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Debt | 12 Months Ended
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Dec. 31, 2025
Debt Disclosure [Abstract] |
DEBT | 12. DEBT Our debt consists of the following:
|  | December 31, |
(In thousands) |  | 2025 |  |  | 2024 |
2025 Notes |  | $ | — |  |  | $ | 192,500 |
2028 Notes |  |  | 261,000 |  |  |  | 261,000 |
Total debt |  |  | 261,000 |  |  |  | 453,500 |
Less: Unamortized debt discount and issuance costs |  |  | (3,269 | ) |  |  | (5,156 | )
Total debt, net |  |  | 257,731 |  |  |  | 448,344 |
Less: Current portion of long-term debt, net |  |  | — |  |  |  | (192,028 | )
Total long-term debt, net |  | $ | 257,731 |  |  | $ | 256,316 |
Convertible Subordinated Notes Due 2023 In January 2013, we completed an underwritten public offering of $287.5 million aggregate principal amount of our 2023 Notes, which matured on January 15, 2023. The 2023 Notes carried interest at the rate of 2.125% per year that was payable semi-annually in arrears in cash on January 15 and July 15 of each year. From time to time, the total face value of the 2023 Notes was reduced through partial conversion, retirement and repurchase. The remaining balance of $96.2 million was fully paid in cash upon the maturity date in January 2023. The following table sets forth total interest expense recognized related to the 2023 Notes for the year ended December 31, 2023:
|  | Year Ended December 31, |
(In thousands) |  | 2023 |
Contractual interest expense |  | $ | 85 |
Amortization of debt issuance costs |  |  | 11 |
Total interest and amortization expense |  | $ | 96 |
Convertible Senior Notes Due 2025 On August 7, 2017, we completed a private placement of $192.5 million aggregate principal amount of our 2025 Notes. The 2025 Notes were senior unsecured obligations and carried interest at a rate of 2.5% per year, payable semi-annually in arrears on February 15 and August 15 of each year. The 2025 Notes were convertible, based on the applicable conversion rate, into cash, shares of our common stock or a combination thereof, at our election. In June 2025, we elected to settle the 2025 Notes in shares. Holders had the option to convert their 2025 Notes at any time until the close of business on the second scheduled trading day immediately preceding the maturity date. During June 2025, $0.5 million of the principal amount was converted into 28,962 shares of our common stock. During August 2025, $192.0 million of the principal amount was converted into 11,119,956 shares of our common stock. The remaining principal balance of $25,000 was fully paid in cash upon the maturity date in August 15, 2025. The annual effective interest rate on the 2025 Notes in 2025 up to its settlement was 2.90%. For the years ended December 31, 2024 and 2023, the annual effective interest rate on the 2025 Notes was 2.88%. Our 2025 Notes balances consisted of the following as of December 31, 2024:
|  | December 31, |
(In thousands) |  | 2024 |
Principal |  | $ | 192,500 |
Debt discount and issuance costs, net |  |  | (472 | )
Net carrying amount |  | $ | 192,028 |
The following table sets forth total interest expense recognized related to the 2025 Notes for the years ended December 31, 2025, 2024 and 2023:
|  | Year Ended December 31, |
(In thousands) |  | 2025 |  |  | 2024 |  |  | 2023 |
Contractual interest expense |  | $ | 3,002 |  |  | $ | 4,813 |  |  | $ | 4,813 |
Amortization of debt issuance costs |  |  | 472 |  |  |  | 733 |  |  |  | 712 |
Total interest and amortization expense |  | $ | 3,474 |  |  | $ | 5,546 |  |  | $ | 5,525 |
Convertible Senior Notes Due 2028 In March 2022, we completed a private placement of $261.0 million aggregate principal amount of our 2028 Notes, which will mature on March 15, 2028. We used approximately $21.0 million of the net proceeds to fund the cost of entering into the capped call transactions described below. In addition, we used $165.6 million of the remaining net proceeds to repurchase $144.8 million aggregate principal amount of the 2023 Notes in separate and individually negotiated transactions with certain holders of the 2023 Notes, which closed concurrently with the issuance of the 2028 Notes. The 2028 Notes bear interest at an annual rate of 2.125% that is payable semi-annually in arrears in cash on March 15 and September 15 of each year, beginning on September 15, 2022. The 2028 Notes are convertible, based on the applicable conversion rate, into cash, shares of our common stock or a combination thereof, at our election. The initial