Delaware
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84-1460811
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(State or other jurisdiction of incorporation or organization)
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(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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Registrant's telephone number, including area code: (303) 381-6600
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Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Name of each exchange on which registered
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Common Stock, par value $0.001 per share
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NASDAQ Global Market
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Securities registered pursuant to Section 12(g) of the Act: None
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Large Accelerated Filer
þ
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Accelerated Filer
¨
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Non-Accelerated Filer
¨
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Smaller Reporting Company
¨
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(do not check if smaller reporting company)
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Emerging Growth Company
¨
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Page
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Item 1.
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Item 1A.
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Item 1B.
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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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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Item 15.
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Compound
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Target/Disease State
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Partner
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Status
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BRAFTOVI + MEKTOVI
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BRAF and MEK inhibitors for advanced
BRAF
-mutant melanoma
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Pierre Fabre Medicament SAS and Ono Pharmaceutical Co., Ltd.
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Approved in US
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Encorafenib
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BRAF inhibitor for
BRAF
-mutant CRC
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Pierre Fabre Medicament SAS and Ono Pharmaceutical Co., Ltd.
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Phase 3
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Binimetinib
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MEK inhibitor for
BRAF
-mutant CRC and other cancers
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Pierre Fabre Medicament SAS and Ono Pharmaceutical Co., Ltd.
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Phase 3
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Selumetinib (1)
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MEK inhibitor for cancer and NF1 (2)
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AstraZeneca, PLC
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Phase 3
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Ganovo/Danoprevir (1)
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Protease inhibitor for Hepatitis C virus
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Roche Holding AG
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Approved in China
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Larotrectinib/LOXO-101 (1)
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PanTrk inhibitor for cancer
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Loxo Oncology, Inc.
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Phase 2 / Registration Trial / New Drug Application ("NDA")
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ARRY-797
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p38 inhibitor for Lamin A/C-related dilated cardiomyopathy
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Wholly-owned by Array
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Phase 3
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Ipatasertib/GDC-0068 (1)
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AKT inhibitor for cancer
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Genentech, Inc.
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Phase 3
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Tucatinib/ONT-380 (1)
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HER2 inhibitor for cancer
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Seattle Genetics, Inc.
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Phase 2 / Registration Trial
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Varlitinib/ASLAN001 (1)
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Pan-HER2 inhibitor for cancer
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ASLAN Pharmaceuticals Pte Ltd.
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Phase 2 / 3
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ARRY-382
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CSF1R inhibitor for cancer
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Wholly-owned by Array
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Phase 2
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Motolimod/VTX-2337 (1)
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Toll-like receptor for cancer
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Celgene Corp. / VentiRx Pharmaceuticals, Inc.
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Phase 2
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Prexasertib/LY2606368 (1)
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CHK-1 inhibitor for cancer
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Eli Lilly and Company
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Phase 2
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GDC-0575 (1)
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CHK-1 inhibitor for cancer
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Genentech, Inc.
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Phase 1b
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LOXO-292 (1)
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Ret inhibitor for cancer
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Loxo Oncology, Inc.
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Phase 1
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LOXO-195 (1)
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Trk inhibitor for cancer
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Loxo Oncology, Inc.
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Phase 1
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AK-1830 (1)
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TrkA selective inhibitor for inflammation
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Asahi Kasei Pharma Corporation
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Phase 1
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•
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Asahi Kasei Pharma
– In March 2016, we entered into a strategic collaboration with Asahi Kasei Pharma Corporation ("AKP") to develop and commercialize select Tropomyosin receptor kinase A (TRKA) inhibitors, including Array-invented AK-1830 for pain, inflammation and other non-cancer indications. AKP is currently advancing AK-1830 in a Phase 1 clinical trial in patients with inflammatory disease in Japan.
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•
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ASLAN
– We entered into a Collaboration and License Agreement with ASLAN in July 2011 to develop our pan-HER inhibitor, varlitinib. ASLAN is currently advancing varlitinib in registration trials in patients with biliary tract cancer and gastric cancer. In January 2018, we granted ASLAN an exclusive license to develop, manufacture and commercialize varlitinib. The License Agreement replaced the 2011 agreement.
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•
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Seattle Genetics
– We entered into a Development and Commercialization Agreement with Cascadian Therapeutics in May 2013, to collaborate on the development and commercialization of tucatinib, an orally active, reversible and selective small-molecule HER2 inhibitor, for the treatment of cancer. In December 2014, we granted Cascadian Therapeutics an exclusive license to develop, manufacture and commercialize
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•
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Genentech
– We entered into a worldwide strategic Drug Discovery Collaboration Agreement with Genentech in January 2003, which was expanded in 2005, 2008, and 2009, and is focused on the discovery, development and commercialization of novel therapeutics. The most advanced drug is ipatasertib, an AKT inhibitor for cancer, which is currently in Phase 3. We also entered into a License Agreement with Genentech in August 2011 for the development of each company's small molecule CHK-1 program in oncology. The program included Genentech's compound GDC-0425 (RG7602) and Array's compound GDC-0575 (previously known as ARRY-575). Genentech selected GDC-0575 to advance into further clinical trials in patients with cancer.
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•
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Loxo
– We entered into a Drug Discovery Collaboration Agreement with Loxo in July 2013 and granted Loxo exclusive rights to develop and commercialize certain Array-invented compounds targeted at the
tropomyosin kinase, or Trk, family of receptors, including larotrectinib, which is currently in a Phase 2/registration clinical trial. In May 2018, Loxo announced that it had filed an NDA with the FDA for larotrectinib and had been granted priority review. The FDA has set a target action date of November 26, 2018, under the Prescription Drug User Fee Act (PDUFA). Loxo is also advancing Array-invented LOXO-195, a Trk inhibitor, and LOXO-292, a Ret inhibitor, in Phase 1 / 2 clinical trials.
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•
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Inventing best-in-class small molecule drugs for patient populations which have significant unmet medical need;
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•
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Conducting clinical trials which maximize the overall value of our programs for patients and Array;
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Building and maintaining an oncology focused sales, marketing and medical organization to commercialize our products in the U.S.; and
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•
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Selectively partnering with early-stage research programs outside oncology.
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Estimated 2018
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||||
Type of Cancer
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New Cases
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Deaths
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Lung
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234,030
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154,050
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Breast
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268,670
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41,400
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Colon & rectum (combined)
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140,250
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50,630
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Melanoma
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91,270
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9,320
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Pancreas
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55,440
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44,330
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Ovarian
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22,240
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14,070
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Stomach
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26,240
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10,800
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Myeloma
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30,770
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12,770
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Gallbladder and Other Biliary
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12,190
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3,790
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881,100
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341,160
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Phase
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Objective
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Estimated Duration
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Discovery
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Lead identification and target validation.
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1 to 2 years
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Preclinical
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Initial toxicology for preliminary identification of risks for humans; gather early pharmacokinetic data.
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2 to 4 years
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Phase 1
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Evaluate the safety and tolerability of the drug in human subjects and find the maximum tolerated dose. The pharmacokinetics of the drug are examined after single and multiple doses, the effects of food on the pharmacokinetics may be evaluated and drug metabolites may be monitored.
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1 to 2 years
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Phase 2
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Evaluate effectiveness of the drug and its optimal dosage in patients; continue safety evaluation.
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2 to 4 years
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Phase 3
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Confirm efficacy, dosage regime and safety profile of the drug in patients.
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2 to 4 years
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NDA Preparation, Review and Approval
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FDA review and approval to sell and market the drug under the approved labeling.
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1 to 2 years
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•
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partners may develop and commercialize, either alone or with others, products and services that are similar to, or competitive with, the products that are the subject of the collaboration with us;
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•
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partners may not commit sufficient resources to the testing, marketing, distribution or other development of our drug candidates;
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•
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partners may not properly maintain or defend intellectual property rights we license to them or they may utilize our proprietary information in such a way as to invite litigation that could jeopardize or potentially invalidate our intellectual property or proprietary information or expose us to potential liability;
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•
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partners may encounter conflicts of interest, changes in business strategy or other business issues which could adversely affect their willingness or ability to fulfill their obligations to us (for example, pharmaceutical and biotechnology companies historically have re-evaluated their priorities following mergers and consolidations, which have been common in recent years in these industries);
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•
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partners are subject to many of the risks described under the heading below "
Risks Related to Our Industry
" and any adverse effects on our partners in connection with their regulatory obligations could have a material adverse effect on our business, financial condition and ability to commercialize our products; and
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•
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disputes may arise between us and our partners delaying or terminating the research, development or commercialization of our drug candidates, resulting in significant litigation or arbitration that could be time-consuming and expensive, or causing partners to act in their own self-interest and not in the interest of holders of our securities.
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•
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our ability to create valuable proprietary drugs targeting large market opportunities;
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•
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strategic decisions to allocate more of our resources to the further development of our proprietary programs and building our commercialization capabilities as our drugs advance;
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•
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research and spending priorities of potential licensing partners;
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•
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willingness of, and the resources available to, pharmaceutical and biotechnology companies to in-license drug candidates to fill their clinical pipelines;
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•
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the success or failure, and timing, of preclinical and clinical trials for our proprietary programs we intend to out-license; or
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•
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our ability or inability to generate proof-of-concept data and to agree with a potential partner on the value of proprietary drug candidates we are seeking to out-license, or on the related terms.
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•
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failure to achieve clinical trial results that indicate a candidate is effective in treating a specified condition or illness in humans;
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•
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presence of harmful side effects;
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•
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determination by the FDA that the submitted data do not satisfy the criteria for approval;
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•
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lack of commercial viability of the drug;
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•
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failure to acquire, on reasonable terms, intellectual property rights necessary for commercialization;
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•
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existence of alternative therapeutics that are more effective; and
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•
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if a drug candidate requires a companion diagnostic test for approval, failure to obtain approval for the companion diagnostic test.
