FORM 10-Q
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ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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EXELIXIS, INC.
(Exact name of registrant as specified in its charter)
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Delaware
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04-3257395
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification Number)
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Large accelerated filer
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ý
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Accelerated filer
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¨
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Emerging growth company
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¨
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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Item 1.
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Item 1A.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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March 31,
2018 |
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December 31, 2017*
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||||
ASSETS
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|
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||||
Current assets:
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|
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||||
Cash and cash equivalents
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$
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232,331
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$
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183,164
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Short-term investments
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194,589
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204,607
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Short-term restricted cash and investments
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504
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504
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Trade and other receivables, net
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91,999
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81,192
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Inventory, net
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7,563
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6,657
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Unbilled collaboration revenue
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31,844
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|
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—
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Prepaid expenses and other current assets
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6,850
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8,750
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Total current assets
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565,680
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484,874
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Long-term investments
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96,710
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64,255
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Long-term restricted cash and investments
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1,500
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4,646
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Property and equipment, net
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45,412
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25,743
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Goodwill
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63,684
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63,684
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Other long-term assets
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1,929
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12,092
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Total assets
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$
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774,915
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$
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655,294
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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||||
Current liabilities:
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||||
Accounts payable
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$
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11,078
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$
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9,575
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Accrued compensation and benefits
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20,756
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21,073
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Accrued clinical trial liabilities
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15,351
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19,849
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Accrued collaboration liabilities
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7,974
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8,974
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Rebates and fees due to customers
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11,989
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7,565
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Current portion of deferred revenue
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—
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31,984
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Other current liabilities
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17,711
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16,150
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Total current liabilities
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84,859
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115,170
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Long-term portion of deferred revenue
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3,177
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238,520
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Other long-term liabilities
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17,113
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16,643
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Total liabilities
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105,149
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370,333
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Commitments (Note 11)
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Stockholders’ equity:
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Preferred stock, $0.001 par value, 10,000,000 shares authorized and no shares issued
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—
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—
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Common stock, $0.001 par value; 400,000,000 shares authorized; issued and outstanding: 296,694,330 and 296,209,426 at March 31, 2018 and December 31, 2017, respectively
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297
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296
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Additional paid-in capital
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2,125,166
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2,114,184
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Accumulated other comprehensive loss
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(887
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)
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(347
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)
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Accumulated deficit
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(1,454,810
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)
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(1,829,172
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)
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Total stockholders’ equity
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669,766
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284,961
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Total liabilities and stockholders’ equity
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$
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774,915
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$
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655,294
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*
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The Condensed Consolidated Balance Sheet as of December 31, 2017 has been derived from the audited financial statements as of that date.
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Three Months Ended March 31,
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2018
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2017
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Revenues:
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Net product revenues
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$
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134,272
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$
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68,877
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Collaboration revenues
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78,074
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12,010
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Total revenues
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212,346
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80,887
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Operating expenses:
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Cost of goods sold
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5,639
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3,203
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Research and development
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37,757
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23,210
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Selling, general and administrative
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52,643
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34,288
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Total operating expenses
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96,039
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60,701
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Income from operations
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116,307
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20,186
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Other income (expense), net:
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Interest income
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1,895
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1,113
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Interest expense
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—
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(4,420
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)
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Other, net
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169
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(45
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)
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Total other income (expense), net
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2,064
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(3,352
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)
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Income before income taxes
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118,371
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16,834
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Provision for income taxes
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2,514
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134
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Net income
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$
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115,857
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$
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16,700
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Net income per share, basic
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$
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0.39
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$
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0.06
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Net income per share, diluted
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$
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0.37
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$
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0.05
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Shares used in computing net income per share, basic
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296,421
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290,870
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Shares used in computing net income per share, diluted
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313,691
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309,535
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Three Months Ended March 31,
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2018
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2017
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Net income
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$
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115,857
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$
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16,700
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Other comprehensive (loss) income
(1)
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(540
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)