conversion rate was 38.1432 shares per $1,000 principal amount of the 2028 Notes, subject to customary anti-dilution adjustment in certain circumstances, which represented an initial conversion price of approximately $26.22 per share. Prior to September 15, 2027, the 2028 Notes will be convertible at the option of the holders only upon the occurrence of specified events and during certain periods, and will be convertible on or after September 15, 2027, at any time until the close of business on the second scheduled trading day immediately preceding the maturity date of the 2028 Notes. Holders of the 2028 Notes may convert all or a portion of their 2028 Notes prior to the close of business on September 15, 2027, only under the following circumstances: • after March 31, 2022, if our closing common stock price for at least 20 days out of the most recent 30 consecutive trading days of the preceding quarter is greater than 130% of the current conversion price of the 2028 Notes; • for five consecutive business days, if the average trading price per $1,000 of Notes during the prior 10 consecutive trading days is less than 98% of the product of our closing common stock price and the conversion rate of the 2028 Notes on such day; and, • upon the occurrence of specified corporate events, including certain distributions, the occurrence of a fundamental change (as defined in the indenture governing the 2028 Notes) or a transaction resulting in our common stock converting into other securities or property or assets. On or after September 15, 2027, holders of the 2028 Notes may convert their 2028 Notes at any time until the close of the business on the second day immediately preceding the maturity date of the 2028 Notes. The 2028 Notes will be redeemable, in whole or in part, at our option at any time, and from time to time, on or after March 20, 2025, and on or before the 75th scheduled trading day immediately before the maturity date but only if the last reported sale price per share of our common stock exceeds 130% of the conversion price for a specified period of time. The redemption price will be equal to the principal amount of the 2028 Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. In addition, calling any 2028 Note for redemption will constitute a make-whole fundamental change (as defined in the indenture governing the 2028 Notes) with respect to that 2028 Note, in which case the conversion rate applicable to the conversion of that 2028 Note will be increased in certain circumstances if it is converted after it is called for redemption. If we undergo a fundamental change, subject to certain conditions, holders may require us to purchase for cash all or any portion of their 2028 Notes. The fundamental change purchase price will be 100% of the principal amount of the 2028 Notes to be purchased plus any accrued and unpaid interest to, but excluding, the fundamental change purchase date. The indenture governing the 2028 Notes contains customary terms and covenants, including a merger covenant and that upon certain events of default occurring and continuing, either the Trustee or the holders of at least 25% of the aggregate principal amount of the outstanding Notes may declare 100% of the principal of, and accrued and unpaid interest, if any, on, all the Notes to be due and payable immediately. In connection with the offering of the 2028 Notes, we entered into privately negotiated capped call transactions. The cap price of the capped call transaction is initially $33.9850 per share and is subject to certain adjustments under the terms of the capped call transactions. The capped call transactions cover, subject to customary adjustments, the number of shares of common stock initially underlying the 2028 Notes. The capped call transactions are expected generally to reduce potential dilution to our common stock upon conversion of the 2028 Notes or at our election (subject to certain conditions) offset any cash payments we are required to make in excess of the aggregate principal amount of converted 2028 Notes, as the case may be, with such reduction or offset subject to a cap. The annual effective interest rate on the 2028 Notes is 2.70%. Our outstanding 2028 Notes balance consisted of th e following:
|  | December 31, |
(In thousands) |  | 2025 |  |  | 2024 |
Principal |  | $ | 261,000 |  |  | $ | 261,000 |
Debt discount and issuance costs, net |  |  | (3,269 | ) |  |  | (4,684 | )
Net carrying amount |  | $ | 257,731 |  |  | $ | 256,316 |