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•
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provide sufficient safety, efficacy or other data regarding a drug candidate to support the commencement of a Phase 3 or other clinical trial;
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•
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reach agreement on acceptable terms with prospective contract manufacturers, CROs and trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different third parties;
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•
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select CROs, trial sites and, where necessary, contract manufacturers that do not encounter any regulatory compliance problems;
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manufacture sufficient quantities of a product candidate for use in clinical trials;
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•
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obtain IRB approval to conduct a clinical trial at a prospective site;
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•
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recruit and enroll patients to participate in clinical trials, which can be impacted by many factors outside our or our partners’ control, including competition from other clinical trial programs for the same or similar indications;
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retain patients who have initiated a clinical trial but may be prone to withdraw due to side effects from the therapy, lack of efficacy or personal issues; and
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•
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develop and validate a companion diagnostic test for a drug candidate that requires one.
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•
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failure to conduct the clinical trial in accordance with regulatory requirements, including GCP, or our protocols;
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•
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inspection of the clinical trial operations, trial sites or manufacturing facility by the FDA or other regulatory authorities resulting in findings of non-compliance and the imposition of a clinical hold;
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•
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unforeseen safety issues or results that do not demonstrate efficacy; and
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•
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lack of adequate funding to continue the clinical trial.
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•
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the federal Anti-Kickback Statute, which prohibits, among other things, knowingly and willfully soliciting, receiving, offering or paying remuneration, directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, order or recommendation of
,
items or services for which payment may be made, in whole or in part, under federal healthcare programs, such as the Medicare and Medicaid programs. The term “remuneration” has been broadly interpreted to include anything of value, and the government can establish a violation of the Anti-Kickback Statute without proving that a person or entity had actual knowledge of the law or specific intent to violate it;
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•
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the federal civil False Claims Act, which prohibits, among other things, individuals or entities from knowingly presenting
,
or causing to be presented, false or fraudulent claims for payment of government funds or knowingly making, using or causing to be made or used, a false record or statement to get a false claim paid. There are also criminal penalties, including imprisonment and criminal fines, for making or presenting a false or fictitious or fraudulent claim to the federal government;
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•
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the federal Health Insurance Portability and Accountability Act of 1996 (HIPAA), which created federal criminal laws that prohibit, among other actions, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program including private third-party payors;
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•
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the federal Physician Payment Sunshine Act, which requires manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program to report annually (with certain exceptions) to the Centers for Medicare & Medicaid Services, or CMS, information related to payments or other ‘‘transfers of value’’ made to physicians and teaching hospitals, and requires applicable manufacturers and group purchasing organizations to report annually to CMS ownership and investment interests held by physicians and their immediate family members and payments or other ‘‘transfers of value’’ to such physician owners;
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•
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the federal Foreign Corrupt Practices Act and similar anti-bribery laws in other jurisdictions, which generally prohibit companies and their intermediaries from making improper payments to government officials and/or other persons for the purpose of obtaining or retaining business; and
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•
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analogous state and foreign law equivalents of each of the above federal laws, such as anti-kickback and false claims laws some of which apply to items or services reimbursed by any third-party payor, including commercial insurers; state laws that require pharmaceutical manufacturers to comply with the industry’s voluntary compliance guidelines and the applicable compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; and state laws that require pharmaceutical manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing
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•
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demonstration of clinical effectiveness and safety;
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•
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potential advantages of our drug candidates over alternative treatments;
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•
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ability to offer our drug candidates for sale at competitive prices;
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•
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availability of adequate third-party reimbursement; and
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•
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effectiveness of marketing and distribution methods for the products.
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•
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availability or contamination of raw materials and components used in the manufacturing process, particularly those for which we have no other source or supplier;
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•
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capacity of our facilities or those of our contract manufacturers;
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•
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facility contamination by microorganisms or viruses or cross contamination;
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•
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compliance with regulatory requirements, including Form 483 notices and Warning Letters;
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•
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changes in forecasts of future demand;
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•
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timing and actual number of production runs;
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•
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production success rates and bulk drug yields; and
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•
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timing and outcome of product quality testing.
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develop and implement drug discovery technologies that will result in the identification of higher quality drug candidates;
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•
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attract and retain experienced, high caliber scientists;
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achieve timely, high-quality results at an acceptable cost; and
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design, create and manufacture our chemical compounds in quantities, at purity levels and at costs that are acceptable to our partners.
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ITEM 5.
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MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
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Fiscal Year Ended June 30, 2018
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High
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|
Low
|
||||
First Quarter
|
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$
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12.47
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$
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7.15
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Second Quarter
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$
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13.17
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$
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9.98
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Third Quarter
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$
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18.78
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$
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12.09
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Fourth Quarter
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$
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20.21
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$
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12.80
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||||
Fiscal Year Ended June 30, 2017
|
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High
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Low
|
||||
First Quarter
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|
$
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6.75
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$
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3.17
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Second Quarter
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|
$
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8.80
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|
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$
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5.38
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Third Quarter
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|
