Delaware
|
84-1460811
|
(State or Other Jurisdiction of Incorporation or Organization)
|
(I.R.S. Employer Identification No.)
|
|
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3200 Walnut Street, Boulder, CO
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80301
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(Address of Principal Executive Offices)
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(Zip Code)
|
|
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(303) 381-6600
|
|
(Registrant’s Telephone Number, Including Area Code)
|
Large Accelerated Filer
¨
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Accelerated Filer
x
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Non-Accelerated Filer
¨
|
Smaller Reporting Company
¨
|
(do not check if smaller reporting company)
|
|
|
|
|
|
|
Page No.
|
PART I
|
|
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Item 1.
|
|
|
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||
|
||
|
||
|
||
|
||
|
|
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Item 2.
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Item 3.
|
||
Item 4.
|
||
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PART II
|
|
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Item 1A.
|
||
Item 6.
|
||
|
|
|
|
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|
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||
|
|
|
December 31,
|
|
June 30,
|
||||
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2013
|
|
2013
|
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
47,194
|
|
|
$
|
60,736
|
|
Marketable securities
|
72,481
|
|
|
47,505
|
|
||
Accounts receivable
|
5,710
|
|
|
9,595
|
|
||
Prepaid expenses and other current assets
|
3,088
|
|
|
3,473
|
|
||
Total current assets
|
128,473
|
|
|
121,309
|
|
||
|
|
|
|
||||
Long-term assets
|
|
|
|
||||
Marketable securities
|
691
|
|
|
465
|
|
||
Property and equipment, net
|
8,421
|
|
|
10,049
|
|
||
Other long-term assets
|
8,736
|
|
|
4,165
|
|
||
Total long-term assets
|
17,848
|
|
|
14,679
|
|
||
Total assets
|
$
|
146,321
|
|
|
$
|
135,988
|
|
|
|
|
|
||||
Liabilities and Stockholders' Deficit
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable
|
$
|
3,958
|
|
|
$
|
5,396
|
|
Accrued outsourcing costs
|
7,356
|
|
|
5,576
|
|
||
Accrued compensation and benefits
|
5,414
|
|
|
9,481
|
|
||
Other accrued expenses
|
1,633
|
|
|
1,135
|
|
||
Co-development liability
|
6,690
|
|
|
10,990
|
|
||
Deferred rent
|
3,695
|
|
|
3,646
|
|
||
Deferred revenue
|
9,532
|
|
|
14,353
|
|
||
Total current liabilities
|
38,278
|
|
|
50,577
|
|
||
|
|
|
|
||||
Long-term liabilities
|
|
|
|
||||
Deferred rent
|
5,967
|
|
|
7,834
|
|
||
Deferred revenue
|
5,305
|
|
|
—
|
|
||
Long-term debt, net
|
101,430
|
|
|
99,021
|
|
||
Other long-term liabilities
|
691
|
|
|
465
|
|
||
Total long-term liabilities
|
113,393
|
|
|
107,320
|
|
||
Total liabilities
|
151,671
|
|
|
157,897
|
|
||
|
|
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|
||||
Commitments and contingencies
|
|
|
|
||||
|
|
|
|
||||
Stockholders' deficit
|
|
|
|
||||
Preferred stock, $0.001 par value; 10,000,000 shares authorized, no shares issued and outstanding
|
—
|
|
|
—
|
|
||
Common stock, $0.001 par value; 220,000,000 shares authorized; 124,774,353 and 116,878,021 shares issued and outstanding as of December 31, 2013 and June 30, 2013, respectively
|
125
|
|
|
117
|
|
||
Additional paid-in capital
|
619,907
|
|
|
571,270
|
|
||
Warrants
|
39,385
|
|
|
39,385
|
|
||
Accumulated other comprehensive income (loss)
|
—
|
|
|
(2
|
)
|
||
Accumulated deficit
|
(664,767
|
)
|
|
(632,679
|
)
|
||
Total stockholders' deficit
|
(5,350
|
)
|
|
(21,909
|
)
|
||
Total liabilities and stockholders' deficit
|
$
|
146,321
|
|
|
$
|
135,988
|
|
|
|
|
|
||||
The accompanying notes are an integral part of these unaudited financial statements.