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90
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Comprehensive income
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$
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115,317
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$
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16,790
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(1)
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Other comprehensive (loss) income consisted solely of unrealized gains or losses, net, on available-for-sale securities arising during the periods presented. Reclassification adjustments to net income resulting from realized gains or losses on the sale of securities were nominal and there was
no
income tax expense related to other comprehensive income during those periods.
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Three Months Ended March 31,
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2018
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2017
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Net income
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$
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115,857
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$
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16,700
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Adjustments to reconcile net income to net cash provided by operating activities:
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Depreciation and amortization
|
371
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|
281
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Stock-based compensation
|
9,305
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4,713
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Amortization of debt discounts and debt issuance costs
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—
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89
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Interest paid in kind
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—
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2,068
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Gain on other equity investments
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(209
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)
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—
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Other
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1,722
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|
680
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Changes in assets and liabilities:
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|
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||||
Trade and other receivables, net
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(10,755
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)
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6,541
|
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||
Inventory, net
|
(906
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)
|
|
34
|
|
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Unbilled collaboration revenue
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(38,014
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)
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—
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Prepaid expenses and other current assets
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1,900
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(881
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)
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Other long-term assets
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(346
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)
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(19
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)
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Accounts payable
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(183
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)
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(1,916
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)
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Accrued compensation and benefits
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(317
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)
|
|
(5,844
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)
|
||
Accrued clinical trial liabilities
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(4,498
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)
|
|
347
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|
||
Accrued collaboration liabilities
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(1,000
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)
|
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—
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Deferred revenue
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(2,652
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)
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|
35,139
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Other current and long-term liabilities
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1,533
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|
|
10,926
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Net cash provided by operating activities
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71,808
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68,858
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Cash flows from investing activities:
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|
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Purchases of property and equipment and other, net
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(2,947
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)
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(804
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)
|
||
Purchases of investments
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(116,537
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)
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(124,494
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)
|
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Proceeds from maturities of investments
|
87,504
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|
|
122,507
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|
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Proceeds from sale of investments
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6,238
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|
|
37,294
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|
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Proceeds from other equity investments
|
209
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|
|
—
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|
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Net cash (used in) provided by investing activities
|
(25,533
|
)
|
|
34,503
|
|
||
Cash flows from financing activities:
|
|
|
|
||||
Principal repayments of debt
|
—
|
|
|
(80,000
|
)
|
||
Proceeds from exercise of stock options
|
1,875
|
|
|
9,675
|
|
||
Taxes paid related to net share settlement of equity awards
|
(2,129
|
)
|
|
(1,543
|
)
|
||
Net cash used in financing activities
|
(254
|
)
|
|
(71,868
|
)
|
||
Net increase in cash, cash equivalents and restricted cash
|
46,021
|
|
|
31,493
|
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
188,314
|
|
|
155,836
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
$
|
234,335
|
|
|
$
|
187,329
|
|
|
December 31, 2017
|
|
Adjustments Due to the Adoption of Topic 606
|
|
January 1, 2018
|
||||||
Contract assets: unbilled collaboration revenue, gross:
|
|
|
|
|
|
||||||
Current portion
|
$
|
—
|
|
|
$
|
9,588
|
|
|
$
|
9,588
|
|
Long-term portion
|
$
|
—
|
|
|
$
|
12,247
|
|
|
$
|
12,247
|
|
Contract liabilities: deferred revenue, gross:
|
|
|
|
|
|
||||||
Current portion
|
$
|
31,984
|
|
|
$
|
(23,591
|
)
|
|
$
|
8,393
|
|
Long-term portion
|
$
|
238,520
|
|
|
$
|
(213,079
|
)
|
|
$
|
25,441
|
|
Accumulated deficit
|
$
|
(1,829,172
|
)
|
|
$
|
258,505
|
|
|
$
|
(1,570,667
|
)
|
|
March 31, 2018
|
||||||||||
|
As Reported
|
|
Balances Without the Adoption of Topic 606
|
|
Effect of Adoption
Higher / (Lower)
|
||||||
Unbilled collaboration revenue
|
$
|
31,844
|
|
|
$
|
—
|
|
|
$
|
31,844
|
|
Current portion of deferred revenue
|
$
|
—
|
|
|
$
|
30,288
|
|
|
$
|
(30,288
|
)
|
Other current liabilities
|
$
|
17,711
|
|
|
$
|
16,820
|
|
|
$
|
891
|
|
Long-term portion of deferred revenue
|
$
|
3,177
|
|
|
$
|
230,948
|
|
|
$
|
(227,771
|
)
|
Accumulated deficit
|
$
|
(1,454,810
|
)
|
|
$
|
(1,743,822
|
)
|
|
$
|
289,012
|
|
|
Three Months Ended March 31, 2018
|
||||||||||
|
As Reported
|
|
Balances Without the Adoption of Topic 606
|
|
Effect of Adoption
Higher / (Lower)
|
||||||
Collaboration revenues
|
$
|
78,074
|
|
|
$
|
46,676
|
|
|
$
|
31,398
|
|
Total revenues
|
$
|
212,346
|
|
|
$
|
180,948
|
|
|
$
|
31,398
|
|
Income before income taxes
|
$
|
118,371
|
|
|
$
|
86,973
|
|
|
$
|
31,398
|
|
Provision for income taxes
|
$
|
2,514
|
|
|
$
|
1,623
|
|
|
$
|
891
|
|
Net income
|
$
|
115,857
|
|
|
$
|
85,350
|
|
|
$
|
30,507
|
|
Net income per share, basic
|
$
|
0.39
|
|
|
$
|
0.29
|
|
|
$
|
0.10
|
|
Net income per share, diluted
|
$
|
0.37
|
|
|
$
|
0.27
|
|
|
$
|
0.10
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Product revenues:
|
|
|
|
||||
Gross product revenues
|
$
|
159,436
|
|
|
$
|
77,959
|
|
Discounts and allowances
|
(25,164
|
)
|
|
(9,082
|
)
|
||
Net product revenues
|
134,272
|
|
|
68,877
|
|
||
Collaboration revenues:
|
|
|
|
||||
License revenues
(1)
|
69,030
|
|
|
11,214
|
|
||
Research and development services revenues
(2)
|
10,099
|
|
|
1,132
|
|
||
Product supply revenues, net
|
(1,055
|
)
|
|
(336
|
)
|
||
Total collaboration revenues
|
78,074
|
|
|
12,010
|
|
||
Total revenues
|
$
|
212,346
|
|
|
$
|
80,887
|
|
(1)
|
License revenues for the
three months ended
March 31, 2018
included revenues related to the portion of two milestones that were allocated to the transfer of intellectual property licenses and were fully recognized in the current period and royalty revenue from Ipsen and Genentech. License revenues for the
three months ended
March 31, 2017
included the recognition of deferred revenues from upfront payments and a non-substantive milestone that were being amortized over various periods, royalty revenues from Ipsen and Genentech and one milestone. Upon the adoption of Topic 606, the allocation of proceeds from our collaboration partners between licenses and research and development services as well as the timing of recognition has changed. Therefore, among other changes, as of January 1, 2018, the portion of proceeds allocated to intellectual property licenses for our Ipsen and Takeda collaboration agreements are recognized immediately and license revenues no longer includes revenues related to the amortization of deferred revenue.
|
(2)
|
Research and development services revenues for
three months ended
March 31, 2018
included the recognition of deferred revenue for the portion of the upfront payments and milestones that were allocated to the research and development services which are being amortized through early 2030, as well as development cost reimbursements earned on our collaboration agreements. As described above, we did not allocate any of our upfront payments or milestones to research and development services prior to the adoption of Topic 606 and therefore research and development services revenues for the
three months ended
March 31, 2017
included only development cost reimbursements earned on our collaboration agreements.
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
CABOMETYX
|
$
|
128,934
|
|
|
$
|
62,359
|
|
COMETRIQ
|
5,338
|
|
|
6,518
|
|
||
Net product revenues
|
$
|
134,272
|
|
|
$
|
68,877
|
|
|
Three Months Ended March 31,
|
||||||||||||
|
2018
|
|
2017
|
||||||||||
|
Dollars
|
|
Percent of total
|
|
Dollars
|
|
Percent of total
|
||||||
Ipsen
|
$
|
53,809
|
|
|
25
|
%
|
|
$
|
4,530
|
|
|
6
|
%
|
Caremark L.L.C.
|
$
|
26,388
|
|
|
12
|
%
|
|
$
|
13,819
|
|
|
17
|
%
|
Affiliates of McKesson Corporation
|
$
|
21,331
|
|
|
10
|
%
|
|
$
|
11,278
|
|
|
14
|
%
|
Diplomat Specialty Pharmacy
|
$
|
20,147
|
|
|
9
|
%
|
|
$
|
19,850
|
|
|
25
|
%
|
Accredo Health, Incorporated
|
$
|
18,286
|
|
|
9
|
%
|
|
$
|
9,440
|
|
|
12
|
%
|
|
Chargebacks and Discounts for Prompt Payment
|
|
Other Customer Credits/Fees and Co-pay Assistance
|
|
Rebates
|
|
Returns
|
|
Total
|
||||||||||
Balance at December 31, 2017
|
$
|
1,928
|
|
|
$
|
1,795
|
|
|
$
|
5,770
|
|
|
$
|
—
|
|
|
$
|
9,493
|
|
Provision related to sales made in:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current period
|
14,475
|
|
|
4,197
|
|
|
6,625
|
|
|
—
|
|
|
25,297
|
|
|||||
Prior periods
|
(331
|
)
|
|
—
|
|
|
199
|
|
|
—
|
|
|
(132
|
)
|
|||||
Payments and customer credits issued
|
(13,556
|
)
|
|
(3,294
|
)
|
|
(3,303
|
)
|
|
—
|
|
|
(20,153
|
)
|
|||||
Balance at March 31, 2018
|
$
|
2,516
|
|
|
$
|
2,698
|
|
|
$
|
9,291
|
|
|
$
|
—
|
|
|
$
|
14,505
|
|
|
Contract Assets: Unbilled Collaboration Revenue
|
|
Contract Liabilities: Deferred Revenue
|
||||||||||||
|
Current Portion
|
|
Long-term Portion
|
|
Current Portion
|
|
Long-term Portion
|
||||||||
Balance at December 31, 2017
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
31,984
|
|
|
$
|
238,520
|
|
Adoption of Topic 606
|
9,588
|
|
|
12,247
|
|
|
(23,591
|
)
|
|
(213,079
|
)
|
||||
Balance at January 1, 2018
|
9,588
|
|
|
12,247
|
|
|
8,393
|
|
|
25,441
|
|
||||
Increases as a result of a change in transaction price and recognition of revenues as services are performed
|
46,006
|
|
|
1,166
|
|
|
—
|
|
|
—
|
|
||||
Transfer to receivables from contract assets recognized at the beginning of the period
|
(9,159
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Increases as a result of the deferral of milestones earned in period, excluding amounts recognized as revenue
|
—
|
|
|
—
|
|
|
173
|
|
|
666
|
|
||||
Revenue recognized that was included in the contract liability balance at the beginning of the period
|
—
|
|
|
—
|
|
|
(3,492
|
)
|
|
—
|
|
||||
Other adjustments
(1)
|
(14,591
|
)
|
|
(13,413
|
)
|
|
(5,074
|
)
|
|
(22,930
|
)
|
||||
Balance at March 31, 2018
|
$
|
31,844
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,177
|
|
(1)
|
Includes reclassification of deferred revenue from long-term to current and adjustments made due to netting of contract assets and liabilities by collaboration agreement.