$
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12.56
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$
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8.56
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Fourth Quarter
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$
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9.07
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$
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6.96
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|
|
6/30/2014
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|
6/30/2015
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6/30/2016
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6/30/2017
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6/30/2018
|
|||||
Array BioPharma Inc.
|
100.44
|
|
|
158.81
|
|
|
78.41
|
|
|
184.36
|
|
|
369.60
|
|
NASDAQ Composite
|
131.23
|
|
|
150.40
|
|
|
148.02
|
|
|
190.07
|
|
|
235.00
|
|
NASDAQ Biotechnology
|
148.48
|
|
|
214.13
|
|
|
149.83
|
|
|
181.40
|
|
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193.94
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Year Ended June 30,
|
|||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|||||||||||
Revenue
|
|
|
|
|
|
|
|
|
|
|||||||||||
Reimbursement revenue
|
$
|
80,958
|
|
|
$
|
107,197
|
|
|
$
|
107,330
|
|
|
$
|
7,020
|
|
|
$
|
—
|
|
|
License and milestone revenue
|
56,537
|
|
|
19,844
|
|
|
3,876
|
|
|
20,367
|
|
|
25,111
|
|
||||||
Collaboration and other revenue
|
36,273
|
|
|
23,811
|
|
|
26,673
|
|
|
24,522
|
|
|
16,967
|
|
||||||
Total revenue
|
173,768
|
|
|
150,852
|
|
|
137,879
|
|
|
51,909
|
|
|
42,078
|
|
||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cost of partnered programs
|
59,374
|
|
|
35,395
|
|
|
23,166
|
|
|
44,392
|
|
|
45,965
|
|
||||||
Research and development for proprietary programs
|
185,821
|
|
|
178,199
|
|
|
160,655
|
|
|
54,442
|
|
|
49,824
|
|
||||||
Selling, general and administrative
|
58,500
|
|
|
39,336
|
|
|
36,267
|
|
|
31,433
|
|
|
21,907
|
|
||||||
Total operating expenses
|
303,695
|
|
|
252,930
|
|
|
220,088
|
|
|
130,267
|
|
|
117,696
|
|
||||||
Gain on the Encorafenib and Binimetinib Agreements, net
|
—
|
|
|
—
|
|
|
—
|
|
|
80,010
|
|
|
—
|
|
||||||
Gain on sale of CMC, net
|
—
|
|
|
—
|
|
|
—
|
|
|
1,641
|
|
|
—
|
|
||||||
Gain (Loss) from operations
|
(129,927
|
)
|
|
(102,078
|
)
|
|
(82,209
|
)
|
|
3,293
|
|
|
(75,618
|
)
|
||||||
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|||||||||||
Loss on extinguishment of Notes
|
(6,457
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|||||
Impairment loss related to cost method investment
|
—
|
|
|
(1,500
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Realized gains on investments and other
|
69
|
|
|
897
|
|
|
—
|
|
|
16,255
|
|
|
—
|
|
||||||
Change in fair value of notes payable
|
(2,387
|
)
|
|
(2,600
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Interest income
|
4,470
|
|
|
796
|
|
|
243
|
|
|
68
|
|
|
77
|
|
||||||
Interest expense
|
(10,814
|
)
|
|
(12,333
|
)
|
|
(10,874
|
)
|
|
(10,247
|
)
|
|
(9,716
|
)
|
||||||
Total other income (expense), net
|
(15,119
|
)
|
|
(14,740
|
)
|
|
(10,631
|
)
|
|
6,076
|
|
|
(9,639
|
)
|
||||||
Loss before income tax expense
|
(145,046
|
)
|
|
(116,818
|
)
|
|
(92,840
|
)
|
|
9,369
|
|
|
(85,257
|
)
|
||||||
Income tax expense
|
2,300
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net income (loss)
|
$
|
(147,346
|
)
|
|
$
|
(116,818
|
)
|
|
$
|
(92,840
|
)
|
|
$
|
9,369
|
|
|
$
|
(85,257
|
)
|
|
Weighted average shares outstanding – basic
|
198,490
|
|
|
163,207
|
|
|
142,964
|
|
|
136,679
|
|
|
123,403
|
|
||||||
Weighted average shares outstanding – diluted
|
198,490
|
|
|
163,207
|
|
|
142,964
|
|
|
141,692
|
|
|
123,403
|
|
||||||
Net income (loss) per share – basic
|
$
|
(0.74
|
)
|
|
$
|
(0.72
|
)
|
|
$
|
(0.65
|
)
|
|
$
|
0.07
|
|
|
$
|
(0.69
|
)
|
|
Net income (loss) per share – diluted
|
$
|
(0.74
|
)
|
|
$
|
(0.72
|
)
|
|
$
|
(0.65
|
)
|
|
$
|
0.07
|
|
|
$
|
(0.69
|
)
|
|
June 30,
|
||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
Cash, cash equivalents and marketable securities
|
$
|
413,406
|
|
|
$
|
235,055
|
|
|
$
|
110,538
|
|
|
$
|
178,822
|
|
|
$
|
111,638
|
|
Working capital
|
355,612
|
|
|
200,626
|
|
|
102,867
|
|
|
148,623
|
|
|
68,943
|
|
|||||
Total assets
|
460,364
|
|
|
279,145
|
|
|
168,900
|
|
|
198,207
|
|
|
136,625
|
|
|||||
Long-term debt, net and notes payable
|
111,775
|
|
|
133,905
|
|
|
113,655
|
|
|
107,280
|
|
|
101,524
|
|
|||||
Total stockholders' equity (deficit)
|
219,743
|
|
|
11,727
|
|
|
(37,932
|
)
|
|
42,653
|
|
|
(25,721
|
)
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
|
|
|
|
|
|
Change
|
|
Change
|
||||||||||||||||
|
Year Ended June 30,
|
|
2018 vs. 2017
|
|
2017 vs. 2016
|
||||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||||
Reimbursement revenue
|
$
|
80,958
|
|
|
$
|
107,197
|
|
|
$
|
107,330
|
|
|
$
|
(26,239
|
)
|
|
(24
|
)%
|
|
$
|
(133
|
)
|
|
—
|
%
|
License and milestone revenue
|
56,537
|
|
|
19,844
|
|
|
3,876
|
|
|
36,693
|
|
|
185
|
%
|
|
15,968
|
|
|
412
|
%
|
|||||
Collaboration and other revenue
|
36,273
|
|
|
23,811
|
|
|
26,673
|
|
|
12,462
|
|
|
52
|
%
|
|
(2,862
|
)
|
|
(11
|
)%
|
|||||
Total revenue
|
$
|
173,768
|
|
|
$
|
150,852
|
|
|
$
|
137,879
|
|
|
$
|
22,916
|
|
|
15
|
%
|
|
$
|
12,973
|
|
|
9
|
%
|
|
|
|
|
|
|
|
Change
|
|
Change
|
||||||||||||||||
|
Year Ended June 30,
|
|
2018 vs. 2017
|
|
2017 vs. 2016
|
||||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Research and development for proprietary programs
|
$
|
185,821
|
|
|
$
|
178,199
|
|
|
$
|
160,655
|
|
|
$
|
7,622
|
|
|
4
|
%
|
|
$
|
17,544
|
|
|
11
|
%
|
|
|
|
|
|
|
|
Change
|
|
Change
|
||||||||||||||||
|
Year Ended June 30,
|
|
2018 vs. 2017
|
|
2017 vs. 2016
|
||||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Selling, general and administrative expenses
|
$
|
58,500
|
|
|
$
|
39,336
|
|
|
$
|
36,267
|
|
|
$
|
19,164
|
|
|
49
|
%
|
|
$
|
3,069
|
|
|
8
|
%
|
|
|
|
|
|
|
|
Change
|
|
Change
|
||||||||||||||||
|
Year Ended June 30,
|
|
2018 vs. 2017
|
|
2017 vs. 2016
|
||||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Loss on extinguishment and conversion of notes
|
$
|
(6,457
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(6,457
|
)
|
|
(a)
|
|
|
$
|
—
|
|
|
(a)
|
|
Impairment loss related to cost method investment
|
$
|
—
|
|
|
$
|
(1,500
|
)
|
|
—
|
|
|
1,500
|
|
|
(a)
|
|
|
(1,500
|
)
|
|
(a)
|
|
|||
Realized gains on investments and other
|
69
|
|
|
897
|
|
|
—
|
|
|
(828
|
)
|
|
(a)
|
|
|
897
|
|
|
(a)
|
|
|||||
Change in fair value of notes payable
|
(2,387
|
)
|
|
(2,600
|
)
|
|
—
|
|
|
213
|
|
|
(a)
|
|
|
(2,600
|
)
|
|
(a)
|
|
|||||
Interest income
|
4,470
|
|
|
796
|
|
|
243
|
|
|
3,674
|
|
|
462
|
%
|
|
553
|
|
|
228
|
%
|
|||||
Interest expense
|
(10,814
|
)
|
|
(12,333
|
)
|
|
(10,874
|
)
|
|
1,519
|
|
|
(12
|
)%
|
|
(1,459
|
)
|
|
13
|
%
|
|||||
Total other income (expense), net
|
$
|
(15,119
|
)
|
|
$
|
(14,740
|
)
|
|
$
|
(10,631
|
)
|
|
$
|
(379
|
)
|
|
3
|
%
|
|
$
|
(4,109
|
)
|
|
39
|
%
|
|
June 30,
|
|
Change
|
|
Change
|
||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2018 vs. 2017
|
|
2017 vs. 2016
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
114,748
|
|
|
$
|
125,933
|
|
|
$
|
56,598
|
|
|
$
|
(11,185
|
)
|
|
$
|
69,335
|
|
Marketable securities – current
|
297,739
|
|
|
108,390
|
|
|
53,344
|
|
|
189,349
|
|
|
55,046
|
|
|||||
Marketable securities – non-current
|
919
|
|
|
732
|
|
|
596
|
|
|
187
|
|
|
136
|
|
|||||
Accounts receivable
|
32,084
|
|
|
31,279
|
|
|
39,302
|
|
|
805
|
|
|
(8,023
|
)
|
|||||
Total
|
$
|
445,490
|
|
|
$
|
266,334
|
|
|
$
|
149,840
|
|
|
$
|
179,156
|
|
|
$
|
116,494
|
|
|
Year Ended June 30,
|
|
Change
|
|
Change
|
||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2018 vs. 2017
|
|
2017 vs. 2016
|
||||||||||
Cash flows provided by (used in):
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating activities
|
$
|
(119,783
|
)
|
|
$
|
(39,354
|
)
|
|
$
|
(70,090
|
)
|
|
$
|
(80,429
|
)
|
|
$
|
30,736
|
|
Investing activities
|
(191,037
|
)
|
|
(58,116
|
)
|
|
66,027
|
|
|
(132,921
|
)
|
|
(124,143
|
)
|
|||||
Financing activities
|
299,635
|
|
|
166,805
|
|
|
4,970
|
|
|
132,830
|
|
|
161,835
|
|
|||||
Total
|
$
|
(11,185
|
)
|
|
$
|
69,335
|
|
|
$
|
907
|
|
|
$
|
(80,520
|
)
|
|
$
|
68,428
|
|
|
Less than
1 Year
|
|
1 to 3
Years
|
|
4 to 5
Years
|
|
Over 5
Years
|
|
Total
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Debt obligations (1)
|
$
|
12,500
|
|
|
$
|
10,000
|
|
|
$
|
2,500
|
|
|
$
|
126,060
|
|
|
$
|
151,060
|
|
Interest on debt obligations (2)(3)(4)
|
9,739
|
|
|
7,127
|
|
|
7,898
|
|
|
4,797
|
|
|
29,561
|
|
|||||
Operating lease commitments (2)
|
4,288
|
|
|
8,880
|
|
|
9,083
|
|
|
7,594
|
|
|
29,845
|
|
|||||
Capital lease commitments (1)
|
223
|
|
|
256
|
|
|
18
|
|
|
—
|
|
|
497
|
|
|||||
Purchase obligations (2)(5)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
26,750
|
|
|
$
|
26,263
|
|
|
$
|
19,499
|
|
|
$
|
138,451
|
|
|
$
|
210,963
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Reflected in the accompanying balance sheets.
|
(2)
|
Includes $1.0 million accrued interest and a $5.0 million exit fee payable upon maturity of the Redmile Notes, as well as a $1.2 million term loan final payment fee to Silicon Valley Bank. The remainder is not reflected in the accompanying balance sheets.
|
(3)
|
Interest on the variable debt obligation under the term loan with Silicon Valley Bank is calculated at
3.00%
, the interest rate in effect as of
June 30, 2018
.
|
(4)
|
Interest on the 2024 Notes is calculated at 2.625%, which is the coupon rate.
|
(5)
|
We have contracts for anticipated future obligations of
$245.7 million
, which include
$149.4 million
for CROs,
$44.7 million
for drug product manufacturing and supply and
$51.7 million
for all other outsourced services which are primarily for clinical trials and research and development costs. Included in these amounts are purchase orders totaling
$61.7 million
to complete the Novartis transitioned studies, the majority of which we expect will be reimbursed to us by Novartis. Substantially all of our purchase orders may be canceled without significant penalty to Array.
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
(1)
|
Consists of
15,326,350
stock options with a weighted average exercise price of
$7.68
and
959,730
restricted stock units.
|
(2)
|
The shares available for issuance under the Stock Option and Incentive Plan are increased automatically by an amount equal to the difference between (a) 25% of our issued and outstanding shares of capital stock (on a fully diluted, as converted basis) and (b) the sum of the shares relating to outstanding option grants plus the shares available for future grants under such Stock Option and Incentive Plan. However, in no event shall the number of additional authorized shares determined pursuant to this formula exceed, when added to the number of shares of common stock outstanding and reserved for issuance under the Stock Option and Incentive Plan other than pursuant to this formula, under the ESPP and upon conversion or exercise of outstanding warrants, convertible securities or convertible debt, the total number of shares of common stock authorized for issuance under our Amended and Restated Certificate of Incorporation.
|
|
|
|
|
Incorporated by Reference
|
||||
Exhibit Number
|
|
Description of Exhibit
|
|
Form
|
|
File No.
