Quarterly report pursuant to Section 13 or 15(d)

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

v3.20.2
Basis of Presentation and Summary of Significant Accounting Policies (Tables)
6 Months Ended
Jun. 30, 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 Six months ended
June 30, June 30,
2020 2019 2020 2019
Royalties
Kyprolis $ 5,481    $ 4,882    $ 9,886    $ 8,715   
Evomela 1,199    1,144    2,775    2,055   
Other 501    600    1,085    1,201   
Promacta —    —    —    14,193   
$ 7,181    $ 6,626    $ 13,746    $ 26,164   
Captisol $ 24,468    $ 8,549    $ 45,577    $ 17,508   
Service Revenue $ 4,582    $ 4,559    $ 7,939    $ 8,442   
Contract Revenue
License Fees $ 660    $ 1,990    $ 1,635    $ 2,840   
Milestone 3,472    2,497    3,806    12,751   
Other 1,057    766    1,878    766   
$ 5,189    $ 5,253    $ 7,319    $ 16,357   
Total $ 41,420    $ 24,987    $ 74,581    $ 68,471   
Schedule of Short-Term Investments
Our investments, excluding investment in Viking, consist of the following at June 30, 2020 and December 31, 2019 (in thousands):
June 30, 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 $ 269,114    $ 221    $ (56)   $ 269,279    $ 411,690    $ 188    $ (3)   $ 411,875   
     Corporate bonds 55,380    125    (94)   55,411    63,818    161    —    63,979   
     Commercial paper 163,590    134    —    163,724    210,525    43    (16)   210,552   
     Corporate equity securities 4,506    634    (2,484)   2,656    4,506    416    (1,850)   3,072   
     Mutual fund 151,223    —    (97)   151,126    250,635    —    (249)   250,386   
     Warrants —    177    —    177    —    125    —    125   
$ 643,813    $ 1,291    $ (2,731)   $ 642,373    $ 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):

June 30, 2020
Amortized Cost Fair Value
Within one year $ 414,505    $ 414,905   
After one year through five years 73,579    73,509   
After five years —    —   
Total $ 488,084    $ 488,414   

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
June 30, 2020
Bank deposits $ (56)   $ 30,015    $ —    $ —    $ (56)   $ 30,015   
Corporate bonds (94)   16,022    —    —    (94)   16,022   
Total $ (150)   $ 46,037    $ —    $ —    $ (150)   $ 46,037   
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):
June 30, December 31,
2020 2019
     Goodwill $ 103,369    $ 95,229   
Definite lived intangible assets
     Complete technology 244,513    242,813   
          Less: accumulated amortization(1)
(57,053)   (50,203)  
     Trade name 2,642    2,642   
          Less: accumulated amortization (1,246)   (1,180)  
     Customer relationships 40,700    29,600   
          Less: accumulated amortization (14,261)   (13,224)  
Total goodwill and other identifiable intangible assets, net $ 318,664    $ 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):
June 30, 2020 December 31, 2019
Gross
Adjustments(1)
Net Gross
Adjustments(2)
Net
Aziyo and CorMatrix $ 17,696    $ (9,698)   $ 7,998    $ 17,696    $ (5,500)   $ 12,196   
Palvella 10,000    (10,000)   —    10,000    (7,492)   2,508   
Selexis and Dianomi 10,602    (7,994)   2,608    10,602    (5,216)   5,386   
     Total $ 38,298    $ (27,692)   $ 10,606    $ 38,298    $ (18,208)   $ 20,090   

(1) Amounts represent accumulated amortization to principal or research and development expenses of $21.7 million and credit loss adjustments of   $6.0 million as of June 30, 2020.
(2) Amounts represent accumulated amortization to principal or research and development expenses as of December 31, 2019.
Schedule of Accrued Liabilities
Accrued liabilities consist of the following (in thousands):
June 30, December 31,
2020 2019
Compensation $ 3,457    $ 1,986   
Professional fees 964    1,135   
Amounts owed to former licensees 413    381   
Royalties owed to third parties 1,038    —   
Return reserve 2,899    3,027   
Current operating lease liabilities 1,728    1,242   
Accrued interest 471    690   
Other 1,858    1,375   
     Total accrued liabilities
$ 12,828    $ 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 Six months ended
June 30, June 30,
2020 2019 2020 2019
SBC - Research and development expenses $ 3,019    $ 2,528    $ 5,416    $ 4,655   
SBC - General and administrative expenses 4,340    4,043    7,596    7,263   
$ 7,359    $ 6,571    $ 13,012    $ 11,918   
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 Six months ended
June 30, June 30,
2020 2019 2020 2019
Risk-free interest rate 0.4% 1.9% 1.1% 2.4%
Dividend yield
Expected volatility 69% 40% 55% 43%
Expected term 5.1 5.9 4.8 5.2
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 Six months ended
June 30, June 30,
2020 2019 2020 2019
Weighted average shares outstanding: 16,055    19,558    16,292    20,000   
Dilutive potential common shares:
     Restricted stock 40    —    —    38   
     Stock options 599    —    —    761   
Shares used to compute diluted income per share 16,694    19,558    16,292    20,799   
Potentially dilutive shares excluded from calculation due to anti-dilutive effect 7,832    7,457    8,988    7,243