x | Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 |
o | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Delaware | 77-0160744 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
3911 Sorrento Valley Boulevard, Suite 110 San Diego, CA | 92121 (Zip Code) |
(Address of principal executive offices) |
Large Accelerated Filer | x | Accelerated Filer | o | |
Non-Accelerated Filer | o | (Do not check if a smaller reporting company) | Smaller Reporting Company | o |
PART I. FINANCIAL INFORMATION | ||
Condensed Consolidated Balance Sheets as of September 30, 2016 and December 31, 2015 (restated) | ||
Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2016 and 2015 (restated)(Unaudited) | ||
Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2016 and 2015 (restated)(Unaudited) | ||
Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2016 and 2015 (restated)(Unaudited) | ||
PART II. OTHER INFORMATION | ||
ITEM 2. Unregistered Sales of Equity Securities | ||
GLOSSARY OF TERMS AND ABBREVIATIONS | |
Abbreviation | Definition |
2019 Convertible Senior Notes | $245.0 million aggregate principal amount of convertible senior unsecured notes due 2019 |
Amgen | Amgen, Inc. |
AOCI | Accumulated Other Comprehensive Income |
ASC | Accounting Standards Codification |
ASU | Accounting Standards Update |
Company | Ligand Pharmaceuticals Incorporated, including subsidiaries |
CorMatrix | CorMatrix Cardiovascular, Inc. |
CVR | Contingent value right |
CyDex | CyDex Pharmaceuticals, Inc. |
DTA | Deferred Tax Asset |
Amended ESPP | Employee Stock Purchase Plan, as amended and restated |
Eisai | Eisai Incorporated |
EMA | European Medicines Agency |
FASB | Financial Accounting Standards Board |
FDA | Food and Drug Administration |
FSGS | Focal segmental glomerulosclerosis |
GAAP | Generally accepted accounting principles in the United States |
IPO | Initial public offering |
IPR&D | In-Process Research and Development |
Ligand | Ligand Pharmaceuticals Incorporated, including subsidiaries |
LSA | Loan and Security Agreement |
Metabasis | Metabasis Therapeutics, Inc. |
MLA | Master License Agreement |
NOLs | Net Operating Losses |
OMT | OMT, Inc. or Open Monoclonal Technology, Inc. |
Par | Par Pharmaceuticals, Inc. |
Pfizer | Pfizer Inc. |
Retrophin | Retrophin Inc. |
SEC | Securities and Exchange Commission |
Selexis | Selexis, SA |
TPE | Third-party evidence |
VIE | Variable interest entity |
Viking | Viking Therapeutics |
Viking IPO | Viking's initial public offering |
VSOE | Vendor-specific objective evidence |
PART I. | FINANCIAL INFORMATION |
ITEM 1. | FINANCIAL STATEMENTS |
September 30, 2016 | December 31, 2015 restated | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 86,580 | $ | 97,428 | |||
Short-term investments | 37,535 | 102,791 | |||||
Accounts receivable | 6,586 | 6,170 | |||||
Note receivable from Viking Therapeutics | 3,207 | 4,782 | |||||
Inventory | 4,027 | 1,633 | |||||
Other current assets | 2,756 | 1,908 | |||||
Total current assets | 140,691 | 214,712 | |||||
Deferred income taxes | 133,486 | 189,083 | |||||
Investment in Viking Therapeutics | 17,339 | 29,728 | |||||
Intangible assets, net | 207,435 | 48,347 | |||||
Goodwill | 72,359 | 12,238 | |||||
Commercial license rights, net | 25,985 | 8,554 | |||||
Property and equipment, net | 1,826 | 372 | |||||
Other assets | 1,744 | 27 | |||||
Total assets | $ | 600,865 | $ | 503,061 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 2,757 | $ | 4,083 | |||
Accrued liabilities | 6,675 | 5,397 | |||||
Current contingent liabilities | 5,079 | 10,414 | |||||
Current lease exit obligations | — | 934 | |||||
2019 convertible senior notes, net | 210,115 | 201,985 | |||||
Other current liabilities | 1,505 | 8 | |||||
Total current liabilities | 226,131 | 222,821 | |||||
2019 convertible senior notes, net | — | — | |||||
Long-term contingent liabilities | 3,933 | 3,033 | |||||
Other long-term liabilities | 408 | 297 | |||||
Total liabilities | 230,472 | 226,151 | |||||
Commitments and Contingencies | |||||||
Equity component of currently redeemable convertible notes (Note 5) | 32,138 | 39,628 | |||||
Stockholders' equity: | |||||||
Common stock, $0.001 par value; 33,333,333 shares authorized; 20,898,889 and 19,949,012 shares issued and outstanding at September 30, 2016 and December 31, 2015, respectively | 28 | 20 | |||||
Additional paid-in capital | 762,576 | 661,850 | |||||
Accumulated other comprehensive income | 3,652 | 4,903 | |||||
Accumulated deficit | (428,001 | ) | (429,491 | ) | |||
Total stockholders' equity attributable to Ligand Pharmaceuticals | 338,255 | 237,282 | |||||
Total liabilities and stockholders' equity | $ | 600,865 | $ | 503,061 |
Three months ended | Nine months ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2016 | 2015 restated | 2016 | 2015 restated | ||||||||||||
Revenues: | |||||||||||||||
Royalties | $ | 15,698 | $ | 9,755 | $ | 39,842 | $ | 26,648 | |||||||
Material sales | 4,219 | 6,046 | 13,445 | 20,456 | |||||||||||
License fees, milestones and other revenues | 1,702 | 1,900 | 17,500 | 3,618 | |||||||||||
Total revenues | 21,619 | 17,701 | 70,787 | 50,722 | |||||||||||
Operating costs and expenses: | |||||||||||||||
Cost of sales (1) | 999 | 1,250 | 2,674 | 4,923 | |||||||||||
Amortization of intangibles | 2,706 | 593 | 7,912 | 1,780 | |||||||||||
Research and development | 5,898 | 1,945 | 14,813 | 8,730 | |||||||||||
General and administrative | 6,305 | 4,971 | 19,995 | 18,190 | |||||||||||
Lease exit and termination costs | 245 | 345 | 863 | 786 | |||||||||||
Total operating costs and expenses | 16,153 | 9,104 | 46,257 | 34,409 | |||||||||||
Income from operations | 5,466 | 8,597 | 24,530 | 16,313 | |||||||||||
Other (expense) income: | |||||||||||||||
Interest expense, net | (3,116 | ) | (2,930 | ) | (9,172 | ) | (8,875 | ) | |||||||
Increase (decrease) in contingent liabilities | (958 | ) | 2,301 | (2,595 | ) | (4,976 | ) | ||||||||
Gain on deconsolidation of Viking Therapeutics | — | — | — | 28,190 | |||||||||||
Loss from Viking Therapeutics | (1,396 | ) | (2,169 | ) | (14,139 | ) | (3,040 | ) | |||||||
Other income, net | 1,215 | 1,485 | 2,107 | 1,889 | |||||||||||
Total other (expense) income, net | (4,255 | ) | (1,313 | ) | (23,799 | ) | 13,188 | ||||||||
Income before income taxes | 1,211 | 7,284 | 731 | 29,501 | |||||||||||
Income tax benefit (expense) | (160 | ) | 191,881 | 28 | 191,602 | ||||||||||
Income from operations | 1,051 | 199,165 | 759 | 221,103 | |||||||||||
Discontinued operations: | |||||||||||||||
Gain on sale of Oncology Product Line before income taxes | — | — | 1,139 | — | |||||||||||
Income tax expense on discontinued operations | — | — | (408 | ) | — | ||||||||||
Income from discontinued operations | — | — | 731 | — | |||||||||||
Net income including noncontrolling interests: | 1,051 | 199,165 | 1,490 | 221,103 | |||||||||||
Less: Net loss attributable to noncontrolling interests | — | — | — | (2,380 | ) | ||||||||||
Net income | $ | 1,051 | $ | 199,165 | $ | 1,490 | $ | 223,483 | |||||||
Per share amounts attributable to Ligand common shareholders: | |||||||||||||||
Basic earnings per share data(2) | |||||||||||||||
Income from continuing operations | $ | 0.05 | $ | 10.01 | $ | 0.04 | $ | 11.32 | |||||||
Income from discontinued operations | — | — | 0.04 | — | |||||||||||
Net income | $ | 0.05 | $ | 10.01 | $ | 0.07 | $ | 11.32 | |||||||
Diluted earnings per share data (2) | |||||||||||||||
Income from continuing operations | $ | 0.05 | $ | 9.28 | $ | 0.03 | $ | 10.58 | |||||||
Income from discontinued operations | — | — | 0.03 | — | |||||||||||
Net (loss) income | $ | 0.05 | $ | 9.28 | $ | 0.07 | $ | 10.58 | |||||||
Shares used for computation (in thousands) | |||||||||||||||
Basic | 20,887 | 19,887 | 20,806 | 19,741 | |||||||||||
Diluted | 22,997 | 21,460 | 22,742 | 21,122 |
Three months ended | Nine months ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2016 | 2015 restated | 2016 | 2015 restated | ||||||||||||
Net income: | $ | 1,051 | $ | 199,165 | $ | 1,490 | $ | 223,483 | |||||||
Unrealized net gain on available-for-sale securities, net of tax | 978 | (3,059 | ) | 367 | 1,978 | ||||||||||
Less: Reclassification of net realized gains included in net income, net of tax | (1,071 | ) | (606 | ) | (1,670 | ) | (1,591 | ) | |||||||
Comprehensive income | $ | 958 | $ | 195,500 | $ | 187 | $ | 223,870 |
Nine months ended | |||||||
September 30, | |||||||
2016 | 2015 Restated | ||||||
Operating activities | |||||||
Net income including noncontrolling interests | $ | 1,490 | $ | 221,103 | |||
Less: income from discontinued operations | 731 | — | |||||
Income from continuing operations | 759 | 221,103 | |||||
Adjustments to reconcile net income including noncontrolling interests to net cash provided by operating activities: | |||||||
Non-cash change in estimated fair value of contingent liabilities | 2,595 | 4,976 | |||||
Realized gain on sale of short-term investment | (1,776 | ) | (1,988 | ) | |||
Gain on disposal of assets | 183 | — | |||||
Depreciation and amortization | 8,322 | 1,940 | |||||
Amortization of discount on investments, net | 510 | 73 | |||||
Amortization of debt discount and issuance fees | 8,130 | 7,646 | |||||
Stock-based compensation | 13,690 | 9,511 | |||||
Deferred income taxes | 347 | (191,615 | ) | ||||
Accretion of note payable | — | 16 | |||||
Gain on deconsolidation of Viking Therapeutics | — | (28,190 | ) | ||||
Change in fair value of the Viking convertible debt receivable and warrants | (464 | ) | — | ||||
Loss from Viking Therapeutics | 14,139 | 3,040 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | (411 | ) | 7,142 | ||||
Inventory | (2,394 | ) | (158 | ) | |||
Other current assets | (9 | ) | (438 | ) | |||
Other long-term assets | (31 | ) | (546 | ) | |||
Accounts payable and accrued liabilities | (3,079 | ) | (4,993 | ) | |||
Restricted investments | — | 661 | |||||
Deferred revenue | 1,497 | (118 | ) | ||||
Net cash provided by operating activities | 42,008 | 28,062 | |||||
Investing activities | |||||||
Purchase of commercial license rights | (17,695 | ) | (4,030 | ) | |||
Payments to CVR holders and other contingency payments | (7,055 | ) | (4,941 | ) | |||
Purchases of property and equipment | (1,783 | ) | (27 | ) | |||
Cash paid for acquisition, net of cash acquired | (92,504 | ) | — | ||||
Purchase of short-term investments | (73,109 | ) | (111,788 | ) | |||
Purchase of common stock in equity method investment | (1,000 | ) | — | ||||
Purchase of Viking common stock and warrants | (700 | ) | (9,000 | ) | |||
Proceeds from sale of property and equipment | — | 1 | |||||
Proceeds received from repayment of Viking note receivable | 300 | — | |||||
Reduction of cash due to deconsolidation of Viking | — | (247 | ) | ||||
Proceeds from sale of short-term investments | 23,387 | 5,680 | |||||
Proceeds from maturity of short-term investments | 113,694 | 22,967 | |||||
Net cash used in investing activities | (56,465 | ) | (101,385 | ) | |||
Financing activities | |||||||
Net proceeds from stock option exercises and ESPP | 4,608 | 7,379 | |||||
Taxes paid related to net share settlement of equity awards | (999 | ) | — | ||||
Share repurchase | (489 | ) | |||||
Net cash provided by financing activities | 3,609 | 6,890 | |||||
Net decrease in cash and cash equivalents | (10,848 | ) | (66,433 | ) | |||
Cash and cash equivalents at beginning of period | 97,428 | 160,203 | |||||
Cash and cash equivalents at end of period | $ | 86,580 | $ | 93,770 |
Supplemental disclosure of cash flow information | |||||||
Interest paid | $ | 1,838 | $ | 1,822 | |||
Taxes paid | 36 | 19 | |||||
Supplemental schedule of non-cash activity | |||||||
Stock issued for acquisition, net of issuance cost | (77,330 | ) | — | ||||
Unsettled repurchase of common stock | (1,554 | ) | — | ||||
Stock and warrant received for repayment of Viking notes receiveable | 1,200 | — | |||||
Accrued inventory purchases | — | — | |||||
Unrealized gain (loss) on AFS investments | (271 | ) | 3,082 |
Nine months ended September 30, 2015 | |||||||||||
As Reported | Adjustments | As Restated | |||||||||
Income tax benefit | $ | 219,083 | $ | (27,481 | ) | $ | 191,602 | ||||
Net income | 250,964 | (27,481 | ) | 223,483 | |||||||
Comprehensive income | 251,351 | (27,481 | ) | 223,870 | |||||||
Basic earnings per share | 12.71 | (1.39 | ) | 11.32 | |||||||
Diluted earnings per share data | 11.88 | (1.30 | ) | 10.58 | |||||||
Basic | 19,741 | — | 19,741 | ||||||||
Diluted | 21,122 | — | 21,122 |
Three months ended September 30, 2015 | |||||||||||
As Reported | Adjustments | As Restated | |||||||||
Income tax benefit (expense) | $ | 219,362 | $ | (27,481 | ) | $ | 191,881 | ||||
Net income | 226,646 | (27,481 | ) | 199,165 | |||||||
Comprehensive income | 222,981 | (27,481 | ) | 195,500 | |||||||
Basic earnings per share | 11.40 | (1.39 | ) | 10.01 | |||||||
Diluted earnings per share data | 10.56 | (1.28 | ) | 9.28 |
As of December 31, 2015 | |||||||||||
As Reported | Adjustments | As Restated | |||||||||
Deferred income taxes | $ | 216,564 | $ | (27,481 | ) | $ | 189,083 | ||||
Total assets(1) | 530,542 | (27,481 | ) | 503,061 | |||||||
2019 convertible senior notes, net - current | — | 201,985 | 201,985 | ||||||||
Total current liabilities | 20,836 | 201,985 | 222,821 | ||||||||
2019 convertible senior notes, net - long term(1) | 201,985 | (201,985 | ) | — | |||||||
Equity component of currently redeemable convertible notes (Note 5) | — | 39,628 | 39,628 | ||||||||
Additional paid-in capital | 701,478 | (39,628 | ) | 661,850 | |||||||
Accumulated deficit | (402,010 | ) | (27,481 | ) | (429,491 | ) | |||||
Total stockholders' equity | 304,391 | (67,109 | ) | 237,282 | |||||||
Total liabilities and stockholders' equity(1) | 530,542 | (27,481 | ) | 503,061 | |||||||
(1) $3.4 million of unamortized issuance cost was reclassified to debt discount in the concurrently filed 2015 10-K/A form that it is filed after the Company's retrospective adoption of ASU 2015-03, Interest-Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs in Q1 2016. |
As of September 30, 2015 | |||||||||||
As Reported | Adjustments | As Restated | |||||||||
Deferred income taxes | $ | 208,530 | $ | (27,481 | ) | $ | 181,049 | ||||
Total assets | 523,807 | (27,481 | ) | 496,326 | |||||||
Accumulated deficit | (408,351 | ) | (27,481 | ) | (435,832 | ) | |||||
Total stockholders' equity | 294,288 | (27,481 | ) | 266,807 | |||||||
Total liabilities and stockholders' equity | 523,807 | (27,481 | ) | 496,326 |
Three months ended | Nine months ended | ||||||||||
September 30, | September 30, | ||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||
Weighted average shares outstanding: | 20,886,705 | 19,886,877 | 20,805,604 | 19,741,081 | |||||||
Dilutive potential common shares: | |||||||||||
Restricted stock | 134,008 | 63,324 | 102,282 | 55,899 | |||||||
Stock options | 792,474 | 763,856 | 788,106 | 922,051 | |||||||
2019 convertible senior notes | 1,184,092 | 745,591 | 1,046,257 | 402,941 | |||||||
Shares used to compute diluted income per share | 22,997,279 | 21,459,648 | 22,742,249 | 21,121,972 | |||||||
Potentially dilutive shares excluded from calculation due to anti-dilutive effect | 3,540,806 | 3,343,719 | 3,522,063 | 3,803,007 | |||||||
Amortized cost | Gross unrealized gains | Gross unrealized losses | Estimated fair value | ||||||||||||
September 30, 2016 | |||||||||||||||
Short-term investments | |||||||||||||||
Bank deposits | $ | 11,999 | $ | 9 | $ | (2 | ) | $ | 12,006 | ||||||
Corporate bonds | 6,014 | 31 | — | 6,045 | |||||||||||
Commercial paper | 13,096 | 4 | (9 | ) | 13,091 | ||||||||||
Asset backed securities | 63 | — | — | 63 | |||||||||||
Municipal Bonds | 1,778 | 13 | — | 1,791 | |||||||||||
Corporate equity securities | 1,578 | 2,961 | — | 4,539 | |||||||||||
$ | 34,528 | $ | 3,018 | $ | (11 | ) | $ | 37,535 | |||||||
December 31, 2015 | |||||||||||||||
Short-term investments | |||||||||||||||
Bank deposits | $ | 43,043 | $ | — | $ | (4 | ) | $ | 43,039 | ||||||
Corporate bonds | 41,238 | — | (35 | ) | 41,203 | ||||||||||
Commercial paper | 1,747 | — | — | 1,747 | |||||||||||
Asset backed securities | 10,020 | — | (5 | ) | 10,015 | ||||||||||
Corporate equity securities | 1,843 | 4,944 | — | 6,787 | |||||||||||
$ | 97,891 | $ | 4,944 | $ | (44 | ) | $ | 102,791 |
September 30, | December 31, | ||||||
2016 | 2015 | ||||||
Indefinite lived intangible assets | |||||||
Acquired IPR&D | $ | 12,246 | $ | 12,556 | |||
Goodwill | 72,359 | 12,238 | |||||
Definite lived intangible assets | |||||||
Complete technology | 182,577 | 15,267 | |||||
Less: Accumulated amortization | (10,465 | ) | (3,762 | ) | |||
Trade name | 2,642 | 2,642 | |||||
Less: Accumulated amortization | (751 | ) | (652 | ) | |||
Customer relationships | 29,600 | 29,600 | |||||
Less: Accumulated amortization | (8,414 | ) | (7,304 | ) | |||
Total goodwill and other identifiable intangible assets, net | $ | 279,794 | $ | 60,585 |
September 30, | December 31, | ||||||
2016 | 2015 | ||||||
CorMatrix | $ | 17,696 | $ | — | |||
Selexis | 8,601 | 8,602 | |||||
26,297 | 8,602 | ||||||
Less: accumulated amortization | (312 | ) | (48 | ) | |||
Total commercial rights, net | $ | 25,985 | $ | 8,554 |
September 30, | December 31, | ||||||
2016 | 2015 | ||||||
Lab and office equipment | $ | 1,068 | $ | 2,248 | |||
Leasehold improvements | 1,686 | 273 | |||||
Computer equipment and software | 568 | 632 | |||||
3,322 | 3,153 | ||||||
Less accumulated depreciation and amortization | (1,496 | ) | (2,781 | ) | |||
Total property and equipment, net | $ | 1,826 | $ | 372 |
September 30, | December 31, | ||||||
2016 | 2015 | ||||||
Compensation | $ | 2,150 | $ | 1,711 | |||
Professional fees | 640 | 726 | |||||
Amounts owed to former licensees | 980 | 915 | |||||
Royalties owed to third parties | 1,028 | 823 | |||||
Other | 1,877 | 1,222 | |||||
Total accrued liabilities | $ | 6,675 | $ | 5,397 |
Three months ended | Nine months ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Stock-based compensation expense as a component of: | |||||||||||||||
Research and development expenses | $ | 2,845 | $ | 957 | $ | 6,112 | $ | 3,131 | |||||||
General and administrative expenses | 2,486 | 1,879 | 7,578 | 6,380 | |||||||||||
$ | 5,331 | $ | 2,836 | $ | 13,690 | $ | 9,511 |
Three months ended | Nine months ended | ||||||
September 30, | September 30, | ||||||
2016 | 2015 | 2016 | 2015 | ||||
Risk-free interest rate | 1.3% | 2% | 1.5% | 1.7%-2.0% | |||
Dividend yield | — | — | — | — | |||
Expected volatility | 49% | 50% | 50% | 50%-58% | |||
Expected term | 6.7 | 6.5 | 6.6 | 6.6 | |||
Forfeiture rate | 5.0% | 8.5% | 5.0% | 8.5% |
Cash consideration | $ | 96,006 | |
Total share consideration: | |||
Actual number of shares issued | 790 | ||
Multiplied by: Ligand closing share price on January 8, 2016 | $ | 97.92 | |
Total share consideration | 77,373 | ||
Total consideration | $ | 173,379 |
Cash and cash equivalents | $ | 3,504 | |
Accounts receivable | 5 | ||
Income tax receivable | 140 | ||
Prepaid expenses and other current assets | 2 | ||
Deferred tax liabilities, net | (56,114 | ) | |
Intangible asset with finite life - core technology | 167,000 | ||