|
|
Date Filed
|
3.1
|
|
|
10-K
|
|
001-16633
|
|
8/19/2016
|
|
3.2
|
|
|
8-K
|
|
001-16633
|
|
2/6/2018
|
|
4.1
|
|
|
S-1/A
|
|
333-45922
|
|
10/27/2000
|
|
4.2
|
|
Indenture dated June 10, 2013 between the registrant and Wells Fargo Bank, National Association
|
|
8-K
|
|
001-16633
|
|
6/10/2013
|
4.3
|
|
First Supplemental Indenture dated June 10, 2013 between the registrant and Wells Fargo Bank, National Association (including the form of global note for the 3.00% Convertible Senior Notes due 2020)
|
|
8-K
|
|
001-16633
|
|
6/10/2013
|
4.4
|
|
|
8-K
|
|
001-16633
|
|
12/4/2017
|
|
10.1
|
|
|
S-1
|
|
333-45922
|
|
9/15/2000
|
|
10.2
|
|
|
S-1
|
|
333-45922
|
|
9/15/2000
|
|
10.3
|
|
|
DEF 14A
|
|
001-16633
|
|
9/18/2015
|
|
10.4
|
|
|
10-K
|
|
001-16633
|
|
8/16/2012
|
|
10.5
|
|
|
10-K
|
|
001-16633
|
|
9/1/2006
|
|
10.6
|
|
|
10-K
|
|
001-16633
|
|
9/1/2006
|
|
10.7
|
|
|
8-K
|
|
001-16633
|
|
8/20/2014
|
|
10.8
|
|
|
DEF 14A
|
|
001-16633
|
|
9/12/2016
|
|
10.9
|
|
|
8-K
|
|
001-16633
|
|
5/1/2012
|
|
10.10
|
|
|
8-K
|
|
001-16633
|
|
5/1/2012
|
|
10.11
|
|
|
8-K
|
|
001-16633
|
|
5/1/2012
|
|
10.12
|
|
|
10-K
|
|
001-16633
|
|
9/30/2002
|
|
10.13
|
|
|
10-K
|
|
001-16633
|
|
8/15/2014
|
|
10.14
|
|
Employment Agreement, dated August 29, 2014, between registrant and Victor Sandor, M.D.*
|
|
8-K
|
|
001-16633
|
|
9/12/2014
|
10.15
|
|
Noncompete Agreement, dated August 29, 2014, between registrant and Victor Sandor, M.D.*
|
|
8-K
|
|
001-16633
|
|
9/12/2014
|
10.16
|
|
Confidentiality and Inventions Agreement, dated August 29, 2014, between registrant and Victor Sandor, M.D.*
|
|
8-K
|
|
001-16633
|
|
9/12/2014
|
10.17
|
|
|
8-K
|
|
001-16633
|
|
9/12/2014
|
|
10.18
|
|
|
8-K
|
|
001-16633
|
|
12/21/2004
|
|
10.19
|
|
|
10-Q
|
|
001-16633
|
|
2/6/2006
|
|
10.20
|
|
|
S-1
|
|
333-45922
|
|
9/15/2000
|
|
10.21
|
|
|
8-K/A
|
|
001-16633
|
|
2/6/2002
|
|
10.22
|
|
|
10-Q
|
|
001-16633
|
|
11/14/2001
|
|
|
|
|
Incorporated by Reference
|
||||
Exhibit Number
|
|
Description of Exhibit
|
|
Form
|
|
File No.
|
|
Date Filed
|
10.23
|
|
|
10-Q
|
|
001-16633
|
|
2/2/2004
|
|
10.24
|
|
|
10-Q
|
|
001-16633
|
|
2/2/2004
|
|
10.25
|
|
|
10-Q
|
|
001-16633
|
|
2/6/2006
|
|
10.26
|
|
|
10-Q
|
|
001-16633
|
|
11/2/2009
|
|
10.27
|
|
|
10-Q
|
|
001-16633
|
|
11/9/2010
|
|
10.28
|
|
|
10-Q
|
|
001-16633
|
|
5/7/2015
|
|
10.29
|
|
|
10-Q
|
|
001-16633
|
|
11/2/2011
|
|
10.30
|
|
|
10-K
|
|
001-16633
|
|
9/13/2005
|
|
10.31
|
|
|
10-K
|
|
001-16633
|
|
9/1/2006
|
|
10.32
|
|
|
10-K
|
|
001-16633
|
|
9/1/2006
|
|
10.33
|
|
|
10-Q
|
|
001-16633
|
|
11/6/2006
|
|
10.34
|
|
|
10-Q
|
|
001-16633
|
|
2/6/2006
|
|
10.35
|
|
|
10-Q
|
|
001-16633
|
|
11/6/2006
|
|
10.36
|
|
|
8-K
|
|
001-16633
|
|
8/28/17
|
|
10.37
|
|
|
10-Q
|
|
001-16633
|
|
11/2/2011
|
|
10.38
|
|
|
8-K
|
|
001-16633
|
|
3/27/2013
|
|
10.39
|
|
|
POS#AM
|
|
333-189048
|
|
8/18/2014
|
|
10.40
|
|
|
S-3ASR
|
|
333-206525
|
|
8/21/2015
|
|
10.41
|
|
|
10-Q
|
|
001-16633
|
|
11/6/2015
|
|
10.42
|
|
|
10-K
|
|
001-16633
|
|
8/12/2013
|
|
10.43
|
|
|
10-K
|
|
001-16633
|
|
8/15/2014
|
|
10.44
|
|
|
10-K
|
|
001-16633
|
|
8/15/2014
|
|
10.45
|
|
|
10-Q
|
|
001-16633
|
|
2/4/2015
|
|
10.46
|
|
|
10-K
|
|
001-16633
|
|
8/21/2015
|
|
10.47
|
|
|
10-Q
|
|
001-16633
|
|
11/1/2013
|
|
10.48
|
|
|
10-Q
|
|
001-16633
|
|
2/4/2015
|
|
|
|
|
Incorporated by Reference
|
||||
Exhibit Number
|
|
Description of Exhibit
|
|
Form
|
|
File No.
|
|
Date Filed
|
10.49
|
|
|
10-Q
|
|
001-16633
|
|
2/4/2015
|
|
10.50
|
|
|
10-Q
|
|
001-16633
|
|
5/7/2015
|
|
10.51
|
|
|
10-Q
|
|
001-16633
|
|
5/7/2015
|
|
10.52
|
|
|
10-Q
|
|
001-16633
|
|
5/7/2015
|
|
10.53
|
|
|
10-Q
|
|
001-16633
|
|
5/7/2015
|
|
10.54
|
|
|
10-K
|
|
001-16633
|
|
8/21/2015
|
|
10.55
|
|
|
10-K
|
|
001-16633
|
|
8/21/2015
|
|
10.56
|
|
|
10-Q/A
|
|
001-16633
|
|
6/8/2016
|
|
10.57
|
|
|
10-K
|
|
001-16633
|
|
8/19/2016
|
|
10.58
|
|
|
10-K
|
|
001-16633
|
|
8/19/2016
|
|
10.59
|
|
|
10-K
|
|
001-16633
|
|
8/19/2016
|
|
10.60
|
|
|
8-K
|
|
001-16633
|
|
12/23/2016
|
|
10.61
|
|
|
8-K
|
|
001-16633
|
|
9/2/2016
|
|
10.62
|
|
|
8-K
|
|
001-16633
|
|
9/2/2016
|
|
10.63
|
|
|
8-K
|
|
001-16633
|
|
9/2/2016
|
|
10.64
|
|
|
8-K
|
|
001-16633
|
|
8/9/2017
|
|
10.65
|
|
|
10-K
|
|
001-16633
|
|
8/11/2017
|
|
10.66
|
|
|
10-K
|
|
001-16633
|
|
8/11/2017
|
|
10.67
|
|
|
10-K
|
|
001-16633
|
|
8/11/2017
|
|
10.68
|
|
|
8-K
|
|
001-16633
|
|
11/17/2017
|
|
10.69
|
|
|
10-Q
|
|
001-16633
|
|
2/6/2018
|
|
10.70
|
|
|
10-Q
|
|
001-16633
|
|
5/9/2018
|
|
10.71
|
|
|
|
|
Filed herewith
|
|
|
|
23.1
|
|
|
|
|
Filed herewith
|
|
|
|
31.1
|
|
|
|
|
Filed herewith
|
|
|
|
31.2
|
|
|
|
|
Filed herewith
|
|
|
|
|
|
|
Incorporated by Reference
|
||||
Exhibit Number
|
|
Description of Exhibit
|
|
Form
|
|
File No.
|
|
Date Filed
|
32.1
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ RON SQUARER
|
|
Ron Squarer
|
|
Chief Executive Officer
|
|
(Principal Executive Officer)
|
|
|
By:
|
/s/ JASON HADDOCK
|
|
Jason Haddock
|
|
Chief Financial Officer
|
|
(Principal Financial and Accounting Officer)
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
|
|
|
/s/ RON SQUARER
|
|
Chief Executive Officer
|
|
August 14, 2018
|
Ron Squarer
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ JASON HADDOCK
|
|
Chief Financial Officer
|
|
August 14, 2018
|
Jason Haddock
|
|
(Principal Financial and Accounting Officer)
|
|
|
|
|
|
|
|
|
|
Chairman of the Board of Directors
|
|
August 14, 2018
|
Carrie S. Cox
|
|
|
|
|
|
|
|
|
|
/s/ CHARLES M. BAUM
|
|
Director
|
|
August 14, 2018
|
Charles M. Baum, M.D., Ph.D.
|
|
|
|
|
|
|
|
|
|
/s/ GWEN A. FYFE
|
|
Director
|
|
August 14, 2018
|
Gwen A. Fyfe, M.D.
|
|
|
|
|
|
|
|
|
|
/s/ KYLE A. LEFKOFF
|
|
Director
|
|
August 14, 2018
|
Kyle A. Lefkoff
|
|
|
|
|
|
|
|
|
|
/s/ JOHN A. ORWIN
|
|
Director
|
|
August 14, 2018
|
John A. Orwin
|
|
|
|
|
|
|
|
|
|
/s/ SHALINI SHARP
|
|
Director
|
|
August 14, 2018
|
Shalini Sharp
|
|
|
|
|
|
|
|
|
|
/s/ GIL J. VAN LUNSEN
|
|
Director
|
|
August 14, 2018
|
Gil J. Van Lunsen
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
||||||
|
2018
|
|
2017
|
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
114,748
|
|
|
$
|
125,933
|
|
Marketable securities
|
297,739
|
|
|
108,390
|
|
||
Accounts receivable
|
32,084
|
|
|
31,279
|
|
||
Prepaid expenses and other current assets
|
6,972
|
|
|
4,575
|
|
||
Total current assets
|
451,543
|
|
|
270,177
|
|
||
|
|
|
|
||||
Non-current assets
|
|
|
|
||||
Marketable securities
|
919
|
|
|
732
|
|
||
Property and equipment, net
|
7,128
|
|
|
8,132
|
|
||
Other long-term assets
|
774
|
|
|
104
|
|
||
Total non-current assets
|
8,821
|
|
|
8,968
|
|
||
Total assets
|
$
|
460,364
|
|
|
$
|
279,145
|
|
|
|
|
|
||||
Liabilities and Stockholders' Equity
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable
|
$
|
14,059
|
|
|
$
|
8,636
|
|
Accrued outsourcing costs
|
31,853
|
|
|
31,388
|
|
||
Accrued compensation and benefits
|
16,695
|
|
|
10,172
|
|
||
Other accrued expenses
|
1,868
|
|
|
1,575
|
|
||
Notes payable at fair value
|
15,899
|
|
|
—
|
|
||
Deferred rent
|
707
|
|
|
624
|
|
||
Deferred revenue
|
12,350
|
|
|
17,156
|
|
||
Current portion of long-term debt
|
2,500
|
|
|
—
|
|
||
Total current liabilities
|
95,931
|
|
|
69,551
|
|
||
|
|
|
|
||||
Non-current liabilities
|
|
|
|
||||
Deferred rent
|
5,598
|
|
|
5,714
|
|
||
Deferred revenue
|
44,470
|
|
|
57,325
|
|
||
Long-term debt, net
|
93,376
|
|
|
121,305
|
|
||
Notes payable at fair value
|
—
|
|
|
12,600
|
|
||
Other non-current liabilities
|
1,246
|
|
|
923
|
|
||
Total non-current liabilities
|
144,690
|
|
|
197,867
|
|
||
Total liabilities
|
240,621
|
|
|
267,418
|
|
||
|
|
|
|
||||
Commitments and contingencies
|
|
|
|
||||
|
|
|
|
||||
Stockholders' equity
|
|
|
|
||||
Preferred stock, $0.001 par value; 10,000,000 shares authorized, no shares issued and outstanding
|
—
|
|
|
—
|
|
||
Common stock, $0.001 par value; 280,000,000 shares authorized as of June 30, 2018 and June 30, 2017, 211,289,922 and 171,307,715 shares issued and outstanding as of June 30, 2018 and June 30, 2017, respectively
|
211
|
|
|
171
|
|
||
Additional paid-in capital
|
1,286,000
|
|
|
930,293
|
|
||
Accumulated other comprehensive loss
|
(461
|
)
|
|
(76
|
)
|
||
Accumulated deficit
|
(1,066,007
|
)
|
|
(918,661
|
)
|
||
Total stockholders' equity
|
219,743
|
|
|
11,727
|
|
||
Total liabilities and stockholders' equity
|
$
|
460,364
|
|
|
$
|
279,145
|
|
|
|
|
|
||||
The accompanying notes are an integral part of these consolidated financial statements.
