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)
9 Months Ended
Sep. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Schedule of Revenue by Source
The following table represents disaggregation of royalties, Captisol and contract revenue (in thousands):

Three months ended Nine months ended
September 30, September 30,
2020 2019 2020 2019
Royalties
Kyprolis $ 6,923  $ 7,602  $ 16,809  $ 16,317 
Evomela 1,802  1,515  4,577  3,570 
Other 280  650  1,365  1,851 
Promacta —  —  —  14,193 
$ 9,005  $ 9,767  $ 22,751  $ 35,931 
Captisol $ 23,389  $ 6,849  $ 68,966  $ 24,357 
Contract
Service Revenue $ 7,341  $ 4,548  $ 15,280  $ 12,990 
License Fees 158  243  1,793  3,083 
Milestone 960  2,674  4,766  15,425 
Other 995  727  2,873  1,493 
$ 9,454  $ 8,192  $ 24,712  $ 32,991 
Total $ 41,848  $ 24,808  $ 116,429  $ 93,279 
Schedule of Short-Term Investments
Our investments, excluding investment in Viking, consist of the following at September 30, 2020 and December 31, 2019 (in thousands):
September 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 $ 68,226  $ 101  $ —  $ 68,327  $ 411,690  $ 188  $ (3) $ 411,875 
     Corporate bonds 27,125  102  —  27,227  63,818  161  —  63,979 
     Commercial paper 47,943  60  —  48,003  210,525  43  (16) 210,552 
     Corporate equity securities 4,484  415  (2,624) 2,275  4,506  416  (1,850) 3,072 
     Mutual fund 151,513  204  —  151,717  250,635  —  (249) 250,386 
     Warrants —  155  —  155  —  125  —  125 
$ 299,291  $ 1,037  $ (2,624) $ 297,704  $ 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):

September 30, 2020
Amortized Cost Fair Value
Within one year $ 121,452  $ 121,610 
After one year through five years 21,842  21,947 
After five years —  — 
Total $ 143,294  $ 143,557 

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
September 30, 2020
Bank deposits $ —  $ 5,011  $ —  $ —  $ —  $ 5,011 
Corporate bonds (0.4) 3,007  —  —  (0.4) 3,007 
Total $ (0.4) $ 8,018  $ —  $ —  $ (0.4) $ 8,018 
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):
September 30, December 31,
2020 2019
     Goodwill $ 102,136  $ 95,229 
Definite lived intangible assets
     Complete technology 257,317  242,813 
          Less: accumulated amortization(1)
(59,869) (50,203)
     Trade name 2,642  2,642 
          Less: accumulated amortization (1,279) (1,180)
     Customer relationships 40,700  29,600 
          Less: accumulated amortization (14,929) (13,224)
Total goodwill and other identifiable intangible assets, net $ 326,718  $ 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):
September 30, 2020 December 31, 2019
Gross
Adjustments(1)
Net Gross
Adjustments(2)
Net
Aziyo and CorMatrix $ 17,696  $ (9,644) $ 8,052  $ 17,696  $ (5,500) $ 12,196 
Palvella 10,000  (10,000)   10,000  (7,492) 2,508 
Selexis and Dianomi 10,602  (7,820) 2,782  10,602  (5,216) 5,386 
     Total $ 38,298  $ (27,464) $ 10,834  $ 38,298  $ (18,208) $ 20,090 

(1) Amounts represent accumulated amortization to principal or research and development expenses of $21.5 million and credit loss adjustments of             $6.0 million as of September 30, 2020.
(2) Amounts represent accumulated amortization to principal or research and development expenses as of December 31, 2019.
Schedule of Other Assets
Other assets consist of the following (in thousands):
September 30, December 31,
2020 2019
Captisol manufacturing ramp up fee $ 9,215  $ — 
Long-term investment receivable 2,000  — 
Equity investment 813  750 
Deposits 138  219 
Other 1,538  1,388 
     Total other assets
$ 13,704  $ 2,357 
Schedule of Accrued Liabilities
Accrued liabilities consist of the following (in thousands):
September 30, December 31,
2020 2019
Compensation $ 4,840  $ 1,986 
Professional fees 1,226  1,135 
Amounts owed to former licensees 407  381 
Royalties owed to third parties 805  — 
Return reserve 2,835  3,027 
Current operating lease liabilities 1,029  1,242 
Accrued interest 1,437  690 
Other 1,919  1,375 
     Total accrued liabilities
$ 14,498  $ 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 Nine months ended
September 30, September 30,
2020 2019 2020 2019
SBC - Research and development expenses $ 3,094  $ 2,481  $ 8,510  $ 7,136 
SBC - General and administrative expenses 4,646  3,816  12,242  11,079 
$ 7,740  $ 6,297  $ 20,752  $ 18,215 
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 Nine months ended
September 30, September 30,
2020 2019 2020 2019
Risk-free interest rate 0.3% 1.6% 1.0% 2.4%
Dividend yield
Expected volatility 59% 41% 55% 43%
Expected term 4.9 5.3 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 Nine months ended
September 30, September 30,
2020 2019 2020 2019
Weighted average shares outstanding: 16,082  18,770  16,222  19,586 
Dilutive potential common shares:
     Restricted stock —  —  —  35 
     Stock options —  —  —  728 
Shares used to compute diluted income per share 16,082  18,770  16,222  20,349 
Potentially dilutive shares excluded from calculation due to anti-dilutive effect 7,028  11,549  8,330  8,694