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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¨
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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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Page
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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,
2019 |
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December 31, 2018*
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ASSETS
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||||
Current assets:
|
|
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||||
Cash and cash equivalents
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$
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373,937
|
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$
|
314,775
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Short-term investments
|
425,713
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|
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378,559
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||
Trade receivables, net
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107,670
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162,771
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||
Other receivables
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7,445
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16,056
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Inventory, net
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10,143
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9,838
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||
Unbilled collaboration revenue
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7,244
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|
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—
|
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Prepaid expenses and other current assets
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14,146
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|
|
15,017
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Total current assets
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946,298
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897,016
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Long-term investments
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218,619
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157,187
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Long-term restricted cash and investments
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1,100
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1,100
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Property and equipment, net
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50,553
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50,897
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Operating lease right-of-use assets
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13,921
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|
5,867
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Deferred tax assets, net
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243,717
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|
244,111
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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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3,902
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|
|
2,424
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Total assets
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$
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1,541,794
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$
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1,422,286
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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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9,748
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$
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10,901
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Accrued clinical trial liabilities
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23,055
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18,231
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Accrued compensation and benefits
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22,550
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32,142
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||
Rebates and fees due to customers
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19,708
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14,954
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Accrued collaboration liabilities
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7,556
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7,419
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Current portion of deferred revenue
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2,376
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|
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—
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Other current liabilities
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40,139
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21,825
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Total current liabilities
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125,132
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105,472
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Long-term portion of lease liabilities
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19,958
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12,178
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Long-term portion of deferred revenue
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8,323
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15,897
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Other long-term liabilities
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3,361
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1,286
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Total liabilities
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156,774
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134,833
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Commitments
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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, $0.001 par value; 400,000,000 shares authorized; issued and outstanding: 301,519,885 and 299,876,080 at March 31, 2019 and December 31, 2018, respectively
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302
|
|
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300
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Additional paid-in capital
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2,188,578
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2,168,217
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Accumulated other comprehensive income (loss)
|
728
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(701
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)
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Accumulated deficit
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(804,588
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)
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(880,363
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)
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Total stockholders’ equity
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1,385,020
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1,287,453
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Total liabilities and stockholders’ equity
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$
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1,541,794
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$
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1,422,286
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*
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The Condensed Consolidated Balance Sheet as of December 31, 2018 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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||||||
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2019
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2018
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Revenues:
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Net product revenues
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$
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179,581
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$
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134,272
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Collaboration revenue
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35,906
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79,447
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Total revenues
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215,487
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213,719
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Operating expenses:
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Cost of goods sold
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7,501
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5,639
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Research and development
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63,289
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37,757
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Selling, general and administrative
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60,138
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54,016
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Total operating expenses
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130,928
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97,412
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Income from operations
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84,559
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116,307
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Other income (expense), net:
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Interest income
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6,087
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1,895
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Other, net
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25
|
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169
|
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Total other income (expense), net:
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6,112
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|
2,064
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Income before income taxes
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90,671
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118,371
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Provision for income taxes
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(14,896
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)
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(2,514
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)
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Net income
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$
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75,775
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$
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115,857
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Net income per share, basic
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$
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0.25
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$
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0.39
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Net income per share, diluted
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$
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0.24
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$
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0.37
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Shares used in computing net income per share, basic
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300,542
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296,421
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Shares used in computing net income per share, diluted
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314,644
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313,691
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Three Months Ended March 31,
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||||||
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2019
|
|
2018
|
||||
Net income
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$
|
75,775
|
|
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$
|
115,857
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Other comprehensive income (loss):
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Net unrealized gains or losses on available-for-sale securities, net of tax impact of $394 and $0, respectively
(1)
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1,429
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(540
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)
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Total other comprehensive income (loss)
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1,429
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(540
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)
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Comprehensive income
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$
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77,204
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$
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115,317
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(1)
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Reclassification adjustments to net income resulting from realized gains or losses on the sale of securities and the related tax impact were nominal or zero during those periods.
