit to serve as collateral for a corporate credit card program,
$70 in royalty revenue paid by Shionogi & Co., Ltd. (“Shionogi”) designated for interest on the PhaRMA Notes
(defined in Note 4) and $1,402 the Company is required to maintain as collateral for a letter of credit associated with the lease
execution and build-out of its new Birmingham research facilities.
Investments
The Company invests in high credit quality investments in accordance
with its investment policy, which is designed to minimize the possibility of loss. The objective of the Company’s investment
policy is to ensure the safety and preservation of invested funds, as well as maintaining liquidity sufficient to meet cash flow
requirements. The Company places its excess cash with high credit quality financial institutions, commercial companies, and government
agencies in order to limit the amount of its credit exposure. In accordance with its policy, the Company is able to invest in marketable
debt securities that may consist of U.S. Government and government agency securities, money market and mutual fund investments,
municipal and corporate notes and bonds, commercial paper and asset or mortgage-backed securities, among others. The Company’s
investment policy requires it to purchase high-quality marketable securities with a maximum individual maturity of three years
and requires an average portfolio maturity of no more than 18 months. Some of the securities the Company invests in may have market
risk. This means that a change in prevailing interest rates may cause the principal amount of the investment to fluctuate. To minimize
this risk, the Company schedules its investments with maturities that coincide with expected cash flow needs, thus avoiding the
need to redeem an investment prior to its maturity date. Accordingly, the Company does not believe it has a material exposure to
interest rate risk arising from its investments. Generally, the Company’s investments are not collateralized. The Company
has not realized any significant losses from its investments.
The Company classifies all of its investments as available-for-sale.
Unrealized gains and losses on investments are recognized in comprehensive loss, unless an unrealized loss is considered to be
other than temporary, in which case the unrealized loss is charged to operations. The Company periodically reviews its investments
for other than temporary declines in fair value below cost basis and whenever events or changes in circumstances indicate that
the carrying amount of an asset may not be recoverable. The Company believes the individual unrealized losses represent temporary
declines primarily resulting from interest rate changes. Realized gains and losses are reflected in interest and other income in
the Consolidated Statements of Comprehensive Loss and are determined using the specific identification method with transactions
recorded on a settlement date basis. Investments with original maturities at date of purchase beyond three months and which mature
at or less than 12 months from the balance sheet date are classified as current. Investments with a maturity beyond 12 months from
the balance sheet date are classified as long-term. At September 30, 2015, the Company believes that the costs of its investments
are recoverable in all material respects.
The following tables summarize the fair value of the Company’s
investments by type. The estimated fair value of the Company’s fixed income investments are classified as Level 2 in the
fair value hierarchy as defined in U.S. GAAP. These valuations are based on observable direct and indirect inputs, primarily quoted
prices of similar, but not identical, instruments in active markets or quoted prices for identical or similar instruments in markets
that are not active. These fair values are obtained from independent pricing services which utilize Level 2 inputs.
| |
September 30,
2015 |
| |
Amortized Cost | |
Accrued Interest | |
Gross Unrealized Gains | |
Gross Unrealized Losses | |
Estimated Fair Value |
Obligations of U.S. Government and its agencies | |
$ | 23,119 | | |
$ | 42 | | |
$ | 28 | | |
$ | (2 | ) | |
$ | 23,187 | |
Corporate debt securities | |
| 27,249 | | |
| 141 | | |
| 26 | | |
| (14 | ) | |
| 27,402 | |
Certificates of deposit | |
| 20,909 | | |
| 28 | | |
| 10 | | |
| (49 | ) | |
| 20,898 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Total investments | |
$ | 71,277 | | |
$ | 211 | | |
$ | 64 | | |
$ | (65 | ) | |
$ | 71,487 | |
| |
December 31, 2014 |
| |
Amortized Cost | |
Accrued Interest | |
Gross Unrealized Gains | |
Gross Unrealized Losses | |
Estimated Fair Value |
Obligations of U.S. Government and its agencies | |
$ | 20,307 | | |
$ | 22 | | |
$ | — | | |
$ | (23 | ) | |
$ | 20,306 | |
Corporate debt securities | |
| 27,152 | | |
| 151 | | |
| 5 | | |
| (47 | ) | |
| 27,261 | |
Certificates of deposit | |
| 11,838 | | |
| 6 | | |
| — | | |
| (63 | ) | |
| 11,781 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Total investments | |
$ | 59,297 | | |
$ | 179 | | |
$ | 5 | | |
$ | (133 | ) | |
$ | 59,348 | |
The following table summarizes the scheduled maturity for the Company’s
investments at September 30, 2015 and December 31, 2014.
| |
2015 | |
2014 |
Maturing in one year or less | |
$ | 23,700 | | |
$ | 18,232 | |
Maturing after one year through two years | |
| 27,183 | | |
| 25,459 | |
Maturing after two years | |
| 20,604 | | |
| 15,657 | |
| |
| | | |
| | |
Total investments | |
$ | 71,487 | | |
$ | 59,348 | |
Receivables from Collaborations
Receivables from collaborations are recorded for amounts due to the Company
related to reimbursable research and development costs from the U.S. Department of Health and Human Services, royalty receivables
from Shionogi, and product sales to Green Cross Corporation (“Green Cross”) and Seqirus UK Limited (“SUL”).
These receivables are evaluated to determine if any reserve or allowance should be established at each reporting date. At September
30, 2015 and December 31, 2014, the Company had the following receivables.
| |
September 30, 2015 |
| |
Billed | |
Unbilled | |
Total |
U.S. Department of Health and Human Services | |
$ | — | | |
$ | 5,444 | | |
$ | 5,444 | |
Green Cross Corporation | |
| 129 | | |
| — | | |
| 129 | |
Seqirus UK Limited
| |
| 1,922 | | |
| — | | |
| 1,922 | |
Total receivables | |
$ | 2,051 | | |
$ | 5,444 | | |
$ | 7,495 | |
| |
December 31, 2014 |
| |
Billed | |
Unbilled | |
Total |
U.S. Department of Health and Human Services | |
$ | — | | |
$ | 2,778 | | |
$ | 2,778 | |
Shionogi & Co. Ltd. | |
| 1,071 | | |
| — | | |
| 1,071 | |
Total receivables | |
$ | 1,071 | | |
$ | 2,778 | | |
$ | 3,849 | |
Monthly invoices are submitted to the U.S. Department of Health and
Human Services related to reimbursable research and development costs. The Company is also entitled to monthly reimbursement of
indirect costs based on rates stipulated in the underlying contract. The Company’s calculations of its indirect cost rates
are subject to audit by the U.S. Government.
Receivables from Product Sales
Receivables from product sales are recorded for amounts due to the
Company related to sales of RAPIVAB®. These receivables are evaluated to determine if any reserve or allowance should
be established at each reporting date.
Inventory
At December 31, 2014, the Company’s inventory consisted of RAPIVAB
finished goods inventory and work in process. Inventory is stated at the lower of cost, determined under the first-in, first-out
(“FIFO”) method, or market. The Company expenses costs related to the production of inventories as research and development
expenses in the period incurred until such time it is believed that future economic benefit is expected to be recognized, which
generally is reliant upon receipt of regulatory approval. Upon regulatory approval, the Company will capitalize subsequent costs
related to the production of inventories. In connection with the June 2015 SUL collaboration, the Company sold all of its available
RAPIVAB finished goods inventory to SUL in accordance with terms stipulated in the licensing agreement.
During 2014, in connection with the Food and Drug Administration (“FDA”)
approval of RAPIVAB, the Company began capitalizing costs associated with the production of RAPIVAB commercial inventories.
The Company’s inventory consisted of the following at September 30,
2015 and December 31, 2014:
| |
2015 | |
2014 |
Work in process | |
$ | — | | |
$ | 267 | |
Finished Goods | |
| — | | |
| 416 | |
| |
| | | |
| | |
Net inventories | |
$ | — | | |
$ | 683 | |
Patents and Licenses
The Company seeks patent protection on all internally developed
processes and products. All patent related costs are expensed to selling, general and administrative expenses when incurred
as recoverability of such expenditures is uncertain.
Accrued Expenses
The Company generally enters into contractual agreements with third-party
vendors who provide research and development, manufacturing, and other services in the ordinary course of business. Some of these
contracts are subject to milestone-based invoicing and services are completed over an extended period of time. The Company records
liabilities under these contractual commitments when it determines an obligation has been incurred, regardless of the timing of
the invoice. This process involves reviewing open contracts and purchase orders, communicating with applicable Company personnel
to identify services that have been performed on its behalf and estimating the level of service performed and the associated cost
incurred for the service when the Company has not yet been invoiced or otherwise notified of actual cost. The majority of service
providers invoice the Company monthly in arrears for services performed. The Company makes estimates of accrued expenses as of
each balance sheet date in its financial statements based on the facts and circumstances. The Company periodically confirms the
accuracy of its estimates with the service providers and makes adjustments if necessary. Examples of estimated accrued expenses
include:
|
• |
fees paid to Clinical Research Organizations (“CROs”) in connection with preclinical and toxicology studies and clinical trials; |
|
• |
fees paid to investigative sites in connection with clinical trials; |
|
• |
fees paid to contract manufacturers in connection with the production of our raw materials, drug substance and drug products; and |
|
• |
professional fees. |
The Company bases its expenses related to clinical trials on its estimates
of the services received and efforts expended pursuant to contracts with multiple research institutions and CROs that conduct and
manage clinical trials on the Company’s behalf. The financial terms of these agreements are subject to negotiation, vary
from contract to contract and may result in uneven payment flows. Payments under some of these contracts depend on factors such
as the successful enrollment of patients and the completion of clinical trial milestones. In accruing service fees, the Company
estimates the time period over which services will be performed and the level of effort expended in each period. If the actual
timing of the performance of services or the level of effort varies from the estimate, the Company will adjust the accrual accordingly.
As of September 30, 2015 and December 31, 2014, the carrying value of accrued expenses approximates their fair value due to their
short-term settlement.
Income Taxes
The liability method is used in the Company’s accounting for
income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting
and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that are expected to be in effect
when the differences are expected to reverse.
Accumulated Other Comprehensive Loss
Accumulated other comprehensive loss is comprised of unrealized gains
and losses on available-for-sale investments and is disclosed as a separate component of stockholders’ equity. Amounts reclassified
from accumulated other comprehensive loss are recorded as interest and other income on the Consolidated Statements of Comprehensive
Loss. During the nine months ended September 30, 2015, realized gains of $13 were reclassified out of accumulated other comprehensive
loss. No reclassifications out of accumulated other comprehensive loss were recorded during the nine months ended September 30,
2014.
Revenue Recognition
The Company recognizes revenues from collaborative and other research
and development arrangements, royalties and product sales when realized or realizable and earned. Revenue is realized or realizable
and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists; (ii) delivery
has occurred or services have been rendered; (iii) the seller’s price to the buyer is fixed or determinable; and (iv) collectability
is reasonably assured.
Collaborative and Other Research and Development Arrangements and Royalties
Revenue from license fees, royalty payments, event payments, and research
and development fees are recognized as revenue when the earnings process is complete and the Company has no further continuing
performance obligations or the Company has completed the performance obligations under the terms of the agreement. Fees received
under licensing agreements that are related to future performance are deferred and recognized over an estimated period determined
by management based on the terms of the agreement and the products licensed. Revisions to revenue or profit estimates as a result
of changes in the estimated revenue period are recognized prospectively.
Under certain of the Company’s license agreements, the Company
receives royalty payments based upon its licensees’ net sales of covered products. The Company recognizes royalty revenues
when it can reliably estimate such amounts and collectability is reasonably assured.
For arrangements that involve the delivery of more than one element,
each product, service and/or right to use assets is evaluated to determine whether it qualifies as a separate unit of accounting.
This determination is based on whether the deliverable has “stand-alone value” to the customer. The consideration that
is fixed or determinable is then allocated to each separate unit of accounting based on the relative selling price of each deliverable.
The estimated selling price of each deliverable is determined using the following hierarchy of values: (i) vendor-specific objective
evidence of fair value, (ii) third-party evidence of selling price (“TPE”) and (iii) best estimate of selling price
(“BESP”). The BESP reflects our best estimate of what the selling price would be if the deliverable was regularly sold
by the Company on a stand-alone basis. In most cases the Company expects to use TPE or BESP for allocating consideration to each
deliverable. The consideration allocated to each unit of accounting is recognized as the related goods or services are delivered,
limited to the consideration that is not contingent upon future deliverables. Analyzing the arrangement to identify deliverables
requires the use of judgment, and each deliverable may be an obligation to deliver services, a right or license to use an asset,
or another performance obligation.
In June 2015, the Company entered into a License Agreement (the “SUL
Agreement”) granting SUL and its affiliates worldwide rights, excluding Israel, Japan, Korea and Taiwan, to develop, manufacture
and commercialize RAPIVAB. The SUL Agreement provides for various types of payments, including a non-refundable upfront fee, milestone
payments, and future royalties. Analysis of the SUL Agreement identified three deliverables: (i) license rights, (ii) inventory
and (iii) regulatory support to obtain Canadian and European Union (“EU”) marketing approvals. The Company received
an upfront payment of $33,740 from SUL, of which $7,000 was determined to be contingent upon EU marketing approval and will be
deferred until that time. Approximately $21,777 of the upfront payment was allocated to the license rights and recognized as revenue
in the second quarter. Approximately $3,740 of the upfront payment was allocated to the pending sale of inventory and was recognized
during the third quarter, when the inventory transfer was completed. Approximately $1,223 of the revenue from the SUL Agreement
will be recognized over the expected period of involvement in these regulatory support activities.
Milestone payments are recognized as licensing revenue upon the achievement
of specified milestones if (i) the milestone is substantive in nature and the achievement of the milestone was not reasonably assured
at the inception of the agreement; and (ii) the fees are non-refundable. Any milestone payments received prior to satisfying these
revenue recognition criteria are recorded as deferred revenue.
Under the terms of the SUL Agreement, the Company may receive up to $12,000
in additional payments related to the successful achievement of regulatory milestones, including marketing approval (i) by the
FDA for a pediatric indication, (ii) by the EMA for an adult indication in the EU and (iii) by Health Products and Food Branch
of Health Canada (“Health Canada”) for an adult indication in Canada. The Company evaluated each event based payment
under the provisions of ASU 2010-17, Milestone Method of Revenue Recognition, and determined that each event based payment
met the criteria to be considered substantive and represents a milestone under the milestone method of accounting. No event based
payments were achieved during the periods presented.
Reimbursements received for direct out-of-pocket expenses related
to research and development costs are recorded as revenue in the Consolidated Statements of Comprehensive Loss rather than as a
reduction in expenses. Under the Company’s contracts with the Biomedical Advanced Research and Development Authority within
the United States Department of Health and Human Services (”BARDA/HHS”) and the National Institute of Allergy and Infectious
Diseases (“NIAID/HHS”), revenue is recognized as reimbursable direct and indirect costs are incurred.
Product Sales
The Company recognizes revenue for sales of RAPIVAB when title and substantially
all the risks and rewards of ownership have transferred to the customer, which generally occurs on the date of shipment from our
specialty distributors, utilizing the Sell-Through revenue recognition methodology. Product sales are recognized when there is
persuasive evidence that an arrangement exists, title has passed, the price is fixed and determinable, and collectability is reasonably
assured. Product sales are recognized net of estimated allowances, discounts, sales returns, chargebacks and rebates. In the United
States, the Company sells RAPIVAB to specialty distributors, who in turn, sell to physician offices, hospitals and federal, state
and commercial health care organizations. With the completion of the SUL worldwide license of RAPIVAB, SUL will be primarily
responsible for sales of RAPIVAB, other than U.S. Government stockpiling sales, and the Company’s commercial sales will be
minimal.
Sales deductions consist of statutory rebates to state Medicaid, Medicare
and other government agencies and sales discounts (including trade discounts and distribution service fees). These deductions are
recorded as reductions from revenue from RAPIVAB in the same period as the related sales with estimates of future utilization derived
from historical experience adjusted to reflect known changes in the factors that impact such reserves.
The Company utilizes data from external sources to help it estimate
gross-to-net sales adjustments as they relate to the recognition of revenue for RAPIVAB sold. Externally sourced data includes,
but is not limited to, information obtained from specialty distributors with respect to their inventory levels and their sell-through
to customers, as well as information from third-party suppliers of market research data to the pharmaceutical industry.
The Company accounts for these sales deductions in accordance with
authoritative guidance on revenue recognition when consideration is given by a vendor to a customer.
The Company has categorized and described more fully the following
significant sales deductions, all of which involve estimates and judgments, which the Company considers to be critical accounting
estimates, and require it to use information from external sources.
Rebates and Chargebacks
Statutory rebates to state Medicaid agencies and Medicare are based
on statutory discounts to RAPIVAB’s selling price. As it can take up to nine months or more for information to be received
on actual usage of RAPIVAB in Medicaid and other governmental programs, the Company maintains reserves for amounts payable under
these programs relating to RAPIVAB sales.
Chargebacks claimed by specialty distributors are based on the differentials
between product acquisition prices paid by the specialty distributors and lower government contract pricing paid by eligible customers
covered under federally qualified programs.
The amount of the reserve for rebates and chargebacks is based on
multiple qualitative and quantitative factors, including the historical and projected utilization levels, historical payment experience,
changes in statutory laws and interpretations as well as contractual terms, product pricing (both normal selling prices and statutory
or negotiated prices), changes in prescription demand patterns and utilization of the Company’s product through public benefit
plans, and the levels of RAPIVAB inventory in the distribution channel. The Company acquires prescription utilization data from
third-party suppliers of market research data to the pharmaceutical industry. The Company updates its estimates and assumptions
each period and records any necessary adjustments to its reserves. Settlements of rebates and chargebacks typically occur within
nine months from point of sale. To the extent actual rebates and chargebacks differ from the Company’s estimates, additional
reserves may be required or reserves may need to be reversed, either of which would impact current period product revenue.
Discounts and Sales Incentives
Discounts and other sales incentives primarily consist of Inventory
Management Agreement (“IMA”) Fees. Per contractual agreements with the Company’s specialty distributors, the
Company provides an IMA fee based on a percentage of their purchases of RAPIVAB. The IMA fee rates are set forth in individual
contracts. The Company tracks sales to these distributors each period and accrues a liability relating to the unpaid portion of
these fees by applying the contractual rates to such product sales.
Product Returns
The Company does not record a product return allowance as it does
not offer the ability to return goods once a bonafide shipment has been accepted by a specialty distributor.
Advertising
The Company engages in very limited distribution and direct-response
advertising when promoting RAPIVAB.
The Company recorded the following revenues for the three and nine
months ended September 30, 2015 and 2014:
| |
Three Months | |
Nine Months |
| |
2015 | |
2014 | |
2015 | |
2014 |
Product sales, net | |
$ | 5,699 | | |
$ | — | | |
$ | 6,236 | | |
$ | — | |
Royalty revenue | |
| 126 | | |
| 5 | | |
| 1,776 | | |
| 1,951 | |
Collaborative and other research and development revenues: | |
| | | |
| | | |
| | | |
| | |
U.S. Department of Health and Human Services | |
| 4,582 | | |
| 2,937 | | |
| 12,788 | | |
| 5,323 | |
Green Cross Corporation | |
| 132 | | |
| — | | |
| 132 | | |
| — | |
Shionogi (Japan) | |
| 296 | | |
| 296 | | |
| 888 | | |
| 888 | |
Seqirus UK Limited
| |
| 152 | | |
| — | | |
| 21,835 | | |
| — | |
Total collaborative and other research and development revenues | |
| 5,162 | | |
| 3,233 | | |
| 35,643 | | |
| 6,211 | |
| |
| | | |
| | | |
| | | |
| | |
Total revenues | |
$ | 10,987 | | |
$ | 3,238 | | |
$ | 43,655 | | |
$ | 8,162 | |
Research and Development Expenses
The Company’s research and development costs are charged to
expense when incurred. Research and development expenses include all direct and indirect development costs related to the development
of the Company’s portfolio of product candidates. Advance payments for goods or services that will be used or rendered for
future research and development activities are deferred and capitalized. Such amounts are recognized as expense when the related
goods are delivered or the related services are performed. Research and development expenses include, among other items, personnel
costs, including salaries and benefits, manufacturing costs, clinical, regulatory, and toxicology services performed by CROs, materials
and supplies, and overhead allocations consisting of various administrative and facilities related costs. Most of the Company’s
manufacturing and clinical and preclinical studies are performed by third-party CROs. Costs for studies performed by CROs are accrued
by the Company over the service periods specified in the contracts and estimates are adjusted, if required, based upon the Company’s
on-going review of the level of services actually performed.
Additionally, the Company has license agreements with third parties,
such as Albert Einstein College of Medicine of Yeshiva University (“AECOM”), Industrial Research, Ltd. (“IRL”),
and the University of Alabama at Birmingham (“UAB”), which require fees related to sublicense agreements or maintenance
fees. The Company expenses sublicense payments as incurred unless they are related to revenues that have been deferred, in which
case the expenses are deferred and recognized over the related revenue recognition period. The Company expenses maintenance payments
as incurred.
Deferred collaboration expenses represent sub-license payments, paid
to the Company’s academic partners upon receipt of consideration from various commercial partners, and other consideration
paid to our academic partners for modification to existing license agreements. These deferred expenses would not have been incurred
without receipt of such payments or modifications from the Company’s commercial partners and are being expensed in proportion
to the related revenue being recognized. The Company believes that this accounting treatment appropriately matches expenses with
the associated revenue.
Stock-Based Compensation
All share-based payments, including grants of stock option awards
and restricted stock unit awards, are recognized in the Company’s Consolidated Statements of Comprehensive Loss based on
their fair values. The fair value of stock option awards is estimated using the Black-Scholes option pricing model. The fair value
of restricted stock unit awards is based on the grant date closing price of the common stock. Stock-based compensation cost is
recognized as expense on a straight-line basis over the requisite service period of the award. In addition, we have outstanding
performance-based stock options for which no compensation expense is recognized until “performance” has occurred.
Interest Expense and Deferred Financing Costs
Interest expense for the three months ended September 30, 2015
and 2014 was $1,241 and $1,217, respectively, and for the nine months ended September 30, 2015 and 2014 was $3,862 and $3,684,
respectively, and relates to the issuance of the PhaRMA Notes (defined in Note 4). Costs directly associated with the issuance
of the PhaRMA Notes have been capitalized and are included in other current assets on the Consolidated Balance Sheets. These costs
are being amortized to interest expense over the term of the PhaRMA Notes using the effective interest rate method. Amortization
of deferred financing costs included in interest expense was $110 for each of the three months ended September 30, 2015 and
2014, and $329 for each of the nine months ended September 30, 2015 and 2014.
Currency Hedge Agreement
In connection with the issuance by Royalty Sub of
the PhaRMA Notes, the Company entered into a Currency Hedge Agreement (defined in Note 4) to hedge certain risks associated with
changes in the value of the Japanese yen relative to the U.S. dollar. The Currency Hedge Agreement does not qualify for hedge accounting
treatment; therefore, mark-to-market adjustments are recognized in the Company’s Consolidated Statements of Comprehensive
Loss. Cumulative mark-to-market adjustments for the nine months ended September 30, 2015 and 2014 resulted in a loss of $793 and
a gain of $732, respectively. Mark-to-market adjustments are determined by a third party pricing model that uses quoted prices
in markets that are not actively traded and for which significant inputs are observable directly or indirectly, representing Level
2 in the fair value hierarchy as defined by U.S. GAAP. In addition, the Company realized a currency exchange gain of $1,654 during
the first nine months of 2015 associated with the exercise of a U.S. Dollar/Japanese yen currency option.
The Company is also required to post collateral in connection with
the mark-to-market adjustments based on thresholds defined in the Currency Hedge Agreement. As of September 30, 2015 and December
31, 2014, no hedge collateral was posted under the agreement.
Net Loss Per Share
Net loss per share is based upon the weighted average number of common
shares outstanding during the period. Diluted loss per share is equivalent to basic net loss per share for all periods presented
herein because common equivalent shares from unexercised stock options and common shares expected to be issued under the Company’s
employee stock purchase plan were anti-dilutive. The calculation of diluted earnings per share for the three months ended September 30,
2015 and 2014 does not include 3,821 and 4,240, respectively, of such potential common shares, as their impact would be anti-dilutive.
The calculation of diluted earnings per share for the nine months ended September 30, 2015 and 2014 does not include 3,673
and 3,986, respectively, of such potential common shares, as their impact would be anti-dilutive.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP
requires the Company to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results
could differ from those estimates.
Significant Customers and Other Risks
The Company relies primarily on three specialty distributors to purchase
and supply the majority of RAPIVAB. These three pharmaceutical specialty distributors accounted for greater than 90% of all RAPIVAB
product sales to date and accounted for predominantly all of the Company’s outstanding receivables from product sales. The
loss of one or more of these specialty distributors as a customer could negatively impact the commercialization of RAPIVAB. However,
the Company will utilize these specialty distributors on a limited basis subsequent to the SUL collaboration as SUL, and other
peramivir collaboration partners, will be responsible for commercial sales on a worldwide basis. In addition, in connection with
the SUL collaboration, all peramivir sales (i.e., RAPIVAB, RAPIACTA, and PERAMIFLU) will be made by the Company’s partners
and the Company will be reliant on these partners to generate sales and remit cash to satisfy receivables.
The Company’s primary source of revenue that has an underlying cash
flow stream is the reimbursement of RAPIVAB and BCX4430 development expenses earned under cost-plus-fixed-fee contracts with BARDA/HHS
and NIAID/HHS, respectively. The Company relies on BARDA/HHS and NIAID/HHS to reimburse predominantly all of the development costs
for its RAPIVAB and BCX4430 programs. Accordingly, reimbursement of these expenses represents a significant portion of the Company’s
collaborative and other research and development revenues. The completion (as with the June 30, 2014 BARDA/HHS peramivir development
contract) or termination of the NIAID/HHS and BARDA/HHS BCX4430 contracts could negatively impact the Company’s future Consolidated
Statements of Comprehensive Loss and Cash Flows. In addition, the Company also recognizes royalty revenue from the net sales of
RAPIACTA by Shionogi; however, the underlying cash flow from these royalty payments goes directly to pay the interest, and then
the principal, on the Company’s non-recourse notes payable. Payment of the interest and the ultimate repayment of principal
of these notes will be entirely funded by future royalty payments derived from net sales of RAPIACTA. Further, the Company’s
drug development activities are performed by a limited group of third party vendors. If any of these vendors were unable to perform
their services, this could significantly impact the Company’s ability to complete its drug development activities.
Risks from Third Party Manufacturing and Distribution Concentration
The Company relies on single source manufacturers
for active pharmaceutical ingredient and finished drug product manufacturing of RAPIVAB, as well as for its other product candidates
in development.
Credit Risk
Cash equivalents and investments are financial instruments which potentially
subject the Company to concentration of risk to the extent recorded on the Consolidated Balance Sheets. The Company deposits excess
cash with major financial institutions in the United States. Balances may exceed the amount of insurance provided on such deposits.
The Company believes it has established guidelines for investment of its excess cash relative to diversification and maturities
that maintain safety and liquidity. To minimize the exposure due to adverse shifts in interest rates, the Company maintains a portfolio
of investments with an average maturity of approximately 18 months or less. Other than product sale and collaborative partner receivables
discussed above, the majority of the Company’s receivables from collaborations are due from the U.S. Government, for which
there is no assumed credit risk.
Recent Accounting Pronouncements
In April 2015, the FASB issued ASU No.2015-03, Simplifying the
Presentation of Debt Issuance Costs. This standard amends existing guidance to require the presentation of debt issuance costs
in the balance sheet as a deduction from the carrying amount of the related debt liability instead of a deferred charge. It is
effective for annual reporting periods beginning after December 15, 2015. Early adoption is permitted. The Company does not expect
this ASU will have a material impact on its consolidated financial statements.
In May 2014, the FASB issued ASU 2014-09 – Revenue from Contracts
with Customers, which provides a single, comprehensive revenue recognition model for all contracts with customers. The core
principal of this ASU is that an entity should recognize revenue when it transfers promised goods or services to customers in an
amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This
ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from
customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain
or fulfill a contract. In July 2015, the FASB finalized a one year delay in the effective date of this standard, which will now
be effective January 1, 2018; however, early adoption is permitted any time after the original effective date, January 1, 2017.
Companies can transition to the new standard under the full retrospective method or the modified retrospective method. The Company
is currently evaluating the impact this ASU will have on its consolidated financial statements.
Note 3 — Collaborative and Other Research and Development Contracts
U.S. Department of Health and Human Services (“BARDA/HHS”).
In January 2007, BARDA/HHS awarded the Company a $102,661, four-year contract for the advanced development of peramivir for the
treatment of influenza. During 2009, peramivir clinical development shifted to focus on intravenous delivery and the treatment
of hospitalized patients. To support this focus, a September 2009 contract modification was awarded to extend the i.v. peramivir
program and to increase funding by $77,191. On February 24, 2011, the Company announced that BARDA/HHS had awarded it a $55,000
contract modification, intended to fund completion of the Phase 3 development of i.v. peramivir for the treatment of patients hospitalized
with influenza. That contract modification brought the total contract award from BARDA/HHS to $234,852 and provided funding to
support the filing of an NDA to seek regulatory approval for i.v. peramivir in the U.S. In December 2013, BioCryst submitted an
NDA filing for i.v. peramivir to the FDA and the NDA was approved in December 2014. The BARDA/HHS contract expired on June 30,
2014 according to its terms.
On March 31, 2015, the Company announced that the Biomedical Research
and Development Authority within the U.S. Department of Health and Human Services’ Office of the Assistant Secretary for
Preparedness and Response awarded BioCryst a contract for the continued development of BCX4430 as a potential treatment for diseases
caused by RNA pathogens, including filoviruses. This BARDA/HHS contract includes a base contract of $13,314 to support BCX4430
drug manufacturing, as well as $22,855 in additional development options that can be exercised by the government, bringing the
potential value of the contract to $36,169. As of September 30, 2015, a total of $16,300 has been awarded under exercised options
within this contract.
National Institute of Allergy and Infectious Diseases (“NIAID/HHS”).
In September 2013, NIAID/HHS contracted with the Company for the development of BCX4430 as a treatment for Marburg virus disease.
NIAID/HHS, part of the National Institutes of Health, made an initial award of $5,000 to the Company. The total funding under this
contract as of September 30, 2015 could be up to $34,002, if all contract options are exercised by NIAID/HHS, over a five year
period. The goals of this contract, including amendments, are to file IND applications for intravenous and intramuscular BCX4430
for the treatment of Marburg virus disease, to study BCX4430 as a treatment for Ebola virus disease and to conduct an initial Phase
1 human clinical trial. As of September 30, 2015, a total of $29,875 has been awarded under exercised options within this contract.
BCX4430 is the lead compound in the Company’s BSAV research program.
The contracts with BARDA/HHS and NIAID/HHS are cost-plus-fixed-fee
contracts. That is, the Company is entitled to receive reimbursement for all costs incurred in accordance with the contracts provisions
that are related to the development of peramivir and BCX4430 plus a fixed fee, or profit. BARDA/HHS and NIAID/HHS will make periodic
assessments of progress and the continuation of the contract is based on the Company’s performance, the timeliness and quality
of deliverables, and other factors. The government has rights under certain contract clauses to terminate these contracts. These
contracts are terminable by the government at any time for breach or without cause.
Seqirus UK Limited (“SUL”). On June 16, 2015, the
Company and Seqirus UK Limited ("SUL"), a limited company organized under the laws of the United Kingdom and a subsidiary
of CSL Limited, a company organized under the laws of Australia, entered into a License Agreement (the "SUL Agreement")
granting SUL and its affiliates worldwide rights to develop, manufacture and commercialize RAPIVAB (peramivir injection) for the
treatment of influenza except for the rights to conduct such activities in Israel, Japan, Korea and Taiwan (the permitted geographies
together constituting the "Territory"). RAPIVAB is an intravenous treatment for acute uncomplicated influenza and is
currently licensed for use in the United States, Japan and Korea. RAPIVAB is the first and only intravenous influenza treatment
in the world and was approved by the U.S. Food and Drug Administration in December 2014 for the treatment of acute uncomplicated
influenza in patients 18 years and older who have been symptomatic for no more than two days. The Company retains all rights and
associated economics to procure pandemic stockpiling orders for RAPIVAB from the U.S. Government, while SUL has the right to pursue
government stockpiling outside the U.S.
Pursuant to the SUL Agreement, RAPIVAB will be commercialized by CSL's
subsidiary, SUL, which specializes in influenza prevention through the supply of seasonal and pandemic vaccine to global markets.
SUL will manufacture, commercialize and exercise decision-making authority with respect to the development and commercialization
of RAPIVAB within the Territory and be responsible for all related costs, including sales and promotion. The Company will exercise
sole decision-making authority with regard to the development and commercialization of RAPIVAB outside of the Territory and is
responsible for all associated costs.
In December 2013, the Company submitted a New Drug Application ("NDA")
for RAPIVAB to the FDA. Under the terms of the SUL Agreement, the Company is responsible for fulfilling all post-marketing approval
commitments in connection with the FDA's approval of the NDA, and upon fulfillment will transfer ownership of and financial responsibility
for the NDA to SUL. Pursuant to potential rights to sell RAPIVAB in Canada and the EU, the Company is also responsible for regulatory
filings and interactions with the Health Canada and the European Medicines Agency ("EMA") until marketing approval for
RAPIVAB is obtained and assigned to SUL. In accordance with the SUL Agreement, the Company and SUL formed a joint steering committee,
composed of an equal number of representatives from each party, to oversee, review and coordinate the conduct and progress of the
commercialization of RAPIVAB in the Territory and any additional development.
Under the terms of the SUL Agreement, the Company received
an upfront payment of $33,740, and may receive up to $12,000 in additional milestone payments related to the successful achievement
of regulatory milestones, including marketing approval (i) by the FDA for a pediatric indication, (ii) by the EMA for an adult
indication in the EU and (iii) by Health Canada for an adult indication in Canada. The Company is also entitled under the SUL Agreement
to receive tiered royalties at a percentage rate beginning in the mid-teens contingent upon meeting minimum thresholds of net sales,
as well as a low-thirties percentage of the gross profit from government stockpiling purchases made outside the U.S. Specifically,
the Company receives tiered royalties at a percentage rate in the mid-teens to low-forties on net sales in the U.S. during a Contract
Year (defined as July 1 - June 30) and tiered royalties at a percentage rate in the mid-teens to mid-twenties on net sales in the
Territory, other than in the U.S., during a Calendar Year, each subject to certain downward adjustments for circumstance or events
impacting the overall market opportunity. SUL's royalty payment obligations commence on the date of the SUL Agreement and expire,
on a country-by-country basis, upon the later of (i) the expiration of legal exclusivity in such country and (ii) ten years from
the date of the SUL Agreement (the "Royalty Term"). The Company developed RAPIVAB under a license from UAB and will owe
sublicense payments to them on any future milestone payments and/or royalties received by the Company from SUL.
The term of the SUL Agreement shall continue on a country-by-country
basis until the expiration of the last-to-expire Royalty Term in any such country in the Territory. Either party may terminate
the SUL Agreement in its entirety if the other party breaches a payment obligation, otherwise materially breaches the SUL Agreement,
subject to applicable cure periods, or if the other party suffers an insolvency event. The Company may also terminate the SUL Agreement
if SUL or any of its affiliates seek to challenge the validity of the Company's patents. Termination does not affect a party's
rights which have accrued prior thereto, but there are no stated payments in connection with termination other than payments of
obligations previously accrued. For all terminations exercised by the Company, the SUL Agreement provides for the termination of
any sublicenses granted by SUL to third parties, and in the case of termination by the Company for cause, the ceasing of SUL's
activities with respect to RAPIVAB, the discontinued use of all Company intellectual property and the termination of licenses and
rights previously granted to SUL. If requested by the Company, SUL shall also promptly sell to the Company all licensed product
it then holds in stock, otherwise, SUL may continue to sell such licensed product for designated periods.
Shionogi & Co., Ltd. (“Shionogi”). In
February 2007, the Company entered into an exclusive license agreement with Shionogi to develop and commercialize peramivir in
Japan for the treatment of seasonal and potentially life-threatening human influenza. Under the terms of the agreement, Shionogi
obtained rights to injectable formulations of peramivir in Japan. The Company developed peramivir under a license from UAB and
will owe sublicense payments to them on any future milestone payments and/or royalties received by the Company from Shionogi. In
October 2008, the Company and Shionogi amended the license agreement to expand the territory covered by the agreement to include
Taiwan and to provide rights for Shionogi to perform a Phase 3 clinical trial in Hong Kong. Shionogi has commercially launched
peramivir under the commercial name RAPIACTA in Japan. Shionogi submitted an NDA to the Taiwan FDA in late 2013.
Green Cross Corporation (“Green Cross”). In June
2006, the Company entered into an agreement with Green Cross to develop and commercialize peramivir in Korea. Under the terms of
the agreement, Green Cross will be responsible for all development, regulatory, and commercialization costs in Korea. The Company
received a one-time license fee of $250. The license also provides that the Company will share in profits resulting from the sale
of peramivir in Korea, including the sale of peramivir to the Korean government for stockpiling purposes. Furthermore, Green Cross
will pay the Company a premium over its cost to supply peramivir for development and any future marketing of peramivir products
in Korea.
Mundipharma International Holdings Limited (“Mundipharma”).
In February 2006, the Company entered into an exclusive, royalty bearing right and license agreement with Mundipharma for the development
and commercialization of forodesine, a Purine Nucleoside Phosphorylase (“PNP”) inhibitor, for use in oncology. Under
the terms of the license agreement, as amended, Mundipharma obtained worldwide rights to forodesine.
Albert Einstein College of Medicine of Yeshiva University and Industrial
Research, Ltd. (“AECOM” and “IRL” respectively). In June 2000, the Company licensed a series of potent
inhibitors of PNP from AECOM and IRL, (collectively, the “Licensors”). The lead product candidates from this collaboration
are forodesine and ulodesine. The Company has obtained worldwide exclusive rights to develop and ultimately distribute these, or
any other, product candidates that might arise from research on these inhibitors. The Company has the option to expand the Agreement
to include other inventions in the field made by the investigators or employees of the Licensors. The Company agreed to use commercially
reasonable efforts to develop these drugs. In addition, the Company has agreed to pay certain milestone payments for each licensed
product (which range in the aggregate from $1,400 to almost $4,000 per indication) for future development of these inhibitors,
single digit royalties on net sales of any resulting product made by the Company, and to share approximately one quarter of future
payments received from other third-party partners, if any. In addition, the Company has agreed to pay annual license fees, which
can range from $150 to $500, that are creditable against actual royalties and other payments due to the Licensors. This agreement
may be terminated by the Company at any time by giving 60 days advance notice or in the event of material uncured breach by
the Licensors.
In May 2010, the Company amended the licensee agreement through which
the Company obtained worldwide exclusive rights to develop and ultimately distribute any product candidates that might arise from
research on a series of PNP inhibitors, including forodesine and ulodesine. Under the terms of the amendment, the Licensors agreed
to accept a reduction of one-half in the percentage of future payments received from third-party sub licensees of the licensed
PNP inhibitors that must be paid to the Licensors. This reduction does not apply to (i) any milestone payments the Company
may receive in the future under its license agreement dated February 1, 2006 with Mundipharma and (ii) royalties received
from its sub licensees in connection with the sale of licensed products, for which the original payment rate will remain in effect.
The rate of royalty payments to the Licensors based on net sales of any resulting product made by the Company remains unchanged.
In consideration for these modifications in 2010, the Company issued
to the Licensors shares of its common stock with an aggregate value of $5,911 and paid the Licensors $90 in cash. Additionally,
at the Company’s sole option and subject to certain agreed upon conditions, any future non-royalty payments due to be paid
by it to the Licensors under the license agreement may be made either in cash, in shares of its common stock, or in a combination
of cash and shares.
On November 17, 2011, the Company further amended its agreements
with the Licensors whereby the Licensors agreed to accept a reduction of one-half in the percentage of Net Proceeds (as defined)
received by the Company under its Amended and Restated Agreement with Mundipharma that will be paid to AECOM/IRL.
On June 19, 2012, the Company further amended its agreements
with AECOM/IRL whereby the parties clarified the definition of the field with respect to PNP inhibition and AECOM/IRL agreed to
exclusive worldwide license of BCX4430 to BioCryst for any antiviral use.
At its sole option and subject to certain agreed upon conditions,
any future non-royalty payments due to be paid by the Company to AECOM/IRL under the license agreement may be made either in cash,
in shares of the Company’s common stock, or in a combination of cash and shares.
On January 6, 2014, the Carbohydrate Chemistry Research Team from
Callaghan Innovation Research Limited, formerly Industrial Research Limited, transferred to Victoria University of Wellington (“VUW”)
to establish the Ferrier Research Institute. The intellectual property rights relating to this research team, and the contracts
relating to that intellectual property were transferred to a wholly owned subsidiary of VUW, including the contracts to which BioCryst
is a party. The parties executed novation agreements in order to effectuate the transfer. Except for a substitution of parties,
the terms and conditions of the contracts are substantially the same.
The University of Alabama at Birmingham (“UAB”). The
Company currently has agreements with UAB for influenza neuraminidase and complement inhibitors. Under the terms of these agreements,
UAB performed specific research for the Company in return for research payments and license fees. UAB has granted the Company certain
rights to any discoveries in these areas resulting from research developed by UAB or jointly developed with the Company. The Company
has agreed to pay single digit royalties on sales of any resulting product and to share in future payments received from other
third-party partners. The Company has completed the research under the UAB agreements. These two agreements have initial 25-year
terms, are automatically renewable for five-year terms throughout the life of the last patent and are terminable by the Company
upon three months’ notice and by UAB under certain circumstances. Upon termination both parties shall cease using the other
parties’ proprietary and confidential information and materials, the parties shall jointly own joint inventions and UAB shall
resume full ownership of all UAB licensed products. There is currently no activity between the Company and UAB on these agreements,
but when the Company licenses this technology, such as in the case of the Shionogi, Green Cross and SUL agreements, or commercializes
products related to these programs, the Company will owe sublicense fees or royalties on amounts it receives.
Note 4 — Royalty Monetization
Overview
On March 9, 2011, the Company completed a $30,000 financing
transaction to monetize certain future royalty and milestone payments under the Shionogi Agreement, pursuant to which Shionogi
licensed from the Company the rights to market RAPIACTA in Japan and, if approved for commercial sale, Taiwan. The Company received
net proceeds of $22,691 from the transaction after transaction costs of $4,309 and the establishment of a $3,000 interest
reserve account by Royalty Sub, available to help cover interest shortfalls in the future. All of the interest reserve account
has been fully utilized with the September 2012 interest payment.
As part of the transaction, the Company entered into a purchase and
sale agreement dated as of March 9, 2011 with Royalty Sub, whereby the Company transferred to Royalty Sub, among other things,
(i) its rights to receive certain royalty and milestone payments from Shionogi arising under the Shionogi Agreement, and (ii) the
right to receive payments under a Japanese yen/US dollar foreign currency hedge arrangement (as further described below, the “Currency
Hedge Agreement”) put into place by the Company in connection with the transaction. Royalty payments will be paid by Shionogi
in Japanese yen and milestone payments will paid in U.S. dollars. The Company’s collaboration with Shionogi was not impacted
as a result of this transaction.