The following table sets forth total interest expense recognized related to the 2028 Notes for the years ended December 31, 2025, 2024 and 2023:
|  | Year Ended December 31, |
(In thousands) |  | 2025 |  |  | 2024 |  |  | 2023 |
Contractual interest expense |  | $ | 5,546 |  |  | $ | 5,546 |  |  | $ | 5,546 |
Amortization of debt discount and issuance costs |  |  | 1,415 |  |  |  | 1,377 |  |  |  | 1,342 |
Total interest and amortization expense |  | $ | 6,961 |  |  | $ | 6,923 |  |  | $ | 6,888 |
Debt Maturities The aggregate scheduled maturities of our convertible debt as of December 31, 2025 are as follows:
(In thousands) |  | Amount |
Year ending December 31, |  |  |
2026 |  | $ | — |
2027 |  |  | — |
2028 |  |  | 261,000 |
Total |  | $ | 261,000 |
Deferred Royalty Obligation As part of our acquisition of La Jolla, we recorded the fair value of its deferred royalty obligation in connection with La Jolla’s royalty financing agreement (“La Jolla Royalty Agreement”) with HealthCare Royalty Partners (“HCR”). Under the terms of the La Jolla Royalty Agreement, HCR is entitled to receive quarterly royalties on worldwide net sales of GIAPREZA® until either January 1, 2031 or when the maximum aggregate royalty payments have been made, whichever occurs first. Quarterly payments to HCR under the Royalty Agreement start at a maximum royalty rate, with step-downs based on the achievement of annual net product sales thresholds. The maximum royalty rate through December 31, 2023 was 14%. Starting January 1, 2024, the maximum royalty rate was increased to 18% based on the terms of the Agreement. The La Jolla Royalty Agreement is subject to maximum aggregate royalty payments to HCR of $225.0 million. For the years ended December 31, 2025, 2024 and 2023, we recognized interest expense of $6.3 million, $9.8 million and $6.5 million, respectively, on the deferred royalty obligation. The carrying value of the deferred royalty obligation as of December 31, 2025 and 2024 was $62.2 million and $69.5 million, respectively, (refer to Note 9 “Balance Sheet Components”). During the years ended December 31, 2025, 2024 and 2023, we made royalty payments to HCR of $12.8 million, $9.1 million and $5.4 million, respectively. The deferred royalty obligation was valued using Level 3 inputs, and its carrying value as of December 31, 2025 and 2024 approximates fair value. The fair value of the deferred royalty obligation was calculated as the discounted deferred royalty obligations based on risk-adjusted revenue projections for GIAPREZA®. As of December 31, 2025, the annual effective interest rate of the deferred royalty obligation is 10.03%. Under the terms of the La Jolla Royalty Agreement, if we are unable to meet certain obligations, including the obligation to use commercially reasonable and diligent efforts to commercialize GIAPREZA®, HCR would have the right to terminate the La Jolla Royalty Agreement and demand payment of either $125.0 million or $225.0 million (depending on which obligation we have failed to meet) less aggregate royalties already paid to HCR. As of December 31, 2025, inclusive of the aggregate royalties paid to HCR by La Jolla under the La Jolla Royalty Agreement prior to our acquisition, La Jolla paid approximately $40.0 million of aggregate royalties to HCR. In the event that we fail to pay such amount if and when due in a timely manner, HCR would have the right to foreclose on the GIAPREZA®-related assets. HCR has no recourse against any asset other than GIAPREZA®. Certain contract provisions within the La Jolla Royalty Agreement that could result in an acceleration of amounts due under the La Jolla Royalty Agreement are recognized as embedded derivatives that require bifurcation from the deferred royalty obligation and fair value recognition. We determined the fair value of each derivative by assessing the probability of each event occurring, as well as the potential repayment amounts and timing of such repayments that would result under various scenarios. As a result of this assessment, we determined that the fair value of the embedded derivatives is immaterial and, therefore, not recognized as of December 31, 2025 and 2024. We estimate the fair value of the embedded derivatives for each reporting period until either the features lapse or the La Jolla Royalty Agreement is terminated, whichever occurs first. Any material change in the fair value of the embedded derivatives will be recorded as either a gain or loss in the consolidated statements of income and comprehensive income.

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