|
|
Year Ended June 30,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Revenue
|
|
|
|
|
|
||||||
Reimbursement revenue
|
$
|
80,958
|
|
|
$
|
107,197
|
|
|
$
|
107,330
|
|
License and milestone revenue
|
56,537
|
|
|
19,844
|
|
|
3,876
|
|
|||
Collaboration and other revenue
|
36,273
|
|
|
23,811
|
|
|
26,673
|
|
|||
Total revenue
|
173,768
|
|
|
150,852
|
|
|
137,879
|
|
|||
|
|
|
|
|
|
||||||
Operating expenses
|
|
|
|
|
|
||||||
Cost of partnered programs
|
59,374
|
|
|
35,395
|
|
|
23,166
|
|
|||
Research and development for proprietary programs
|
185,821
|
|
|
178,199
|
|
|
160,655
|
|
|||
Selling, general and administrative
|
58,500
|
|
|
39,336
|
|
|
36,267
|
|
|||
Total operating expenses
|
303,695
|
|
|
252,930
|
|
|
220,088
|
|
|||
|
|
|
|
|
|
||||||
Loss from operations
|
(129,927
|
)
|
|
(102,078
|
)
|
|
(82,209
|
)
|
|||
|
|
|
|
|
|
||||||
Other income (expense)
|
|
|
|
|
|
||||||
Loss on extinguishment of Notes
|
(6,457
|
)
|
|
—
|
|
|
—
|
|
|||
Impairment loss related to cost method investment
|
—
|
|
|
(1,500
|
)
|
|
—
|
|
|||
Realized gains on investments and other
|
69
|
|
|
897
|
|
|
—
|
|
|||
Change in fair value of notes payable
|
(2,387
|
)
|
|
(2,600
|
)
|
|
—
|
|
|||
Interest income
|
4,470
|
|
|
796
|
|
|
243
|
|
|||
Interest expense
|
(10,814
|
)
|
|
(12,333
|
)
|
|
(10,874
|
)
|
|||
Total other income (expense), net
|
(15,119
|
)
|
|
(14,740
|
)
|
|
(10,631
|
)
|
|||
|
|
|
|
|
|
||||||
Loss before income tax expense
|
(145,046
|
)
|
|
(116,818
|
)
|
|
(92,840
|
)
|
|||
|
|
|
|
|
|
||||||
Income tax expense
|
2,300
|
|
|
—
|
|
|
—
|
|
|||
|
|
|
|
|
|
||||||
Net loss
|
$
|
(147,346
|
)
|
|
$
|
(116,818
|
)
|
|
$
|
(92,840
|
)
|
|
|
|
|
|
|
||||||
Change in unrealized gain (loss) on marketable securities
|
(385
|
)
|
|
(83
|
)
|
|
2
|
|
|||
|
|
|
|
|
|
||||||
Comprehensive loss
|
$
|
(147,731
|
)
|
|
$
|
(116,901
|
)
|
|
$
|
(92,838
|
)
|
|
|
|
|
|
|
||||||
Net loss per share – basic
|
$
|
(0.74
|
)
|
|
$
|
(0.72
|
)
|
|
$
|
(0.65
|
)
|
Net loss per share – diluted
|
$
|
(0.74
|
)
|
|
$
|
(0.72
|
)
|
|
$
|
(0.65
|
)
|
|
|
|
|
|
|
||||||
Weighted average shares outstanding – basic
|
198,490
|
|
|
163,207
|
|
|
142,964
|
|
|||
Weighted average shares outstanding – diluted
|
198,490
|
|
|
163,207
|
|
|
142,964
|
|
|||
|
|
|
|
|
|
||||||
The accompanying notes are an integral part of these consolidated financial statements.
|
|
|
|
|
|
|
Additional Paid-in Capital
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Accumulated Deficit
|
|
Total
|
|||||||||||
|
|
Common Stock
|
|
|
|
|
|||||||||||||||||
|
|
Shares
|
|
Amounts
|
|
|
|
|
|||||||||||||||
Balance as of June 30, 2015
|
|
142,107
|
|
|
$
|
142
|
|
|
$
|
751,073
|
|
|
$
|
5
|
|
|
$
|
(708,567
|
)
|
|
$
|
42,653
|
|
Shares issued for cash under employee share plans, net
|
|
782
|
|
|
1
|
|
|
2,031
|
|
|
—
|
|
|
—
|
|
|
2,032
|
|
|||||
Employee share-based compensation expense
|
|
—
|
|
|
—
|
|
|
7,283
|
|
|
—
|
|
|
—
|
|
|
7,283
|
|
|||||
Warrants exercised - cashless
|
|
223
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Warrants exercised for cash
|
|
12
|
|
|
—
|
|
|
46
|
|
|
—
|
|
|
—
|
|
|
46
|
|
|||||
Issuance of common stock, net of offering costs / At-the-market offering
|
|
566
|
|
|
1
|
|
|
2,891
|
|
|
—
|
|
|
—
|
|
|
2,892
|
|
|||||
Change in unrealized gain on marketable securities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|||||
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(92,840
|
)
|
|
(92,840
|
)
|
|||||
Balance as of June 30, 2016
|
|
143,690
|
|
|
144
|
|
|
763,324
|
|
|
7
|
|
|
(801,407
|
)
|
|
(37,932
|
)
|
|||||
Shares issued for cash under employee share plans, net
|
|
939
|
|
|
1
|
|
|
2,343
|
|
|
—
|
|
|
—
|
|
|
2,344
|
|
|||||
Employee share-based compensation expense
|
|
—
|
|
|
—
|
|
|
9,965
|
|
|
—
|
|
|
—
|
|
|
9,965
|
|
|||||
Cumulative effect adjustment upon adoption of ASU 2016-09
|
|
—
|
|
|
—
|
|
|
436
|
|
|
—
|
|
|
(436
|
)
|
|
—
|
|
|||||
Issuance of common stock, net of offering costs / Public offering
|
|
21,160
|
|
|
21
|
|
|
124,171
|
|
|
—
|
|
|
—
|
|
|
124,192
|
|
|||||
Issuance of common stock, net of offering costs / At-the-market offering
|
|
5,519
|
|
|
5
|
|
|
30,054
|
|
|
—
|
|
|
—
|
|
|
30,059
|
|
|||||
Change in unrealized loss on marketable securities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(83
|
)
|
|
—
|
|
|
(83
|
)
|
|||||
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(116,818
|
)
|
|
(116,818
|
)
|
|||||
Balance as of June 30, 2017
|
|
171,308
|
|
|
171
|
|
|
930,293
|
|
|
(76
|
)
|
|
(918,661
|
)
|
|
11,727
|
|
|||||
Shares issued for cash under employee share plans, net
|
|
4,489
|
|
|
4
|
|
|
19,638
|
|
|
—
|
|
|
—
|
|
|
19,642
|
|
|||||
Share-based compensation expense
|
|
—
|
|
|
—
|
|
|
19,107
|
|
|
—
|
|
|
—
|
|
|
19,107
|
|
|||||
Issuance of common stock, net of offering costs / Public offering
|
|
24,070
|
|
|
24
|
|
|
242,978
|
|
|
—
|
|
|
—
|
|
|
243,002
|
|
|||||
Issuance of common stock, net of offering costs / At-the-market offering
|
|
2,554
|
|
|
3
|
|
|
40,161
|
|
|
—
|
|
|
—
|
|
|
40,164
|
|
|||||
Extinguishment of 2020 Notes
|
|
7,956
|
|
|
8
|
|
|
(15,705
|
)
|
|
—
|
|
|
—
|
|
|
(15,697
|
)
|
|||||
Conversion of 2020 Notes
|
|
913
|
|
|
1
|
|
|
5,418
|
|
|
—
|
|
|
—
|
|
|
5,419
|
|
|||||
Issuance of 2024 Notes
|
|
—
|
|
|
—
|
|
|
44,110
|
|
|
—
|
|
|
—
|
|
|
44,110
|
|
|||||
Change in unrealized loss on marketable securities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(385
|
)
|
|
—
|
|
|
(385
|
)
|
|||||
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(147,346
|
)
|
|
(147,346
|
)
|
|||||
Balance as of June 30, 2018
|
|
211,290
|
|
|
$
|
211
|
|
|
$
|
1,286,000
|
|
|
$
|
(461
|
)
|
|
$
|
(1,066,007
|
)
|
|
$
|
219,743
|
|
|
|||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
|
|
Year Ended June 30,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Cash flows from operating activities
|
|
|
|
|
|
||||||
Net loss
|
$
|
(147,346
|
)
|
|
$
|
(116,818
|
)
|
|
$
|
(92,840
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization expense
|
2,236
|
|
|
2,068
|
|
|
1,529
|
|
|||
Non-cash interest expense
|
6,252
|
|
|
7,223
|
|
|
6,375
|
|
|||
Share-based compensation expense
|
19,107
|
|
|
9,965
|
|
|
7,283
|
|
|||
Loss on extinguishment and conversion of Notes
