Quarterly report pursuant to Section 13 or 15(d)

Basis of Presentation and Summary of Significant Accounting Policies (Tables)

v3.20.1
Basis of Presentation and Summary of Significant Accounting Policies (Tables)
3 Months Ended
Mar. 31, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Schedule of Revenue by Source
The following table represents disaggregation of royalties, Captisol, service revenue and contract revenue (in thousands):

Three months ended
March 31,
2020 2019
Royalties
Kyprolis $ 4,405    $ 3,833   
Evomela 1,576    911   
Other 584    601   
Promacta —    14,193   
$ 6,565    $ 19,538   
Captisol $ 21,109    $ 8,959   
Service Revenue $ 3,357    $ 3,883   
Contract Revenue
License Fees $ 975    $ 850   
Milestone 334    10,254   
Other 821    —   
$ 2,130    $ 11,104   
Total $ 33,161    $ 43,484   
Schedule of Short-Term Investments
Our investments consist of the following at March 31, 2020 and December 31, 2019 (in thousands):
March 31, 2020 December 31, 2019
Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value Amortized cost Gross unrealized gains Gross unrealized losses Estimated fair value
Short-term investments
     Bank deposits $ 284,855    $ 157    $ (1,398)   $ 283,614    $ 411,690    $ 188    $ (3)   $ 411,875   
     Corporate bonds 62,191    21    (1,666)   60,546    63,818    161    —    63,979   
     Commercial paper 127,928      (273)   127,660    210,525    43    (16)   210,552   
     Corporate equity securities 4,506    430    (3,483)   1,453    4,506    416    (1,850)   3,072   
     Mutual fund 150,747    —    (2,794)   147,953    250,635    —    (249)   250,386   
     Warrants —    58    —    58    —    125    —    125   
$ 630,227    $ 671    $ (9,614)   $ 621,284    $ 941,174    $ 933    $ (2,118)   $ 939,989   
Schedule of Available-for-Sale Debt Securities
The following table summarizes our available-for-sale debt securities by contractual maturity (in thousands):

March 31, 2020
Amortized Cost Fair Value
Within one year $ 401,338    $ 400,627   
After one year through five years 73,636    71,193   
After five years —    —   
Total $ 474,974    $ 471,820   

The following table summarizes our available-for-sale debt securities in an unrealized loss position (in thousands):

Less than 12 months 12 months or greater Total
Gross
Unrealized
Losses
Estimated
Fair Value
Gross
Unrealized
Losses
Estimated
Fair Value
Gross
Unrealized
Losses
Estimated
Fair Value
March 31, 2020
Bank deposits $ (1,398)   $ 214,597    $ —    $ —    $ (1,398)   $ 214,597   
Corporate bonds (1,666)   40,460    —    —    (1,666)   40,460   
Commercial paper (273)   110,666    —    —    (273)   110,666   
Total $ (3,337)   $ 365,723    $ —    $ —    $ (3,337)   $ 365,723   
December 31, 2019
Bank deposits $ (3)   $ 58,584    $ —    $ —    $ (3)   $ 58,584   
Commercial paper (16)   79,363    —    —    (16)   79,363   
Total $ (19)   $ 137,947    $ —    $ —    $ (19)   $ 137,947   
Schedule of Goodwill and Other Identifiable Intangible Assets
Goodwill and other identifiable intangible assets consist of the following (in thousands):
March 31, December 31,
2020 2019
     Goodwill $ 94,341    $ 95,229   
Definite lived intangible assets
     Complete technology 242,813    242,813   
          Less: accumulated amortization(1)
(53,728)   (50,203)  
     Trade name 2,642    2,642   
          Less: accumulated amortization (1,213)   (1,180)  
     Customer relationships 29,600    29,600   
          Less: accumulated amortization (13,594)   (13,224)  
Total goodwill and other identifiable intangible assets, net $ 300,861    $ 305,677   
(1) accumulated amortization for complete technology includes immaterial amount of foreign currency translation adjustments for the complete technology acquired from the Vernalis acquisition.
Schedule of Commercial License Rights
Commercial license and other economic rights consist of the following (in thousands):

March 31, December 31,
2020 2019
Aziyo and CorMatrix $ 17,696    $ 17,696   
Palvella 10,000    10,000   
Selexis 8,602    8,602   
Dianomi 2,000    2,000   
38,298    38,298   
Less: accumulated amortization attributed to principal or research and development (21,939)   (18,208)  
Less: credit loss adjustments (5,978)   —   
   Total commercial license and other economic rights, net $ 10,381    $ 20,090   
Schedule of Accrued Liabilities
Accrued liabilities consist of the following (in thousands):
March 31, December 31,
2020 2019
Compensation $ 2,321    $ 1,986   
Professional fees 690    1,135   
Amounts owed to former licensees 383    381   
Royalties owed to third parties 1,062    —   
Return reserve 2,899    3,027   
Current operating lease liabilities 1,483    1,242   
Accrued interest 1,437    690   
Other 1,573    1,375   
     Total accrued liabilities
$ 11,848    $ 9,836   
Schedule of Accounting for Share-Based Compensation The following table summarizes share-based compensation expense recorded as components of research and development expenses and general and administrative expenses for the periods indicated (in thousands):
Three months ended
March 31,
2020 2019
Share-based compensation expense as a component of:
Research and development expenses $ 2,397    $ 2,127   
General and administrative expenses 3,256    3,220   
$ 5,653    $ 5,347   
Schedule 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:
Three months ended
March 31,
2020 2019
Risk-free interest rate 1.4% 2.5%
Dividend yield
Expected volatility 47% 44%
Expected term 4.7 5.1
Schedule of Computation of Basic and Diluted Earnings per Share
The following table presents the calculation of weighted average shares used to calculate basic and diluted earnings per share (in thousands):
Three months ended
March 31,
2020 2019
Weighted average shares outstanding: 16,529    20,447   
Dilutive potential common shares:
     Restricted stock —    45   
     Stock options —    785   
Shares used to compute diluted income per share 16,529    21,277   
Potentially dilutive shares excluded from calculation due to anti-dilutive effect 10,144    7,015