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Ipsen collaboration revenues
|
$
|
53,809
|
|
|
$
|
4,530
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Takeda collaboration revenues
|
$
|
2,917
|
|
|
$
|
2,682
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Royalty revenues on ex-U.S. sales
|
$
|
1,349
|
|
|
$
|
2,298
|
|
Profits and losses on U.S. commercialization
|
$
|
1,373
|
|
|
$
|
(626
|
)
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Royalties accruing to GSK
|
$
|
5,125
|
|
|
$
|
2,737
|
|
|
March 31, 2018
|
|
December 31, 2017
|
|
March 31, 2017
|
|
December 31, 2016
|
||||||||
Cash and cash equivalents
|
$
|
232,331
|
|
|
$
|
183,164
|
|
|
$
|
183,179
|
|
|
$
|
151,686
|
|
Restricted cash included in short-term restricted cash and investments
|
504
|
|
|
504
|
|
|
—
|
|
|
—
|
|
||||
Restricted cash included in long-term restricted cash and investments
|
1,500
|
|
|
4,646
|
|
|
4,150
|
|
|
4,150
|
|
||||
Cash, cash equivalents, and restricted cash as reported within the Condensed Consolidated Statements of Cash Flows
|
$
|
234,335
|
|
|
$
|
188,314
|
|
|
$
|
187,329
|
|
|
$
|
155,836
|
|
|
March 31, 2018
|
||||||||||||||
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
||||||||
Money market funds
|
$
|
55,241
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
55,241
|
|
Commercial paper
|
237,067
|
|
|
—
|
|
|
—
|
|
|
237,067
|
|
||||
Corporate bonds
|
191,361
|
|
|
13
|
|
|
(843
|
)
|
|
190,531
|
|
||||
U.S. Treasury and government sponsored enterprises
|
21,490
|
|
|
—
|
|
|
(57
|
)
|
|
21,433
|
|
||||
Total
|
$
|
505,159
|
|
|
$
|
13
|
|
|
$
|
(900
|
)
|
|
$
|
504,272
|
|
|
December 31, 2017
|
||||||||||||||
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
||||||||
Money market funds
|
$
|
45,478
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
45,478
|
|
Commercial paper
|
199,647
|
|
|
—
|
|
|
—
|
|
|
199,647
|
|
||||
Corporate bonds
|
179,336
|
|
|
18
|
|
|
(332
|
)
|
|
179,022
|
|
||||
U.S. Treasury and government sponsored enterprises
|
16,295
|
|
|
—
|
|
|
(32
|
)
|
|
16,263
|
|
||||
Total
|
$
|
440,756
|
|
|
$
|
18
|
|
|
$
|
(364
|
)
|
|
$
|
440,410
|
|
|
March 31, 2018
|
||||||||||||||||||||||
|
In an Unrealized Loss Position Less than 12 Months
|
|
In an Unrealized Loss Position 12 Months or Greater
|
|
Total
|
||||||||||||||||||
|
Fair Value
|
|
Gross
Unrealized Losses |
|
Fair Value
|
|
Gross
Unrealized Losses |
|
Fair Value
|
|
Gross
Unrealized Losses |
||||||||||||
Corporate bonds
|
$
|
167,459
|
|
|
$
|
(822
|
)
|
|
$
|
9,077
|
|
|
$
|
(21
|
)
|
|
$
|
176,536
|
|
|
$
|
(843
|
)
|
U.S. Treasury and government sponsored enterprises
|
17,000
|
|
|
(52
|
)
|
|
2,655
|
|
|
(5
|
)
|
|
19,655
|
|
|
(57
|
)
|
||||||
Total
|
$
|
184,459
|
|
|
$
|
(874
|
)
|
|
$
|
11,732
|
|
|
$
|
(26
|
)
|
|
$
|
196,191
|
|
|
$
|
(900
|
)
|
|
December 31, 2017
|
||||||||||||||||||||||
|
In an Unrealized Loss Position Less than 12 Months
|
|
In an Unrealized Loss Position 12 Months or Greater
|
|
Total
|
||||||||||||||||||
|
Fair Value
|
|
Gross
Unrealized Losses |
|
Fair Value
|
|
Gross
Unrealized Losses |
|
Fair Value
|
|
Gross
Unrealized Losses |
||||||||||||
Corporate bonds
|
$
|
140,746
|
|
|
$
|
(296
|
)
|
|
$
|
20,047
|
|
|
$
|
(36
|
)
|
|
$
|
160,793
|
|
|
$
|
(332
|
)
|
U.S. Treasury and government sponsored enterprises
|
13,611
|
|
|
(23
|
)
|
|
2,651
|
|
|
(9
|
)
|
|
16,262
|
|
|
(32
|
)
|
||||||
Total
|
$
|
154,357
|
|
|
$
|
(319
|
)
|
|
$
|
22,698
|
|
|
$
|
(45
|
)
|
|
$
|
177,055
|
|
|
$
|
(364
|
)
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Maturing in one year or less
|
$
|
410,062
|
|
|
$
|
377,155
|
|
Maturing after one year through five years
|
94,210
|
|
|
63,255
|
|
||
Total
|
$
|
504,272
|
|
|
$
|
440,410
|
|
|
March 31,
2018 |
|
December 31, 2017
|
||||
Raw materials
|
$
|
1,937
|
|
|
$
|
498
|
|
Work in process
|
3,726
|
|
|
3,997
|
|
||
Finished goods
|
2,977
|
|
|
2,854
|
|
||
Total
|
$
|
8,640
|
|
|
$
|
7,349
|
|
|
|
|
|
||||
Balance Sheet classification:
|
|
|
|
||||
Inventory
|
$
|
7,563
|
|
|
$
|
6,657
|
|
Other long-term assets
|
1,077
|
|
|
692
|
|
||
Total
|
$
|
8,640
|
|
|
$
|
7,349
|
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
Computer equipment and software
|
$
|
14,772
|
|
|
$
|
14,146
|
|
Laboratory equipment
|
5,959
|
|
|
5,959
|
|
||
Leasehold improvements
|
4,715
|
|
|
4,715
|
|
||
Furniture and fixtures
|
1,609
|
|
|
1,609
|
|
||
Construction in progress
|
41,528
|
|
|
22,114
|
|
||
|
68,583
|
|
|
48,543
|
|
||
Less: accumulated depreciation and amortization
|
(23,171
|
)
|
|
(22,800
|
)
|
||
Property and equipment, net
|
$
|
45,412
|
|
|
$
|
25,743
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Research and development
|
$
|
3,033
|
|
|
$
|
1,478
|
|
Selling, general and administrative
|
6,272
|
|
|
3,235
|
|
||
Total stock-based compensation
|
$
|
9,305
|
|
|
$
|
4,713
|
|
|
Three Months Ended March 31,
|
||||
|
2018
|
|
2017
|
||
Stock options:
|
|
|
|
||
Risk-free interest rate
|
2.40
|
%
|
|
1.62
|
%
|
Dividend yield
|
—
|
%
|
|
—
|
%
|
Volatility
|
54
|
%
|
|
64
|
%
|
Expected life
|
4.0 years
|
|
|
4.0 years
|
|
ESPP:
|
|
|
|
||
Risk-free interest rate
|
1.53
|
%
|
|
0.62
|
%
|
Dividend yield
|
—
|
%
|
|
—
|
%
|
Volatility
|
53
|
%
|
|
68
|
%
|
Expected life
|
6 months
|
|
|
6 months
|
|
|
Shares
|
|