|
6,457
|
|
|
—
|
|
|
—
|
|
|||
Realized gain from investments, net
|
—
|
|
|
(529
|
)
|
|
—
|
|
|||
Impairment loss related to cost method investment
|
—
|
|
|
1,500
|
|
|
—
|
|
|||
Financing fees on notes payable
|
—
|
|
|
240
|
|
|
—
|
|
|||
Change in fair value of notes payable
|
3,299
|
|
|
2,600
|
|
|
—
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
(805
|
)
|
|
8,023
|
|
|
(32,995
|
)
|
|||
Prepaid expenses and other assets
|
(3,067
|
)
|
|
6,179
|
|
|
(4,352
|
)
|
|||
Accounts payable and other accrued expenses
|
5,716
|
|
|
(1,004
|
)
|
|
3,931
|
|
|||
Accrued outsourcing costs
|
465
|
|
|
12,248
|
|
|
1,738
|
|
|||
Accrued compensation and benefits
|
5,390
|
|
|
1,539
|
|
|
1,126
|
|
|||
Deferred rent
|
(33
|
)
|
|
1,564
|
|
|
175
|
|
|||
Deferred revenue
|
(17,661
|
)
|
|
25,664
|
|
|
37,831
|
|
|||
Other long-term liabilities
|
207
|
|
|
184
|
|
|
109
|
|
|||
Net cash used in operating activities
|
(119,783
|
)
|
|
(39,354
|
)
|
|
(70,090
|
)
|
|||
|
|
|
|
|
|
||||||
Cash flows from investing activities
|
|
|
|
|
|
||||||
Purchases of property and equipment
|
(1,232
|
)
|
|
(3,520
|
)
|
|
(3,159
|
)
|
|||
Proceeds from investment
|
—
|
|
|
529
|
|
|
—
|
|
|||
Purchases of marketable securities
|
(442,602
|
)
|
|
(387,554
|
)
|
|
(139,150
|
)
|
|||
Proceeds from sales and maturities of marketable securities
|
252,797
|
|
|
332,429
|
|
|
208,336
|
|
|||
Net cash provided by (used in) investing activities
|
(191,037
|
)
|
|
(58,116
|
)
|
|
66,027
|
|
|||
|
|
|
|
|
|
||||||
Cash flows from financing activities
|
|
|
|
|
|
||||||
Proceeds from the issuance of common stock / Public offering
|
258,750
|
|
|
132,250
|
|
|
—
|
|
|||
Offering costs for the issuance of common stock / Public offering
|
(15,748
|
)
|
|
(8,058
|
)
|
|
—
|
|
|||
Proceeds from the issuance of common stock / At-the-market offering
|
41,216
|
|
|
30,790
|
|
|
2,992
|
|
|||
Offering costs for the issuance of common stock / At-the-market offering
|
(1,052
|
)
|
|
(731
|
)
|
|
(100
|
)
|
|||
Proceeds from notes payable at fair value
|
—
|
|
|
10,000
|
|
|
—
|
|
|||
Issuance costs for notes payable at fair value
|
—
|
|
|
(240
|
)
|
|
—
|
|
|||
Proceeds from employee stock purchases and options exercised
|
20,775
|
|
|
2,344
|
|
|
2,032
|
|
|||
Payment for debt issuance costs
|
(4,306
|
)
|
|
—
|
|
|
—
|
|
|||
Payment of Comerica term loan
|
—
|
|
|
(14,550
|
)
|
|
—
|
|
|||
Proceeds from the issuance of the SVB term loan
|
—
|
|
|
15,000
|
|
|
—
|
|
|||
Warrants exercised for cash
|
—
|
|
|
—
|
|
|
46
|
|
|||
Net cash provided by financing activities
|
299,635
|
|
|
166,805
|
|
|
4,970
|
|
|||
|
|
|
|
|
|
||||||
Net increase (decrease) in cash and cash equivalents
|
(11,185
|
)
|
|
69,335
|
|
|
907
|
|
|||
Cash and cash equivalents at beginning of period
|
125,933
|
|
|
56,598
|
|
|
55,691
|
|
|||
Cash and cash equivalents at end of period
|
$
|
114,748
|
|
|
$
|
125,933
|
|
|
$
|
56,598
|
|
|
|
|
|
|
|
||||||
Supplemental disclosure of cash flow information
|
|
|
|
|
|
||||||
Cash paid for interest
|
$
|
4,026
|
|
|
$
|
4,386
|
|
|
$
|
4,466
|
|
Cash paid for income taxes
|
$
|
2,300
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Change in unrealized gain (loss) on marketable securities
|
$
|
(385
|
)
|
|
$
|
(83
|
)
|
|
$
|
2
|
|
|
|
|
|
|
|
Furniture and fixtures
|
7 years
|
Equipment
|
5 years
|
Computer hardware and software
|
3 years
|
|
Year Ended June 30,
|
|||||||
|
2018
|
|
2017
|
|
2016
|
|||
|
|
|
|
|
|
|||
Novartis
|
46.6
|
%
|
|
72.3
|
%
|
|
80.5
|
%
|
Aslan
|
13.2
|
%
|
|
—
|
%
|
|
—
|
%
|
Pierre Fabre
|
12.3
|
%
|
|
7.5
|
%
|
|
2.7
|
%
|
Loxo
|
7.8
|
%
|
|
10.8
|
%
|
|
9.2
|
%
|
Total
|
79.9
|
%
|
|
90.6
|
%
|
|
92.4
|
%
|
|
Year Ended June 30,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
|
|
|
|
|
||||||
North America
|
$
|
22,397
|
|
|
$
|
24,152
|
|
|
$
|
22,474
|
|
Europe
|
105,276
|
|
|
122,877
|
|
|
114,806
|
|
|||
Asia Pacific
|
46,095
|
|
|
3,823
|
|
|
599
|
|
|||
Total
|
$
|
173,768
|
|
|
$
|
150,852
|
|
|
$
|
137,879
|
|
|
June 30, 2018
|
||||||||||||||
|
|
|
Gross
|
|
Gross
|
|
|
||||||||
|
Amortized
|
|
Unrealized
|
|
Unrealized
|
|
Fair
|
||||||||
|
Cost
|
|
Gains
|
|
Losses
|
|
Value
|
||||||||
Short-term available-for-sale securities:
|
|
|
|
|
|
|
|
||||||||
U.S. treasury securities
|
$
|
297,965
|
|
|
$
|
—
|
|
|
$
|
(461
|
)
|
|
$
|
297,504
|
|
Mutual fund securities
|
235
|
|
|
—
|
|
|
—
|
|
|
235
|
|
||||
|
298,200
|
|
|
—
|
|
|
(461
|
)
|
|
297,739
|
|
||||
Long-term available-for-sale securities:
|
|
|
|
|
|
|
|
||||||||
Mutual fund securities
|
919
|
|
|
—
|
|
|
—
|
|
|
919
|
|
||||
|
919
|
|
|
—
|
|
|
—
|
|
|
919
|
|
||||
Total
|
$
|
299,119
|
|
|
$
|
—
|
|
|
$
|
(461
|
)
|
|
$
|
298,658
|
|
|
June 30, 2017
|
||||||||||||||
|
|
|
Gross
|
|
Gross
|
|
|
||||||||
|
Amortized
|
|
Unrealized
|
|
Unrealized
|
|
Fair
|
||||||||
|
Cost
|
|
Gains
|
|
Losses
|
|
Value
|
||||||||
Short-term available-for-sale securities:
|
|
|
|
|
|
|
|
||||||||
U.S. treasury securities
|
$
|
108,174
|
|
|
$
|
—
|
|
|
$
|
(76
|
)
|
|
$
|
108,098
|
|
Mutual fund securities
|
292
|
|
|
—
|
|
|
—
|
|
|
292
|
|
||||
|
108,466
|
|
|
—
|
|
|
(76
|
)
|
|
108,390
|
|
||||
Long-term available-for-sale securities:
|
|
|
|
|
|
|
|
||||||||
Mutual fund securities
|
732
|
|
|
—
|
|
|
—
|
|
|
732
|
|
||||
|
732
|
|
|
—
|
|
|
—
|
|
|
732
|
|
||||
Total
|
$
|
109,198
|
|
|
$
|
—
|
|
|
$
|
(76
|
)
|
|
$
|
109,122
|
|
|
Amortized
|
|
Fair
|
||||
|
Cost
|
|
Value
|
||||
|
|
|
|
||||
Due in one year or less
|
$
|
297,965
|
|
|
$
|
297,504
|
|
Total
|
$
|
297,965
|
|
|
$
|
297,504
|
|
|
|
Year Ended June 30,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
|
|
|
|
|
|
||||||
Novartis (1)
|
|
$
|
80,958
|
|
|
$
|
108,997
|
|
|
$
|
110,930
|
|
ASLAN
|
|
23,000
|
|
|
—
|
|
|
—
|
|
|||
Pierre Fabre
|
|
21,318
|
|
|
11,288
|
|
|
3,724
|
|
|||
Loxo
|
|
13,588
|
|
|
16,359
|
|
|
12,635
|
|
|||
Ono
|
|
12,087
|
|
|
306
|
|
|
—
|
|
|||
Asahi Kasei
|
|
11,008
|
|
|
3,519
|
|
|
600
|
|
|||
Mirati
|
|
6,385
|
|
|
4,501
|
|
|
3,557
|
|
|||
Other partners
|
|
5,424
|
|
|
5,882
|
|
|
6,433
|
|
|||
Total revenue
|
|
$
|
173,768
|
|
|
$
|
150,852
|
|
|
$
|
137,879
|
|
|
|
|
|
|
|
|
|
June 30,
|
||||||
|
2018
|
|
2017
|
||||
|
|
|
|
||||
Furniture and fixtures
|
$
|
2,791
|
|
|
$
|
2,701