Liabilities assumed | (1,279 | ) | |
Goodwill | 60,121 | ||
Total consideration | $ | 173,379 |
Three months ended | Nine months ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||
Revenue | $ | 21,619 | $ | 18,824 | $ | 73,263 | $ | 55,795 | ||||||
Net (loss) income | $ | 1,051 | 196,354 | $ | 3,759 | $ | 216,900 | |||||||
Basic (loss) income per share: | $ | 0.05 | $ | 9.87 | $ | 0.18 | $ | 10.99 | ||||||
Diluted (loss) income per share: | $ | 0.05 | $ | 9.15 | $ | 0.17 | $ | 10.27 |
Fair Value Measurements at Reporting Date Using | |||||||||||||||
Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs | Significant Unobservable Inputs | |||||||||||||
Total | (Level 1) | (Level 2) | (Level 3) | ||||||||||||
Assets: | |||||||||||||||
Short-term investments (2) | $ | 37,535 | $ | 4,539 | $ | 32,996 | $ | — | |||||||
Note receivable Viking (3) | 3,207 | — | — | 3,207 | |||||||||||
Investment in warrants (4) | 684 | 684 | — | — | |||||||||||
Total assets | $ | 41,426 | $ | 5,223 | $ | 32,996 | $ | 3,207 | |||||||
Liabilities: | |||||||||||||||
Current contingent liabilities-CyDex (5) | $ | 5,079 | $ | — | $ | — | $ | 5,079 | |||||||
Long-term contingent liabilities-CyDex (5) | 1,634 | — | — | 1,634 | |||||||||||
Long-term contingent liabilities-Metabasis (6) | 2,299 | — | 2,299 | — | |||||||||||
Liability for amounts owed to former licensees(7) | 536 | 536 | — | — | |||||||||||
Total liabilities | $ | 9,548 | $ | 536 | $ | 2,299 | $ | 6,713 |
Fair Value Measurements at Reporting Date Using | |||||||||||||||
Quoted Prices in Active Markets for Identical Assets | Significant Other Observable Inputs * | Significant Unobservable Inputs | |||||||||||||
Total | (Level 1) | (Level 2) | (Level 3) | ||||||||||||
Assets: | |||||||||||||||
Cash equivalents (1) | $ | 3,015 | $ | — | $ | 3,015 | $ | — | |||||||
Short-term investments (2) | 92,775 | 6,786 | 85,989 | — | |||||||||||
Viking note receivable (3) | 4,782 | — | — | 4,782 | |||||||||||
Total assets | $ | 100,572 | $ | 6,786 | $ | 89,004 | $ | 4,782 | |||||||
Liabilities: | |||||||||||||||
Current contingent liabilities-CyDex (5) | $ | 7,812 | $ | — | $ | — | $ | 7,812 | |||||||
Current contingent liabilities-Metabasis (6) | 2,602 | — | 2,602 | — | |||||||||||
Long-term contingent liabilities-Metabasis (6) | 1,355 | — | 1,355 | — | |||||||||||
Long-term contingent liabilities-CyDex (5) | 1,678 | — | — | 1,678 | |||||||||||
Liability for amounts owed to former licensees (7) | 794 | 794 | — | — | |||||||||||
Total liabilities | $ | 14,241 | $ | 794 | $ | 3,957 | $ | 9,490 |
(1) | Highly liquid investments with maturities less than 90 days from the purchase date are recorded as cash equivalents that are classified as Level 2 of the fair value hierarchy, as these investment securities are valued based upon quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market. |
(2) | Investments in equity securities, which the Company received as a result of event-based and upfront payments from licensees, are classified as level 1 as the fair value is determined using quoted market prices in active markets for the same securities. Short-term investments in marketable securities with maturities greater than 90 days are classified as level 2 of the fair value hierarchy, as these investment securities are valued based upon quoted prices for identical or |
(3) | The fair value of the convertible note receivable from Viking was determined using a probability weighted option pricing model using a lattice methodology. The fair value is subjective and is affected by certain significant input to the valuation model such as the estimated volatility of the common stock, which was estimated to be 75% at September 30, 2016. Changes in these assumptions may materially affect the fair value estimate. |
(4) | Investment in warrants, which the Company received as a result of Viking’s partial repayment of the Viking note receivable and the Company’s purchase of Viking common stock and warrants in April 2016, are classified as level 1 as the fair value is determined using quoted market prices in active markets for the same securities. |
(5) | The fair value of the liabilities for CyDex contingent liabilities were determined based on the income approach. To the extent the estimated future income may vary significantly given the long-term nature of the estimate, the Company utilizes a Monte Carlo model. The fair value is subjective and is affected by changes in inputs to the valuation model including management’s estimates of timing and probability of achievement of certain revenue thresholds and developmental and regulatory milestones which may be achieved and affect amounts owed to former license holders and CVR holders. Changes in these assumptions can materially affect the fair value estimate. |
(6) | The liability for CVRs for Metabasis are determined using quoted prices in an market that is not active for the underlying CVR. |
(7) | The liability for amounts owed to former licensees are determined using quoted market prices in active markets for the underlying investment received from a partner, a portion of which is owed to former licensees. |
September 30, 2016 | December 31, 2015 | ||
Annual revenue subject to revenue sharing (1) | $28.0 million | $22.5 million | |
Revenue volatility | 25% | 25% | |
Average probability | 92% | 73% | |
Sales beta | 0.30 | 0.40 | |
Credit rating | BB | BB | |
Equity risk premium | 6% | 6% |
(1) | Revenue subject to revenue sharing represent management’s estimate of the total annual revenue subject to revenue sharing (i.e. annual revenues in excess of $15 million) through December 31, 2016, which is the term of the CVR agreement. |
Assets: | |||
Fair value of level 3 financial instrument assets as of December 31, 2015 | $ | 4,782 | |
Viking note receivable fair market value adjustment | (215 | ) | |
Cash payment received as partial repayment of note receivable | (300 | ) | |
Fair market value of stock received as partial repayment of note receivable | (1,060 | ) | |
Fair value of level 3 financial instrument assets as of September 30, 2016 | $ | 3,207 | |
Liabilities: | |||
Fair value of level 3 financial instrument liabilities as of December 31, 2015 | $ | 9,490 | |
Payments to CVR and other former license holders | (4,413 | ) | |
Fair value adjustments to contingent liabilities | 1,636 | ||
Fair value of level 3 financial instrument liabilities as of September 30, 2016 | $ | 6,713 |
September 30, 2016 | December 31, 2015 | ||||||
2019 Convertible Senior Notes | |||||||
Principal amount outstanding | $ | 245,000 | $ | 245,000 | |||
Unamortized discount | (34,885 | ) | (43,015 | ) | |||
Total notes payable | $ | 210,115 | $ | 201,985 |
Stock Options | Restricted Stock Award | ||||||||||||
Shares | Weighted- Average Exercise Price | Shares | Weighted- Average Grant Date Fair Value | ||||||||||
Balance as of December 31, 2015 | 1,683,341 | $ | 34.23 | 130,749 | $ | 60.36 | |||||||
Granted | 263,489 | 92.09 | 234,855 | 95.31 | |||||||||
Exercised | (130,185 | ) | 34.65 | (53,121 | ) | 93.49 | |||||||
Forfeited | (30,115 | ) | 60.17 | (2,183 | ) | 71.03 | |||||||
Balance as of September 30, 2016 | 1,786,530 | $ | 42.29 | 310,300 | $ | 76.02 |
ITEM 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations |
• | Novartis announced Q3 2016 net sales of Promacta® of $168 million, a $51 million or 44% increase over Q3 2015. Novartis also announced that Promacta is now approved in more than 100 countries. |
• | On September 27, 2016, Amgen announced top-line results of the Phase 3 CLARION trial, which evaluated an investigational regimen of Kyprolis® (carfilzomib), melphalan and prednisone (KMP) versus Velcade® (bortezomib), melphalan and prednisone (VMP) for 54 weeks in patients with newly diagnosed multiple myeloma who were ineligible for hematopoietic stem-cell transplant. The trial did not meet the primary endpoint of superiority in progression-free survival (PFS). A Phase 3 study evaluating Kyprolis in combination with lenalidomide plus dexamethasone (KRd) versus Velcade in combination with lenalidomide plus dexamethasone (VRd) in newly diagnosed multiple myeloma patients, called ENDURANCE, is underway independently by the ECOG-ACRIN Cancer Research Group. |
• | On July 3, 2016, Amgen announced that the European Commission approved an expanded indication for Kyprolis®, to be used in combination with dexamethasone alone, for adult patients with multiple myeloma who have received at least one prior therapy. |
• | Also, Ono Pharmaceuticals, holder of Kyprolis® marketing rights in Japan, announced approval in Japan for treatment of patients with relapsed or refractory multiple myeloma. |
• | Retrophin announced positive top-line results from the Phase 2 DUET study of sparsentan for the treatment of focal segmental glomerulosclerosis. The study achieved statistical significance in the primary efficacy endpoint for the overall sparsentan treatment group, demonstrating a greater than two-fold reduction of proteinuria compared to irbesartan after the eight-week, double-blind treatment period. |
• | Additional data from the Phase 2 DUET study of sparsentan for the treatment of focal segmental glomerulosclerosis will be presented at the late-breaking High-Impact Clinical Trials oral session at the American Society of Nephrology (ASN) Kidney Week 2016. |
• | Lundbeck announced FDA approval of Carnexiv™ (carbamazepine) injection as a short-term replacement therapy for oral carbamazepine formulations in adults with certain seizure types when oral administration is temporarily not feasible. Ligand earned a $1.25 million milestone payment upon approval and is entitled to receive a royalty of 2.75% on net sales of Carnexiv. |
• | Melinta Therapeutics announced that it has submitted NDAs to the FDA for approval of IV and oral Baxdela™ (delafloxacin) for the treatment of patients with acute bacterial skin and skin structure infections (ABSSSI). With the submission, Ligand earned a $1.5 million milestone payment. If approved, Ligand is entitled to receive a 2.5% royalty on net sales of the IV formulation of Baxdela and an additional $1.5 million approval milestone payment. |
• | Baxdela was the subject of several poster presentations at IDWeek 2016, held October 26-30 at the New Orleans Ernest N. Morial Convention Center. |
• | The FDA granted orphan designation to Merck’s Noxafil for treatment of invasive aspergillosis. |
• | Viking Therapeutics announced first patient dosed in the company's Phase 2 clinical trial of VK2809 in patients with primary hypercholesterolemia and non-alcoholic fatty liver disease. |
• | Viking Therapeutics announced positive top-line results from a proof-of-concept study of VK0214 in a mouse model of X-linked adrenoleukodystrophy (X-ALD), showing VK0214 rapidly reduced plasma very long chain fatty acid levels by more than 25% in treated animals compared with vehicle controls (p<0.01). Detailed study results were presented at the 86th Annual Meeting of the American Thyroid Association. |
• | Aldeyra Therapeutics announced plans for ADX-102 (formerly NS2) for the first-ever vehicle-controlled Phase 3 clinical trial in noninfectious anterior uveitis, as well as a Phase 3 clinical trial in Sjögren-Larsson Syndrome. Aldeyra also announced the expected advancement of ADX-102 to a Phase 2b clinical trial in allergic conjunctivitis and the addition of a clinical program in dry eye syndrome. |
• | Eli Lilly presented data on Prexasertib (LY2606368) demonstrating activity in patients with BRCA wild type sporadic high-grade serous ovarian cancer at the European Society for Medical Oncology 2016 Congress. |
• | Merrimack Pharmaceuticals announced the FDA granted seribantumab (MM-121) Fast Track designation for development in patients with heregulin-positive, locally advanced or metastatic non-small cell lung cancer whose disease has progressed following immunotherapy. |
• | Lubris BioPharma announced positive results of a clinical trial that showed recombinant human lubricin demonstrated significant improvement in both signs and symptoms of dry eye disease compared to sodium hyaluronate (HA). Results were published in the September issue of The Ocular Surface. |
• | Opthea announced that the Phase 1 dose-escalation study of OPT-302 met its primary objective demonstrating safety and tolerability as monotherapy and in combination with the current wet AMD standard of care Lucentis®. Opthea is recruiting patients for its Phase 2a dose-expansion trial and expects data by the end of 2016. |
• | Ligand announced worldwide license agreements with Gilead Sciences, F-Star Biotechnology Limited and TeneoBio to use certain or all of the OmniAb platform technologies to discover fully human antibodies. Ligand is eligible to receive annual access payments, sublicensing fees, milestone payments and royalties on future net sales of any antibodies discovered under these licenses. |
• | Ligand announced licensing rights to four programs to Seelos Therapeutics including aplindore for the treatment of various CNS disorders, a CRTH2 antagonist for the treatment of respiratory disorders, a Captisol-enabled™ acetaminophen program for pain and fever management and an H3 receptor antagonist program for the treatment of narcolepsy. Ligand is entitled to receive milestones and net sales royalties ranging from 4% to 10% for the various programs licensed. |
• | Ligand announced a license agreement for its LTP technology with Nucorion Pharmaceuticals, a venture-funded biotechnology company focused on developing anti-cancer and anti-viral agents initially directed to China, of which Ligand is a minority shareholder. Three initial programs fall under the license: NUC-202, a targeted anticancer analog for the treatment of hepatocellular carcinoma; NUC-404, a targeted nucleotide analog for the treatment of hepatitis B; and NUC-101, a targeted nucleotide analog for the treatment of hepatitis C. Ligand is eligible to receive milestones in addition to royalties ranging from 5% to 9% on future net sales of any approved program. |
• | Ligand announced initiation of a Phase 2 clinical trial with LGD-6972 for the treatment of type 2 diabetes mellitus (T2DM). The randomized, double-blind, placebo-controlled study will evaluate the safety and efficacy of LGD-6972, as an adjunct to diet and exercise, in subjects with T2DM whose blood glucose levels are inadequately controlled with metformin. |
• | Results from two Phase 1 clinical trials with LGD-6972 were published in the August issue of the journal Diabetes, Obesity and Metabolism. |
(Dollars in thousands) | Q3 2016 | Q3 2015 | Change | % Change | YTD 2016 | YTD 2015 | Change | % Change | |||||||||||||||||||||
Royalty Revenue | $ | 15,698 | $ | 9,755 | $ | 5,943 | 61 | % | $ | 39,842 | $ | 26,648 | $ | 13,194 | 50 | % | |||||||||||||
Material Sales | 4,219 | 6,046 | (1,827 | ) | (30 | )% | 13,445 | 20,456 | (7,011 | ) | (34 | )% | |||||||||||||||||
License fees, milestones and other revenue | 1,702 | 1,900 | (198 | ) | (10 | )% | 17,500 | 3,618 | 13,882 | 384 | % | ||||||||||||||||||
Total revenue | $ | 21,619 | $ | 17,701 | $ | 3,918 | 22 | % | $ | 70,787 | $ | 50,722 | $ | 20,065 | 40 | % |
(Dollars in thousands) | Q3 2016 | Q3 2015 | Change | YTD 2016 | YTD 2015 | Change | |||||||||||||||||||
Costs of sales | $ | 999 | $ | 1,250 | $ | (251 | ) | $ | 2,674 | $ | 4,923 | $ | (2,249 | ) | |||||||||||
Amortization of intangibles | 2,706 | 593 | 2,113 | 7,912 | 1,780 | 6,132 | |||||||||||||||||||
Research and development | 5,898 | 1,945 | 3,953 | 14,813 | 8,730 | 6,083 | |||||||||||||||||||
General and administrative | 6,305 | 4,971 | 1,334 | 19,995 | 18,190 | 1,805 | |||||||||||||||||||
Lease exit and termination costs | 245 | 345 | (100 | ) | 863 | 786 | 77 | ||||||||||||||||||
Total operating costs and expenses | $ | 16,153 | $ | 9,104 | $ | 7,049 | $ | 46,257 | $ | 34,409 | $ | 11,848 |
(Dollars in thousands) | Q3 2016 | Q3 2015 | Change | YTD 2016 | YTD 2015 | Change | |||||||||||||||||||
Interest expense, net | $ | (3,116 | ) | $ | (2,930 | ) | $ | (186 | ) | $ | (9,172 | ) | $ | (8,875 | ) | $ | (297 | ) | |||||||
Decrease (increase) in contingent liabilities | (958 | ) | 2,301 | (3,259 | ) | (2,595 | ) | (4,976 | ) | 2,381 | |||||||||||||||
Gain on deconsolidation of Viking Therapeutics | — | — | — | — | 28,190 | (28,190 | ) | ||||||||||||||||||
Loss from Viking Therapeutics | (1,396 | ) | (2,169 | ) | 773 | (14,139 | ) | (3,040 | ) | (11,099 | ) | ||||||||||||||
Other income (expense), net | 1,215 | 1,485 | (270 | ) | 2,107 | 1,889 | 218 | ||||||||||||||||||
Total other income (expense), net | $ | (4,255 | ) | $ | (1,313 | ) | $ | (2,942 | ) | $ | (23,799 | ) | $ | 13,188 | $ | (36,987 | ) |
(Dollars in thousands) | Q3 2016 | Q3 2015 | Change | YTD 2016 | YTD 2015 | Change | |||||||||||||||||||
Income (loss) before income taxes | $ | 1,211 | $ | 7,284 | $ | (6,073 | ) | $ | 731 | $ | 29,501 | $ | (28,770 | ) | |||||||||||
Income tax benefit (expense) | (160 | ) | 191,881 | (192,041 | ) | 28 | 191,602 | (191,574 | ) | ||||||||||||||||
(Loss) income from operations | 1,051 | 199,165 | (198,114 | ) | 759 | 221,103 | (220,344 | ) | |||||||||||||||||
Effective tax rate | (13.2 | )% | 2,634.3 | % | 3.8 | % | 649.5 | % |
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
ITEM 4. | CONTROLS AND PROCEDURES |
PART II. | OTHER INFORMATION |
ITEM 1A. | RISK FACTORS |
Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Dollar Value of Shares that May Yet Be Purchased Under the Program (in thousands) | ||||||||
July 1 - July 31, 2016 | — | — | — | 199,510 | |||||||
August 1 - August 31, 2016 | — | — | — | 199,510 | |||||||
September 1 - September 30, 2016 | 15,500 | $100.22 | 15,500 | 197,957 | |||||||
Total | 15,500 | $100.22 | 15,500 | 197,957 |
ITEM 6. | EXHIBITS |
Date: | November 14, 2016 | By: | /s/ Matthew Korenberg | |
Matthew Korenberg | ||||
Vice President, Finance and Chief Financial Officer | ||||
Duly Authorized Officer and Principal Financial Officer |
Exhibit Number | Description |
10.1# | Amended & Restated Director Compensation and Stock Ownership Policy |
31.1 | Certification by Principal Executive Officer, Pursuant to Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
31.2 | Certification by Principal Financial Officer, Pursuant to Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
32.1 | Certifications by Principal Executive Officer and Principal Financial Officer, Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
101.INS | XBRL Instance Document |
101.SCH | XBRL Taxonomy Extension Schema Document |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
1. | Cash Compensation. |
a. | Annual Retainer. Each Independent Director shall be eligible to receive an annual retainer of $45,000 for service on the Board. In addition, an Independent Director serving as: |
i. | chairman of the Board shall be eligible to receive an additional annual retainer of $30,000 for such service; |
ii. | chairman of the Audit Committee shall be eligible to receive an additional annual retainer of $20,000 for such service; |
iii. | members (other than the chairman) of the Audit Committee shall be eligible to receive an additional annual retainer of $10,000 for such service; |