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Common Stock
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Additional
Paid-in Capital |
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Accumulated
Other Comprehensive Loss |
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Accumulated
Deficit |
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Total
Stockholders’ Equity |
|||||||||||||
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Shares
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Amount
|
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|
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Balance at December 31, 2017
|
296,209,426
|
|
|
$
|
296
|
|
|
$
|
2,114,184
|
|
|
$
|
(347
|
)
|
|
$
|
(1,829,172
|
)
|
|
$
|
284,961
|
|
Adoption of Accounting Standards Update (ASU) No. 2014-09,
Revenue from Contracts with Customers (Topic 606)
|
—
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|
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—
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—
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—
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258,505
|
|
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258,505
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|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
115,857
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|
115,857
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|
|||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
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(540
|
)
|
|
—
|
|
|
(540
|
)
|
|||||
Issuance of common stock under equity incentive and stock purchase plans
|
484,904
|
|
|
1
|
|
|
1,677
|
|
|
—
|
|
|
—
|
|
|
1,678
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|||||
Stock-based compensation
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—
|
|
|
—
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|
|
9,305
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—
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—
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|
|
9,305
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|||||
Balance at March 31, 2018
|
296,694,330
|
|
|
$
|
297
|
|
|
$
|
2,125,166
|
|
|
$
|
(887
|
)
|
|
$
|
(1,454,810
|
)
|
|
$
|
669,766
|
|
|
Common Stock
|
|
Additional
Paid-in Capital |
|
Accumulated
Other Comprehensive Income (Loss) |
|
Accumulated
Deficit |
|
Total
Stockholders’ Equity |
|||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||
Balance at December 31, 2018
|
299,876,080
|
|
|
$
|
300
|
|
|
$
|
2,168,217
|
|
|
$
|
(701
|
)
|
|
$
|
(880,363
|
)
|
|
$
|
1,287,453
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
75,775
|
|
|
75,775
|
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
1,429
|
|
|
—
|
|
|
1,429
|
|
|||||
Issuance of common stock under equity incentive and stock purchase plans
|
1,643,805
|
|
|
2
|
|
|
7,832
|
|
|
—
|
|
|
—
|
|
|
7,834
|
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
12,529
|
|
|
—
|
|
|
—
|
|
|
12,529
|
|
|||||
Balance at March 31, 2019
|
301,519,885
|
|
|
$
|
302
|
|
|
$
|
2,188,578
|
|
|
$
|
728
|
|
|
$
|
(804,588
|
)
|
|
$
|
1,385,020
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Net income
|
$
|
75,775
|
|
|
$
|
115,857
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
1,962
|
|
|
371
|
|
||
Stock-based compensation
|
12,529
|
|
|
9,305
|
|
||
401(k) matching contributions made in common stock
|
2,469
|
|
|
1,880
|
|
||
Amortization and other right-of-use assets
|
(7,730
|
)
|
|
—
|
|
||
Gain on other equity investments
|
—
|
|
|
(209
|
)
|
||
Accretion of investments, net and other
|
(1,415
|
)
|
|
(158
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Trade receivables, net
|
55,101
|
|
|
(10,819
|
)
|
||
Other receivables
|
8,741
|
|
|
64
|
|
||
Inventory, net
|
(305
|
)
|
|
(906
|
)
|
||
Unbilled collaboration revenue
|
(7,753
|
)
|
|
(38,014
|
)
|
||
Prepaid expenses and other current assets
|
871
|
|
|
1,900
|
|
||
Other long-term assets
|
(4,854
|
)
|
|
(346
|
)
|
||
Accounts payable
|
(1,294
|
)
|
|
(183
|
)
|
||
Accrued compensation and benefits
|
(9,592
|
)
|
|
(317
|
)
|
||
Accrued clinical trial liabilities
|
4,824
|
|
|
(4,498
|
)
|
||
Rebates and fees due customers
|
4,754
|
|
|
4,424
|
|
||
Accrued collaboration liability
|
137
|
|
|
(1,000
|
)
|
||
Current and long-term deferred revenue
|
(1,313
|
)
|
|
(2,652
|
)
|
||
Long-term portion of lease liabilities
|
7,517
|
|
|
(35
|
)
|
||
Other current and long-term liabilities
|
21,169
|
|
|
(2,856
|
)
|
||
Net cash provided by operating activities
|
161,593
|
|
|
71,808
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Purchases of property and equipment
|
(2,307
|
)
|
|
(2,947
|
)
|
||
Purchases of investments
|
(239,869
|
)
|
|
(116,537
|
)
|
||
Proceeds from maturities of investments
|
129,820
|
|
|
87,504
|
|
||
Proceeds from sale of investments
|
4,699
|
|
|
6,238
|
|
||
Proceeds from other equity investments
|
—
|
|
|
209
|
|
||
Net cash used in investing activities
|
(107,657
|
)
|
|
(25,533
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from exercise of stock options
|
6,817
|
|
|
1,875
|
|
||
Taxes paid related to net share settlement of equity awards
|
(1,580
|
)
|
|
(2,129
|
)
|
||
Principal payments on financing lease obligation
|
(11
|
)
|
|
—
|
|
||
Net cash provided by (used in) financing activities
|
5,226
|
|
|
(254
|
)
|
||
Net increase in cash, cash equivalents and restricted cash
|
59,162
|
|
|
46,021
|
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
315,875
|
|
|
188,314
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
$
|
375,037
|
|
|
$
|
234,335
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Supplemental cash flow disclosure
|
|
|
|
||||
Right-of-use assets obtained in exchange for lease obligations
(1)
|
$
|
8,170
|
|
|
$
|
17,180
|
|
Unpaid liabilities incurred to acquire Property and equipment
|
$
|
141
|
|
|
$
|
6,608
|
|
(1)
|
Amounts for the
three months ended
March 31, 2019
include receipt of a tenant inventive payment. Amounts for the
three months ended
March 31, 2018
include the transition adjustment for the adoption of Accounting Standards Codification (ASC) Topic 842,
Leases
.
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Product revenues:
|
|
|
|
||||
Gross product revenues
|
$
|
223,750
|
|
|
$
|
159,436
|
|
Discounts and allowances
|
(44,169
|
)
|
|
(25,164
|
)
|
||
Net product revenues
|
179,581
|
|
|
134,272
|
|
||
Collaboration revenues:
|
|
|
|
||||
License revenues
(1)
|
24,509
|
|
|
69,030
|
|
||
Research and development service revenues
(2)
|
11,928
|
|
|
10,099
|
|
||
Other collaboration revenues
(3)
|
(531
|
)
|
|
318
|
|
||
Total collaboration revenues
|
35,906
|
|
|
79,447
|
|
||
Total revenues
|
$
|
215,487
|
|
|
$
|
213,719
|
|
(1)
|
License revenues included the immediate recognition of the portion of milestones allocated to the transfer of intellectual property licenses for which it had become probable in the current period that the milestone would be achieved and a significant revenue reversal would not occur, as well as royalty revenues from Ipsen Pharma SAS (Ipsen) and Genentech.
|
(2)
|
Research and development service revenues included the recognition of deferred revenue for the portion of upfront and milestone payments that have been allocated to research and development service performance obligations, as well as development cost reimbursements earned on our collaboration agreements.
|
(3)
|
Other collaboration revenues included the profit on the U.S. commercialization of COTELLIC from Genentech and revenues on product supply services provided to Ipsen and Takeda Pharmaceutical Company Ltd. (Takeda), which were partially offset by the
3%
royalty we are required to pay GlaxoSmithKline (GSK) on the net sales by Ipsen of any product incorporating cabozantinib.