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
December 31,
|
|
December 31,
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Revenue
|
|
|
|
|
|
|
|
||||||||
License and milestone revenue
|
$
|
9,287
|
|
|
$
|
14,016
|
|
|
$
|
19,352
|
|
|
$
|
26,492
|
|
Collaboration revenue
|
4,779
|
|
|
4,361
|
|
|
8,942
|
|
|
7,718
|
|
||||
Total revenue
|
14,066
|
|
|
18,377
|
|
|
28,294
|
|
|
34,210
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating expenses
|
|
|
|
|
|
|
|
||||||||
Cost of partnered programs
|
13,110
|
|
|
7,909
|
|
|
23,768
|
|
|
14,448
|
|
||||
Research and development for proprietary programs
|
9,487
|
|
|
13,941
|
|
|
21,191
|
|
|
27,475
|
|
||||
General and administrative
|
5,472
|
|
|
4,610
|
|
|
10,651
|
|
|
9,390
|
|
||||
Total operating expenses
|
28,069
|
|
|
26,460
|
|
|
55,610
|
|
|
51,313
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Loss from operations
|
(14,003
|
)
|
|
(8,083
|
)
|
|
(27,316
|
)
|
|
(17,103
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Other income (expense)
|
|
|
|
|
|
|
|
||||||||
Interest income
|
23
|
|
|
12
|
|
|
39
|
|
|
24
|
|
||||
Interest expense
|
(2,428
|
)
|
|
(2,860
|
)
|
|
(4,811
|
)
|
|
(5,619
|
)
|
||||
Total other expense, net
|
(2,405
|
)
|
|
(2,848
|
)
|
|
(4,772
|
)
|
|
(5,595
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Net loss
|
$
|
(16,408
|
)
|
|
$
|
(10,931
|
)
|
|
$
|
(32,088
|
)
|
|
$
|
(22,698
|
)
|
|
|
|
|
|
|
|
|
||||||||
Change in unrealized gains and losses on marketable securities
|
(8
|
)
|
|
—
|
|
|
2
|
|
|
3
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Comprehensive loss
|
$
|
(16,416
|
)
|
|
$
|
(10,931
|
)
|
|
$
|
(32,086
|
)
|
|
$
|
(22,695
|
)
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding – basic and diluted
|
123,921
|
|
|
105,403
|
|
|
120,715
|
|
|
99,005
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net loss per share – basic and diluted
|
$
|
(0.13
|
)
|
|
$
|
(0.10
|
)
|
|
$
|
(0.27
|
)
|
|
$
|
(0.23
|
)
|
|
|
|
|
|
|
|
|
||||||||
The accompanying notes are an integral part of these unaudited financial statements.
|
|
|
|
|
|
Additional Paid-in Capital
|
|
Warrants
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Accumulated Deficit
|
|
Total
|
|||||||||||||
|
Common Stock
|
|
|
|
|
|
||||||||||||||||||||
|
Shares
|
|
Amounts
|
|
|
|
|
|
||||||||||||||||||
Balance as of July 1, 2013
|
116,878
|
|
|
$
|
117
|
|
|
$
|
571,270
|
|
|
$
|
39,385
|
|
|
$
|
(2
|
)
|
|
$
|
(632,679
|
)
|
|
$
|
(21,909
|
)
|
Issuance of common stock under stock option and employee stock purchase plans
|
828
|
|
|
1
|
|
|
2,769
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,770
|
|
||||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
2,008
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,008
|
|
||||||
Issuance of common stock, net of offering costs
|
7,068
|
|
|
7
|
|
|
43,890
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
43,897
|
|
||||||
Offering costs for convertible senior notes, equity portion
|
—
|
|
|
—
|
|
|
(30
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(30
|
)
|
||||||
Change in unrealized loss on marketable securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(32,088
|
)
|
|
(32,088
|
)
|
||||||
Balance as of December 31, 2013
|
124,774
|
|
|
$
|
125
|
|
|
$
|
619,907
|
|
|
$
|
39,385
|
|
|
$
|
—
|
|
|
$
|
(664,767
|
)
|
|
$
|
(5,350
|
)
|
|
||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited financial statements.