iv. | chairman of the Compensation Committee shall be eligible to receive an additional annual retainer of $15,000 for such service; |
v. | members (other than the chairman) of the Compensation Committee shall be eligible to receive an additional annual retainer of $7,500 for such service; |
vi. | chairman of the Nominating and Corporate Governance Committee shall be eligible to receive an additional annual retainer of $10,000 for such service; and |
vii. | members (other than the chairman) of the Nominating and Corporate Governance Committee shall be eligible to receive an additional annual retainer of $5,000 for such service. |
b. | Payment of Cash Compensation. Annual retainer fees shall be paid after each annual meeting of the Company’s stockholders in advance for the upcoming year of service and shall be prorated for the period of the year served for Independent Directors who are elected or appointed to the Board at a time other than the date of the annual meeting of the Company’s stockholders; provided, however, that an Independent Director may elect in writing prior to the date of an annual meeting to receive all or a portion of his annual retainer fee in the form of such number of fully vested shares of the Company’s common stock as is equal to (i) the amount of the annual retainer the Independent Director has elected to receive in the form of shares of the Company’s common stock, divided by (ii) the closing price per share of the Company’s common stock on the Nasdaq Global Market (or such other established stock exchange or national quotation system on which the stock is quoted) on the date of the annual meeting. Committee retainer fees shall also be paid annually after each annual meeting of the Company’s stockholders in advance for the upcoming year of service and shall be prorated for any partial quarters served for Independent Directors who serve on a committee for a partial year. |
2. | Equity Compensation. The Independent Directors shall be granted the following stock awards. The stock awards described below shall be granted under and shall be subject to the terms and provisions of the Company’s 2002 Stock Incentive Plan (the “2002 Plan”) and shall be granted subject to the execution and delivery of award agreements, including attached exhibits, in substantially the same forms previously approved by the Board. |
a. | Initial Stock Awards. A person who is initially elected or appointed to the Board on or after the Restatement Effective Date, and who was or is an Independent Director at the time of such initial election or appointment, shall be eligible to receive the following stock awards on the date of such initial election or appointment (each, an “Initial Stock Award”): |
i. | that number of restricted stock units determined by dividing (A) $[113,000], by (B) the average closing price per share of the Company’s common stock on the Nasdaq Global Market (or such other established stock exchange or national quotation system on which the stock is quoted) for the 30-calendar day period prior to the date of grant; and |
ii. | that number of stock options having a value of $[205,000], calculated on the grant date in accordance with the Black-Scholes option pricing model (utilizing the same assumptions that the Company utilizes in preparation of its financial statements). |
b. | Subsequent Stock Awards. A person who is an Independent Director as of the date of each annual meeting of the Company’s stockholders and who is re-elected for another year of service as an Independent Director at such annual meeting automatically shall be eligible to receive the following stock awards on the date of each such annual meeting of the Company’s stockholders on or after the Restatement Effective Date (each, a “Subsequent Stock Award”): |
i. | that number of restricted stock units determined by dividing (A) $75,000, by (B) the average closing price per share of the Company’s common stock on the Nasdaq Global Market (or such other established stock exchange or national quotation system on which the stock is quoted) for the 30-calendar day period prior to the date of grant; and |
ii. | that number of stock options having a value of $140,000, calculated on the grant date in accordance with the Black-Scholes option pricing model (utilizing the same assumptions that the Company utilizes in preparation of its financial statements). . |
c. | Termination of Employment of Employee Directors. Members of the Board who are employees of the Company or any parent or subsidiary of the Company who subsequently terminate their employment with the Company and any parent or subsidiary of the Company and remain on the Board will not receive any Initial Stock Awards pursuant to clause 2(a) above, but to the extent that they are otherwise eligible, will be eligible to receive, after termination from employment with the Company and any parent or subsidiary of the Company, Subsequent Stock Awards as described in clause 2(b) above. |
d. | Vesting of Stock Awards Granted to Independent Directors. |
i. | Initial Stock Awards granted hereunder shall vest in three (3) equal annual installments on each of the first three (3) anniversaries following the date of grant, subject to the Independent Director’s continuing service on the Board through each such vesting date. |
ii. | Subsequent Stock Awards granted hereunder shall vest in full on the earlier of (A) the date of the annual meeting of the Company’s stockholders next following the grant date (it being understood that the Subsequent Stock Awards shall vest on the date of such annual meeting whether or not the Independent Director is re-elected at such meeting, so long as the Independent Director serves through such meeting) and (B) on the first anniversary of the date of grant, subject to the Independent Director’s continuing service on the Board through each such vesting date. |
iii. | Any stock awards granted hereunder shall vest in full in the event of a Change in Control or a Hostile Take-Over (each as defined in the 2002 Plan) to the extent the Independent Director is serving on the Board at the time of such transaction or in the event an Independent Director ceases to serve on the Board by reason of death or Permanent Disability as defined in the 2002 Plan. |
iv. | Any unvested stock awards will be forfeited to the Company in the event an Independent Director ceases to serve on the Board prior to the vesting of such awards. |
e. | Effect of Termination of Board Service on Stock Options. An Independent Director shall be able to exercise his or her stock options that were vested at the time of his or her cessation of Board service until the first to occur of (i) the third anniversary of the date of his or her cessation of Board service, or (ii) the original expiration date of the term of such stock options. |
f. | Term of Stock Options. Each stock option granted hereunder shall have a term of ten (10) years measured from the date of grant. |
g. | Exercise Price of Stock Options. The exercise price per share of any stock options granted hereunder shall be equal to one hundred percent (100%) of the Fair Market Value (as defined in the 2002 Plan) of the common stock on the date of grant. |
1. | I have reviewed this Quarterly Report on Form 10-Q of Ligand Pharmaceuticals Incorporated; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ John L. Higgins |
John L. Higgins |
Chief Executive Officer |
(Principal Executive Officer) |
1. | I have reviewed this Quarterly Report on Form 10-Q of Ligand Pharmaceuticals Incorporated; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ Matthew Korenberg |
Matthew Korenberg |
Vice President, Finance and Chief Financial Officer |
(Principal Financial Officer) |
(1) | The Report fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. | |||
Date: | November 14, 2016 | /s/ John L. Higgins | ||
John L. Higgins Chief Executive Officer (Principal Executive Officer) |
(1) | The Report fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. | |||
Date: | November 14, 2016 | /s/ Matthew Korenberg | ||
Matthew Korenberg Vice President, Finance and Chief Financial Officer (Principal Financial Officer) |
Document and Entity Information - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Nov. 01, 2016 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | LIGAND PHARMACEUTICALS INC | |
Entity Central Index Key | 0000886163 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 20,900,189 |
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Common stock, par value (USD per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 33,333,333 | 33,333,333 |
Common stock, shares issued | 20,898,889 | 19,949,012 |
Common stock, shares outstanding | 20,898,889 | 19,949,012 |
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
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Statement of Comprehensive Income [Abstract] | ||||
Net income: | $ 1,051 | $ 199,165 | $ 1,490 | $ 223,483 |
Unrealized net gain on available-for-sale securities, net of tax | 978 | (3,059) | 367 | 1,978 |
Less: Reclassification of net realized gains included in net income, net of tax | (1,071) | (606) | (1,670) | (1,591) |
Comprehensive income | $ 958 | $ 195,500 | $ 187 | $ 223,870 |
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Operating activities | ||
Net income including noncontrolling interests | $ 1,490 | $ 221,103 |
Less: income from discontinued operations | 731 | 0 |
Income from continuing operations | 759 | 221,103 |
Adjustments to reconcile net income including noncontrolling interests to net cash provided by operating activities: | ||
Non-cash change in estimated fair value of contingent liabilities | 2,595 | 4,976 |
Realized gain on sale of short-term investment | (1,776) | (1,988) |
Gain on disposal of assets | 183 | 0 |
Depreciation and amortization | 8,322 | 1,940 |
Amortization of discount on investments, net | 510 | 73 |
Amortization of debt discount and issuance fees | 8,130 | 7,646 |
Stock-based compensation | 13,690 | 9,511 |
Deferred income taxes | 347 | (191,615) |
Accretion of note payable | 0 | 16 |
Gain on deconsolidation of Viking Therapeutics | 0 | (28,190) |
Change in fair value of the Viking convertible debt receivable and warrants | (464) | 0 |
Loss from Viking Therapeutics | 14,139 | 3,040 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (411) | 7,142 |
Inventory | (2,394) | (158) |
Other current assets | (9) | (438) |
Other long-term assets | (31) | (546) |
Accounts payable and accrued liabilities | (3,079) | (4,993) |
Restricted investments | 0 | 661 |
Deferred revenue | 1,497 | (118) |
Net cash provided by operating activities | 42,008 | 28,062 |
Investing activities | ||
Purchase of commercial license rights | (17,695) | (4,030) |
Payments to CVR holders and other contingency payments | (7,055) | (4,941) |
Purchases of property and equipment | (1,783) | (27) |
Cash paid for acquisition, net of cash acquired | (92,504) | 0 |
Purchase of short-term investments | (73,109) | (111,788) |
Proceeds from sale of property and equipment | 0 | 1 |
Proceeds received from repayment of Viking note receivable | 300 | 0 |
Reduction of cash due to deconsolidation of Viking | 0 | (247) |
Proceeds from sale of short-term investments | 23,387 | 5,680 |
Proceeds from maturity of short-term investments | 113,694 | 22,967 |
Net cash used in investing activities | (56,465) | (101,385) |
Financing activities | ||
Net proceeds from stock option exercises and ESPP | 4,608 | 7,379 |
Taxes paid related to net share settlement of equity awards | (999) | 0 |
Share repurchase | (489) | |
Net cash provided by financing activities | 3,609 | 6,890 |
Net decrease in cash and cash equivalents | (10,848) | (66,433) |
Cash and cash equivalents at beginning of period | 97,428 | 160,203 |
Cash and cash equivalents at end of period | 86,580 | 93,770 |
Supplemental disclosure of cash flow information | ||
Interest paid | 1,838 | 1,822 |
Taxes paid | 36 | 19 |
Supplemental schedule of non-cash activity | ||
Stock issued for acquisition, net of issuance cost | (77,330) | 0 |
Unsettled repurchase of common stock | (1,554) | 0 |
Stock and warrant received for repayment of Viking notes receiveable | 1,200 | 0 |
Accrued inventory purchases | 0 | 0 |
Unrealized gain (loss) on AFS investments | (271) | 3,082 |
Purchase of Common Stock [Member] | ||
Investing activities | ||
Purchase of Viking common stock and warrants | (1,000) | 0 |
Viking Therapeutics, Inc. | ||
Investing activities | ||
Purchase of Viking common stock and warrants | $ (700) | $ (9,000) |
Basis of Presentation and Significant Accounting Policies |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation and Significant Accounting Policies | Significant Accounting Policies Business Ligand is a biopharmaceutical company with a business model based on developing or acquiring assets which generate royalty, milestone or other passive revenue for the Company and using a lean corporate cost structure. We operate in one business segment: development and licensing of biopharmaceutical assets. Principles of Consolidation The accompanying condensed consolidated financial statements include Ligand and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Basis of Presentation The Company’s accompanying unaudited condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial information. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the financial position and results of operations of the Company and its subsidiaries, have been included. Interim financial results are not necessarily indicative of the results that may be expected for the full year. These financial statements should be read in conjunction with the consolidated financial statements and notes therein included in the Company’s annual report on Form 10-K for the year ended December 31, 2015 filed on November 14, 2016. Upon the occurrence of certain circumstances, holders of the 2019 Convertible Senior Notes may require us to purchase all or a portion of their notes for cash, which may require the use of a substantial amount of cash. If such cash is not available, we may be required to sell other assets or enter into alternate financing arrangements at terms that may or may not be desirable. The existence of the 2019 Convertible Senior Notes and the obligations that we incurred by issuing them may restrict our ability to take advantage of certain future opportunities, such as engaging in future debt or equity financing activities. Restatement The Company is restating its previously issued consolidated financial statements as of and for the year ended December 31, 2015 and the condensed consolidated financial statements as of and for the three and nine months ended September 30, 2015 to correct errors relating to the Company's net operating loss (NOL) carryforward benefits in the United States which resulted in an overstatement of deferred tax assets (DTA). In connection with three acquisitions that were completed prior to February 2010, the Company recognized DTAs for a portion of the NOLs, which included capitalized research and development expenses, obtained from the acquired businesses. From the time of the acquisitions until September 2015, there was a full valuation allowance against all of the Company’s NOLs, including those obtained from the entities acquired. In September 2015, the Company concluded that it was more likely than not that a substantial portion of it deferred tax assets would be realized through future taxable income. As a result, the Company released the majority of its DTA valuation allowance, including $27.5 million related to NOLs recognized as part of the businesses acquired prior to February of 2010. During the quarter ended September 30, 2016, the Company concluded that for accounting purposes the approximately $27.5 million of DTAs that were obtained upon acquiring the businesses prior to February of 2010 did not meet the more likely-than-not criterion for recognition in 2015 and that the related valuation allowance should not have been reversed. As a result, the Company's income tax benefit and net income for the year ended December 31, 2015 and the three and nine month periods ended September 30, 2015 were overstated by $27.5 million each. The Company also recorded adjustments to the consolidated financial statements as part of this restatement relating to the classification of our 2019 Convertible Senior Notes. As of December 31, 2015, the Company's last reported sale price exceeded the 130% threshold described in Note 5 - "Financing Arrangements" and accordingly the 2019 Convertible Senior Notes have been reclassified as a current liability as of December 31, 2015. As a result, the related unamortized discount of $39.6 million previously classified within stockholders' equity was reclassified as temporary equity component of currently redeemable convertible notes on our Consolidated Balance Sheet. The account balances labeled As Reported in the following tables as of December 31, 2015 and as of and for the three and nine months ended September 30, 2015 represent the previously reported amounts as presented in the Company's Annual Report on Form 10-K for the year ended December 31, 2015 and the Quarterly Report on Form 10-Q for the three months ended September 30, 2015, respectively. The effects of these prior period corrections on the statement of operations and comprehensive income are as follows (in thousands except for per share data):
The effects of these prior period corrections on the consolidated balance sheet is as follows:
The effects of these prior period corrections on the condensed consolidated balance sheet is as follows:
The corrections did not have any impact on the company's cash flow statements for any period. Significant Accounting Policies We describe our significant accounting policies in Note 1 to the financial statements in Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2015. There have been no changes to our significant accounting policies during the first nine months of fiscal 2016. Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires the use of estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and the accompanying notes. Actual results may differ from those estimates. Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation. Recent Accounting Pronouncements During the first quarter of 2016, we adopted a new accounting standard, ASU 2015-03, Interest-Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs that amends the presentation for debt issuance costs. see Note 5 for details. In May 2014, the Financial Accounting Standards Board (FASB) issued a new accounting standard that amends the guidance for the recognition of revenue from contracts with customers to transfer goods and services. The FASB has subsequently issued additional clarifying standards to address issues arising from implementation of the new revenue recognition standard. The new revenue recognition standard and clarifying standards are effective for interim and annual periods beginning January 1, 2018, and may be adopted earlier, but not before January 1, 2017. The revenue standards are required to be adopted by taking either a full retrospective or a modified retrospective approach. We are currently evaluating the impact that the revenue standards will have on our consolidated financial statements and determining the transition method that we will apply. In February 2016, the FASB issued a new accounting standard that amends the guidance for the accounting and disclosure of leases. This new standard requires that lessees recognize the assets and liabilities that arise from leases on the balance sheet and disclose qualitative and quantitative information about their leasing arrangements. The new standard is effective for interim and annual periods beginning on January 1, 2019. We are currently evaluating the impact that this new standard will have on our consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation, which identifies areas for simplification involving several aspects of accounting for stock-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows. ASU No. 2016-09 is effective for reporting periods beginning after December 31, 2016. Early adoption is permitted. We are currently assessing the potential impact that the adoption of ASU No. 2016-09 will have in our condensed consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments which requires that expected credit losses relating to financial assets measured on an amortized cost basis and available-for-sale debt securities be recorded through an allowance for credit losses. ASU 2016-13 limits the amount of credit losses to be recognized for available-for-sale debt securities to the amount by which carrying value exceeds fair value and also requires the reversal of previously recognized credit losses if fair value increases. The new standard will be effective for us on January 1, 2020. Early adoption will be available on January 1, 2019. We are currently evaluating the effect that the updated standard will have on our consolidated financial statements. In August 2016 the FASB issued ASU No. 2016-15 Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments. The guidance addresses the classification of cash flows related to (1) debt prepayment or extinguishment costs, (2) settlement of zero-coupon debt instruments or other debt instruments with coupon rates that are insignificant in relation to the effective interest rate of the borrowing, (3) contingent consideration payments made after a business combination, (4) proceeds from the settlement of insurance claims, (5) proceeds from the settlement of corporate-owned life insurance, including bank-owned life insurance, (6) distributions received from equity method investees and (7) beneficial interests in securitization transactions. The guidance also clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. The new guidance will be effective for fiscal years beginning after 15 December 2017, and interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the effect that the updated standard will have on our consolidated financial statements. Income (Loss) Per Share Basic income (loss) per share is calculated by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted income (loss) per share is computed based on the sum of the weighted average number of common shares and potentially dilutive common shares outstanding during the period. Potentially dilutive common shares consist of shares issuable under 2019 convertible senior notes, stock options and restricted stock. 2019 convertible senior notes have a dilutive impact when the average market price of the Company’s common stock exceeds the applicable conversion price of the respective notes. Potentially dilutive common shares from stock options and restricted stock are determined using the average share price for each period under the treasury stock method. In addition, the following amounts are assumed to be used to repurchase shares: proceeds from exercise of stock options; the average amount of unrecognized compensation expense for restricted stock; and estimated tax benefits that will be recorded in additional paid-in capital when expenses related to equity awards become deductible. In loss periods, basic net loss per share and diluted net loss per share are identical because the otherwise dilutive potential common shares become anti-dilutive and are therefore excluded. The following table presents the calculation of weighted average shares used to calculate basic and diluted earnings per share (in thousands):
Subsequent to September 30, 2016, the Company repurchased 20,000 shares of its common stock for $1.9 million in the aggregate. Cash Equivalents Cash equivalents consist of all investments with maturities of three months or less from the date of acquisition. Short-term Investments Short-term investments primarily consist of investments in debt securities that have effective maturities greater than three months and less than twelve months from the date of acquisition. The Company classifies its short-term investments as "available-for-sale". Such investments are carried at fair value, with unrealized gains and losses included in the statement of comprehensive income (loss). The Company determines the cost of investments based on the specific identification method. The following table summarizes the various investment categories at September 30, 2016 and December 31, 2015 (in thousands):
Inventory Inventory, which consists of finished goods, is stated at the lower of cost or market value. The Company determines cost using the first-in, first-out method. Inventory levels are analyzed periodically and written down to net realizable value if it has become obsolete, has a cost basis in excess of its expected net realizable value or is in excess of expected requirements. There were no write downs related to obsolete inventory recorded for the three and nine months ended September 30, 2016 and 2015. Goodwill and Other Identifiable Intangible Assets Goodwill and other identifiable intangible assets consist of the following (in thousands):
The Company tests the carrying value of goodwill in accordance with accounting rules on impairment of goodwill, which require that the Company estimate the fair value of the reporting unit annually, or when impairment indicators exist, and compare such amounts to their respective carrying values to determine if an impairment is required. The Company performed its annual assessment for goodwill impairment for the year ended December 31, 2015, noting no impairment. Commercial License Rights Commercial License Rights consist of the following (in thousands):
Commercial license rights represent a portfolio of future milestone and royalty payment rights acquired from Selexis in April 2013 and April 2015 and CorMatrix in May 2016. Individual commercial license rights acquired are carried at allocated cost and approximate fair value. The carrying value of the license rights will be reduced on a pro-rata basis as revenue is realized over the term of the agreement. Declines in the fair value of individual license rights below their carrying value that are deemed to be other than temporary are reflected in earnings in the period such determination is made. As of September 30, 2016, management does not believe there have been any events or circumstances indicating that the carrying amount of its commercial license rights may not be recoverable. Relationships between the CorMatrix Parties As previously disclosed in Ligand’s filings, Jason Aryeh is a director of both Ligand and CorMatrix. Mr. Aryeh beneficially owns equity of CorMatrix representing less than 1% of CorMatrix’s outstanding equity. Mr. Aryeh recused himself from all of the board’s consideration of the purchase agreement between the Company and CorMatrix, including any financial analysis, the terms of the purchase agreement and the vote to approve the Purchase Agreement and the related transactions. Property and Equipment Property and equipment is stated at cost and consists of the following (in thousands):
Depreciation of equipment is computed using the straight-line method over the estimated useful lives of the assets, which range from three to ten years. Leasehold improvements are amortized using the straight-line method over the shorter of the estimated useful lives or the related lease term. Depreciation expense of $0.1 million was recognized for each of the nine months ended September 30, 2016 and 2015, which is included in operating expenses. Accrued Liabilities Accrued liabilities consist of the following (in thousands):
Contingent Liabilities In connection with the Company’s acquisition of CyDex in January 2011, the Company recorded a contingent liability, for amounts potentially due to holders of the CyDex CVRs and former license holders. The liability is periodically assessed based on events and circumstances related to the underlying milestones, royalties and material sales. Any change in fair value is recorded in the Company’s consolidated statement of operations. The carrying amount of the liability may fluctuate significantly and actual amounts paid under the CVR agreements may be materially different than the carrying amount of the liability. The fair value of the liability at September 30, 2016 and December 31, 2015 was $6.7 million and $9.5 million, respectively. The Company recorded a fair-value adjustment to increase the liability by $1.2 million and $1.6 million for the three and nine months ended September 30, 2016, respectively. The Company paid CyDex CVR holders $1.4 million and $4.4 million for the three and nine months ended September 30, 2016. The Company recorded a fair-value adjustment to increase the liability by $0.9 million and $3.1 million for the three and nine months ended September 30, 2015, respectively. The Company paid CyDex CVR holders $0.8 million and $3.9 million during the three and nine months ended September 30, 2015, respectively. In connection with the Company’s acquisition of Metabasis in January 2010, the Company issued to Metabasis stockholders four tradable CVRs, one CVR from each of four respective series of CVR, for each Metabasis share. The CVRs will entitle Metabasis stockholders to potential cash payments as frequently as every six months as cash is received by the Company from proceeds from the sale or partnering of any of the Metabasis drug development programs, among other triggering events. The fair values of the CVRs are remeasured at each reporting date through the term of the related agreement. Any change in fair value is recorded in the Company’s consolidated statement of operations. The carrying amount of the liability may fluctuate significantly based upon quoted market prices and actual amounts paid under the agreements may be materially different than the carrying amount of the liability. The fair value of the liability was estimated to be $2.3 million and $4.0 million as of September 30, 2016 and December 31, 2015, respectively. The Company recorded a decrease in the liability for Metabasis-related CVRs of $0.2 million and an increase of $1 million for the three and nine months ended September 30, 2016. The Company paid Metabasis CVR holders $2.6 million for the nine months ended September 30, 2016. No payments were made to Metabasis CVR holders for the three months ended September 30, 2016. The Company recorded a decrease in the liability of Metabasis-related CVRs of $3.2 million and an increase of $1.9 million for the three and nine months ended September 30, 2015, respectively. The Company paid Metabasis CVR holders $0.5 million and $0.8 million during the three and nine months ended September 30, 2015. Stock-Based Compensation Stock-based compensation expense for awards to employees and non-employee directors is recognized on a straight-line basis over the vesting period until the last tranche vests. The following table summarizes stock-based compensation expense recorded as components of research and development expenses and general and administrative expenses for the periods indicated (in thousands):
The fair-value for options that were awarded to employees and directors was estimated at the date of grant using the Black-Scholes option valuation model with the following weighted-average assumptions:
Lease Obligations We describe our operating lease obligations in Note 4 to the financial statements in Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2015. As of December 31, 2015, the Company had lease exit obligations of $0.9 million. As of September 30, 2016, the Company no longer records a lease obligation with respect to it's vacated space expiring in June of 2019 as the sublease proceeds offset the estimated lease exist obligation. There were no other significant changes in our operating lease commitments during the first nine months of 2016. Convertible Debt In August 2014, the Company completed a $245.0 million offering of 2019 Convertible Senior Notes, which bear interest at 0.75%. The Company accounted for the 2019 Convertible Senior Notes by separating the liability and equity components of the instrument in a manner that reflects the Company's nonconvertible debt borrowing rate. As a result, the Company assigned a value to the debt component of the 2019 Convertible Senior Notes equal to the estimated fair value of similar debt instruments without the conversion feature, which resulted in the Company recording the debt instrument at a discount. The Company is amortizing the debt discount over the life of the 2019 Convertible Senior Notes as additional non-cash interest expense utilizing the effective interest method. |
Business Combination |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combination | Business Combination On January 8, 2016, the Company acquired substantially all of the assets and liabilities of OMT. OMT is a biotechnology company engaged in the genetic engineering of animals for the generation of human therapeutic antibodies through its OmniAb® technology, which currently offers three transgenic animal platforms for license, including OmniRat®, OmniMouse® and OmniFlic®. The transaction, which was accounted for as a business combination, initially added 16 partnerships to the Company's portfolio and provides the Company with opportunities for further licensing and collaborations in the area. The aggregate acquisition consideration was $173.4 million, consisting of (in thousands, except per share amounts):
The acquisition consideration is subject to certain customary post-closing adjustments up to 15 months from January 8, 2016, in accordance with the terms and subject to the conditions contained in the merger agreement between the Company and OMT. The acquisition consideration was preliminarily allocated to the acquisition date fair values of acquired assets and assumed liabilities as follows (in thousands):
The fair value of the core technology, or OMT's OmniAb technology, was based on the discounted cash flow method that estimated the present value of a hypothetical royalty stream derived from the licensing of the OmniAb technology. These projected cash flows were discounted to present value using a discount rate of 15.5%. The fair value of the core technology is being amortized on a straight-line basis over the estimated useful life of 20 years. The excess of the acquisition date consideration over the fair values assigned to the assets acquired and the liabilities assumed was $60.1 million and was recorded as goodwill, which is not deductible for tax purposes and is primarily attributable to OMT’s potential revenue growth from combining the OMT and Ligand businesses and workforce, as well as the benefits of access to different markets and customers. The purchase price allocations were prepared on a preliminary basis and are subject to change as additional information becomes available concerning the fair value and tax basis of the assets acquired and liabilities assumed. Any measurement period adjustments to the OMT purchase price allocation will be made as soon as practicable but no later than one year from the date of acquisition. The following table presents supplemental pro forma information for the three and nine months ended September 30, 2016 and September 30, 2015, as if the acquisition of OMT had occurred on January 1, 2015 (in thousands except for income per share):
The unaudited pro forma consolidated results include pro forma adjustments that assume the acquisition occurred on January 1, 2015. The primary adjustments include: (i) the $0.3 million and $0.9 million for the three and nine months ended September 30, 2015, respectively, for share based compensation expenses related to the stock awards issued to the retained OMT employees after the acquisition, (ii) additional intangible amortization expense of $2.1 million and $6.3 million was included in the three and nine months ended September 30, 2015, respectively and (iii) a platform license fee of $3.0 million paid by OMT during the nine months ended September 30, 2015. The license agreement was terminated upon acquisition by Ligand. The adjustments also include $2.5 million license revenue recognized by OMT from January 1, 2016 to the acquisition date. The unaudited pro forma consolidated results are not necessarily indicative of what our consolidated results of operations actually would have been had we completed the acquisition on January 1, 2015. In addition, the unaudited pro forma consolidated results do not purport to project the future results of operations of the combined company nor do they reflect the expected realization of any cost savings associated with the acquisition. |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements The Company measures certain financial assets and liabilities at fair value on a recurring basis. Fair value is a market-based measurement that should be determined using assumptions that market participants would use in pricing an asset or liability. The Company establishes a three-level hierarchy to prioritize the inputs used in measuring fair value. The levels are described below with level 1 having the highest level input that is significant to the measurement and level 3 having the lowest: Level 1 - Quoted prices in active markets; Level 2 - Quoted prices for similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active, or Inputs other than the quoted prices in active markets that are observable either directly or indirectly; and Level 3 - Unobservable inputs in which there is little or no market data, which require the Company to develop its own assumptions. The following table provides a summary of the carrying value of assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2016 (in thousands). There were no transfers between Level 1 and Level 2 securities during the nine months ended September 30, 2016:
The following table provides a summary of the assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2015 (in thousands):
The following table represents significant unobservable inputs used in determining the fair value of contingent liabilities assumed in the acquisition of CyDex:
A reconciliation of the level 3 financial instruments as of September 30, 2016 is as follows (in thousands):