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
CABOMETYX
|
$
|
175,890
|
|
|
$
|
128,934
|
|
COMETRIQ
|
3,691
|
|
|
5,338
|
|
||
Net product revenues
|
$
|
179,581
|
|
|
$
|
134,272
|
|
|
Three Months Ended March 31,
|
||||||||||||
|
2019
|
|
2018
|
||||||||||
|
Dollars
|
|
Percent of total
|
|
Dollars
|
|
Percent of total
|
||||||
Caremark L.L.C.
|
$
|
32,698
|
|
|
15
|
%
|
|
$
|
26,388
|
|
|
12
|
%
|
Affiliates of McKesson Corporation
|
25,311
|
|
|
12
|
%
|
|
21,331
|
|
|
10
|
%
|
||
Accredo Health, Incorporated
|
22,495
|
|
|
10
|
%
|
|
18,286
|
|
|
9
|
%
|
||
Affiliates of AmerisourceBergen Corporation
|
21,902
|
|
|
10
|
%
|
|
15,736
|
|
|
7
|
%
|
||
Ipsen
|
21,868
|
|
|
10
|
%
|
|
53,809
|
|
|
25
|
%
|
||
Others, individually less than 10% of Total revenues for all periods presented
|
91,213
|
|
|
43
|
%
|
|
78,169
|
|
|
37
|
%
|
||
Total revenues
|
$
|
215,487
|
|
|
100
|
%
|
|
$
|
213,719
|
|
|
100
|
%
|
|
Chargebacks and Discounts for Prompt Payment
|
|
Other Customer Credits/Fees and Co-pay Assistance
|
|
Rebates
|
|
Returns
|
|
Total
|
||||||||||
Balance at December 31, 2018
|
$
|
2,322
|
|
|
$
|
3,038
|
|
|
$
|
11,916
|
|
|
$
|
—
|
|
|
$
|
17,276
|
|
Provision related to sales made in:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current period
|
27,153
|
|
|
3,875
|
|
|
12,905
|
|
|
—
|
|
|
43,933
|
|
|||||
Prior periods
|
—
|
|
|
9
|
|
|
227
|
|
|
—
|
|
|
236
|
|
|||||
Payments and customer credits issued
|
(27,367
|
)
|
|
(4,189
|
)
|
|
(8,073
|
)
|
|
—
|
|
|
(39,629
|
)
|
|||||
Balance at March 31, 2019
|
$
|
2,108
|
|
|
$
|
2,733
|
|
|
$
|
16,975
|
|
|
$
|
—
|
|
|
$
|
21,816
|
|
|
Contract Assets: Unbilled Collaboration Revenue
|
|
Contract Liabilities: Deferred Revenue
|
||||||||||||
|
Current Portion
|
|
Long-term Portion
|
|
Current Portion
|
|
Long-term Portion
|
||||||||
Balance at December 31, 2018
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
15,897
|
|
Increases as a result of a change in transaction price and recognition of revenues as services are performed
|
10,222
|
|
|
1,450
|
|
|
—
|
|
|
—
|
|
||||
Transfer to receivables from contract assets recognized at the beginning of the period
|
(543
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Increases as a result of the deferral of milestones achieved in period, excluding amounts recognized as revenue
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Revenue recognized that was included in the contract liability balance at the beginning of the period
|
—
|
|
|
—
|
|
|
(1,313
|
)
|
|
—
|
|
||||
Other adjustments
(1)
|
(2,435
|
)
|
|
(1,450
|
)
|
|
3,689
|
|
|
(7,574
|
)
|
||||
Balance at March 31, 2019
|
$
|
7,244
|
|
|
$
|
—
|
|
|
$
|
2,376
|
|
|
$
|
8,323
|
|
(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,
|
||||||
|
2019
|
|
2018
|
||||
Ipsen collaboration revenues
|
$
|
21,868
|
|
|
$
|
53,809
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Takeda collaboration revenues
|
$
|
11,493
|
|
|
$
|
2,917
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Royalties accruing to GSK
|
$
|
7,282
|
|
|
$
|
5,125
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Profits on U.S. commercialization
|
$
|
1,055
|
|
|
$
|
1,373
|
|
Royalty revenues on ex-U.S. sales
|
$
|
1,490
|
|
|
$
|
1,349
|
|
|
March 31, 2019
|
|
December 31, 2018
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||
Cash and cash equivalents
|
$
|
373,937
|
|
|
$
|
314,775
|
|
|
$
|
232,331
|
|
|
$
|
183,164
|
|
Restricted cash included in short-term restricted cash and investments
|
—
|
|
|
—
|
|
|
504
|
|
|
504
|
|
||||
Restricted cash included in long-term restricted cash and investments
|
1,100
|
|
|
1,100
|
|
|
1,500
|
|
|
4,646
|
|
||||
Cash, cash equivalents, and restricted cash as reported within the accompanying Condensed Consolidated Statements of Cash Flows
|
$
|
375,037
|
|
|
$
|
315,875
|
|
|
$
|
234,335
|
|
|
$
|
188,314
|
|
|
March 31, 2019
|
||||||||||||||
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
||||||||