|
|
Equipment
|
26,814
|
|
|
26,493
|
|
||
Computer hardware and software
|
17,009
|
|
|
16,994
|
|
||
Leasehold improvements
|
18,105
|
|
|
17,434
|
|
||
Property and equipment, gross
|
64,719
|
|
|
63,622
|
|
||
Less: accumulated depreciation
|
(57,591
|
)
|
|
(55,490
|
)
|
||
Property and equipment, net
|
$
|
7,128
|
|
|
$
|
8,132
|
|
|
June 30,
|
||||||
|
2018
|
|
2017
|
||||
Notes payable at fair value (current)
|
$
|
15,899
|
|
|
$
|
—
|
|
Notes payable at fair value (non-current)
|
$
|
—
|
|
|
$
|
12,600
|
|
|
|
|
|
||||
Silicon Valley Bank term loan (1)
|
$
|
16,200
|
|
|
$
|
16,200
|
|
2020 convertible senior notes
|
—
|
|
|
132,250
|
|
||
2024 convertible senior notes
|
126,060
|
|
|
—
|
|
||
Long-term debt, gross
|
142,260
|
|
|
148,450
|
|
||
Less: Unamortized debt discount and costs
|
(46,384
|
)
|
|
(27,145
|
)
|
||
Long-term debt, net
|
95,876
|
|
|
121,305
|
|
||
Less: Current portion
|
(2,500
|
)
|
|
—
|
|
||
Long-term debt, non-current portion
|
$
|
93,376
|
|
|
$
|
121,305
|
|
|
Year Ended June 30,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Comerica Term Loan (1)
|
|
|
|
|
|
|
|||||
Simple interest
|
—
|
|
|
250
|
|
|
501
|
|
|||
Amortization of prepaid fees paid for letters of credit
|
—
|
|
|
2
|
|
|
31
|
|
|||
Total interest expense on the Comerica term loan
|
—
|
|
|
252
|
|
|
532
|
|
|||
Silicon Valley Bank Term Loan
|
|
|
|
|
|
||||||
Simple interest
|
390
|
|
|
152
|
|
|
—
|
|
|||
Amortization of debt discount
|
324
|
|
|
163
|
|
|
—
|
|
|||
Amortization of prepaid fees for line of credit
|
114
|
|
|
85
|
|
|
—
|
|
|||
Total interest expense on the Silicon Valley Bank term loan
|
828
|
|
|
400
|
|
|
—
|
|
|||
Convertible Senior Notes
|
|
|
|
|
|
||||||
Contractual interest
|
3,559
|
|
|
3,968
|
|
|
3,967
|
|
|||
Amortization of debt discount
|
5,600
|
|
|
6,681
|
|
|
6,033
|
|
|||
Amortization of debt issuance costs
|
328
|
|
|
379
|
|
|
342
|
|
|||
Total interest expense on convertible senior notes
|
9,487
|
|
|
11,028
|
|
|
10,342
|
|
|||
Other Debt
|
|
|
|
|
|
||||||
Simple interest
|
$
|
499
|
|
|
$
|
413
|
|
|
$
|
—
|
|
Fees paid
|
—
|
|
|
240
|
|
|
—
|
|
|||
Total interest expense on other debt
|
499
|
|
|
653
|
|
|
—
|
|
|||
Total interest expense
|
$
|
10,814
|
|
|
$
|
12,333
|
|
|
$
|
10,874
|
|
|
Principal Due
|
||
|
|
||
2019 (1)
|
$
|
12,500
|
|
2020
|
5,000
|
|
|
2021
|
5,000
|
|
|
2022 (2)
|
2,500
|
|
|
2023
|
—
|
|
|
Thereafter
|
126,060
|
|
|
|
$
|
151,060
|
|
•
|
Level 1: Observable inputs such as unadjusted quoted prices in active markets for identical instruments.
|
•
|
Level 2: Quoted prices for similar instruments that are directly or indirectly observable in the marketplace.
|
•
|
Level 3: Significant unobservable inputs which are supported by little or no market activity and that are financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation.
|
|
|
Fair Value Measurement as of June 30, 2018
|
||||||||||
($ in thousands)
|
|
Level 1
|
Level 2
|
Level 3
|
|
Total
|
||||||
|
|
|
|
|
|
|
|
|
||||
Assets
|
|
|
|
|
|
|
|
|
||||
Current assets
|
|
|
|
|
|
|
|
|
||||
U.S. treasury securities
|
|
297,504
|
|
|
—
|
|
|
—
|
|
|
297,504
|
|
Mutual fund securities
|
|
235
|
|
|
—
|
|
|
—
|
|
|
235
|
|
Long-term assets
|
|
|
|
|
|
|
|
|
||||
Mutual fund securities
|
|
919
|
|
|
—
|
|
|
—
|
|
|
919
|
|
|
|
|
|
|
|
|
|
|
||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes payable, at fair value
|
|
—
|
|
|
—
|
|
|
15,899
|
|
|
15,899
|
|
|
|
Fair Value Measurement as of June 30, 2017
|
||||||||||
($ in thousands)
|
|
Level 1
|
Level 2
|
Level 3
|
|
Total
|
||||||
|
|
|
|
|
|
|
|
|
||||
Assets
|
|
|
|
|
|
|
|
|
||||
Current Assets
|
|
|
|
|
|
|
|
|
||||
U.S. treasury securities
|
|
108,098
|
|
|
—
|
|
|
—
|
|
|
108,098
|
|
Mutual fund securities
|
|
292
|
|
|
—
|
|
|
—
|
|
|
292
|
|
Long-term Assets
|
|
|
|
|
|
|
|
|
||||
Mutual fund securities
|
|
732
|
|
|
—
|
|
|
—
|
|
|
732
|
|
|
|
|
|
|
|
|
|
|
||||
Liabilities
|
|
|
|
|
|
|
|
|
||||
Notes payable, at fair value
|
|
—
|
|
|
—
|
|
|
12,600
|
|
|
12,600
|
|
($ in thousands)
|
|
2018
|
|
2017
|
||||
Balance at July 1,
|
|
$
|
12,600
|
|
|
$
|
—
|
|
Additions during the period
|
|
—
|
|
|
10,000
|
|
||
Change in fair value
|
|
3,299
|
|
|
2,600
|
|
||
Balance at June 30,
|
|
$
|
15,899
|
|
|
$
|
12,600
|
|
|
|
Rental Payments
|
||
|
|
|
||
2019
|
|
$
|
4,288
|
|
2020
|
|
4,397
|
|
|
2021
|
|
4,483
|
|
|
2022
|
|
4,534
|
|
|
2023
|
|
4,549
|
|
|
Thereafter
|
|
7,594
|
|
|
|
|
$
|
29,845
|
|
|
Year Ended June 30,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
|
|
|
|
|
||||||
Cash paid for rent
|
$
|
4,454
|
|
|
$
|
4,027
|
|
|
$
|
4,785
|
|
Deferred rent credits
|
(472
|
)
|
|
(590
|
)
|
|
(1,270
|
)
|
|||
Rent expense, net
|
$
|
3,982
|
|
|
$
|
3,437
|
|
|
$
|
3,515
|
|
|
Year Ended June 30,
|
||||||
|
2018
|
|
2017
|
||||
|
|
|
|
||||
Total shares of common stock sold
|
2,554
|
|
|
5,519
|
|
||
Weighted average price per share
|
$
|
16.14
|
|
|
$
|
5.58
|
|
Gross proceeds
|
$
|
41,216
|
|
|
$
|
30,790
|
|
Commissions earned by Cantor and other costs
|
$
|
1,052
|
|
|
$
|
731
|
|
(i)
|
25%
of our issued and outstanding shares of common stock, on a fully diluted and as-converted basis; and
|
(ii)
|
the number of outstanding shares relating to awards under the Option and Incentive Plan plus the number of shares available for future grants of awards under the Option and Incentive Plan on that date.
|
|
|
Year Ended June 30,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Awards issued to employees
|
|
$
|
18,227
|
|
|
$
|
9,965
|
|
|
$
|
7,283
|
|
Other non-employee awards
|
|
880
|
|
|
—
|
|
|
—
|
|
|||
Total share-based compensation expense
|
|
$
|
19,107
|
|
|
$
|
9,965
|
|
|
$
|
7,283
|
|
•
|
Risk-free interest rate - We determine the risk-free interest rate by using a weighted average assumption equivalent to the expected term based on the U.S. Treasury constant maturity rate.
|
•
|
Expected term - We estimate the expected term of our options based upon historical exercises and post-vesting termination behavior.
|
•
|
Expected volatility - We estimate expected volatility using daily historical trading data of our common stock.
|
•
|
Dividend yield - We have never paid dividends and currently have no plans to do so; therefore, no dividend yield is applied.