Weighted
Average
Exercise Price Per Share
|
|
Weighted
Average
Remaining Contractual
Term
|
|
Aggregate
Intrinsic
Value
|
|||||
Options outstanding at December 31, 2017
|
22,208,446
|
|
|
$
|
6.83
|
|
|
|
|
|
||
Granted
|
293,580
|
|
|
$
|
25.72
|
|
|
|
|
|
||
Exercised
|
(288,196
|
)
|
|
$
|
6.69
|
|
|
|
|
|
||
Forfeited
|
(18,484
|
)
|
|
$
|
12.04
|
|
|
|
|
|
||
Options outstanding at March 31, 2018
|
22,195,346
|
|
|
$
|
7.08
|
|
|
3.86 years
|
|
$
|
339,631
|
|
Exercisable at March 31, 2018
|
16,497,014
|
|
|
$
|
4.66
|
|
|
3.30 years
|
|
$
|
288,535
|
|
|
Shares
|
|
Weighted
Average
Grant Date
Fair Value Per Share
|
|
Weighted
Average
Remaining
Contractual
Term
|
|
Aggregate
Intrinsic
Value
|
|||||
RSUs outstanding at December 31, 2017
|
3,762,990
|
|
|
$
|
17.76
|
|
|
|
|
|
||
Awarded
|
146,790
|
|
|
$
|
25.72
|
|
|
|
|
|
||
Vested and released
|
(197,884
|
)
|
|
$
|
6.30
|
|
|
|
|
|
||
Forfeited
|
(24,494
|
)
|
|
$
|
17.89
|
|
|
|
|
|
||
RSUs outstanding at March 31, 2018
|
3,687,402
|
|
|
$
|
18.69
|
|
|
1.83 years
|
|
$
|
81,676
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Provision for income taxes
|
$
|
2,514
|
|
|
$
|
134
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Numerator:
|
|
|
|
||||
Net income
|
$
|
115,857
|
|
|
$
|
16,700
|
|
Net income allocated to participating securities
|
—
|
|
|
(57
|
)
|
||
Net income allocable to common stock for basic net income per share
|
115,857
|
|
|
16,643
|
|
||
Adjustment to net income allocated to participating securities
|
—
|
|
|
3
|
|
||
Net income allocable to common stock for diluted net income per share
|
$
|
115,857
|
|
|
$
|
16,646
|
|
Denominator:
|
|
|
|
||||
Weighted-average shares of common stock outstanding used in computing basic net income per share
|
296,421
|
|
|
290,870
|
|
||
Dilutive securities:
|
|
|
|
||||
Outstanding stock options, unvested RSUs and ESPP contributions
|
17,270
|
|
|
18,665
|
|
||
Weighted-average shares of common stock outstanding and dilutive securities used in computing diluted net income per share
|
313,691
|
|
|
309,535
|
|
||
|
|
|
|
||||
Net income per share, basic
|
$
|
0.39
|
|
|
$
|
0.06
|
|
Net income per share, diluted
|
$
|
0.37
|
|
|
$
|
0.05
|
|
|
Three Months Ended March 31,
|
||||
|
2018
|
|
2017
|
||
Outstanding stock options, unvested RSUs and ESPP contributions
|
1,907
|
|
|
1,396
|
|
Secured Convertible Notes due 2018 (“Deerfield Notes”)
|
—
|
|
|
33,890
|
|
Total potentially dilutive shares
|
1,907
|
|
|
35,286
|
|
|
March 31, 2018
|
||||||||||
|
Level 1
|
|
Level 2
|
|
Total
|
||||||
Money market funds
|
$
|
55,241
|
|
|
$
|
—
|
|
|
$
|
55,241
|
|
Commercial paper
|
—
|
|
|
237,067
|
|
|
237,067
|
|
|||
Corporate bonds
|
—
|
|
|
190,531
|
|
|
190,531
|
|
|||
U.S. Treasury and government sponsored enterprises
|
—
|
|
|
21,433
|
|
|
21,433
|
|
|||
Total financial assets
|
$
|
55,241
|
|
|
$
|
449,031
|
|
|
$
|
504,272
|
|
|
December 31, 2017
|
||||||||||
|
Level 1
|
|
Level 2
|
|
Total
|
||||||
Money market funds
|
$
|
45,478
|
|
|
$
|
—
|
|
|
$
|
45,478
|
|
Commercial paper
|
—
|
|
|
199,647
|
|
|
199,647
|
|
|||
Corporate bonds
|
—
|
|
|
179,022
|
|
|
179,022
|
|
|||
U.S. Treasury and government sponsored enterprises
|
—
|
|
|
16,263
|
|
|
16,263
|
|
|||
Total financial assets
|
$
|
45,478
|
|
|
$
|
394,932
|
|
|
$
|
440,410
|
|
•
|
In January 2018, we announced an amendment to the protocol for the phase 1b trial of cabozantinib in combination with atezolizumab in patients with locally advanced or metastatic solid tumors. The amendment added four new expansion cohorts to the trial, which now includes patients with NSCLC and CRPC, in addition to previously included patients with RCC and UC.
|
•
|
In January 2018,
we entered into an exclusive collaboration and license agreement with StemSynergy for the discovery and development of novel oncology compounds aimed to inhibit tumor growth by targeting CK1α.
|
•
|
In February 2018, we announced updated results from the NCI-CTEP-sponsored phase 1 trial of cabozantinib in combination with nivolumab, with or without ipilimumab, in patients with refractory genitourinary tumors. The updated results demonstrated an acceptable tolerability profile and high rates of durable responses in the previously treated metastatic UC and metastatic RCC cohorts.
|
•
|
In
February 2018, updated data from a phase 2 IST of cabozantinib in patients with previously untreated radioiodine-refractory differentiated thyroid carcinoma, or DTC, were presented at the 2018 Multidisciplinary Head and Neck Cancers Symposium. Based on the encouraging efficacy results and manageable safety profile in this phase 2 trial and other prior phase 2 trials in previously treated DTC, we plan to initiate a phase 3 pivotal trial evaluating cabozantinib as a treatment for patients with advanced DTC in 2018.
|
•
|
In February 2018, we announced that our partner Daiichi Sankyo submitted its regulatory application for esaxerenone for an essential hypertension indication to the Japanese Pharmaceutical and Medical Devices Agency. The submission was based on the positive top-line results from
ESAX-HTN,
a phase 3 pivotal trial of esaxerenone, a product of the companies’ prior research collaboration, in patients with essential hypertension in Japan, which achieved its primary endpoint in September 2017.