Investments available-for-sale:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
75,171
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
75,171
|
|
Commercial paper
|
414,317
|
|
|
—
|
|
|
—
|
|
|
414,317
|
|
||||
Corporate bonds
|
417,303
|
|
|
1,257
|
|
|
(175
|
)
|
|
418,385
|
|
||||
U.S. Treasury and government sponsored enterprises
|
84,448
|
|
|
41
|
|
|
(2
|
)
|
|
84,487
|
|
||||
Total investments available-for-sale
|
991,239
|
|
|
1,298
|
|
|
(177
|
)
|
|
992,360
|
|
||||
Cash and restricted cash
|
1,019
|
|
|
—
|
|
|
—
|
|
|
1,019
|
|
||||
Certificates of deposit
|
25,990
|
|
|
—
|
|
|
—
|
|
|
25,990
|
|
||||
Total cash and investments
|
$
|
1,018,248
|
|
|
$
|
1,298
|
|
|
$
|
(177
|
)
|
|
$
|
1,019,369
|
|
|
December 31, 2018
|
||||||||||||||
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
||||||||
Investments available-for-sale:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
47,744
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
47,744
|
|
Commercial paper
|
381,134
|
|
|
—
|
|
|
(1
|
)
|
|
381,133
|
|
||||
Corporate bonds
|
344,741
|
|
|
180
|
|
|
(857
|
)
|
|
344,064
|
|
||||
U.S. Treasury and government sponsored enterprises
|
55,224
|
|
|
2
|
|
|
(25
|
)
|
|
55,201
|
|
||||
Total investments available-for-sale
|
828,843
|
|
|
182
|
|
|
(883
|
)
|
|
828,142
|
|
||||
Cash and restricted cash
|
6,883
|
|
|
—
|
|
|
—
|
|
|
6,883
|
|
||||
Certificates of deposit
|
16,596
|
|
|
—
|
|
|
—
|
|
|
16,596
|
|
||||
Total cash and investments
|
$
|
852,322
|
|
|
$
|
182
|
|
|
$
|
(883
|
)
|
|
$
|
851,621
|
|
|
March 31, 2019
|
||||||||||||||||||||||
|
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
|
$
|
49,233
|
|
|
$
|
(39
|
)
|
|
$
|
45,010
|
|
|
$
|
(136
|
)
|
|
$
|
94,243
|
|
|
$
|
(175
|
)
|
U.S. Treasury and government sponsored enterprises
|
—
|
|
|
—
|
|
|
7,990
|
|
|
(2
|
)
|
|
7,990
|
|
|
(2
|
)
|
||||||
Total
|
$
|
49,233
|
|
|
$
|
(39
|
)
|
|
$
|
53,000
|
|
|
$
|
(138
|
)
|
|
$
|
102,233
|
|
|
$
|
(177
|
)
|
|
December 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
|
$
|
236,162
|
|
|
$
|
(606
|
)
|
|
$
|
39,627
|
|
|
$
|
(251
|
)
|
|
$
|
275,789
|
|
|
$
|
(857
|
)
|
U.S. Treasury and government sponsored enterprises
|
28,105
|
|
|
(16
|
)
|
|
9,182
|
|
|
(9
|
)
|
|
37,287
|
|
|
(25
|
)
|
||||||
Commercial paper
|
7,091
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
7,091
|
|
|
(1
|
)
|
||||||
Total
|
$
|
271,358
|
|
|
$
|
(623
|
)
|
|
$
|
48,809
|
|
|
$
|
(260
|
)
|
|
$
|
320,167
|
|
|
$
|
(883
|
)
|
|
March 31,
2019 |
|
December 31, 2018
|
||||
Maturing in one year or less
|
$
|
784,432
|
|
|
$
|
674,455
|
|
Maturing after one year through five years
|
207,928
|
|
|
153,687
|
|
||
Total investments available-for-sale
|
$
|
992,360
|
|
|
$
|
828,142
|
|
|
March 31,
2019 |
|
December 31, 2018
|
||||
Raw materials
|
$
|
2,245
|
|
|
$
|
1,922
|
|
Work in process
|
6,514
|
|
|
6,170
|
|
||
Finished goods
|
4,862
|
|
|
3,836
|
|
||
Total
|
$
|
13,621
|
|
|
$
|
11,928
|
|
|
|
|
|
||||
Balance Sheet classification:
|
|
|
|
||||
Current portion included in Inventory
|
$
|
10,143
|
|
|
$
|
9,838
|
|
Long-term portion included in Other long-term assets
|
3,478
|
|
|
2,090
|
|
||
Total
|
$
|
13,621
|
|
|
$
|
11,928
|
|
|
March 31,
2019 |
|
December 31,
2018 |
||||
Leasehold improvements
|
$
|
33,811
|
|
|
$
|
33,941
|
|
Computer equipment and software
|
15,110
|
|
|
15,022
|
|
||
Furniture and fixtures
|
12,908
|
|
|
12,709
|
|
||
Laboratory equipment
|
6,764
|
|
|
5,668
|
|
||
Construction in progress
|
1,231
|
|
|
866
|
|
||
|
69,824
|
|
|
68,206
|
|
||
Less: accumulated depreciation and amortization
|
(19,271
|
)
|
|
(17,309
|
)
|
||
Property and equipment, net
|
$
|
50,553
|
|
|
$
|
50,897
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Research and development
|
$
|
4,306
|
|
|
$
|
3,033
|
|
Selling, general and administrative
|
8,223
|
|
|
6,272
|
|
||
Total stock-based compensation
|
$
|
12,529
|
|
|
$
|
9,305
|
|
|
Three Months Ended March 31,
|
||||
|
2019
|
|