Non-Recourse Notes Payable
On March 9, 2011, Royalty Sub completed a private placement to
institutional investors of $30,000 in aggregate principal amount of its PhaRMA Senior Secured 14.0% Notes due 2020 (the “PhaRMA
Notes”). The PhaRMA Notes were issued by Royalty Sub under an Indenture, dated as of March 9, 2011 (the “Indenture”),
by and between Royalty Sub and U.S. Bank National Association, as Trustee. Principal and interest on the PhaRMA Notes issued are
payable from, and are secured by, the rights to royalty and milestone payments under the Shionogi Agreement transferred by the
Company to Royalty Sub and payments, if any, made to Royalty Sub under the Currency Hedge Agreement. The PhaRMA Notes bear interest
at 14% per annum, payable annually in arrears on September 1st of each year. The Company remains entitled to receive
any royalties and milestone payments related to sales of peramivir by Shionogi following repayment of the PhaRMA Notes.
Royalty Sub’s obligations to pay principal and interest on the
PhaRMA Notes are obligations solely of Royalty Sub and are without recourse to any other person, including the Company, except
to the extent of the Company’s pledge of its equity interests in Royalty Sub in support of the PhaRMA Notes. The Company
may, but is not obligated to, make capital contributions to a capital account that may be used to redeem, or on up to one occasion
pay any interest shortfall on, the PhaRMA Notes.
On September 1, 2014, Royalty Sub was unable to pay the full
amount of interest payable to avoid an event of default. Accordingly, the PhaRMA Notes and related accrued interest have been classified
as current liabilities on the Consolidated Balance Sheet. As a result of the event of default under the PhaRMA Notes, the holders
of the PhaRMA Notes may pursue acceleration of the PhaRMA Notes, may foreclose on the collateral securing the PhaRMA Notes and
the equity interest in Royalty Sub and exercise other remedies available to them under the Indenture in respect of the PhaRMA Notes.
In such event, the Company may not realize the benefit of future royalty payments that might otherwise accrue to it following repayment
of the PhaRMA Notes and it might otherwise be adversely affected. Due to the non-recourse nature of the PhaRMA Notes, in the event
of any potential acceleration or foreclosure, the primary impact to the Company would be the loss of future royalty payments from
Shionogi and legal costs associated with retiring the PhaRMA Notes. In addition, the Company may incur costs associated with liquidating
the related Currency Hedge Agreement, which would no longer be required in the event of foreclosure, or if the PhaRMA Notes cease
to be outstanding. As the PhaRMA Notes are the obligation of Royalty Sub and non-recourse to the Company, the event of default
of the PhaRMA Notes is not expected to have a significant impact on the Company’s future results of operations or cash flows.
The Indenture does not contain any financial covenants. The Indenture
includes customary representations and warranties of Royalty Sub, affirmative and negative covenants of Royalty Sub, Events of
Default and related remedies, and provisions regarding the duties of the Trustee, indemnification of the Trustee, and other matters
typical for indentures used in structured financings of this type.
The PhaRMA Notes are redeemable at the option of Royalty Sub at any
time at a redemption price equal to the outstanding principal balance of the PhaRMA Notes being redeemed plus accrued and unpaid
interest through the redemption date on the PhaRMA Notes being redeemed.
Foreign Currency Hedge
In connection with the issuance by Royalty Sub of the PhaRMA Notes, the
Company entered into a Currency Hedge Agreement to hedge certain risks associated with changes in the value of the Japanese yen
relative to the U.S. dollar. Under the Currency Hedge Agreement, the Company has the right to purchase dollars and sell yen at
a rate of 100 yen per dollar for which the Company may be required to pay a premium in each year from 2016 through 2020, provided
the Currency Hedge Agreement remains in effect. A payment of $1,950 will be required if, on May 18 of the relevant year,
the U.S. dollar is worth 100 yen or less as determined in accordance with the Currency Hedge Agreement.
The Currency Hedge Agreement does not qualify for hedge accounting treatment;
therefore, mark-to-market adjustments are recognized in the Company’s Consolidated Statement of Comprehensive Loss. Cumulative
mark-to-market adjustments resulted in a loss of $460 and a gain of $4,082 for the three months ended September 30, 2015 and
2014, respectively and a loss of $793 and a gain of $732 for the nine months ended September 30, 2015 and 2014, respectively.
During the nine months ended September 30, 2015, the Company realized a currency exchange gain of $1,654 associated with the
exercise of a U.S. Dollar/Japanese yen currency option. The Company is also required to post collateral in connection with the
mark-to-market adjustments based on defined thresholds. As of September 30, 2015 and December 31, 2014, no collateral was
posted under the Currency Hedge Agreement. The Company will not be required at any time to post collateral exceeding the maximum
premium payments remaining payable under the Currency Hedge Agreement. As of September 30, 2015, the maximum amount of hedge collateral
the Company may be required to post is $9,750.
Note 5 — Stockholders’ Equity
On March 3, 2015, the Company filed a $150,000 shelf registration
statement on Form S-3 with the SEC. This shelf registration statement became effective upon filing and allows the Company to sell
securities, including common stock, preferred stock, depository shares, stock purchase contracts, warrants and units, from time
to time at prices and on terms to be determined at the time of sale.
On November 6, 2013, the Company filed a $125,000 shelf registration
statement on Form S-3 with the SEC. This shelf registration statement was declared effective in November 2013 and allows the Company
to sell securities, including common stock, preferred stock, depository shares, stock purchase contracts, warrants and units, from
time to time at prices and on terms to be determined at the time of sale. The Company has $10,000 remaining under this shelf registration
statement.
Item 2. Management’s Discussion and Analysis of Financial Condition and
Results of Operations
This Quarterly Report on Form 10-Q contains statements of a forward-looking
nature relating to future events or the future financial performance of BioCryst. Such statements are only predictions and the
actual events or results may differ materially from the results discussed in the forward-looking statements. Factors that could
cause or contribute to such differences include those discussed below and elsewhere in this report, as well as those discussed
in other filings made by the Company with the Securities and Exchange Commission, including the Company’s Annual Report on
Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. See “Information Regarding Forward-Looking Statements.”
Cautionary Statement
The discussion herein contains forward-looking statements within the
meaning of Section 21E of the Securities Exchange Act of 1934, as amended, which are subject to the “safe harbor”
created in Section 21E. Forward looking statements regarding our financial condition and our results of operations that are
based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted
within the United States (“U.S. GAAP”), as well as projections for the future. The preparation of these financial statements
requires our management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses,
and related disclosure of contingent assets and liabilities. We evaluate our estimates on an ongoing basis. Our estimates are based
on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. The results
of our estimates form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent
from other sources.
We operate in a highly competitive environment that involves a number
of risks, some of which are beyond our control. We are subject to risks common to biotechnology and biopharmaceutical companies,
including risks inherent in our drug discovery, drug development and commercialization efforts, clinical trials, uncertainty of
regulatory actions and marketing approvals, reliance on collaborative partners, enforcement of patent and proprietary rights, the
need for future capital, competition associated with products, potential competition associated with our products and product candidates
and retention of key employees. In order for any of our product candidates to be commercialized, it will be necessary for us, or
our collaborative partners, to conduct clinical trials, demonstrate efficacy and safety of the product candidate to the satisfaction
of regulatory authorities, obtain marketing approval, enter into manufacturing, distribution and marketing arrangements, and obtain
market acceptance and adequate reimbursement from government and private insurers. We cannot provide assurance that we will generate
significant revenues or achieve and sustain profitability in the future. In addition, we can provide no assurance that we will
have sufficient funding to meet our future capital requirements. Statements contained in Management’s Discussion and Analysis
of Financial Condition and Results of Operations and elsewhere in this report which are not historical facts are, or may constitute,
forward-looking statements. Forward-looking statements involve known and unknown risks that could cause our actual results to differ
materially from expected results. The most significant known risks are discussed in the section entitled “Risk Factors.”
Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements. We caution you not to place undue reliance on any forward-looking statements.
Our revenues are difficult to predict and depend on numerous factors,
including the prevalence and severity of influenza in regions for which peramivir has received regulatory approval, seasonality
of influenza, ongoing discussions with government agencies regarding future RAPIVAB and/or BCX4430 development and stockpiling
procurement, as well as entering into, or modifying, licensing agreements for our product candidates. Furthermore, revenues related
to our collaborative development activities are dependent upon the progress toward and the achievement of developmental milestones
by us or our collaborative partners.
Our operating expenses are also difficult to predict and depend on several
factors, including research and development expenses (and whether these expenses are reimbursable under government contracts),
drug manufacturing, clinical research activities, the ongoing requirements of our development programs, the anticipated regulatory
approval of our drug candidates, expenses related to building a commercial organization, and the availability of capital and direction
from regulatory agencies, which are difficult to predict. Management may be able to control the timing and level of research and
development and selling, general and administrative expenses, but many of these expenditures will occur irrespective of our actions
due to contractually committed activities and/or payments.
As a result of these factors, we believe that period to period comparisons
are not necessarily meaningful and you should not rely on them as an indication of future performance. Due to all of the foregoing
factors, it is possible that our operating results will be below the expectations of market analysts and investors. In such event,
the prevailing market price of our common stock could be materially adversely affected.
Overview
We are a biotechnology company that designs, optimizes and develops
novel small molecule drugs that block key enzymes involved in the pathogenesis of diseases. We focus on the treatment of rare diseases
in which significant unmet medical needs exist and align with our capabilities and expertise. We integrate the disciplines of biology,
crystallography, medicinal chemistry and computer modeling to discover and develop small molecule pharmaceuticals through the process
known as structure-guided drug design.
Critical Accounting Policies and Estimates
The accompanying discussion and analysis of our financial condition
and results of operations are based upon our consolidated financial statements and the related disclosures, which have been prepared
in accordance with U.S. GAAP. The preparation of these consolidated financial statements requires us to make estimates and judgments
that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosure of contingent assets and liabilities.
We evaluate our estimates, judgments and the policies underlying these estimates on a periodic basis, as situations change, and
regularly discuss financial events, policies, and issues with members of our audit committee and our independent registered public
accounting firm. We routinely evaluate our estimates and policies regarding revenue recognition, administration, inventory and
manufacturing, taxes, stock-based compensation, research and development, consulting and other expenses and any associated liabilities.
Recent Corporate Highlights
RAPIVAB (peramivir injection)
RAPIVAB was approved by the FDA on December 19, 2014 for the treatment
of acute uncomplicated influenza in adult patients who have been symptomatic for no more than two days. We have elected the “Sell-Through”
revenue recognition methodology and recognized approximately $0.6 million of RAPIVAB product sales in the first nine months of
2015. With the approval, commercial availability and out-licensing collaboration of RAPIVAB, we have moved our focus to obtaining
a stockpiling procurement contract with the U.S. Government.
On June 16, 2015, we and Seqirus UK Limited, a limited company organized
under the laws of the UK ("SUL") and a subsidiary of CSL, entered into a License Agreement (the "SUL Agreement")
granting SUL and its affiliates worldwide rights to develop, manufacture and commercialize RAPIVAB (peramivir injection) for the
treatment of influenza except for the rights to conduct such activities in Israel, Japan, Korea and Taiwan (the permitted geographies
together constituting the "Territory"). RAPIVAB is an intravenous treatment for acute uncomplicated influenza and is
currently licensed for use in the United States, Japan and Korea. RAPIVAB is the first and only intravenous influenza treatment
in the world. We retain all rights and associated economics to procure pandemic stockpiling orders for RAPIVAB from the U.S. government,
while SUL has the right to pursue government stockpiling outside the U.S.
Pursuant to the SUL Agreement, RAPIVAB will be commercialized by CSL's
subsidiary, SUL, which specializes in influenza prevention through the supply of seasonal and pandemic vaccine to global markets.
SUL will manufacture, commercialize and exercise decision-making authority with respect to the development and commercialization
of RAPIVAB within the Territory and be responsible for all related costs, including sales and promotion. We will exercise sole
decision-making authority with regard to the development and commercialization of RAPIVAB outside of the Territory and are responsible
for all associated costs.
Under the terms of the SUL Agreement, we are responsible for
fulfilling all post-marketing approval commitments in connection with the FDA's approval of the NDA, and upon fulfillment we will
transfer ownership of and financial responsibility for the NDA to SUL. Pursuant to potential rights to sell RAPIVAB in Canada and
the European Union (“EU”), we are also responsible for regulatory filings and interactions with the Health Products
and Food Branch of Health Canada ("Health Canada") and the European Medicines Agency ("EMA") until marketing
approval for RAPIVAB is obtained and assigned to SUL. In accordance with the SUL Agreement, we and SUL formed a joint steering
committee, composed of an equal number of representatives from each party, to oversee, review and coordinate the conduct and progress
of the commercialization of RAPIVAB in the Territory and any additional development.
Under the terms of the SUL Agreement, we received an upfront payment of
$33.7 million, and we may receive up to $12.0 million in additional milestone payments related to the successful achievement of
regulatory milestones, including marketing approval (i) by the FDA for a pediatric indication, (ii) by the EMA for an adult indication
in the EU and (iii) by Health Canada for an adult indication in Canada. We are also entitled under the SUL Agreement to receive
tiered royalties at a percentage rate beginning in the mid-teens contingent upon meeting minimum thresholds of net sales, as well
as a low-thirties percentage of the gross profit from government stockpiling purchases made outside the U.S. Specifically, we receive
tiered royalties at a percentage rate in the mid-teens to low-forties on net sales in the U.S. during a Contract Year (defined
as July 1 – June 30) and tiered royalties at a percentage rate in the mid-teens to mid-twenties on net sales in the Territory,
other than in the U.S., during a Contract Year, each subject to certain downward adjustments for circumstance or events impacting
the overall market opportunity. SUL's royalty payment obligations commence on the date of the SUL Agreement and expire, on a country-by-country
basis, upon the later of (i) the expiration of legal exclusivity in such country and (ii) ten years from the date of the SUL Agreement
(the "Royalty Term").
The term of the SUL Agreement shall continue on a country-by-country basis
until the expiration of the last-to-expire Royalty Term in any such country in the Territory. Either party may terminate the SUL
Agreement in its entirety if the other party breaches a payment obligation, otherwise materially breaches the SUL Agreement, subject
to applicable cure periods, or if the other party suffers an insolvency event. We may also terminate the SUL Agreement if SUL or
any of its affiliates seek to challenge the validity of our patents. Termination does not affect a party's rights which have accrued
prior thereto, but there are no stated payments in connection with termination other than payments of obligations previously accrued.
For all terminations exercised by us, the SUL Agreement provides for the termination of any sublicenses granted by SUL to third
parties, and in the case of termination by us for cause, the ceasing of SUL's activities with respect to RAPIVAB, the discontinued
use of all of our intellectual property and the termination of licenses and rights previously granted to SUL. If requested by us,
SUL shall also promptly sell to us all licensed product it then holds in stock, otherwise, SUL may continue to sell such licensed
product for designated periods.
HAE Program
Avoralstat, formerly known as BCX4161
On December 18, 2014, we announced the dosing of the first patient
in OPuS-2 (Oral ProphylaxiS-2), a blinded, randomized, placebo-controlled clinical trial of orally-administered avoralstat in patients
with HAE. OPuS-2 is a 12-week, three-arm, parallel cohort design trial to evaluate the efficacy and safety of two doses of avoralstat,
300 mg and 500 mg, administered three-times daily compared with placebo. This trial is being conducted in the U.S., Canada and
Europe and approximately 100 HAE patients have been enrolled. The primary efficacy endpoint for the trial is the mean angioedema
attack rate for each avoralstat dose group compared to placebo. Avoralstat has Orphan Drug designation in the U.S. and Europe and
has Fast Track designation for the treatment of HAE in the U.S.
On October 8, 2015, we announced that the OPuS-2 trial completed enrollment,
and we anticipate the final OPuS-2 patient visits will occur in January 2016. Accordingly, we expect to report results in early
2016. The results of this trial will then be provided for regulatory discussions intended to determine the scope of any additional
information that may be required for completion of avoralstat registration. We have been corresponding with regulatory agencies
regarding a deferral of a two-year rat carcinogenicity study for avoralstat. The results from this type of study are normally required
to be available at the time of submission for approval. Currently, we have reached agreement with the EMA to defer submission of
these results as a post-filing commitment. Agreement has not been reached with the FDA regarding a deferral at this time and the
most recent (September 2015) communication from the FDA indicated that we would be required to complete the two year rat carcinogenicity
at the time of filing for avoralstat. At the end-of-Phase 2 meeting following the completion of OPuS-2, we plan to engage in further
dialogue with the FDA to discuss deferral, in the context of all available toxicology and clinical data. We plan to initiate a
two-year rat carcinogenicity study in early 2016. Without a deferral, we expect our NDA filing to occur in 2018.
BCX7353 and other 2nd generation HAE compounds
In January 2015, we selected BCX7353 to advance into Phase 1 development
as a once-daily, oral prophylactic HAE treatment. BXC7353 is structurally different from avoralstat, but has a similar mechanism
of action targeting plasma kallikrein. On May 13, 2015, we announced the initiation of a Phase 1 clinical trial to evaluate the
safety, pharmacokinetics and pharmacodynamics of orally-administered BCX7353 in healthy volunteers.
On October 8, 2015, we announced
that the randomized, placebo-controlled, Phase 1 clinical trial of orally-administered BCX7353 in
healthy volunteers successfully met all of its objectives. Oral BCX7353 was generally safe and well tolerated at all doses up to
500 mg once-daily for 7 days and 350 mg once-daily for 14 days in healthy volunteers, and no dose-limiting toxicity was identified.
BCX7353 plasma levels increased in approximate proportion to dose,
and drug exposure was not affected by dosing with food. The half-life of BCX7353 was estimated at 50-60 hours. After daily dosing,
blood levels met or exceeded a predicted target therapeutic range throughout the 24 hour dosing interval. Inhibition of the target
enzyme, plasma kallikrein, was measured in a sensitive and specific bioassay. Daily dosing with BCX7353 strongly inhibited plasma
kallikrein at all four dose levels; the degree of inhibition was dose-related (p < 0.0001) and inhibition was sustained throughout
the 24 hour dosing interval. This pharmacodynamic effect correlated strongly to the achieved drug concentration (r = 0.91, p <
0.0001).
There were no serious adverse events (“AEs”)
and most AEs observed were mild. Two subjects discontinued the study due to moderate gastrointestinal AEs. One subject developed
a delayed-type hypersensitivity rash after completing seven days of study drug; the rash resolved quickly with oral and topical
steroids. No clinically significant laboratory abnormalities were seen at any dose or duration tested. The safety, tolerability,
drug exposure and on-target plasma kallikrein inhibition results strongly support advancing the development program into a Phase
2 study in HAE patients. A Phase 2, four week dose ranging trial to evaluate the safety, tolerability,
pharmacokinetics, pharmacodynamics and efficacy of BCX7353 as a preventative treatment to reduce the frequency of attacks in HAE
patients is expected to begin in early 2016.
On October 27, 2015 the Japanese Ministry of Health Labor & Welfare
(“MHLW”) announced that BioCryst’s BCX7353 was one of six products designated under MHLW’s new “Sakigake”
fast track review system. The Sakigake Designation System promotes R&D in Japan, aiming at early practical application for
innovative pharmaceutical products. This designation provides for additional interactions with the regulatory agency in Japan from
early development through filing, and prioritized development and review, with the aim of introduction of the product as soon as
possible to address a serious unmet medical need.
In addition to BCX7353, we have succeeded in inventing several uniquely
different plasma kallikrein inhibitor molecules from distinct structural classes. Accordingly, we have selected additional drug
candidates that have suitable pharmacologic properties to advance into preclinical development. The development of these candidates
is approximately two years behind BCX7353.
BCX4430
On December 15, 2014, we announced the dosing of the first subject in
a randomized, placebo-controlled Phase 1 clinical trial to evaluate i.m. administration of BCX4430 in healthy volunteers. The main
goals of this first-in-human study are to evaluate the safety, tolerability and pharmacokinetics of escalating doses of BCX4430
administered via i.m. injection in healthy subjects. This Phase 1 study is expected to continue in 2016.
Results of Operations (three months ended September 30, 2015 compared to the three
months ended September 30, 2014)
For the three months ended September 30, 2015, total revenues were $11.0
million as compared to $3.2 million for the three months ended September 30, 2014. The increase in revenue in the third quarter
of 2015, as compared to 2014, resulted from higher levels of product and collaboration revenue associated with the sale of RAPIVAB
and the SUL out-licensing transaction, as well as increased collaboration revenue associated with the development of BCX4430 under
the NIAID/HHS and BARDA/HHS contracts. Revenues in the third quarter of 2015 included $5.7 million of RAPIVAB product revenue and
$0.2 million of collaborative revenue related to the SUL out-licensing transaction, $0.1 million of royalty revenue from Shionogi
and Green Cross associated with sales of peramivir in Japan and Korea, $4.6 million of reimbursement of collaborative expenses
from NIAID/HHS and BARDA/HHS related to the development of BCX4430 and $0.3 million associated with collaborative revenue amortization
from other corporate partnerships. Revenues in the third quarter of 2014 included $2.9 million of reimbursement of collaborative
expenses from NIAID/HHS related to the development of BCX4430 and $0.3 million associated with collaborative revenue amortization
from other corporate partnerships.
Research and development (“R&D”) expenses increased to
$20.1 million for the third quarter of 2015 from $13.0 million in 2014. The increase in 2015 R&D expenses, as compared to 2014,
reflect increased spending on our HAE program, and to a lesser extent, higher expenses associated with two discovery-stage rare
disease projects. The increase in spending on our HAE program was associated with the clinical advancement of avoralstat and BCX7353.
Selling, general and administrative (“SG&A”) expenses
increased to $2.7 million for the third quarter of 2015 as compared to $1.8 million in 2014. The increase of $0.9 million
is primarily associated with initiation of activities in preparation for commercialization of our HAE product candidates and to
a lesser extent commercial expenses associated with RAPIVAB. With the completion of the SUL transaction, we do not anticipate incurring
substantial commercial expenses to promote RAPIVAB in the future. We do expect our SG&A expenses to be higher than in previous
quarters due to administrative expenses associated with corporate growth in preparation for future NDA and other regulatory filings
and for HAE product commercialization.
Interest expense related to the non-recourse notes issued in conjunction
with the non-dilutive peramivir royalty monetization transaction in March 2011 was $1.2 million in the third quarter of 2015
and 2014. In addition, a mark-to-market loss of $0.5 million was recognized in the third quarter of 2015 related to our foreign
currency hedge, compared to a mark-to-market gain of $4.1 million in the same quarter of 2014, both resulting from changes in the
U.S. dollar/Japanese yen exchange rate in the related time periods. In addition, we realized a currency exchange gain of $0.1 million
in the third quarter of 2015 related to the exercise of a U.S. Dollar/Japanese yen currency option under our foreign currency hedge.
Results of Operations (nine months ended September 30, 2015 compared to the nine months
ended September 30, 2014)
For the nine months ended September 30, 2015, total revenues were $43.7
million as compared to $8.2 million for the nine months ended September 30, 2014. The increase in 2015 was primarily due to recognizing
revenue associated with the SUL out-licensing transaction, RAPIVAB product revenue and increased collaboration revenue associated
with BCX4430 development. Revenues in the first nine months of 2015 included $5.7 million of RAPIVAB product revenue and $21.8
million of collaborative revenue related to the SUL Agreement, $1.8 million of royalty revenue from Shionogi and Green Cross associated
with sales of peramivir in Japan and Korea, $12.8 million of reimbursement of collaborative expenses from NIAID/HHS and BARDA/HHS
related to the development of BCX4430 and $0.9 million associated with collaborative revenue amortization from other corporate
partnerships. In addition, we recorded approximately $0.6 million of RAPIVAB revenue under the “Sell-Through” revenue
recognition methodology. Revenues in the first nine months of 2014 included $2.0 million of royalty revenue from Shionogi and Green
Cross associated with sales of peramivir in Japan and Korea, $5.3 million of reimbursement of collaborative expenses from NIAID/HHS
and BARDA/HHS related to the development of BCX4430 and i.v. peramivir and $0.9 million associated with collaborative revenue amortization
from other corporate partnerships.
R&D expenses increased to $53.7 million for the first nine months
of 2015 from $33.3 million in 2014. The increase in 2015 R&D expenses, as compared to 2014, reflect increased spending on our
HAE program, and to a lesser extent, our BCX4430 program and two rare disease projects.
The following table summarizes our R&D expenses for the periods
indicated (amounts are in thousands).
| |
Three Months Ended September 30, | |
Nine Months Ended September 30, |
| |
2015 | |
2014 | |
2015 | |
2014 |
R&D expenses by program: | |
| | | |
| | | |
| | | |
| | |
Avoralstat | |
$ | 7,296 | | |
$ | 4,822 | | |
$ | 19,390 | | |
$ | 13,634 | |
BCX4430 | |
| 3,394 | | |
| 3,204 | | |
| 9,746 | | |
| 6,877 | |
2nd generation HAE compounds | |
| 6,308 | | |
| 3,530 | | |
| 16,415 | | |
| 7,450 | |
Peramivir | |
| 647 | | |
| 608 | | |
| 2,685 | | |
| 1,970 | |
Other research, preclinical and development costs | |
| 2,422 | | |
| 872 | | |
| 5,475 | | |
| 3,355 | |
| |
| | | |
| | | |
| | | |
| | |
Total R&D expenses | |
$ | 20,067 | | |
$ | 13,036 | | |
$ | 53,711 | | |
$ | 33,286 | |
SG&A expenses increased to $10.3 million for the first nine months
of 2015 as compared to $5.4 million in 2014. The increase of $4.9 million is primarily associated with initiation of commercial
organization in preparation for commercialization of our HAE drug candidates, unrestricted grants awarded to the U.S. and international
HAE patient advocacy groups, as well as deal-related expenses associated with the SUL out-license transaction.
Interest expense related to the non-recourse notes issued in conjunction
with the non-dilutive peramivir royalty monetization transaction in March 2011 was $3.9 million in the first nine months of
2015, compared to $3.7 million in the first nine months of 2014. In addition, a mark-to-market loss of $0.8 million was recognized
in the first nine months of 2015 related to our foreign currency hedge, compared to a mark-to-market gain of $0.7 million in the
same period in the prior year, both resulting from changes in the U.S. dollar/Japanese yen exchange rate in the related time periods.
In addition, a realized currency exchange gain of $1.6 million was recognized in the first nine months of 2015 related to the exercise
of a U.S. Dollar/Japanese yen currency option under our foreign currency hedge.
Liquidity and Capital Resources
Cash expenditures have exceeded revenues since our inception and we expect
our 2015 operating expenses to exceed our 2015 revenues. Our operations have principally been funded through public offerings and
private placements of equity securities; cash from collaborative and other research and development agreements, including U.S.
Government contracts for peramivir and BCX4430; and to a lesser extent, the PhaRMA Notes financing. To date, we have been awarded
a BARDA/HHS peramivir development contract totaling $234.8 million, which expired on June 30, 2014, a NIAID/HHS BCX4430 development
contract totaling $34.0 million, which is ongoing, and a BARDA/HHS BCX4430 development contract totaling $36.2 million, which is
also ongoing. The total amount of NIAID/HHS and BARDA/HHS funding obligated under awarded options in the active contracts is $29.9 million
and $16.3 million, respectively. Most recently, we completed a successful public offering in June 2014 of 11.5 million shares of
common stock at a price of $10.00 per share following the release of our OPuS-1 clinical trial results, which provided net proceeds
to us of approximately $107.8 million. This financing and the recently completed SUL out-licensing transaction provides us liquidity
into 2017. We retain the ability to offer for sale approximately $160.0 million of securities, including common stock, preferred
stock, depositary shares, stock purchase contracts, warrants, and units from effective shelf registration statements, which we
filed with the Securities and Exchange Commission. In addition to the above, we have received funding from other sources, including
other collaborative and other research and development agreements; government grants; equipment lease financing; facility leases;
research grants; and interest income on our investments.
As of September 30, 2015, we had net working capital of $20.1 million,
a decrease of approximately $12.0 million from $32.1 million at December 31, 2014. The decrease in working capital was principally
due to our normal operating expenses associated with the development of our product candidates. Our principal sources of liquidity
at September 30, 2015 were approximately $46.6 million in cash and cash equivalents; approximately $71.5 million in investments
considered available-for-sale; and approximately $7.5 million in receivables from collaborations. We anticipate our cash and investments
will fund our operations into 2017.
We intend to contain costs and cash flow requirements by closely managing
our third party costs and headcount, leasing scientific equipment and facilities, contracting with other parties to conduct certain
research and development projects and using consultants. We expect to incur additional expenses, potentially resulting in significant
losses, as we continue to pursue our research and development activities and begin to build a commercial infrastructure. We may
incur additional expenses related to the filing, prosecution, maintenance, defense and enforcement of patent and other intellectual
property claims and additional regulatory costs as our clinical programs advance through later stages of development. The objective
of our investment policy is to ensure the safety and preservation of invested funds, as well as maintaining liquidity sufficient
to meet cash flow requirements. We place our excess cash with high credit quality financial institutions, commercial companies,
and government agencies in order to limit the amount of our credit exposure. We have not realized any significant losses on our
investments.
We extended or executed additional lease obligations in 2015 for our
Birmingham, Alabama operations, which increases the obligation by $5.6 million and extends these new obligations through 2026.
These operating lease obligations encompass future rental obligations of our Birmingham operating facilities.
We plan to finance our needs principally from the following:
|
• |
lease or loan financing and future public or private equity financing; |
|
• |
our existing capital resources and interest earned on that capital; |
|
• |
payments under existing and executing new contracts with the U.S. Government; and |
|
• |
payments under collaborative and licensing agreements with corporate partners. |
As our programs continue to advance, our costs will increase. Our
current and planned clinical trials, plus the related development, manufacturing, regulatory approval process requirements and
additional personnel resources and testing required for the continuing development of our product candidates will consume significant
capital resources and will increase our expenses. Our expenses, revenues and cash utilization rate could vary significantly depending
on many factors, including our ability to raise additional capital, the development progress of our collaborative agreements for
our product candidates, the amount and timing of funding we receive from existing U.S. Government contracts for BCX4430, the amount
of funding or assistance, if any, we receive from new U.S. Government contracts or other new partnerships with third parties for
the development and or commercialization of our product candidates, the progress and results of our current and proposed clinical
trials for our most advanced product candidates, the progress made in the manufacturing of our lead product candidates and the
progression of our other programs.
With the funds available at September 30, 2015, we believe these resources
will be sufficient to fund our operations into 2017. Our future liquidity needs, and ability to address those needs, will largely
be determined by the success of our product candidates and key development and regulatory events in the future. In order to continue
our operations substantially beyond 2017, we will need to: (1) successfully secure or increase U.S. Government funding of
our programs, including procurement contracts; (2) out-license rights to certain of our products or product candidates, pursuant
to which we would receive cash milestones; (3) raise additional capital through equity or debt financings or from other sources;
(4) obtain additional product candidate regulatory approvals, which would generate revenue and cash flow; (5) reduce
spending on one or more research and development programs; and/or (6) restructure operations. We retain the ability to offer
for sale approximately $160.0 million of securities, including common stock, preferred stock, depositary shares stock purchase
contracts, warrants, and units from our effective shelf S-3 registration statements.
Our long-term capital requirements and the adequacy of our available
funds will depend upon many factors, including:
|
• |
our ability to perform under our government contracts and receive reimbursement, and receive stockpiling procurement contracts; |
|
• |
the magnitude of work under our government contracts; |
|
• |
the progress and magnitude of our research, drug discovery and development programs; |
|
• |
the timing, progress and magnitude of building out our commercial capabilities; |
|
• |
changes in existing collaborative relationships or government contracts; |
|
• |
our ability to establish additional collaborative relationships with academic institutions, biotechnology or pharmaceutical companies and governmental agencies or other third parties; |
|
• |
the extent to which our partners, including governmental agencies, will share in the costs associated with the development of our programs or run the development programs themselves; |
|
• |
our ability to negotiate favorable development and marketing strategic alliances for certain product candidates; |
|
• |
successful commercialization of marketed products by either us or our partners; |
|
• |
the scope and results of preclinical studies and clinical trials to identify and develop product candidates; |
|
• |
our ability to engage sites and enroll subjects in our clinical trials; |
|
• |
the scope of manufacturing of our product candidates to support our preclinical research and clinical trials; |
|
• |
increases in personnel and related costs to support the development and commercialization of our product candidates; |
|
• |
the scope of manufacturing of our drug substance and product candidates required for future NDA filings; |
|
• |
competitive and technological advances; |
|
• |
the time and costs involved in obtaining regulatory approvals as well as the success or failure of obtaining regulatory approvals both in the United States and in other major markets; |
|
• |
post-approval commitments for RAPIVAB and other products that receive regulatory approval; and |
|
• |
the costs involved in all aspects of intellectual property strategy and protection including the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing patent claims. |
We expect that we will be required to raise additional capital
to complete the development and commercialization of our current product candidates and we may seek to raise capital in the near
future. Additional funding, whether through additional sales of equity or debt securities, collaborative or other arrangements
with corporate partners or from other sources, including governmental agencies in general and existing government contracts specifically,
may not be available when needed or on terms acceptable to us. The issuance of preferred or common stock or convertible securities,
with terms and prices significantly more favorable than those of the currently outstanding common stock, could have the effect
of diluting or adversely affecting the holdings or rights of our existing stockholders. In addition, collaborative arrangements
may require us to transfer certain material rights to such corporate partners. Insufficient funds may require us to delay, scale
back or eliminate certain of our research and development programs. Our future working capital requirements, including the need
for additional working capital, will be largely determined by the advancement of our portfolio of product candidates as well as
rate of reimbursement by U.S. Government agencies of our BCX4430 expenses and any future decisions regarding the future of the
RAPIVAB and BCX4430 programs, including those relating to stockpiling procurement. More specifically, our working capital requirements
will be dependent on the number, magnitude, scope and timing of our development programs; regulatory approval of our product candidates;
obtaining funding from collaborative partners; the cost, timing and outcome of regulatory reviews, regulatory investigations, and
changes in regulatory requirements; the costs of obtaining patent protection for our product candidates; the timing and terms of
business development activities; the rate of technological advances relevant to our operations; the efficiency of manufacturing
processes developed on our behalf by third parties; and the level of required administrative support for our daily operations.
Financial Outlook for 2015
Based upon our development plans, expected operations and our awarded
government contracts, we expect 2015 operating cash usage to be in the range of $8 to $18 million upon adjusting our previously
predicted range for the first nine months of operations including the SUL transaction, and expect our total 2015 operating expenses
to continue to be in the range of $75 to $95 million. Our operating expense range excludes equity-based compensation expense due
to the difficulty in accurately projecting this expense as it is significantly impacted by the volatility and price of our stock,
as well as vesting of our outstanding performance-based stock options. Our operating cash forecast excludes any impact of our royalty
monetization, and hedge collateral posted or returned, but includes the impact of the $33.7 million payment received associated
with the SUL transaction. Our ability to remain within our operating expense and operating cash target ranges is subject to multiple
factors, including unanticipated or additional general development and administrative costs and other factors described under the
Risk Factors located elsewhere in this report.
Off-Balance Sheet Arrangements
As of September 30, 2015, we do not have any unconsolidated entities
or off-balance sheet arrangements.
Critical Accounting Policies
We have established various accounting policies that govern the application
of U.S. GAAP, which were utilized in the preparation of our consolidated financial statements. Certain accounting policies involve
significant judgments and assumptions by management that have a material impact on the carrying value of certain assets and liabilities.
Management considers such accounting policies to be critical accounting policies. The judgments and assumptions used by management
are based on historical experience and other factors, which are believed to be reasonable under the circumstances. Because of the
nature of the judgments and assumptions made by management, actual results could differ from these judgments and estimates, which
could have a material impact on the carrying values of assets and liabilities and the results of operations.
While our significant accounting policies are more fully described
in Note 1 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31,
2014, we believe that the following accounting policies are the most critical to aid you in fully understanding and evaluating
our reported financial results and affect the more significant judgments and estimates that we use in the preparation of our financial
statements.
Inventory
Our inventories consist of RAPIVAB finished goods and work in process,
which are valued at the lower of cost or market using the first-in, first-out (i.e., FIFO) method. Cost includes materials, labor,
overhead, shipping and handling costs. Our inventories are subject to expiration dating. We regularly evaluate the carrying value
of our inventories and provide valuation reserves for any estimated obsolete, short-dated or unmarketable inventories. In addition,
we may experience spoilage of our raw materials and supplies. Our determination that a valuation reserve might be required, in
addition to the quantification of such reserve, requires us to utilize significant judgment. In connection with the FDA approval
of RAPIVAB in December 2014, we began capitalizing costs associated with the production of RAPIVAB commercial inventories. In connection
with the June 2015 SUL collaboration, we sold all of our available RAPIVAB finished goods inventory to SUL in accordance with terms
stipulated in the licensing agreement.
Accrued Expenses
We enter into contractual agreements with third-party vendors who
provide research and development, manufacturing, and other services in the ordinary course of business. Some of these contracts
are subject to milestone-based invoicing and services are completed over an extended period of time. We record liabilities under
these contractual commitments when an obligation has been incurred. This accrual process involves reviewing open contracts and
purchase orders, communicating with our applicable personnel to identify services that have been performed and estimating the level
of service performed and the associated cost when we have not yet been invoiced or otherwise notified of actual cost. The majority
of our service providers invoice us monthly in arrears for services performed. We make estimates of our accrued expenses as of
each balance sheet date based on the facts and circumstances known to us. We periodically confirm the accuracy of our estimates
with the service providers and make adjustments if necessary. Examples of estimated accrued expenses include:
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fees paid to Clinical Research Organizations (“CROs”) in connection with preclinical and toxicology studies and clinical trials; |
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fees paid to investigative sites in connection with clinical trials; |
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fees paid to contract manufacturers in connection with the production of our raw materials, drug substance and product candidates; and |
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professional fees. |
We base our expenses related to clinical trials on our estimates of
the services received and efforts expended pursuant to contracts with multiple research institutions and CROs that conduct and
manage clinical trials on our behalf. The financial terms of these agreements are subject to negotiation, vary from contract to
contract and may result in uneven payment flows. Payments under some of these contracts depend on factors such as the successful
enrollment of patients and the completion of clinical trial milestones. In accruing service fees, we estimate the time period over
which services will be performed and the level of effort expended in each period. If the actual timing of the performance of services
or the level of effort varies from our estimate, we will adjust the accrual accordingly. If we do not identify costs that we have
begun to incur or if we underestimate or overestimate the level of these costs, our actual expenses could differ from our estimates.
Revenue Recognition
We recognize revenues from collaborative and other research and development
arrangements and product sales. Revenue is realized or realizable and earned when all of the following criteria are met: (i) persuasive
evidence of an arrangement exists; (ii) delivery has occurred or services have been rendered; (iii) the seller’s
price to the buyer is fixed or determinable; and (iv) collectability is reasonably assured.
Collaborative and Other Research and Development Arrangements and Royalties
Revenue from license fees, royalty payments, event payments, and research
and development fees are recognized as revenue when the earnings process is complete and we have no further continuing performance
obligations or we have completed the performance obligations under the terms of the agreement. Fees received under licensing agreements
that are related to future performance are deferred and recognized over an estimated period determined by management based on the
terms of the agreement and the products licensed. In the event a license agreement contains multiple deliverables, we evaluate
whether the deliverables are separate or combined units of accounting. Revisions to revenue or profit estimates as a result of
changes in the estimated revenue period are recognized prospectively.
Under certain of our license agreements, we receive royalty payments
based upon our licensees’ net sales of covered products. We recognize royalty revenues when we can reliably estimate such
amounts and collectability is reasonably assured. Royalty revenue paid by Shionogi on their product sales is subject to returns.
For arrangements that involve the delivery of more than one element,
each product, service and/or right to use assets is evaluated to determine whether it qualifies as a separate unit of accounting.
This determination is based on whether the deliverable has “stand-alone value” to the customer. The consideration that
is fixed or determinable is then allocated to each separate unit of accounting based on the relative selling price of each deliverable.
The estimated selling price of each deliverable is determined using the following hierarchy of values: (i) vendor-specific objective
evidence of fair value, (ii) third-party evidence of selling price (“TPE”) and (iii) best estimate of selling price
(“BESP”). The BESP reflects our best estimate of what the selling price would be if the deliverable was regularly sold
by us on a stand-alone basis. In most cases we expect to use TPE or BESP for allocating consideration to each deliverable. The
consideration allocated to each unit of accounting is recognized as the related goods or services are delivered, limited to the
consideration that is not contingent upon future deliverables. Analyzing the arrangement to identify deliverables requires the
use of judgment, and each deliverable may be an obligation to deliver services, a right or license to use an asset, or another
performance obligation.
In June 2015, we entered into a License Agreement
(the "SUL Agreement") granting SUL and its affiliates worldwide rights, excluding Israel, Japan, Korea and Taiwan, to
develop, manufacture and commercialize RAPIVAB. The SUL Agreement provides for various types of payments, including a non-refundable
upfront fee, milestone payments, and future royalties. Analysis of the SUL Agreement identified three deliverables: (i) license
rights, (ii) inventory and (iii) regulatory support to obtain Canadian and EU marketing approvals. We received an upfront payment
of $33.7 million from SUL of which $7.0 million was determined to be contingent upon EU marketing approval and will be deferred
until that time. Approximately $21.8 million of the upfront payment was allocated to the license rights and recognized as revenue
in the second quarter. Approximately $3.7 million of the upfront payment was allocated to the sale of inventory and was recognized
in the third quarter when the inventory transfer was completed. Approximately $1.2 million of the revenue from the SUL Agreement
will be recognized ratably over the expected period of involvement in these regulatory support activities.
Milestone payments are recognized as licensing revenue upon the achievement
of specified milestones if (i) the milestone is substantive in nature and the achievement of the milestone was not reasonably assured
at the inception of the SUL Agreement; and (ii) the fees are non-refundable. Any milestone payments received prior to satisfying
these revenue recognition criteria are recorded as deferred revenue.
Under the terms of the SUL Agreement, we may receive up to $12.0 million
in additional payments related to the successful achievement of regulatory milestones, including marketing approval (i) by the
FDA for a pediatric indication, (ii) by the EMA for an adult indication in the EU and (iii) by Health Canada for an adult indication
in Canada. We evaluated each event based payment under the provisions of ASU 2010-17, Milestone Method of Revenue Recognition,
and determined that each event based payment met the criteria to be considered substantive and represents a milestone under the
milestone method of accounting. No event based payments were achieved during the periods presented.
Reimbursements received for direct out-of-pocket expenses related
to research and development costs are recorded as revenue in the income statement rather than as a reduction in expenses. Under
our contracts with BARDA/HHS and NIAID/HHS, revenue is recognized as reimbursable direct and indirect costs are incurred.
Product Sales
We recognize revenue for sales of RAPIVAB when title and substantially
all the risks and rewards of ownership have transferred to the customer, which generally occurs on the date of shipment from our
specialty distributors, utilizing the Sell-Through revenue recognition methodology. Product sales are recognized when there is
persuasive evidence that an arrangement exists, title has passed, the price was fixed and determinable, and collectability is reasonably
assured. Product sales are recognized net of estimated allowances, discounts, sales returns, chargebacks and rebates. In the United
States, we sell RAPIVAB to specialty distributors, who, in turn, sell to physician offices, hospitals and federal, state and commercial
health care organizations.
Sales deductions consist of statutory rebates to state Medicaid, Medicare
and other government agencies and sales discounts (including trade discounts and distribution service fees). These deductions are
recorded as reductions to revenue from RAPIVAB in the same period as the related sales with estimates of future utilization derived
from historical experience adjusted to reflect known changes in the factors that impact such reserves.
We utilize data from external sources to help estimate gross-to-net
sales adjustments as they relate to the recognition of revenue for RAPIVAB sold. External sourced data includes, but is not limited
to, information obtained from specialty distributors with respect to their inventory levels and sell-through to customers, and
information from third-party suppliers of market research data to the pharmaceutical industry.
We have categorized and described more fully the following significant
sales deductions, all of which involve estimates and judgments, which we consider to be critical accounting estimates, and requires
us to use information from external sources.