As a result of the submission, we received a $20.0 million milestone payment in March 2018 per the two companies’ collaboration agreement.
|
•
|
In March 2018, we completed the submission of an sNDA with the FDA for cabozantinib as a treatment for patients with previously treated advanced HCC.
|
•
|
In March 2018, Ipsen received a positive opinion from the Committee for Medicinal Products for Human Use
, or CHMP,
for CABOMETYX in adult patients with previously untreated, intermediate- or poor-risk advanced RCC.
|
•
|
In March 2018, Ipsen received validation from the European Medicines Agency, or EMA, for the application for variation to the CABOMETYX marketing authorization for the addition of a new indication in previously treated advanced HCC.
|
•
|
In April 2018, Maria C. Freire, Ph.D. was elected to our Board of Directors. Dr. Freire currently serves as President and Executive Director and as a member of the board of directors of the Foundation for the National Institutes of Health, an independent 501(c)(3) charitable organization established by Congress to support the National Institutes of Health by raising private funds for biomedical research and fostering partnerships and alliances around the world.
|
•
|
In April 2018, Roche confirmed that IMspire150, its phase 3 pivotal trial evaluating the combination of cobimetinib, atezolizumab and vemurafenib in patients with first-line BRAF V600 mutation-positive metastatic or unresectable locally advanced melanoma, completed enrollment.
|
•
|
In May 2018,
we entered into a collaboration and license agreement with Invenra to discover and develop multispecific antibodies for the treatment of cancer.
|
•
|
Net income for the first quarter of 2018 was
$115.9 million
, or
$0.39
per share, basic and
$0.37
per share, diluted, compared to
$16.7 million
, or
$0.06
per share, basic and
$0.05
per share, diluted, for the first quarter of 2017.
|
•
|
Total revenues for the first quarter of 2018 increased to
$212.3 million
, compared to
$80.9 million
for the first quarter of 2017.
|
•
|
Net product revenues for the first quarter of 2018 increased to
$134.3 million
, compared to
$68.9 million
for the first quarter of 2017.
|
•
|
Research and development expenses for the first quarter of 2018 increased to
$37.8 million
, compared to
$23.2 million
for the first quarter of 2017.
|
•
|
Selling, general and administrative expenses for the first quarter of 2018 increased to
$52.6 million
, compared to
$34.3 million
for the first quarter of 2017.
|
•
|
Cash and investments increased to
$525.6 million
at
March 31, 2018
, compared to
$457.2 million
at
December 31, 2017
.
|
|
Three Months Ended March 31,
|
|
Percentage Change -
2018 v. 2017
|
|||||||
|
2018
|
|
2017
|
|
||||||
Net product revenues
|
$
|
134,272
|
|
|
$
|
68,877
|
|
|
95
|
%
|
Collaboration revenues
|
78,074
|
|
|
12,010
|
|
|
550
|
%
|
||
Total revenues
|
$
|
212,346
|
|
|
$
|
80,887
|
|
|
163
|
%
|
|
Three Months Ended March 31,
|
|
Percentage Change -
2018 v. 2017 |
|||||||
|
2018
|
|
2017
|
|
||||||
CABOMETYX
|
$
|
128,934
|
|
|
$
|
62,359
|
|
|
107
|
%
|
COMETRIQ
|
5,338
|
|
|
6,518
|
|
|
(18
|
)%
|
||
Net product revenues
|
$
|
134,272
|
|
|
$
|
68,877
|
|
|
95
|
%
|
|
Three Months Ended March 31,
|
|
Percentage Change -
2018 v. 2017 |
|||||||
|
2018
|
|
2017
|
|
||||||
Collaboration revenues:
|
|
|
|
|
|
|
||||
License revenues
(1)
|
$
|
69,030
|
|
|
$
|
11,214
|
|
|
516
|
%
|
Research and development services revenues
(2)
|
10,099
|
|
|
1,132
|
|
|
792
|
%
|
||
Product supply revenues, net
|
(1,055
|
)
|
|
(336
|
)
|
|
214
|
%
|
||
Total collaboration revenues
|
$
|
78,074
|
|
|
$
|
12,010
|
|
|
550
|
%
|
(1)
|
License revenues for the
three months ended
March 31, 2018
included revenues related to the portion of two milestones that were allocated to the transfer of intellectual property licenses and were fully recognized in the current period and royalty revenues from Ipsen and Genentech. License revenues for the
three months ended
March 31, 2017
included the recognition of deferred revenue from upfront payments and a non-substantive milestone that were being amortized over various periods, royalty revenues from Ipsen and Genentech and one milestone. Upon the adoption of Topic 606, the allocation of proceeds from our collaboration partners between licenses and research and development services as well as the timing of recognition has changed. Therefore, among other changes, as of January 1, 2018, the portion of proceeds allocated to intellectual property licenses for our Ipsen and Takeda collaboration agreements are recognized immediately and license revenues no longer includes revenues related to the amortization of deferred revenue.
|
(2)
|
Research and development services revenues for
three months ended
March 31, 2018
included the recognition of deferred revenue for the portion of the upfront payments and milestones that were allocated to the research and development services which are being amortized through early 2030, as well as development cost reimbursements earned on our collaboration agreements. As described in (1) above, we did not allocate any of our upfront payments or milestones to research and development services prior to the adoption of Topic 606 and therefore research and development services revenues for the
three months ended
March 31, 2017
included only development cost reimbursements earned on our collaboration agreements.
|
|
Three Months Ended March 31,
|
|
Percentage Change -
2018 v. 2017 |
|||||||
|
2018
|
|
2017
|
|
||||||
Cost of goods sold
|
$
|
5,639
|
|
|
$
|
3,203
|
|
|
76
|
%
|
Gross margin
|
96
|
%
|
|
95
|
%
|
|
|
|
Three Months Ended March 31,
|
|
Percentage Change -
2018 v. 2017 |
|||||||
|
2018
|
|
2017
|
|
||||||
Research and development expenses
|
$
|
37,757
|
|
|
$
|
23,210
|
|
|
63
|
%
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Research and development expenses:
|
|
|
|
||||
Development:
|
|
|
|
||||
Clinical trial costs
|
$
|
11,196
|
|
|
$
|
7,808
|
|
Personnel expenses
|
10,658
|
|
|
7,164
|
|
||
Consulting and outside services
|
1,945
|
|
|
1,805
|
|
||
Other development costs
|
3,388
|
|
|
2,733
|
|
||
Total development
|
27,187
|
|
|
19,510
|
|
||
Drug discovery
(1)
|
5,990
|
|
|
798
|
|
||
Other
(2)
|
4,580
|
|
|
2,902
|
|
||
Total research and development expenses
|
$
|
37,757
|
|
|
$
|
23,210
|
|
(1)
|
Primarily includes a $3.0 million upfront payment for our exclusive collaboration and license agreement with StemSynergy, personnel expenses, consulting and outside services, and laboratory supplies.
|
(2)
|
Includes stock-based compensation and the allocation of general corporate costs to research and development.