2018
|
||
Stock options:
|
|
|
|
||
Risk-free interest rate
|
2.22
|
%
|
|
2.40
|
%
|
Dividend yield
|
—
|
%
|
|
—
|
%
|
Volatility
|
49
|
%
|
|
54
|
%
|
Expected life
|
4.0 years
|
|
|
4.0 years
|
|
ESPP:
|
|
|
|
||
Risk-free interest rate
|
2.48
|
%
|
|
1.53
|
%
|
Dividend yield
|
—
|
%
|
|
—
|
%
|
Volatility
|
57
|
%
|
|
53
|
%
|
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, 2018
|
22,674,062
|
|
|
$
|
8.71
|
|
|
|
|
|
||
Granted
|
246,820
|
|
|
$
|
22.94
|
|
|
|
|
|
||
Exercised
|
(1,413,766
|
)
|
|
$
|
4.91
|
|
|
|
|
|
||
Forfeited
|
(44,200
|
)
|
|
$
|
14.32
|
|
|
|
|
|
||
Expired
|
(22,925
|
)
|
|
$
|
22.12
|
|
|
|
|
|
||
Options outstanding at March 31, 2019
|
21,439,991
|
|
|
$
|
9.10
|
|
|
3.6 years
|
|
$
|
317,143
|
|
Exercisable at March 31, 2019
|
15,714,721
|
|
|
$
|
6.01
|
|
|
2.9 years
|
|
$
|
280,307
|
|
|
Shares
|
|
Weighted
Average
Grant Date
Fair Value Per Share
|
|
Weighted
Average
Remaining
Contractual
Term
|
|
Aggregate
Intrinsic
Value
|
|||||
RSUs outstanding at December 31, 2018
|
4,857,334
|
|
|
$
|
18.42
|
|
|
|
|
|
||
Awarded
|
123,410
|
|
|
$
|
22.94
|
|
|
|
|
|
||
Vested and released
|
(194,296
|
)
|
|
$
|
7.83
|
|
|
|
|
|
||
Forfeited
|
(100,630
|
)
|
|
$
|
18.13
|
|
|
|
|
|
||
RSUs outstanding at March 31, 2019
|
4,685,818
|
|
|
$
|
18.98
|
|
|
2.0 years
|
|
$
|
111,522
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Numerator:
|
|
|
|
||||
Net income
|
$
|
75,775
|
|
|
$
|
115,857
|
|
Denominator:
|
|
|
|
||||
Weighted-average shares of common stock outstanding used in computing basic net income per share
|
300,542
|
|
|
296,421
|
|
||
Dilutive securities
|
14,102
|
|
|
17,270
|
|
||
Weighted-average shares of common stock outstanding and dilutive securities used in computing diluted net income per share
|
314,644
|
|
|
313,691
|
|
||
|
|
|
|
||||
Net income per share, basic
|
$
|
0.25
|
|
|
$
|
0.39
|
|
Net income per share, diluted
|
$
|
0.24
|
|
|
$
|
0.37
|
|
|
Three Months Ended March 31,
|
||||
|
2019
|
|
2018
|
||
Potentially dilutive securities
|
5,089
|
|
|
1,907
|
|
|
March 31, 2019
|
||||||||||
|
Level 1
|
|
Level 2
|
|
Total
|
||||||
Money market funds
|
$
|
75,171
|
|
|
$
|
—
|
|
|
$
|
75,171
|
|
Commercial paper
|
—
|
|
|
414,317
|
|
|
414,317
|
|
|||
Corporate bonds
|
—
|
|
|
418,385
|
|
|
418,385
|
|
|||
U.S. Treasury and government sponsored enterprises
|
—
|
|
|
84,487
|
|
|
84,487
|
|
|||
Total investments available-for-sale
|
75,171
|
|
|
917,189
|
|
|
992,360
|
|
|||
Certificates of deposit
|
—
|
|
|
25,990
|
|
|
25,990
|
|
|||
Total financial assets carried at fair value
|
$
|
75,171
|
|
|
$
|
943,179
|
|
|
$
|
1,018,350
|
|
|
December 31, 2018
|
||||||||||
|
Level 1
|
|
Level 2
|
|
Total
|
||||||
Money market funds
|
$
|
47,744
|
|
|
$
|
—
|
|
|
$
|
47,744
|
|
Commercial paper
|
—
|
|
|
381,133
|
|
|
381,133
|
|
|||
Corporate bonds
|
—
|
|
|
344,064
|
|
|
344,064
|
|
|||
U.S. Treasury and government sponsored enterprises
|
—
|
|
|
55,201
|
|
|
55,201
|
|
|||
Total investments available-for-sale
|
47,744
|
|
|
780,398
|
|
|
828,142
|
|
|||
Certificates of deposit
|
—
|
|
|
16,596
|
|
|
16,596
|
|
|||
Total financial assets carried at fair value
|
$
|
47,744
|
|
|
$
|
796,994
|
|
|
$
|
844,738
|
|
•
|
I
n January 2019, we announced that our partner Daiichi Sankyo received approval from the Japanese MHLW for MINNEBRO as a treatment for patients with hypertension in Japan. MINNEBRO is a compound identified during our research collaboration with Daiichi Sankyo, which the companies entered into in March 2006, and has been subsequently developed by Daiichi Sankyo.
|
•
|
In January 2019, the FDA approved CABOMETYX as a treatment for patients with HCC who have been previously treated with sorafenib. The FDA’s approval of CABOMETYX was based on results from CELESTIAL, our phase 3 pivotal trial evaluating cabozantinib in patients with previously treated HCC, which demonstrated a statistically significant and clinically meaningful improvement in OS versus placebo.