Rebates and Chargebacks
Statutory rebates to state Medicaid agencies and Medicare are based
on statutory discounts to RAPIVAB’s selling price. As it can take up to nine months or more for information to be received
on actual usage of RAPIVAB in Medicaid and other governmental programs, we maintain reserves for amounts payable under these programs
relating to RAPIVAB sales.
Chargebacks claimed by specialty distributors are based on the differentials
between product acquisition prices paid by the specialty distributors and lower government contract pricing paid by eligible customers
covered under federally qualified programs.
The amount of the reserve for rebates and chargebacks is based on
multiple qualitative and quantitative factors, including the historical and projected utilization levels, historical payment experience,
changes in statutory laws and interpretations as well as contractual terms, product pricing (both normal selling prices and statutory
or negotiated prices), changes in prescription demand patterns and utilization of our product through public benefit plans, and
the levels of RAPIVAB inventory in the distribution channel. We acquire prescription utilization data from third-party suppliers
of market research data to the pharmaceutical industry. We update our estimates and assumptions each period and record any necessary
adjustments to reserves. Settlements of rebates and chargebacks typically occur within nine months from point of sale. To the extent
actual rebates and chargebacks differ from our estimates, additional reserves may be required or reserves may need to be reversed,
either of which would impact current period product revenue.
Discounts and Sales Incentives
Discounts and other sales incentives primarily consist of Inventory
Management Agreement (“IMA”) Fees. Per contractual agreements with our specialty distributors, we provide an IMA fee
based on a percentage of their purchases of RAPIVAB. The IMA fee rates are set forth in our individual contracts. We track sales
to our specialty distributors each period and accrue a liability relating to the unpaid portion of these fees by applying contractual
rates to such sales.
Product Returns
We do not record a product return allowance as we do not offer the
ability to return goods once a bona fide shipment has been accepted by a specialty distributor.
Research and Development Expenses
Our research and development costs are charged to expense when incurred.
Advance payments for goods or services that will be used or rendered for future research and development activities are deferred
and capitalized. Such amounts are recognized as expense when the related goods are delivered or the related services are performed.
Research and development expenses include, among other items, personnel costs, including salaries and benefits, manufacturing costs,
clinical, regulatory, and toxicology services performed by CROs, materials and supplies, and overhead allocations consisting of
various administrative and facilities related costs. Most of our manufacturing and clinical and preclinical studies are performed
by third-party CROs. Costs for studies performed by CROs are accrued by us over the service periods specified in the contracts
and estimates are adjusted, if required, based upon our on-going review of the level of services actually performed.
Additionally, we have license agreements with third parties, such
as AECOM, IRL, and UAB, which require fees related to sublicense agreements or maintenance fees. We expense sublicense payments
as incurred unless they are related to revenues that have been deferred, in which case the expenses are deferred and recognized
over the related revenue recognition period. We expense maintenance payments as incurred.
Deferred collaboration expenses represent sub-license payments paid
to our academic partners upon receipt of consideration from various commercial partners, and other consideration to our academic
partners for modification to existing license agreements. These deferred expenses would not have been incurred without receipt
of such payments or modifications from our commercial partners and are being expensed in proportion to the related revenue being
recognized. We believe that this accounting treatment appropriately matches expenses with the associated revenue.
We group our R&D expenses into two major categories: direct external
expenses and indirect expenses. Direct expenses consist of compensation for R&D personnel and costs of outside parties to conduct
laboratory studies, develop manufacturing processes and manufacture the product candidate, conduct and manage clinical trials,
as well as other costs related to our clinical and preclinical studies. These costs are accumulated and tracked by program. Indirect
expenses consist of lab supplies and services, facility expenses, depreciation of development equipment and other overhead of our
research and development efforts. These costs apply to work on our clinical and preclinical candidates as well as our discovery
research efforts.
Stock-Based Compensation
All share-based payments, including grants of stock option awards
and restricted stock unit awards, are recognized in our Consolidated Statements of Comprehensive Loss based on their fair values.
Stock-based compensation cost is estimated at the grant date based on the fair value of the award and is recognized as expense
on a straight-line basis over the requisite service period of the award. Determining the appropriate fair value model and the related
assumptions for the model requires judgment, including estimating the life of an award, the stock price volatility, and the expected
term. We utilize the Black-Scholes option-pricing model to value our awards and recognize compensation expense on a straight-line
basis over the vesting periods. The estimation of share-based payment awards that will ultimately vest requires judgment, and to
the extent actual results or updated estimates differ from our current estimates, such amounts will be recorded as a cumulative
adjustment in the period estimates are revised. In addition, we have outstanding performance-based stock options for which no compensation
expense is recognized until “performance” has occurred. Significant management judgment is also required in determining
estimates of future stock price volatility and forfeitures to be used in the valuation of the options. Actual results, and future
changes in estimates, may differ substantially from our current estimates.
Foreign Currency Hedge
In connection with our issuance of the PhaRMA Notes, we entered into
a foreign Currency Hedge Agreement to hedge certain risks associated with changes in the value of the Japanese yen relative to
the U.S. dollar. Under the Currency Hedge Agreement, we have the right to purchase dollars and sell yen at a rate of 100 yen
per dollar for which we may be required to pay a premium in each year from 2016 through 2020, provided the Currency Hedge Agreement
remains in effect. A payment of $2.0 million will be required if, on May 18 of the relevant year, the U.S. dollar is
worth 100 yen or less as determined in accordance with the Currency Hedge Agreement. In conjunction with establishing the Currency
Hedge Agreement, we will be required to post collateral to the counterparty, which may cause us to experience additional quarterly
volatility in our financial results. We will not be required at any time to post collateral exceeding the maximum premium payments
remaining payable under the Currency Hedge Agreement. In establishing the hedge, we provided initial funds of approximately $2.0 million
to support our potential hedge obligations. As of September 30, 2015, the maximum amount of hedge collateral we may be required
to post is $9.8 million.
The Currency Hedge Agreement does not qualify for hedge accounting
treatment and therefore mark-to-market adjustments will be recognized in our Consolidated Statements of Comprehensive Loss. Cumulative
mark-to-market adjustments for the nine months ended September 30, 2015 resulted in a $0.8 million loss. Mark-to-market adjustments
are determined by quoted prices in markets that are not actively traded and for which significant inputs are observable directly
or indirectly, representing the Level 2 in the fair value hierarchy as defined by generally accepted accounting principles. We
are also required to post collateral in connection with the mark-to-market adjustments based on defined thresholds. As of September
30, 2015, no collateral was posted under the agreement.
Tax
We account for uncertain tax positions in accordance with accounting
principles generally accepted in the U.S. Significant management judgment is required in determining our provision for income taxes,
deferred tax assets and liabilities and any valuation allowance recorded against net deferred tax assets. We have recorded a valuation
allowance against all potential tax assets, due to uncertainties in our ability to utilize deferred tax assets, primarily consisting
of certain net operating losses carried forward, before they expire. The valuation allowance is based on estimates of taxable income
in each of the jurisdictions in which we operate and the period over which our deferred tax assets will be recoverable.
Information Regarding Forward-Looking Statements
This filing contains forward-looking statements within the meaning
of Section 21E of the Securities Exchange Act of 1934, as amended, which are subject to the “safe harbor” created
in Section 21E. All statements other than statements of historical facts contained in this filing are forward-looking statements.
These forward-looking statements can generally be identified by the use of words such as “may,” “will,”
“intends,” “plans,” “believes,” “anticipates,” “expects,” “estimates,”
“predicts,” “potential,” the negative of these words or similar expressions. Statements that describe our
future plans, strategies, intentions, expectations, objectives, goals or prospects are also forward-looking statements. Discussions
containing these forward-looking statements are principally contained in “Business,” “Risk Factors” and
“Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as well as any amendments
we make to those sections in filings with the SEC. These forward-looking statements include, but are not limited to, statements
about:
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the initiation, timing, progress and results of our preclinical testing, clinical trials, and to the extent applicable, post-marketing commitments, for our HAE product candidates, RAPIVAB, BCX4430, and our other research and development efforts; |
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the further preclinical development, clinical development, commercialization, or post marketing studies by either us or partners of our product candidates and products, including our HAE program, RAPIVAB, BCX4430, and early stage discovery programs; |
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the potential funding from our contracts with NIAID/HHS and BARDA/HHS for the development of BCX4430; |
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the potential for government stockpiling orders of RAPIVAB, additional regulatory approvals of RAPIVAB or milestones royalties or profit from commercial sales of RAPIVAB by us or our partners; |
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the potential use of RAPIVAB as a treatment for H1N1, H5N1, and H7N9 or other strains of influenza; |
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the implementation of our business model, strategic plans for our business, products, product candidates and technology; |
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our ability to establish and maintain collaborations or out-license rights to our drug candidates; |
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plans, programs, progress and potential success of our collaborations, including Seqirus UK Limited (“SUL”) for RAPIVAB, Mundipharma for forodesine and Shionogi and Green Cross for peramivir in their territories; |
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Royalty Sub’s ability to service its payment obligations in respect of the PhaRMA Notes, and our ability to benefit from our equity interest in Royalty Sub; |
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the foreign currency hedge agreement entered into by us in connection with the issuance by Royalty Sub of the PhaRMA Notes; |
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the scope of protection we are able to establish and maintain for intellectual property rights covering our products, product candidates and technology; |
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our ability to operate our business without infringing the intellectual property rights of others; |
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estimates of our expenses, revenues, capital requirements, annual cash utilization and our needs for additional financing; |
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the timing or likelihood of regulatory filings or regulatory agreements, deferrals, and approvals; |
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our ability to raise additional capital to fund our operations; |
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our financial performance; and |
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competitive companies, technologies and our industry. |
These statements relate to future events or to our future financial
performance and involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance
or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking
statements. Factors that may cause actual results to differ materially from current expectations include, among other things, those
listed under “Risk Factors.” Any forward-looking statement reflects our current views with respect to future events
and is subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, industry
and future growth. Except as required by law, we assume no obligation to update or revise these forward-looking statements for
any reason, even if new information becomes available in the future.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Interest Rate Risk
We are subject to interest rate risk on our investment portfolio and
borrowings under our PhaRMA Notes.
We invest in marketable securities in accordance with our investment
policy. The primary objectives of our investment policy are to preserve capital, maintain proper liquidity to meet operating needs
and maximize yields. Our investment policy specifies credit quality standards for our investments and limits the amount of credit
exposure to any single issue, issuer or type of investment. We place our excess cash with high credit quality financial institutions,
commercial companies, and government agencies in order to limit the amount of credit exposure. Some of the securities we invest
in may have market risk. This means that a change in prevailing interest rates may cause the principal amount of the investment
to fluctuate.
Our investment exposure to market risk for changes in interest rates
relates to the increase or decrease in the amount of interest income we can earn on our portfolio, changes in the market value
due to changes in interest rates and other market factors as well as the increase or decrease in any realized gains and losses.
Our investment portfolio includes only marketable securities and instruments with active secondary or resale markets to help ensure
portfolio liquidity. A hypothetical 100 basis point drop in interest rates along the entire interest rate yield curve would not
significantly affect the fair value of our interest sensitive financial instruments. We generally have the ability to hold our
fixed-income investments to maturity and therefore do not expect that our operating results, financial position or cash flows will
be materially impacted due to a sudden change in interest rates. However, our future investment income may fall short of expectations
due to changes in interest rates, or we may suffer losses in principal if forced to sell securities which have declined in market
value due to changes in interest rates or other factors, such as changes in credit risk related to the securities’ issuers.
To minimize this risk, we schedule our investments to have maturities that coincide with our expected cash flow needs, thus avoiding
the need to redeem an investment prior to its maturity date. Accordingly, we do not believe that we have material exposure to interest
rate risk arising from our investments. Generally, our investments are not collateralized. We have not realized any significant
losses from our investments.
We do not use interest rate derivative instruments to manage exposure
to interest rate changes. We ensure the safety and preservation of invested principal funds by limiting default risk, market risk
and reinvestment risk. We reduce default risk by investing in investment grade securities.
Foreign Currency Risk
The majority of our transactions occur in U.S. dollars and we do not
have operating subsidiaries or investments in foreign countries. Therefore, we are not subject to significant foreign currency
exchange risk in our normal operations.
In connection with the issuance by Royalty Sub of the PhaRMA Notes,
we entered into a Currency Hedge Agreement to hedge certain risks associated with changes in the value of the Japanese yen relative
to the U.S. dollar. Under the Currency Hedge Agreement, we are required to post collateral based on our potential obligations under
the Currency Hedge Agreement as determined by periodic mark-to-market adjustments. Provided the Currency Hedge Agreement remains
in effect, we may be required to pay an annual premium in the amount of $2.0 million from May 2016 through May 2020.
Such payment will be required if, in May of the relevant year, the spot rate of exchange for Japanese yen-U.S. dollars (determined
in accordance with the Currency Hedge Agreement) is such that the U.S. dollar is worth 100 yen or less.
Item 4. Controls and Procedures
We maintain a set of disclosure controls and procedures that are designed
to ensure that information relating to BioCryst Pharmaceuticals, Inc. required to be disclosed in our periodic filings under the
Exchange Act is recorded, processed, summarized and reported in a timely manner under the Exchange Act. We carried out an evaluation,
under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer,
of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon that evaluation, the Chief
Executive Officer and Chief Financial Officer concluded that, as of September 30, 2015, the Company’s disclosure controls
and procedures are effective to ensure that information required to be disclosed by the Company in the reports filed or submitted
by it under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s
rules and forms, and include controls and procedures designed to ensure that information required to be disclosed by the Company
in such reports is accumulated and communicated to the Company’s management, including the Chief Executive Officer and Chief
Financial Officer of the Company, as appropriate to allow timely decisions regarding required disclosure.
There have been no changes in our internal control over financial
reporting that occurred during the quarter ended September 30, 2015 that have materially affected, or are reasonably likely to
materially affect, the Company’s internal control over financial reporting.
PART II. OTHER INFORMATION
ITEM 1A. RISK FACTORS
An investment in our common stock involves risks. You should consider
carefully all of the information that is included or incorporated by reference in this report before investing in our common stock.
In particular, you should evaluate the uncertainties and risks referred to or described below, which may adversely
affect our business, financial condition, liquidity or results of operations.
Risks Relating to Our Business
We have incurred losses since our inception, expect to continue to incur
such losses, and may never be profitable.
Since our inception, we have not achieved sustained profitability. We
expect to incur additional losses for the foreseeable future, and our losses could increase as our research and development efforts
progress. We expect that such losses will fluctuate from quarter to quarter and losses and fluctuations may be substantial.
To become profitable, we, or our collaborative partners, must successfully
manufacture and develop product candidates, receive regulatory approval, and successfully commercialize and/or enter into profitable
agreements with other parties. It could be several years, if ever, before we receive significant revenue from any current or future
license agreements or revenues directly from product sales.
Because of the numerous risks and uncertainties associated with developing
our product candidates and their potential for commercialization, we are unable to predict the extent of any future losses. Even
if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. If we are
unable to achieve and sustain profitability, the market value of our common stock will likely decline.
Our success depends upon our ability to advance our products through
the various stages of development, especially through the clinical trial process.
To receive the regulatory approvals necessary for the sale of our
product candidates, we or our partners must demonstrate through preclinical studies and clinical trials that each product candidate
is safe and effective. The development process and related regulatory process are complex and uncertain. Because of the cost and
duration of clinical trials, we may decide to discontinue development of product candidates that are unlikely to show good results
in the clinical trials, unlikely to help advance a product to the point of a meaningful collaboration, or unlikely to have reasonable
commercial potential. We may suffer significant setbacks in pivotal pre-clinical studies and clinical trials (e.g. BCX4430, avoralstat,
BCX7353 and our other rare disease product candidates), even after earlier clinical trials show promising results. The development
of our product candidates, including our clinical trials, may not be adequately designed or executed, which could affect the potential
outcome and analysis of study results. Any of our product candidates may produce undesirable side effects in humans. The pre-clinical
and clinical data from our product candidates could cause us or regulatory authorities to interrupt, delay or halt clinical trials
of a product candidate. Undesirable data or side effects in humans could also result in the FDA or foreign regulatory authorities
refusing to approve the product candidate for any targeted indications. In addition, the FDA or other regulatory agencies may determine
that study data from our product candidates necessitates additional studies or study designs which differ from our planned development
strategy, and regulatory agencies may also require patient monitoring and testing or may implement restrictions or other conditions
on our development activities, any of which could materially impact the cost and timing of our planned development strategy. We,
our partners, the FDA or foreign regulatory authorities may suspend or terminate clinical trials at any time if we or they believe
the trial participants face unacceptable health risks. Clinical trials may fail to demonstrate that our product candidates are
safe or effective and have acceptable commercial viability. Regulatory authorities may interrupt, delay or halt clinical trials
for a product candidate for any number of reasons.
Our ability to successfully complete clinical trials is dependent
upon many factors, including but not limited to:
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our ability to find suitable clinical sites and investigators to enroll patients; |
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the ability to maintain contact with patients to provide complete data after treatment; |
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our product candidates may not prove to be either safe or effective; |
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clinical protocols or study procedures may not be adequately designed or followed by the investigators; |
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formulation improvements may not work as expected, which could negatively impact commercial demand for our
product candidates; |
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manufacturing or quality control problems could affect the supply of product candidates for our trials; and |
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delays or changes in our planned development strategy, the regulations or guidelines, or other unexpected conditions or requirements by governmental agencies. |
Clinical trials are lengthy and expensive. We or our partners incur
substantial expense for, and devote significant time to, preclinical testing and clinical trials, yet we cannot be certain that
the tests and trials will ever result in the commercial sale of a product. For example, clinical trials require adequate supplies
of drug and sufficient patient enrollment. Lack of adequate drug supply or delays in patient enrollment, including in our planned
clinical trials for HAE, can result in increased costs and longer development times. Even if we or our partners successfully complete
clinical trials for our product candidates, we or our partners might not file the required regulatory submissions in a timely manner
and may not receive regulatory approval for the product candidates.
We focus on rare diseases, which may create additional risks and challenges.
Because the focus of our Company is developing drugs for rare diseases,
we may seek orphan drug, breakthrough therapy or fast track designations for our product candidates in the United States or the
equivalent designations elsewhere in the world. Often, regulatory agencies have broad discretion in determining whether or not
to grant such designations. We cannot guarantee that we will be able to receive orphan drug status from the FDA or equivalent regulatory
designations elsewhere. We also cannot guarantee that we will obtain breakthrough therapy or fast track designation, which may
provide certain potential benefits such as more frequent meetings with the FDA to discuss the development plan and intensive guidance
on an efficient drug development program as well as potential eligibility for rolling review or priority review. Even if we are
successful in obtaining any such designation by the FDA or other regulatory agency for our product candidates, such designations
may not lead to faster development or regulatory review or approval, and it does not increase the likelihood that our product candidates
will receive marketing approval. Additionally, we may not be able to maintain such designations for our product candidates, and
our competitors may obtain these designations for their product candidates, which could impact our ability to develop and commercialize
our product candidates and may adversely impact our business, financial condition or results of operations.
We have received orphan and fast track designations for avoralstat in
the United States. Despite this designation; we may not experience a faster development, review or approval process compared to
the conventional FDA procedures. The FDA may withdraw fast track designation if it believes the designation is no longer supported
by data from our clinical development program. Although we have also received Sakigake designation for BCX7353 in Japan; we may
not experience a faster development, review or approval process compared to the conventional process.
Our clinical trials may not adequately show that our product candidates
are safe or effective.
Progression of our product candidates through the clinical development
process is dependent upon our trials indicating our product candidates have adequate safety and efficacy in the patients being
treated by achieving pre-determined safety and efficacy endpoints according to the clinical trial protocols. Failure to achieve
either of these in any of our programs, including avoralstat, BCX7353 and our other rare disease product candidates, could result
in delays in our trials or require the performance of additional unplanned trials. This could result in delays in the development
of our product candidates and could result in significant unexpected costs or the termination of programs.
If we fail to reach milestones or to make annual minimum payments or
otherwise breach our obligations under our license agreements, our licensors may terminate our agreements with them and seek additional
remedies.
If we are unable or fail to meet payment obligations, performance
milestones relating to the timing of regulatory filings, product supply obligations, post approval commitments for RAPIVAB, or
development and commercial diligence obligations, are unable or fail to make milestone payments or material data use payments in
accordance with applicable provisions, or fail to pay the minimum annual payments under our respective licenses, our licensors
may terminate the applicable license or seek other available remedies. As a result, our development of the respective product candidate
or commercialization of the product would cease.
If we fail to obtain additional financing or acceptable partnership
arrangements, we may be unable to complete the development and commercialization of our product candidates or continue operations.
As our programs advance, our costs are likely to increase. Our current
and planned discovery, pre-clinical and clinical trials plus the related development, manufacturing, regulatory approval process
requirements, and additional personnel resources and testing required for supporting the development of our product candidates
will consume significant capital resources. Our expenses, revenues and cash utilization rate could vary significantly depending
on many factors, including: our ability to raise additional capital; the development progress of our collaborative agreements for
our product candidates; the amount of funding we receive from NIAID/HHS and BARDA/HHS for BCX4430 or from other new partnerships
with third parties for the development of our product candidates, including avoralstat, BCX7353 and our other rare disease product
candidates; the commercial success of peramivir by our partners; the amount or profitability of any orders for RAPIVAB or BCX4430
by any government agency or other party; the progress and results of our current and proposed clinical trials for our most advanced
product candidates, including avoralstat, BCX7353 and our other rare disease product candidates; the progress made in the manufacture
of our lead products and the progression of our other programs.
We expect that we will be required to raise additional capital to
complete the development and commercialization of our current product candidates and we may seek to raise capital at any time.
Additional funding, whether through additional sales of securities or collaborative or other arrangements with corporate partners
or from other sources, including governmental agencies in general and from any BARDA/HHS or NIAID/HHS contract specifically, may
not be available when needed or on terms acceptable to us. The issuance of preferred or common stock or convertible securities,
with terms and prices significantly more favorable than those of the currently outstanding common stock, could have the effect
of diluting or adversely affecting the holdings or rights of our existing stockholders. In addition, collaborative arrangements
may require us to transfer certain material rights to such corporate partners. Insufficient funds or lack of an acceptable partnership
may require us to delay, scale-back or eliminate certain of our research and development programs.
In order to continue future operations and continue our drug development
programs, we will be required to raise additional capital. In addition to seeking strategic partnerships, transactions and government
funding, we may decide to access the equity or debt markets or seek other sources to meet liquidity needs. Our ability to raise
additional capital may be limited and may greatly depend upon the success of ongoing development related to our current drug development
programs, including post approval studies for RAPIVAB, the progress, timeline and ultimate outcome of the avoralstat
development program (including, but not limited to, the OPuS-2 clinical trial, long-term human safety studies, and the timing of
carcinogenicity studies), progress of BCX7353 and our other rare disease product candidates, funding for and continued successful
development of BCX4430, and progress of our early discovery programs. In addition, constriction and volatility in the equity and
debt markets may restrict our future flexibility to raise capital when such needs arise. Furthermore, we have exposure to many
different industries, financing partners and counterparties, including commercial banks, investment banks and partners (which include
investors, licensing partners, and the U.S. Government) which may be unstable or may become unstable in the current economic and
political environment. Any such instability may impact these parties’ ability to fulfill contractual obligations to us or
they might limit or place burdensome conditions upon future transactions with us. Also, it is possible that suppliers may be negatively
impacted. Any such unfavorable outcomes in our current programs or unfavorable economic conditions could place severe downward
pressure on the stock and credit markets, which could reduce the return available on invested corporate cash, which if severe and
sustained could have a material and adverse impact on our results of operations and cash flows and limit our ability to continue
development of our product candidates.
If BARDA/HHS or NIAID/HHS were to eliminate, reduce or delay funding
from our contracts, this would have a significant negative impact on our revenues and cash flows.
Our projections of revenues and incoming cash flows are substantially
dependent upon BARDA/HHS and NIAID/HHS reimbursement for the costs related to our BCX4430 program. If BARDA/HHS or NIAID/HHS were
to eliminate, reduce or delay the funding for these programs or disallow some of our incurred costs, we would have to obtain additional
funding for continued development or regulatory registration for these product candidates or significantly reduce or stop the
development effort.
In contracting with BARDA/HHS and NIAID/HHS, we are subject to various
U.S. Government contract requirements, including general clauses for a cost-reimbursement research and development contract, which
may limit our reimbursement or if we are found to be in violation could result in contract termination. U.S. Government contracts
typically contain extraordinary provisions that would not typically be found in commercial contracts. For instance, government
contracts permit unilateral modification by the government, interpretation of relevant regulations (i.e., federal acquisition regulation
clauses), and the ability to terminate without cause. In addition, U.S. Government contracts are subject to an in-process review,
where the U.S. Government will review the project and its options under the contract. As such, we may be at a disadvantage as compared
to other commercial contracts. U.S. Government contracts are subject to audit and modification by the government at its sole discretion.
If the U.S. Government terminates any of its contracts with us for its convenience, or if we default by failing to perform in accordance
with the contract schedule and terms, significant negative impact on our cash flows and operations could result.
Our government contracts with BARDA/HHS and NIAID/HHS have special contracting
requirements, which create additional risks of reduction or loss of funding.
We have recently completed work under a contract with BARDA/HHS for
the development of our neuraminidase inhibitor, peramivir. We also have entered into contracts with BARDA/HHS and NIAID/HHS for
the development of BCX4430 as a treatment for diseases caused by RNA pathogens, including Marburg virus disease and Ebola virus
disease. In contracting with these government agencies, we are subject to various U.S. Government contract requirements, including
general clauses for a cost-reimbursement research and development contract, which may limit our reimbursement or, if we are found
to be in violation, could result in contract termination. U.S. Government contracts typically contain extraordinary provisions
that would not typically be found in commercial contracts. For instance, government contracts permit unilateral modification by
the government, interpretation of relevant regulations (i.e., federal acquisition regulation clauses), and the ability to terminate
without cause. In addition, U.S. Government contracts are subject to the in-process review described above. As such, we may be
at a disadvantage as compared to competitors that do not rely on U.S. Government contracts.
U.S. Government contracts typically contain unfavorable termination
provisions and are subject to audit and modification by the government at its sole discretion, each of which subjects us to additional
risks. These risks include the ability of the U.S. Government to unilaterally:
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terminate or reduce the scope of our contract; and |
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audit and object to our contract-related costs and fees, including allocated indirect costs. |
The U.S. Government may terminate its contracts with us either for
its convenience or if we default by failing to perform in accordance with the contract schedule and terms. Termination for convenience
provisions generally enable us to recover only our costs incurred or committed, and settlement expenses and profit on the work
completed prior to termination. Termination does not permit these recoveries under default provisions. In the event of termination
or upon expiration of a contract, the U.S. Government may dispute wind-down and termination costs and may question prior expenses
under the contract and deny payment of those expenses. Should we choose to challenge the U.S. Government for denying certain payments
under a contract, such a challenge could subject us to substantial additional expenses which we may or may not recover. Further,
if the U.S. Government terminates its contracts with us for its convenience, or if we default by failing to perform in accordance
with the contract schedule and terms, significant negative impact on our cash flows and operations could result. As a U.S. Government
contractor, we are required to comply with applicable laws, regulations and standards relating to our accounting practices and
are subject to periodic audits and reviews. As part of any such audit or review, the U.S. Government may review the adequacy of,
and our compliance with, our internal control systems and policies, including those relating to our purchasing, property, estimating,
compensation and management information systems. Audits conducted by the U.S. Government for the completed BARDA/HHS contract have
been performed and concluded through fiscal 2009; all subsequent fiscal years are still open and auditable. Audits under the active
BARDA/HHS and NIAID/HHS contracts may occur at the election of the U.S. Government. Based on the results of its audits, the U.S.
Government may adjust our contract-related costs and fees, including allocated indirect costs. This adjustment could impact the
amount of revenues reported on a historic basis and could impact our cash flows under the contracts prospectively. In addition,
in the event BARDA/HHS or NIAID/HHS determines that certain costs and fees were unallowable or determines that the allocated indirect
cost rate was higher than the actual indirect cost rate, BARDA/HHS or NIAID/HHS would be entitled to recoup any overpayment from
us as a result. In addition, if an audit or review uncovers any improper or illegal activity, we may be subject to civil and criminal
penalties and administrative sanctions, including termination of our contracts, forfeiture of profits, suspension of payments,
fines and suspension or prohibition from doing business with the U.S. Government. We could also suffer serious harm to our reputation
if allegations of impropriety were made against us. In addition, under U.S. Government purchasing regulations, some of our costs
may not be reimbursable or allowed under our contracts. Further, as a U.S. Government contractor, we are subject to an increased
risk of investigations, criminal prosecution, civil fraud, whistleblower lawsuits and other legal actions and liabilities as compared
to private sector commercial companies.
If we fail to successfully commercialize or establish collaborative
relationships to commercialize certain of our product candidates or if any partner terminates or fails to perform its obligations
under agreements with us, potential revenues from commercialization of our product candidates could be reduced, delayed or eliminated.
Our business strategy is to increase the asset value of our product
candidate portfolio. We believe this is best achieved by retaining full product rights or through collaborative arrangements with
third parties as appropriate. As needed, potential third-party alliances could include preclinical development, clinical development,
regulatory approval, marketing, sales and distribution of our product candidates.
Currently, we have established collaborative relationships with Mundipharma
for the development and commercialization of forodesine and with each of Shionogi and Green Cross for the development and commercialization
of peramivir, in Japan, Taiwan and South Korea. Most recently we have established a collaborative relationship with Seqirus UK
Limited for RAPIVAB in the United States and countries other than Israel, Japan, Korea and Taiwan. The process of establishing
and implementing collaborative relationships is difficult, time-consuming and involves significant uncertainty, including:
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our partners may seek to renegotiate or terminate their relationships with us due to unsatisfactory clinical results, including post approval clinical commitments, a change in business strategy, a change of control or other reasons; |
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our contracts for collaborative arrangements may expire; |
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our partners may choose to pursue alternative technologies, including those of our competitors; |
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we may have disputes with a partner that could lead to litigation or arbitration; |
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we do not have day to day control over the activities of our partners and have limited control over their decisions; |
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our ability to generate future event payments and royalties from our partners depends upon their abilities to establish the safety and efficacy of our product candidates, obtain regulatory approvals and achieve market acceptance of products developed from our product candidates; |
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we or our partners may fail to properly initiate, maintain or defend our intellectual property rights, where applicable, or a party may utilize our proprietary information in such a way as to invite litigation that could jeopardize or potentially invalidate our proprietary information or expose us to potential liability; |
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we or our partners may not devote sufficient capital or resources towards our product
candidates; and |
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we or our partners may not comply with applicable government regulatory requirements. |
If we or our partners fail to fulfill our responsibilities in a
timely manner, or at all, our commercialization efforts related to that collaboration could be reduced, delayed or terminated,
or it may be necessary for us to assume responsibility for activities that would otherwise have been the responsibility of our
partner. In the case of our collaboration with SUL, we continue to have certain promotional regulatory and government pricing risks
because we hold the RAPIVAB NDA and our partner is conducting the marketing and commercialization efforts.
If we are unable to establish and maintain collaborative relationships
on acceptable terms, we may have to delay or discontinue further development of one or more of our product candidates, undertake
commercialization activities at our own expense or find alternative sources of funding. Any delay in the development or commercialization
of our product candidates would severely affect our business, because if our product candidates do not progress through the development
process or reach the market in a timely manner, or at all, we may not receive additional future event payments and may never receive
milestone, product sales or royalty payments.
We do not have a great deal of experience in commercializing our products
or technologies, and our future revenue generation is uncertain.
We do not have a great deal of experience in commercializing our products
or technologies. We currently have limited marketing capability, no direct or third-party sales force and limited distribution
capabilities. We may be unable to establish or sufficiently increase these capabilities for products we currently, or plan to,
commercialize. In addition, our revenue from collaborative agreements may be dependent upon the status of our preclinical and clinical
programs. If we fail to advance these programs to the point of being able to enter into successful collaborations, we will not
receive any potential future event or other collaborative payments.
Our ability to receive revenue from products we commercialize presents
several risks, including:
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we or our collaborators may fail to successfully complete clinical trials, or satisfy post-marketing commitments, sufficient to obtain and keep FDA marketing approval; |
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many competitors are more experienced and have significantly more resources, and their products could reach the market faster, be more cost effective or have a better efficacy or tolerability profile than our product candidates; |
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we may fail to employ a comprehensive and effective intellectual property strategy, which could result in decreased commercial value of our Company and our products; |
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we may fail to employ a comprehensive and effective regulatory strategy, which could result in a delay or failure in commercialization of our products; |
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our ability to successfully commercialize our products is affected by the competitive landscape, which cannot be fully known at this time; |
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reimbursement is constantly changing, which could greatly affect usage of our products; and |
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future revenue from product sales would depend on our ability to successfully complete clinical studies, obtain regulatory approvals, and manufacture, market and commercialize our approved drugs. |
If our development collaborations with third parties, such as our development
partners and contract research organizations, fail, the development of our product candidates will be delayed or stopped.
We rely heavily upon other parties for many important stages of our
product candidate development, including but not limited to:
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discovery of compounds that cause or enable biological reactions necessary for the progression of the disease or disorder, called enzyme targets; |
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licensing or designing of enzyme inhibitors for development as product candidates; |
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execution of some preclinical studies and late-stage development for our compounds and product candidates; |
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management of our clinical trials, including medical monitoring and data management; |
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execution of additional toxicology studies that may be required to obtain approval for our product candidates; and |
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formulation improvement strategies and methods, including those for avoralstat; and |
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manufacturing the starting materials and drug substance required to formulate our products and the product candidates to be used in our clinical trials, toxicology studies and any potential commercial product. |
Our failure to engage in successful collaborations at any one of these
stages would greatly impact our business. If we do not license enzyme targets or inhibitors from academic institutions or from
other biotechnology companies on acceptable terms, our drug development efforts would suffer. Similarly, if the contract research
organizations that conduct our initial or late-stage clinical trials, conduct our toxicology studies, manufacture our starting
materials, drug substance and product candidates or manage our regulatory function breached their obligations to us or perform
their services inconsistent with industry standards and not in accordance with the required regulations, this would delay or prevent
both the development of our product candidates and the availability of any potential commercial product.
If we lose our relationship with any one or more of these parties,
we could experience a significant delay in both identifying another comparable provider and then contracting for its services.
We may be unable to retain an alternative provider on reasonable terms, if at all. Even if we locate an alternative provider, it
is likely that this provider may need additional time to respond to our needs and may not provide the same type or level of service
as the original provider. In addition, any provider that we retain will be subject to applicable FDA current Good Laboratory Practices
(“cGLP”), current Good Manufacturing Practices (“cGMP”) and current Good Clinical Practices (“cGCP”),
and comparable foreign standards. We do not have control over compliance with these regulations by these providers. Consequently,
if these practices and standards are not adhered to by these providers, the development and commercialization of our product candidates
could be delayed, and our business, financial condition and results of operations could be materially adversely affected.
Commercialization of RAPIVAB by our partners is subject to the potential
commercialization risks described herein and numerous additional risks. Any potential revenue benefits to us in the form of milestones,
royalties or other consideration are highly speculative.
Commercialization success of RAPIVAB is uncertain and is subject to
all the risks and uncertainties disclosed in our other risk factors relating to drug development and commercialization. In addition,
commercialization of RAPIVAB is subject to further risks and commercialization may be negatively impacted by a number of factors,
including, but not limited to, the following:
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RAPIVAB may not prove to be adequately safe and effective for market approval in markets other than the United States; |
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necessary funding for post marketing commitments and further development of RAPIVAB may not be available timely, at all, or in sufficient amounts; |
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flu prevention or pandemic treatment concerns may not materialize at all, or in the near future; |
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advances in flu vaccines or other antivirals, including competitive i.v. antivirals, could substantially replace potential demand for RAPIVAB; |
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a limited number of governmental entities are expected to be the primary potential stockpiling customers for RAPIVAB and if we are not successful at marketing RAPIVAB to these entities for any reason, we will not receive substantial revenues from stockpiling orders; |
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government and third party payors may not provide sufficient coverage or reimbursement which would negatively impact the demand for RAPIVAB; |
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we may not be able to supply commercial material to our partners and our partners may not be able to maintain or establish sufficient and acceptable commercial manufacturing, either directly or through third-party manufacturers; |
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the commercial demand and acceptance for RAPIVAB by healthcare providers and by patients may not be sufficient to result in substantial revenues of RAPIVAB to our partners and may result in little to no milestones or royalties to us; |
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effectiveness of marketing efforts for RAPIVAB by our partners; |
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market satisfaction with existing alternative therapies; |
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perceived efficacy relative to other available therapies; |
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disease prevalence; |
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cost of treatment; |
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pricing and availability of alternative products; |
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marketing and sales activities of competitors; |
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shifts in the medical community to new treatment paradigms or standards of care; and |
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relative convenience and ease of administration. |
If any or all of these and other risk factors occur, we will not attain
significant revenues or gross margins from RAPIVAB and our stock price and or cash flows may be adversely affected.
We are subject to various federal and state laws regulating the marketing
of RAPIVAB and, if we do not comply with these regulations, we could face substantial penalties.
Our sales, promotion and other activities related to RAPIVAB, or any
of our other products under development following their regulatory approval, are subject to regulatory and law enforcement authorities
in addition to the FDA, including the Federal Trade Commission, the Department of Justice, and state and local governments. We
are subject to various federal and state laws pertaining to health care “fraud and abuse,” including both federal and
state anti-kickback laws. Although we seek to comply with these statutes, it is possible that our practices, or those of our distributors,
might be challenged under anti-kickback or similar laws. Violations of fraud and abuse laws may be punishable by civil or criminal
sanctions, including fines and civil monetary penalties, and future exclusion from participation in government healthcare programs.
Because we continue to hold the NDA for RAPIVAB in the United States,
we may be held responsible for any and all sales, promotion and other activities related to RAPIVAB, as well as any of our other
products under development following their regulatory approval. We are subject to regulatory and law enforcement authorities in
addition to the FDA, including the Federal Trade Commission, the Department of Justice, and state and local governments. We are
subject to various federal and state laws pertaining to health care “fraud and abuse,” including both federal and state
anti-kickback laws. Although we seek to comply with these statutes, it is possible that our practices, or those of our partners,
might be challenged under anti-kickback or similar laws. Violations of fraud and abuse laws may be punishable by civil or criminal
sanctions, including fines and civil monetary penalties, and future exclusion from participation in government healthcare programs.
We have a number of outstanding post-marketing commitments to the
FDA that we retain despite our partnership, which we may not complete successfully or on time for any number of reasons, including
but not limited to lack of funds to complete the studies or insufficient interest by appropriate sites, investigators or study
subjects. For example, as a condition of the approval of RAPIVAB, we are required to complete a pediatric patient study of RAPIVAB
and to submit the final results of this clinical trial to the FDA. Depending on the outcome of this clinical trial, we may be unable
to expand the indication for RAPIVAB or we may be required to include specific warnings or limitations on dosing this product,
which could negatively impact sales of RAPIVAB and negatively impact our relationship with our partner. We may be subject to penalties
if we fail to comply with post-approval legal and regulatory requirements and our products could be subject to continual recordkeeping
and reporting requirements, review and periodic inspections by the FDA and other regulatory bodies. Regulatory approval of a product
may be subject to limitations on the indicated uses for which the product may be marketed or to the other restrictive conditions
of approval that limit our ability to promote, sell or distribute a product. Furthermore, RAPIVAB, and any other future product
candidates’ approval, may contain requirements for costly post-marketing testing and surveillance to monitor its safety or
efficacy.
Advertising and promotion are subject to stringent FDA rules and oversight
and as the holder of the NDA we may be held responsible for any advertising and promotion conducted by our partner that is not
in compliance with the rules and regulations. In particular, the claims in all promotional materials and activities must be consistent
with the FDA approvals for approved products, and must be appropriately substantiated and fairly balanced with information on the
safety risks and limitations of the products. Adverse event information concerning approved products must be reviewed as well and
as the NDA holder of RAPIVAB we are required to make expedited and periodic adverse event reports to the FDA and other regulatory
authorities.
In addition, the research, manufacturing, distribution, sale and promotion
of products are potentially subject to regulation by various federal, state and local authorities in addition to the FDA, including
the Centers for Medicare and Medicaid Services, other divisions of the U.S. Department of Health and Human Services, the U.S. Department
of Justice and individual U.S. Attorney offices within the Department of Justice, and state and local governments. Until we can
successfully transfer the pricing responsibilities to our partner, we remain responsible for pricing and rebate programs. Pricing
and rebate programs must comply with the Medicaid rebate requirements of the Omnibus Budget Reconciliation Act of 1990, as amended,
and the Veterans Health Care Act of 1992, as amended. If products are made available to authorized users of the Federal Supply
Schedule of the General Services Administration, additional laws and requirements apply. All of these activities are also potentially
subject to federal and state consumer protection and unfair competition laws.
If our operations with respect to RAPIVAB or our other products which
are subject to healthcare laws and regulations are found to be in violation of any of the healthcare fraud and abuse laws described
above or any other governmental regulations that apply to us, we may be subject to penalties, including civil and criminal penalties,
damages, fines and the curtailment or restructuring of our operations. Any penalties, damages, fines, curtailment or restructuring
of our operations could adversely affect our ability to operate our business and our financial results. Although compliance programs
can mitigate the risk of investigation and prosecution for violations of these laws, the risks cannot be entirely eliminated. Any
action against us for violation of these laws, even if we successfully defend against it, could cause us to incur significant legal
expenses and divert our management's attention from the operation of our business. Moreover, achieving and sustaining compliance
with all applicable federal and state fraud and abuse laws may be costly.
We and our partners may be subject to new legislation, regulatory proposals
and healthcare payor initiatives that may increase our costs of compliance and adversely affect our ability to market our products,
including RAPIVAB, obtain collaborators and raise capital.
In March 2010, the President signed the Patient Protection and Affordable
Care Act, or PPACA, which makes extensive changes to the delivery of health care in the U.S. The PPACA includes numerous provisions
that affect pharmaceutical companies, some of which became effective immediately and others of which will be taking effect over
the next several years. For example, the PPACA seeks to expand health care coverage to the uninsured through private health insurance
reforms and an expansion of Medicaid. The PPACA will also impose substantial costs on pharmaceutical manufacturers, such as an
increase in liability for rebates paid to Medicaid, new drug discounts that must be offered to certain enrollees in the Medicare
prescription drug benefit, an annual fee imposed on all manufacturers of brand prescription drugs in the U.S., and an expansion
of an existing program requiring pharmaceutical discounts to certain types of hospitals and federally subsidized clinics. The PPACA
also contains cost containment measures that could reduce reimbursement levels for health care items and services generally, including
pharmaceuticals. It also will require reporting and public disclosure of payments and other transfers of value provided by pharmaceutical
companies to physicians and teaching hospitals. We cannot predict what effect the PPACA or other healthcare reform initiatives
that may be adopted in the future will have on our business. Further, it remains unclear whether there will be any changes made
to provisions of the PPACA or other health care laws through acts of Congress in the future. The continuing efforts of the government,
insurance companies, managed care organizations and other payors of health care services to contain or reduce costs of health care
could result in decreased net revenues from our pharmaceutical products and decrease potential returns from our development efforts.
In addition, pharmaceutical and device manufacturers will also be required to report and disclose investment interests held by
physicians and their immediate family members during the preceding calendar year. Failure to submit required information
may result in civil monetary penalties for payments, transfers of value or ownership or investment interests not reported in an
annual submission. Compliance with the PPACA and state laws with similar provisions is difficult and time consuming, and companies
that do not comply with these state laws face civil penalties. Because of the breadth of these laws and the narrowness of the safe
harbors, it is possible that some of our business activities could be subject to challenge under one or more of such laws. Such
a challenge could have a material adverse effect on our business, financial condition, results of operations and growth prospects.