|
|
Three Months Ended March 31,
|
|
Percentage Change -
2018 v. 2017 |
|||||||
|
2018
|
|
2017
|
|
||||||
Selling, general and administrative expenses
|
$
|
52,643
|
|
|
$
|
34,288
|
|
|
54
|
%
|
|
Three Months Ended March 31,
|
|
Percentage Change -
2018 v. 2017 |
|||||||
|
2018
|
|
2017
|
|
||||||
Interest income
|
$
|
1,895
|
|
|
$
|
1,113
|
|
|
70
|
%
|
Interest expense
|
—
|
|
|
(4,420
|
)
|
|
(100
|
)%
|
||
Other, net
|
169
|
|
|
(45
|
)
|
|
476
|
%
|
||
Total other income (expenses), net
|
$
|
2,064
|
|
|
$
|
(3,352
|
)
|
|
(162
|
)%
|
|
Three Months Ended March 31,
|
|
Percentage Change -
2018 v. 2017 |
|||||||
|
2018
|
|
2017
|
|
||||||
Provision for income taxes
|
$
|
2,514
|
|
|
$
|
134
|
|
|
1,776
|
%
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Net cash provided by operating activities:
|
|
|
|
||||
Net income
|
$
|
115,857
|
|
|
$
|
16,700
|
|
Adjustments to reconcile net income to net cash provided by operating activities
|
11,189
|
|
|
7,831
|
|
||
Changes in operating assets and liabilities
|
(55,238
|
)
|
|
44,327
|
|
||
Net cash provided by operating activities
|
71,808
|
|
|
68,858
|
|
||
Net cash (used in) provided by investing activities
|
(25,533
|
)
|
|
34,503
|
|
||
Net cash used in financing activities
|
(254
|
)
|
|
(71,868
|
)
|
||
Net increase in cash, cash equivalents and restricted cash
|
46,021
|
|
|
31,493
|
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
188,314
|
|
|
155,836
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
$
|
234,335
|
|
|
$
|
187,329
|
|
•
|
the effectiveness, or perceived effectiveness, of CABOMETYX in comparison to competing products;
|
•
|
the safety of CABOMETYX, including the existence of serious side effects of CABOMETYX and their severity in comparison to those of competing products;
|
•
|
CABOMETYX’s relative convenience and ease of administration;
|
•
|
potential unexpected results connected with analysis of data from future or ongoing clinical trials of cabozantinib;
|
•
|
the timing of CABOMETYX label expansions for additional indications, if any, relative to competitive treatments;
|
•
|
the price of CABOMETYX relative to competitive therapies and any new government initiatives affecting pharmaceutical pricing;
|
•
|
the strength of CABOMETYX sales efforts, marketing, medical affairs and distribution support;
|
•
|
the sufficiency of commercial and government insurance coverage and adequacy of reimbursement for CABOMETYX; and
|
•
|
our ability to enforce our intellectual property rights with respect to CABOMETYX.
|
•
|
the federal Anti-Kickback Statute, or AKS, which governs our business activities, including our marketing practices, educational programs, pricing policies, and relationships with healthcare providers or other entities.
The AKS has been broadly interpreted to apply to manufacturer arrangements with prescribers, purchasers and formulary managers, among others. Among other things, this statute prohibits persons and entities
from knowingly and willfully soliciting, receiving, offering or paying remuneration, directly or indirectly, in exchange for or to induce either the referral of an individual for, or the purchase, order or recommendation of, any good or service for which payment may be made under federal healthcare programs such as the Medicare and Medicaid programs. Remuneration is not defined in the AKS and has been broadly interpreted to include
|
•
|
the Federal Food, Drug, and Cosmetic Act, or FDCA, and its regulations, which prohibit, among other things, the introduction or delivery for introduction into interstate commerce of any drug that is adulterated or misbranded;
|
•
|
federal civil and criminal false claims laws, including the civil False Claims Act, and civil monetary penalty laws, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid, or other third-party payers that are false or fraudulent, or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government;
|
•
|
federal criminal laws that prohibit executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters;
|
•
|
the Health Insurance Portability and Accountability Act of 1996, or HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, and its implementing regulations, which impose certain requirements relating to the privacy, security and transmission of individually identifiable health information on covered entities and business associates that access such information on behalf of a covered entity;
|
•
|
state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws, which may apply to items or services reimbursed by any third-party payer, including commercial insurers, and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts;
|
•
|
the Foreign Corrupt Practices Act, a U.S. law which regulates certain financial relationships with foreign government officials (which could include, for example, certain medical professionals) and its foreign equivalents;
|
•
|
federal and state consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers;
|
•
|
federal and state government price reporting laws, which require us to calculate and report complex pricing metrics to government programs, where such reported prices may be used in the calculation of reimbursement and/or discounts on our marketed drugs, as well as certain state and municipal government price reporting laws that require us to provide justifications where drug prices exceed a certain price increase threshold (and participation in these programs and compliance with the applicable requirements may subject us to potentially significant discounts on our products, increased infrastructure costs, and could potentially affect our ability to offer certain marketplace discounts); and
|
•
|
federal and state financial and drug pricing transparency laws, which generally require certain types of expenditures in the U.S. to be tracked and reported (and compliance with such requirements may require investment in infrastructure to ensure that tracking is performed properly, and some of these laws result in the public disclosure of various types of payments and relationships with healthcare providers and healthcare entities, which could potentially have a negative effect on our business and/or increase enforcement scrutiny of our activities).
|
•
|
lack of efficacy or an effective safety profile;
|
•
|
negative or inconclusive clinical trial results may require us to conduct further testing or to abandon projects that we had expected to be promising;
|
•
|
our competitors may discover or commercialize other compounds or therapies that show significantly improved safety or efficacy compared to our product candidates;
|
•
|
our inability to identify and maintain a sufficient number of trial sites, many of which may already be engaged in other clinical trial programs;
|
•
|
patient registration or enrollment in our clinical testing may be lower than we anticipate, resulting in the delay or cancellation of clinical testing;
|
•
|
failure by our collaborators to provide us on a timely basis with an adequate supply of product that complies with the applicable quality and regulatory requirements for a combination trial;
|
•
|
failure of our third-party contract research organization or investigators to satisfy their contractual obligations, including deviating from trial protocol; and
|
•
|
regulators or institutional review boards may withhold authorization to commence or conduct clinical trials of a product candidate, or delay, suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements or their determination that participating patients are being exposed to unacceptable health risks.
|
•
|
the number of patients who ultimately participate in the clinical trial;
|
•
|
the duration of patient follow-up that is appropriate in view of the results or required by regulatory authorities;
|
•
|
the number of clinical sites included in the trials; and
|
•
|
the length of time required to enroll suitable patient subjects.
|
•
|
the commercial success of both CABOMETYX and COMETRIQ and the revenues we generate from those approved products;
|
•
|
costs associated with maintaining our expanded sales, marketing, medical affairs and distribution capabilities for CABOMETYX and COMETRIQ;
|
•
|
the achievement of stated regulatory and commercial milestones under our collaboration agreements with Ipsen and Takeda;
|
•
|
the commercial success of COTELLIC and the revenues generated through our share of related profits and losses for the commercialization of COTELLIC in the U.S. and royalties from COTELLIC sales outside the U.S. under our collaboration with Genentech;
|
•
|
the potential regulatory approval of cabozantinib as a treatment for patients with previously treated advanced HCC, and in other indications, both in the U.S. and abroad;
|
•
|
future clinical trial results;
|
•
|
our future investments in the expansion of our pipeline through drug discovery and corporate development activities;
|
•
|
our ability to control costs;
|
•
|
the cost of clinical drug supply for our clinical trials;
|
•
|
trends and developments in the pricing of oncologic therapeutics in the U.S. and abroad, especially in the EU;
|
•
|
scientific developments in the market for oncologic therapeutics and the timing of regulatory approvals for competing oncologic therapies; and
|
•
|
the filing, maintenance, prosecution, defense and enforcement of patent claims and other intellectual property rights.