|
•
|
In January 2019, the FDA accepted our Investigational New Drug application for XL092, a next-generation oral TKI and the first compound to advance from our new discovery organization.
|
•
|
In February 2019, we initiated a phase 1 dose escalation trial, evaluating the pharmacokinetics, safety and tolerability of XL092 in patients with advanced solid tumors, with the primary objective of determining a dose for daily oral administration suitable for further evaluation.
|
•
|
In April 2019, CheckMate 9ER, the phase 3 pivotal trial evaluating the combination of cabozantinib and nivolumab versus sunitinib in patients with previously untreated advanced or metastatic RCC completed enrollment, including in Japan where the last few patients are in the process of being randomized.
|
•
|
In April 2019, Takeda applied
to the Japanese MHLW for approval to manufacture and sell CABOMETYX as a treatment for unresectable and metastatic RCC in Japan.
|
•
|
In May 2019, we announced the initiation of COSMIC-313, a phase 3 pivotal trial evaluating the triplet combination of cabozantinib, nivolumab and ipilimumab versus the combination of nivolumab and ipilimumab in patients with previously untreated advanced
intermediate- or poor-risk
RCC, which will be conducted in collaboration with BMS.
|
•
|
Net income for the first quarter of 2019 was
$75.8 million
, or
$0.25
per share, basic and
$0.24
per share, diluted, compared to
$115.9 million
, or
$0.39
per share, basic and
$0.37
per share diluted, for the first quarter of 2018.
|
•
|
Net product revenues for the first quarter of 2019 increased to
$179.6 million
, compared to
$134.3 million
for the first quarter of 2018.
|
•
|
Total revenues for the first quarter of 2019 increased to
$215.5 million
, compared to
$213.7 million
for the first quarter of 2018.
|
•
|
Research and development expenses for the first quarter of 2019 increased to
$63.3 million
, compared to
$37.8 million
for the first quarter of 2018.
|
•
|
Selling, general and administrative expenses for the first quarter of 2019 increased to
$60.1 million
, compared to
$54.0 million
for the first quarter of 2018.
|
•
|
Provision for income taxes for the first quarter of 2019 increased to
$14.9 million
, compared to
$2.5 million
for the first quarter of 2018.
|
•
|
Cash and investments increased to
$1,019.4 million
at
March 31, 2019
, compared to
$851.6 million
at
December 31, 2018
.
|
|
Three Months Ended March 31,
|
|
Percentage Change
|
|||||||
|
2019
|
|
2018
|
|
||||||
Net product revenues
|
$
|
179,581
|
|
|
$
|
134,272
|
|
|
34
|
%
|
Collaboration revenues
|
35,906
|
|
|
79,447
|
|
|
(55
|
)%
|
||
Total revenues
|
$
|
215,487
|
|
|
$
|
213,719
|
|
|
1
|
%
|
|
Three Months Ended March 31,
|
|
Percentage Change
|
|||||||
|
2019
|
|
2018
|
|
||||||
Gross product revenues
|
$
|
223,750
|
|
|
$
|
159,436
|
|
|
40
|
%
|
Discounts and allowances
|
(44,169
|
)
|
|
(25,164
|
)
|
|
76
|
%
|
||
Net product revenues
|
$
|
179,581
|
|
|
$
|
134,272
|
|
|
34
|
%
|
|
|
|
|
|
|
|||||
Product revenues by product:
|
|
|
|
|
|
|||||
CABOMETYX
|
$
|
175,890
|
|
|
$
|
128,934
|
|
|
36
|
%
|
COMETRIQ
|
3,691
|
|
|
5,338
|
|
|
(31
|
)%
|
||
Net product revenues
|
$
|
179,581
|
|
|
$
|
134,272
|
|
|
34
|
%
|
|
Three Months Ended March 31,
|
|
Percentage Change
|
|||||||
|
2019
|
|
2018
|
|
||||||
Collaboration revenues:
|
|
|
|
|
|
|||||
License revenues
(1)
|
$
|
24,509
|
|
|
$
|
69,030
|
|
|
(64
|
)%
|
Research and development service revenues
(2)
|
11,928
|
|
|
10,099
|
|
|
18
|
%
|
||
Other collaboration revenues
(3)
|
(531
|
)
|
|
318
|
|
|
n/m
|
|
||
Total collaboration revenues
|
$
|
35,906
|
|
|
$
|
79,447
|
|
|
(55
|
)%
|
(1)
|
License revenues included the immediate recognition of the portion of milestones allocated to the transfer of intellectual property licenses for which it had become probable in the current period that the milestone would be achieved and a significant revenue reversal would not occur, as well as royalty revenues from Ipsen and Genentech.
|
(2)
|
Research and development service revenues included the recognition of deferred revenue for the portion of upfront and milestone payments that have been allocated to research and development service performance obligations, as well as development cost reimbursements earned on our collaboration agreements.
|
(3)
|
Other collaboration revenues included the profit on the U.S. commercialization of COTELLIC from Genentech and revenues on product supply services provided to Ipsen and Takeda, which were partially offset by the
3%
royalty we are required to pay GlaxoSmithKline (GSK) on the net sales by Ipsen of any product incorporating cabozantinib.