In addition, there have been a number of other legislative and regulatory
proposals aimed at changing the pharmaceutical industry. In particular, legislation has been enacted in certain states and proposed
at a federal level that requires development of an electronic pedigree to track and trace each prescription drug at the saleable
unit level through the distribution system. Compliance with these electronic pedigree requirements may increase our operational
expenses and impose significant administrative burdens. In addition, our compliance may be deemed insufficient and we could fact
a material adverse effect on our business, financial condition, results of operations and growth prospects. As a result of
these and other new proposals, we may determine to change our current manner of operation, provide additional benefits or change
our contract arrangements, any of which could have a material adverse effect on our business, financial condition and results of
operations.
Managed care organizations are increasingly challenging the prices
charged for medical products and services and, in some cases, imposing restrictions on the coverage of particular drugs. Many managed
care organizations negotiate the price of medical services and products and develop formularies which establish pricing and reimbursement
levels. Exclusion of a product from a formulary can lead to its sharply reduced usage in the managed care organization’s
patient population. The process for obtaining coverage can be lengthy and costly, and we expect that it could take several months
before a particular payor initially reviews our product and makes a decision with respect to coverage. For example, third-party
payors may require cost-benefit analysis data from us in order to demonstrate the cost-effectiveness of RAPIVAB or any other product
we might bring to market. For any individual third-party payor, we may not be able to provide data sufficient to gain reimbursement
on a similar or preferred basis to competitive products, or at all which may have a material adverse effect on our business, financial
condition and results of operations.
There are risks related to the potential government use or sale of RAPIVAB.
Government use or sale of RAPIVAB in emergency situations, or otherwise,
may result in the use of RAPIVAB which is outside of its approved use. To the extent that RAPIVAB is used as a treatment for influenza
by any government entity, there can be no assurance that it will prove to be generally safe, well-tolerated and effective. Such
government use of RAPIVAB may create certain liabilities for us. There is no assurance that we or our manufacturers will be able
to fully meet the demand for RAPIVAB in the event of additional orders. Further, we may not achieve a favorable price for additional
orders of RAPIVAB in the United States or in any other country. Our competitors may develop products that could compete with or replace peramivir. We may face competition
in markets where we have no existing intellectual property protection or are unable to successfully enforce our intellectual property
rights.
There is no assurance that the non-U.S. partnerships
that we have entered into for peramivir will result in any order for peramivir in those countries. There is no assurance that RAPIVAB
will be approved for any use or will achieve market approval in additional countries. In the event that any emergency use or market
approval is granted, there is no assurance that any order by any non-U.S. partnership or commercialization of RAPIVAB in other
countries will be substantial or will be profitable to us. The sale of peramivir, emergency use or other use of peramivir in any
country may create certain liabilities for us.
Because we have limited manufacturing experience, we depend on third-party
manufacturers to manufacture our product, product candidates and the materials for our product candidates. Often, especially early
in the development and commercialization process, we have only one source for manufacturing. If we cannot rely on existing third-party
manufacturers, we will be required to incur significant costs and potential delays in finding new third-party manufacturers.
We have limited manufacturing experience and only a small scale manufacturing
facility. We currently rely upon third-party manufacturers to manufacture the materials required for our product, product candidates
and most of the preclinical and clinical quantities of our product candidates. We depend on these third-party manufacturers to
perform their obligations in a timely manner and in accordance with applicable governmental regulations. Our third-party manufacturers,
which may be the only manufacturer we have engaged, may encounter difficulties with meeting our requirements including but not
limited to problems involving:
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inconsistent production yields; |
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product liability claims or recalls of commercial product; |
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difficulties in scaling production to commercial and validation sizes; |
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interruption of the delivery of materials required for the manufacturing process; |
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scheduling of plant time with other vendors or unexpected equipment failure; |
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potential catastrophes that could strike their facilities or have an effect on infrastructure; |
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potential impurities in our drug substance or products that could affect availability of product for our clinical trials or future commercialization; |
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poor quality control and assurance or inadequate process controls; and |
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lack of compliance or cooperation with regulations and specifications or requests set forth by the FDA or other foreign regulatory agencies, particularly associated with RAPIVAB and planned studies for avoralstat, BCX7353 and BCX4430. |
These contract manufacturers may not be able to
manufacture the materials required for our product candidates at a cost or in quantities necessary to make them commercially viable.
We also have no control over whether third-party manufacturers breach their agreements with us or whether they may terminate or
decline to renew agreements with us. To date, our third-party manufacturers have met our manufacturing requirements, but they may
not continue to do so. Furthermore, changes in the manufacturing process or procedure, including a change in the location where
the drug is manufactured or a change of a third-party manufacturer, may require prior review and approval in accordance with the
FDA’s cGMP and comparable foreign requirements. This review may be costly and time-consuming and could delay or prevent the
launch of a product. The FDA or similar foreign regulatory agencies at any time may also implement new standards, or change their
interpretation and enforcement of existing standards for manufacture, packaging or testing of products. If we or our contract manufacturers
are unable to comply, we or they may be subject to regulatory action, civil actions or penalties.
If we are unable to maintain current manufacturing or other contract
relationships, or enter into new agreements with additional manufacturers on commercially reasonable terms, or if there is poor
manufacturing performance or failure to comply with any regulatory agency on the part of any of our third-party manufacturers,
we may not be able to complete development of, seek timely approval of, or market, our product candidates.
Our raw materials, drug substances, and product candidates are manufactured
by a limited group of suppliers and some at a single facility. If any of these suppliers were unable to produce these items, this
could significantly impact our supply of product candidate material for further preclinical testing and clinical trials.
Royalties and milestone payments from Shionogi under our license agreement
with Shionogi (the “Shionogi Agreement”) will be required to be used by Royalty Sub to service its obligations under
its PhaRMA Notes, and generally will not be available to us for other purposes until Royalty Sub has repaid in full its obligations
under the PhaRMA Notes.
In March 2011, our wholly-owned subsidiary Royalty Sub issued $30.0
million in aggregate principal amount of PhaRMA Notes. The PhaRMA Notes are secured principally by (i) certain royalty and milestone
payments under the Shionogi Agreement, pursuant to which Shionogi licensed from us the rights to market peramivir in Japan and,
if approved for commercial sale, Taiwan, (ii) rights to certain payments under a Japanese yen/U.S. dollar foreign currency hedge
arrangement put into place by us in connection with the issuance of the PhaRMA Notes and (iii) the pledge by us of our equity interest
in Royalty Sub. Payments from Shionogi to us under the Shionogi Agreement will generally not be available to us for other purposes
until Royalty Sub has repaid in full its obligations under the PhaRMA Notes. Accordingly, these funds will be required to be dedicated
to Royalty Sub’s debt service and not available to us for product development or other purposes. As of September 1, 2014,
the payments from Shionogi were insufficient for Royalty Sub to service its obligations under the PhaRMA Notes, resulting in an
event of default with respect to the PhaRMA Notes. As a result of this event of default, the holders of the PhaRMA Notes may be
able to pursue acceleration of the PhaRMA Notes and foreclose on the collateral securing the PhaRMA Notes and our equity interest
in Royalty Sub and may exercise other remedies available to them under the indenture or other documents related to the
PhaRMA Notes. In such event, we may not realize the benefit of future royalty payments that might otherwise accrue to us following
repayment of the PhaRMA Notes, we may incur legal costs and we might otherwise be adversely affected.
Because an event of default has occurred under the PhaRMA Notes,
the holders of the PhaRMA Notes may be able to pursue acceleration of the PhaRMA Notes and foreclose on the collateral securing
the PhaRMA Notes and our equity interest in Royalty Sub, in which case we may not realize the benefit of future royalty payments
that might otherwise accrue to us following repayment of the PhaRMA Notes and we could otherwise be adversely affected.
Royalty Sub’s ability to service its payment obligations in respect
of the PhaRMA Notes, and our ability to benefit from our equity interest in Royalty Sub, is subject to numerous risks. Royalty
Sub’s ability to service the PhaRMA Notes may be adversely affected by, among other things, changes in or any termination
of our relationship with Shionogi, reimbursement, regulatory, manufacturing and/or intellectual property issues, product returns,
product recalls, product liability claims and allegations of safety issues, as well as other factors. As Royalty Sub has been unable
to service its obligations under the PhaRMA Notes and an event of default has occurred under the PhaRMA Notes, the holders of the
PhaRMA Notes may be able to pursue acceleration of the PhaRMA Notes and foreclose on the collateral securing the PhaRMA Notes and
our equity interest in Royalty Sub and may exercise other remedies available to them under the indenture or other documents
related to the PhaRMA Notes. In such event, we may not realize the benefit of future royalty payments that might otherwise
accrue to us following repayment of the PhaRMA Notes, we may incur legal costs and we might otherwise be adversely affected.
We may be required to pay significant premiums under the foreign currency
hedge arrangement entered into by us in connection with the issuance of the PhaRMA Notes. In addition, because our potential obligations
under the foreign currency hedge are marked to market, we may experience additional quarterly volatility in our operating results
and cash flows attributable to the foreign currency hedge arrangement.
In connection with the issuance by Royalty Sub of the PhaRMA Notes,
we entered into a foreign currency hedge arrangement to hedge certain risks associated with changes in the value of the Japanese
yen relative to the U.S. dollar. Under the foreign currency hedge agreement, we may be required to pay an annual premium in the
amount of $2.0 million in each May, provided the foreign currency hedge arrangement remains in effect, continuing through May 2020.
Such payment will be required if, in May of the relevant year, the spot rate of exchange for Japanese yen-U.S. dollars (determined
in accordance with the foreign currency hedge arrangement) is such that the U.S. dollar is worth 100 yen or less. We will be required
to mark-to-market our potential obligations under the currency hedge and post cash collateral, which may cause us to experience
additional quarterly volatility in our operating results and cash flows as a result. Additionally, we may be required to pay significant
premiums or a termination fee under the foreign currency hedge agreement entered into by us in connection with the issuance of
the PhaRMA Notes. We are required to maintain a foreign currency hedge at 100 yen per dollar under the agreements governing the
PhaRMA Notes.
If we or our partners do not obtain and maintain governmental approvals
for our product candidates under development, we or our partners will not be able to sell these potential products, which would
significantly harm our business because we will receive no revenue.
We or our partners must obtain regulatory approval before marketing
or selling our future product candidates. If we or our partners are unable to receive regulatory approval and do not market or
sell our future product candidates, we will never receive any revenue from such product sales. In the United States, we or our
partners must obtain FDA approval for product candidates that we intend to commercialize. The process of preparing for and obtaining
FDA approval may be lengthy and expensive, and approval is never certain. Products distributed abroad are also subject to foreign
government regulation and export laws of the United States. Because of the risks and uncertainties in biopharmaceutical development,
our product candidates could take a significantly longer time to gain regulatory approval than we expect or may never gain approval.
If the FDA delays regulatory approval of our product candidates, our management’s credibility, our value and our operating
results may suffer. Even if the FDA or foreign regulatory agencies approve a product candidate, the approval may limit the indicated
uses for a product candidate and/or may require post-approval studies.
The FDA regulates, among other things, the record keeping and storage
of data pertaining to potential pharmaceutical products. We currently store most of our preclinical research data, our clinical
data and our manufacturing data at our facility. While we do store duplicate copies of most of our clinical data offsite and a
significant portion of our data is included in regular backups of our systems, we could lose important data if our facility incurs
damage, or if our vendor data systems fail, suffer damage or are destroyed. If we receive approval to market our potential products,
whether in the United States or internationally, we will continue to be subject to extensive regulatory requirements. These requirements
are wide ranging and govern, among other things:
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adverse drug experience reporting regulations; |
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product promotion; |
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product manufacturing, including good manufacturing practice requirements; and |
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product changes or modifications. |
Our failure to comply with existing or future regulatory requirements,
or our loss of, or changes to, previously obtained approvals, could have a material adverse effect on our business because we will
not receive product or royalty revenues if we or our partners do not receive approval of our products for marketing.
We face intense competition, and if we are unable to compete effectively,
the demand for our products, if any, may be reduced.
The biotechnology and pharmaceutical industries are highly competitive
and subject to rapid and substantial technological change. There are many companies seeking to develop products for the same indications
that we are working on. Our competitors in the United States and elsewhere are numerous and include, among others, major multinational
pharmaceutical and chemical companies and specialized biotechnology firms. Most of these competitors have greater resources than
we do, including greater financial resources, larger research and development staffs and more experienced marketing and manufacturing
organizations. In addition, most of our competitors have greater experience than we do in conducting clinical trials and obtaining
FDA and other regulatory approvals. Accordingly, our competitors may succeed in obtaining FDA or other regulatory approvals of
product candidates more rapidly than we do. Companies that complete clinical trials, obtain required regulatory approvals, and
commence commercial sale of their drugs before we do may achieve a significant competitive advantage, including patent and FDA
exclusivity rights that would delay our ability to market products. We face, and will continue to face, competition in the licensing
of desirable disease targets, licensing of desirable product candidates, and development and marketing of our product candidates
from academic institutions, government agencies, research institutions and biotechnology and pharmaceutical companies. Competition
may also arise from, among other things:
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other drug development technologies; |
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methods of preventing or reducing the incidence of disease, including vaccines; and |
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new small molecule or other classes of therapeutic agents. |
Developments by others may render our product candidates or technologies
obsolete or noncompetitive.
We and our partners are performing research on or developing products
for the treatment of several disorders including HAE, recurrent/refractory peripheral T-cell lymphoma and broad spectrum antivirals
which may be developed as medical countermeasures. We expect to encounter significant competition for any of the pharmaceutical
products we plan to develop. Companies that complete clinical trials, obtain required funding or government support, obtain required
regulatory approvals and commence commercial sales or stockpiling orders of their products before their competitors may achieve
a significant competitive advantage. Such is the case with Eisai Co. Ltd.’s TARGRETIN® for cutaneous T-cell lymphoma
and the current neuraminidase inhibitors marketed by GSK and Roche for influenza and CINRYZE® and FIRAZYR® for HAE, marketed
by Shire Pharmaceuticals, Inc., and KALBITOR® for HAE, marketed by Dyax Corporation. Therapeutic products with potentially
promising data to treat Ebola include Mapp Biopharmaceutical, Inc.’s ZMapp (antibody-based) and Gilead Sciences, Inc.’s
(small molecule), both of which have been used in Ebola infected patients. Further, several pharmaceutical and biotechnology firms,
including major pharmaceutical companies and specialized structure-based drug design companies, have announced efforts in the field
of structure-based drug design and molecules in development in the fields of HAE and in other therapeutic areas where we have discovery
and development efforts ongoing. If one or more of our competitors’ products or programs are successful, the market for our
products may be reduced or eliminated.
Compared to us, many of our competitors and potential competitors
have substantially greater:
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capital resources; |
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research and development resources, including personnel and technology; |
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regulatory experience; |
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preclinical study and clinical testing experience; |
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manufacturing and marketing experience; and |
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production facilities. |
Any of these competitive factors could impede our funding efforts,
render technology and product candidates noncompetitive or eliminate or reduce demand for our product candidates.
If we fail to adequately protect or enforce our intellectual property
rights or secure rights to patents of others, the value of those rights would diminish.
Our success will depend in part on our ability and the abilities of
our partners to obtain, protect and enforce viable intellectual property rights including but not limited to trade name, trademark
and patent protection for our Company and its products, methods, processes and other technologies we may license or develop, to
preserve our trade secrets, and to operate without infringing the proprietary rights of third parties both domestically and abroad.
The patent position of biotechnology and pharmaceutical companies is generally highly uncertain, involves complex legal and factual
questions and has recently been the subject of much litigation. Neither the United States Patent and Trademark Office (“USPTO”),
the Patent Cooperation Treaty offices, nor the courts of the United States and other jurisdictions have consistent policies nor
predictable rulings regarding the breadth of claims allowed or the degree of protection afforded under many biotechnology and pharmaceutical
patents. Further, we may not have worldwide patent protection for all of our product candidates and our intellectual property rights
may not be legally protected or enforceable in all countries throughout the world. In some jurisdictions, some of our product candidates
in certain programs, including our HAE program, may have short or no composition of matter patent life and we may therefore rely
on orphan drug exclusivity or data exclusivity. There can be no assurance that we will obtain orphan drug exclusivity or data exclusivity
in every jurisdiction. Further, in some jurisdictions, we may rely on formulation patents or method of use patents. Both the ability
to achieve issuance and the enforcement of formulation and method of use patents can be highly uncertain and can vary from jurisdiction
to jurisdiction, and such patents may therefore not adequately prevent competitors and potential infringers in some jurisdictions.
The validity, scope, enforceability and commercial value of the rights protected by such patents, therefore, is highly uncertain.
We also rely on trade secrets to protect technology in cases when
we believe patent protection is not appropriate or obtainable. However, trade secrets are difficult to protect. If we cannot maintain
the confidentiality of our technology and other confidential information in connection with our collaborators and advisors, our
ability to receive patent protection or protect our proprietary information may be imperiled.
We may be involved in lawsuits to protect or enforce our patents, the
patents of our partners or our other intellectual property rights, which could be expensive, time consuming and unsuccessful.
Competitors may infringe or otherwise violate our patents, the patents
of our licensors or our other intellectual property rights. To counter infringement or unauthorized use, we may be required to
file legal claims, which can be expensive and time-consuming and unsuccessful. An adverse result in any litigation or defense proceeding
could put one or more of our patents at risk. Our success depends in part on avoiding the infringement of other parties’
patents and other intellectual property rights as well as avoiding the breach of any licenses relating to our technologies and
products. In the United States, patent applications filed in recent years are confidential for 18 months, while older applications
are not published until the patent issues. As a result, avoiding patent infringement may be difficult and we may inadvertently
infringe third-party patents or proprietary rights. These third parties could bring claims against us, our partners or our licensors
that even if resolved in our favor, could cause us to incur substantial expenses and, if resolved against us, could additionally
cause us to pay substantial damages. Further, if a patent infringement suit were brought against us, our partners or our licensors,
we or they could be forced to stop or delay research, development, manufacturing or sales of any infringing product in the country
or countries covered by the patent we infringe, unless we can obtain a license from the patent holder. Such a license may not be
available on acceptable terms, or at all, particularly if the third party is developing or marketing a product competitive with
the infringing product. Even if we, our partners or our licensors were able to obtain a license, the rights may be nonexclusive,
which would give our competitors access to the same intellectual property.
If we or our partners are unable or fail to adequately initiate, protect,
defend or enforce our intellectual property rights in any area of commercial interest or in any part of the world where we wish
to seek regulatory approval for our products, methods, processes and other technologies, the value of the product candidates to
produce revenue would diminish. Additionally, if our products, methods, processes, and other technologies or our commercial use
of such products, processes, and other technologies, including but not limited to any trade name, trademark or commercial strategy
infringe the proprietary rights of other parties, we could incur substantial costs. The USPTO and the patent offices of other jurisdictions
have issued to us a number of patents for our various inventions and we have in-licensed several patents from various institutions.
We have filed additional patent applications and provisional patent applications with the USPTO. We have filed a number of corresponding
foreign patent applications and intend to file additional foreign and U.S. patent applications, as appropriate. We have also filed
certain trademark and trade name applications worldwide. We cannot assure you as to:
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the degree and range of protection any patents will afford against competitors with similar products; |
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if and when patents will issue; |
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if patents do issue we cannot be sure that we will be able to adequately defend such patents and whether or not we will be able to adequately enforce such patents; or |
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whether or not others will obtain patents claiming aspects similar to those covered by our patent applications. |
If the USPTO or other foreign patent office upholds patents issued
to others or if the USPTO grants patent applications filed by others, we may have to:
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obtain licenses or redesign our products or processes to avoid infringement; |
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stop using the subject matter claimed in those patents; or |
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pay damages. |
We may initiate, or others may bring against us, litigation or administrative
proceedings related to intellectual property rights, including proceedings before the USPTO or other foreign patent office. Any
judgment adverse to us in any litigation or other proceeding arising in connection with a patent or patent application could materially
and adversely affect our business, financial condition and results of operations. In addition, the costs of any such proceeding
may be substantial whether or not we are successful.
Our success is also dependent upon the skills, knowledge and experience,
none of which is patentable, of our scientific and technical personnel. To help protect our rights, we require all employees, consultants,
advisors and partners to enter into confidentiality agreements that prohibit the disclosure of confidential information to anyone
outside of our company and require disclosure and assignment to us of their ideas, developments, discoveries and inventions. These
agreements may not provide adequate protection for our trade secrets, know-how or other proprietary information in the event of
any unauthorized use or disclosure or the lawful development by others of such information, and if any of our proprietary information
is disclosed, our business will suffer because our revenues depend upon our ability to license or commercialize our product candidates
and any such events would significantly impair the value of such product candidates.
We face an inherent risk of liability in the event that the use or misuse
of our products results in personal injury or death and our product liability insurance coverage may be insufficient.
If the use or misuse of peramivir or any other regulatory body-approved
products we or a partner may sell in the future harms people, we may be subject to costly and damaging product liability claims
brought against us by consumers, healthcare providers, pharmaceutical companies, third-party payors or others. The use of our product
candidates in clinical trials, including post marketing clinical studies, could also expose us to product liability claims. We
cannot predict all of the possible harms or side effects that may result from the use of our products or the testing of product
candidates and, therefore, the amount of insurance coverage we currently may not be adequate to cover all liabilities or defense
costs we might incur. A product liability claim or series of claims brought against us could give rise to a substantial liability
that could exceed our resources. Even if claims are not successful, the costs of defending such claims and potential adverse publicity
could be harmful to our business.
We face an inherent risk of product liability exposure related to
the testing of our product candidates in human clinical trials and will face even greater risks upon any commercialization by us
of our product candidates. We have product liability insurance covering our commercial sale of RAPIVAB and our clinical trials.
Clinical trial and product liability insurance is becoming increasingly expensive. As a result, we may be unable to obtain sufficient
insurance or increase our existing coverage at a reasonable cost to protect us against losses that could have a material adverse
effect on our business. An individual may bring a product liability claim against us if one of our products or product candidates
causes, or is claimed to have caused, an injury or is found to be unsuitable for consumer use. Any product liability claim brought
against us, with or without merit, could result in:
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liabilities that substantially exceed our product liability insurance, which we would then be required to pay from other sources, if available; |
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an increase of our product liability insurance rates or the inability to maintain insurance coverage in the future on acceptable terms, or at all; |
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withdrawal of clinical trial volunteers or patients; |
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damage to our reputation and the reputation of our products, resulting in lower sales; |
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regulatory investigations that could require costly recalls or product modifications; |
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litigation costs; and |
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the diversion of management’s attention from managing our business. |
Insurance coverage is increasingly more costly and difficult to obtain
or maintain.
While we currently have insurance for our business, property, directors
and officers, and our products insurance is increasingly more costly and narrower in scope, and we may be required to assume more
risk in the future. If we are subject to claims or suffer a loss or damage in excess of our insurance coverage, we will be required
to bear any loss in excess of our insurance limits. If we are subject to claims or suffer a loss or damage that is outside of our
insurance coverage, we may incur significant uninsured costs associated with loss or damage that could have an adverse effect on
our operations and financial position. Furthermore, any claims made on our insurance policies may impact our ability to obtain
or maintain insurance coverage at reasonable costs or at all.
If our facility incurs damage or power is lost for a significant length
of time, or if we incur significant cost overruns or delays in the construction of our new discovery facilities in Birmingham,
Alabama, our business will suffer.
We store clinical and stability samples at our facility that could
be damaged if our facility incurs physical damage or in the event of an extended power failure. We have backup power systems in
addition to backup generators to maintain power to all critical functions, but any loss of these samples could result in significant
delays in our drug development process.
In addition, we store most of our preclinical and clinical data at
our facilities. Duplicate copies of most critical data are secured off-site. Any significant degradation or failure of our computer
systems could cause us to inaccurately calculate or lose our data. Loss of data could result in significant delays in our drug
development process and any system failure could harm our business and operations.
We also face the risk that the costs and time
required in connection with the construction of our new discovery facilities in Birmingham, Alabama could exceed our current expectations.
If there is a significant cost overrun or significant delay in the completion of the construction, our business, financial condition,
and results of operations could be adversely affected.
A significant disruption in our information technology systems or a
cyber-security breach could adversely affect our business.
We are increasingly dependent on information technology systems to
operate our business. Like other companies in our industry, our networks and infrastructure may be vulnerable to cyber-attacks
or intrusions, including by computer hackers, foreign governments, foreign companies or competitors, or may be breached by employee
error, malfeasance or other disruption. A breakdown, invasion, corruption, destruction or interruption of critical information
technology systems could negatively impact operations. If our systems are damaged, fail to function properly or otherwise
become unavailable, we may incur substantial costs to repair or replace them, and we may experience loss of critical data and interruptions
or delays in our ability to perform critical functions, which could adversely affect our business, financial condition or results
of operations. Any compromise of our data security could also result in a violation of applicable privacy and other laws, significant
legal and financial exposure, damage to our reputation, loss or misuse of the information and a loss of confidence in our data
security measures, which could harm our business. There can be no assurance that our efforts to protect our data and information
technology systems will prevent breakdowns or breaches in our systems, or those of third parties with which we do business, and
any such events could adversely affect our business.
If we fail to retain our existing key personnel or fail to attract and
retain additional key personnel, the development of our product candidates and commercialization of our products and the related
expansion of our business will be delayed or stopped.
We are highly dependent upon our senior management and scientific
team, the unexpected loss of whose services might impede the achievement of our development and commercial objectives. Competition
for key personnel with the experience that we require is intense and is expected to continue to increase. Our inability to attract
and retain the required number of skilled and experienced management, commercial, operational and scientific personnel will harm
our business because we rely upon these personnel for many critical functions of our business.
If because of our use of hazardous materials, we violate any environmental
controls or regulations that apply to such materials, we may incur substantial costs and expenses in our remediation efforts.
Our research and development involves the controlled use of hazardous
materials, chemicals and various radioactive compounds. We are subject to federal, state and local laws and regulations governing
the use, storage, handling and disposal of these materials and some waste products. Accidental contamination or injury from these
materials could occur. In the event of an accident, we could be liable for any damages that result and any liabilities could exceed
our resources. Compliance with environmental laws and regulations or a violation of such environmental laws and regulations could
require us to incur substantial unexpected costs, which would materially and adversely affect our results of operations.
Risks relating to investing in our common stock
Our existing principal stockholders hold a substantial amount of our
common stock and may be able to influence significant corporate decisions, which may conflict with the interest of other stockholders.
Several of our stockholders own greater than 5% of our outstanding common
stock. Our top ten stockholders own more than 50% of BioCryst and can individually, and as a group, influence our operations based
upon their concentrated ownership. These stockholders, if they act together, may be able to influence the outcome of matters requiring
approval of the stockholders, including the election of our directors and other corporate actions.
Our stock price has been, and is likely to continue to be, highly volatile,
which could result in the value of an investment in our common stock to decline significantly.
The market prices for securities of biotechnology companies
in general have been highly volatile and may continue to be highly volatile in the future. Moreover, our stock price has fluctuated
frequently, and these fluctuations are often not related to our financial results. For the twelve months ended September 30, 2015,
the 52-week range of the market price of our stock was from $7.85 to $16.83 per share. The following factors, in addition to other
risk factors described in this section, may have a significant impact on the market price of our common stock:
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announcements of technological innovations or new products by us or our competitors; |
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developments or disputes concerning patents or proprietary rights; |
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additional dilution through sales of our common stock or other derivative securities; |
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status of new or existing licensing or collaborative agreements and government contracts; |
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announcements relating to the status of our programs; |
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developments and announcements regarding new and virulent strains of influenza; |
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we or our partners achieving or failing to achieve development milestones; |
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publicity regarding actual or potential medical results relating to products under development by us or our competitors; |
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publicity regarding certain public health concerns for which we are or may be developing treatments; |
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regulatory developments in both the United States and foreign countries; |
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public concern as to the safety of pharmaceutical products; |
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actual or anticipated fluctuations in our operating results; |
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changes in financial estimates or recommendations by securities analysts; |
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changes in the structure of healthcare payment systems, including developments in price control legislation; |
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announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments; |
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additions or departures of key personnel or members of our board of directors; |
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purchases or sales of substantial amounts of our stock by existing stockholders, including officers or directors; |
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economic and other external factors or other disasters or crises; and |
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period-to-period fluctuations in our financial results. |
Future sales and issuances of securities may dilute the ownership interests
of our current stockholders and cause our stock price to decline.
Future sales of our common stock by current stockholders into the public
market could cause the market price of our stock to fall. As of October 31, 2015, there were 73,336,871 shares of our common
stock outstanding. We may from time to time issue securities in relation to a license arrangement, collaboration, merger or acquisition.
We may also sell, for our own account, shares of common stock or other equity securities, from time to time at prices and on terms
to be determined at the time of sale.
As of October 31, 2015, there were 9,820,203 stock options and restricted
stock units outstanding, 890,262 shares available for issuance under our Amended and Restated Stock Incentive Plan, and 497,204
shares available for issuance under our Employee Stock Purchase Plan. In addition, we could also make equity compensation grants
outside of our Stock Incentive Plan. The shares underlying existing stock options, restricted stock units and possible future stock
options, stock appreciation rights and stock awards have been registered pursuant to registration statements on Form S-8.
If some or all of such shares are sold or otherwise issued into the
public market over a short period of time, our current stockholders’ ownership interests may be diluted and the value of
all publicly traded shares is likely to decline, as the market may not be able to absorb those shares at then-current market prices.
Additionally, such sales and issuances may make it more difficult for us to sell equity securities or equity-related securities
in the future at a time and price that our management deems acceptable, or at all.
We have anti-takeover provisions in our corporate charter documents
that may result in outcomes with which you do not agree.
Our board of directors has the authority to issue up to 4,800,000
shares of undesignated preferred stock and to determine the rights, preferences, privileges and restrictions of those shares without
further vote or action by our stockholders. The rights of the holders of any preferred stock that may be issued in the future may
adversely affect the rights of the holders of common stock. The issuance of preferred stock could make it more difficult for third
parties to acquire a majority of our outstanding voting stock.
In addition, our certificate of incorporation provides for staggered
terms for the members of the board of directors and supermajority approval of the removal of any member of the board of directors
and prevents our stockholders from acting by written consent. Our certificate also requires supermajority approval of any amendment
of these provisions. These provisions and other provisions of our by-laws and of Delaware law applicable to us could delay or make
more difficult a merger, tender offer or proxy contest involving us.
We have never paid dividends on our common stock and do not anticipate
doing so in the foreseeable future.
We have never paid cash dividends on our stock. We currently intend
to retain all future earnings, if any, for use in the operation of our business. Accordingly, we do not anticipate paying cash
dividends on our common stock in the foreseeable future.
Item 6. Exhibits
See the Exhibit Index attached to this quarterly report and incorporated herein
by reference.
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 on this 6th day of November, 2015.
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BIOCRYST PHARMACEUTICALS, INC. |
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/s/ Jon P. Stonehouse |
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Jon P. Stonehouse |
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President and Chief Executive Officer |
(Principal Executive Officer) |
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/s/ Thomas R. Staab, II |
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Thomas R. Staab, II |
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Senior Vice President, Chief Financial Officer |
and Treasurer |
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(Principal Financial and Principal Accounting Officer) |
INDEX TO EXHIBITS
Number |
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Description |
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3.1 |
|
Third Restated Certificate of Incorporation of Registrant. Incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K filed December 22, 2006. |
|
3.2 |
|
Certificate of Amendment to the Third Restated Certificate of Incorporation of Registrant. Incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K filed July 24, 2007. |
|
3.3 |
|
Certificate of Increase of Authorized Number of Shares of Series B Junior Participating Preferred Stock. Incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K filed November 4, 2008. |
|
3.4 |
|
Certificate of Amendment to the Third Restated Certificate of Incorporation of Registrant. Incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K filed May 7, 2014. |
|
3.5 |
|
Certificate of Increase of Authorized Number of Shares of Series B Junior Participating Preferred Stock. Incorporated by reference to Exhibit 3.2 to the Company’s Form 8-K filed May 7, 2014. |
|
3.6 |
|
Amended and Restated Bylaws of Registrant effective October 29, 2008. Incorporated by reference to Exhibit 3.2 to the Company’s Form 8-K filed November 4, 2008. |
|
(10.1)† |
|
Amendment #2 to the Agreement between BioCryst Pharmaceuticals, Inc. and the Biomedical Advanced Research and Development Authority within the U.S. Department of Health and Human Services’ Office of the Assistant Secretary for Preparedness and Response, dated July 8, 2015. (Portions omitted pursuant to request for confidential treatment.) |
|
(10.2)† |
|
Amendment #3 to the Agreement between BioCryst Pharmaceuticals, Inc. and the Biomedical Advanced Research and Development Authority within the U.S. Department of Health and Human Services’ Office of the Assistant Secretary for Preparedness and Response, dated August 25, 2015. (Portions omitted pursuant to request for confidential treatment). |
|
(10.3)† |
|
Amendment #14 to the Agreement between BioCryst Pharmaceuticals, Inc. and the National Institute of Allergy and Infectious Diseases, dated September 16, 2015. (Portions omitted pursuant to request for confidential treatment.) |
|
(31.1) |
|
Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
(31.2) |
|
Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
(32.1) |
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
(32.2) |
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
(101) |
|
Financial statements from the Quarterly Report on Form 10-Q of BioCryst Pharmaceuticals, Inc. for the three months ended September 30, 2015, formatted in XBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Comprehensive Loss, (iii) Consolidated Statements of Cash Flows, and (iv) Notes to Consolidated Financial Statements. |
______________
( ) |
Filed or furnished herewith. |
† |
Confidential treatment requested. |
49
EX-10.1
2
exh_101.htm
EXHIBIT 10.1
EXHIBIT 10.1
EX-10.2
3
exh_102.htm
EXHIBIT 10.2
EXHIBIT 10.2
Pursuant to 17 CFR 20.24b-2, confidential information has been omitted
in places marked "***" and has been filed separately with the
Securities and Exchange Commission pursuant to a Confidential Treatment
Application with the Commission.
ATTACHMENT 1
Statement of Work
HHSO100201500007C
BCX4430 NDA Enabling CMC and Non-Clinical Toxicology Studies
August 19, 2015
PREAMBLE
Independently and not as an agent of the Government, the Contractor shall furnish all
the necessary services, qualified personnel, material, equipment, and facilities, not otherwise provided by the Government as needed
to perform the Statement of Work submitted in response to the BARDA Broad Agency Announcement (BAA) CBRN-BAA-10-100-SOL-00013.
The Government reserves the right to modify the milestones, progress, schedule, budget,
or deliverables to add or delete deliverables, process, or schedules if the need arises. Because of the nature of this research
and development (R&D) contract and the complexities inherent in this and prior programs, at designated milestones the Government
will evaluate whether work should be redirected, removed, or whether schedule or budget adjustments should be made.
Overall
Objectives and Scope
The overall objective of this contract is to advance the development of BCX4430, a novel
small molecule nucleoside with broad spectrum antiviral activity being developed for diseases caused by RNA pathogens. BCX4430,
an inhibitor of viral RNA – dependent RNA polymerase (RdRp), is the lead compound in our broad-spectrum antiviral program
to meet the need for a parenteral, direct-acting antiviral medical countermeasure (MCM) having efficacy across multiple viruses.
The scope of work for this contract includes preclinical and manufacturing development activities that fall into the following
areas: manufacturing of clinical trial material, manufacturing process improvements and development, non-clinical toxicology studies;
and all associated regulatory, quality assurance, management, and administrative activities. The proposed activities take into
account the Ebola virus disease (EVD) outbreak in West Africa. The R&D effort will contribute toward an NDA filing for BCX4430.
Overall, this Statement of Work (SOW) focuses on:
| · | Drug substance (DS) and drug product (DP) manufacturing process development activities that will
be conducted at US based facilities, which will result in the ability to consistently produce high quality, cGMP compliant material
and deliver drug supply that could be available for deployment as a medical countermeasure during the Ebola crisis and support
future clinical and non-clinical studies |
| · | Nonclinical development activities to advance the intramuscular (IM) and intravenous (IV) formulation
through NDA-enabling toxicology including *** and *** studies in the *** |
Pursuant to 17 CFR 20.24b-2, confidential information has been omitted in places marked "***" and has been filed separately with the
Securities and Exchange Commission pursuant to a Confidential Treatment Application with the Commission.
| 1 | BASE:
Manufacture of Clinical Trial Material |
Duration: 18 months
Drug Substance and Drug Product cGMP manufacturing by US suppliers to support non-clinical
and clinical activities. Drug Substance will be produced following an *** starting with ***, which will be used as the GMP starting
material to produce BCX4430.
The primary objectives will be to
| · | Produce *** batches of BCX4430 drug substance following ***. |
| · | Conduct drug product process improvements that will be focused on validation of analytical methods, stress testing, stability
studies, and process design space optimization |
1.1.
Procurement of Starting Materials
The contractor shall procure the starting materials to produce *** of the current manufacturing
process of BCX4430. The key starting materials to be procured are *** and ***.
1.1.1. Procurement of Starting Materials
to produce two 35 kg batches of BCX1777
The contractor shall procure *** and *** for the manufacture of *** of *** to support
a *** campaign (WBS 1.4.1 and 1.4.2) and a *** batch of BCX4430 (Clinical Trial Material Batch *** WBS1.7.1)
1.2.
Further Process Improvements of ***
The contractor shall conduct further process improvements that may be identified focused
on improving the existing plant-scale processes following generally the same ***.
1.2.1 Conduct Process Improvements
The contractor shall conduct the process improvements with existing plant-scale processes.
1.2.2 Determination that Process is Sufficient to move to Commercial Scale up
The contractor shall evaluate the processes developed and provide sufficient information
through a deliverable that will enable BARDA to determine that the processes are sufficient to move to commercial scale –up
activities.
1.3.
Manufacture of *** at ***
The contractor shall produce *** of *** will be utilized as the starting material for
the manufacture of BCX4430 in accordance with cGMP guidance.
1.3.1. Manufacture of *** of ***
(Batch ***)
The contractor shall produce *** of *** using the existing process at ***.
1.3.2. Manufacture of *** of ***
(Batch ***)
The contractor shall produce *** of *** using the existing process at ***.
1.4.
Manufacturing Campaign of BCX4430
The contractor shall produce *** batches of BCX4430 at *** in compliance with cGMP.
1.4.1. Manufacturing of *** of cGMP
BCX4430 (DS Batch ***)
The contractor shall produce and release *** of cGMP BCX4430 ***.
Pursuant to 17 CFR 20.24b-2, confidential information has been omitted in places marked "***" and has been filed separately with the
Securities and Exchange Commission pursuant to a Confidential Treatment Application with the Commission.
1.4.2. Manufacturing of *** of cGMP
BCX4430 (DS Batch ***)
The contractor shall produce and release *** of cGMP BCX4430 ***.
1.4.3. Prepare a Campaign Summary
Report
The contractor shall prepare a campaign summary report of the manufacture and release
of DS Batches ***.
1.4.4. Drug Substance Stability Studies
The contractor shall place samples from DS Batch *** of BCX4430 on a *** stability program
at *** and a *** accelerated stability study at ***.
Table 1. BCX4430 Drug Substance Stability
Study Sampling Points
Test
ID |
Months |
0 |
1 |
3 |
6 |
9 |
12 |
18 |
24 |
48 |
60 |
A |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
B |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
C |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
D |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
E |
X |
X |
X |
X |
X |
X |
X |
X |
X |
X |
F |
X |
X |
|
X |
|
X |
X |
X |
X |
X |
G |
X |
X |
|
X |
|
X |
X |
X |
X |
X |
NOTE: BARDA will only cover stability activities
for ***.
Table 2. BCX4430 Drug Substance Stability
Tests
Test ID |
Test |
A |
*** |
B |
*** |
C |
*** |
D |
*** |
E |
*** |
F |
*** |
G |
*** |
1.5.
Drug Product Development
The contractor shall conduct drug product process improvements that will be focused on
validation of analytical methods, stress testing, stability studies, and process design space optimization.
The contractor shall conduct formulation development activities and produce a sterile,
parenteral formulation containing *** of the active compound per unit in compliance with cGMP guidance. Initial development efforts
will be focused on delivering *** that tolerates terminal sterilization and provides an acceptable stability profile to support
a *** shelf life. Additionally, studies to include: *** will be conducted to evaluate the feasibility of ***.
1.5.1. Stress Conditions Studies
The contractor shall conduct a series of experiments under conditions outlined in ICH
guidance to evaluate the stability of the drug product made from available drug substance.
1.5.2. Design Space Studies
The contractor shall conduct studies to evaluate and define the design space of the formulation
process.
1.5.3. Analytical Method Validation
The contractor shall conduct analytical methods validation or qualification as listed
in the table below.
Pursuant to 17 CFR 20.24b-2, confidential information has been omitted in places marked "***" and has been filed separately with the
Securities and Exchange Commission pursuant to a Confidential Treatment Application with the Commission.
Table 3. BCX4430 Drug Product Methods
that will be Validated or Qualified
Test |
Method and Objective |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
1.5.4. Prepare Process Development
Report for DP
The contractor shall prepare a process development report summarizing the experiments
and results of the studies conducted to define the process and evaluate the formulation.
1.5.5. Pre-formulation and Physicochemical
Properties Studies
The contractor shall conduct studies to determine the physicochemical properties of the
drug substance and identify potential formulations and primary packaging for an IM injection based on stability and ability to
be produced on manufacturing lines.
1.5.6. Feasibility Runs
The contractor shall conduct small-scale, nonGMP manufacturing runs of potential formulations
and formats.
1.5.7. Extractable/Leachable Study
The contractor shall conduct studies to determine drug product stability in primary packaging
and of syringe types that will be used for delivery.
1.5.8. Excipient Compatibility Studies
for IV Formulation from IM
The contractor shall conduct studies to evaluate the compatibility of the IM formulation
added to various standard IV fluids.
| 1.6. | Manufacturing of Drug Product to Support Clinical Trials |
The contractor shall produce *** batches of approximately *** of drug product suitable
for clinical trial use. The drug product will produced from the *** cGMP DS Batches *** (WBS 1.4.1 and 1.4.2)
1.6.1. Manufacture of Clinical Trial
Material (CTM Batch ***)
The contractor shall produce approximately *** per cGMP for use in clinical trials which
will include active drug and placebo batches to support the future clinical safety study.
1.6.2. Manufacture of Clinical Trial
Material (CTM Batch ***)
The contractor shall produce approximately *** per cGMP for use in clinical trials which
will include active drug and placebo batches to support the future clinical safety study.
Pursuant to 17 CFR 20.24b-2, confidential information has been omitted in places marked "***" and has been filed separately with the
Securities and Exchange Commission pursuant to a Confidential Treatment Application with the Commission.
1.6.3. Prepare a Campaign Summary
Reports
The contractor shall prepare a campaign summary report of the manufacture and release
of CTM Batches ***.
1.6.4. Drug Product Stability Studies
- Active
The contractor shall place drug product on stability based on the following conditions:
Table 4. BCX4430 Drug Product Stability
Testing Conditions and Sampling
Stability Conditions |
Configuration |
Test Points |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
NOTE: BARDA will only cover stability
activities for ***
Testing at each interval,
unless otherwise specified below, will include:
***
1.6.5. Drug Product Stability Studies
- Placebo
The contractor shall place drug product on stability based on the following conditions:
Table 5. BCX4430 Drug Product Stability
Testing Conditions and Sampling
Stability Conditions |
Configuration |
Test Points |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
Testing at each interval,
unless otherwise specified below, will include:
***
NOTE: BARDA will only cover stability
activities for ***
1.6.6. Comparability Study
The contractor shall conduct comparability studies evaluating drug substance produced
by *** and ***, and the subsequently produced drug product, will be conduct per FDA Guidance. These studies will evaluate: in-process
checks, impurity profiles, release testing results, and stability profiles at standard and accelerated conditions to ensure the
material produced by both manufacturers is substantially comparable.