|
|
Six Months Ended December 31,
|
||||||
|
2013
|
|
2012
|
||||
Cash flows from operating activities
|
|
|
|
||||
Net loss
|
$
|
(32,088
|
)
|
|
$
|
(22,698
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
||||
Depreciation and amortization expense
|
2,353
|
|
|
2,278
|
|
||
Non-cash interest expense
|
2,575
|
|
|
2,158
|
|
||
Share-based compensation expense
|
2,008
|
|
|
1,562
|
|
||
Payment of employee bonus with stock
|
—
|
|
|
2,857
|
|
||
Non-cash license revenue
|
(4,500
|
)
|
|
—
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
3,885
|
|
|
(617
|
)
|
||
Prepaid expenses and other assets
|
205
|
|
|
(475
|
)
|
||
Accounts payable and other accrued expenses
|
(940
|
)
|
|
(1,235
|
)
|
||
Accrued outsourcing costs
|
1,780
|
|
|
(885
|
)
|
||
Accrued compensation and benefits
|
(4,067
|
)
|
|
(2,432
|
)
|
||
Co-development liability
|
(4,300
|
)
|
|
(5,208
|
)
|
||
Deferred rent
|
(1,818
|
)
|
|
(1,741
|
)
|
||
Deferred revenue
|
484
|
|
|
(24,464
|
)
|
||
Other liabilities
|
108
|
|
|
137
|
|
||
Net cash used in operating activities
|
(34,315
|
)
|
|
(50,763
|
)
|
||
|
|
|
|
||||
Cash flows from investing activities
|
|
|
|
||||
Purchases of property and equipment
|
(725
|
)
|
|
(1,464
|
)
|
||
Purchases of marketable securities
|
(68,194
|
)
|
|
(62,022
|
)
|
||
Proceeds from sales and maturities of marketable securities
|
43,111
|
|
|
45,650
|
|
||
Net cash used in investing activities
|
(25,808
|
)
|
|
(17,836
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities
|
|
|
|
||||
Proceeds from the issuance of common stock
|
44,810
|
|
|
75,555
|
|
||
Proceeds from employee stock purchases and options exercised
|
2,770
|
|
|
1,454
|
|
||
Payment of debt issuance costs
|
(86
|
)
|
|
—
|
|
||
Payment of stock offering costs
|
(913
|
)
|
|
(4,644
|
)
|
||
Net cash provided by financing activities
|
46,581
|
|
|
72,365
|
|
||
|
|
|
|
||||
Net increase (decrease) in cash and cash equivalents
|
(13,542
|
)
|
|
3,766
|
|
||
Cash and cash equivalents at beginning of period
|
60,736
|
|
|
55,799
|
|
||
Cash and cash equivalents at end of period
|
$
|
47,194
|
|
|
$
|
59,565
|
|
|
|
|
|
||||
Supplemental disclosure of cash flow information
|
|
|
|
||||
Cash paid for interest
|
$
|
2,127
|
|
|
$
|
3,463
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||
|
December 31,
|
|
December 31,
|
||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||
|
|
|
|
|
|
|
|
||||
AstraZeneca AB
|
35.9
|
%
|
|
—
|
%
|
|
17.9
|
%
|
|
—
|
%
|
Celgene
|
6.9
|
|
|
21.6
|
|
|
6.3
|
|
|
18.4
|
|
Genentech, Inc.
|
3.8
|
|
|
10.5
|
|
|
7.9
|
|
|
13.2
|
|
Loxo Oncology, Inc.
|
8.0
|
|
|
—
|
|
|
23.8
|
|
|
—
|
|
Novartis International Pharmaceutical Ltd.
|
26.7
|
|
|
18.7
|
|
|
26.5
|
|
|
20.3
|
|
Amgen Inc.
|
—
|
|
|
30.0
|
|
|
—
|
|
|
32.5
|
|
|
81.3
|
%
|
|
80.8
|
%
|
|
82.4
|
%
|
|
84.4
|
%
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
December 31,
|
|
December 31,
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
|
|
|
|
|
|
|
||||||||
North America
|
$
|
5,237
|
|
|
$
|
14,909
|
|
|
$
|
15,706
|
|
|
$
|
27,127
|
|
Europe
|
8,794
|
|
|
3,465
|
|
|
12,553
|
|
|
7,080
|
|
||||
Asia Pacific
|
35
|
|
|
3
|
|
|
35
|
|
|
3
|
|
||||
Total revenue
|
$
|
14,066
|
|
|
$
|
18,377
|
|
|
$
|
28,294
|
|
|
$
|
34,210
|
|
|
|
|
Gross
|
|
Gross
|
|
|
||||||||
|
Amortized
|
|
Unrealized
|
|
Unrealized
|
|
Fair
|
||||||||
|
Cost
|
|
Gains
|
|
Losses
|
|
Value
|
||||||||
Short-term available-for-sale securities:
|
|
|
|
|
|
|
|
||||||||
U.S. treasury securities
|
$
|
72,045
|
|
|
$
|
2
|
|
|
$
|
(2
|
)
|
|
$
|
72,045
|
|
Mutual fund securities
|
436
|
|
|
—
|
|
|
—
|
|
|
436
|
|
||||
|
72,481
|
|
|
2
|
|
|
(2
|
)
|
|
72,481
|
|
||||