|
|
Three Months Ended March 31,
|
|
Percentage Change
|
|||||||
|
2019
|
|
2018
|
|
||||||
Research and development expenses
|
$
|
63,289
|
|
|
$
|
37,757
|
|
|
68
|
%
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Research and development expenses:
|
|
|
|
||||
Development:
|
|
|
|
||||
Clinical trial costs
|
$
|
28,187
|
|
|
$
|
11,196
|
|
Personnel expenses
|
13,587
|
|
|
10,658
|
|
||
Consulting and outside services
|
2,712
|
|
|
1,945
|
|
||
Other development costs
|
4,134
|
|
|
3,388
|
|
||
Total development
|
48,620
|
|
|
27,187
|
|
||
Drug discovery
(1)
|
7,040
|
|
|
5,990
|
|
||
Other
(2)
|
7,629
|
|
|
4,580
|
|
||
Total research and development expenses
|
$
|
63,289
|
|
|
$
|
37,757
|
|
(1)
|
Primarily includes personnel expenses, consulting and outside services, laboratory supplies and license costs for our collaboration and license agreements with Invenra and StemSynergy.
|
(2)
|
Includes stock-based compensation and the allocation of general corporate costs to research and development.
|
|
Three Months Ended March 31,
|
|
Percentage Change
|
|||||||
|
2019
|
|
2018
|
|
||||||
Selling, general and administrative expenses
|
$
|
60,138
|
|
|
$
|
54,016
|
|
|
11
|
%
|
|
Three Months Ended March 31,
|
|
Percentage Change
|
|||||||
|
2019
|
|
2018
|
|
||||||
Interest income
|
$
|
6,087
|
|
|
$
|
1,895
|
|
|
221
|
%
|
Other, net
|
25
|
|
|
169
|
|
|
(85
|
)%
|
||
Total other income (expense), net
|
$
|
6,112
|
|
|
$
|
2,064
|
|
|
196
|
%
|
|
Three Months Ended March 31,
|
|
Percentage Change
|
|||||||
|
2019
|
|
2018
|
|
||||||
Provision for income taxes
|
$
|
14,896
|
|
|
$
|
2,514
|
|
|
493
|
%
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Net cash provided by operating activities
|
$
|
161,593
|
|
|
$
|
71,808
|
|
Net cash used in investing activities
|
$
|
(107,657
|
)
|
|
$
|
(25,533
|
)
|
Net cash provided by (used in) financing activities
|
$
|
5,226
|
|
|
$
|
(254
|
)
|
•
|
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;
|
•
|
price increases taken by us and the impact on the net sales price of CABOMETYX as a result of any new laws, regulations or other government initiatives affecting pharmaceutical pricing;
|
•
|
the strength of CABOMETYX sales efforts, marketing, market access and product distribution support;
|
•
|
our ability to obtain and maintain coverage and reimbursement for CABOMETYX from commercial and government payers
; and
|
•
|
our ability to enforce our intellectual property rights with respect to CABOMETYX.
|
•
|
the federal Anti-Kickback Statute (AKS), which governs our business activities, including our marketing practices, medical 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 anything of value, including for example, gifts, discounts, coupons, the furnishing of supplies or equipment, credit arrangements, payments of cash, waivers of payments, ownership interests, value-added services to customers, and providing anything at less than its fair market value;
|
•
|
the Federal Food, Drug, and Cosmetic Act (FDCA) and its implementing 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 (HIPAA) 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 Open Payments program of the Patient Protection and Affordable Care Act, as amended by the Healthcare and Education Reconciliation Act (PPACA), which was created under the Physician Payments Sunshine Act and its implementing regulations and requires certain manufacturers
of drugs, devices, biologics and medical supplies that are reimbursable under Medicare, Medicaid, or the Children’s Health Insurance Program, with specific exceptions, to report annually to the government information related to certain payments and other transfers of value to physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members;
|
•
|
state laws and regulations that require drug manufacturers to file reports relating to pricing and marketing information, which requires tracking gifts and other remuneration and items of value provided to healthcare professionals and entities, as
well as state and local laws requiring the registration of pharmaceutical sales representatives;
|
•
|
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; and
|
•
|
f
ederal, state and municipal pharmaceutical price and price reporting laws, both existing (e.g., California’s SB-17 and Oregon’s HB 4005) and under consideration (e.g. the U.S. Senate’s Stopping the Pharmaceutical
|
•
|
lack of efficacy or a tolerable safety profile;
|
•
|
negative or inconclusive clinical trial results that require us to conduct further testing or to abandon projects that we had expected to be promising;
|
•
|
discovery or commercialization by our competitors of other compounds or therapies that show significantly improved safety or efficacy compared to cabozantinib or our other 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;
|
•
|
lower-than-anticipated patient registration or enrollment in our clinical testing, resulting in the delay or cancellation of clinical testing;
|
•
|
failure by our collaborators to provide us with an adequate and timely supply of product that complies with the applicable quality and regulatory requirements for a combination trial;
|
•
|
failure of our third-party contract research organizations or investigators to satisfy their contractual obligations, including deviating from any trial protocols; and
|
•
|
withholding of authorization from regulators or institutional review boards to commence or conduct clinical trials of cabozantinib or another product candidate, or delays, suspensions or terminations of clinical research for various reasons, including noncompliance with regulatory requirements or a determination by these regulators and institutional review boards that participating patients are being exposed to unacceptable health risks.
|
•
|
characteristics of the product candidate under investigation;
|
•
|
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, market access, medical affairs and product distribution capabilities for CABOMETYX and COMETRIQ;
|
•
|
the achievement of stated regulatory and commercial milestones and royalties paid under our collaboration agreements with Ipsen and Takeda;
|
•
|
the commercial success of and revenues generated by products marketed under our collaboration and license agreements;
|
•
|
future clinical trial results;
|
•
|
the level of our investments in the expansion of our pipeline through drug discovery and corporate development activities;
|
•
|
our ability to control costs;
|
•
|
the number and size of clinical trials we conduct and the cost of drug supply for such clinical trials evaluating our products with other therapeutic agents;
|
•
|
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.