Other Fair Value Measurements 2019 Convertible Senior Notes In August 2014, the Company issued $245.0 million aggregate principal amount of its 2019 Convertible Senior Notes. The Company uses a quoted rate in a market that is not active, which is classified as a Level 2 input, to estimate the current fair value of its 2019 Convertible Senior Notes. The estimated fair value of the 2019 Senior Convertible Notes was $357.6 million as of September 30, 2016. The carrying value of the notes does not reflect the market rate. See Note 5 Financing Arrangements for additional information. Viking Therapeutics The Company records its investment in Viking under the equity method of accounting. The investment is subsequently adjusted for the Company’s share of Viking's operating results, and if applicable, cash contributions and distributions. See Note 4 Investment in Viking Therapeutics for additional information. The market value of the Company's investment in Viking was $8.8 million as of September 30, 2016. The carrying value of the investment in Viking does not reflect the market value. |
Investment in Viking Therapeutics |
9 Months Ended |
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Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Investment in Viking Therapeutics | Investment in Viking Therapeutics In 2014, the Company entered into a MLA with Viking to license the rights to five of the Company's programs to Viking. Under the terms of the MLA, no consideration was exchanged upon execution, but rather Viking agreed to issue shares of Viking common stock with an aggregate value of approximately $29.2 million upon consummation of Viking's IPO. As part of this transaction, the Company also extended a $2.5 million convertible loan to Viking under a LSA. As a result of these transactions, the Company determined it held a variable interest in Viking. The Company considered certain criteria in the accounting guidance for VIEs, and determined that Viking was a VIE and Ligand was the primary beneficiary of Viking. As a result, the Company consolidated Viking on its financial statements from May 2014 through May 2015, the effective date of Viking's IPO. The Company recorded 100% of the losses incurred as net loss attributable to noncontrolling interest because it was the primary beneficiary with no equity interest in the VIE. In May 2015, Viking completed the Viking IPO and issued the Company approximately 3.7 million shares of Viking common stock with an aggregate value of $29.2 million based on the IPO price of $8.00 per share. In connection with the Viking IPO, the Company purchased 1.1 million shares of Viking common stock for an aggregate price of $9.0 million at the initial public offering price. Upon completion of Viking’s IPO, the Company determined that Viking was no longer a VIE and the Company did not have any other element of control that would require consolidation of Viking. In May 2015, the Company deconsolidated Viking and began to account for its equity investment in Viking under the equity method and records its proportional share of Viking gains and losses in Loss from Viking Therapeutics in the Company's consolidated statement of operations. The Company owned an aggregate of 31.4% of the outstanding common stock of Viking at September 30, 2016. In January 2016, the Company entered into an amendment to the LSA with Viking to extend the maturity of the convertible loan to May 2017, reduce the interest rate from 5.0% to 2.5%, and extend the lock up period by one year such that the Company may not sell, transfer, or dispose of any Viking securities prior to January 23, 2017. Additionally, upon the consummation of a subsequent capital financing transaction, Viking will be required to repay $1.5 million of the Viking Note obligation to the Company, with at least $0.3 million to be paid in cash and the remaining amount to be paid in the form and at the price of the Viking equity securities sold in the financing transaction. Upon maturity or further payments, the Company may elect to receive equity of Viking common stock or cash equal to 200% of the principal amount plus accrued and unpaid interest. The Company has opted to account for the Viking convertible note receivable at fair value. In April 2016, Viking closed its underwritten public offering of 7.5 million shares of common stock and warrants to purchase up to 7.5 million shares of its common stock at a price of $1.25 per share of its common stock and related warrants. The warrant has an exercise price of $1.50 per share, immediately exercisable and will expire on April 13, 2021. As part of this public offering, the Company purchased 560,000 shares of common stock and warrants to purchase 560,000 shares of Viking's common stock for a total purchase price of $0.7 million. The purchased shares of common stock and warrants are subject to the same terms as the shares issued in this offering. In addition, on April 13, 2016, pursuant to the terms of the amendment to the LSA that was entered in January 2016 between Ligand and Viking, Viking repaid $0.3 million of the convertible notes in cash, and issued the Company 960,000 shares of its common stock and warrants to purchase 960,000 shares of its common stock as repayment of $1.2 million of the convertible notes. The shares received as part of the repayment, like all Viking securities held by the Company, are subject to a lock-up period that ends on January 23, 2017 in accordance with the amended LSA. A gain of $0.2 million representing the fair market value of the warrants is included within other income for the quarter ended September 30, 2016. As of September 30, 2016, the aggregate fair value of the note receivable was $3.2 million. The Company recorded a $0.2 million decrease in the fair value of the Viking convertible note in "Other Income" on its Condensed and Consolidated Statement of Operations for the nine months ended September 30, 2016. See Note 3, Fair Value Measurements for additional details. The Company's ownership in Viking decreased to 32.7% after the public offering and the repayment of the convertible notes. Accordingly, the book value of the Company's equity method investment in Viking decreased by $10.0 million. The resulting net loss was recognized in Loss from Viking Therapeutics in the Company's consolidated statement of operations for the nine months ended September 30, 2016. The Company's ownership in Viking decreased to 31.4% during the third quarter of 2016 resulting in a loss of $0.3 million which was recognized in Loss from Viking Therapeutics in the Company's consolidated statement of operations for the three months ended September 30, 2016. The Company reviews its investment in Viking on a regular basis and assesses whether events, changes in circumstances or the passage of time, in management's judgment, indicate that a loss in the market value of the investment may be other than temporary. This might include, but would not necessarily be limited to, the period of time during which the carrying value of our investment is significantly above the observed market value, a deterioration in Viking's financial condition, or an adverse event relating to its lead clinical programs. The Company has the ability to hold its investment in Viking at the current market value, and we do not believe there was an other-than-temporary impairment for the periods ended September 30, 2016 or December 31, 2015. |
Financing Arrangements |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financing Arrangements | Financing Arrangements 0.75% Convertible Senior Notes Due 2019 In August 2014, the Company issued $245.0 million aggregate principal amount of its 2019 Convertible Senior Notes, resulting in net proceeds of $239.3 million. The 2019 Convertible Senior Notes are convertible into common stock at an initial conversion rate of 13.3251 shares per $1,000 principal amount of convertible notes, subject to adjustment upon certain events, which is equivalent to an initial conversion price of approximately $75.05 per share of common stock. The notes bear cash interest at a rate of 0.75% per year, payable semi-annually. Holders of the 2019 Convertible Senior Notes may convert the notes at any time prior to the close of business on the business day immediately preceding May 15, 2019, under any of the following circumstances: (1) during any fiscal quarter (and only during such fiscal quarter) commencing after December 31, 2014, if, for at least 20 trading days (whether or not consecutive) during the 30 consecutive trading day period ending on the last trading day of the immediately preceding fiscal quarter, the last reported sale price of the Company's common stock on such trading day is greater than 130% of the conversion price on such trading day; (2) during the five business day period immediately following any ten consecutive trading day period, in which the trading price per $1,000 principal amount of notes was less than 98% of the product of the last reported sale price of the Company's common stock on such trading day and the conversion rate on each such trading day; or (3) upon the occurrence of certain specified corporate events as specified in the indenture governing the notes. As of September 30, 2016, the Company's last reported sale price has exceeded the 130% threshold described above and accordingly the Convertible Notes have been classified as a current liability as of September 30, 2016. As a result, the related unamortized discount of $32.1 million was classified as temporary equity component of currently redeemable convertible notes on our Condensed Consolidated Balance Sheet. The determination of whether or not the Convertible Notes are convertible as described above is made each quarter until maturity, conversion or repurchase. It is possible that the Convertible Notes may not be convertible in future periods, in which case the Convertible Notes would be classified as long-term debt, unless one of the other conversion events described above were to occur. On or after May 15, 2019 until the close of business on the second scheduled trading day immediately preceding August 15, 2019, holders of the notes may convert all or a portion of their notes at any time, regardless of the foregoing circumstances. Upon conversion, Ligand must deliver cash to settle the principal and may deliver cash or shares of common stock, at the option of the Company, to settle any premium due upon conversion. In accordance with accounting guidance for debt related to conversion and other options, the Company separately accounted for the debt and equity components of the 2019 Convertible Senior Notes by allocating the $245.0 million total proceeds between the debt component and the embedded conversion option, or equity component, due to Ligand's ability to settle the 2019 Convertible Senior Notes in cash for the principal portion and to settle any premium in cash or common stock, at the Company's election. The debt allocation was performed in a manner that reflected the Company's non-convertible borrowing rate for similar debt of 5.83% derived from independent valuation analysis. The initial debt value of $192.5 million accretes at 5.83% to reach $245.0 million at the maturity date. The equity component of the 2019 Convertible Senior Notes was recognized as a debt discount and represents the difference between the $245.0 million proceeds at issuance of the 2019 Convertible Senior Notes and the fair value of the debt allocation on their respective issuance dates. The debt discount is amortized to interest expense using the effective interest method over the expected life of a similar liability without an equity component. The notes will have a dilutive effect to the extent the average market price per share of common stock for a given reporting period exceeds the conversion price of $75.05 per share. As of September 30, 2016, the “if-converted value” exceeded the principal amount of the 2019 Convertible Senior Notes by $88.2 million. In connection with the issuance of the 2019 Convertible Senior Notes, the Company incurred $5.7 million of issuance costs, which primarily consisted of underwriting, legal and other professional fees. The portions of these costs allocated to the equity components totaling $1.2 million were recorded as a reduction to additional paid-in capital. The portions of these costs allocated to the liability components totaling $4.5 million are recorded net of the liability component on the balance sheet beginning in 2016 in accordance with ASU 2015-03, Interest-Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs. The portions allocated to the liability components are amortized to interest expense using the effective interest method over the expected life of the 2019 Convertible Senior Notes. The Company determined the expected life of the debt discount for the 2019 Convertible Senior Notes to be equal to the original five-year term of the notes. The carrying value of the equity component related to the 2019 Convertible Senior Notes as of September 30, 2016 and December 31, 2015, net of issuance costs, was $51.3 million. Convertible Bond Hedge and Warrant Transactions In August 2014, in connection with the issuance of the 2019 Convertible Senior Notes, to minimize the impact of potential dilution to the Company's common stock upon conversion of such notes, the Company entered into convertible bond hedges and sold warrants covering approximately 3,264,643 shares of its common stock. The convertible bond hedges have an exercise price of $75.05 per share and are exercisable when and if the 2019 Convertible Senior Notes are converted. If upon conversion of the 2019 Convertible Senior Notes, the price of the Company's common stock is above the exercise price of the convertible bond hedges, the counterparties will deliver shares of common stock and/or cash with an aggregate value approximately equal to the difference between the price of common stock at the conversion date and the exercise price, multiplied by the number of shares of common stock related to the convertible bond hedge transaction being exercised. The convertible bond hedges and warrants described below are separate transactions entered into by the Company and are not part of the terms of the 2019 Convertible Senior Notes. Holders of the 2019 Convertible Senior Notes and warrants will not have any rights with respect to the convertible bond hedges. The Company paid $48.1 million for these convertible bond hedges and recorded the amount as a reduction to additional paid-in capital. Concurrently with the convertible bond hedge transactions, the Company entered into warrant transactions whereby it sold warrants to acquire, approximately 3,264,643 shares of common stock with an exercise price of approximately $125.08 per share, subject to certain adjustments. The warrants have various expiration dates ranging from November 13, 2019 to April 22, 2020. The warrants will have a dilutive effect to the extent the market price per share of common stock exceeds the applicable exercise price of the warrants, as measured under the terms of the warrant transactions. The Company received $11.6 million for these warrants and recorded this amount to additional paid-in capital. The common stock issuable upon exercise of the warrants will be in unregistered shares, and the Company does not have the obligation and does not intend to file any registration statement with the SEC registering the issuance of the shares under the warrants. The carrying values and the fixed contractual coupon rates of the Company's financing arrangements as of September 30, 2016 and December 31, 2015 were as follows (in thousands):
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Income Tax |
9 Months Ended |
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Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Tax | Income Tax As of September 30, 2015, the Company concluded that it was more likely than not that a substantial portion of its deferred tax assets would be realized through future taxable income. The Company's income tax provision of $191.9 million and $191.6 million for the three and nine months ended September 30, 2015, respectively, included income tax expense and a discrete income tax benefit related to the release of a majority of the Company’s valuation allowance and various adjustments to its deferred tax assets, including studies validating the Company’s tax attributes and adjustments resulting from the tax return filings during the quarter. The Company's income tax expense from continuing operations for the three months ended September 30, 2016 was $0.2 million, or $0.01 per diluted share. The Company recorded an income tax benefit of $28.0 thousand for the nine months ended September 30, 2016. The Company's income tax expense from discontinued operations for the nine months ended September 30, 2016 was $0.4 million. The Company estimates its annual effective income tax rate for continuing operations to be approximately 42% for 2016, compared to the 509.5% effective income tax rate for 2015. The estimated effective tax rate for 2016 is different from the federal statutory rate primarily as a result of significant permanent book-to-tax differences and state taxes. The permanent differences include non-taxable contingent consideration income (expense) recorded related to the change in market value of contingent liabilities. Any significant contingent consideration expense or income will result in a significantly higher or lower effective tax rate because contingent consideration expense is largely not deductible for tax purposes and contingent consideration income is not taxable. Other permanent differences between financial statement income and taxable income relate to items such as stock compensation, meals and entertainment charges, and compensation of officers. The primary difference in the estimated effective tax rate in 2016 compared to 2015 relates to the release of the Company’s valuation allowance in 2015. The Company maintains a valuation allowance in the amount of $8.9 million against certain U.S. state NOLs, federal NOLs arising from Pre-ASC 718 excess stock compensation benefits and federal research and development tax credits. Each reporting period, the Company evaluates the need for a valuation allowance on our deferred tax assets by jurisdiction and adjusts our estimates as more information becomes available. The Company will reassess the ability to realize the deferred tax assets on a quarterly basis. If it is more likely than not that it will not realize the recognized deferred tax assets, then all or a portion of the valuation allowance may need to be re-established, which would result in a charge to tax expense. Conversely if new events indicate that it is more likely than not that we will realize additional deferred tax assets, then all or a portion of the remaining valuation allowance may be released, which would result in a tax benefit. As of September 30, 2016, the Company had unrecognized tax benefits of approximately $33.5 million related to uncertain tax positions that, if recognized, would result in adjustments to the related deferred tax assets and reduce our annual effective tax rate, subject to the remaining valuation allowance. The Company files income tax returns in the U.S. and in various state jurisdictions with varying statutes of limitations. The Company is no longer subject to income tax examination by tax authorities for years prior to 2011; however, its net operating loss and research credit carry-forwards arising prior to that year are subject to adjustment. It is the Company's policy to recognize interest expense and penalties related to income tax matters as a component of income tax expense. As of September 30, 2016, there was no material accrued interest related to uncertain tax positions. |