1.7.
Manufacture of Additional Supply
That contractor shall produce *** of BCX4430 based on *** facility and subsequently produce
*** of drug product at *** suitable for clinical trial use.
1.7.1. Manufacturing of *** cGMP
BCX4430 (DS Batch ***)
The contractor shall produce *** of cGMP BCX4430 from ***.
Pursuant to 17 CFR 20.24b-2, confidential information has been omitted in places marked "***" and has been filed separately with the
Securities and Exchange Commission pursuant to a Confidential Treatment Application with the Commission.
1.7.2. Prepare a Campaign Summary
Report
The contractor shall prepare a campaign summary report of the manufacture and release
of ***.
1.7.3. Manufacturing of approximately
*** (CTM Batch ***)
The contractor shall produce approximately *** of cGMP BCX4430 drug product using drug
substance from the *** cGMP BCX4430 (DS Batch ***, WBS 1.7.1).
1.7.4. Prepare a Campaign Summary
Report
The contractor shall prepare a campaign summary report of the manufacture and release
of CTM Batches ***
1.7.5. Stability Studies for DS and
DP
The contractor shall conduct drug substance and drug product stabilities for the DS and
DP manufactured in from the *** of cGMP BCX4430 drug substance based on *** (WBS 1.6).
NOTE: BARDA will only cover stability
activities for ***
1.7.6. Comparability Studies
The contractor shall conduct comparability studies evaluating drug substance produced
by *** and both process at ***, and the subsequently produced drug product, will be conduct per FDA Guidance. These studies will
evaluate: in-process checks, impurity profiles, release testing results, and stability profiles at standard and accelerated conditions
to ensure the material produced by both manufacturers and both *** process are substantially comparable.
2
Option 1: Commercial Scale up and NDA Registration Batches
Duration: ***
Go/No Go Criteria to Initiate: WBS 1.2.2 BARDA approval of process developed
Through optimization of manufacturing processes, BARDA will evaluate and determine what process
should be sufficient to initiate commercial scale up activities in this Option. This Option will add value to the project through
conducting manufacturing regulatory activities that will be needed for future product approval with the FDA.
Decision Criteria:
The objective is to produce DS registration batches from the qualified process, ***.
This will be determined upon the conclusion of the DS development effort being undertaken by BioCryst and funded by NIAID that
is scheduled to conclude in December 2015. Additionally during this stage, the DP manufacturing process would be finalized for
the commercial presentation and registration batches produced.
2.1.
Procurement
The contractor shall procure the *** starting materials needed to produce BCX4430.
2.1.1. Procurement of ***
The contractor shall qualify a vendor(s) to produce the *** and procure enough material
to support the manufacture of *** batches of BCX4430 drug substance.
Pursuant to 17 CFR 20.24b-2, confidential information has been omitted in places marked "***" and has been filed separately with the
Securities and Exchange Commission pursuant to a Confidential Treatment Application with the Commission.
2.1.2. Procurement of ***
The contractor shall qualify a vendor(s) to produce the *** and procure enough material
to support the manufacture of *** batches of BCX4430 drug substance.
2.2.
Drug Substance Process Scale-up
The contractor shall conduct process development work targeting a *** that can be scaled
to plant equipment. This work will include: development of a *** through lab scale studies, process hazard evaluation including
RC-1 and digital scanning calorimetry, lab scale qualification runs, pilot plant scale-up technical batches, necessary modifications
to analytical methods based on the ***, and plant-scale registration runs.
| 2.2.1 | Further Process Improvements of Final Route |
The contractor shall conduct further process improvements that may be identified focused
on improving the *** to be scaled up. The *** will be based either ***.
| 2.2.2 | Process Hazard Evaluation |
The contractor shall conduct process hazard evaluation studies needed for the scale-up
of the optimized process into the plant.
2.2.3 Scale-up Technical Run
The contractor shall conduct a nonGMP manufacturing run at plant-scale to ensure the
safety and output of the optimized process.
2.2.4 Analytical Method Development and Qualification
The contractor shall modify, add to, revalidate, or requalify the analytical methods.
| 2.2.5 | Prepare Process Development Report |
The contractor shall prepare a process development report describing the experiments
and results leading to the selection of the optimized manufacturing process
2.3
Manufacture of cGMP Drug Substance Registration Batches
The contractor shall produce *** cGMP batches of BCX4430 following the *** at a scale
comparable to the estimated commercial scale.
| 2.3.1 | Manufacture of DS Batch (DS Batch ***) |
The contractor shall manufacture a batch of cGMP BCX4430 at plant scale.
2.3.2 Manufacture of
DS Batch (DS Batch ***)
The contractor shall manufacture a batch of cGMP BCX4430 at plant scale.
2.3.3 Manufacture of
DS Batch (DS Batch ***)
The contractor shall manufacture a batch of cGMP BCX4430 at plant scale.
2.3.4 Prepare Campaign
Summary Report
The contractor shall prepare a report summarizing the conduct, observations, and results
of the manufacturing of DS Batches ***.
Pursuant to 17 CFR 20.24b-2, confidential information has been omitted in places marked "***" and has been filed separately with the
Securities and Exchange Commission pursuant to a Confidential Treatment Application with the Commission.
2.4
Drug Product Registration Batches
The contractor shall produce *** drug product lots at *** that will be used as the NDA
registration batches.
2.4.1 Manufacture of
DP Registration (DPR Batch ***)
The contractor shall manufacture a NDA registration batch of cGMP BCX4430 drug product
at a scale at least *** the estimated commercial scale.
2.4.2 Manufacture of
DP Registration (DPR Batch ***)
The contractor shall manufacture a NDA registration batch of cGMP BCX4430 drug product
at a scale at least *** the estimated commercial scale.
2.4.3 Manufacture of
DP Registration (DPR Batch ***)
The contractor shall manufacture a NDA registration batch of cGMP BCX4430 drug product
at a scale at least *** the estimated commercial scale.
2.4.4 Prepare campaign
summary report
The contractor shall prepare a report summarizing the conduct, observations, and results
of the manufacturing of DPR Batches ***.
2.5
Stability studies for DS and DP
The contractor shall conduct drug substance and drug product stabilities as described
in Table 2 and Table 3 .
NOTE: BARDA will only cover stability activities for ***
2.6
Comparability study
The contractor shall conduct comparability studies evaluating drug substance produced
for clinical trials in the base period versus the NDA registration batches manufactured via *** in Option 1, and the subsequently
produced drug product, will be conduct per FDA Guidance. These studies will evaluate: in-process checks, impurity profiles, release
testing results, and stability profiles at standard and accelerated conditions to ensure the material produced by both processes
is substantially comparable.
Pursuant to 17 CFR 20.24b-2, confidential information has been omitted in places marked "***" and has been filed separately with the
Securities and Exchange Commission pursuant to a Confidential Treatment Application with the Commission.
3
Option 2: Nonclinical NDA-enabling Toxicology
Duration: ***
Go/No Go Criteria to Initiate: Availability of cGMP BCX4430 *** DS batch manufactured
under NIAID contract HHSO100201500007C
Through completion of manufacturing of Drug substance there will be material to conduct further
regulatory activities such as the IM non-clinical NDA-enabling toxicology studies in this option. This Option will add value to
the project through conducting additional non-clinical activities that will support a potential future NDA.
Decision Criterion:
The contractor shall perform nonclinical GLP studies of BCX4430 to characterize ***.
3.1.
GLP *** Toxicology
The contractor shall for each toxicology study develop the protocol, select and qualify
the vendor, conduct in life and recovery phases and analyze study data resulting in a final study report.
Studies include:
Pursuant to 17 CFR 20.24b-2, confidential information has been omitted in places marked "***" and has been filed separately with the
Securities and Exchange Commission pursuant to a Confidential Treatment Application with the Commission.
3.1.1.
Conduct GLP *** toxicology study - ***
3.1.2.
Conduct GLP *** general toxicology study - ***
3.2.
*** toxicology
The contractor shall for each *** study segment develop the protocol, select and qualify
the vendor, conduct in life and recovery phases and analyze study data resulting in a final study report.
Studies include:
3.2.1.
Conduct *** assessment in ***
3.2.2. Conduct *** Dose Range Finding Studies in the ***
3.2.3.
Conduct Definitive *** toxicology in the ***
3.2.4.
Conduct *** toxicology ***
3.3.
Nonclinical ADME
The contractor shall procure radiolabeled BCX4430. In addition for each ADME study, the
contractor shall develop the protocol, select and qualify the vendor, conduct the study and analyze study data resulting in a final
study report. Studies include:
3.3.1.
Conduct Radiolabeled ADME study - ***
3.3.2.
Conduct Radiolabeled ADME – ***
A listing of the proposed studies for the nonclinical NDA-enabling toxicology studies
is provided.
Table 6 Nonclinical NDA-enabling
Toxicology Studies
Study # |
Description |
Objective(s) |
Species (N) |
|
GLP *** general toxicology |
*** |
*** |
|
GLP *** general toxicology |
*** |
*** |
|
*** assessment |
*** |
*** |
|
*** Dose Range Finding |
***
|
*** |
|
*** Dose Range Finding |
***
|
*** |
|
Definitive *** toxicology |
*** |
*** |
|
Definitive *** toxicology |
*** |
*** |
|
*** toxicology |
*** |
*** |
|
Radiolabeled ADME |
Determine the absorption, distribution, metabolism and excretion of the test article following IM dosing |
*** |
|
Radiolabeled ADME |
Determine the absorption, metabolism and excretion of the test article following IM dosing |
*** |
Pursuant to 17 CFR 20.24b-2, confidential information has been omitted in places marked "***" and has been filed separately with the
Securities and Exchange Commission pursuant to a Confidential Treatment Application with the Commission.
4
Option 3: In vitro Experiments – IV
Duration: ***
Go/No Go to Initiate: Selection of a preliminary IV formulation (LRI) based on initial
studies
Through completion of earlier studies, it will be determined what is an appropriate IV formulation
to continue with toxicology studies of the IV formulation under this Option. This Option will add value to determine if there is
any identified toxicology in in vitro assays before moving to animal studies in Option 4.
Decision Criterion:
The contractor shall develop the protocol, select and qualify the vendor, conduct the
experiments and analyze the data resulting in a study report.
| 4.2. | Conduct *** Test – IV |
The contractor shall develop the protocol, select and qualify the vendor, conduct the
experiment and analyze the data resulting in a study report.
A listing of the proposed experiments for the in vitro experiments to be conducted
in advance of the nonclinical NDA-enabling toxicology studies for the IV formulation is provided in Table
7 .
Table 7 In vitro Experiments - IV
Study # |
Description |
Objective(s) |
Species (N) |
|
*** |
*** |
*** |
|
*** |
*** |
*** |
4.3 Study Report on all in vitro assays
The contractor shall submit a summarized study report with data and conclusions from
all in vitro experiments conducted in table 7 to determine whether there is any toxicology before advancing into non-clinical NDA
enabling toxicology studies (Option 5).
Pursuant to 17 CFR 20.24b-2, confidential information has been omitted in places marked "***" and has been filed separately with the
Securities and Exchange Commission pursuant to a Confidential Treatment Application with the Commission.
5
Option 4: Nonclinical NDA-enabling Toxicology - IV
Duration: ***
Go/No Go Criteria to Initiate: WBS 4.3 Study Report on all in vitro assays
Through completion of the IV in vitro toxicology studies with the IV formulation conducted
in Option 3 and summarized in WBS 4.3, it will be determined if the IV formulation is safe to move into non-clinical toxicology
animal studies in this Option. This Option will add value to the project through conducting additional non-clinical activities
that will support a potential future NDA.
Decision Criterion:
| 5.1. | GLP *** Toxicology – IV |
The contractor shall for each toxicology study develop the protocol, select and qualify
the vendor, conduct in life and recovery phases and analyze study data resulting in a final study report. Studies include:
5.1.1.
Conduct GLP *** IV general toxicology study - ***
5.1.2.
Conduct GLP *** IV toxicology study - ***
5.2.
*** toxicology - IV
The contractor shall for each *** study segment develop the protocol, select and qualify
the vendor, conduct in life and recovery phases and analyze study data resulting in a final study report. Studies include:
5.2.1.
Conduct *** assessment in ***
| 5.2.2. | Conduct *** Dose Range Finding Studies in the *** |
5.2.3.
Conduct Definitive *** toxicology in the ***
5.2.4.
Conduct *** toxicology ***
A listing of the proposed studies for the nonclinical NDA-enabling toxicology studies
for the IV formulation is provided in Table 8.
Pursuant to 17 CFR 20.24b-2, confidential information has been omitted in places marked "***" and has been filed separately with the
Securities and Exchange Commission pursuant to a Confidential Treatment Application with the Commission.
Table 8. Nonclinical NDA-enabling
Toxicology Studies for an IV Formulation
Study # |
Description |
Objective(s) |
Species (N) |
|
GLP *** IV general toxicology |
*** |
*** |
|
GLP *** IV general toxicology |
*** |
*** |
|
*** assessment |
*** |
*** |
|
*** Dose Range Finding |
***
|
*** |
|
*** Dose Range Finding |
***
|
*** |
|
Definitive *** toxicology |
*** |
*** |
|
Definitive *** toxicology |
*** |
*** |
|
*** toxicology |
*** |
*** |
Pursuant to 17 CFR 20.24b-2, confidential information has been omitted in places marked "***" and has been filed separately with the
Securities and Exchange Commission pursuant to a Confidential Treatment Application with the Commission.
6
Program Management
The contractor shall provide all expertise needed for the implementation of the activities
to be performed under this contract, including: research, manufacturing, regulatory, clinical, statistical analyses, management
and administrative activities.
6.1.
Technical and Project Management Support
The contractor shall appoint a Principal Investigator (PI) who will be responsible for
all aspects of project performance and communication with the BARDA.
The contractor shall provide project management that will ensure day-to-day monitoring
and tracking of progress and timelines, the coordination of project activities and costs incurred.
The contractor shall provide all managerial and administrative functions necessary for
overall planning, monitoring, and implementing activities for the completion of the strategic product development plan.
The contractor shall provide for all necessary legal affairs required to ensure the timely
acquisition of all proprietary rights, including intellectual property rights and all materials needed to perform the project,
as well as reporting to the Government all inventions made in the performance of the project.
6.2.
Subcontractor Management
The contractor shall provide for tracking, coordination and oversight
of subcontractor efforts and manage communications with subcontractors.
6.3.
Risk Management
The contractor shall identify project risks, develop risk management strategies and implement
mitigation actions.
6.4.
Earned Value Management (EVM)
The contractor shall provide EVM information.
6.5.
Project Communications
The contractor shall provide for project communications including communications
with BARDA and external experts.
The contractor shall provide planning and steps required for the conduct
of contract review meetings.
Pursuant to 17 CFR 20.24b-2, confidential information has been omitted in places marked "***" and has been filed separately with the
Securities and Exchange Commission pursuant to a Confidential Treatment Application with the Commission.
7
Regulatory
The contractor shall ensure adherence to FDA regulations and guidance, including requirements
for the conduct of animal studies and assays under GLP, the manufacturing of the therapeutic product under cGMP, and the conduct
of clinical trials under GCP standards.
7.1.
Regulatory Authority Interactions
The contractor shall prepare and submit documentation and correspondence to regulatory
authorities as required. The contractor shall request and conduct meetings with regulatory authorities to ensure the development
program is conducted in accordance with regulatory guidelines and expectations.
7.2.
Quality Assurance
The contractor shall maintain quality assurance documentation. The
contractor shall arrange for audits of subcontractor facilities to ensure all planned procedures comply with the FDA regulations
and guidance that are required to meet GLP, cGMP and GCP standards. In addition, the contractor shall ensure that all contractor
and/or subcontractor records and staff are available for site visits or audits.
7.3.
Expert Collaborations
The contractor shall collaborate with experts in the field in the design of experiments
and studies that support the advancement of the development program.
Pursuant to 17 CFR 20.24b-2, confidential information has been omitted in places marked "***" and has been filed separately with the
Securities and Exchange Commission pursuant to a Confidential Treatment Application with the Commission.
ATTACHMENT 2
MILESTONE AND DELIVERABLES CHART
August 20, 2015
HHSO100201500007C
WBS |
Milestone |
Deliverable |
Success Criteria |
Timing |
Go/No-Go
for initiation |
CLIN 0001 - MANUFACTURE OF CLINICAL TRIAL MATERIAL |
1.2.1 |
Process Improvements Report |
Report on Process Development |
Process Developed |
*** |
|
1.2.2 |
Determination of Sufficient Process for Commercial Scale up |
Evaluation report |
BARDA approval of developed process |
*** |
N/A |
1.3.1 |
Manufacture *** (Batch ***) |
*** |
Acceptable quality and yield |
*** |
N/A |
1.3.2 |
Manufacture *** (Batch ***) |
*** |
Acceptable quality and yield |
*** |
N/A |
1.4.1 |
Manufacture cGMP BCX4430 (*** campaign DS Batch ***) |
BCX4430 DS
CofA,
|
Acceptable quality and yield |
*** |
N/A |
1.4.2 |
Manufacture cGMP BCX4430 (*** campaign DS Batch ***) |
BCX4430 DS
CofA,
|
Acceptable quality and yield |
*** |
N/A |
1.4.3 |
Prepare a Campaign Summary Reports |
Campaign Reports (DS Batches ***) |
Completion of DS Campaigns |
*** |
N/A |
1.4.4 |
Drug substance stability study |
Initial Report on stability activities |
Stability data |
*** |
|
1.5 |
Drug Product Development |
DP Process Development Report (WBS 1.5.4)
Pre-formulation and Physicochemical Report (WBS1.5.5)
Extractable/Leachable Report (WBS 1.5.7)
|
Completion of Studies |
*** |
N/A |
1.5.8 |
Excipient Compatibility Report for IV Formulation |
Compatibility Report |
IV formulation completed |
*** |
|
1.6.1 |
Manufacture cGMP DP (CTM Batch ***) |
BCX4430 DP
CofA, |
Acceptable quality and yield |
*** |
Accepted GMP DS |
|
Pursuant to 17 CFR 20.24b-2, confidential information has been omitted in places marked "***" and has been filed separately with the
Securities and Exchange Commission pursuant to a Confidential Treatment Application with the Commission.
1.6.2 |
Manufacture cGMP DP (CTM Batch ***) |
BCX4430 DP
CofA, |
Acceptable quality and yield |
*** |
Accepted GMP DS |
1.6.3 |
Prepare a Campaign Summary Reports |
Campaign Reports (CTM Batches ***) |
Completion of DP Campaigns |
*** |
N/A |
1.6.4 |
Drug Product stability study - Active |
Initial Report on stability activities |
Stability Data |
*** |
|
1.6.5 |
Drug Product stability study - Placebo |
Initial Report on stability activities |
Stability Data |
*** |
|
1.6.6 |
Comparability Study |
Comparability Protocol and Report |
Completion of DS and DP Campaigns |
*** |
|
1.7.1 |
Manufacture cGMP BCX4340 (*** campaign DS Batch ***) |
BCX4430 DS
CofA |
Acceptable DS process |
*** |
N/A |
1.7.2 |
Prepare a Campaign Summary Report |
Campaign Reports (DS Batch***) |
Completion of DS Campaign |
*** |
N/A |
1.7.3 |
Manufacture cGMP DP (CTM Batch ***) |
BCX4430 DP
CofA, |
Acceptable quality and yield |
*** |
Accepted GMP DS |
1.7.4 |
Prepare a Campaign Summary Report |
Campaign Report (CTM Batches ***) |
Completion of DS Campaigns |
*** |
N/A |
1.7.5 |
Drug Substance and Drug Product stability study |
Initial report on stability activities |
Stability Data |
*** |
Manufacture of 1.7.1 drug substance and 1.7.2 drug product |
1.7.6 |
Comparability Study |
Comparability Protocol and Report |
Comparable DS and DP profiles |
*** |
N/A |
CLIN 0002 – COMMERCIAL SCALE UP AND NDA REGISTRATION BATCHES
Go/No Go Criteria to Initiate: WBS 1.2.2 BARDA approval of process
developed
|
2.2 |
Drug Substance Process Scale-up |
Process Development Report (WBS 2.2.4) |
Selection of the optimized manufacturing process |
*** |
*** process |
2.3.1
|
Manufacture BCX4340 DS (DS Registration Batch ***) |
BCX4430 Registration
DS
CofA |
Acceptable quality and yield |
*** |
*** process |
2.3.2
|
Manufacture BCX4340 DS (DS Registration Batch ***) |
BCX4430 Registration DS
CofA, |
Acceptable quality and yield |
*** |
*** process |
2.3.3
|
Manufacture BCX4340 DS (DS Registration Batch ***) |
BCX4430 Registration DS
CofA, |
Acceptable quality and yield |
*** |
*** process |
|
Pursuant to 17 CFR 20.24b-2, confidential information has been omitted in places marked "***" and has been filed separately with the
Securities and Exchange Commission pursuant to a Confidential Treatment Application with the Commission.
2.3.4 |
Prepare a Campaign Summary Report |
Campaign Reports (DS Batches ***) |
Completion of DS Campaign |
*** |
N/A |
2.4.1
|
Manufacture BCX4430 DP (DP Registration Batch ***) |
BCX4430 DP
CofA, |
Acceptable quality and yield |
*** |
Accepted GMP DS |
2.4.2
|
Manufacture BCX4430 DP (DP Registration Batch ***) |
BCX4430 DP
CofA, |
Acceptable quality and yield |
*** |
Accepted GMP DS |
2.4.3
|
Manufacture BCX4430 DP (DP Registration Batch ***) |
BCX4430 DP
CofA, |
Acceptable quality and yield |
*** |
Accepted GMP DS |
2.4.4 |
Prepare a Campaign Summary Report |
Campaign Report (CTM Registration Batches ***) |
Completion of DS Campaigns |
*** |
N/A |
2.5 |
Drug substance and Drug Product stability study |
Report on stability activities |
Stability Data |
*** |
|
2.6 |
Comparability Study |
Comparability Protocol and Report |
Comparable DS and DP profiles |
*** |
Accepted GMP DS |
CLIN 0003 – NONCLINICAL NDA-ENABLING TOXICOLOGY
Go/No Go Criteria to Initiate: /availability
of *** cGMP batch of DS manufactured under NIAID contract HHSO100201500007C |
3.1.1 |
Complete GLP ***Tox Study - *** |
Study Report |
Established NOAEL |
*** |
Drug Substance confirming to release criteria |
3.1.2 |
Complete GLP *** Tox Study - *** |
Study Report |
Established NOAEL |
*** |
Drug Substance confirming to release criteria |
3.2.1 |
Conduct *** assessment in *** |
Study Report |
No significant findings |
*** |
N/A |
3.2.2 |
Conduct *** Dose Range Finding Studies in the *** |
Study Report |
No significant findings |
*** |
N/A |
3.2.3 |
Conduct Definitive *** toxicology in the *** |
Study Report |
No significant findings |
*** |
N/A |
3.2.4 |
Conduct *** toxicology *** |
Study Report |
No significant findings |
*** |
N/A |
3.3.1 |
Conduct Radiolabeled ADME study - *** |
Study Report |
Characterize drug disposition |
*** |
Acceptable Radiolabel Material |
3.3.2 |
Conduct Radiolabeled ADME – ***
|
Study Report |
Characterize drug disposition |
*** |
Acceptable Radiolabel Material |
|
Pursuant to 17 CFR 20.24b-2, confidential information has been omitted in places marked "***" and has been filed separately with the
Securities and Exchange Commission pursuant to a Confidential Treatment Application with the Commission.
CLIN 0004 – IN VITRO EXPERIMENTS – IV
Go/No Go to Initiate: selection of an appropriate preliminary IV formulation |
4.1. |
Conduct *** Test – IV |
Study Report |
No effect on *** |
*** |
IV formulation WBS 1.5.8 |
4.2. |
Conduct *** – IV |
Study Report |
No effect on mitotic apparatus |
*** |
N/A |
4.3 |
In Vitro IV experiments |
Study report on all In Vitro assays with recommendation to proceed CLIN0005 |
No toxicology in vitro |
*** |
|
CLIN 0005 – NONCLINICAL NDA-ENABLING TOXICOLOGY – IV
Go/No Go to Initiate: WBS 4.3 Completion of *** IV toxicology
studies |
5.1.1 |
Complete GLP *** IV Tox Study - *** |
Study Report |
Established NOAEL |
*** |
Drug Substance confirming to release criteria |
5.1.2 |
Complete GLP *** IV Tox Study - *** |
Study Report |
Established NOAEL |
*** |
Drug Substance confirming to release criteria |
5.2.1 |
Conduct *** assessment in *** |
Study Report |
No significant findings |
*** |
N/A |
5.2.2 |
Conduct *** Dose Range Finding Studies in the *** |
Study Report |
No significant findings |
*** |
N/A |
5.2.3 |
Conduct Definitive *** toxicology in the *** |
Study Report |
No significant findings |
*** |
N/A |
5.2.4 |
Conduct *** toxicology *** |
Study Report |
No significant findings |
*** |
N/A |
Pursuant to 17 CFR 20.24b-2, confidential information has been omitted in places marked "***" and has been filed separately with the
Securities and Exchange Commission pursuant to a Confidential Treatment Application with the Commission.
ATTACHMENT 3
BCX4430 MANUFACTURING SUMMARY
August 20, 2015
Starting Material |
DS Campaign |
CMO |
DS Process Desc |
DS Timing |
DP Campaign |
DP Timing |
Use |
Funding |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
Pursuant to 17 CFR 20.24b-2, confidential information has been omitted in places marked "***" and has been filed separately with the
Securities and Exchange Commission pursuant to a Confidential Treatment Application with the Commission.
Attachment 4
HHSO100201500007C
August 20, 2015
***
All activities covered under this BioCryst contract will provide merit
and value to the Government by ensuring that funding supported under the Base period results in progress towards several activities
to ensure moving the BioCryst BCX4430 compound through the development pipeline for future FDA approval. This activities include
manufacturing clinical trial material to be used in clinical trials as an urgent need to the Ebola epidemic in west Africa (Base),
commercial scale up and manufacturing of registration batches, a regulatory approval requirement (Option 1), non-clinical toxicology
studies to support NDA regulatory requirements (Option 2) and non-clinical toxicology studies of the IV formulation first in vitro
(Option 3) and then in animals (Option 4) to support NDA regulatory requirements. BioCryst’s ability to complete three critical
GO/NO GO contract milestones in the Base period will determine, whether to exercise any follow-on option phases to continue supporting
development of the compound.
There are 4 decision points which will trigger advancement to Options.
| 1. | Trigger 1 (for start of Option 1): Further optimization processes
for manufacturing will be developed under the WBS 1.2 Once these activities are sufficient to warrant a scale up manufacturing
process, as will be evaluated in a delivered report, process development (milestone WBS1.2, July 2015), Option 1 can begin.
In Option 1, the process developed in WBS 1.2 and other processes being developed to manufacture the BCX4430 compound will be evaluated,
such that BioCryst can select a process of most value to the Government to generate *** drug
substance registration batches that will then be used to make *** drug product registration
batches at a scale at least *** the estimated commercial scale which is a regulatory requirement
for qualifying a GMP process for manufacturing. |
Pursuant to 17 CFR 20.24b-2, confidential information has been omitted in places marked "***" and has been filed separately with the
Securities and Exchange Commission pursuant to a Confidential Treatment Application with the Commission.
| 2. | Trigger 2 (for start of Option 3): In order to conduct toxicology experiments in animals, the IV
formulation of BCX4430 will first need to be assessed in vitro through *** as well as *** (Option 3) before moving
into animals. Initially a go/no go milestone was established to evaluate excipient compatibility of the IV formulation before initiating
these studies. However, since BioCryst has determined that the BCX4430 drug substance to be used in these studies will be available
and released *** as well as having identified a preliminary IV solution (LRI) based on initial results, it was determined that
there was sufficient data to support the initiation of these in vitro toxicology studies of this formulation - Option 3
(in Vitro experiments- IV) before moving in to animal toxicology studies (Option 4). |
| 3. | Trigger 3 (for start of Option 2): In order to conduct further regulatory activities to
support NDA activities, toxicology experiments will need to be conducted in animals as well as radiolabeled absorption, metabolism
and excretion studies. The original go/no go criteria was to generate enough drug substance material WBS 1.4.1 that conformed
to release criteria to use in these studies. However additional batches of BCX4430 have been manufactured that will start to be
available *** and therefore should provide enough material to conduct these non-clinical animal toxicology studies in Option 2,
a NDA regulatory requirement. |
| 4. | Trigger 4 (for start of Option 4): In order to proceed with conducting further regulatory
activities to support NDA activities for the IV formulation, toxicology experiments will need to be conducted in animals.
However, this can only proceed if the preliminary toxicology studies performed in vitro, as evaluated in the in vitro
study report (WBS 4.3, ***) demonstrate that the IV formulation is safe. |
EX-10.3
4
exh_103.htm
EXHIBIT 10.3
EXHIBIT 10.3
![](exh1_2.jpg)
![](exh1_3.jpg)
EX-31.1
5
exh_311.htm
EXHIBIT 31.1
Exhibit 31.1
CERTIFICATIONS
I, Jon P. Stonehouse, certify that:
1. |
I have reviewed this quarterly report on Form 10-Q of BioCryst 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(s) 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(s) 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. |
Date: November 6, 2015 |
/s/ Jon P. Stonehouse |
|
|
Jon P. Stonehouse |
|
|
President and Chief Executive Officer |
EX-31.2
6
exh_312.htm
EXHIBIT 31.2
Exhibit 31.2
CERTIFICATIONS
I, Thomas R. Staab, II, certify that:
1. |
I have reviewed this quarterly report on Form 10-Q of BioCryst 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(s) 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(s) 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. |
Date: November 6, 2015 |
/s/ Thomas R. Staab, II |
|
|
Thomas R. Staab, II |
|
|
Senior Vice President, Chief Financial Officer and Treasurer |
EX-32.1
7
exh_321.htm
EXHIBIT 32.1
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of BioCryst Pharmaceuticals, Inc. (the “Company”)
on Form 10-Q for the period ending September 30, 2015 as filed with the Securities and Exchange Commission on the date hereof (the
“Report”), I, Jon P. Stonehouse, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350,
as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:
|
(1) |
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 result of operations of the Company. |
/s/ Jon P. Stonehouse |
|
Jon P. Stonehouse |
|
President and Chief Executive Officer
Date: November 6, 2015 |
EX-32.2
8
exh_322.htm
EXHIBIT 32,2
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of BioCryst Pharmaceuticals, Inc. (the “Company”)
on Form 10-Q for the period ending September 30, 2015 as filed with the Securities and Exchange Commission on the date hereof (the
“Report”), I, Thomas R. Staab, II, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350,
as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:
|
(1) |
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 result of operations of the Company. |
/s/ Thomas R. Staab, II |
|
Thomas R. Staab, II |
|
Senior Vice President, Chief Financial Officer and Treasurer
Date: November 6, 2015 |
EX-101.INS
9
bcrx-20150930.xml
XBRL INSTANCE FILE
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;">Accrued Expenses</div></div></div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">The Company generally enters into contractual agreements with third-party vendors who provide research and development, manufacturing, and other services in the ordinary course of business. Some of these contracts are subject to milestone-based invoicing and services are completed over an extended period of time. The Company records liabilities under these contractual commitments when it determines an obligation has been incurred, regardless of the timing of the invoice. This process involves reviewing open contracts and purchase orders, communicating with applicable Company personnel to identify services that have been performed on its behalf and estimating the level of service performed and the associated cost incurred for the service when the Company has not yet been invoiced or otherwise notified of actual cost. The majority of service providers invoice the Company monthly in arrears for services performed. The Company makes estimates of accrued expenses as of each balance sheet date in its financial statements based on the facts and circumstances. The Company periodically confirms the accuracy of its estimates with the service providers and makes adjustments if necessary. Examples of estimated accrued expenses include:</div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </div><table style="; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 700px;" cellpadding="0" cellspacing="0"> <tr> <td style="width: 5%"> </td> <td style="vertical-align: top; width: 2%"><div style="display: inline; font: 10pt Times New Roman, Times, Serif">•</div></td> <td style="vertical-align: top; width: 1%"> </td> <td style="vertical-align: top; width: 92%"><div style="display: inline; font: 10pt Times New Roman, Times, Serif">fees paid to Clinical Research Organizations (“CROs”) in connection with preclinical and toxicology studies and clinical trials;</div></td> </tr> </table><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </div><table style="; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 700px;" cellpadding="0" cellspacing="0"> <tr> <td style="width: 5%"> </td> <td style="vertical-align: top; width: 2%"><div style="display: inline; font: 10pt Times New Roman, Times, Serif">•</div></td> <td style="vertical-align: top; width: 1%"> </td> <td style="vertical-align: top; width: 92%"><div style="display: inline; font: 10pt Times New Roman, Times, Serif">fees paid to investigative sites in connection with clinical trials;</div></td> </tr> </table><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </div><table style="; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 700px;" cellpadding="0" cellspacing="0"> <tr> <td style="width: 5%"> </td> <td style="vertical-align: top; width: 2%"><div style="display: inline; font: 10pt Times New Roman, Times, Serif">•</div></td> <td style="vertical-align: top; width: 1%"> </td> <td style="vertical-align: top; width: 92%"><div style="display: inline; font: 10pt Times New Roman, Times, Serif">fees paid to contract manufacturers in connection with the production of our raw materials, drug substance and drug products; and</div></td> </tr> </table><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </div><table style="; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 700px;" cellpadding="0" cellspacing="0"> <tr> <td style="width: 5%"> </td> <td style="vertical-align: top; width: 2%"><div style="display: inline; font: 10pt Times New Roman, Times, Serif">•</div></td> <td style="vertical-align: top; width: 1%"> </td> <td style="vertical-align: top; width: 92%"><div style="display: inline; font: 10pt Times New Roman, Times, Serif">professional fees.</div></td> </tr> </table><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">The Company bases its expenses related to clinical trials on its estimates of the services received and efforts expended pursuant to contracts with multiple research institutions and CROs that conduct and manage clinical trials on the Company’s behalf. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows. Payments under some of these contracts depend on factors such as the successful enrollment of patients and the completion of clinical trial milestones. In accruing service fees, the Company estimates the time period over which services will be performed and the level of effort expended in each period. If the actual timing of the performance of services or the level of effort varies from the estimate, the Company will adjust the accrual accordingly. As of September 30, 2015 and December 31, 2014, the carrying value of accrued expenses approximates their fair value due to their short-term settlement.</div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div>
P60D
500000
150000
42000
141000
28000
211000
22000
151000
6000
179000
27183000
25459000
<div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse;; width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">2015</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">2014</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 65%; font-size: 10pt; text-align: left">Maturing in one year or less</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 14%; font-size: 10pt; text-align: right">23,700</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 2%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 14%; font-size: 10pt; text-align: right">18,232</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left">Maturing after one year through two years</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">27,183</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">25,459</td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; padding-bottom: 1pt">Maturing after two years</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">20,604</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">15,657</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; padding-bottom: 2.25pt">Total investments</td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">71,487</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">59,348</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> </tr> </table></div>
20604000
15657000
P1Y180D
P18Y
77191000
55000000
234852000
102661000
P5Y
5162000
3233000
35643000
6211000
4582000
2937000
12788000
5323000
132000
132000
296000
296000
888000
888000
152000
21835000
5162000
3233000
35643000
6211000
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;">Significant Customers and Other Risks</div></div></div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">The Company relies primarily on three specialty distributors to purchase and supply the majority of RAPIVAB. These three pharmaceutical specialty distributors accounted for greater than 90% of all RAPIVAB product sales to date and accounted for predominantly all of the Company’s outstanding receivables from product sales. The loss of one or more of these specialty distributors as a customer could negatively impact the commercialization of RAPIVAB. However, the Company will utilize these specialty distributors on a limited basis subsequent to the CSL transaction as CSL will be responsible for commercial sales on a worldwide basis with the exception of Israel, Japan, Korea and Taiwan.</div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">The Company’s primary source of revenue that has an underlying cash flow stream is the reimbursement of RAPIVAB (i.e., peramivir) and BCX4430 development expenses, which was earned under cost-plus-fixed-fee contracts with BARDA/HHS and NIAID/HHS, respectively. The Company relies on BARDA/HHS and NIAID/HHS to reimburse predominantly all of the development costs for its RAPIVAB and BCX4430 programs. Accordingly, reimbursement of these expenses represents a significant portion of the Company’s collaborative and other research and development revenues. The completion, as with the June 30, 2014 BARDA/HHS peramivir development contract, or termination of the NIAID/HHS and BARDA/HHS BCX4430 programs/collaboration could negatively impact the Company’s future Consolidated Statements of Comprehensive Loss and Cash Flows. In addition, the Company also recognizes royalty revenue from the net sales of RAPIACTA; however, the underlying cash flow from these royalty payments goes directly to pay the interest, and then the principal, on the Company’s non-recourse notes payable. Payment of the interest and the ultimate repayment of principal of these notes will be entirely funded by future royalty payments derived from net sales of RAPIACTA. The Company’s drug development activities are performed by a limited group of third party vendors. If any of these vendors were unable to perform their services, this could significantly impact the Company’s ability to complete its drug development activities.</div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt"><div style="display: inline; font-style: italic;">Risks from Third Party Manufacturing and Distribution Concentration</div></div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 27pt">The Company relies on single source manufacturers for active pharmaceutical ingredient and finished product manufacturing of RAPIVAB. Additionally, the Company relies upon a single third party to provide warehousing and distribution services for RAPIVAB. Delays in the manufacture or distribution of any product could adversely impact the commercial revenue and future procurement stockpiling of RAPIVAB.</div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div>
P4Y
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;">Currency Hedge Agreement</div></div></div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In connection with the issuance by Royalty Sub of the PhaRMA Notes, the Company entered into a Currency Hedge Agreement (defined in Note 4) to hedge certain risks associated with changes in the value of the Japanese yen relative to the U.S. dollar. The Currency Hedge Agreement does not qualify for hedge accounting treatment; therefore, mark-to-market adjustments are recognized in the Company’s Consolidated Statements of Comprehensive Loss. Cumulative mark-to-market adjustments for the nine months ended September 30, 2015 and 2014 resulted in a loss of $792 and a gain of $732, respectively. Mark-to-market adjustments are determined by a third party pricing model that uses quoted prices in markets that are not actively traded and for which significant inputs are observable directly or indirectly, representing Level 2 in the fair value hierarchy as defined by U.S. GAAP. In addition, the Company realized a currency exchange gain of $1,653 during the first nine months of 2015 associated with the exercise of a U.S. Dollar/Japanese yen currency option.</div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">The Company is also required to post collateral in connection with the mark-to-market adjustments based on thresholds defined in the Currency Hedge Agreement. As of September 30, 2015 and December 31, 2014, no hedge collateral was posted under the agreement.</div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div>
282000
177000
117000
-45000
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;">The Company</div></div></div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">BioCryst Pharmaceuticals, Inc. (the “Company”) is a biotechnology company that designs, optimizes and develops novel small molecule drugs that block key enzymes involved in the pathogenesis of diseases. The Company focuses on the treatment of rare diseases in which significant unmet medical needs exist and align with its capabilities and expertise. The Company was incorporated in Delaware in 1986 and its headquarters is located in Durham, North Carolina. The Company integrates the disciplines of biology, crystallography, medicinal chemistry and computer modeling to discover and develop small molecule pharmaceuticals through the process known as structure-guided drug design. BioCryst has incurred losses and negative cash flows from operations since inception.</div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">Based on its current operating plans, the Company expects it has sufficient liquidity, with its existing cash and investments of $119,736, to continue its planned operations into 2017. The Company’s liquidity needs, and ability to address those needs, will largely be determined by the success of its product candidates and key development and regulatory events in the future. In order to continue its operations substantially beyond 2017 it will need to: (1) successfully secure or increase U.S. Government funding of its programs, including procurement contracts; (2) out-license rights to certain of its products or product candidates, pursuant to which the Company would receive cash milestones; (3) raise additional capital through equity or debt financings or from other sources; (4) obtain additional product candidate regulatory approvals, which would generate revenue and cash flow; (5) reduce spending on one or more research and development programs; and/or (6) restructure operations. The Company retains the ability to offer for sale approximately $150,000 of securities, including common stock, preferred stock, depositary shares, stock purchase contracts, warrants, and units from its effective shelf S-3 registration statement, which it filed with the Securities and Exchange Commission on March 3, 2015. Additionally, the Company retains the ability to offer for sale approximately $10,000 of securities, including common stock, preferred stock, depositary shares, stock purchase contracts, warrants and units from its effective shelf S-3 registration statement, which it filed with the Securities and Exchange Commission on November 6, 2013. The Company will continue to incur operating losses and negative cash flows until revenues reach a level sufficient to support ongoing operations.</div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div>
1782000
290000
2508000
4627000
5632000
34002000
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;">Interest Expense and Deferred Financing Costs</div></div></div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">Interest expense for the three months ended September 30, 2015 and 2014 was $1,214 and $1,217, respectively, and for the nine months ended September 30, 2015 and 2014 was $3,862 and $3,684, respectively, and relates to the issuance of the PhaRMA Notes (defined in Note 4). Costs directly associated with the issuance of the PhaRMA Notes have been capitalized and are included in other current assets on the Consolidated Balance Sheets. These costs are being amortized to interest expense over the term of the PhaRMA Notes using the effective interest rate method. Amortization of deferred financing costs included in interest expense was $110 for each of the three months ended September 30, 2015 and 2014, and $329 for each of the nine months ended September 30, 2015 and 2014.</div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div>
3000000
P12Y
P3Y
P3Y
P12Y
150000000
125000000
9750000
12000000
12000000
4000000
1400000
3
2
90000
0.5
0.85
0.85
0.15
P25Y
30000000
16300000
5000000
29875
10000000
P5Y
100
22691000
30000000
30000000
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;">Note 4 — Royalty Monetization</div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Overview</div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">On March 9, 2011, the Company completed a $30,000 financing transaction to monetize certain future royalty and milestone payments under the Shionogi Agreement, pursuant to which Shionogi licensed from the Company the rights to market RAPIACTA in Japan and, if approved for commercial sale, Taiwan. The Company received net proceeds of $22,691 from the transaction after transaction costs of $4,309 and the establishment of a $3,000 interest reserve account by Royalty Sub, available to help cover interest shortfalls in the future. All of the interest reserve account has been fully utilized with the September 2012 interest payment.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">As part of the transaction, the Company entered into a purchase and sale agreement dated as of March 9, 2011 with Royalty Sub, whereby the Company transferred to Royalty Sub, among other things, (i) its rights to receive certain royalty and milestone payments from Shionogi arising under the Shionogi Agreement, and (ii) the right to receive payments under a Japanese yen/US dollar foreign currency hedge arrangement (as further described below, the “Currency Hedge Agreement”) put into place by the Company in connection with the transaction. Royalty payments will be paid by Shionogi in Japanese yen and milestone payments will paid in U.S. dollars. The Company’s collaboration with Shionogi was not impacted as a result of this transaction.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Non-Recourse Notes Payable</div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">On March 9, 2011, Royalty Sub completed a private placement to institutional investors of $30,000 in aggregate principal amount of its PhaRMA Senior Secured 14.0% Notes due 2020 (the “PhaRMA Notes”). The PhaRMA Notes were issued by Royalty Sub under an Indenture, dated as of March 9, 2011 (the “Indenture”), by and between Royalty Sub and U.S. Bank National Association, as Trustee. Principal and interest on the PhaRMA Notes issued are payable from, and are secured by, the rights to royalty and milestone payments under the Shionogi Agreement transferred by the Company to Royalty Sub and payments, if any, made to Royalty Sub under the Currency Hedge Agreement. The PhaRMA Notes bear interest at 14% per annum, payable annually in arrears on September 1st of each year. The Company remains entitled to receive any royalties and milestone payments related to sales of peramivir by Shionogi following repayment of the PhaRMA Notes. </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">Royalty Sub’s obligations to pay principal and interest on the PhaRMA Notes are obligations solely of Royalty Sub and are without recourse to any other person, including the Company, except to the extent of the Company’s pledge of its equity interests in Royalty Sub in support of the PhaRMA Notes. The Company may, but is not obligated to, make capital contributions to a capital account that may be used to redeem, or on up to one occasion pay any interest shortfall on, the PhaRMA Notes.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">On September 1, 2014, Royalty Sub was unable to pay the full amount of interest payable to avoid an event of default. Accordingly, the PhaRMA Notes and related accrued interest have been classified as current liabilities on the Consolidated Balance Sheet. As a result of the event of default under the PhaRMA Notes, the holders of the PhaRMA Notes may pursue acceleration of the PhaRMA Notes, may foreclose on the collateral securing the PhaRMA Notes and the equity interest in Royalty Sub and exercise other remedies available to them under the Indenture in respect of the PhaRMA Notes. In such event, the Company may not realize the benefit of future royalty payments that might otherwise accrue to it following repayment of the PhaRMA Notes and it might otherwise be adversely affected. Due to the non-recourse nature of the PhaRMA Notes, in the event of any potential acceleration or foreclosure, the primary impact to the Company would be the loss of future royalty payments from Shionogi and legal costs associated with retiring the PhaRMA Notes. In addition, the Company may incur costs associated with liquidating the related Currency Hedge Agreement, which would no longer be required in the event of foreclosure, or if the PhaRMA Notes cease to be outstanding. As the PhaRMA Notes are the obligation of Royalty Sub and non-recourse to the Company, the event of default of the PhaRMA Notes is not expected to have a significant impact on the Company’s future results of operations or cash flows.</div> <!-- Field: Page; Sequence: 18; Value: 3 --> <div style="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"> </div> <!-- Field: /Page --> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">The Indenture does not contain any financial covenants. The Indenture includes customary representations and warranties of Royalty Sub, affirmative and negative covenants of Royalty Sub, Events of Default and related remedies, and provisions regarding the duties of the Trustee, indemnification of the Trustee, and other matters typical for indentures used in structured financings of this type.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">The PhaRMA Notes are redeemable at the option of Royalty Sub at any time at a redemption price equal to the outstanding principal balance of the PhaRMA Notes being redeemed plus accrued and unpaid interest through the redemption date on the PhaRMA Notes being redeemed.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Foreign Currency Hedge</div></div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0">In connection with the issuance by Royalty Sub of the PhaRMA Notes, the Company entered into a Currency Hedge Agreement to hedge certain risks associated with changes in the value of the Japanese yen relative to the U.S. dollar. Under the Currency Hedge Agreement, the Company has the right to purchase dollars and sell yen at a rate of 100 yen per dollar for which the Company may be required to pay a premium in each year from 2016 through 2020, provided the Currency Hedge Agreement remains in effect. A payment of $1,950 will be required if, on May 18 of the relevant year, the U.S. dollar is worth 100 yen or less as determined in accordance with the Currency Hedge Agreement.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0">The Currency Hedge Agreement does not qualify for hedge accounting treatment; therefore, mark-to-market adjustments are recognized in the Company’s Consolidated Statement of Comprehensive Loss. Cumulative mark-to-market adjustments resulted in a loss of $460 and a gain of $4,082 for the three months ended September 30, 2015 and 2014, respectively and a loss of $793 and a gain of $732 for the nine months ended September 30, 2015 and 2014, respectively. During the nine months ended September 30, 2015, the Company realized a currency exchange gain of $1,654 associated with the exercise of a U.S. Dollar/Japanese yen currency option. The Company is also required to post collateral in connection with the mark-to-market adjustments based on defined thresholds. As of September 30, 2015 and December 31, 2014, no collateral was posted under the Currency Hedge Agreement. The Company will not be required at any time to post collateral exceeding the maximum premium payments remaining payable under the Currency Hedge Agreement. As of September 30, 2015, the maximum amount of hedge collateral the Company may be required to post is $9,750.</div></div>
P10Y
<div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse;; width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; font-weight: bold; text-align: center; padding-bottom: 1pt"></td> <td style="padding-bottom: 1pt"> </td> <td colspan="11" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">September 30, 2015</td> </tr> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; font-weight: bold; text-align: center; padding-bottom: 1pt"></td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"><div style="display: inline; font-size: 10pt"> </div></td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid"><div style="display: inline; font-size: 10pt">Billed</div></td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"><div style="display: inline; font-size: 10pt"> </div></td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid"><div style="display: inline; font-size: 10pt">Unbilled</div></td> <td style="padding-bottom: 1pt"><div style="display: inline; font-size: 10pt"> </div></td> <td colspan="3" style="border-bottom: black 1.1pt solid; font-size: 10pt; font-weight: bold; text-align: center"><div style="display: inline; font-size: 10pt">Total</div></td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 55%; font-size: 10pt; text-align: left">U.S. Department of Health and Human Services</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 12%; font-size: 10pt; text-align: right">—</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 12%; font-size: 10pt; text-align: right">5,444</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 12%; font-size: 10pt; text-align: right">5,444</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left">Green Cross Corporation</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">129</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">—</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">129</td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; padding-bottom: 1pt"><div style=" margin: 0">Seqirus UK Limited</div> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">1,922</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">—</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">1,922</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left; padding-bottom: 2.25pt">Total receivables</td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">2,051</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">5,444</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">7,495</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> </tr> </table></div><div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse;; width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; font-weight: bold; text-align: center"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="11" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">December 31, 2014</td> </tr> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; font-weight: bold; text-align: center"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">Billed</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">Unbilled</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">Total</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 55%; font-size: 10pt; text-align: left">U.S. Department of Health and Human Services</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 12%; font-size: 10pt; text-align: right">—</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 12%; font-size: 10pt; text-align: right">2,778</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 12%; font-size: 10pt; text-align: right">2,778</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left; padding-bottom: 1pt">Shionogi & Co. Ltd.</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">1,071</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">—</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">1,071</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; padding-bottom: 2.25pt">Total receivables</td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">1,071</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">2,778</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">3,849</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> </tr> </table></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse;; width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="7" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">Three Months</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="7" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">Nine Months</td> </tr> <tr style="vertical-align: bottom"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">2015</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">2014</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">2015</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">2014</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 48%; font-size: 10pt; text-align: left">Product sales, net</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right">5,699</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right">—</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right">6,236</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right">—</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left">Royalty revenue</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">126</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">5</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">1,776</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">1,951</td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; text-indent: -20pt; padding-left: 20pt">Collaborative and other research and development revenues:</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left; text-indent: -10pt; padding-left: 30pt">U.S. Department of Health and Human Services</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">4,582</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">2,937</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">12,788</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">5,323</td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; padding-left: 20pt">Green Cross Corporation</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">132</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">—</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">132</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">—</td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left; padding-left: 20pt">Shionogi (Japan)</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">296</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">296</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">888</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">888</td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 20pt"><div style=" margin: 0">Seqirus UK Limited</div> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">152</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">—</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">21,835</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">—</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: -10pt; padding-left: 10pt">Total collaborative and other research and development revenues</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">5,162</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">3,233</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">35,643</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">6,211</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left; padding-bottom: 2.25pt">Total revenues</td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">10,987</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">3,238</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">43,655</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">8,162</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> </tr> </table></div>