Long-term available-for-sale securities:
|
|
|
|
|
|
|
|
||||||||
Mutual fund securities
|
691
|
|
|
—
|
|
|
—
|
|
|
691
|
|
||||
|
691
|
|
|
—
|
|
|
—
|
|
|
691
|
|
||||
Total
|
$
|
73,172
|
|
|
$
|
2
|
|
|
$
|
(2
|
)
|
|
$
|
73,172
|
|
|
|
|
Gross
|
|
Gross
|
|
|
||||||||
|
Amortized
|
|
Unrealized
|
|
Unrealized
|
|
Fair
|
||||||||
|
Cost
|
|
Gains
|
|
Losses
|
|
Value
|
||||||||
Short-term available-for-sale securities:
|
|
|
|
|
|
|
|
||||||||
U.S. treasury securities
|
$
|
47,130
|
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
$
|
47,128
|
|
Mutual fund securities
|
377
|
|
|
—
|
|
|
—
|
|
|
377
|
|
||||
|
47,507
|
|
|
—
|
|
|
(2
|
)
|
|
47,505
|
|
||||
Long-term available-for-sale securities:
|
|
|
|
|
|
|
|
||||||||
Mutual fund securities
|
465
|
|
|
—
|
|
|
—
|
|
|
465
|
|
||||
|
465
|
|
|
—
|
|
|
—
|
|
|
465
|
|
||||
Total
|
$
|
47,972
|
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
$
|
47,970
|
|
|
December 31,
|
|
June 30,
|
||||
|
2013
|
|
2013
|
||||
|
|
|
|
||||
Quoted prices in active markets for identical assets (Level 1)
|
$
|
73,172
|
|
|
$
|
47,970
|
|
Quoted prices for similar assets observable in the marketplace (Level 2)
|
—
|
|
|
—
|
|
||
Significant unobservable inputs (Level 3)
|
—
|
|
|
—
|
|
||
Total
|
$
|
73,172
|
|
|
$
|
47,970
|
|
|
Amortized
|
|
Fair
|
||||
|
Cost
|
|
Value
|
||||
|
|
|
|
||||
Due in one year or less
|
$
|
72,481
|
|
|
$
|
72,481
|
|
Due in one year to three years
|
691
|
|
|
691
|
|
||
Total
|
$
|
73,172
|
|
|
$
|
73,172
|
|
|
December 31,
|
|
June 30,
|
||||
|
2013
|
|
2013
|
||||
|
|
|
|
||||
Celgene
|
$
|
9,210
|
|
|
$
|
—
|
|
Genentech, Inc.
|
1,074
|
|
|
2,300
|
|
||
Novartis International Pharmaceutical Ltd.
|
4,553
|
|
|
12,053
|
|
||
Total deferred revenue
|
14,837
|
|
|
14,353
|
|
||
Less: Current portion
|
(9,532
|
)
|
|
(14,353
|
)
|
||
Deferred revenue, long-term portion
|
$
|
5,305
|
|
|
$
|
—
|
|
|
December 31,
|
|
June 30,
|
||||
|
2013
|
|
2013
|
||||
|
|
|
|
||||
Comerica term loan
|
$
|
14,550
|
|
|
$
|
14,550
|
|
Convertible senior notes
|
132,250
|
|
|
132,250
|
|
||
Long-term debt, gross
|
146,800
|
|
|
146,800
|
|
||
Less: Unamortized debt discount
|
(45,370
|
)
|
|
(47,779
|
)
|
||
Long-term debt, net
|
$
|
101,430
|
|
|
$
|
99,021
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
December 31,
|
|
December 31,
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Comerica Term Loan
|
|
|
|
|
|
|
|
||||||||
Simple interest
|
$
|
120
|
|
|
$
|
123
|
|
|
$
|
241
|
|
|
$
|
244
|
|
Amortization of fees paid for letters of credit
|
9
|
|
|
27
|
|
|
29
|
|
|
54
|
|
||||
Total interest expense on the Comerica term loan
|
129
|
|
|
150
|
|
|
270
|
|
|
298
|
|
||||
Convertible Senior Notes
|
|
|
|
|
|
|
|
||||||||
Contractual interest
|
1,003
|
|
|
—
|
|
|
1,995
|
|
|
—
|
|
||||
Amortization of debt discount
|
1,227
|
|
|
—
|
|
|
2,410
|
|
|
—
|
|
||||
Amortization of debt issuance costs
|
69
|
|
|
—
|
|
|
136
|
|
|
—
|
|
||||
Total interest expense on the convertible senior notes
|
2,299
|
|
|
—
|
|
|
4,541
|
|
|
—
|
|
||||
Deerfield Credit Facilities
|
|
|
|
|
|
|
|
||||||||
Simple interest
|
—
|
|
|
1,609
|
|
|
—
|
|
|
3,217
|
|
||||
Amortization of debt discounts and transaction fees
|
—
|
|
|
1,149
|
|
|
—
|
|
|
2,281
|
|
||||
Change in fair value of the embedded derivatives
|
—
|
|
|
(48
|
)
|
|
—
|
|
|
(177
|
)
|
||||
Total interest expense on the Deerfield credit facilities
|
—
|
|
|
2,710
|
|
|
—
|
|
|
5,321
|
|
||||
Total interest expense
|
$
|
2,428
|
|
|
$
|
2,860
|
|
|
$
|
4,811
|
|
|
$
|
5,619
|
|
|
|
Proprietary Program
|
|
Indication
|
|
Clinical Status
|
1.
|
|
ARRY-520
|
|
KSP inhibitor for multiple myeloma, or MM
|
|
Phase 2
|
2.