Stockholders' Equity |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity | Stockholders’ Equity The Company grants options and awards to employees and non-employee directors pursuant to a stockholder approved stock incentive plan, which is described in further detail in Note 8, Stockholders' Equity, of Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015. The following is a summary of the Company’s stock option and restricted stock activity and related information:
Net cash received from options exercised during the nine months ended September 30, 2016 and 2015 was approximately $4.5 million and $7.3 million, respectively. Tax deductions for stock options and restricted stock which have exceeded stock based compensation expense in previous years have not been recognized by the Company. The Company will monitor the utilization of the net operating losses and recognize the excess tax deduction when that deduction reduces taxes payable. As of September 30, 2016, 951,526 shares were available for future option grants or direct issuance under the Company's 2002 Stock Incentive Plan, as amended. Employee Stock Purchase Plan The Company's Amended ESPP allows participating employees to purchase up to 1,250 shares of Ligand common stock during each offering period, but in no event may a participant purchase more than 1,250 shares of common stock during any calendar year. The length of each offering period is six months, and employees are eligible to participate in the first offering period beginning after their hire date. This plan is described in further detail in Note 8, Stockholders' Equity, of Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015. There were 1,241 shares of common stock issued under the amended ESPP during the nine months ended September 30, 2016. There were no shares of common stock issued under the amended ESPP plan during the nine months ended September 30, 2015. As of September 30, 2016, 71,126 shares were available for future purchases under the Amended ESPP. Issuance of common stock In conjunction with the acquisition of OMT, the Company issued 790,163 shares of its common stock. |
Litigation |
9 Months Ended |
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Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation | Litigation The Company records an estimate of a loss when the loss is considered probable and estimable. Where a liability is probable and there is a range of estimated loss and no amount in the range is more likely than any other number in the range, the Company records the minimum estimated liability related to the claim in accordance with FASB ASC Topic 450 Contingencies. As additional information becomes available, the Company assesses the potential liability related to its pending litigation and revises its estimates. Revisions in the Company's estimates of potential liability could materially impact its results of operations. Securities Litigation In 2012, a federal securities class action and shareholder derivative lawsuit was filed in Pennsylvania alleging that the Company and its CEO assisted various breaches of fiduciary duties based on the Company’s purchase of a licensing interest in a development-stage pharmaceutical program from the Genaera Liquidating Trust in 2010 and the Company’s subsequent sale of half of its interest in the transaction to Biotechnology Value Fund, Inc. Plaintiff filed a second amended complaint in February 2015, which the Company moved to dismiss in March 2015. The district court granted the motion to dismiss on November 11, 2015. The plaintiff has appealed that ruling to the Third Circuit. The Company intends to continue to vigorously defend against the claims against the Company and its CEO. The outcome of the matter is not presently determinable. Paragraph IV Certification by Par Pharmaceuticals On January 7, 2016, the Company received a paragraph IV certification from Par Sterile Products, LLC, a subsidiary of Par Pharmaceuticals, Inc., or Par, advising us that it had filed an ANDA with the FDA seeking approval to market a generic version of Merck’s NOXAFIL-IV product. On October 31, 2016, the parties entered into a consent judgment dismissing all claims, counterclaims, affirmative defenses and demands. The parties have reported to the court that they entered into a confidential settlement agreement, and that they submitted the agreement to the Federal Trade Commission and the United States Department of Justice pursuant to Section 112(a) of the Medicare Prescription Drug, Improvement and Modernization Act of 2003. |
Basis of Presentation and Significant Accounting Policies (Policies) |
9 Months Ended |
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Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying condensed consolidated financial statements include Ligand and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. |
Basis of Presentation | Basis of Presentation The Company’s accompanying unaudited condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial information. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the financial position and results of operations of the Company and its subsidiaries, have been included. Interim financial results are not necessarily indicative of the results that may be expected for the full year. These financial statements should be read in conjunction with the consolidated financial statements and notes therein included in the Company’s annual report on Form 10-K for the year ended December 31, 2015 filed on November 14, 2016. Upon the occurrence of certain circumstances, holders of the 2019 Convertible Senior Notes may require us to purchase all or a portion of their notes for cash, which may require the use of a substantial amount of cash. If such cash is not available, we may be required to sell other assets or enter into alternate financing arrangements at terms that may or may not be desirable. The existence of the 2019 Convertible Senior Notes and the obligations that we incurred by issuing them may restrict our ability to take advantage of certain future opportunities, such as engaging in future debt or equity financing activities. |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires the use of estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and the accompanying notes. Actual results may differ from those estimates. |
Reclassifications | Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements During the first quarter of 2016, we adopted a new accounting standard, ASU 2015-03, Interest-Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs that amends the presentation for debt issuance costs. see Note 5 for details. In May 2014, the Financial Accounting Standards Board (FASB) issued a new accounting standard that amends the guidance for the recognition of revenue from contracts with customers to transfer goods and services. The FASB has subsequently issued additional clarifying standards to address issues arising from implementation of the new revenue recognition standard. The new revenue recognition standard and clarifying standards are effective for interim and annual periods beginning January 1, 2018, and may be adopted earlier, but not before January 1, 2017. The revenue standards are required to be adopted by taking either a full retrospective or a modified retrospective approach. We are currently evaluating the impact that the revenue standards will have on our consolidated financial statements and determining the transition method that we will apply. In February 2016, the FASB issued a new accounting standard that amends the guidance for the accounting and disclosure of leases. This new standard requires that lessees recognize the assets and liabilities that arise from leases on the balance sheet and disclose qualitative and quantitative information about their leasing arrangements. The new standard is effective for interim and annual periods beginning on January 1, 2019. We are currently evaluating the impact that this new standard will have on our consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation, which identifies areas for simplification involving several aspects of accounting for stock-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows. ASU No. 2016-09 is effective for reporting periods beginning after December 31, 2016. Early adoption is permitted. We are currently assessing the potential impact that the adoption of ASU No. 2016-09 will have in our condensed consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments which requires that expected credit losses relating to financial assets measured on an amortized cost basis and available-for-sale debt securities be recorded through an allowance for credit losses. ASU 2016-13 limits the amount of credit losses to be recognized for available-for-sale debt securities to the amount by which carrying value exceeds fair value and also requires the reversal of previously recognized credit losses if fair value increases. The new standard will be effective for us on January 1, 2020. Early adoption will be available on January 1, 2019. We are currently evaluating the effect that the updated standard will have on our consolidated financial statements. In August 2016 the FASB issued ASU No. 2016-15 Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments. The guidance addresses the classification of cash flows related to (1) debt prepayment or extinguishment costs, (2) settlement of zero-coupon debt instruments or other debt instruments with coupon rates that are insignificant in relation to the effective interest rate of the borrowing, (3) contingent consideration payments made after a business combination, (4) proceeds from the settlement of insurance claims, (5) proceeds from the settlement of corporate-owned life insurance, including bank-owned life insurance, (6) distributions received from equity method investees and (7) beneficial interests in securitization transactions. The guidance also clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. The new guidance will be effective for fiscal years beginning after 15 December 2017, and interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the effect that the updated standard will have on our consolidated financial statements. |
Income (Loss) Per Share | Income (Loss) Per Share Basic income (loss) per share is calculated by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted income (loss) per share is computed based on the sum of the weighted average number of common shares and potentially dilutive common shares outstanding during the period. Potentially dilutive common shares consist of shares issuable under 2019 convertible senior notes, stock options and restricted stock. 2019 convertible senior notes have a dilutive impact when the average market price of the Company’s common stock exceeds the applicable conversion price of the respective notes. Potentially dilutive common shares from stock options and restricted stock are determined using the average share price for each period under the treasury stock method. In addition, the following amounts are assumed to be used to repurchase shares: proceeds from exercise of stock options; the average amount of unrecognized compensation expense for restricted stock; and estimated tax benefits that will be recorded in additional paid-in capital when expenses related to equity awards become deductible. In loss periods, basic net loss per share and diluted net loss per share are identical because the otherwise dilutive potential common shares become anti-dilutive and are therefore excluded. |
Cash Equivalents and Short-term Investments | Cash Equivalents Cash equivalents consist of all investments with maturities of three months or less from the date of acquisition. Short-term Investments Short-term investments primarily consist of investments in debt securities that have effective maturities greater than three months and less than twelve months from the date of acquisition. The Company classifies its short-term investments as "available-for-sale". Such investments are carried at fair value, with unrealized gains and losses included in the statement of comprehensive income (loss). The Company determines the cost of investments based on the specific identification method. |
Inventory | Inventory Inventory, which consists of finished goods, is stated at the lower of cost or market value. The Company determines cost using the first-in, first-out method. Inventory levels are analyzed periodically and written down to net realizable value if it has become obsolete, has a cost basis in excess of its expected net realizable value or is in excess of expected requirements. |
Commercial license rights | Commercial license rights represent a portfolio of future milestone and royalty payment rights acquired from Selexis in April 2013 and April 2015 and CorMatrix in May 2016. Individual commercial license rights acquired are carried at allocated cost and approximate fair value. The carrying value of the license rights will be reduced on a pro-rata basis as revenue is realized over the term of the agreement. Declines in the fair value of individual license rights below their carrying value that are deemed to be other than temporary are reflected in earnings in the period such determination is made. |
Property and Equipment | Depreciation of equipment is computed using the straight-line method over the estimated useful lives of the assets, which range from three to ten years. Leasehold improvements are amortized using the straight-line method over the shorter of the estimated useful lives or the related lease term. |
Contingent Liabilities | Contingent Liabilities In connection with the Company’s acquisition of CyDex in January 2011, the Company recorded a contingent liability, for amounts potentially due to holders of the CyDex CVRs and former license holders. The liability is periodically assessed based on events and circumstances related to the underlying milestones, royalties and material sales. Any change in fair value is recorded in the Company’s consolidated statement of operations. The carrying amount of the liability may fluctuate significantly and actual amounts paid under the CVR agreements may be materially different than the carrying amount of the liability. The fair value of the liability at September 30, 2016 and December 31, 2015 was $6.7 million and $9.5 million, respectively. The Company recorded a fair-value adjustment to increase the liability by $1.2 million and $1.6 million for the three and nine months ended September 30, 2016, respectively. The Company paid CyDex CVR holders $1.4 million and $4.4 million for the three and nine months ended September 30, 2016. The Company recorded a fair-value adjustment to increase the liability by $0.9 million and $3.1 million for the three and nine months ended September 30, 2015, respectively. The Company paid CyDex CVR holders $0.8 million and $3.9 million during the three and nine months ended September 30, 2015, respectively. In connection with the Company’s acquisition of Metabasis in January 2010, the Company issued to Metabasis stockholders four tradable CVRs, one CVR from each of four respective series of CVR, for each Metabasis share. The CVRs will entitle Metabasis stockholders to potential cash payments as frequently as every six months as cash is received by the Company from proceeds from the sale or partnering of any of the Metabasis drug development programs, among other triggering events. The fair values of the CVRs are remeasured at each reporting date through the term of the related agreement. Any change in fair value is recorded in the Company’s consolidated statement of operations. The carrying amount of the liability may fluctuate significantly based upon quoted market prices and actual amounts paid under the agreements may be materially different than the carrying amount of the liability. |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation expense for awards to employees and non-employee directors is recognized on a straight-line basis over the vesting period until the last tranche vests. |
Convertible Debt | Convertible Debt In August 2014, the Company completed a $245.0 million offering of 2019 Convertible Senior Notes, which bear interest at 0.75%. The Company accounted for the 2019 Convertible Senior Notes by separating the liability and equity components of the instrument in a manner that reflects the Company's nonconvertible debt borrowing rate. As a result, the Company assigned a value to the debt component of the 2019 Convertible Senior Notes equal to the estimated fair value of similar debt instruments without the conversion feature, which resulted in the Company recording the debt instrument at a discount. The Company is amortizing the debt discount over the life of the 2019 Convertible Senior Notes as additional non-cash interest expense utilizing the effective interest method. |
Basis of Presentation and Significant Accounting Policies (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restatement to Prior Year Income | The effects of these prior period corrections on the statement of operations and comprehensive income are as follows (in thousands except for per share data):
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Summary of computation of basic and diluted net income (loss) per share | The following table presents the calculation of weighted average shares used to calculate basic and diluted earnings per share (in thousands):
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Summary of investment categories | The following table summarizes the various investment categories at September 30, 2016 and December 31, 2015 (in thousands):
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Summary of goodwill and other identifiable intangible assets | Goodwill and other identifiable intangible assets consist of the following (in thousands):
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Schedule of commercial license rights | Commercial License Rights consist of the following (in thousands):
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Summary of property and equipment | Property and equipment is stated at cost and consists of the following (in thousands):
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Summary of accrued liabilities | Accrued liabilities consist of the following (in thousands):