150000000
10000000
25000
P1Y
1319000
0.25
1
28000
5911000
4309000
false
--12-31
Q3
2015
2015-09-30
10-Q
0000882796
73336871
Yes
Large Accelerated Filer
BIOCRYST PHARMACEUTICALS INC
No
Yes
bcrx
3782000
2849000
7495000
3849000
5641000
23027000
11329000
-1000
-130000
556095000
542943000
0
7773000
7553000
220000
6550000
6388000
162000
110000
329000
110000
329000
3821000
4240000
3673000
3986000
138956000
136874000
84502000
89343000
71487000
59348000
23187000
27402000
20898000
20306000
27261000
11781000
28000
26000
10000
64000
5000
5000
-2000
-14000
-49000
-65000
-23000
-47000
-63000
-133000
23119000
27249000
20909000
71277000
20307000
27152000
11838000
59297000
23700000
18232000
23700000
18232000
47787000
41116000
<div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse;; width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="19" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">September 30, 2015</td> </tr> <tr style="vertical-align: bottom"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">Amortized<br /> Cost</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">Accrued<br /> Interest</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">Gross<br /> Unrealized<br /> Gains</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">Gross<br /> Unrealized<br /> Losses</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">Estimated<br /> Fair Value</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 35%; font-size: 10pt; text-align: left; text-indent: -10pt; padding-left: 10pt">Obligations of U.S. Government and its agencies</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right">23,119</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right">42</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right">28</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right">(2</td> <td style="width: 1%; font-size: 10pt; text-align: left">)</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right">23,187</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left">Corporate debt securities</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">27,249</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">141</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">26</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">(14</td> <td style="font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">27,402</td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; padding-bottom: 1pt">Certificates of deposit</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">20,909</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">28</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">10</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">(49</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">20,898</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; padding-bottom: 2.25pt">Total investments</td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">71,277</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">211</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">64</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">(65</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">71,487</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> </tr> </table></div><div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse;; width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="19" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">December 31, 2014</td> </tr> <tr style="vertical-align: bottom"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">Amortized<br /> Cost</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">Accrued<br /> Interest</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">Gross<br /> Unrealized<br /> Gains</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">Gross<br /> Unrealized<br /> Losses</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">Estimated<br /> Fair Value</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 35%; font-size: 10pt; text-align: left; text-indent: -10pt; padding-left: 10pt">Obligations of U.S. Government and its agencies</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right">20,307</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right">22</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right">—</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right">(23</td> <td style="width: 1%; font-size: 10pt; text-align: left">)</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right">20,306</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left">Corporate debt securities</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">27,152</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">151</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">5</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">(47</td> <td style="font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">27,261</td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; padding-bottom: 1pt">Certificates of deposit</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">11,838</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">6</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">—</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">(63</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">11,781</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; padding-bottom: 2.25pt">Total investments</td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">59,297</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">179</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">5</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">(133</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">59,348</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> </tr> </table></div>
46627000
54540000
21164000
121157000
-7913000
99993000
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;">Cash and Cash Equivalents</div></div></div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">The Company generally considers cash equivalents to be all cash held in commercial checking accounts, certificates of deposit, money market accounts or investments in debt instruments with maturities of three months or less at the time of purchase. The carrying value of cash and cash equivalents approximates fair value due to the short-term nature of these items.</div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;">Restricted Cash</div></div></div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: 0.5in"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;"> </div></div></div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">Restricted cash as of September 30, 2015 reflects $150 the Company is required to maintain in an interest bearing certificate of deposit to serve as collateral for a corporate credit card program, $70 in royalty revenue paid by Shionogi & Co., Ltd. (“Shionogi”) designated for interest on the PhaRMA Notes (defined in Note 4) and $1,402 the Company is required to maintain as collateral for a letter of credit associated with the lease execution and build-out of its new Birmingham research facilities.</div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;">Note 3 — Collaborative and Other Research and Development Contracts</div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">U.S. Department of Health and Human Services (“BARDA/HHS”).</div> In January 2007, BARDA/HHS awarded the Company a $102,661, four-year contract for the advanced development of peramivir for the treatment of influenza. During 2009, peramivir clinical development shifted to focus on intravenous delivery and the treatment of hospitalized patients. To support this focus, a September 2009 contract modification was awarded to extend the i.v. peramivir program and to increase funding by $77,191. On February 24, 2011, the Company announced that BARDA/HHS had awarded it a $55,000 contract modification, intended to fund completion of the Phase 3 development of i.v. peramivir for the treatment of patients hospitalized with influenza. That contract modification brought the total contract award from BARDA/HHS to $234,852 and provided funding to support the filing of an NDA to seek regulatory approval for i.v. peramivir in the U.S. In December 2013, BioCryst submitted an NDA filing for i.v. peramivir to the FDA and the NDA was approved in December 2014. The BARDA/HHS contract expired on June 30, 2014 according to its terms.</div> <!-- Field: Page; Sequence: 15; Value: 3 --> <div style="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"> </div> <!-- Field: /Page --> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">On March 31, 2015, the Company announced that the Biomedical Research and Development Authority within the U.S. Department of Health and Human Services’ Office of the Assistant Secretary for Preparedness and Response awarded BioCryst a contract for the continued development of BCX4430 as a potential treatment for diseases caused by RNA pathogens, including filoviruses. This BARDA/HHS contract includes a base contract of $13,314 to support BCX4430 drug manufacturing, as well as $22,855 in additional development options that can be exercised by the government, bringing the potential value of the contract to $36,169. As of September 30, 2015, a total of $16,300 has been awarded under exercised options within this contract.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">National Institute of Allergy and Infectious Diseases (“NIAID/HHS”).</div> In September 2013, NIAID/HHS contracted with the Company for the development of BCX4430 as a treatment for Marburg virus disease. NIAID/HHS, part of the National Institutes of Health, made an initial award of $5,000 to the Company. The total funding under this contract as of September 30, 2015 could be up to $34,002, if all contract options are exercised by NIAID/HHS, over a five year period. The goals of this contract, including amendments, are to file IND applications for intravenous and intramuscular BCX4430 for the treatment of Marburg virus disease, to study BCX4430 as a treatment for Ebola virus disease and to conduct an initial Phase 1 human clinical trial. As of September 30, 2015, a total of $29,875 has been awarded under exercised options within this contract. BCX4430 is the lead compound in the Company’s BSAV research program.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">The contracts with BARDA/HHS and NIAID/HHS are cost-plus-fixed-fee contracts. That is, the Company is entitled to receive reimbursement for all costs incurred in accordance with the contracts provisions that are related to the development of peramivir and BCX4430 plus a fixed fee, or profit. BARDA/HHS and NIAID/HHS will make periodic assessments of progress and the continuation of the contract is based on the Company’s performance, the timeliness and quality of deliverables, and other factors. The government has rights under certain contract clauses to terminate these contracts. These contracts are terminable by the government at any time for breach or without cause.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Seqirus UK Limited (“SUL”).</div> On June 16, 2015, the Company and Seqirus UK Limited ("SUL"), a limited company organized under the laws of the United Kingdom and a subsidiary of CSL Limited, a company organized under the laws of Australia, entered into a License Agreement (the "SUL Agreement") granting SUL and its affiliates worldwide rights to develop, manufacture and commercialize RAPIVAB (peramivir injection) for the treatment of influenza except for the rights to conduct such activities in Israel, Japan, Korea and Taiwan (the permitted geographies together constituting the "Territory"). RAPIVAB is an intravenous treatment for acute uncomplicated influenza and is currently licensed for use in the United States, Japan and Korea. RAPIVAB is the first and only intravenous influenza treatment in the world and was approved by the U.S. Food and Drug Administration in December 2014 for the treatment of acute uncomplicated influenza in patients 18 years and older who have been symptomatic for no more than two days. The Company retains all rights and associated economics to procure pandemic stockpiling orders for RAPIVAB from the U.S. Government, while SUL has the right to pursue government stockpiling outside the U.S.</div> <div style=" font-size: 10pt; margin: 0; text-indent: 0.5in"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">Pursuant to the SUL Agreement, RAPIVAB will be commercialized by CSL's subsidiary, SUL, which specializes in influenza prevention through the supply of seasonal and pandemic vaccine to global markets. SUL will manufacture, commercialize and exercise decision-making authority with respect to the development and commercialization of RAPIVAB within the Territory and be responsible for all related costs, including sales and promotion. The Company will exercise sole decision-making authority with regard to the development and commercialization of RAPIVAB outside of the Territory and is responsible for all associated costs.</div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0"> </div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0">In December 2013, the Company submitted a New Drug Application ("NDA") for RAPIVAB to the FDA. Under the terms of the SUL Agreement, the Company is responsible for fulfilling all post-marketing approval commitments in connection with the FDA's approval of the NDA, and upon fulfillment will transfer ownership of and financial responsibility for the NDA to SUL. Pursuant to potential rights to sell RAPIVAB in Canada and the EU, the Company is also responsible for regulatory filings and interactions with the Health Canada and the European Medicines Agency ("EMA") until marketing approval for RAPIVAB is obtained and assigned to SUL. In accordance with the SUL Agreement, the Company and SUL formed a joint steering committee, composed of an equal number of representatives from each party, to oversee, review and coordinate the conduct and progress of the commercialization of RAPIVAB in the Territory and any additional development.</div> <div style=" font-size: 10pt; text-indent: 0.5in; margin: 0"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">Under the terms of the SUL Agreement, the Company received an upfront payment of $33,740, and may receive up to $12,000 in additional milestone payments related to the successful achievement of regulatory milestones, including marketing approval (i) by the FDA for a pediatric indication, (ii) by the EMA for an adult indication in the EU and (iii) by Health Canada for an adult indication in Canada. The Company is also entitled under the SUL Agreement to receive tiered royalties at a percentage rate beginning in the mid-teens contingent upon meeting minimum thresholds of net sales, as well as a low-thirties percentage of the gross profit from government stockpiling purchases made outside the U.S. Specifically, the Company receives tiered royalties at a percentage rate in the mid-teens to low-forties on net sales in the U.S. during a Contract Year (defined as July 1 - June 30) and tiered royalties at a percentage rate in the mid-teens to mid-twenties on net sales in the Territory, other than in the U.S., during a Calendar Year, each subject to certain downward adjustments for circumstance or events impacting the overall market opportunity. SUL's royalty payment obligations commence on the date of the SUL Agreement and expire, on a country-by-country basis, upon the later of (i) the expiration of legal exclusivity in such country and (ii) ten years from the date of the SUL Agreement (the "Royalty Term"). The Company developed RAPIVAB under a license from UAB and will owe sublicense payments to them on any future milestone payments and/or royalties received by the Company from SUL.</div> <!-- Field: Page; Sequence: 16; Value: 3 --> <div style="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"> </div> <!-- Field: /Page --> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">The term of the SUL Agreement shall continue on a country-by-country basis until the expiration of the last-to-expire Royalty Term in any such country in the Territory. Either party may terminate the SUL Agreement in its entirety if the other party breaches a payment obligation, otherwise materially breaches the SUL Agreement, subject to applicable cure periods, or if the other party suffers an insolvency event. The Company may also terminate the SUL Agreement if SUL or any of its affiliates seek to challenge the validity of the Company's patents. Termination does not affect a party's rights which have accrued prior thereto, but there are no stated payments in connection with termination other than payments of obligations previously accrued. For all terminations exercised by the Company, the SUL Agreement provides for the termination of any sublicenses granted by SUL to third parties, and in the case of termination by the Company for cause, the ceasing of SUL's activities with respect to RAPIVAB, the discontinued use of all Company intellectual property and the termination of licenses and rights previously granted to SUL. If requested by the Company, SUL shall also promptly sell to the Company all licensed product it then holds in stock, otherwise, SUL may continue to sell such licensed product for designated periods.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Shionogi & Co., Ltd. (“Shionogi”).</div> In February 2007, the Company entered into an exclusive license agreement with Shionogi to develop and commercialize peramivir in Japan for the treatment of seasonal and potentially life-threatening human influenza. Under the terms of the agreement, Shionogi obtained rights to injectable formulations of peramivir in Japan. The Company developed peramivir under a license from UAB and will owe sublicense payments to them on any future milestone payments and/or royalties received by the Company from Shionogi. In October 2008, the Company and Shionogi amended the license agreement to expand the territory covered by the agreement to include Taiwan and to provide rights for Shionogi to perform a Phase 3 clinical trial in Hong Kong. Shionogi has commercially launched peramivir under the commercial name RAPIACTA in Japan. Shionogi submitted an NDA to the Taiwan FDA in late 2013.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Green Cross Corporation (“Green Cross”).</div> In June 2006, the Company entered into an agreement with Green Cross to develop and commercialize peramivir in Korea. Under the terms of the agreement, Green Cross will be responsible for all development, regulatory, and commercialization costs in Korea. The Company received a one-time license fee of $250. The license also provides that the Company will share in profits resulting from the sale of peramivir in Korea, including the sale of peramivir to the Korean government for stockpiling purposes. Furthermore, Green Cross will pay the Company a premium over its cost to supply peramivir for development and any future marketing of peramivir products in Korea.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Mundipharma International Holdings Limited (“Mundipharma”).</div> In February 2006, the Company entered into an exclusive, royalty bearing right and license agreement with Mundipharma for the development and commercialization of forodesine, a Purine Nucleoside Phosphorylase (“PNP”) inhibitor, for use in oncology. Under the terms of the license agreement, as amended, Mundipharma obtained worldwide rights to forodesine. </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Albert Einstein College of Medicine of Yeshiva University and Industrial Research, Ltd. (“AECOM” and “IRL” respectively).</div> In June 2000, the Company licensed a series of potent inhibitors of PNP from AECOM and IRL, (collectively, the “Licensors”). The lead product candidates from this collaboration are forodesine and ulodesine. The Company has obtained worldwide exclusive rights to develop and ultimately distribute these, or any other, product candidates that might arise from research on these inhibitors. The Company has the option to expand the Agreement to include other inventions in the field made by the investigators or employees of the Licensors. The Company agreed to use commercially reasonable efforts to develop these drugs. In addition, the Company has agreed to pay certain milestone payments for each licensed product (which range in the aggregate from $1,400 to almost $4,000 per indication) for future development of these inhibitors, single digit royalties on net sales of any resulting product made by the Company, and to share approximately one quarter of future payments received from other third-party partners, if any. In addition, the Company has agreed to pay annual license fees, which can range from $150 to $500, that are creditable against actual royalties and other payments due to the Licensors. This agreement may be terminated by the Company at any time by giving 60 days advance notice or in the event of material uncured breach by the Licensors.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">In May 2010, the Company amended the licensee agreement through which the Company obtained worldwide exclusive rights to develop and ultimately distribute any product candidates that might arise from research on a series of PNP inhibitors, including forodesine and ulodesine. Under the terms of the amendment, the Licensors agreed to accept a reduction of one-half in the percentage of future payments received from third-party sub licensees of the licensed PNP inhibitors that must be paid to the Licensors. This reduction does not apply to (i) any milestone payments the Company may receive in the future under its license agreement dated February 1, 2006 with Mundipharma and (ii) royalties received from its sub licensees in connection with the sale of licensed products, for which the original payment rate will remain in effect. The rate of royalty payments to the Licensors based on net sales of any resulting product made by the Company remains unchanged.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">In consideration for these modifications in 2010, the Company issued to the Licensors shares of its common stock with an aggregate value of $5,911 and paid the Licensors $90 in cash. Additionally, at the Company’s sole option and subject to certain agreed upon conditions, any future non-royalty payments due to be paid by it to the Licensors under the license agreement may be made either in cash, in shares of its common stock, or in a combination of cash and shares.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">On November 17, 2011, the Company further amended its agreements with the Licensors whereby the Licensors agreed to accept a reduction of one-half in the percentage of Net Proceeds (as defined) received by the Company under its Amended and Restated Agreement with Mundipharma that will be paid to AECOM/IRL.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">On June 19, 2012, the Company further amended its agreements with AECOM/IRL whereby the parties clarified the definition of the field with respect to PNP inhibition and AECOM/IRL agreed to exclusive worldwide license of BCX4430 to BioCryst for any antiviral use.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">At its sole option and subject to certain agreed upon conditions, any future non-royalty payments due to be paid by the Company to AECOM/IRL under the license agreement may be made either in cash, in shares of the Company’s common stock, or in a combination of cash and shares.</div> <!-- Field: Page; Sequence: 17; Value: 3 --> <div style="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"> </div> <!-- Field: /Page --> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">On January 6, 2014, the Carbohydrate Chemistry Research Team from Callaghan Innovation Research Limited, formerly Industrial Research Limited, transferred to Victoria University of Wellington (“VUW”) to establish the Ferrier Research Institute. The intellectual property rights relating to this research team, and the contracts relating to that intellectual property were transferred to a wholly owned subsidiary of VUW, including the contracts to which BioCryst is a party. The parties executed novation agreements in order to effectuate the transfer. Except for a substitution of parties, the terms and conditions of the contracts are substantially the same.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0"><div style="display: inline; font-style: italic;">The University of Alabama at Birmingham (“UAB”).</div> The Company currently has agreements with UAB for influenza neuraminidase and complement inhibitors. Under the terms of these agreements, UAB performed specific research for the Company in return for research payments and license fees. UAB has granted the Company certain rights to any discoveries in these areas resulting from research developed by UAB or jointly developed with the Company. The Company has agreed to pay single digit royalties on sales of any resulting product and to share in future payments received from other third-party partners. The Company has completed the research under the UAB agreements. These two agreements have initial 25-year terms, are automatically renewable for five-year terms throughout the life of the last patent and are terminable by the Company upon three months’ notice and by UAB under certain circumstances. Upon termination both parties shall cease using the other parties’ proprietary and confidential information and materials, the parties shall jointly own joint inventions and UAB shall resume full ownership of all UAB licensed products. There is currently no activity between the Company and UAB on these agreements, but when the Company licenses this technology, such as in the case of the Shionogi, Green Cross and SUL agreements, or commercializes products related to these programs, the Company will owe sublicense fees or royalties on amounts it receives.</div></div>
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<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;">Accumulated Other Comprehensive Loss</div></div></div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">Accumulated other comprehensive loss is comprised of unrealized gains and losses on investments available-for-sale and is disclosed as a separate component of stockholders’ equity. Amounts reclassified from accumulated other comprehensive loss are recorded as interest and other income on the Consolidated Statements of Comprehensive Loss. During the nine months ended September 30, 2015, realized gains of $13 were reclassified out of accumulated other comprehensive loss. No reclassifications out of accumulated other comprehensive loss were recorded during the nine months ended September 30, 2014. </div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;">Credit Risk</div></div></div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">Cash equivalents and investments are financial instruments which potentially subject the Company to concentration of risk to the extent recorded on the Consolidated Balance Sheets. The Company deposits excess cash with major financial institutions in the United States. Balances may exceed the amount of insurance provided on such deposits. The Company believes it has established guidelines for investment of its excess cash relative to diversification and maturities that maintain safety and liquidity. To minimize the exposure due to adverse shifts in interest rates, the Company maintains a portfolio of investments with an average maturity of approximately 18 months or less. Other than product sale receivables discussed above, the majority of the Company’s receivables from collaborations are due from the U.S. Government, for which there is no assumed credit risk.</div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div>
0.9
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;">Basis of Presentation</div></div></div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, JPR Royalty Sub LLC (“Royalty Sub”). Royalty Sub was formed in connection with a $30,000 financing transaction the Company completed on March 9, 2011. See Note 4, Royalty Monetization, for a further description of this transaction. All intercompany transactions and balances have been eliminated.</div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial reporting and the instructions to Form 10-Q and do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. Such financial statements reflect all adjustments that are, in management’s opinion, necessary to present fairly, in all material respects, the Company’s consolidated financial position, results of operations, and cash flows. There were no adjustments other than normal recurring adjustments.</div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">These financial statements should be read in conjunction with the financial statements for the year ended December 31, 2014 and the notes thereto included in the Company’s 2014 Annual Report on Form 10-K. Interim operating results are not necessarily indicative of operating results for the full year. The balance sheet as of December 31, 2014 has been derived from the audited consolidated financial statements included in the Company’s most recent Annual Report on Form 10-K.</div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div>
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<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;">Note 2 — Stock-Based Compensation</div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">As of September 30, 2015, the Company had two stock-based employee compensation plans, the Stock Incentive Plan (“Incentive Plan”) and the Employee Stock Purchase Plan (“ESPP”), both which were amended and restated in March 2014 and approved by the Company’s stockholders in May 2014. Stock-based compensation expense of $7,773 ($7,553 of expense related to the Incentive Plan and $220 of expense related to the ESPP) was recognized during the first nine months of 2015, while $6,550 ($6,388 of expense related to the Incentive Plan and $162 of expense related to the ESPP) was recognized during the first nine months of 2014.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">There was approximately $14,839 of total unrecognized compensation cost related to non-vested stock option awards and restricted stock unit awards granted by the Company as of September 30, 2015. That cost is expected to be recognized as follows: $1,782 during the remainder of 2015, $5,632 in 2016, $4,627 in 2017, $2,508 in 2018 and $290 in 2019. In addition, the Company has approximately $11,982 of unrecognized compensation cost related to outstanding performance-based stock options for which no compensation expense is recognized until “performance” has occurred and the award vests. At the time of vesting, compensation expense will be recognized.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;">Stock Incentive Plan</div></div></div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">The Company grants stock option awards and restricted stock unit awards to its employees, directors, and consultants under the Incentive Plan. Under the Incentive Plan, stock option awards are granted with an exercise price equal to the market price of the Company’s stock at the date of grant. Since March 1, 2011, stock option awards granted to employees generally vest 25% each year until fully vested after four years. In January 2013, the Company made retention grants of stock option awards and restricted stock units. These awards vest 50% each year until fully vested after two years. In August 2013 and December 2014, the Company issued 1,032 and 1,250 performance-based stock options, respectively. These awards vest upon successful completion of specific development milestones. As of September 30, 2015, 75% of the August 2013 grants have vested based upon achievement of three milestones: (1) successful completion of the OPuS-1 clinical trial, for which vesting occurred in the second quarter of 2014, (2) FDA approval of RAPIVAB for which vesting occurred in the fourth quarter of 2014, and (3) initiation of a Phase 1 clinical trial to evaluate the safety, pharmacokinetics and pharmacodynamics of orally-administered BCX7353 in healthy volunteers, for which vesting occurred in the second quarter of 2015. Thus, as of September 30, 2015, 25% of the August 2013 performance-based grants and 100% of the December 2014 performance-based grants remain unvested and no compensation expense has been recognized for these portions of the previously issued performance-based grants. Stock option awards granted to non-employee directors of the Company generally vest monthly over one year. All stock option awards have contractual terms of 5 to 10 years. The vesting exercise provisions of all awards granted under the Incentive Plan are subject to acceleration in the event of certain stockholder-approved transactions, or upon the occurrence of a change in control as defined in the Incentive Plan.</div> <!-- Field: Page; Sequence: 14; Value: 3 --> <div style="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"> </div> <!-- Field: /Page --> <div style=" font-size: 10pt; margin: 0pt 0">Related activity under the Incentive Plan is as follows:</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div> <table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">Awards<br /> Available</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">Options<br /> Outstanding</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">Weighted<br /> Average<br /> Exercise<br /> Price</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 55%; font-size: 10pt">Balance December 31, 2014</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 12%; font-size: 10pt; text-align: right">2,362</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 12%; font-size: 10pt; text-align: right">9,605</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 12%; font-size: 10pt; text-align: right">6.21</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left; padding-left: 10pt">Restricted stock unit awards granted</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">(155</td> <td style="font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">—</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">—</td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; padding-left: 10pt">Restricted stock unit awards cancelled</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">1</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">—</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">—</td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left; padding-left: 10pt">Stock option awards granted</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">(1,319</td> <td style="font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">1,319</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">11.99</td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; padding-left: 10pt">Stock option awards exercised</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">—</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">(1,102</td> <td style="font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">4.36</td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 10pt">Stock option awards cancelled</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">28</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">(28</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: right">9.05</td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; padding-bottom: 2.25pt">Balance September 30, 2015</td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">917</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">9,794</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="padding-bottom: 2.25pt; font-size: 10pt; text-align: left">$</td> <td style="padding-bottom: 2.25pt; font-size: 10pt; text-align: right">7.19</td> <td style="padding-bottom: 2.25pt; font-size: 10pt; text-align: left"> </td> </tr> </table> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">For stock option awards granted under the Incentive Plan during the first nine months of 2015 and 2014, the fair value was estimated on the date of grant using a Black-Scholes option pricing model and the assumptions noted in the table below. The weighted average grant date fair value per share of the awards granted during the first nine months of 2015 and 2014 was $8.15 and $8.19, respectively. The fair value of the stock option awards is amortized to expense over the vesting periods using a straight-line expense attribution method. The following table summarizes the key assumptions used by the Company to value the stock option awards granted during the first nine months of 2015 and 2014. The expected life is based on the average of the assumption that all outstanding stock option awards will be exercised at full vesting and the assumption that all outstanding stock option awards will be exercised at the midpoint of the current date (if already vested) or at full vesting (if not yet vested) and the full contractual term. The expected volatility represents the historical volatility on the Company’s publicly traded common stock. The Company has assumed no expected dividend yield, as dividends have never been paid to stock or option holders and will not be paid for the foreseeable future. The weighted average risk-free interest rate is the implied yield currently available on zero-coupon government issues with a remaining term equal to the expected term.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-align: center; margin: 0pt 0"><div style="display: inline; font-weight: bold;">Weighted Average Assumptions for Stock Option Awards Granted to</div></div> <div style=" font-size: 10pt; text-align: center; margin: 0pt 0"><div style="display: inline; font-weight: bold;">Employees and Directors under the Incentive Plan</div></div> <div style=" font-size: 10pt; text-align: center; margin: 0pt 0"> </div> <div> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">2015</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">2014</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 70%; font-size: 10pt; text-align: left">Expected Life in Years</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 12%; font-size: 10pt; text-align: right">5.5</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 12%; font-size: 10pt; text-align: right">5.5</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left">Expected Volatility</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">83</td> <td style="font-size: 10pt; text-align: left">%</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">87</td> <td style="font-size: 10pt; text-align: left">%</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left">Expected Dividend Yield</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">0.0</td> <td style="font-size: 10pt; text-align: left">%</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">0.0</td> <td style="font-size: 10pt; text-align: left">%</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left">Risk-Free Interest Rate</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">1.5</td> <td style="font-size: 10pt; text-align: left">%</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">1.6</td> <td style="font-size: 10pt; text-align: left">%</td> </tr> </table> </div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"> </div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;">Employee Stock Purchase Plan</div></div></div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">The Company has reserved a total of 1,475 shares of common stock to be purchased under the ESPP, of which 497 shares remain available for purchase at September 30, 2015. Eligible employees may authorize up to 15% of their salary to purchase common stock at the lower of 85% of the beginning or 85% of the ending price during six-month purchase intervals. No more than 3 shares may be purchased by any one employee at the six-month purchase dates and no employee may purchase stock having a fair market value at the commencement date of $25 or more in any one calendar year. The Company issued 41 shares during the first nine months of 2015 under the ESPP. Compensation expense for shares purchased under the ESPP related to the purchase discount and the “look-back” option were determined using a Black-Scholes option pricing model.</div></div>
-0.20
-0.12
-0.34
-0.52
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;">Net Loss Per Share</div></div></div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">Net loss per share is based upon the weighted average number of common shares outstanding during the period. Diluted loss per share is equivalent to basic net loss per share for all periods presented herein because common equivalent shares from unexercised stock options and common shares expected to be issued under the Company’s employee stock purchase plan were anti-dilutive. The calculation of diluted earnings per share for the three months ended September 30, 2015 and 2014 does not include 0,000 and 0,000, respectively, of such potential common shares, as their impact would be anti-dilutive. The calculation of diluted earnings per share for the nine months ended September 30, 2015 and 2014 does not include 0,000 and 0,000, respectively, of such potential common shares, as their impact would be anti-dilutive.</div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div>
14839000
11982000
1654000
-460000
4082000
-793000
732000
-352000
4082000
861000
732000
2731000
1812000
10326000
5413000
13314000
22855000
36169000
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;">Income Taxes</div></div></div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">The liability method is used in the Company’s accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse.</div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div>
12582000
3602000
1602000
-880000
-793000
732000
-512000
957000
-683000
-1331000
29000
-1995000
1123000
1472000
-1000
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;">Patents and Licenses</div></div></div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">The Company seeks patent protection on all internally developed processes and products. All patent related costs are expensed to general and administrative expenses when incurred as recoverability of such expenditures is uncertain.</div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div>
134000
14000
367000
50000
1241000
1217000
3862000
3684000
5517000
6029000
416000
683000
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;">Inventory</div></div></div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">At September 30, 2015 and December 31, 2014, the Company’s inventory consisted of RAPIVAB finished goods inventory and work in process. Inventory is stated at the lower of cost, determined under the first-in, first-out (“FIFO”) method, or market. The Company expenses costs related to the production of inventories as research and development expenses in the period incurred until such time it is believed that future economic benefit is expected to be recognized, which generally is reliant upon receipt of regulatory approval. Upon regulatory approval, the Company will capitalize subsequent costs related to the production of inventories.</div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">During 2014, in connection with the Food and Drug Administration (“FDA”) approval of RAPIVAB, the Company began capitalizing costs associated with the production of RAPIVAB commercial inventories.</div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">The Company’s inventory consisted of the following at September 30, 2015 and December 31, 2014:</div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </div><div> <table style="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; width: 700px;" cellpadding="0" cellspacing="0"> <tr style="vertical-align: bottom"> <td> </td> <td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</td> <td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 78%; text-align: left">Work in process</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">-</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">267</td> <td style="width: 1%; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Finished Goods</td> <td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">-</td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td> <td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">416</td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.25pt">Net inventories</td> <td style="padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right">-</td> <td style="border-bottom: Black 2.25pt double; text-align: left"> </td> <td style="padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right">683</td> <td style="border-bottom: Black 2.25pt double; text-align: left"> </td> </tr> </table> </div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div>
267000
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;">Investments</div></div></div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">The Company invests in high credit quality investments in accordance with its investment policy, which is designed to minimize the possibility of loss. The objective of the Company’s investment policy is to ensure the safety and preservation of invested funds, as well as maintaining liquidity sufficient to meet cash flow requirements. The Company places its excess cash with high credit quality financial institutions, commercial companies, and government agencies in order to limit the amount of its credit exposure. In accordance with its policy, the Company is able to invest in marketable debt securities that may consist of U.S. Government and government agency securities, money market and mutual fund investments, municipal and corporate notes and bonds, commercial paper and asset or mortgage-backed securities, among others. The Company’s investment policy requires it to purchase high-quality marketable securities with a maximum individual maturity of three years and requires an average portfolio maturity of no more than 18 months. Some of the securities the Company invests in may have market risk. This means that a change in prevailing interest rates may cause the principal amount of the investment to fluctuate. To minimize this risk, the Company schedules its investments with maturities that coincide with expected cash flow needs, thus avoiding the need to redeem an investment prior to its maturity date. Accordingly, the Company does not believe it has a material exposure to interest rate risk arising from its investments. Generally, the Company’s investments are not collateralized. The Company has not realized any significant losses from its investments.</div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">The Company classifies all of its investments as available-for-sale. Unrealized gains and losses on investments are recognized in comprehensive loss, unless an unrealized loss is considered to be other than temporary, in which case the unrealized loss is charged to operations. The Company periodically reviews its investments for other than temporary declines in fair value below cost basis and whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company believes the individual unrealized losses represent temporary declines primarily resulting from interest rate changes. Realized gains and losses are reflected in interest and other income in the Consolidated Statements of Comprehensive Loss and are determined using the specific identification method with transactions recorded on a settlement date basis. Investments with original maturities at date of purchase beyond three months and which mature at or less than 12 months from the balance sheet date are classified as current. Investments with a maturity beyond 12 months from the balance sheet date are classified as long-term. At September 30, 2015, the Company believes that the costs of its investments are recoverable in all material respects.</div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">The following tables summarize the fair value of the Company’s investments by type. The estimated fair value of the Company’s fixed income investments are classified as Level 2 in the fair value hierarchy as defined in U.S. GAAP. These valuations are based on observable direct and indirect inputs, primarily quoted prices of similar, but not identical, instruments in active markets or quoted prices for identical or similar instruments in markets that are not active. These fair values are obtained from independent pricing services which utilize Level 2 inputs.</div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </div><div> <table style="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; width: 700px;" cellpadding="0" cellspacing="0"> <tr style="vertical-align: bottom"> <td> </td> <td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="19" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">September 30, 2015</td> </tr> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1pt"> </td> <td colspan="3" style="text-align: center; border-bottom: Black 1pt solid"><div style="display: inline; font: 10pt Times New Roman, Times, Serif"><div style="display: inline; font-weight: bold;">Amortized</div></div><br /> <div style="display: inline; font: 10pt Times New Roman, Times, Serif"><div style="display: inline; font-weight: bold;">Cost</div></div></td> <td style="padding-bottom: 1pt"> </td> <td colspan="3" style="text-align: center; border-bottom: Black 1pt solid"><div style="display: inline; font: 10pt Times New Roman, Times, Serif"><div style="display: inline; font-weight: bold;">Accrued</div></div><br /> <div style="display: inline; font: 10pt Times New Roman, Times, Serif"><div style="display: inline; font-weight: bold;">Interest</div></div></td> <td style="padding-bottom: 1pt"> </td> <td colspan="3" style="text-align: center; border-bottom: Black 1pt solid"><div style="display: inline; font: 10pt Times New Roman, Times, Serif"><div style="display: inline; font-weight: bold;">Gross</div></div><br /> <div style="display: inline; font: 10pt Times New Roman, Times, Serif"><div style="display: inline; font-weight: bold;">Unrealized</div></div><br /> <div style="display: inline; font: 10pt Times New Roman, Times, Serif"><div style="display: inline; font-weight: bold;">Gains</div></div></td> <td style="padding-bottom: 1pt"> </td> <td colspan="3" style="text-align: center; border-bottom: Black 1pt solid"><div style="display: inline; font: 10pt Times New Roman, Times, Serif"><div style="display: inline; font-weight: bold;">Gross</div></div><br /> <div style="display: inline; font: 10pt Times New Roman, Times, Serif"><div style="display: inline; font-weight: bold;">Unrealized</div></div><br /> <div style="display: inline; font: 10pt Times New Roman, Times, Serif"><div style="display: inline; font-weight: bold;">Losses</div></div></td> <td style="padding-bottom: 1pt"> </td> <td colspan="3" style="text-align: center; border-bottom: Black 1pt solid"><div style="display: inline; font: 10pt Times New Roman, Times, Serif"><div style="display: inline; font-weight: bold;">Estimated</div></div><br /> <div style="display: inline; font: 10pt Times New Roman, Times, Serif"><div style="display: inline; font-weight: bold;">Fair Value</div></div></td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 45%; text-align: left">Obligations of U.S. Government and its agencies</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">23,119</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">42</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">28</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">(2</td> <td style="width: 1%; text-align: left">)</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">23,187</td> <td style="width: 1%; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Corporate debt securities</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">27,249</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">141</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">26</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(14</td> <td style="text-align: left">)</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">27,402</td> <td style="text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1pt">Certificates of deposit</td> <td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">20,909</td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td> <td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">28</td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td> <td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">10</td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td> <td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">(49</td> <td style="border-bottom: Black 1pt solid; text-align: left">)</td> <td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">20,898</td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 2.25pt">Total investments</td> <td style="padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right">71,277</td> <td style="border-bottom: Black 2.25pt double; text-align: left"> </td> <td style="padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right">211</td> <td style="border-bottom: Black 2.25pt double; text-align: left"> </td> <td style="padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right">64</td> <td style="border-bottom: Black 2.25pt double; text-align: left"> </td> <td style="padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right">(65</td> <td style="border-bottom: Black 2.25pt double; text-align: left">)</td> <td style="padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right">71,487</td> <td style="border-bottom: Black 2.25pt double; text-align: left"> </td> </tr> </table> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </div><div> <table style="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; width: 700px;" cellpadding="0" cellspacing="0"> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="19"> </td> </tr> <tr style="vertical-align: bottom"> <td> </td> <td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="19" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">December 31, 2014</td> </tr> <tr style="vertical-align: bottom"> <td> </td> <td style="padding-bottom: 1pt"> </td> <td colspan="3" style="text-align: center; border-bottom: Black 1pt solid"><div style="display: inline; font: 10pt Times New Roman, Times, Serif"><div style="display: inline; font-weight: bold;">Amortized</div></div><br /> <div style="display: inline; font: 10pt Times New Roman, Times, Serif"><div style="display: inline; font-weight: bold;">Cost</div></div></td> <td style="padding-bottom: 1pt"> </td> <td colspan="3" style="text-align: center; border-bottom: Black 1pt solid"><div style="display: inline; font: 10pt Times New Roman, Times, Serif"><div style="display: inline; font-weight: bold;">Accrued</div></div><br /> <div style="display: inline; font: 10pt Times New Roman, Times, Serif"><div style="display: inline; font-weight: bold;">Interest</div></div></td> <td style="padding-bottom: 1pt"> </td> <td colspan="3" style="text-align: center; border-bottom: Black 1pt solid"><div style="display: inline; font: 10pt Times New Roman, Times, Serif"><div style="display: inline; font-weight: bold;">Gross</div></div><br /> <div style="display: inline; font: 10pt Times New Roman, Times, Serif"><div style="display: inline; font-weight: bold;">Unrealized</div></div><br /> <div style="display: inline; font: 10pt Times New Roman, Times, Serif"><div style="display: inline; font-weight: bold;">Gains</div></div></td> <td style="padding-bottom: 1pt"> </td> <td colspan="3" style="text-align: center; border-bottom: Black 1pt solid"><div style="display: inline; font: 10pt Times New Roman, Times, Serif"><div style="display: inline; font-weight: bold;">Gross</div></div><br /> <div style="display: inline; font: 10pt Times New Roman, Times, Serif"><div style="display: inline; font-weight: bold;">Unrealized</div></div><br /> <div style="display: inline; font: 10pt Times New Roman, Times, Serif"><div style="display: inline; font-weight: bold;">Losses</div></div></td> <td style="padding-bottom: 1pt"> </td> <td colspan="3" style="text-align: center; border-bottom: Black 1pt solid"><div style="display: inline; font: 10pt Times New Roman, Times, Serif"><div style="display: inline; font-weight: bold;">Estimated</div></div><br /> <div style="display: inline; font: 10pt Times New Roman, Times, Serif"><div style="display: inline; font-weight: bold;">Fair Value</div></div></td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 45%; text-align: left">Obligations of U.S. Government and its agencies</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">20,307</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">22</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">-</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">(23</td> <td style="width: 1%; text-align: left">)</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">20,306</td> <td style="width: 1%; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Corporate debt securities</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">27,152</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">151</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">5</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">(47</td> <td style="text-align: left">)</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">27,261</td> <td style="text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 1pt">Certificates of deposit</td> <td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">11,838</td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td> <td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">6</td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td> <td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">-</td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td> <td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">(63</td> <td style="border-bottom: Black 1pt solid; text-align: left">)</td> <td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">11,781</td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 2.25pt">Total investments</td> <td style="padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right">59,297</td> <td style="border-bottom: Black 2.25pt double; text-align: left"> </td> <td style="padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right">179</td> <td style="border-bottom: Black 2.25pt double; text-align: left"> </td> <td style="padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right">5</td> <td style="border-bottom: Black 2.25pt double; text-align: left"> </td> <td style="padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right">(133</td> <td style="border-bottom: Black 2.25pt double; text-align: left">)</td> <td style="padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right">59,348</td> <td style="border-bottom: Black 2.25pt double; text-align: left"> </td> </tr> </table> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">The following table summarizes the scheduled maturity for the Company’s investments at September 30, 2015 and December 31, 2014.</div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt"> </div><div> <table style="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; width: 700px;" cellpadding="0" cellspacing="0"> <tr style="vertical-align: bottom"> <td> </td> <td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</td> <td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 78%; text-align: left">Maturing in one year or less</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">23,700</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">18,232</td> <td style="width: 1%; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Maturing after one year through two years</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">27,183</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">25,459</td> <td style="text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">Maturing after two years</td> <td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">20,604</td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td> <td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">15,657</td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 2.25pt">Total investments</td> <td style="padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right">71,487</td> <td style="border-bottom: Black 2.25pt double; text-align: left"> </td> <td style="padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right">59,348</td> <td style="border-bottom: Black 2.25pt double; text-align: left"> </td> </tr> </table> </div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div>