|
|
ARRY-614
|
|
p38/Tie2 dual inhibitor for myelodysplastic syndromes, or MDS
|
|
Phase 1
|
3.
|
|
ARRY-797
|
|
p38 inhibitor for
LMNA
-related dilated cardiomyopathy
|
|
Phase 2
|
4.
|
|
ARRY-502
|
|
CRTh2 antagonist for asthma
|
|
Phase 2
|
|
|
Drug Candidate
|
|
Indication
|
|
Partner
|
|
Clinical Status
|
1.
|
|
Binimetinib
|
|
MEK inhibitor for cancer
|
|
Novartis International Pharmaceutical Ltd.
|
|
Phase 3
|
2.
|
|
Selumetinib
|
|
MEK inhibitor for cancer
|
|
AstraZeneca, PLC
|
|
Phase 3
|
3.
|
|
Danoprevir
|
|
Hepatitis C virus protease inhibitor
|
|
InterMune (danoprevir now owned by Roche Holding AG)
|
|
Phase 2
|
4.
|
|
ARRY-543/ASLAN001
|
|
HER2 / EGFR inhibitor for gastric cancer
|
|
ASLAN Pharmaceuticals Pte Ltd.
|
|
Phase 2
|
5.
|
|
GDC-0068
|
|
AKT inhibitor for cancer
|
|
Genentech, Inc.
|
|
Phase 2
|
6.
|
|
LY2606368
|
|
Chk-1 inhibitor for cancer
|
|
Eli Lilly and Company
|
|
Phase 2
|
7.
|
|
VTX-2337
|
|
Toll-like receptor for cancer
|
|
VentiRx Pharmaceuticals, Inc.
|
|
Phase 2
|
8.
|
|
GDC-0575
|
|
Chk-1 inhibitor for cancer
|
|
Genentech, Inc.
|
|
Phase 1b
|
9.
|
|
ARRY-380/ONT-380
|
|
HER2 inhibitor for breast cancer
|
|
Oncothyreon Inc.
|
|
Phase 1b
|
10.
|
|
GDC-0994
|
|
Undisclosed cancer target
|
|
Genentech, Inc.
|
|
Phase 1
|
|
Three Months Ended
|
|
Change
|
|
Six Months Ended
|
|
Change
|
||||||||||||||||||||||
|
December 31,
|
|
2013 vs. 2012
|
|
December 31,
|
|
2013 vs. 2012
|
||||||||||||||||||||||
|
2013
|
|
2012
|
|
$
|
|
%
|
|
2013
|
|
2012
|
|
$
|
|
%
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
License revenue
|
$
|
3,037
|
|
|
$
|
9,740
|
|
|
$
|
(6,703
|
)
|
|
(69
|
)%
|
|
$
|
10,727
|
|
|
$
|
19,073
|
|
|
$
|
(8,346
|
)
|
|
(44
|
)%
|
Milestone revenue
|
6,250
|
|
|
4,276
|
|
|
1,974
|
|
|
46
|
%
|
|
8,625
|
|
|
7,419
|
|
|
1,206
|
|
|
16
|
%
|
||||||
Total license and milestone revenue
|
$
|
9,287
|
|
|
$
|
14,016
|
|
|
$
|
(4,729
|
)
|
|
(34
|
)%
|
|
$
|
19,352
|
|
|
$
|
26,492
|
|
|
$
|
(7,140
|
)
|
|
(27
|
)%
|
|
Three Months Ended
|
|
Change
|
|
Six Months Ended
|
|
Change
|
||||||||||||||||||||||
|
December 31,
|
|
2013 vs. 2012
|
|
December 31,
|
|
2013 vs. 2012
|
||||||||||||||||||||||
|
2013
|
|
2012
|
|
$
|
|
%
|
|
2013
|
|
2012
|
|
$
|
|
%
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Collaboration revenue
|
$
|
4,779
|
|
|
$
|
4,361
|
|
|
$
|
418
|
|
|
10
|
%
|
|
$
|
8,942
|
|
|
$
|
7,718
|
|
|
$
|
1,224
|
|
|
16
|
%
|
|
Three Months Ended
|
|
Change
|
|
Six Months Ended
|
|
Change
|
||||||||||||||||||||||
|
December 31,
|
|
2013 vs. 2012
|
|
December 31,
|
|
2013 vs. 2012
|
||||||||||||||||||||||
|
2013
|
|
2012
|
|
$
|
|
%
|
|
2013
|
|
2012
|
|
$
|
|
%
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Cost of partnered programs
|
$
|
13,110
|
|
|
$
|
7,909
|
|
|
$
|
5,201
|
|
|
66
|
%
|
|
$
|
23,768
|
|
|
$
|
14,448
|
|
|
$
|
9,320
|
|
|
65
|
%
|
Cost of partnered programs as a percentage of total revenue
|
93
|
%
|
|
43
|
%
|
|
|
|
|
|
84
|
%
|
|
42
|
%
|
|
|
|
|
|
Three Months Ended
|
|
Change
|
|
Six Months Ended
|
|
Change
|
||||||||||||||||||||||
|
December 31,
|
|
2013 vs. 2012
|
|
December 31,
|
|
2013 vs. 2012
|
||||||||||||||||||||||
|
2013
|
|
2012
|
|
$
|
|
%
|
|
2013
|
|
2012
|
|
$
|
|
%
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Salaries, benefits and share-based compensation
|
$
|
3,542