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Schedule for accounting for share-based compensation | The following table summarizes stock-based compensation expense recorded as components of research and development expenses and general and administrative expenses for the periods indicated (in thousands):
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Summary of fair-value options awarded to employees and directors | The fair-value for options that were awarded to employees and directors was estimated at the date of grant using the Black-Scholes option valuation model with the following weighted-average assumptions:
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Restatement of Previously Reported Balance Sheet Information | The effects of these prior period corrections on the consolidated balance sheet is as follows:
The effects of these prior period corrections on the condensed consolidated balance sheet is as follows:
The corrections did not have any impact on the company's cash flow statements for any period. |
Business Combination (Tables) |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Business Acquisitions by Acquisition, Consideration Transferred | The aggregate acquisition consideration was $173.4 million, consisting of (in thousands, except per share amounts):
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Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | he acquisition consideration was preliminarily allocated to the acquisition date fair values of acquired assets and assumed liabilities as follows (in thousands):
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Schedule of Pro Forma Information | The following table presents supplemental pro forma information for the three and nine months ended September 30, 2016 and September 30, 2015, as if the acquisition of OMT had occurred on January 1, 2015 (in thousands except for income per share):
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Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of the assets and liabilities measured at fair value on recurring basis | The following table provides a summary of the carrying value of assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2016 (in thousands). There were no transfers between Level 1 and Level 2 securities during the nine months ended September 30, 2016:
The following table provides a summary of the assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2015 (in thousands):
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CyDex Acquisition | The following table represents significant unobservable inputs used in determining the fair value of contingent liabilities assumed in the acquisition of CyDex:
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Reconciliation of level 3 financial instruments | A reconciliation of the level 3 financial instruments as of September 30, 2016 is as follows (in thousands):
|
Financing Arrangements (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of carrying values and coupon rates on financing arrangements | The carrying values and the fixed contractual coupon rates of the Company's financing arrangements as of September 30, 2016 and December 31, 2015 were as follows (in thousands):
|
Stockholders' Equity (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock option plan activity | The following is a summary of the Company’s stock option and restricted stock activity and related information:
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Restricted stock activity | The following is a summary of the Company’s stock option and restricted stock activity and related information:
|
Basis of Presentation and Significant Accounting Policies (Narrative) (Details) |
1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|---|
Jan. 31, 2010
right
|
Sep. 30, 2016
USD ($)
shares
|
Sep. 30, 2015
USD ($)
shares
|
Sep. 30, 2016
USD ($)
segment
shares
|
Sep. 30, 2015
USD ($)
shares
|
Dec. 31, 2015
USD ($)
|
Aug. 31, 2014
USD ($)
|
|
Property, Plant and Equipment [Line Items] | |||||||
Number of operating segments | segment | 1 | ||||||
Earnings (Loss) Per Share | |||||||
Common shares excluded from computation | shares | 3,540,806 | 3,343,719 | 3,522,063 | 3,803,007 | |||
Cash, Cash Equivalents and Short-term Investments | |||||||
Maturity period of cash and cash equivalents, maximum | 3 months | ||||||
Maturity period of short term investments, minimum | 3 months | ||||||
Inventory, Net [Abstract] | |||||||
Inventory write downs | $ 0 | $ 0 | $ 0 | $ 0 | |||
Property and Equipment | |||||||
Depreciation | 100,000 | 100,000 | |||||
Contingent Liabilities | |||||||
Purchase of commercial license rights | 92,504,000 | 0 | |||||
Lease Obligations | |||||||
Lease exit obligations | 0 | $ 0 | $ 934,000 | ||||
Equipment | Minimum | |||||||
Property and Equipment | |||||||
Estimated useful life of assets | 3 years | ||||||
Equipment | Maximum | |||||||
Property and Equipment | |||||||
Estimated useful life of assets | 10 years | ||||||
Cydex Pharmaceuticals, Inc | |||||||
Contingent Liabilities | |||||||
Fair value of liability | 6,700,000 | $ 6,700,000 | 9,500,000 | ||||
Contingent liability change in amount | (1,200,000) | (900,000) | (1,600,000) | (3,100,000) | |||
Cydex Pharmaceuticals, Inc | Revenue Sharing | |||||||
Contingent Liabilities | |||||||
Purchase of commercial license rights | 1,400,000 | 800,000 | 4,400,000 | 3,900,000 | |||
Metabasis Therapeutics | |||||||
Contingent Liabilities | |||||||
Fair value of liability | 2,300,000 | 2,300,000 | 4,000,000 | ||||
Contingent liability change in amount | (200,000) | (3,200,000) | 1,000,000 | 1,900,000 | |||
Number of contingent value rights | right | 4 | ||||||
Number of contingent value rights per series of contingent value rights | right | 1 | ||||||
Number of contingent value rights issued for each share | right | 4 | ||||||
Contingent value rights, frequency of cash payment | 6 months | ||||||
Contingent liability, cash payment | 0 | $ 500,000 | 2,600,000 | $ 800,000 | |||
2019 convertible senior notes | |||||||
Convertible Debt | |||||||
Principal amount outstanding | $ 245,000,000 | $ 245,000,000 | $ 245,000,000 | ||||
2019 convertible senior notes | Senior Notes | |||||||
Convertible Debt | |||||||
Principal amount outstanding | $ 245,000,000.0 | ||||||
Interest rate | 0.75% | ||||||
Director | |||||||
Relationships between the CorMatrix Parties | |||||||
Mr. Aryeh's owenership percentage in CorMatrix (percent, less than) | 1.00% | 1.00% |
Basis of Presentation and Significant Accounting Policies (Prior Period Corrections of Statement of Income and Comprehensive Income) (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
Dec. 31, 2015 |
Aug. 31, 2014 |
Jan. 31, 2010 |
||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||||||
Amount of valuation allowance released | $ (27,481) | |||||||||||
Deferred tax assets acquired | $ 27,500 | |||||||||||
Income Tax Expense (Benefit) | $ 160 | $ (191,881) | $ (28) | (191,602) | ||||||||
Income Statement Related Disclosures [Abstract] | ||||||||||||
Net income | 1,051 | 199,165 | 1,490 | 223,483 | ||||||||
Comprehensive income | $ 958 | $ 195,500 | $ 187 | $ 223,870 | ||||||||
Basic earnings per share (in usd per share) | [1] | $ 0.05 | $ 10.01 | $ 0.07 | $ 11.32 | |||||||
Diluted earnings per share data (in usd per share) | $ 0.05 | [1] | $ 9.28 | [1] | $ 0.07 | $ 10.58 | [1] | |||||
Basic (in shares) | 20,887,000 | 19,887,000 | 20,806,000 | 19,741,000 | ||||||||
Diluted (in shares) | 22,997,279 | 21,459,648 | 22,742,249 | 21,121,972 | ||||||||
Balance Sheet Related Disclosures [Abstract] | ||||||||||||
Deferred income taxes | $ 133,486 | $ 181,049 | $ 133,486 | $ 181,049 | $ 189,083 | |||||||
Total assets | 600,865 | 496,326 | 600,865 | 496,326 | 503,061 | |||||||
2019 convertible senior notes, net - current | 210,115 | 210,115 | 201,985 | |||||||||
Total current liabilities | 226,131 | 226,131 | 222,821 | |||||||||
2019 convertible senior notes, net - long term | 0 | 0 | 0 | |||||||||
Equity component of currently redeemable convertible notes (Note 5) | 32,138 | 32,138 | 39,628 | |||||||||
Additional paid-in capital | 762,576 | 762,576 | 661,850 | |||||||||
Accumulated deficit | (428,001) | (435,832) | (428,001) | (435,832) | (429,491) | |||||||
Total stockholders' equity | 338,255 | 266,807 | 338,255 | 266,807 | 237,282 | |||||||
Total liabilities and stockholders' equity | 600,865 | 496,326 | 600,865 | 496,326 | 503,061 | |||||||
As Reported | ||||||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||||||
Income Tax Expense (Benefit) | (219,362) | (219,083) | ||||||||||
Income Statement Related Disclosures [Abstract] | ||||||||||||
Net income | 226,646 | 250,964 | ||||||||||
Comprehensive income | $ 222,981 | $ 251,351 | ||||||||||
Basic earnings per share (in usd per share) | $ 11.40 | $ 12.71 | ||||||||||
Diluted earnings per share data (in usd per share) | $ 10.56 | $ 11.88 | ||||||||||
Basic (in shares) | 19,741,000 | |||||||||||
Diluted (in shares) | 21,122,000 | |||||||||||
Balance Sheet Related Disclosures [Abstract] | ||||||||||||
Deferred income taxes | $ 208,530 | $ 208,530 | 216,564 | |||||||||
Total assets | 523,807 | 523,807 | 530,542 | |||||||||
2019 convertible senior notes, net - current | 0 | |||||||||||
Total current liabilities | 20,836 | |||||||||||
2019 convertible senior notes, net - long term | 201,985 | |||||||||||
Equity component of currently redeemable convertible notes (Note 5) | 0 | |||||||||||
Additional paid-in capital | 701,478 | |||||||||||
Accumulated deficit | (408,351) | (408,351) | (402,010) | |||||||||
Total stockholders' equity | 294,288 | 294,288 | 304,391 | |||||||||
Total liabilities and stockholders' equity | 523,807 | 523,807 | 530,542 | |||||||||
Adjustments | ||||||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||||||
Income Tax Expense (Benefit) | (27,481) | |||||||||||
Income Statement Related Disclosures [Abstract] | ||||||||||||
Net income | (27,481) | (27,481) | ||||||||||
Comprehensive income | $ (27,481) | $ (27,481) | ||||||||||
Basic earnings per share (in usd per share) | $ (1.39) | $ (1.39) | ||||||||||
Diluted earnings per share data (in usd per share) | $ (1.28) | $ (1.30) | ||||||||||
Basic (in shares) | 0 | |||||||||||
Diluted (in shares) | 0 | |||||||||||
Balance Sheet Related Disclosures [Abstract] | ||||||||||||
Deferred income taxes | $ (27,481) | $ (27,481) | (27,481) | |||||||||
Total assets | (27,481) | (27,481) | (27,481) | |||||||||
2019 convertible senior notes, net - current | 201,985 | |||||||||||
Total current liabilities | 201,985 | |||||||||||
2019 convertible senior notes, net - long term | (201,985) | |||||||||||
Equity component of currently redeemable convertible notes (Note 5) | 39,628 | |||||||||||
Additional paid-in capital | (39,628) | |||||||||||
Accumulated deficit | (27,481) | (27,481) | (27,481) | |||||||||
Total stockholders' equity | (27,481) | (27,481) | (67,109) | |||||||||
Total liabilities and stockholders' equity | (27,481) | $ (27,481) | $ (27,481) | |||||||||
2019 convertible senior notes | Senior Notes | ||||||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||||||
Percentage of stock price trigger to classify convertible debt as current | 130.00% | |||||||||||
Balance Sheet Related Disclosures [Abstract] | ||||||||||||
2019 convertible senior notes, net - long term | $ 192,500 | |||||||||||
Equity component of currently redeemable convertible notes (Note 5) | $ 51,300 | $ 51,300 | $ 51,300 | |||||||||
Previously Reported Overstatement | ||||||||||||
Income Statement Related Disclosures [Abstract] | ||||||||||||
Net income | $ 27,500 | |||||||||||
10-K [Member] | Adjustments | ||||||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||||||
Income Tax Expense (Benefit) | $ (27,481) | |||||||||||
|
Basis of Presentation and Significant Accounting Policies (Earnings (Loss) Per Share) (Details) - USD ($) $ in Millions |
1 Months Ended | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|---|
Nov. 04, 2016 |
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Summary of computation of basic and diluted net income (loss) per share | |||||
Weighted average shares outstanding: | 20,886,705 | 19,886,877 | 20,805,604 | 19,741,081 | |
Dilutive potential common shares: | |||||
Restricted stock | 134,008 | 63,324 | 102,282 | 55,899 | |
Stock options | 792,474 | 763,856 | 788,106 | 922,051 | |
2019 convertible senior notes | 1,184,092 | 745,591 | 1,046,257 | 402,941 | |
Shares used to compute diluted income per share | 22,997,279 | 21,459,648 | 22,742,249 | 21,121,972 | |
Potentially dilutive shares excluded from calculation due to anti-dilutive effect | 3,540,806 | 3,343,719 | 3,522,063 | 3,803,007 | |
Subsequent Event [Member] | |||||
Dilutive potential common shares: | |||||
Shares repurchased (shares) | 20,000 | ||||
Share repurchased | $ 1.9 |
Basis of Presentation and Significant Accounting Policies (Investment Categories) (Details) - USD ($) $ in Thousands |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Summary of investment categories | ||
Amortized cost | $ 34,528 | $ 97,891 |
Gross unrealized gains | 3,018 | 4,944 |
Gross unrealized losses | (11) | (44) |
Estimated fair value | 37,535 | 102,791 |
Bank deposits | ||
Summary of investment categories | ||
Amortized cost | 11,999 | 43,043 |
Gross unrealized gains | 9 | 0 |
Gross unrealized losses | (2) | (4) |
Estimated fair value | 12,006 | 43,039 |
Corporate bonds | ||
Summary of investment categories | ||
Amortized cost | 6,014 | 41,238 |
Gross unrealized gains | 31 | 0 |
Gross unrealized losses | 0 | (35) |
Estimated fair value | 6,045 | 41,203 |
Commercial paper | ||
Summary of investment categories | ||
Amortized cost | 13,096 | 1,747 |
Gross unrealized gains | 4 | 0 |
Gross unrealized losses | (9) | 0 |
Estimated fair value | 13,091 | 1,747 |
Asset backed securities | ||
Summary of investment categories | ||
Amortized cost | 63 | 10,020 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses | 0 | (5) |
Estimated fair value | 63 | 10,015 |
Municipal Bonds | ||
Summary of investment categories | ||
Amortized cost | 1,778 | |
Gross unrealized gains | 13 | |
Gross unrealized losses | 0 | |
Estimated fair value | 1,791 | |
Corporate equity securities | ||
Summary of investment categories | ||
Amortized cost | 1,578 | 1,843 |
Gross unrealized gains | 2,961 | 4,944 |
Gross unrealized losses | 0 | 0 |
Estimated fair value | $ 4,539 | $ 6,787 |
Basis of Presentation and Significant Accounting Policies (Goodwill and Other Identifiable Intangible Assets) (Details) - USD ($) $ in Thousands |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Summary of Goodwill and Other Identifiable Intangible Assets | ||
Goodwill | $ 72,359 | $ 12,238 |
Total goodwill and other identifiable intangible assets, net | 279,794 | 60,585 |
Complete technology | ||
Summary of Goodwill and Other Identifiable Intangible Assets | ||
Definite lived intangible assets | 182,577 | 15,267 |
Less: Accumulated amortization | (10,465) | (3,762) |
Trade name | ||
Summary of Goodwill and Other Identifiable Intangible Assets | ||
Definite lived intangible assets | 2,642 | 2,642 |
Less: Accumulated amortization | (751) | (652) |
Customer relationships | ||
Summary of Goodwill and Other Identifiable Intangible Assets | ||
Definite lived intangible assets | 29,600 | 29,600 |
Less: Accumulated amortization | (8,414) | (7,304) |
Commercial license rights | ||
Summary of Goodwill and Other Identifiable Intangible Assets | ||
Definite lived intangible assets | 26,297 | 8,602 |
Less: Accumulated amortization | (312) | (48) |
Total goodwill and other identifiable intangible assets, net | 25,985 | 8,554 |
Acquired in-process research and development | ||
Summary of Goodwill and Other Identifiable Intangible Assets | ||
Acquired in-process research and development | 12,246 | 12,556 |
CorMatrix | Commercial license rights | ||
Summary of Goodwill and Other Identifiable Intangible Assets | ||
Definite lived intangible assets | 17,696 | 0 |
Selexis | Commercial license rights | ||
Summary of Goodwill and Other Identifiable Intangible Assets | ||
Definite lived intangible assets | $ 8,601 | $ 8,602 |
Basis of Presentation and Significant Accounting Policies (Property and Equipment) (Details) - USD ($) $ in Thousands |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Summary of Property and equipment | ||
Property and equipment , gross | $ 3,322 | $ 3,153 |
Less accumulated depreciation and amortization | (1,496) | (2,781) |
Total property and equipment, net | 1,826 | 372 |
Lab and office equipment | ||
Summary of Property and equipment | ||
Property and equipment , gross | 1,068 | 2,248 |
Leasehold improvements | ||
Summary of Property and equipment | ||
Property and equipment , gross | 1,686 | 273 |
Computer equipment and software | ||
Summary of Property and equipment | ||
Property and equipment , gross | $ 568 | $ 632 |
Basis of Presentation and Significant Accounting Policies (Accrued Liabilities and Other Long-Term Liabilities) (Details) - USD ($) $ in Thousands |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Accrued Liabilities | ||
Compensation | $ 2,150 | $ 1,711 |
Professional fees | 640 | 726 |
Amounts owed to former licensees | 980 | 915 |
Royalties owed to third parties | 1,028 | 823 |
Other | 1,877 | 1,222 |
Total accrued liabilities | $ 6,675 | $ 5,397 |
Basis of Presentation and Significant Accounting Policies (Accounting for Share-Based Compensation) (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Basis of Presentation [Line Items] | ||||
Share-based compensation expense total | $ 5,331 | $ 2,836 | $ 13,690 | $ 9,511 |
Research and development expenses | ||||
Basis of Presentation [Line Items] | ||||
Share-based compensation expense total | 2,845 | 957 | 6,112 | 3,131 |
General and administrative expenses | ||||
Basis of Presentation [Line Items] | ||||
Share-based compensation expense total | $ 2,486 | $ 1,879 | $ 7,578 | $ 6,380 |
Basis of Presentation and Significant Accounting Policies (Fair Value Valuation Assumptions) (Details) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Summary of fair-value options awarded to employees and directors | ||||
Risk-free interest rate | 1.30% | 2.00% | 1.50% | |
Dividend yield | 0.00% | 0.00% | 0.00% | 0.00% |
Expected volatility | 49.00% | 50.00% | 50.00% | |
Expected term | 6 years 8 months 12 days | 6 years 6 months | 6 years 7 months 10 days | 6 years 7 months 6 days |
Forfeiture rate | 5.00% | 8.50% | 5.00% | 8.50% |
Minimum | ||||
Summary of fair-value options awarded to employees and directors | ||||
Risk-free interest rate | 1.70% | |||
Expected volatility | 50.00% | |||
Maximum | ||||
Summary of fair-value options awarded to employees and directors | ||||
Risk-free interest rate | 2.00% | |||
Expected volatility | 58.00% |
Business Combination (Details) $ in Thousands |
Jan. 08, 2016
USD ($)
program
platform
|
Sep. 30, 2016
USD ($)
|
Dec. 31, 2015
USD ($)
|
---|---|---|---|
Business Acquisition [Line Items] | |||
Goodwill | $ 72,359 | $ 12,238 | |
OMT, Inc. | |||
Business Acquisition [Line Items] | |||
Number of transgenic animal platforms | platform | 3 | ||