119736000
138956000
136874000
64444000
57293000
30000000
30000000
0
5392000
111546000
-15017000
13108000
1712000
-24661000
-24884000
-33517000
-14621000
-8731000
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;">Recent Accounting Pronouncements</div></div></div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">In April 2015, the FASB issued ASU No. 2015-03, <div style="display: inline; font-style: italic;">Simplifying the Presentation of Debt Issuance Costs</div>. This standard amends existing guidance to require the presentation of debt issuance costs in the balance sheet as a deduction from the carrying amount of the related debt liability instead of a deferred charge. It is effective for annual reporting periods beginning after December 15, 2015. Early adoption is permitted. The Company does not expect this ASU will have a material impact on its consolidated financial statements.</div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">In May 2014, the FASB issued ASU 2014-09 – <div style="display: inline; font-style: italic;">Revenue from Contracts with Customers</div>, which provides a single, comprehensive revenue recognition model for all contracts with customers. The core principal of this ASU is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In July 2015, the FASB finalized a one year delay in the effective date of this standard, which will now be effective January 1, 2018, however early adoption is permitted any time after the original effective date, January 1, 2017. Companies can transition to the new standard under the full retrospective method or the modified retrospective method. The Company is currently evaluating the impact this ASU will have on its consolidated financial statements.</div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div>
-13162000
-11610000
-22250000
-30615000
5239000
6031000
91000
-1000
129000
-2000
1950000
48343000
15852000
1076000
41000
0.001
0.001
5000000
5000000
0
0
0
0
0
0
4970000
6172000
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;">Reclassifications</div></div></div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">Certain balance sheet amounts as of December 31, 2014 have been reclassified to conform to the 2015 presentation.</div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div>
1175000
106600000
33740000
7000000
33740000
250000
35874000
29000000
3861000
4636000
356000
310000
1146000
207000
5444000
5444000
129000
129000
1922000
1922000
2051000
5444000
7495000
2778000
2778000
1071000
1071000
1071000
2778000
3849000
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;">Receivables from Collaborations</div></div></div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">Receivables from collaborations are recorded for amounts due to the Company related to reimbursable research and development costs from the U.S. Department of Health and Human Services, royalty receivables from Shionogi & Co. Ltd., product sales to Green Cross Corporation and CSL Limited. These receivables are evaluated to determine if any reserve or allowance should be established at each reporting date. At September 30, 2015 and December 31, 2014, the Company had the following receivables.</div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </div><div> <table style="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; width: 700px;" cellpadding="0" cellspacing="0"> <tr style="vertical-align: bottom"> <td style="font-weight: bold; text-align: center; padding-bottom: 1pt"> </td> <td style="padding-bottom: 1pt"> </td> <td colspan="11" style="text-align: center; border-bottom: Black 1pt solid"><div style="display: inline; font-weight: bold;">September 30, 2015</div></td> </tr> <tr style="vertical-align: bottom"> <td style="font-weight: bold; text-align: center; padding-bottom: 1pt"> </td> <td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Billed</td> <td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Unbilled</td> <td style="padding-bottom: 1pt"> </td> <td colspan="3" style="text-align: center; border-bottom: Black 1pt solid"><div style="display: inline; font-weight: bold;">Total</div></td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 67%; text-align: left">U.S. Department of Health and Human Services</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">-</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">5,444</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">5,444</td> <td style="width: 1%; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Green Cross Corporation</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">129</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">-</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">129</td> <td style="text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">CSL Limited</td> <td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">1,922</td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td> <td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">-</td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td> <td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">1,922</td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.25pt">Total receivables</td> <td style="padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right">2,051</td> <td style="border-bottom: Black 2.25pt double; text-align: left"> </td> <td style="padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right">5,444</td> <td style="border-bottom: Black 2.25pt double; text-align: left"> </td> <td style="padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right">7,495</td> <td style="border-bottom: Black 2.25pt double; text-align: left"> </td> </tr> </table> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </div><div> <table style="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; width: 700px;" cellpadding="0" cellspacing="0"> <tr style="vertical-align: bottom"> <td> </td> <td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="11" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">December 31, 2014</td> </tr> <tr style="vertical-align: bottom"> <td> </td> <td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Billed</td> <td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Unbilled</td> <td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Total</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 67%; text-align: left">U.S. Department of Health and Human Services</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">-</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">2,778</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">2,778</td> <td style="width: 1%; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Shionogi & Co. Ltd.</td> <td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">1,071</td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td> <td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">-</td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td> <td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">1,071</td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.25pt">Total receivables</td> <td style="padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right">1,071</td> <td style="border-bottom: Black 2.25pt double; text-align: left"> </td> <td style="padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right">2,778</td> <td style="border-bottom: Black 2.25pt double; text-align: left"> </td> <td style="padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right">3,849</td> <td style="border-bottom: Black 2.25pt double; text-align: left"> </td> </tr> </table> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">Monthly invoices are submitted to the U.S. Department of Health and Human Services related to reimbursable research and development costs. The Company is also entitled to monthly reimbursement of indirect costs based on rates stipulated in the underlying contract. The Company’s calculations of its indirect cost rates are subject to audit by the U.S. Government.</div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;">Receivables from Product Sales</div></div></div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">Receivables from product sales are recorded for amounts due to the Company related to sales of RAPIVAB<div style="display: inline; bottom:.33em; font-size: 82%; position: relative; vertical-align: baseline;">®</div>. These receivables are evaluated to determine if any reserve or allowance should be established at each reporting date.</div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div>
0
13000
20067000
13036000
53711000
33286000
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;">Research and Development Expenses</div></div></div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">The Company’s research and development costs are charged to expense when incurred. Research and development expenses include all direct and indirect development costs related to the development of the Company’s portfolio of product candidates. Advance payments for goods or services that will be used or rendered for future research and development activities are deferred and capitalized. Such amounts are recognized as expense when the related goods are delivered or the related services are performed. Research and development expenses include, among other items, personnel costs, including salaries and benefits, manufacturing costs, clinical, regulatory, and toxicology services performed by CROs, materials and supplies, and overhead allocations consisting of various administrative and facilities related costs. Most of the Company’s manufacturing and clinical and preclinical studies are performed by third-party CROs. Costs for studies performed by CROs are accrued by the Company over the service periods specified in the contracts and estimates are adjusted, if required, based upon the Company’s on-going review of the level of services actually performed.</div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">Additionally, the Company has license agreements with third parties, such as Albert Einstein College of Medicine of Yeshiva University (“AECOM”), Industrial Research, Ltd. (“IRL”), and the University of Alabama at Birmingham (“UAB”), which require fees related to sublicense agreements or maintenance fees. The Company expenses sublicense payments as incurred unless they are related to revenues that have been deferred, in which case the expenses are deferred and recognized over the related revenue recognition period. The Company expenses maintenance payments as incurred.</div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">Deferred collaboration expenses represent sub-license payments, paid to the Company’s academic partners upon receipt of consideration from various commercial partners, and other consideration paid to our academic partners for modification to existing license agreements. These deferred expenses would not have been incurred without receipt of such payments or modifications from the Company’s commercial partners and are being expensed in proportion to the related revenue being recognized. The Company believes that this accounting treatment appropriately matches expenses with the associated revenue. </div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div>
1402000
150000
70000
1622000
150000
-492782000
-467898000
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;">Revenue Recognition</div></div></div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">The Company recognizes revenues from collaborative and other research and development arrangements, royalties and product sales when realized or realizable and earned. Revenue is realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists; (ii) delivery has occurred or services have been rendered; (iii) the seller’s price to the buyer is fixed or determinable; and (iv) collectability is reasonably assured.</div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><div style="display: inline; font-style: italic;">Collaborative and Other Research and Development Arrangements and Royalties</div></div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">Revenue from license fees, royalty payments, event payments, and research and development fees are recognized as revenue when the earnings process is complete and the Company has no further continuing performance obligations or the Company has completed the performance obligations under the terms of the agreement. Fees received under licensing agreements that are related to future performance are deferred and recognized over an estimated period determined by management based on the terms of the agreement and the products licensed. Revisions to revenue or profit estimates as a result of changes in the estimated revenue period are recognized prospectively.</div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">Under certain of the Company’s license agreements, the Company receives royalty payments based upon its licensees’ net sales of covered products. The Company recognizes royalty revenues when it can reliably estimate such amounts and collectability is reasonably assured.</div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">For arrangements that involve the delivery of more than one element, each product, service and/or right to use assets is evaluated to determine whether it qualifies as a separate unit of accounting. This determination is based on whether the deliverable has “stand-alone value” to the customer. The consideration that is fixed or determinable is then allocated to each separate unit of accounting based on the relative selling price of each deliverable. The estimated selling price of each deliverable is determined using the following hierarchy of values: (i) vendor-specific objective evidence of fair value, (ii) third-party evidence of selling price (“TPE”) and (iii) best estimate of selling price (“BESP”). The BESP reflects our best estimate of what the selling price would be if the deliverable was regularly sold by the Company on a stand-alone basis. In most cases the Company expects to use TPE or BESP for allocating consideration to each deliverable. The consideration allocated to each unit of accounting is recognized as the related goods or services are delivered, limited to the consideration that is not contingent upon future deliverables. Analyzing the arrangement to identify deliverables requires the use of judgment, and each deliverable may be an obligation to deliver services, a right or license to use an asset, or another performance obligation.</div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">In June 2015, the Company entered into a License Agreement (the “Agreement”) granting CSL Limited (“CSL”) and its affiliates worldwide rights, excluding Israel, Japan, Korea and Taiwan, to develop, manufacture and commercialize RAPIVAB. The Agreement provides for various types of payments, including a non-refundable upfront fee, milestone payments, and future royalties. Analysis of the Agreement identified three deliverables: (i) license rights, (ii) inventory and (iii) regulatory support to obtain Canadian and European Union (“EU”) marketing approvals. The Company received an upfront payment of $33,740 from CSL of which $7,000 was determined to be contingent upon EU marketing approval and will be deferred until that time. Approximately $21,777 of the upfront payment was allocated to the license rights and recognized as revenue in the current quarter. Approximately $3,740 of the upfront payment was allocated to the pending sale of inventory and was recognized during the third quarter when the inventory transfer was completed. Approximately $1,223 of this revenue will be recognized over the expected period of involvement in these regulatory support activities.</div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">Milestone payments are recognized as licensing revenue upon the achievement of specified milestones if (i) the milestone is substantive in nature and the achievement of the milestone was not reasonably assured at the inception of the agreement; and (ii) the fees are non-refundable. Any milestone payments received prior to satisfying these revenue recognition criteria are recorded as deferred revenue.</div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">Under the terms of the Agreement, the Company may receive up to $12,000 in additional payments related to the successful achievement of regulatory milestones, including marketing approval (i) by the FDA for a pediatric indication, (ii) by the EMA for an adult indication in the European Union and (iii) by Health Canada for an adult indication in Canada. The Company evaluated each event based payment under the provisions of ASU 2010-17, <div style="display: inline; font-style: italic;">Milestone Method of Revenue Recognition</div>, and determined that each event based payment met the criteria to be considered substantive and represents a milestone under the milestone method of accounting. No event based payments were achieved during the periods presented.</div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">Reimbursements received for direct out-of-pocket expenses related to research and development costs are recorded as revenue in the Consolidated Statements of Comprehensive Loss rather than as a reduction in expenses. Under the Company’s contracts with the Biomedical Advanced Research and Development Authority within the United States Department of Health and Human Services (”BARDA/HHS”) and the National Institute of Allergy and Infectious Diseases (“NIAID/HHS”), revenue is recognized as reimbursable direct and indirect costs are incurred.</div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 20pt"><div style="display: inline; font-style: italic;">Product Sales</div></div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">The Company recognizes revenue for sales of RAPIVAB when title and substantially all the risks and rewards of ownership have transferred to the customer, which generally occurs on the date of shipment from our specialty distributors, utilizing the Sell-Through revenue recognition methodology. Product sales are recognized when there is persuasive evidence that an arrangement exists, title has passed, the price is fixed and determinable, and collectability is reasonably assured. Product sales are recognized net of estimated allowances, discounts, sales returns, chargebacks and rebates. In the United States, the Company sells RAPIVAB to specialty distributors, who in turn, sell to physician offices, hospitals and federal, state and commercial health care organizations. With the completion of the CSL worldwide license of RAPIVAB, CSL will be primarily responsible for sales of RAPIVAB other than U.S. Government stockpiling sales and the Company’s commercial sales will be minimal.</div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">Sales deductions consist of statutory rebates to state Medicaid, Medicare and other government agencies and sales discounts (including trade discounts and distribution service fees). These deductions are recorded as reductions from revenue from RAPIVAB in the same period as the related sales with estimates of future utilization derived from historical experience adjusted to reflect known changes in the factors that impact such reserves.</div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">The Company utilizes data from external sources to help it estimate gross-to-net sales adjustments as they relate to the recognition of revenue for RAPIVAB sold. Externally sourced data includes, but is not limited to, information obtained from specialty distributors with respect to their inventory levels and their sell-through to customers, as well as information from third-party suppliers of market research data to the pharmaceutical industry.</div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">The Company accounts for these sales deductions in accordance with authoritative guidance on revenue recognition when consideration is given by a vendor to a customer. </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">The Company has categorized and described more fully the following significant sales deductions, all of which involve estimates and judgments, which the Company considers to be critical accounting estimates, and require it to use information from external sources. </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><div style="display: inline; font-style: italic;">Rebates and Chargebacks</div></div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">Statutory rebates to state Medicaid agencies and Medicare are based on statutory discounts to RAPIVAB’s selling price. As it can take up to nine months or more for information to be received on actual usage of RAPIVAB in Medicaid and other governmental programs, the Company maintains reserves for amounts payable under these programs relating to RAPIVAB sales.</div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">Chargebacks claimed by specialty distributors are based on the differentials between product acquisition prices paid by the specialty distributors and lower government contract pricing paid by eligible customers covered under federally qualified programs.</div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">The amount of the reserve for rebates and chargebacks is based on multiple qualitative and quantitative factors, including the historical and projected utilization levels, historical payment experience, changes in statutory laws and interpretations as well as contractual terms, product pricing (both normal selling prices and statutory or negotiated prices), changes in prescription demand patterns and utilization of the Company’s product through public benefit plans, and the levels of RAPIVAB inventory in the distribution channel. The Company acquires prescription utilization data from third-party suppliers of market research data to the pharmaceutical industry. The Company updates its estimates and assumptions each period and records any necessary adjustments to its reserves. Settlements of rebates and chargebacks typically occur within nine months from point of sale. To the extent actual rebates and chargebacks differ from the Company’s estimates, additional reserves may be required or reserves may need to be reversed, either of which would impact current period product revenue. </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><div style="display: inline; font-style: italic;">Discounts and Sales Incentives</div></div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">Discounts and other sales incentives primarily consist of Inventory Management Agreement (“IMA”) Fees. Per contractual agreements with the Company’s specialty distributors, the Company provides an IMA fee based on a percentage of their purchases of RAPIVAB. The IMA fee rates are set forth in individual contracts. The Company tracks sales to these distributors each period and accrues a liability relating to the unpaid portion of these fees by applying the contractual rates to such product sales. </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><div style="display: inline; font-style: italic;">Product Returns</div></div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">The Company does not record a product return allowance as it does not offer the ability to return goods once a bonafide shipment has been accepted by a specialty distributor. </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><div style="display: inline; font-style: italic;">Advertising</div></div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">The Company engages in very limited distribution and direct-response advertising when promoting RAPIVAB.</div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">The Company recorded the following revenues for the three and nine months ended September 30, 2015 and 2014:</div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> </div><div> <table style="border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; width: 700px;" cellpadding="0" cellspacing="0"> <tr style="vertical-align: bottom"> <td> </td> <td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="7" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Three Months</td> <td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="7" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Nine Months</td> </tr> <tr style="vertical-align: bottom"> <td> </td> <td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</td> <td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</td> <td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2015</td> <td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 56%; text-align: left">Product sales, net</td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">5,699</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">-</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">6,236</td> <td style="width: 1%; text-align: left"> </td> <td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td> <td style="width: 8%; text-align: right">-</td> <td style="width: 1%; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Royalty revenue</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">126</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">5</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">1,776</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">1,951</td> <td style="text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Collaborative and other research and development revenues:</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">U.S. Department of Health and Human Services</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">4,581</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">2,937</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">12,788</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">5,323</td> <td style="text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Green Cross Corporation</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">132</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">-</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">132</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">-</td> <td style="text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Shionogi (Japan)</td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">296</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">296</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">888</td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right">888</td> <td style="text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1pt">CSL Limited</td> <td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">153</td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td> <td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">-</td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td> <td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">21,835</td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td> <td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">-</td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Total collaborative and other research and development revenues</td> <td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">5,162</td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td> <td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">3,233</td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td> <td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">35,643</td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td> <td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; text-align: right">6,211</td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td> <td> </td> <td style="text-align: left"> </td> <td style="text-align: right"> </td> <td style="text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.25pt">Total revenues</td> <td style="padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right">10,987</td> <td style="border-bottom: Black 2.25pt double; text-align: left"> </td> <td style="padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right">3,238</td> <td style="border-bottom: Black 2.25pt double; text-align: left"> </td> <td style="padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right">43,655</td> <td style="border-bottom: Black 2.25pt double; text-align: left"> </td> <td style="padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; text-align: right">8,162</td> <td style="border-bottom: Black 2.25pt double; text-align: left"> </td> </tr> </table> </div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div>
21777000
10987000
3238000
43655000
8162000
5000
507000
78000
126000
5000
1776000
1951000
5699000
6236000
10987000
3238000
43655000
8162000
<div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse;; width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">2015</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">2014</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 65%; font-size: 10pt; text-align: left">Work in process</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 14%; font-size: 10pt; text-align: right">—</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 2%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 14%; font-size: 10pt; text-align: right">267</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left; padding-bottom: 1pt">Finished Goods</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">—</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">416</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left; padding-bottom: 2.25pt">Net inventories</td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">—</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">683</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> </tr> </table></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse;; width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">Awards<br /> Available</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">Options<br /> Outstanding</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">Weighted<br /> Average<br /> Exercise<br /> Price</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 55%; font-size: 10pt">Balance December 31, 2014</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 12%; font-size: 10pt; text-align: right">2,362</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 12%; font-size: 10pt; text-align: right">9,605</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 12%; font-size: 10pt; text-align: right">6.21</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left; padding-left: 10pt">Restricted stock unit awards granted</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">(155</td> <td style="font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">—</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">—</td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; padding-left: 10pt">Restricted stock unit awards cancelled</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">1</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">—</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">—</td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left; padding-left: 10pt">Stock option awards granted</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">(1,319</td> <td style="font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">1,319</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">11.99</td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; padding-left: 10pt">Stock option awards exercised</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">—</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">(1,102</td> <td style="font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">4.36</td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 10pt">Stock option awards cancelled</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">28</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">(28</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: right">9.05</td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; padding-bottom: 2.25pt">Balance September 30, 2015</td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">917</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">9,794</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="padding-bottom: 2.25pt; font-size: 10pt; text-align: left">$</td> <td style="padding-bottom: 2.25pt; font-size: 10pt; text-align: right">7.19</td> <td style="padding-bottom: 2.25pt; font-size: 10pt; text-align: left"> </td> </tr> </table></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse;; width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">2015</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">2014</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 70%; font-size: 10pt; text-align: left">Expected Life in Years</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 12%; font-size: 10pt; text-align: right">5.5</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 12%; font-size: 10pt; text-align: right">5.5</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left">Expected Volatility</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">83</td> <td style="font-size: 10pt; text-align: left">%</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">87</td> <td style="font-size: 10pt; text-align: left">%</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left">Expected Dividend Yield</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">0.0</td> <td style="font-size: 10pt; text-align: left">%</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">0.0</td> <td style="font-size: 10pt; text-align: left">%</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left">Risk-Free Interest Rate</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">1.5</td> <td style="font-size: 10pt; text-align: left">%</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">1.6</td> <td style="font-size: 10pt; text-align: left">%</td> </tr> </table></div>
7773000
6550000
P4Y
P2Y
1000
155000
0
0
0.83
0.87
0.015
0.016
3000
1475000
497000
2362000
917000
7.19
28000
9.05
1319000
1032000
1250000
8.15
8.19
9605000
9794000
6.21
4.36
11.99
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;">Stock-Based Compensation</div></div></div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">All share-based payments, including grants of stock option awards and restricted stock unit awards, are recognized in the Company’s Consolidated Statements of Comprehensive Loss based on their fair values. The fair value of stock option awards is estimated using the Black-Scholes option pricing model. The fair value of restricted stock unit awards is based on the grant date closing price of the common stock. Stock-based compensation cost is recognized as expense on a straight-line basis over the requisite service period of the award. In addition, we have outstanding performance-based stock options for which no compensation expense is recognized until “performance” has occurred.</div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div>
0.25
0.5
0.75
P5Y182D
P5Y182D
P5Y
P10Y
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;">Note 1 — Significant Accounting Policies</div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;">The Company</div></div></div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">BioCryst Pharmaceuticals, Inc. (the “Company”) is a biotechnology company that designs, optimizes and develops novel small molecule drugs that block key enzymes involved in the pathogenesis of diseases. The Company focuses on the treatment of rare diseases in which significant unmet medical needs exist and align with its capabilities and expertise. The Company was incorporated in Delaware in 1986 and its headquarters is located in Durham, North Carolina. The Company integrates the disciplines of biology, crystallography, medicinal chemistry and computer modeling to discover and develop small molecule pharmaceuticals through the process known as structure-guided drug design. BioCryst has incurred losses and negative cash flows from operations since inception.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">Based on its current operating plans, the Company expects it has sufficient liquidity, with its existing cash and investments of $119,736, to continue its planned operations into 2017. The Company’s liquidity needs, and ability to address those needs, will largely be determined by the success of its product candidates and key development and regulatory events in the future. In order to continue its operations substantially beyond 2017 it will need to: (1) successfully secure or increase U.S. Government funding of its programs, including procurement contracts; (2) out-license rights to certain of its products or product candidates, pursuant to which the Company would receive cash milestones; (3) raise additional capital through equity or debt financings or from other sources; (4) obtain additional product candidate regulatory approvals, which would generate revenue and cash flow; (5) reduce spending on one or more research and development programs; and/or (6) restructure operations. The Company retains the ability to offer for sale approximately $150,000 of securities, including common stock, preferred stock, depositary shares, stock purchase contracts, warrants, and units from its effective shelf S-3 registration statement, which it filed with the Securities and Exchange Commission on March 3, 2015. Additionally, the Company retains the ability to offer for sale approximately $10,000 of securities, including common stock, preferred stock, depositary shares, stock purchase contracts, warrants and units from its effective shelf S-3 registration statement, which it filed with the Securities and Exchange Commission on November 6, 2013. The Company will continue to incur operating losses and negative cash flows until revenues reach a level sufficient to support ongoing operations.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;">Basis of Presentation</div></div></div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, JPR Royalty Sub LLC (“Royalty Sub”). Royalty Sub was formed in connection with a $30,000 financing transaction the Company completed on March 9, 2011. See Note 4, Royalty Monetization, for a further description of this transaction. All intercompany transactions and balances have been eliminated.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial reporting and the instructions to Form 10-Q and do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. Such financial statements reflect all adjustments that are, in management’s opinion, necessary to present fairly, in all material respects, the Company’s consolidated financial position, results of operations, and cash flows. There were no adjustments other than normal recurring adjustments.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">These financial statements should be read in conjunction with the financial statements for the year ended December 31, 2014 and the notes thereto included in the Company’s 2014 Annual Report on Form 10-K. Interim operating results are not necessarily indicative of operating results for the full year. The balance sheet as of December 31, 2014 has been derived from the audited consolidated financial statements included in the Company’s most recent Annual Report on Form 10-K.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;">Reclassifications</div></div></div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">Certain balance sheet amounts as of December 31, 2014 have been reclassified to conform to the 2015 presentation.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;">Cash and Cash Equivalents</div></div></div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">The Company generally considers cash equivalents to be all cash held in commercial checking accounts, certificates of deposit, money market accounts or investments in debt instruments with maturities of three months or less at the time of purchase. The carrying value of cash and cash equivalents approximates fair value due to the short-term nature of these items.</div> <!-- Field: Page; Sequence: 6; Value: 3 --> <div style="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"> </div> <!-- Field: /Page --> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;">Restricted Cash</div></div></div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">Restricted cash as of September 30, 2015 reflects $150 the Company is required to maintain in an interest bearing certificate of deposit to serve as collateral for a corporate credit card program, $70 in royalty revenue paid by Shionogi & Co., Ltd. (“Shionogi”) designated for interest on the PhaRMA Notes (defined in Note 4) and $1,402 the Company is required to maintain as collateral for a letter of credit associated with the lease execution and build-out of its new Birmingham research facilities.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;">Investments</div></div></div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">The Company invests in high credit quality investments in accordance with its investment policy, which is designed to minimize the possibility of loss. The objective of the Company’s investment policy is to ensure the safety and preservation of invested funds, as well as maintaining liquidity sufficient to meet cash flow requirements. The Company places its excess cash with high credit quality financial institutions, commercial companies, and government agencies in order to limit the amount of its credit exposure. In accordance with its policy, the Company is able to invest in marketable debt securities that may consist of U.S. Government and government agency securities, money market and mutual fund investments, municipal and corporate notes and bonds, commercial paper and asset or mortgage-backed securities, among others. The Company’s investment policy requires it to purchase high-quality marketable securities with a maximum individual maturity of three years and requires an average portfolio maturity of no more than 18 months. Some of the securities the Company invests in may have market risk. This means that a change in prevailing interest rates may cause the principal amount of the investment to fluctuate. To minimize this risk, the Company schedules its investments with maturities that coincide with expected cash flow needs, thus avoiding the need to redeem an investment prior to its maturity date. Accordingly, the Company does not believe it has a material exposure to interest rate risk arising from its investments. Generally, the Company’s investments are not collateralized. The Company has not realized any significant losses from its investments.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">The Company classifies all of its investments as available-for-sale. Unrealized gains and losses on investments are recognized in comprehensive loss, unless an unrealized loss is considered to be other than temporary, in which case the unrealized loss is charged to operations. The Company periodically reviews its investments for other than temporary declines in fair value below cost basis and whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company believes the individual unrealized losses represent temporary declines primarily resulting from interest rate changes. Realized gains and losses are reflected in interest and other income in the Consolidated Statements of Comprehensive Loss and are determined using the specific identification method with transactions recorded on a settlement date basis. Investments with original maturities at date of purchase beyond three months and which mature at or less than 12 months from the balance sheet date are classified as current. Investments with a maturity beyond 12 months from the balance sheet date are classified as long-term. At September 30, 2015, the Company believes that the costs of its investments are recoverable in all material respects.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">The following tables summarize the fair value of the Company’s investments by type. The estimated fair value of the Company’s fixed income investments are classified as Level 2 in the fair value hierarchy as defined in U.S. GAAP. These valuations are based on observable direct and indirect inputs, primarily quoted prices of similar, but not identical, instruments in active markets or quoted prices for identical or similar instruments in markets that are not active. These fair values are obtained from independent pricing services which utilize Level 2 inputs.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="19" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">September 30, 2015</td> </tr> <tr style="vertical-align: bottom"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">Amortized<br /> Cost</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">Accrued<br /> Interest</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">Gross<br /> Unrealized<br /> Gains</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">Gross<br /> Unrealized<br /> Losses</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">Estimated<br /> Fair Value</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 35%; font-size: 10pt; text-align: left; text-indent: -10pt; padding-left: 10pt">Obligations of U.S. Government and its agencies</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right">23,119</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right">42</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right">28</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right">(2</td> <td style="width: 1%; font-size: 10pt; text-align: left">)</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right">23,187</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left">Corporate debt securities</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">27,249</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">141</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">26</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">(14</td> <td style="font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">27,402</td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; padding-bottom: 1pt">Certificates of deposit</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">20,909</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">28</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">10</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">(49</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">20,898</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; padding-bottom: 2.25pt">Total investments</td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">71,277</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">211</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">64</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">(65</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">71,487</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> </tr> </table> </div> <div style=" margin-top: 0; margin-bottom: 0"> </div> <div> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="19" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">December 31, 2014</td> </tr> <tr style="vertical-align: bottom"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">Amortized<br /> Cost</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">Accrued<br /> Interest</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">Gross<br /> Unrealized<br /> Gains</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">Gross<br /> Unrealized<br /> Losses</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">Estimated<br /> Fair Value</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 35%; font-size: 10pt; text-align: left; text-indent: -10pt; padding-left: 10pt">Obligations of U.S. Government and its agencies</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right">20,307</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right">22</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right">—</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right">(23</td> <td style="width: 1%; font-size: 10pt; text-align: left">)</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right">20,306</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left">Corporate debt securities</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">27,152</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">151</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">5</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">(47</td> <td style="font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">27,261</td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; padding-bottom: 1pt">Certificates of deposit</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">11,838</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">6</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">—</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">(63</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">11,781</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; padding-bottom: 2.25pt">Total investments</td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">59,297</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">179</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">5</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">(133</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">59,348</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> </tr> </table> </div> <!-- Field: Page; Sequence: 7; Value: 3 --> <div style="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"> </div> <!-- Field: /Page --> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">The following table summarizes the scheduled maturity for the Company’s investments at September 30, 2015 and December 31, 2014.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div> <table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">2015</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">2014</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 65%; font-size: 10pt; text-align: left">Maturing in one year or less</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 14%; font-size: 10pt; text-align: right">23,700</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 2%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 14%; font-size: 10pt; text-align: right">18,232</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left">Maturing after one year through two years</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">27,183</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">25,459</td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; padding-bottom: 1pt">Maturing after two years</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">20,604</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">15,657</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; padding-bottom: 2.25pt">Total investments</td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">71,487</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">59,348</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> </tr> </table> </div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"> </div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;">Receivables from Collaborations</div></div></div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0">Receivables from collaborations are recorded for amounts due to the Company related to reimbursable research and development costs from the U.S. Department of Health and Human Services, royalty receivables from Shionogi, and product sales to Green Cross Corporation (“Green Cross”) and Seqirus UK Limited (“SUL”). These receivables are evaluated to determine if any reserve or allowance should be established at each reporting date. At September 30, 2015 and December 31, 2014, the Company had the following receivables.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div> <table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; font-weight: bold; text-align: center; padding-bottom: 1pt"></td> <td style="padding-bottom: 1pt"> </td> <td colspan="11" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">September 30, 2015</td> </tr> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; font-weight: bold; text-align: center; padding-bottom: 1pt"></td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"><div style="display: inline; font-size: 10pt"> </div></td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid"><div style="display: inline; font-size: 10pt">Billed</div></td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"><div style="display: inline; font-size: 10pt"> </div></td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid"><div style="display: inline; font-size: 10pt">Unbilled</div></td> <td style="padding-bottom: 1pt"><div style="display: inline; font-size: 10pt"> </div></td> <td colspan="3" style="border-bottom: black 1.1pt solid; font-size: 10pt; font-weight: bold; text-align: center"><div style="display: inline; font-size: 10pt">Total</div></td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 55%; font-size: 10pt; text-align: left">U.S. Department of Health and Human Services</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 12%; font-size: 10pt; text-align: right">—</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 12%; font-size: 10pt; text-align: right">5,444</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 12%; font-size: 10pt; text-align: right">5,444</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left">Green Cross Corporation</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">129</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">—</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">129</td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; padding-bottom: 1pt"><div style=" margin: 0">Seqirus UK Limited</div> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">1,922</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">—</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">1,922</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left; padding-bottom: 2.25pt">Total receivables</td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">2,051</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">5,444</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">7,495</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> </tr> </table> </div> <div style=" margin-top: 0; margin-bottom: 0"> </div> <div> <table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; font-weight: bold; text-align: center"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="11" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">December 31, 2014</td> </tr> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; font-weight: bold; text-align: center"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">Billed</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">Unbilled</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">Total</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 55%; font-size: 10pt; text-align: left">U.S. Department of Health and Human Services</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 12%; font-size: 10pt; text-align: right">—</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 12%; font-size: 10pt; text-align: right">2,778</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 12%; font-size: 10pt; text-align: right">2,778</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left; padding-bottom: 1pt">Shionogi & Co. Ltd.</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">1,071</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">—</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">1,071</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; padding-bottom: 2.25pt">Total receivables</td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">1,071</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">2,778</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">3,849</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> </tr> </table> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">Monthly invoices are submitted to the U.S. Department of Health and Human Services related to reimbursable research and development costs. The Company is also entitled to monthly reimbursement of indirect costs based on rates stipulated in the underlying contract. The Company’s calculations of its indirect cost rates are subject to audit by the U.S. Government.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;">Receivables from Product Sales</div></div></div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">Receivables from product sales are recorded for amounts due to the Company related to sales of RAPIVAB<div style="display: inline; bottom:.33em; font-size: 82%; position: relative; vertical-align: baseline;">®</div>. These receivables are evaluated to determine if any reserve or allowance should be established at each reporting date.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;">Inventory</div></div></div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0">At December 31, 2014, the Company’s inventory consisted of RAPIVAB finished goods inventory and work in process. Inventory is stated at the lower of cost, determined under the first-in, first-out (“FIFO”) method, or market. The Company expenses costs related to the production of inventories as research and development expenses in the period incurred until such time it is believed that future economic benefit is expected to be recognized, which generally is reliant upon receipt of regulatory approval. Upon regulatory approval, the Company will capitalize subsequent costs related to the production of inventories. In connection with the June 2015 SUL collaboration, the Company sold all of its available RAPIVAB finished goods inventory to SUL in accordance with terms stipulated in the licensing agreement.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">During 2014, in connection with the Food and Drug Administration (“FDA”) approval of RAPIVAB, the Company began capitalizing costs associated with the production of RAPIVAB commercial inventories.</div> <!-- Field: Page; Sequence: 8; Value: 3 --> <div style="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"> </div> <!-- Field: /Page --> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">The Company’s inventory consisted of the following at September 30, 2015 and December 31, 2014:</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div> <table cellpadding="0" cellspacing="0" align="center" style="border-collapse: collapse; width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">2015</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">2014</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 65%; font-size: 10pt; text-align: left">Work in process</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 14%; font-size: 10pt; text-align: right">—</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 2%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 14%; font-size: 10pt; text-align: right">267</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left; padding-bottom: 1pt">Finished Goods</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">—</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">416</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left; padding-bottom: 2.25pt">Net inventories</td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">—</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">683</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> </tr> </table> </div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"><div style="display: inline; font-weight: bold;"> </div></div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;">Patents and Licenses</div></div></div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">The Company seeks patent protection on all internally developed processes and products. All patent related costs are expensed to selling, general and administrative expenses when incurred as recoverability of such expenditures is uncertain.