|
|
|
$
|
5,215
|
|
|
$
|
(1,673
|
)
|
|
(32
|
)%
|
|
$
|
9,300
|
|
|
$
|
10,695
|
|
|
$
|
(1,395
|
)
|
|
(13
|
)%
|
Outsourced services and consulting
|
2,873
|
|
|
5,050
|
|
|
(2,177
|
)
|
|
(43
|
)%
|
|
5,396
|
|
|
9,194
|
|
|
(3,798
|
)
|
|
(41
|
)%
|
||||||
Laboratory supplies
|
1,436
|
|
|
1,599
|
|
|
(163
|
)
|
|
(10
|
)%
|
|
2,888
|
|
|
3,286
|
|
|
(398
|
)
|
|
(12
|
)%
|
||||||
Facilities and depreciation
|
1,360
|
|
|
1,704
|
|
|
(344
|
)
|
|
(20
|
)%
|
|
2,980
|
|
|
3,541
|
|
|
(561
|
)
|
|
(16
|
)%
|
||||||
Other
|
276
|
|
|
373
|
|
|
(97
|
)
|
|
(26
|
)%
|
|
627
|
|
|
759
|
|
|
(132
|
)
|
|
(17
|
)%
|
||||||
Total research and development expenses
|
$
|
9,487
|
|
|
$
|
13,941
|
|
|
$
|
(4,454
|
)
|
|
(32
|
)%
|
|
$
|
21,191
|
|
|
$
|
27,475
|
|
|
$
|
(6,284
|
)
|
|
(23
|
)%
|
|
Three Months Ended
|
|
Change
|
|
Six Months Ended
|
|
Change
|
||||||||||||||||||||||
|
December 31,
|
|
2013 vs. 2012
|
|
December 31,
|
|
2013 vs. 2012
|
||||||||||||||||||||||
|
2013
|
|
2012
|
|
$
|
|
%
|
|
2013
|
|
2012
|
|
$
|
|
%
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
General and administrative expenses
|
$
|
5,472
|
|
|
$
|
4,610
|
|
|
$
|
862
|
|
|
19
|
%
|
|
$
|
10,651
|
|
|
$
|
9,390
|
|
|
$
|
1,261
|
|
|
13
|
%
|
|
Three Months Ended
|
|
Change
|
|
Six Months Ended
|
|
Change
|
||||||||||||||||||||||
|
December 31,
|
|
2013 vs. 2012
|
|
December 31,
|
|
2013 vs. 2012
|
||||||||||||||||||||||
|
2013
|
|
2012
|
|
$
|
|
%
|
|
2013
|
|
2012
|
|
$
|
|
%
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Interest income
|
$
|
23
|
|
|
$
|
12
|
|
|
$
|
11
|
|
|
92
|
%
|
|
$
|
39
|
|
|
$
|
24
|
|
|
$
|
15
|
|
|
63
|
%
|
Interest expense
|
(2,428
|
)
|
|
(2,860
|
)
|
|
432
|
|
|
15
|
%
|
|
(4,811
|
)
|
|
(5,619
|
)
|
|
808
|
|
|
14
|
%
|
||||||
Total other expense, net
|
$
|
(2,405
|
)
|
|
$
|
(2,848
|
)
|
|
$
|
443
|
|
|
16
|
%
|
|
$
|
(4,772
|
)
|
|
$
|
(5,595
|
)
|
|
$
|
823
|
|
|
15
|
%
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
December 31,
|
|
December 31,
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Comerica Term Loan
|
|
|
|
|
|
|
|
||||||||
Simple interest
|
$
|
120
|
|
|
$
|
123
|
|
|
$
|
241
|
|
|
$
|
244
|
|
Amortization of fees paid for letters of credit
|
9
|
|
|
27
|
|
|
29
|
|
|
54
|
|
||||
Total interest expense on the Comerica term loan
|
129
|
|
|
150
|
|
|
270
|
|
|
298
|
|
||||
Convertible Senior Notes
|
|
|
|
|
|
|
|
||||||||
Contractual interest
|
1,003
|
|
|
—
|
|
|
1,995
|
|
|
—
|
|
||||
Amortization of debt discount
|
1,227
|
|
|
—
|
|
|
2,410
|
|
|
—
|
|
||||
Amortization of debt issuance costs
|
69
|
|
|
—
|
|
|
136
|
|
|
—
|
|
||||
Total interest expense on the convertible senior notes
|
2,299
|
|
|
—
|
|
|
4,541
|
|
|
—
|
|
||||
Deerfield Credit Facilities
|
|
|
|
|
|
|
|
||||||||
Simple interest
|
—
|
|
|
1,609
|
|
|
—
|
|
|
3,217
|
|
||||
Amortization of debt discounts and transaction fees
|
—
|
|
|
1,149
|
|
|
—
|
|
|
2,281
|
|
||||
Change in fair value of the embedded derivatives
|
—
|
|
|
(48
|
)
|
|
—
|
|
|
(177
|
)
|
||||
Total interest expense on the Deerfield credit facilities
|
—
|
|
|
2,710
|
|
|
—
|
|
|
5,321
|
|
||||
Total interest expense
|
$
|
2,428
|
|
|
$
|
2,860
|
|
|
$
|
4,811
|
|
|
$
|
5,619
|
|
•
|
In December 2009, we received a
$60 million
up-front payment from Amgen under a Collaboration and License Agreement.