Number of partnered programs added | program | 16 | ||
Consideration transferred | $ 173,400 | ||
Period for certain post-closing adjustments | 15 months | ||
Goodwill | $ 60,121 | ||
Core Technology | OMT, Inc. | |||
Business Acquisition [Line Items] | |||
Projected cash flow discount rate (percent) | 15.50% | ||
Finite-lived intangible asset, useful life | 20 years |
Business Combination - Consideration Transferred (Details) - OMT, Inc. $ / shares in Units, $ in Thousands |
Jan. 08, 2016
USD ($)
$ / shares
shares
|
---|---|
Business Acquisition [Line Items] | |
Cash consideration | $ 96,006 |
Total share consideration: | |
Actual number of shares issued (shares) | shares | 790,163 |
Multiplied by: Ligand closing share price on January 8, 2016 (in USD per share) | $ / shares | $ 97.92 |
Total share consideration | $ 77,373 |
Total consideration | $ 173,379 |
Business Combination - Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands |
Sep. 30, 2016 |
Jan. 08, 2016 |
Dec. 31, 2015 |
---|---|---|---|
Business Acquisition [Line Items] | |||
Goodwill | $ 72,359 | $ 12,238 | |
OMT, Inc. | |||
Business Acquisition [Line Items] | |||
Cash and cash equivalents | $ 3,504 | ||
Accounts receivable | 5 | ||
Income tax receivable | 140 | ||
Prepaid expenses and other current assets | 2 | ||
Deferred tax liabilities, net | (56,114) | ||
Intangible asset with finite life - core technology | 167,000 | ||
Liabilities assumed | (1,279) | ||
Goodwill | 60,121 | ||
Total consideration | $ 173,379 |
Business Combination - Pro Forma Information (Details) - OMT, Inc. - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Jan. 07, 2016 |
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Business Acquisition [Line Items] | |||||
Revenue | $ 21,619 | $ 18,824 | $ 73,263 | $ 55,795 | |
Net (loss) income | $ 1,051 | $ 196,354 | $ 3,759 | $ 216,900 | |
Basic (loss) income per share (in USD per share): | $ 0.05 | $ 9.87 | $ 0.18 | $ 10.99 | |
Diluted (loss) income per share (in USD per share): | $ 0.05 | $ 9.15 | $ 0.17 | $ 10.27 | |
Pro forma adjustment for share-based compensation expense of OMT | $ 300 | $ 900 | |||
Pro forma adjustment for additional intangible amortization expense | $ 2,100 | 6,300 | |||
Pro forma adjustment for platform license fee paid | $ 3,000 | ||||
Pro forma adjustment for license revenue recognized by OMT in the current period prior to the acquisition | $ 2,500 |
Fair Value Measurements (Details) - USD ($) |
9 Months Ended | ||
---|---|---|---|
Sep. 30, 2016 |
Dec. 31, 2015 |
Aug. 31, 2014 |
|
2019 convertible senior notes | |||
Liabilities: | |||
Principal amount outstanding | $ 245,000,000 | $ 245,000,000 | |
2019 convertible senior notes | Senior Notes | |||
Liabilities: | |||
Principal amount outstanding | $ 245,000,000.0 | ||
Estimated fair value of debt | 357,600,000 | ||
Recurring | |||
Assets: | |||
Assets, fair value | 41,426,000 | 100,572,000 | |
Liabilities: | |||
Liabilities, fair value | 9,548,000 | 14,241,000 | |
Recurring | Current contingent liabilities-CyDex | |||
Liabilities: | |||
Liabilities, fair value | 5,079,000 | 7,812,000 | |
Recurring | Current contingent liabilities-Metabasis | |||
Liabilities: | |||
Liabilities, fair value | 2,602,000 | ||
Recurring | Long-term contingent liabilities-Metabasis | |||
Liabilities: | |||
Liabilities, fair value | 2,299,000 | 1,355,000 | |
Recurring | Long-term contingent liabilities-CyDex | |||
Liabilities: | |||
Liabilities, fair value | 1,634,000 | 1,678,000 | |
Recurring | Liability for amounts owed to former licensees | |||
Liabilities: | |||
Liabilities, fair value | 536,000 | 794,000 | |
Recurring | Cash Equivalents | |||
Assets: | |||
Assets, fair value | 3,015,000 | ||
Recurring | Short-term investments | |||
Assets: | |||
Assets, fair value | $ 37,535,000 | 92,775,000 | |
Recurring | Note receivable Viking Therapeutics, Inc. | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Volatility of common stock | 75.00% | ||
Assets: | |||
Assets, fair value | $ 3,207,000 | 4,782,000 | |
Recurring | Investment in warrants | |||
Assets: | |||
Assets, fair value | 684,000 | ||
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Assets: | |||
Assets, fair value | 5,223,000 | 6,786,000 | |
Liabilities: | |||
Liabilities, fair value | 536,000 | 794,000 | |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Current contingent liabilities-CyDex | |||
Liabilities: | |||
Liabilities, fair value | 0 | 0 | |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Current contingent liabilities-Metabasis | |||
Liabilities: | |||
Liabilities, fair value | 0 | ||
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Long-term contingent liabilities-Metabasis | |||
Liabilities: | |||
Liabilities, fair value | 0 | 0 | |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Long-term contingent liabilities-CyDex | |||
Liabilities: | |||
Liabilities, fair value | 0 | 0 | |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Liability for amounts owed to former licensees | |||
Liabilities: | |||
Liabilities, fair value | 536,000 | 794,000 | |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Cash Equivalents | |||
Assets: | |||
Assets, fair value | 0 | ||
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Short-term investments | |||
Assets: | |||
Assets, fair value | 4,539,000 | 6,786,000 | |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Note receivable Viking Therapeutics, Inc. | |||
Assets: | |||
Assets, fair value | 0 | 0 | |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Investment in warrants | |||
Assets: | |||
Assets, fair value | 684,000 | ||
Recurring | Significant Other Observable Inputs (Level 2) | |||
Assets: | |||
Assets, fair value | 32,996,000 | 89,004,000 | |
Liabilities: | |||
Liabilities, fair value | 2,299,000 | 3,957,000 | |
Recurring | Significant Other Observable Inputs (Level 2) | Current contingent liabilities-CyDex | |||
Liabilities: | |||
Liabilities, fair value | 0 | 0 | |
Recurring | Significant Other Observable Inputs (Level 2) | Current contingent liabilities-Metabasis | |||
Liabilities: | |||
Liabilities, fair value | 2,602,000 | ||
Recurring | Significant Other Observable Inputs (Level 2) | Long-term contingent liabilities-Metabasis | |||
Liabilities: | |||
Liabilities, fair value | 2,299,000 | 1,355,000 | |
Recurring | Significant Other Observable Inputs (Level 2) | Long-term contingent liabilities-CyDex | |||
Liabilities: | |||
Liabilities, fair value | 0 | 0 | |
Recurring | Significant Other Observable Inputs (Level 2) | Liability for amounts owed to former licensees | |||
Liabilities: | |||
Liabilities, fair value | 0 | 0 | |
Recurring | Significant Other Observable Inputs (Level 2) | Cash Equivalents | |||
Assets: | |||
Assets, fair value | 3,015,000 | ||
Recurring | Significant Other Observable Inputs (Level 2) | Short-term investments | |||
Assets: | |||
Assets, fair value | 32,996,000 | 85,989,000 | |
Recurring | Significant Other Observable Inputs (Level 2) | Note receivable Viking Therapeutics, Inc. | |||
Assets: | |||
Assets, fair value | 0 | 0 | |
Recurring | Significant Other Observable Inputs (Level 2) | Investment in warrants | |||
Assets: | |||
Assets, fair value | 0 | ||
Recurring | Significant Unobservable Inputs (Level 3) | |||
Assets: | |||
Assets, fair value | 3,207,000 | 4,782,000 | |
Liabilities: | |||
Liabilities, fair value | 6,713,000 | 9,490,000 | |
Recurring | Significant Unobservable Inputs (Level 3) | Current contingent liabilities-CyDex | |||
Liabilities: | |||
Liabilities, fair value | 5,079,000 | 7,812,000 | |
Recurring | Significant Unobservable Inputs (Level 3) | Current contingent liabilities-Metabasis | |||
Liabilities: | |||
Liabilities, fair value | 0 | ||
Recurring | Significant Unobservable Inputs (Level 3) | Long-term contingent liabilities-Metabasis | |||
Liabilities: | |||
Liabilities, fair value | 0 | 0 | |
Recurring | Significant Unobservable Inputs (Level 3) | Long-term contingent liabilities-CyDex | |||
Liabilities: | |||
Liabilities, fair value | 1,634,000 | 1,678,000 | |
Recurring | Significant Unobservable Inputs (Level 3) | Liability for amounts owed to former licensees | |||
Liabilities: | |||
Liabilities, fair value | 0 | 0 | |
Recurring | Significant Unobservable Inputs (Level 3) | Cash Equivalents | |||
Assets: | |||
Assets, fair value | 0 | ||
Recurring | Significant Unobservable Inputs (Level 3) | Short-term investments | |||
Assets: | |||
Assets, fair value | 0 | 0 | |
Recurring | Significant Unobservable Inputs (Level 3) | Note receivable Viking Therapeutics, Inc. | |||
Assets: | |||
Assets, fair value | 3,207,000 | $ 4,782,000 | |
Recurring | Significant Unobservable Inputs (Level 3) | Investment in warrants | |||
Assets: | |||
Assets, fair value | 0 | ||
Viking Therapeutics, Inc. | |||
Liabilities: | |||
Market value of investment in Viking | $ 8,800,000 |
Fair Value Measurements (Acquisition of CyDex) (Details) - Cydex Pharmaceuticals, Inc - USD ($) $ in Millions |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2016 |
Dec. 31, 2015 |
|
Credit Derivatives [Line Items] | ||
Amount Of Revenue For Contingent Consideration | $ 15.0 | |
Contingent Consideration Classified as Equity | ||
Credit Derivatives [Line Items] | ||
Annual revenue subject to revenue sharing | $ 28.0 | $ 22.5 |
Revenue volatility | 25.00% | 25.00% |
Average probability | 92.00% | 73.00% |
Sales beta | 0.30 | 0.40 |
Credit rating | BB | BB |
Equity risk premium | 6.00% | 6.00% |
Fair Value Measurements (Level 3 Reconciliation) (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Assets: | ||
Fair value of level 3 financial instrument assets as of December 31, 2015 | $ 4,782 | |
Viking note receivable fair market value adjustment | (215) | |
Cash payment received as partial repayment of note receivable | (300) | $ 0 |
Fair market value of stock received as partial repayment of note receivable | (1,060) | |
Fair value of level 3 financial instrument assets as of September 30, 2016 | 3,207 | |
Liabilities: | ||
Fair value of level 3 financial instrument liabilities as of December 31, 2015 | 9,490 | |
Payments to CVR and other former license holders | (4,413) | |
Fair value adjustments to contingent liabilities | 1,636 | |
Fair value of level 3 financial instrument liabilities as of September 30, 2016 | $ 6,713 |
Investment in Viking Therapeutics (Details) $ / shares in Units, $ in Thousands |
1 Months Ended | 3 Months Ended | 9 Months Ended | 13 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Apr. 13, 2016
USD ($)
shares
|
Apr. 30, 2016
USD ($)
$ / shares
shares
|
Jan. 31, 2016
USD ($)
|
May 31, 2015
USD ($)
$ / shares
shares
|
May 31, 2014
USD ($)
program
|
Sep. 30, 2016
USD ($)
|
Sep. 30, 2016
USD ($)
|
Sep. 30, 2015
USD ($)
|
May 31, 2015
$ / shares
|
Dec. 31, 2015
USD ($)
|
Aug. 31, 2014
$ / shares
shares
|
|
Schedule of Equity Method Investments [Line Items] | |||||||||||
Warrants issued in public offering (shares) | shares | 3,264,643 | ||||||||||
Exercise price (USD per share) | $ / shares | $ 125.08 | ||||||||||
Proceeds received from repayment of Viking note receivable | $ 300 | $ 0 | |||||||||
Note receivable from Viking Therapeutics | $ 3,207 | 3,207 | $ 4,782 | ||||||||
Change in fair value of the Viking convertible debt receivable and warrants | $ (200) | ||||||||||
Viking | |||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||
Number of programs licensed | program | 5 | ||||||||||
Loss percentage recorded (percent) | 100.00% | ||||||||||
Debt | Viking | |||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||
Convertible loan facility | $ 2,500 | ||||||||||
Viking Therapeutics, Inc. | |||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||
Shares issued in IPO (shares) | shares | 7,500,000 | ||||||||||
IPO share price (USD per share) | $ / shares | $ 1.25 | ||||||||||
IPO shares purchased by the Company (shares) | shares | 560,000 | ||||||||||
Payments to acquire IPO shares | $ 700 | ||||||||||
Equity interest in outstanding common stock of Viking (percent) | 32.70% | 31.40% | 31.40% | ||||||||
Note receivable, stated interest rate (percent) | 2.50% | 5.00% | |||||||||
LSA, lock-up period extension | 1 year | ||||||||||
Note receivable, amount due upon consummation of capital financing transaction | $ 1,500 | ||||||||||
Note receivable, cash due upon consummation of capital financing transaction | $ 300 | ||||||||||
Note receivable, repayment in equity (percent) | 200.00% | ||||||||||
Warrants issued in public offering (shares) | shares | 7,500,000 | ||||||||||
Exercise price (USD per share) | $ / shares | $ 1.50 | ||||||||||
Public offering warrants purchased by the Company (shares) | shares | 560,000 | ||||||||||
Proceeds received from repayment of Viking note receivable | $ 300 | ||||||||||
Shares received for repayment of note receivable (shares) | shares | 960,000 | ||||||||||
Warrants issued for repayment of note (shares) | shares | 960,000 | ||||||||||
Value of shares and warrants received for repayment of note receivable | $ 1,200 | ||||||||||
Decrease in investment in Viking | $ (10,000) | ||||||||||
Common Stock | |||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||
Aggregate value of shares received under licensing agreement | $ 29,200 | ||||||||||
IPO shares purchased by the Company (shares) | shares | 1,100,000 | ||||||||||
Payments to acquire IPO shares | $ 9,000 | ||||||||||
Common Stock | Viking Therapeutics, Inc. | IPO | |||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||
Shares issued in IPO (shares) | shares | 3,700,000 | ||||||||||
IPO aggregate offering price | $ 29,200 | ||||||||||
IPO share price (USD per share) | $ / shares | $ 8.00 | $ 8.00 | |||||||||
Other Income | |||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||
Short term investment gain (loss) | $ 200 | ||||||||||
Loss from Viking Therapeutics | |||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||
Short term investment gain (loss) | $ (300) |
Financing Arrangements (Narrative) (Details) |
1 Months Ended | 9 Months Ended | 12 Months Ended |
---|---|---|---|
Aug. 31, 2014
USD ($)
d
$ / shares
shares
|
Sep. 30, 2016
USD ($)
|
Dec. 31, 2015
USD ($)
|
|
Debt Instrument [Line Items] | |||
Initial debt value | $ 0 | $ 0 | |
Equity component of currently redeemable convertible notes (Note 5) | 32,138,000 | 39,628,000 | |
Common stock, shares available to be issued | shares | 3,264,643 | ||
Exercise price of convertible bond hedge | $ / shares | $ 75.05 | ||
Exercise price (USD per share) | $ / shares | $ 125.08 | ||
Proceeds from issuance of warrants | $ 11,600,000 | ||
2019 convertible senior notes | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount outstanding | 245,000,000 | $ 245,000,000 | |
Senior Notes | |||
Debt Instrument [Line Items] | |||
Payment for convertible bond hedges | $ 48,100,000 | ||
Senior Notes | 2019 convertible senior notes | |||
Debt Instrument [Line Items] | |||
Interest rate | 0.75% | ||
Aggregate principal amount outstanding | $ 245,000,000.0 | ||
Net proceeds from note after debt issuance costs | $ 239,300,000 | ||
Initial conversion rate | 0.0133251 | ||
Initial conversion price | $ / shares | $ 75.05 | ||
Percentage of stock price trigger to classify convertible debt as current | 130.00% | ||
Proceeds from issuance of debt | $ 245,000,000 | ||
Debt discount rate | 5.83% | ||
Initial debt value | $ 192,500,000 | ||
If-converted value in excess of principal | 88,200,000 | ||
Debt issuance costs | 5,700,000 | ||
Equity component of convertible notes recorded as a reduction to additional paid-in capital | 1,200,000 | ||
Long-term debt issuance costs | $ 4,500,000 | ||
Term of notes | 5 years | ||
Equity component of currently redeemable convertible notes (Note 5) | $ 51,300,000 | $ 51,300,000 | |
Senior Notes | 2019 convertible senior notes | Debt Instrument, Redemption, Period One | |||
Debt Instrument [Line Items] | |||
Threshold trading days | d | 20 | ||
Consecutive trading days | 30 days | ||
Percentage of stock price trigger to classify convertible debt as current | 130.00% | 130.00% | |
Senior Notes | 2019 convertible senior notes | Debt Instrument, Redemption, Period Two | |||
Debt Instrument [Line Items] | |||
Threshold trading days | d | 5 | ||
Consecutive trading days | 10 days | ||
Maximum threshold percentage of debt trading price trigger | 98.00% |
Financing Arrangements (Notes Payable) (Details) - 2019 convertible senior notes - USD ($) $ in Thousands |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Notes Payable, Current and Noncurrent [Abstract] | ||
Principal amount outstanding | $ 245,000 | $ 245,000 |
Unamortized discount | (34,885) | (43,015) |
Total notes payable | $ 210,115 | $ 201,985 |
Income Tax (Details) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Income Tax Disclosure [Abstract] | ||||
Income tax provision | $ (160,000) | $ 191,881,000 | $ 28,000 | $ 191,602,000 |
Income tax provision, per diluted share (in USD per share) | $ 0.01 | |||
Income tax expense (benefit), continuing operations | (28,000) | |||
Income tax provision from discontinued operation | $ 400,000 | |||
Effective income tax rate, continuing operations (percent) | 42.00% | 509.50% | ||
Valuation allowance | $ 8,900,000 | $ 8,900,000 | ||
Unrecognized tax benefits | $ 33,500,000 | $ 33,500,000 |
Stockholders' Equity (Stock Option Plan and Restricted Stock Activity) (Details) |
9 Months Ended |
---|---|
Sep. 30, 2016
$ / shares
shares
| |
Stock Options: | |
Balance as of December 31, 2015 | shares | 1,683,341 |
Granted | shares | 263,489 |
Exercised | shares | (130,185) |
Forfeited | shares | (30,115) |
Balance as of September 30, 2016 | shares | 1,786,530 |
Weighted Average Exercise Price (in USD per share) | |
Balance as of December 31, 2015 | $ / shares | $ 34.23 |
Granted | $ / shares | 92.09 |
Exercised | $ / shares | 34.65 |
Forfeited | $ / shares | 60.17 |
Balance as of September 30, 2016 | $ / shares | $ 42.29 |
Restricted Stock [Member] | |
Restricted Shares: | |
Nonvested at December 31, 2015 | shares | 130,749 |
Granted | shares | 234,855 |
Exercised | shares | (53,121) |
Forfeited | shares | (2,183) |
Nonvested at June 30, 2016 | shares | 310,300 |
Weighted- Average Grant Date Fair Value (in USD per share) | |
Nonvested at December 31, 2015 | $ / shares | $ 60.36 |
Granted | $ / shares | 95.31 |
Exercised | $ / shares | 93.49 |
Forfeited | $ / shares | 71.03 |
Nonvested at March 31, 2016 | $ / shares | $ 76.02 |
Stockholders' Equity (Narrative) (Details) - USD ($) $ in Millions |
9 Months Ended | ||
---|---|---|---|
Jan. 08, 2016 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Net proceeds from employee stock purchase plan | $ 4.5 | $ 7.3 | |
2002 Stock Incentive Plan | Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares available for future option grants | 951,526 | ||
Employee Stock Purchase Plan | |||
Employee Stock Purchase Plan | |||
Shares allowed to purchase in employee stock purchase plan | 1,250 | ||
Shares issued in period | 1,241 | 0 | |
Shares available for future purchases | 71,126 | ||
OMT, Inc. | |||
Employee Stock Purchase Plan | |||
Common stock issued in acquisition | 790,163 |
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