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;">Accrued Expenses</div></div></div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">The Company generally enters into contractual agreements with third-party vendors who provide research and development, manufacturing, and other services in the ordinary course of business. Some of these contracts are subject to milestone-based invoicing and services are completed over an extended period of time. The Company records liabilities under these contractual commitments when it determines an obligation has been incurred, regardless of the timing of the invoice. This process involves reviewing open contracts and purchase orders, communicating with applicable Company personnel to identify services that have been performed on its behalf and estimating the level of service performed and the associated cost incurred for the service when the Company has not yet been invoiced or otherwise notified of actual cost. The majority of service providers invoice the Company monthly in arrears for services performed. The Company makes estimates of accrued expenses as of each balance sheet date in its financial statements based on the facts and circumstances. The Company periodically confirms the accuracy of its estimates with the service providers and makes adjustments if necessary. Examples of estimated accrued expenses include:</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <table border="0" cellpadding="0" cellspacing="5" style="; border-collapse: collapse; font-size: 10pt; width: 700px;"> <tr> <td style="vertical-align: middle; width: 2%"> </td> <td style="vertical-align: top; text-align: left; width: 3%">•</td> <td style="vertical-align: middle; width: 95%">fees paid to Clinical Research Organizations (“CROs”) in connection with preclinical and toxicology studies and clinical trials;</td> </tr> <tr> <td style="vertical-align: middle"> </td> <td style="vertical-align: top; text-align: left">•</td> <td style="vertical-align: middle">fees paid to investigative sites in connection with clinical trials;</td> </tr> <tr> <td style="vertical-align: middle"> </td> <td style="vertical-align: top; text-align: left">•</td> <td style="vertical-align: middle">fees paid to contract manufacturers in connection with the production of our raw materials, drug substance and drug products; and</td> </tr> <tr> <td style="vertical-align: middle"> </td> <td style="vertical-align: top; text-align: left">•</td> <td style="vertical-align: middle">professional fees.</td> </tr> </table> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">The Company bases its expenses related to clinical trials on its estimates of the services received and efforts expended pursuant to contracts with multiple research institutions and CROs that conduct and manage clinical trials on the Company’s behalf. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows. Payments under some of these contracts depend on factors such as the successful enrollment of patients and the completion of clinical trial milestones. In accruing service fees, the Company estimates the time period over which services will be performed and the level of effort expended in each period. If the actual timing of the performance of services or the level of effort varies from the estimate, the Company will adjust the accrual accordingly. As of September 30, 2015 and December 31, 2014, the carrying value of accrued expenses approximates their fair value due to their short-term settlement.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;">Income Taxes</div></div></div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">The liability method is used in the Company’s accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;">Accumulated Other Comprehensive Loss</div></div></div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">Accumulated other comprehensive loss is comprised of unrealized gains and losses on available-for-sale investments and is disclosed as a separate component of stockholders’ equity. Amounts reclassified from accumulated other comprehensive loss are recorded as interest and other income on the Consolidated Statements of Comprehensive Loss. During the nine months ended September 30, 2015, realized gains of $13 were reclassified out of accumulated other comprehensive loss. No reclassifications out of accumulated other comprehensive loss were recorded during the nine months ended September 30, 2014. </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;">Revenue Recognition</div></div></div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">The Company recognizes revenues from collaborative and other research and development arrangements, royalties and product sales when realized or realizable and earned. Revenue is realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists; (ii) delivery has occurred or services have been rendered; (iii) the seller’s price to the buyer is fixed or determinable; and (iv) collectability is reasonably assured.</div> <!-- Field: Page; Sequence: 9; Value: 3 --> <div style="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"> </div> <!-- Field: /Page --> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"><div style="display: inline; font-style: italic;">Collaborative and Other Research and Development Arrangements and Royalties</div></div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">Revenue from license fees, royalty payments, event payments, and research and development fees are recognized as revenue when the earnings process is complete and the Company has no further continuing performance obligations or the Company has completed the performance obligations under the terms of the agreement. Fees received under licensing agreements that are related to future performance are deferred and recognized over an estimated period determined by management based on the terms of the agreement and the products licensed. Revisions to revenue or profit estimates as a result of changes in the estimated revenue period are recognized prospectively.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">Under certain of the Company’s license agreements, the Company receives royalty payments based upon its licensees’ net sales of covered products. The Company recognizes royalty revenues when it can reliably estimate such amounts and collectability is reasonably assured.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">For arrangements that involve the delivery of more than one element, each product, service and/or right to use assets is evaluated to determine whether it qualifies as a separate unit of accounting. This determination is based on whether the deliverable has “stand-alone value” to the customer. The consideration that is fixed or determinable is then allocated to each separate unit of accounting based on the relative selling price of each deliverable. The estimated selling price of each deliverable is determined using the following hierarchy of values: (i) vendor-specific objective evidence of fair value, (ii) third-party evidence of selling price (“TPE”) and (iii) best estimate of selling price (“BESP”). The BESP reflects our best estimate of what the selling price would be if the deliverable was regularly sold by the Company on a stand-alone basis. In most cases the Company expects to use TPE or BESP for allocating consideration to each deliverable. The consideration allocated to each unit of accounting is recognized as the related goods or services are delivered, limited to the consideration that is not contingent upon future deliverables. Analyzing the arrangement to identify deliverables requires the use of judgment, and each deliverable may be an obligation to deliver services, a right or license to use an asset, or another performance obligation.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0">In June 2015, the Company entered into a License Agreement (the “SUL Agreement”) granting SUL and its affiliates worldwide rights, excluding Israel, Japan, Korea and Taiwan, to develop, manufacture and commercialize RAPIVAB. The SUL Agreement provides for various types of payments, including a non-refundable upfront fee, milestone payments, and future royalties. Analysis of the SUL Agreement identified three deliverables: (i) license rights, (ii) inventory and (iii) regulatory support to obtain Canadian and European Union (“EU”) marketing approvals. The Company received an upfront payment of $33,740 from SUL, of which $7,000 was determined to be contingent upon EU marketing approval and will be deferred until that time. Approximately $21,777 of the upfront payment was allocated to the license rights and recognized as revenue in the second quarter. Approximately $3,740 of the upfront payment was allocated to the pending sale of inventory and was recognized during the third quarter, when the inventory transfer was completed. Approximately $1,223 of the revenue from the SUL Agreement will be recognized over the expected period of involvement in these regulatory support activities.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">Milestone payments are recognized as licensing revenue upon the achievement of specified milestones if (i) the milestone is substantive in nature and the achievement of the milestone was not reasonably assured at the inception of the agreement; and (ii) the fees are non-refundable. Any milestone payments received prior to satisfying these revenue recognition criteria are recorded as deferred revenue.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0">Under the terms of the SUL Agreement, the Company may receive up to $12,000 in additional payments related to the successful achievement of regulatory milestones, including marketing approval (i) by the FDA for a pediatric indication, (ii) by the EMA for an adult indication in the EU and (iii) by Health Products and Food Branch of Health Canada (“Health Canada”) for an adult indication in Canada. The Company evaluated each event based payment under the provisions of ASU 2010-17, <div style="display: inline; font-style: italic;">Milestone Method of Revenue Recognition</div>, and determined that each event based payment met the criteria to be considered substantive and represents a milestone under the milestone method of accounting. No event based payments were achieved during the periods presented.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">Reimbursements received for direct out-of-pocket expenses related to research and development costs are recorded as revenue in the Consolidated Statements of Comprehensive Loss rather than as a reduction in expenses. Under the Company’s contracts with the Biomedical Advanced Research and Development Authority within the United States Department of Health and Human Services (”BARDA/HHS”) and the National Institute of Allergy and Infectious Diseases (“NIAID/HHS”), revenue is recognized as reimbursable direct and indirect costs are incurred.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 20pt"><div style="display: inline; font-style: italic;">Product Sales</div></div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 20pt"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0">The Company recognizes revenue for sales of RAPIVAB when title and substantially all the risks and rewards of ownership have transferred to the customer, which generally occurs on the date of shipment from our specialty distributors, utilizing the Sell-Through revenue recognition methodology. Product sales are recognized when there is persuasive evidence that an arrangement exists, title has passed, the price is fixed and determinable, and collectability is reasonably assured. Product sales are recognized net of estimated allowances, discounts, sales returns, chargebacks and rebates. In the United States, the Company sells RAPIVAB to specialty distributors, who in turn, sell to physician offices, hospitals and federal, state and commercial health care organizations. With the completion of the SUL worldwide license of RAPIVAB, SUL will be primarily responsible for sales of RAPIVAB, other than U.S. Government stockpiling sales, and the Company’s commercial sales will be minimal.</div> <!-- Field: Page; Sequence: 10; Value: 3 --> <div style="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"> </div> <!-- Field: /Page --> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">Sales deductions consist of statutory rebates to state Medicaid, Medicare and other government agencies and sales discounts (including trade discounts and distribution service fees). These deductions are recorded as reductions from revenue from RAPIVAB in the same period as the related sales with estimates of future utilization derived from historical experience adjusted to reflect known changes in the factors that impact such reserves.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">The Company utilizes data from external sources to help it estimate gross-to-net sales adjustments as they relate to the recognition of revenue for RAPIVAB sold. Externally sourced data includes, but is not limited to, information obtained from specialty distributors with respect to their inventory levels and their sell-through to customers, as well as information from third-party suppliers of market research data to the pharmaceutical industry.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">The Company accounts for these sales deductions in accordance with authoritative guidance on revenue recognition when consideration is given by a vendor to a customer. </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">The Company has categorized and described more fully the following significant sales deductions, all of which involve estimates and judgments, which the Company considers to be critical accounting estimates, and require it to use information from external sources. </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"><div style="display: inline; font-style: italic;">Rebates and Chargebacks</div></div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">Statutory rebates to state Medicaid agencies and Medicare are based on statutory discounts to RAPIVAB’s selling price. As it can take up to nine months or more for information to be received on actual usage of RAPIVAB in Medicaid and other governmental programs, the Company maintains reserves for amounts payable under these programs relating to RAPIVAB sales.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">Chargebacks claimed by specialty distributors are based on the differentials between product acquisition prices paid by the specialty distributors and lower government contract pricing paid by eligible customers covered under federally qualified programs.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">The amount of the reserve for rebates and chargebacks is based on multiple qualitative and quantitative factors, including the historical and projected utilization levels, historical payment experience, changes in statutory laws and interpretations as well as contractual terms, product pricing (both normal selling prices and statutory or negotiated prices), changes in prescription demand patterns and utilization of the Company’s product through public benefit plans, and the levels of RAPIVAB inventory in the distribution channel. The Company acquires prescription utilization data from third-party suppliers of market research data to the pharmaceutical industry. The Company updates its estimates and assumptions each period and records any necessary adjustments to its reserves. Settlements of rebates and chargebacks typically occur within nine months from point of sale. To the extent actual rebates and chargebacks differ from the Company’s estimates, additional reserves may be required or reserves may need to be reversed, either of which would impact current period product revenue. </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"><div style="display: inline; font-style: italic;">Discounts and Sales Incentives</div></div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">Discounts and other sales incentives primarily consist of Inventory Management Agreement (“IMA”) Fees. Per contractual agreements with the Company’s specialty distributors, the Company provides an IMA fee based on a percentage of their purchases of RAPIVAB. The IMA fee rates are set forth in individual contracts. The Company tracks sales to these distributors each period and accrues a liability relating to the unpaid portion of these fees by applying the contractual rates to such product sales. </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"><div style="display: inline; font-style: italic;">Product Returns</div></div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">The Company does not record a product return allowance as it does not offer the ability to return goods once a bonafide shipment has been accepted by a specialty distributor. </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"><div style="display: inline; font-style: italic;">Advertising</div></div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">The Company engages in very limited distribution and direct-response advertising when promoting RAPIVAB.</div> <!-- Field: Page; Sequence: 11; Value: 3 --> <div style="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"> </div> <!-- Field: /Page --> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">The Company recorded the following revenues for the three and nine months ended September 30, 2015 and 2014:</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="7" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">Three Months</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="7" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">Nine Months</td> </tr> <tr style="vertical-align: bottom"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">2015</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">2014</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">2015</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: black 1.1pt solid">2014</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 48%; font-size: 10pt; text-align: left">Product sales, net</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right">5,699</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right">—</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right">6,236</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right">—</td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left">Royalty revenue</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">126</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">5</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">1,776</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">1,951</td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; text-indent: -20pt; padding-left: 20pt">Collaborative and other research and development revenues:</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left; text-indent: -10pt; padding-left: 30pt">U.S. Department of Health and Human Services</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">4,582</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">2,937</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">12,788</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">5,323</td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; padding-left: 20pt">Green Cross Corporation</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">132</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">—</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">132</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">—</td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left; padding-left: 20pt">Shionogi (Japan)</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">296</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">296</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">888</td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right">888</td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 20pt"><div style=" margin: 0">Seqirus UK Limited</div> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">152</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">—</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">21,835</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">—</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: -10pt; padding-left: 10pt">Total collaborative and other research and development revenues</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">5,162</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">3,233</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">35,643</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: right">6,211</td> <td style="border-bottom: black 1.1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left; padding-bottom: 2.25pt">Total revenues</td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">10,987</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">3,238</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">43,655</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right">8,162</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> </tr> </table> </div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"> </div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;">Research and Development Expenses</div></div></div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">The Company’s research and development costs are charged to expense when incurred. Research and development expenses include all direct and indirect development costs related to the development of the Company’s portfolio of product candidates. Advance payments for goods or services that will be used or rendered for future research and development activities are deferred and capitalized. Such amounts are recognized as expense when the related goods are delivered or the related services are performed. Research and development expenses include, among other items, personnel costs, including salaries and benefits, manufacturing costs, clinical, regulatory, and toxicology services performed by CROs, materials and supplies, and overhead allocations consisting of various administrative and facilities related costs. Most of the Company’s manufacturing and clinical and preclinical studies are performed by third-party CROs. Costs for studies performed by CROs are accrued by the Company over the service periods specified in the contracts and estimates are adjusted, if required, based upon the Company’s on-going review of the level of services actually performed.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">Additionally, the Company has license agreements with third parties, such as Albert Einstein College of Medicine of Yeshiva University (“AECOM”), Industrial Research, Ltd. (“IRL”), and the University of Alabama at Birmingham (“UAB”), which require fees related to sublicense agreements or maintenance fees. The Company expenses sublicense payments as incurred unless they are related to revenues that have been deferred, in which case the expenses are deferred and recognized over the related revenue recognition period. The Company expenses maintenance payments as incurred.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">Deferred collaboration expenses represent sub-license payments, paid to the Company’s academic partners upon receipt of consideration from various commercial partners, and other consideration paid to our academic partners for modification to existing license agreements. These deferred expenses would not have been incurred without receipt of such payments or modifications from the Company’s commercial partners and are being expensed in proportion to the related revenue being recognized. The Company believes that this accounting treatment appropriately matches expenses with the associated revenue. </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;">Stock-Based Compensation</div></div></div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">All share-based payments, including grants of stock option awards and restricted stock unit awards, are recognized in the Company’s Consolidated Statements of Comprehensive Loss based on their fair values. The fair value of stock option awards is estimated using the Black-Scholes option pricing model. The fair value of restricted stock unit awards is based on the grant date closing price of the common stock. Stock-based compensation cost is recognized as expense on a straight-line basis over the requisite service period of the award. In addition, we have outstanding performance-based stock options for which no compensation expense is recognized until “performance” has occurred.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;">Interest Expense and Deferred Financing Costs</div></div></div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">Interest expense for the three months ended September 30, 2015 and 2014 was $1,241 and $1,217, respectively, and for the nine months ended September 30, 2015 and 2014 was $3,862 and $3,684, respectively, and relates to the issuance of the PhaRMA Notes (defined in Note 4). Costs directly associated with the issuance of the PhaRMA Notes have been capitalized and are included in other current assets on the Consolidated Balance Sheets. These costs are being amortized to interest expense over the term of the PhaRMA Notes using the effective interest rate method. Amortization of deferred financing costs included in interest expense was $110 for each of the three months ended September 30, 2015 and 2014, and $329 for each of the nine months ended September 30, 2015 and 2014.</div> <!-- Field: Page; Sequence: 12; Value: 3 --> <div style="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"> </div> <!-- Field: /Page --> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;">Currency Hedge Agreement</div></div></div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"> </div> <div style=" font-size: 10pt; text-align: justify; text-indent: 0.5in; margin: 0">In connection with the issuance by Royalty Sub of the PhaRMA Notes, the Company entered into a Currency Hedge Agreement (defined in Note 4) to hedge certain risks associated with changes in the value of the Japanese yen relative to the U.S. dollar. The Currency Hedge Agreement does not qualify for hedge accounting treatment; therefore, mark-to-market adjustments are recognized in the Company’s Consolidated Statements of Comprehensive Loss. Cumulative mark-to-market adjustments for the nine months ended September 30, 2015 and 2014 resulted in a loss of $793 and a gain of $732, respectively. Mark-to-market adjustments are determined by a third party pricing model that uses quoted prices in markets that are not actively traded and for which significant inputs are observable directly or indirectly, representing Level 2 in the fair value hierarchy as defined by U.S. GAAP. In addition, the Company realized a currency exchange gain of $1,654 during the first nine months of 2015 associated with the exercise of a U.S. Dollar/Japanese yen currency option.</div> <div style=" font-size: 10pt; text-align: justify; text-indent: 0.5in; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">The Company is also required to post collateral in connection with the mark-to-market adjustments based on thresholds defined in the Currency Hedge Agreement. As of September 30, 2015 and December 31, 2014, no hedge collateral was posted under the agreement.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;">Net Loss Per Share</div></div></div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0">Net loss per share is based upon the weighted average number of common shares outstanding during the period. Diluted loss per share is equivalent to basic net loss per share for all periods presented herein because common equivalent shares from unexercised stock options and common shares expected to be issued under the Company’s employee stock purchase plan were anti-dilutive. The calculation of diluted earnings per share for the three months ended September 30, 2015 and 2014 does not include 3,821 and 4,240, respectively, of such potential common shares, as their impact would be anti-dilutive. The calculation of diluted earnings per share for the nine months ended September 30, 2015 and 2014 does not include 3,673 and 3,986, respectively, of such potential common shares, as their impact would be anti-dilutive.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;">Use of Estimates</div></div></div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">The preparation of financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the amounts reported in the financial statements. 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However, the Company will utilize these specialty distributors on a limited basis subsequent to the SUL collaboration as SUL, and other peramivir collaboration partners, will be responsible for commercial sales on a worldwide basis. In addition, in connection with the SUL collaboration, all peramivir sales (i.e., RAPIVAB, RAPIACTA, and PERAMIFLU) will be made by the Company’s partners and the Company will be reliant on these partners to generate sales and remit cash to satisfy receivables.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0">The Company’s primary source of revenue that has an underlying cash flow stream is the reimbursement of RAPIVAB and BCX4430 development expenses earned under cost-plus-fixed-fee contracts with BARDA/HHS and NIAID/HHS, respectively. The Company relies on BARDA/HHS and NIAID/HHS to reimburse predominantly all of the development costs for its RAPIVAB and BCX4430 programs. Accordingly, reimbursement of these expenses represents a significant portion of the Company’s collaborative and other research and development revenues. The completion (as with the June 30, 2014 BARDA/HHS peramivir development contract) or termination of the NIAID/HHS and BARDA/HHS BCX4430 contracts could negatively impact the Company’s future Consolidated Statements of Comprehensive Loss and Cash Flows. In addition, the Company also recognizes royalty revenue from the net sales of RAPIACTA by Shionogi; however, the underlying cash flow from these royalty payments goes directly to pay the interest, and then the principal, on the Company’s non-recourse notes payable. Payment of the interest and the ultimate repayment of principal of these notes will be entirely funded by future royalty payments derived from net sales of RAPIACTA. 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The Company deposits excess cash with major financial institutions in the United States. Balances may exceed the amount of insurance provided on such deposits. The Company believes it has established guidelines for investment of its excess cash relative to diversification and maturities that maintain safety and liquidity. To minimize the exposure due to adverse shifts in interest rates, the Company maintains a portfolio of investments with an average maturity of approximately 18 months or less. Other than product sale and collaborative partner receivables discussed above, the majority of the Company’s receivables from collaborations are due from the U.S. Government, for which there is no assumed credit risk.</div> <!-- Field: Page; Sequence: 13; Value: 3 --> <div style="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"> </div> <!-- Field: /Page --> <div style=" font-size: 10pt; text-align: justify; margin: 0pt 0 0pt 0.25in"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;">Recent Accounting Pronouncements</div></div></div> <div style=" font-size: 10pt; text-align: justify; margin: 0pt 0 0pt 0.25in"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">In April 2015, the FASB issued ASU No.2015-03, <div style="display: inline; font-style: italic;">Simplifying the Presentation of Debt Issuance Costs</div>. This standard amends existing guidance to require the presentation of debt issuance costs in the balance sheet as a deduction from the carrying amount of the related debt liability instead of a deferred charge. It is effective for annual reporting periods beginning after December 15, 2015. Early adoption is permitted. The Company does not expect this ASU will have a material impact on its consolidated financial statements.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">In May 2014, the FASB issued ASU 2014-09 – <div style="display: inline; font-style: italic;">Revenue from Contracts with Customers</div>, which provides a single, comprehensive revenue recognition model for all contracts with customers. The core principal of this ASU is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In July 2015, the FASB finalized a one year delay in the effective date of this standard, which will now be effective January 1, 2018; however, early adoption is permitted any time after the original effective date, January 1, 2017. Companies can transition to the new standard under the full retrospective method or the modified retrospective method. The Company is currently evaluating the impact this ASU will have on its consolidated financial statements.</div></div>
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<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;">Note 5 — Stockholders’ Equity</div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">On March 3, 2015, the Company filed a $150,000 shelf registration statement on Form S-3 with the SEC. This shelf registration statement became effective upon filing and allows the Company to sell securities, including common stock, preferred stock, depository shares, stock purchase contracts, warrants and units, from time to time at prices and on terms to be determined at the time of sale.</div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-indent: 27pt; margin: 0pt 0">On November 6, 2013, the Company filed a $125,000 shelf registration statement on Form S-3 with the SEC. This shelf registration statement was declared effective in November 2013 and allows the Company to sell securities, including common stock, preferred stock, depository shares, stock purchase contracts, warrants and units, from time to time at prices and on terms to be determined at the time of sale. The Company has $10,000 remaining under this shelf registration statement.</div></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;">Use of Estimates</div></div></div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"> </div><div style=" font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27pt">The preparation of financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results could differ from those estimates.</div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div>
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EX-101.SCH
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bcrx-20150930.xsd
XBRL SCHEMA FILE
000 - Document - Document And Entity Information
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001 - Statement - Consolidated Balance Sheets (Current Period Unaudited)
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002 - Statement - Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals)
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005 - Disclosure - Note 1 - Significant Accounting Policies
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013 - Disclosure - Note 1 - Significant Accounting Policies (Details Textual)
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014 - Statement - Note 1 - Fair Value of the Company's Investments by Type (Details)
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015 - Statement - Note 1 - Scheduled Maturity for the Company's Investments (Details)
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016 - Statement - Note 1 - Summary of Receivables (Details)
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023 - Disclosure - Note 4 - Royalty Monetization (Details Textual)
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EX-101.CAL
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XBRL CALCULATION FILE
EX-101.DEF
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XBRL DEFINITION FILE
EX-101.LAB
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XBRL LABEL FILE
Agreement [Member]
Represents a License Agreement (the "Agreement") granting rights to develop, manufacture and commercialize RAPIVAB®.
Document And Entity Information
Customer Concentration Risk [Member]
Employee Stock Option [Member]
Note To Financial Statement Details Textual
us-gaap_EmployeeServiceShareBasedCompensationNonvestedAwardsTotalCompensationCostNotYetRecognized
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized
us-gaap_AvailableForSaleSecuritiesDebtSecuritiesNoncurrent
Investments
statementsignificantaccountingpoliciespolicies
statementnote1significantaccountingpoliciestables
statementnote2stockbasedcompensationtables
Sales Revenue, Product Line [Member]
statementnote1fairvalueofthecompanysinvestmentsbytypedetails
statementnote1scheduledmaturityforthecompanysinvestmentsdetails
bcrx_MaturityperiodOfShortTermInvestment
Maturity Period of Short Term Investment
Maturity period of short term investment.
statementnote1summaryofreceivablesdetails
statementnote1inventorydetails
bcrx_LongtermInvestmentMaturityMinimum
Long-term Investment Maturity, Minimum
Represents long term investment maturity minimum.
Amendment Flag
Concentration Risk Benchmark [Axis]
statementnote1summaryofrevenuesdetails
statementnote2stockincentiveplanactivitiesdetails
Concentration Risk Type [Axis]
Vesting [Domain]
statementnote2weightedaverageassumptionsforstockoptionawardsgrantedtoemployeesanddirectorsundertheincentiveplandetails
Employee stock purchase plan sales
Regulatory Support Revenue for Canadian and EU Marketing Approvals, Portion Recognized Ratably Over Expected Period of Involvement [Member]
Represents deferred revenue from upfront payment allocated to the regulatory support for the Canadian and EU marketing approvals, portion to be recognized ratably over the expected period of involvement.
Concentration Risk Benchmark [Domain]
Vesting [Axis]
Notes To Financial Statements
us-gaap_AllocatedShareBasedCompensationExpense
Allocated Share-based Compensation Expense
Plan Name [Domain]
Notes To Financial Statements [Abstract]
us-gaap_IncreaseDecreaseInDeferredRevenue
Deferred revenue
Concentration Risk Type [Domain]
Plan Name [Axis]
Revenue from Sale of Inventory to be Recognized When the Inventory Transfer Is Complete [Member]
Represents deferred revenue from the sale of inventory to be recognized when the inventory transfer is complete.
Minimum [Member]
CSL [Member]
Represents CSL Limited (“CSL”) and its affiliates.
Maximum [Member]
Performance Shares [Member]
Range [Axis]
Range [Domain]
us-gaap_SharebasedCompensationArrangementBySharebasedPaymentAwardAwardVestingRightsPercentage
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage
Document Fiscal Year Focus
us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardAwardVestingPeriod1
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period
Sale of common stock, net
Net loss
Net loss
bcrx_SecuritiesOffered
Securities Offered
Represents securities offered for sale.
Document Fiscal Period Focus
Exercise of stock options
Document Period End Date
us-gaap_IncreaseDecreaseInInterestPayableNet
Interest payable
Investments
bcrx_AveragematurityPeriodOfHighQualityMarketableSecurities
Average Maturity Period of High Quality Marketable Securities
Average maturity period of high quality marketable securities.
Current Fiscal Year End Date
Products and Services [Domain]
us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardNumberOfSharesAuthorized
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized
bcrx_RevenuerecognitionRoyaltyAndMilestoneRevenueRecognized
Revenue Recognition Royalty and Milestone Revenue Recognized
Revenue recognition royalty and milestone revenue recognized.
Products and Services [Axis]
us-gaap_CostsAndExpenses
Total operating expenses
UAB [Member]
UAB
Expenses
AECOM and IRL [Member]
AECOM and IRL
Award Type [Axis]
bcrx_CollaborativeAgreementAdditionalContractValue
Collaborative Agreement Additional Contract Value
Collaborative agreement additional contract value during the period.
Entity Current Reporting Status
Entity Voluntary Filers
US Department of Health and Human Services [Member]
United States department of health and human services.
Entity Filer Category
bcrx_MaturityPeriodOfHighQualityMarketablesecurities
Maturity Period of High Quality Marketable Securities
Represents maturity period of high quality marketable securities.
Document Type
bcrx_CollaborativeAgreementAdjustedContractValue
Collaborative Agreement Adjusted Contract Value
Represents collaborative agreement adjusted contract value.
bcrx_ProceedsFromAwardsForResearchAndDevelopmentContracts
Proceeds from awards for Research and Development Contracts
Represents proceeds from awards for research and development contracts.
Award Date [Axis]
Equity Award [Domain]
Amortization of debt issuance costs
Amortization of Financing Costs
Award Date [Domain]
Estimated Fair Value
Total investments
bcrx_AveragematurityForPortfolioInvestments
Average Maturity for Portfolio Investments
Average maturity for portfolio investments during the period.
Cost of products sold
Royalty Receivable [Member]
Represents royalty receivable.
RAPIVABMember
Repesents RAPIVAB product.
Collateral for Credit [Member]
Restricted cash and cash equivalents required to maintain as collateral for a letter of credit.
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]
Investing activities
Entity Well-known Seasoned Issuer
Stock option awards exercised (in dollars per share)
Prepaid expenses and other current assets
Stock option awards granted (in dollars per share)
Stock option awards cancelled (in dollars per share)
Legal Entity Type of Counterparty [Domain]
Legal Entity of Counterparty, Type [Axis]
Receivables
Trade Accounts Receivable [Member]
Statement [Table]
us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice
Weighted Average Exercise Price (in dollars per share)
Receivable [Domain]
Receivable Type [Axis]
Billed Revenues [Member]
Cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
Unbilled Revenues [Member]
Receivables Billing Status [Domain]
bcrx_DeferredCollaborationExpenseAssets
Deferred collaboration expense
Represents deferred collaboration expense.
Billing Status, Type [Axis]
Restricted cash
Restricted Cash and Cash Equivalents, Current
us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodWeightedAverageGrantDateFairValue
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value
Research and development
Assets
us-gaap_CashAndCashEquivalentsPeriodIncreaseDecrease
(Decrease) Increase in cash and cash equivalents
Income Statement [Abstract]
us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExercisableWeightedAverageExercisePrice
Balance September 30, 2015 (in dollars per share)
us-gaap_InterestExpense
Interest expense
Interest Expense
us-gaap_SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsExercisableWeightedAverageRemainingContractualTerm1
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term
Derivative Instrument [Axis]
Collaborative and other research and development
Collaborative and other research and development during the period.
us-gaap_NetCashProvidedByUsedInFinancingActivitiesContinuingOperations
Net cash provided by financing activities
us-gaap_NetCashProvidedByUsedInInvestingActivitiesContinuingOperations
Net cash (used in) provided by investing activities
Derivative Contract [Domain]
us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardNumberOfSharesAvailableForGrant
Awards Available (in shares)
Balance September 30, 2015 (in shares)
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant
us-gaap_DeferredRevenueAdditions
Deferred Revenue, Additions
us-gaap_NetCashProvidedByUsedInOperatingActivitiesContinuingOperations
Net cash provided by (used in) operating activities
us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardMaximumNumberOfSharesPerEmployee
Share-based Compensation Arrangement by Share-based Payment Award, Maximum Number of Shares Per Employee
us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsForfeituresAndExpirationsInPeriod
Stock option awards cancelled (in shares)
us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber
Options Outstanding (in shares)
Balance September 30, 2015 (in shares)
us-gaap_StockholdersEquity
Total stockholders’ equity
Currency [Domain]
Deferred Revenue Arrangement Type [Axis]
Deferred Revenue [Domain]
us-gaap_TableTextBlock
Notes Tables
bcrx_PaymentsForModificationOfLicenseAgreement
Payments for Modification of License Agreement
Represents payments for modifications of license agreement.
Risk-Free Interest Rate
Preferred stock, shares issued (in shares)
Deferred collaboration expense
Comprehensive Income, Policy [Policy Text Block]
Earnings Per Share, Policy [Policy Text Block]
Preferred stock, shares authorized (in shares)
bcrx_ContractTerm
Contract Term
Period of time between the contract date and its expiration.
Expected Volatility
Preferred stock par value (in dollars per share)
bcrx_StockIssuedDuringPeriodValueForModificationOfLicenseAgreement
Stock Issued During Period, Value, for Modification of License Agreement
Represents stock issued during period value for modification of license agreement.
Expected Life in Years
bcrx_RoyaltyTerm
Royalty Term
Period of time between the date of the Agreement and its expiration.
Inventory
Net inventories
bcrx_AdvanceNoticePeriodForTerminationOfAgreement
Advance Notice Period for Termination of Agreement
Represents advance notice period for termination of agreement.
us-gaap_Revenues
Revenues
Preferred stock, shares outstanding (in shares)
Research and Development Expense, Policy [Policy Text Block]
Common stock, shares outstanding (in shares)
Unrealized gain (loss) on available for sale investments
Maturing in one year or less
CSL Limited [Member
Represents CSL Limited which is a company organized under the laws of Australia.
Stockholders' Equity Note Disclosure [Text Block]
Relationship to Entity [Domain]
Expected Dividend Yield
Income Tax, Policy [Policy Text Block]
Title of Individual [Axis]
Restricted stock unit awards cancelled (in shares)
bcrx_EmployeeServiceShareBasedCompensationNonvestedAwardsCompensationCostExpectedToBeRecognizedYearFour
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Expected to be Recognized Year Four
Employee service share based compensation nonvested awards compensation cost expected to be recognized year four.
bcrx_EmployeeServiceShareBasedCompensationNonvestedAwardsCompensationCostExpectedToBeRecognizedYearFive
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Expected to be Recognized Year Five
Employee service share based compensation nonvested awards compensation cost expected to be recognized year five.
Restricted Cash and Cash Equivalents [Axis]
us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardEquityInstrumentsOtherThanOptionsGrantsInPeriod
Restricted stock unit awards granted (in shares)
bcrx_ShareBasedCompensationArrangementByShareBasedPaymentAwardFirstVestingPeriodAfterGrantDate
Share-based Compensation Arrangement by Share-based Payment Award, First Vesting Period After Grant Date
Share based compensation arrangement by share based payment award first vesting period after grant date.
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]
Cash and Cash Equivalents [Domain]
bcrx_EmployeeServiceShareBasedCompensationNonvestedAwardsCompensationCostExpectedToBeRecognizedYearThree
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Expected to be Recognized Year Three
Employee service share based compensation nonvested awards compensation cost expected to be recognized year three.
bcrx_EmployeeServiceShareBasedCompensationNonvestedAwardsCompensationCostExpectedToBeRecognizedForRemainderOfFiscalYear
Employee Service Share-based Compensation Nonvested Awards Compensation Cost Expected to be Recognized For Remainder of Fiscal Year
Employee service share based compensation nonvested awards compensation cost expected to be recognized for remainder of fiscal year.
us-gaap_ComprehensiveIncomeNetOfTax
Comprehensive loss
bcrx_EmployeeServiceShareBasedCompensationNonvestedAwardsCompensationCostExpectedToBeRecognizedYearTwo
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Expected to be Recognized Year Two
Employee service share based compensation nonvested awards compensation cost expected to be recognized year two.
Royalty Monetization [Text Block]
Royalty monetization.
us-gaap_ReceivablesNetCurrent
Receivables
Additional paid-in capital
Liabilities and Stockholders’ Equity
us-gaap_Assets
Total assets
bcrx_PeriodOfAgreement
Period of Agreement
Represents period of agreement.
bcrx_RenewablePeriodOfAgreement
Renewable Period of Agreement
Represents renewable period of agreement.
Stockholders’ equity:
us-gaap_ReclassificationFromAccumulatedOtherComprehensiveIncomeCurrentPeriodBeforeTax
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax
us-gaap_PaymentsToAcquireProductiveAssets
Acquisitions of furniture and equipment
Legal Entity [Axis]
Corporate Debt Securities [Member]
bcrx_MilestonePaymentMaximum
Milestone Payment Maximum
Represents milestone payment maximum.
us-gaap_PaymentsToAcquireAvailableForSaleSecuritiesDebt
Purchases of investments
Furniture and equipment, net
Entity Registrant Name
Royalty revenue
Royalty revenue
Entity Central Index Key
Entity [Domain]
National Institute of Allergy and Infectious Diseases [Member]
Represents National Institute of Allergy and Infectious Diseases.
Available-for-sale Securities [Table Text Block]
us-gaap_SalesRevenueNet
Total revenues
bcrx_MilestonePaymentMinimum
Milestone Payment Minimum
Represents milestone payment minimum.
Other assets
Entity Common Stock, Shares Outstanding (in shares)
Type of Arrangement and Non-arrangement Transactions [Axis]
bcrx_ExpectedReceivableFromAwardsForResearchAndDevelopmentContracts
Expected Receivable From Awards for Research and Development Contracts
Represents expected receivable from awards for research and development contracts.
Arrangements and Non-arrangement Transactions [Domain]
bcrx_AnnualLicenseFeeMaximum
Annual License Fee Maximum
Represents annual maximum license fee.
Trading Symbol
Scenario [Axis]
Scenario, Unspecified [Domain]
us-gaap_RestrictedCashAndCashEquivalents
Restricted Cash and Cash Equivalents
Operating activities
Sales and maturities of investments
Total current assets
bcrx_AnnualLicenseFeeMinimum
Annual License Fee Minimum
Represent minimum annual license fee.
us-gaap_DisclosureTextBlockAbstract
Notes to Financial Statements
Debt Instrument, Name [Domain]
Debt Instrument [Axis]
Shionogi and Co. Ltd [Member]
Shionogi & Co. Ltd.
Total current liabilities
Stock option awards granted (in shares)
us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodGross
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
bcrx_CollaborativeAndOtherResearchAndDevelopmentRevenues
U.S. Department of Health and Human Services
Represents collaborative and other research and development.
Changes in operating assets and liabilities:
Inventory, Policy [Policy Text Block]
Non-recourse notes payable
Schedule of Revenues from Collaborations [Table Text Block]
Tabular disclosure of schedule of revenues from collaborations.
Counterparty Name [Domain]
Depreciation and amortization
Counterparty Name [Axis]
us-gaap_LiabilitiesAndStockholdersEquity
Total liabilities and stockholders’ equity
us-gaap_ForeignCurrencyTransactionGainLossRealized
Foreign Currency Transaction Gain (Loss), Realized
Accumulated other comprehensive loss
us-gaap_DerivativeLossOnDerivative
Derivative, Loss on Derivative
Accumulated deficit
us-gaap_DerivativeGainOnDerivative
Derivative, Gain on Derivative
Accrued Interest
Represents available for sale securities accrued interest.
Deferred revenue
us-gaap_StockIssuedDuringPeriodSharesEmployeeStockPurchasePlans
Stock Issued During Period, Shares, Employee Stock Purchase Plans
Collaborative and other research and development revenues:
Statement of Financial Position [Abstract]
Stock-based compensation expense
Available For Sale Securities Debt Maturities Fair Value [Table Text Block]
Tabular disclosure of available for sale securities debt maturities fair value.
us-gaap_StockIssuedDuringPeriodSharesStockOptionsExercised
Stock option awards exercised (in shares)
Maturing after one year through two years
Represents available for sale securities debt maturities after one through two years fair value.
Schedule of Receivables from Collaborations [Table Text Block]
Tabular disclosure representing receivables from collaborations.
Statement of Cash Flows [Abstract]
us-gaap_ProceedsFromLicenseFeesReceived
Proceeds from License Fees Received
PhaRMA Notes Member]
Represents PhaRMA notes.
Amortized Cost
JPR Royalty Sub LLC [Member]
Represents JPR Royalty Sub LLC.
Gross Unrealized Losses
Gross Unrealized Gains
us-gaap_DebtInstrumentInterestRateStatedPercentage
Debt Instrument, Interest Rate, Stated Percentage
Research and Development Arrangement, Contract to Perform for Others, Type [Domain]
Research and Development Arrangement, Contract to Perform for Others, Type [Axis]
bcrx_CollaborativeAgreementPeriodOfcontract
Collaborative Agreement Period of Contract
Represents collaborative agreement period of contract.
Product sales, net
Product sales, net
us-gaap_DerivativeForwardExchangeRate1
Derivative, Forward Exchange Rate
Intangible Assets, Finite-Lived, Policy [Policy Text Block]
Collaboration Receivables [Member]
Represents receivables from collaborations for reimbursable research and development costs.
us-gaap_AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount
Weighted average shares outstanding (in shares)
Interest payable
bcrx_PrivatePlacementOfSeniorSecuredNotes
Private Placement of Senior Secured Notes
Represents private placement of senior secured notes.
Deferred Collaborative Revenue [Member]
Represents revenue deferred under collaborative arrangements.
us-gaap_IncreaseDecreaseInInventories
Inventory
Deferred Product Sales [Member]
Deferred revenue related to product sales.
Accrued expenses
Basic and diluted net loss per common share (in dollars per share)
Accounts payable
bcrx_RevenueRecognitionRoyaltyAndMilestoneRevenueRecognizedNet
Revenue Recognition Royalty And Milestone Revenue Recognized, Net
Represents revenue recognition royalty and milestone revenue recognized, net.
Financing activities
Collaborative Arrangement Disclosure [Text Block]
us-gaap_IncreaseDecreaseInRestrictedCash
Change in restricted cash
bcrx_DeferredCollaborationExpenseChangesInOperatingAssetsAndLiabilities
Deferred collaboration expense
Represents deferred collaboration expense.
bcrx_CollaborativeAgreementContractValue
Collaborative Agreement Contract Value
Represents collaborative agreement contract value.
bcrx_MaximumAmountOfCollateralRequiredToPost
Maximum Amount of Collateral Required to Post
Represents maximum amount of collateral required to post.
us-gaap_CollateralAlreadyPostedAggregateFairValue
Collateral Already Posted, Aggregate Fair Value
us-gaap_PaymentsForProceedsFromHedgeInvestingActivities
Payments for (Proceeds from) Hedge, Investing Activities
Revenue Recognition, Policy [Policy Text Block]
Interest and other income
Common stock, $0.01 par value: shares authorized — 200,000; shares issued and outstanding — 73,337 in 2015 and 71,955 in 2014
Receivables, Policy [Policy Text Block]
Investment Type [Axis]
Class of Stock [Axis]
us-gaap_InvestmentsAndCash
Investments and Cash
Common stock, shares issued (in shares)
Significant Accounting Policies [Text Block]
Accounting Policies [Abstract]
Common stock, shares authorized (in shares)
Cash and Cash Equivalents, Policy [Policy Text Block]
Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, Policy [Policy Text Block]
Common stock, par value (in dollars per share)
Revenues
(Loss) gain on foreign currency derivative
Gain (Loss) on Foreign Currency Derivative Instruments Not Designated as Hedging Instruments
us-gaap_IncreaseDecreaseInReceivables
Receivables
Hedging Designation [Domain]
bcrx_RemainingAggregateOfferingPrice
Remaining Aggregate Offering Price
Represents the remaining aggregate offering price of common stock, preferred stock, depository shares, stock purchase contracts, warrants and units.
Not Designated as Hedging Instrument [Member]
Investments [Domain]
Schedule of Inventory, Current [Table Text Block]
bcrx_MaximumAggregateOfferingPrice
Maximum Aggregate Offering Price
Represents the maximum aggregate offering price of common stock, preferred stock, depository shares, stock purchase contracts, warrants and units.
Preferred stock, $0.001 par value; shares authorized — 5,000; no shares issued and outstanding
Currency Hedge Agreement [Member]
Represents the Currency Hedge Agreement to hedge certain risks associated with changes in the value of the Japanese yen relative to the U.S. dollar.
Use of Estimates, Policy [Policy Text Block]
Work in process
Finished Goods
New Accounting Pronouncements, Policy [Policy Text Block]
Hedging Designation [Axis]
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]
Schedule of Share-based Compensation, Activity [Table Text Block]
us-gaap_LossOnSaleOfInvestments
Loss on Sale of Investments
us-gaap_IncreaseDecreaseInPrepaidDeferredExpenseAndOtherAssets
Prepaid expenses and other assets
us-gaap_IncreaseDecreaseInDerivativeAssets
Change in fair value of foreign currency derivative
bcrx_RequiredForeignCurrencyHedgePerDollar
Required Foreign Currency Hedge Per Dollar
The Company is required to maintain a foreign currency hedge per dollar under the agreements governing the PhaRMA Notes.
Foreign Exchange Contract [Member]
bcrx_Interestreserve
Interest Reserve
Represents interest reserve established as part of the royalty monetization.
Royalty Monetization [Member]
Represents the royalty monetization transaction.
Selling, general and administrative
Contingent upon EU Marketing Approval [Member]
Information about the contingent proceed which is upon EU marketing approval.
Statement [Line Items]
Green Cross Corporation [Member]
Represents Green Cross Corporation.
bcrx_TransactionCosts
Transaction Costs
Represents transaction costs associated with royalty monetization.
Base Contract [Member]
The base contract of ASPR/BARDA to support BCX4430 drug manufacturing.
Japan, Yen [Member]
Represents the Japanese Yen.
ASPRBARDA Contract [Member]
The potential value of the ASPR/BARDA Contract.
Additional Development Options [Member]
The additional development options that can be exercised by the Government.
Incentive Plan [Member]
Represents Incentive Plan.
us-gaap_GovernmentContractReceivable
Government Contract Receivable
Unvested Performance Shares [Member]
Represents unvested performance shares.
Employee Stock Purchase Plan [Member]
Employee stock purchase plan, (ESPP).
Description of Company [Policy Text Block]
The description of company policy.
Stock Options and Restricted Stock [Member]
Represents stock options and restricted stock.
Consolidation, Policy [Policy Text Block]
Vest Upon Successful Completion of Specific Development Milestones [Member]
Represents vesting upon successful completion of specific development milestones.
December 2014 [Member]
Represents award date of December 2014.
August 2013 [Member]
Represents award date of August 2013.
Vest 25% Each Year Until Fully Vested [Member]
Represents vest 25% each year until fully vested.
Vest 50% Each Year Until Fully Vested [Member]
Represents vest 50% each year until fully vested.
Other Commitments [Axis]
Certificates of Deposit [Member]
Other Commitments [Domain]
Concentration of Market Risk [Policy Text Block]
Represents concentration of market risk policy.
Interest Expense and Deferred Financing Costs [Policy Text Block]
Represents interest expense and deferred financing costs.
Stock option awards cancelled (in shares)
Share based compensation arrangement by share based payment award options forfeitures in period awards available.
Currency Hedge Agreement [Policy Text Block]
Represents currency hedge agreement policy.
Royalty
Maturing after two years
Represents debt maturities after two years.
Accrued Expenses [Policy Text Block]
Represents accrued expenses policy.
Reclassification, Policy [Policy Text Block]
US Government Agencies Debt Securities [Member]
Non-employee Directors [Member]
Represents non-employee directors of the company.
bcrx_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodAwardsAvailable
Stock option awards granted (in shares)
Represents share based compensation arrangement by share based payment award options grants in period awards available.
bcrx_NumberOfMilestonesaAchieved
Number of Milestones Achieved
Represents the number of milestones achieved.
bcrx_SharebasedCompensationArrangementBySharbasedPaymentAwardAwardsUnvestedPercentage
Share-based Compensation Arrangement by Shar-based Payment Award, Awards Unvested, Percentage
Represents the percentage of performance awards that remain unvested.
us-gaap_DeferredRevenueNoncurrent
Deferred collaboration revenue
Currency [Axis]
bcrx_PercentageOfSalaryToPurchaseCommonStockMaximum
Percentage of Salary to Purchase Common Stock, Maximum
Represents percentage of salary to purchase common stock maximum.
Equity Component [Domain]
Equity Components [Axis]
Investment, Policy [Policy Text Block]
bcrx_NumberOfStockbasedCompensationPlans
Number of Stock-based Compensation Plans
Represents number of stock based compensation plan.
Concentration Risk, Credit Risk, Policy [Policy Text Block]
us-gaap_ConcentrationRiskPercentage1
Concentration Risk, Percentage
bcrx_PercentageOfCarryingAmountInExcessOfFairValue1
Percentage of Carrying Amount in Excess of Fair Value
Represents the percentage of carrying amount in excess of fair value.
us-gaap_PolicyTextBlockAbstract
Accounting Policies
us-gaap_OperatingIncomeLoss
Loss from operations
Accounts payable and accrued expenses
bcrx_PercentageOfCommonStockSharesEnding
Percentage of Common Stock Shares, Ending
Represents percentage of common stock shares ending.
bcrx_PercentageOfCommonStockSharesBeginning
Percentage of Common Stock Shares, Beginning
Represents percentage of common stock shares beginning.
Deferred rent
bcrx_ShareBasedCompensationArrangementBySharbasedPaymentAwardMaximumNumberOfSharesPerEmployeeAmount
Shar-based Compensation Arrangement by Shar-based Payment Award, Maximum Number of Shares Per Employee, Amount
Represents share-based compensation arrangement by share-based payment award maximum value per employee amount.
EX-101.PRE
14
bcrx-20150930_pre.xml
XBRL PRESENTATION FILE
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15
exh2_1.jpg
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