|
•
|
During May and June 2010, we received a total of
$45 million
in up-front and milestone payments under a License Agreement with Novartis.
|
•
|
In December 2010, we received a
$10 million
milestone payment under a Drug Discovery and Development Agreement with Celgene.
|
•
|
In May 2011, we received a
$10 million
milestone payment under a License Agreement with Novartis.
|
•
|
In September 2011, we received a
$28 million
up-front payment under a Drug Discovery Collaboration Agreement with Genentech.
|
•
|
In June 2012, we received an
$8.5 million
milestone payment from Amgen under a Collaboration and License Agreement.
|
•
|
In June 2013, we received a
$10 million
up-front payment under a Development and Commercialization Agreement with Oncothyreon.
|
•
|
In July 2013, we received an $11 million up-front payment under a Drug Discovery and Development Option and License Agreement with Celgene.
|
•
|
In August 2013, we received a $5 million milestone payment under a License Agreement with Novartis.
|
•
|
In November 2013, we received a $5 million milestone payment under a Collaboration and License Agreement with AstraZeneca.
|
|
December 31, 2013
|
|
June 30, 2013
|
|
$ Change
|
||||||
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
47,194
|
|
|
$
|
60,736
|
|
|
$
|
(13,542
|
)
|
Marketable securities – short-term
|
72,481
|
|
|
47,505
|
|
|
24,976
|
|
|||
Marketable securities – long-term
|
691
|
|
|
465
|
|
|
226
|
|
|||
Total
|
$
|
120,366
|
|
|
$
|
108,706
|
|
|
$
|
11,660
|
|
|
Six Months Ended December 31,
|
|
|
||||||||
|
2013
|
|
2012
|
|
$ Change
|
||||||
Cash flows provided by (used in):
|
|
|
|
|
|
||||||
Operating activities
|
$
|
(34,315
|
)
|
|
$
|
(50,763
|
)
|
|
$
|
16,448
|
|
Investing activities
|
(25,808
|
)
|
|
(17,836
|
)
|
|
(7,972
|
)
|
|||
Financing activities
|
46,581
|
|
|
72,365
|
|
|
(25,784
|
)
|
|||
Total
|
$
|
(13,542
|
)
|
|
$
|
3,766
|
|
|
$
|
(17,308
|
)
|
By:
|
/s/ Ron Squarer
|
|
Ron Squarer
|
|
Chief Executive Officer
|
|
|
|
|
By:
|
/s/ R. Michael Carruthers
|
|
R. Michael Carruthers
|
|
Chief Financial Officer
|
|
(Principal Financial and Accounting Officer)
|
|
|
|
|
Incorporated by Reference
|
||||
Exhibit Number
|
|
Description of Exhibit
|
|
Form
|
|
File No.
|
|
Date Filed
|
3.1
|
|
Amended and Restated Certificate of Incorporation of Array BioPharma Inc.
|
|
S-1/A
|
|
333-45922
|
|
10/27/2000
|
3.2
|
|
Amendment to Amended and Restated Certificate of Incorporation of Array BioPharma Inc.
|
|
8-K
|
|
001-16633
|
|
11/6/2007
|
3.3
|
|
Amendment to Amended and Restated Certificate of Incorporation of Array BioPharma Inc.
|
|
8-K
|
|
001-16633
|
|
10/29/2012
|
3.4
|
|
Bylaws of Array BioPharma Inc., as amended and restated on October 30, 2008
|
|
8-K
|
|
001-16633
|
|
11/4/2008
|
4.1
|
|
Specimen certificate representing the common stock
|
|
S-1/A
|
|
333-45922
|
|
10/27/2000
|
4.2
|
|
Registration Rights Agreement, dated May 15, 2009, between the registrant and Deerfield Private Design Fund, L.P. and Deerfield Private Design International, L.P.