|
•
|
we are not able to control the amount and timing of resources that our collaborators or potential future collaborators will devote to the development or commercialization of drug candidates or to their marketing and distribution;
|
•
|
we are not able to control the U.S. commercial resourcing decisions made and resulting costs incurred by Genentech for cobimetinib, which costs we are obligated to share, in part, under our collaboration agreement with Genentech;
|
•
|
collaborators may delay clinical trials, fail to supply us on a timely basis with the product required for a combination trial, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a drug candidate, repeat or conduct new clinical trials or require a new formulation of a drug candidate for clinical testing;
|
•
|
disputes may arise between us and our collaborators that result in the delay or termination of the research, development or commercialization of our drug candidates, or that diminish or delay receipt of the economic benefits we are entitled to receive under the collaboration, or that result in costly litigation or arbitration that diverts management’s attention and resources;
|
•
|
collaborators may experience financial difficulties;
|
•
|
collaborators may not be successful in their efforts to obtain regulatory approvals in a timely manner, or at all;
|
•
|
collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our proprietary information or expose us to potential litigation;
|
•
|
collaborators may not comply with applicable healthcare regulatory laws;
|
•
|
business combinations or significant changes in a collaborator’s business strategy may adversely affect a collaborator’s willingness or ability to complete its obligations under any arrangement;
|
•
|
a collaborator could independently move forward with a competing drug candidate developed either independently or in collaboration with others, including our competitors;
|
•
|
we may be precluded from entering into additional collaboration arrangements with other parties in an area or field of exclusivity;
|
•
|
future collaborators may require us to relinquish some important rights, such as marketing and distribution rights; and
|
•
|
collaborations may be terminated or allowed to expire, which would delay, and may increase the cost of development of our drug candidates.
|
•
|
the commercial success of both CABOMETYX and COMETRIQ and the revenues we generate from those approved products;
|
•
|
customer ordering patterns for CABOMETYX and COMETRIQ, which may vary significantly from period to period;
|
•
|
the overall level of demand for CABOMETYX and COMETRIQ, including the impact of any competitive products and the duration of therapy for patients receiving CABOMETYX or COMETRIQ;
|
•
|
the commercial success of COTELLIC and the revenues generated through our share of related profits and losses for the commercialization of COTELLIC in the U.S. and royalties from COTELLIC sales outside the U.S. under our collaboration with Genentech;
|
•
|
changes in the amount of deductions from gross sales, including changes to the discount percentage of rebates and chargebacks mandated by the government programs in which we participate, including increases in the government discount percentage resulting from price increases we have taken or may take in the future, or due to different levels of utilization by entities entitled to government rebates and chargebacks and changes in patient demographics;
|
•
|
costs associated with maintaining our sales, marketing, medical affairs and distribution capabilities for CABOMETYX, COMETRIQ and COTELLIC;
|
•
|
our ability to obtain regulatory approval for cabozantinib as a treatment for patients with previously treated advanced HCC;
|
•
|
the achievement of stated regulatory and commercial milestones, under our collaboration agreements;
|
•
|
the progress and scope of other development and commercialization activities for cabozantinib and our other compounds;
|
•
|
future clinical trial results;
|
•
|
our future investments in the expansion of our pipeline through drug discovery and business development activities;
|
•
|
the inability to obtain adequate product supply for any approved drug product or inability to do so at acceptable prices;
|
•
|
recognition of upfront licensing or other fees or revenues;
|
•
|
payments of non-refundable upfront or licensing fees, or payment for cost-sharing expenses, to third parties;
|
•
|
the introduction of new technologies or products by our competitors;
|
•
|
the timing and willingness of collaborators to further develop or, if approved, commercialize our product candidates out-licensed to them;
|
•
|
the termination or non-renewal of existing collaborations or third-party vendor relationships;
|
•
|
regulatory actions with respect to our product candidates and any approved products or our competitors’ products;
|
•
|
disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies;
|
•
|
the timing and amount of expenses incurred for clinical development and manufacturing of cabozantinib;
|
•
|
adjustments to expenses accrued in prior periods based on management’s estimates after the actual level of activity relating to such expenses becomes more certain;
|
•
|
the impairment of acquired goodwill and other assets;
|
•
|
additions and departures of key personnel;
|
•
|
significant fluctuations in interest rates or foreign currency exchange rates;
|
•
|
general and industry-specific economic conditions that may affect our or our collaborators’ research and development expenditures; and
|
•
|
other factors described in this “Risk Factors” section.
|
•
|
adverse or inconclusive results or announcements in our or our collaborators’ clinical trials or delays in those clinical trials;
|
•
|
the
announcement of FDA approval or non-approval, or delays in the FDA review process with respect to cabozantinib, our collaborators’ product candidates being developed in combination with cabozantinib, or our competitors’ product candidates
;
|
•
|
the commercial success of both CABOMETYX and COMETRIQ and the revenues we generate from those approved products;
|
•
|
the timing of achievement of our clinical, regulatory, partnering and other milestones, such as the commencement of clinical development, the completion of a clinical trial, the filing for regulatory approval or the establishment of collaborative arrangements for cabozantinib or any of our other programs or compounds;
|
•
|
actions taken by regulatory agencies, both in the U.S. and abroad, with respect to cabozantinib or our clinical trials for cabozantinib;
|
•
|
unanticipated regulatory actions taken by the FDA as a result of changing FDA standards and practices concerning the review of product candidates at earlier stages of clinical development or with lesser developed data sets and the speed with which the FDA is conducting regulatory reviews;
|
•
|
the announcement of new products by our competitors;
|
•
|
the announcement of regulatory applications seeking a path to U.S. approval of generic versions of our marketed products;
|
•
|
quarterly variations in our or our competitors’ results of operations;
|
•
|
developments in our relationships with our collaborators, including the termination or modification of our agreements;
|
•
|
the announcement of an in-licensed product candidate or strategic acquisition;
|
•
|
conflicts or litigation with our collaborators;
|
•
|
litigation, including intellectual property infringement and product liability lawsuits, involving us;
|
•
|
failure to achieve operating results projected by securities analysts;
|
•
|
changes in earnings estimates or recommendations by securities analysts;
|
•
|
the entry into new financing arrangements;
|
•
|
developments in the biotechnology, biopharmaceutical or pharmaceutical industry;
|
•
|
sales of large blocks of our common stock or sales of our common stock by our executive officers, directors and significant stockholders;
|
•
|
departures of key personnel or board members;
|
•
|
the
extent to which coverage and reimbursement is available for both CABOMETYX and COMETRIQ from government and health administration authorities, private health insurers, managed care programs and other third-party payers
;
|
•
|
disposition of any of our technologies or compounds; and
|
•
|
general market, economic and political conditions and other factors, including factors unrelated to our operating performance or the operating performance of our competitors.
|
•
|
a classified Board of Directors;
|
•
|
a prohibition on actions by our stockholders by written consent;
|
•
|
the inability of our stockholders to call special meetings of stockholders;
|
•
|
the ability of our Board of Directors to issue preferred stock without stockholder approval, which could be used to institute a “poison pill” that would work to dilute the stock ownership of a potential hostile acquirer, effectively preventing acquisitions that have not been approved by our Board of Directors;
|
•
|
limitations on the removal of directors; and
|
•
|
advance notice requirements for director nominations and stockholder proposals.