|
|
Year Ended June 30,
|
||||
|
2018
|
|
2017
|
|
2016
|
|
|
|
|
|
|
Risk-free interest rate
|
1.6% - 2.7%
|
|
1.1% - 2.1%
|
|
1.3% - 1.8%
|
Expected option term in years
|
3.8 - 4.1
|
|
4.0 - 5.5
|
|
5.5 - 6.25
|
Expected volatility
|
66.1% - 67.4%
|
|
57.0% - 66.8%
|
|
55.7% - 60.1%
|
Dividend yield
|
0%
|
|
0%
|
|
0%
|
Weighted average grant date fair value
|
$6.00
|
|
$4.46
|
|
$1.95
|
|
Number of RSUs
|
|
Weighted
Average Grant Date Fair Value |
|||
Unvested at June 30, 2017
|
982,709
|
|
|
$
|
6.27
|
|
Granted
|
531,235
|
|
|
$
|
11.83
|
|
Vested
|
(505,967
|
)
|
|
$
|
6.21
|
|
Forfeited
|
(48,247
|
)
|
|
$
|
8.15
|
|
Unvested at June 30, 2018
|
959,730
|
|
|
$
|
9.28
|
|
|
Year Ended June 30,
|
|||||||
|
2018
|
|
2017
|
|
2016
|
|||
|
|
|
|
|
|
|||
U.S. federal income tax expense at the statutory rate
|
28.1
|
%
|
|
34.0
|
%
|
|
34.0
|
%
|
Orphan drug credit
|
13.8
|
|
|
16.1
|
|
|
19.3
|
|
Change in valuation allowance
|
12.0
|
|
|
(58.9
|
)
|
|
(53.4
|
)
|
Stock-based compensation
|
3.4
|
|
|
0.1
|
|
|
(1.1
|
)
|
Available research and experimentation tax credits
|
3.3
|
|
|
3.3
|
|
|
5.0
|
|
State income taxes, net of federal taxes
|
3.1
|
|
|
2.3
|
|
|
2.1
|
|
Change in tax contingency reserve (releases)
|
(2.1
|
)
|
|
(0.3
|
)
|
|
(5.7
|
)
|
Foreign withholding tax, net of federal benefit
|
(1.1
|
)
|
|
—
|
|
|
—
|
|
Other
|
(2.1
|
)
|
|
3.1
|
|
|
(0.2
|
)
|
Tax reform rate change
|
(60.0
|
)
|
|
0.3
|
|
|
—
|
|
Total
|
(1.6
|
%)
|
|
0.0
|
%
|
|
0.0
|
%
|
|
June 30,
|
||||||
|
2018
|
|
2017
|
||||
Deferred tax assets
|
|
|
|
||||
Net operating loss carryforwards
|
$
|
179,425
|
|
|
$
|
224,306
|
|
Orphan drug credit carryforwards
|
94,353
|
|
|
70,178
|
|
||
Research and experimentation credit carryforwards
|
41,313
|
|
|
37,169
|
|
||
Deferred revenue
|
13,195
|
|
|
14,322
|
|
||
Stock compensation
|
5,189
|
|
|
6,802
|
|
||
Third party agreement payment
|
4,845
|
|
|
7,844
|
|
||
Accrued benefits
|
2,720
|
|
|
2,993
|
|
||
Depreciation of property and equipment
|
1,924
|
|
|
3,349
|
|
||
Deferred rent
|
1,571
|
|
|
2,355
|
|
||
Inventory reserve
|
1,017
|
|
|
1,517
|
|
||
Capital loss carryforwards
|
225
|
|
|
361
|
|
||
Other
|
140
|
|
|
58
|
|
||
Total deferred tax assets
|
345,917
|
|
|
371,254
|
|
||
Deferred tax liabilities
|
|
|
|
||||
Discount on convertible senior notes
|
(12,586
|
)
|
|
(9,173
|
)
|
||
Loan costs on convertible senior notes
|
(49
|
)
|
|
(201
|
)
|
||
Total deferred tax liabilities
|
(12,635
|
)
|
|
(9,374
|
)
|
||
Less valuation allowance
|
(333,282
|
)
|
|
(361,880
|
)
|
||
Net deferred tax assets
|
$
|
—
|
|
|
$
|
—
|
|
|
Year Ended June 30,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
|
|
|
|
|
||||||
Balance at beginning of year
|
$
|
13,564
|
|
|
$
|
13,161
|
|
|
$
|
7,311
|
|
Additions based on tax positions related to the current year
|
3,368
|
|
|
3,589
|
|
|
5,071
|
|
|||
Additions for tax positions of prior year
|
1,203
|
|
|
—
|
|
|
1,323
|
|
|||
Reductions for tax positions of prior year
|
(826
|
)
|
|
(3,186
|
)
|
|
(544
|
)
|
|||
Balance at end of year
|
$
|
17,309
|
|
|
$
|
13,564
|
|
|
$
|
13,161
|
|
|
Year Ended June 30,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Net loss - basic and diluted
|
$
|
(147,346
|
)
|
|
$
|
(116,818
|
)
|
|
$
|
(92,840
|
)
|
|
|
|
|
|
|
||||||
Weighted average shares outstanding - basic and diluted
|
198,490
|
|
|
163,207
|
|
|
142,964
|
|
|||
|
|
|
|
|
|
||||||
Per share data:
|
|
|
|
|
|
||||||
Basic
|
$
|
(0.74
|
)
|
|
$
|
(0.72
|
)
|
|
$
|
(0.65
|
)
|
Diluted
|
$
|
(0.74
|
)
|
|
$
|
(0.72
|
)
|
|
$
|
(0.65
|
)
|
|
Year Ended
|
||||||||||
|
June 30,
|
||||||||||
|
2018
|
|
2017
|
|
2015
|
||||||
Convertible senior notes
|
$
|
8,156
|
|
|
$
|
18,762
|
|
|
$
|
18,762
|
|
Stock options
|
15,326
|
|
|
14,844
|
|
|
11,648
|
|
|||
RSUs
|
960
|
|
|
983
|
|
|
832
|
|
|||
Total anti-dilutive common stock equivalents excluded from diluted loss per share calculation
|
$
|
24,442
|
|
|
$
|
34,589
|
|
|
$
|
31,242
|
|
Fiscal Year Ended June 30, 2018
|
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
||||||||
Revenue
|
|
$
|
29,746
|
|
|
$
|
42,218
|
|
|
$
|
66,367
|
|
|
$
|
35,437
|
|
Research and development for proprietary programs
|
|
$
|
41,445
|
|
|
$
|
42,613
|
|
|
$
|
53,636
|
|
|
$
|
48,127
|
|
Total operating expenses
|
|
$
|
65,252
|
|
|
$
|
67,936
|
|
|
$
|
86,921
|
|
|
$
|
83,586
|
|
Net loss
|
|
$
|
(37,994
|
)
|
|
$
|
(34,053
|
)
|
|
$
|
(22,851
|
)
|
|
$
|
(52,448
|
)
|
Net loss per share – basic
|
|
$
|
(0.22
|
)
|
|
$
|
(0.17
|
)
|
|
$
|
(0.11
|
)
|
|
$
|
(0.25
|
)
|
Net loss per share – diluted
|
|
$
|
(0.22
|
)
|
|
$
|
(0.17
|
)
|
|
$
|
(0.11
|
)
|
|
$
|
(0.25
|
)
|
Weighted average shares outstanding – basic
|
|
174,772
|
|
|
199,852
|
|
|
208,994
|
|
|
210,705
|
|
||||
Weighted average shares outstanding – diluted
|
|
174,772
|
|
|
199,852
|
|
|
208,994
|
|
|
210,705
|
|
Fiscal Year Ended June 30, 2017
|
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
||||||||
Revenue
|
|
$
|
39,271
|
|
|
$
|
44,523
|
|
|
$
|
33,280
|
|
|
$
|
33,778
|
|
Research and development for proprietary programs
|
|
$
|
46,563
|
|
|
$
|
46,469
|
|
|
$
|
46,069
|
|
|
$
|
39,098
|
|
Total operating expenses
|
|
$
|
63,270
|
|
|
$
|
64,329
|
|
|
$
|
65,215
|
|
|
$
|
60,116
|
|
Net loss
|
|
$
|
(28,608
|
)
|
|
$
|
(23,301
|
)
|
|
$
|
(35,317
|
)
|
|
$
|
(29,592
|
)
|
Net loss per share – basic
|
|
$
|
(0.20
|
)
|
|
$
|
(0.14
|
)
|
|
$
|
(0.21
|
)
|
|
$
|
(0.17
|
)
|
Net loss per share – diluted
|
|
$
|
(0.20
|
)
|
|
$
|
(0.14
|
)
|
|
$
|
(0.21
|
)
|
|
$
|
(0.17
|
)
|
Weighted average shares outstanding – basic
|
|
145,100
|
|
|
168,127
|
|
|
169,020
|
|
|
170,779
|
|
||||
Weighted average shares outstanding – diluted
|
|
145,100
|
|
|
168,127
|
|
|
169,020
|
|
|
170,779
|
|
Financial Covenant
|
Required
|
Actual
|
Complies
|
|
|
|
|
Maintain at all times, certified monthly (not tested in any
calendar month in which Borrower has maintained Qualified
Cash of not less than One Hundred Million Dollars ($1,000,000,000.00) for each day in such calendar month
|
|
|
|
Minimum Liquidity Ratio
|
2.00:1.00
|
_____:1.00
|
Yes No
|
Have there been any amendments of or other changes to the Operating Documents of Borrower? If yes, provide copies of any such amendments or changes with this Compliance Certificate.
|
Yes
|
No
|
Array BioPharma Inc.
By:
Name:
Title:
|
BANK USE ONLY
Received by: _____________________
AUTHORIZED SIGNER
Date: _________________________
Verified: ________________________
AUTHORIZED SIGNER
Date: _________________________
Compliance Status: Yes No
|
A.
|
Aggregate value of Borrower’s unrestricted cash and Cash Equivalents maintained at Bank and Bank’s Affiliates
|
$
|
B.
|
Aggregate value of Borrower’s unrestricted cash and/or Cash Equivalents at financial institutions other than Bank subject to Control Agreements in favor Bank and that is subject only to the first priority Lien of Bank and is not subject to any other Lien
|
$
|
C.
|
QUALIFIED CASH (the sum of lines A and B)
|
$
|
A.
|
Aggregate value of Borrower’s unrestricted cash and unrestricted Cash Equivalents maintained in accounts at Bank and Bank’s Affiliates
|
$
|
B.
|
Aggregate value of Borrower’s Eligible Accounts
|
$
|
C.
|
Quick Assets (the sum of line A plus line B)
|
$
|
D.
|
Aggregate value of all outstanding Obligations of Borrower owed to Bank
|
$
|
E.
|
Liquidity Ratio (line C divided by line D)
|
:1.00
|
1.
|
I have reviewed this annual report on Form 10-K 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;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in 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:
|
August 14, 2018
|
By:
|
/s/ RON SQUARER
|
|
|
|
Ron Squarer
|
|
|
|
Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K 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;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in 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:
|
August 14, 2018
|
By:
|
/s/ JASON HADDOCK
|
|
|
|
Jason Haddock
|
|
|
|
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:
|
August 14, 2018
|
/s/ RON SQUARER
|
|
|
Ron Squarer
|
|
|
Chief Executive Officer
|
|
|
|
|
|
|
|
|
/s/ JASON HADDOCK
|
|
|
Jason Haddock
|
|
|
Chief Financial Officer
|
|
|
|