|
|
10-K
|
|
001-16633
|
|
8/18/2009
|
4.3
|
|
Form of Warrant to purchase shares of the registrant's Common Stock issued to Deerfield Private Design Fund, L.P., Deerfield Private Design International, L.P., Deerfield Partners, L.P., Deerfield International Limited
|
|
8-K/A
|
|
001-16633
|
|
9/24/2009
|
4.4
|
|
Form of Amendment No. 1 to Warrant to purchase shares of the registrant's Common Stock issued to Deerfield Private Design Fund, L.P., Deerfield Private Design International, L.P., Deerfield Partners, L.P., Deerfield International Limited
|
|
8-K
|
|
001-16633
|
|
5/3/2011
|
4.5
|
|
Indenture dated June 10, 2013 by and between Array BioPharma Inc. and Wells Fargo Bank, National Association, as Trustee
|
|
8-K
|
|
001-16633
|
|
6/10/2013
|
4.6
|
|
First Supplemental Indenture dated June 10, 2013 by and between Array BioPharma Inc. and Wells Fargo Bank, National Association, as Trustee
|
|
8-K
|
|
001-16633
|
|
6/10/2013
|
4.7
|
|
Form of global note for the 3.00% Convertible Senior Notes Due 2020
|
|
8-K
|
|
001-16633
|
|
6/10/2013
|
10.1
|
|
Tenth Amendment to Loan and Security Agreement, dated December 31, 2013, between the registrant and Comerica Bank
|
|
Filed herewith
|
||||
31.1
|
|
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended
|
|
Filed herewith
|
||||
31.2
|
|
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended
|
|
Filed herewith
|
||||
32.1
|
|
Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
Furnished
|
||||
101.INS
|
|
XBRL Instance Document
|
|
Filed herewith
|
||||
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
Filed herewith
|
||||
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
Filed herewith
|
||||
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
Filed herewith
|
||||
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
Filed herewith
|
||||
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
Filed herewith
|
|
ARRAY BIOPHARMA INC.
|
|
|
|
|
|
By:
/s/ R. Michael Carruthers
|
|
|
|
Title:
CFO
|
|
|
|
COMERICA BANK
|
|
|
|
|
|
By:
/s/ J.P. Michael
|
|
|
|
Title:
Senior Vice President
|
Total Cash held in Accounts at Bank
|
Applicable Margin
|
Greater than or equal to $10,000,000
|
0.00%
|
Less than $10,000,000
|
2.00%
|
(1)
|
for any day, the per annum rate of interest determined on the basis of the rate for deposits in United States Dollars for a period equal to one (1) month appearing on Page BBAM of the Bloomberg Financial Markets Information Service as of 8:00 a.m. (California time) (or as soon thereafter as practical) on such day, or if such day is not a Business Day, on the immediately preceding Business Day. In the event that such rate does not appear on Page BBAM of the Bloomberg Financial Markets Information Service (or otherwise on such Service) on any day, the “Daily Adjusting LIBOR Rate” for such day shall be determined by reference to such other publicly available service for displaying eurodollar rates as may be reasonably selected by Bank, or in the absence of such other service, the “Daily Adjusting
|
(2)
|
1.00 minus the maximum rate (expressed as a decimal) on such day at which Bank is required to maintain reserves on "Euro-currency Liabilities" as defined in and pursuant to Regulation D of the Board of Governors of the Federal Reserve System or, if such regulation or definition is modified, and as long as Bank is required to maintain reserves against a category of liabilities which includes eurodollar deposits or includes a category of assets which includes eurodollar loans, the rate at which such reserves are required to be maintained on such category.
|
COMERICA BANK
By:
/s/ J.P. Michael
Name:
J.P. Michael
Title:
Senior Vice President
|
ARRAY BIOPHARMA INC.
By:
/s/ R. Michael Carruthers
Name:
Mike Carruthers
Title:
CFO
|
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Array BioPharma Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant is made known to us by others within this entity, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
February 5, 2014
|
By:
|
/s/ RON SQUARER
|
|
|
|
Ron Squarer
|
|
|
|
Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Array BioPharma Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant is made known to us by others within this entity, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
February 5, 2014
|
By:
|
/s/ R. MICHAEL CARRUTHERS
|
|
|
|
R. Michael Carruthers
|
|
|
|
Chief Financial Officer
|
(a)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(b)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.
|
Date:
|
February 5, 2014
|
/s/ RON SQUARER
|
|
|
Ron Squarer
|
|
|
Chief Executive Officer
|
|
|
|
|
|
|
|
|
/s/ R. MICHAEL CARRUTHERS
|
|
|
R. Michael Carruthers
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial and Accounting Officer)
|