|
Exhibit
Number
|
|
Exhibit Description
|
|
Incorporation by Reference
|
|
Filed
Herewith
|
||||||
Form
|
|
File Number
|
|
Exhibit/
Appendix
Reference
|
|
Filing Date
|
|
|||||
3.1
|
|
|
10-K
|
|
000-30235
|
|
3.1
|
|
3/10/2010
|
|
|
|
3.2
|
|
|
10-K
|
|
000-30235
|
|
3.2
|
|
3/10/2010
|
|
|
|
3.3
|
|
|
8-K
|
|
000-30235
|
|
3.1
|
|
5/25/2012
|
|
|
|
3.4
|
|
|
8-K
|
|
000-30235
|
|
3.1
|
|
10/15/2014
|
|
|
|
3.5
|
|
|
8-K
|
|
000-30235
|
|
3.2
|
|
10/15/2014
|
|
|
|
3.6
|
|
|
8-K
|
|
000-30235
|
|
3.1
|
|
12/5/2011
|
|
|
|
4.1
|
|
|
S-1,
as amended
|
|
333-96335
|
|
4.1
|
|
4/7/2000
|
|
|
|
10.1
|
|
|
10-K
|
|
000-30235
|
|
10.25
|
|
2/26/2018
|
|
|
|
10.2
|
|
|
10-K
|
|
000-30235
|
|
10.35
|
|
2/26/2018
|
|
|
|
10.3
|
|
|
8-K
|
|
000-30235
|
|
Item 5.02 disclosure
|
|
2/16/2018
|
|
|
|
10.4
|
|
|
8-K
|
|
000-30235
|
|
10.1
|
|
2/16/2018
|
|
|
|
10.5
|
|
|
|
|
|
|
|
|
|
|
X
|
|
12.1
|
|
|
|
|
|
|
|
|
|
|
X
|
|
31.1
|
|
|
|
|
|
|
|
|
|
|
X
|
|
31.2
|
|
|
|
|
|
|
|
|
|
|
X
|
|
32.1‡
|
|
|
|
|
|
|
|
|
|
|
X
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
|
|
|
|
|
|
X
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
|
|
|
|
|
|
X
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
Exhibit
Number
|
|
Exhibit Description
|
|
Incorporation by Reference
|
|
Filed
Herewith
|
||||||
Form
|
|
File Number
|
|
Exhibit/
Appendix
Reference
|
|
Filing Date
|
|
|||||
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
101.LAB
|
|
XBRL Taxonomy Extension Labels Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
*
|
Confidential treatment granted for certain portions of this exhibit.
|
**
|
Confidential treatment requested for certain portions of this exhibit.
|
‡
|
This certification accompanies this Quarterly Report on Form 10-Q, is not deemed filed with the SEC and is not to be incorporated by reference into any filing of Exelixis, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of this Quarterly Report on Form 10-Q), irrespective of any general incorporation language contained in such filing.
|
|
|
E
XELIXIS,
I
NC.
|
|
|
|
|
|
May 2, 2018
|
|
By:
|
/s/ C
HRISTOPHER
J. S
ENNER
|
Date
|
|
|
Christopher J. Senner
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
(Duly Authorized Officer and Principal Financial and Accounting Officer)
|
SECTION 1.
|
Introduction.
|
SECTION 2.
|
Definitions.
|
SECTION 3.
|
Eligibility For Benefits.
|
SECTION 4.
|
Amount of Benefits.
|
Position or Level
|
Months
|
Chief Executive Officer
|
24 months
|
Executive Participants other than the Chief Executive Officer
|
18 months
|
Participants who are not Executive Participants
|
12 months
|
Position or Level
|
Time Period
|
Maximum Amount
|
Chief Executive Officer
|
24 months
|
$50,000
|
Executive Participants other than the Chief Executive Officer
|
18 months
|
$30,000
|
Participants who are not Executive Participants
|
12 months
|
$20,000
|
SECTION 5.
|
Time and Form Of Severance Payments.
|
SECTION 6.
|
REEMPLOYMENT.
|
SECTION 7.
|
Limitations on Benefits.
|
SECTION 8.
|
Right To Interpret Plan; Amendment and Termination.
|
SECTION 9.
|
No Implied Employment Contract.
|
SECTION 10.
|
Legal Construction.
|
SECTION 11.
|
Claims, Inquiries And Appeals.
|
(2)
|
references to the specific Plan provisions upon which the denial is based;
|
(3)
|
a description of any additional information or material that the Plan Administrator needs to complete the review and an explanation of why such information or material is necessary; and
|
(4)
|
an explanation of the Plan’s review procedures and the time limits applicable to such procedures, including a statement of the applicant’s right to bring a civil action under Section 502(a) of ERISA following a denial on review of the claim, as described in Section 11(d) below.
|
(2)
|
references to the specific Plan provisions upon which the denial is based;
|
(3)
|
a statement that the applicant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to his or her claim; and
|
(4)
|
a statement of the applicant’s right to bring a civil action under Section 502(a) of ERISA.
|
SECTION 12.
|
Basis Of Payments To And From Plan.
|
SECTION 13.
|
Other Plan Information.
|
SECTION 14.
|
Statement Of ERISA Rights.
|
SECTION 15.
|
General Provisions.
|
SECTION 16.
|
Execution.
|
¨
|
accepts all of the benefits of Section 4(b) of the Plan regardless of any potential adverse effects on any outstanding option or other stock award
|
¨
|
accepts the benefits of Section 4(b) of the Plan that have no adverse effect on outstanding options or other stock awards and rejects the benefits of Section 4(b) of the Plan as to those outstanding options and other stock awards that would have potential adverse effects
|
¨
|
other (please describe): ____________________________________________
|
|
Three Months Ended March 31, 2018
|
|
Year Ended December 31,
|
||||||||||||||||
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|||||||||||
Fixed charges:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
$
|
—
|
|
|
$
|
8,679
|
|
|
$
|
33,060
|
|
|
$
|
40,680
|
|
|
$
|
41,362
|
|
Interest portion of rental expense
|
140
|
|
|
592
|
|
|
721
|
|
|
755
|
|
|
886
|
|
|||||
Total fixed charges
|
$
|
140
|
|
|
$
|
9,271
|
|
|
$
|
33,781
|
|
|
$
|
41,435
|
|
|
$
|
42,248
|
|
Earnings available for fixed charges:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss) before income taxes
|
$
|
118,371
|
|
|
$
|
158,577
|
|
|
$
|
(70,222
|
)
|
|
$
|
(161,744
|
)
|
|
$
|
(261,297
|
)
|
Fixed charges per above
|
140
|
|
|
9,271
|
|
|
33,781
|
|
|
41,435
|
|
|
42,248
|
|
|||||
Total earnings available for fixed charges
|
$
|
118,511
|
|
|
$
|
167,848
|
|
|
$
|
(36,441
|
)
|
|
$
|
(120,309
|
)
|
|
$
|
(219,049
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio of earnings to fixed charges
|
846.51
|
|
|
18.10
|
|
|
N/A
|
|
N/A
|
|
N/A
|
||||||||
Deficiency of earnings available to cover fixed charges
|
N/A
|
|
N/A
|
|
$
|
(70,222
|
)
|
|
$
|
(161,744
|
)
|
|
$
|
(261,297
|
)
|
/s/ M
ICHAEL
M. M
ORRISSEY
|
Michael M. Morrissey, Ph.D.
|
President and Chief Executive Officer
(Principal Executive Officer)
|
/s/ C
HRISTOPHER
J. S
ENNER
|
Christopher J. Senner
|
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
|
/s/ M
ICHAEL
M. M
ORRISSEY
|
|
|
|
/s/ C
HRISTOPHER
J. S
ENNER
|
Michael M. Morrissey, Ph.D.
|
|
|
|
Christopher J. Senner
|
President and Chief Executive Officer
(Principal Executive Officer)
|
|
|
|
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
|