|
•
|
our inability 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;
|
•
|
the possibility that collaborators may delay clinical trials, fail to supply us on a timely basis with the product required for a combination trial, deliver product that fails to meet appropriate quality and regulatory standards and results in a market recall or withdrawal, 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 that 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;
|
•
|
our inability to control the U.S. commercial resourcing decisions made and resulting costs incurred by Genentech for COTELLIC, which costs we are obligated to share, in part, under our collaboration agreement with Genentech;
|
•
|
the possibility that our collaborators may experience financial difficulties;
|
•
|
our collaborators’ lack of success in their efforts to obtain regulatory approvals in a timely manner, or at all;
|
•
|
our collaborators’ failure to properly maintain or defend our intellectual property rights or their use of our intellectual property rights or proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property rights or expose us to potential litigation;
|
•
|
our collaborators’ failure to comply with the terms of our collaboration agreements and related ancillary agreements;
|
•
|
our collaborators’ failure to comply with applicable healthcare laws, as well as established guidelines, laws and regulations
related to Good Manufacturing Practice, Good Clinical Practice, Good Distribution Practice and Good Pharmacovigilance Practice;
|
•
|
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;
|
•
|
the possibility that our collaborators could independently move forward with competing drug candidates, developed either independently or in collaboration with others, including our competitors;
|
•
|
our inability to enter into additional collaboration arrangements with third parties in an area or field of exclusivity;
|
•
|
the possibility that future collaborators may require us to relinquish some important rights, such as marketing and distribution rights; and
|
•
|
the possibility that 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
as a result of multiple factors, including pricing information required to be disclosed by us pursuant to drug pricing transparency laws
;
|
•
|
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 achievement of stated regulatory and commercial milestones and royalties paid under our collaboration agreements;
|
•
|
the commercial success of and revenues generated by products marketed under our collaboration and license agreements, including COTELLIC and MINNEBRO
;
|
•
|
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, market access, medical affairs and product distribution capabilities for CABOMETYX and COMETRIQ;
|
•
|
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;
|
•
|
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 related to 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, including approvals at earlier stages of clinical development or with lesser developed data sets and expedited reviews;
|
•
|
the announcement of new products or clinical trial data 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;
|
•
|
changes in earnings estimates or recommendations by securities analysts
and any failure to achieve the operating results projected 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;
|
•
|
additions and 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
|
|
|
Exhibit
Number
|
|
Exhibit Description
|
|
Incorporation by Reference
|
|
Filed
Herewith
|
||||||
Form
|
|
File Number
|
|
Exhibit/
Appendix
Reference
|
|
Filing Date
|
|
|||||
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
|
|
2/21/2019
|
|
|
|
4.1
|
|
|
S-1,
as amended
|
|
333-96335
|
|
4.1
|
|
4/7/2000
|
|
|
|
10.1*
|
|
|
|
|
|
|
|
|
|
|
X
|
|
10.2
|
|
|
|
|
|
|
|
|
|
|
X
|
|
10.3
|
|
|
|
|
|
|
|
|
|
|
X
|
|
10.4
|
|
|
|
|
|
|
|
|
|
|
X
|
|
10.5
|
|
|
|
|
|
|
|
|
|
|
X
|
|
10.6
|
|
|
|
|
|
|
|
|
|
|
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
|
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
|
*
|
Portions of this exhibit have been omitted as being immaterial and would be competitively harmful if publicly disclosed.
|
‡
|
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 1, 2019
|
|
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)
|
Exelixis, Inc.
|
Bristol-Myers Squibb Company
|
By: /s/ Gisela M. Schwab, M.D.
|
By: /s/ Fouad Namouni, M.D.
|
Name: Gisela M. Schwab, M.D.
|
Name: Fouad Namouni, M.D.
|
Title: President, Product Development and Medical Affairs, CMO
Date: 3/8/2019
|
Title: Head of Oncology Development
Date: 3/8/19
|
|
|
Board of Directors
|
Retainer Fee
|
|
$50,000
|
|
|
Additional Chair Retainer Fee
|
|
$31,000
|
|
|
Meeting Fee
12
|
|
$2,500
|
|
Audit Committee
|
Retainer Fee
|
|
$12,000
|
|
|
Additional Chair Retainer Fee
|
|
$13,000
|
|
|
Meeting Fee
13
|
|
$1,000
|
|
Compensation Committee
|
Retainer Fee
|
|
$10,000
|
|
|
Additional Chair Retainer Fee
|
|
$10,000
|
|
|
Meeting Fee
13
|
|
$1,000
|
|
Nominating and Corporate Governance Committee
|
Retainer Fee
|
|
$5,000
|
|
|
Additional Chair Retainer Fee
|
|
$10,000
|
|
|
Meeting Fee
14
|
|
$1,000
|
|
Research & Development Committee
|
Retainer Fee
|
|
$5,000
|
|
|
Additional Chair Retainer Fee
|
|
$10,000
|
|
|
Meeting Fee
14
|
|
$1,000
|
|
1
|
Meetings for which minutes are generated count toward the meeting threshold to determine when Meeting Fees are to be paid.
|
2
|
Meeting Fee paid for all meetings in excess of eight meetings.
|
3
|
Meeting Fee paid for all meetings in excess of seven meetings.
|
4
|
Meeting Fee paid for all meetings in excess of four meetings.
|
/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)
|