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Prior-Period Financial Statements | 9 Months Ended
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Sep. 30, 2018
Prior-Period Financial Statements |
Prior-Period Financial Statements | 11. Prior-Period Financial Statements The Company adopted ASC 606 on January 1, 2018 using the full retrospective method and as a result the Company has revised its comparative financial statements for the prior period as if ASC 606 had been in effect for that period. The most significant changes to revenue recognition under ASC 606 relate to the timing of revenue recognized for arrangements that include licensing of our technologies. Under ASC 606 revenue related to licensing of access to our technologies is recognized at inception of the agreement, generally the effective date of the agreement. For existing licensing arrangements, the effect of ASC 606 is to shift revenue to earlier periods. Approximately $11.3 million of licensing revenue that was being recognized over the five-year period 2016-2021 is being recognized in the second quarter of 2016. The other significant change under ASC 606 relates to the timing of collaboration revenue when the Company completes its performance obligations for delivery of a drug candidate to its collaboration partners after applying its technologies. For existing collaborations, the effect of ASC 606 is to accelerate revenue recognition to earlier periods. Approximately $6.25 million of collaboration revenue recognized in 2017 and 2018 under historical accounting guidance is being recognized in 2016 under ASC 606. An additional $20.5 million of collaboration revenue that would be recognized in 2018 is being recognized in 2017. The following tables summarize the effects of adopting ASC topic 606 on our financial statements.
| As Reported December 31, |  | Effect of Adoption of |  | As Revised December 31,
| 2017 |  | ASC 606 |  | 2017
Assets |  |  |  |  |  |  |  |
Current assets |  |  |  |  |  |  |  |
Cash and cash equivalents | $ | 16,528 |  | $ | — |  | $ | 16,528
Marketable securities |  | 207,603 |  |  | — |  |  | 207,603
Accounts receivable |  | 1,142 |  |  | — |  |  | 1,142
Prepaid expenses and other current assets |  | 5,606 |  |  | — |  |  | 5,606
Total current assets |  | 230,879 |  |  | — |  |  | 230,879
Property and equipment, net |  | 7,088 |  |  | — |  |  | 7,088
Patents, licenses, and other intangible assets, net |  | 11,148 |  |  | — |  |  | 11,148
Marketable securities - long term |  | 139,198 |  |  | — |  |  | 139,198
Income tax receivable |  | 1,524 |  |  | — |  |  | 1,524
Loan receivable |  | — |  |  | 86 |  |  | 86
Interest receivable |  | — |  |  | 14 |  |  | 14
Other assets |  | 265 |  |  | — |  |  | 265
Total assets | $ | 390,102 |  | $ | 100 |  | $ | 390,202
Liabilities and stockholders’ equity |  |  |  |  |  |  |  |
Current liabilities |  |  |  |  |  |  |  |
Accounts payable | $ | 6,869 |  | $ | — |  | $ | 6,869
Accrued expenses |  | 5,480 |  |  | — |  |  | 5,480
Current portion of deferred rent |  | 26 |  |  | — |  |  | 26
Current portion of deferred revenue |  | 88,813 |  |  | (28,695) |  |  | 60,118
Income taxes |  | 157 |  |  | — |  |  | 157
Total current liabilities |  | 101,345 |  |  | (28,695) |  |  | 72,650
Deferred rent, less current portion |  | 1,088 |  |  | — |  |  | 1,088
Deferred revenue, less current portion |  | 5,623 |  |  | (5,623) |  |  | —
Total liabilities |  | 108,056 |  |  | (34,318) |  |  | 73,738
Commitments and contingencies |  |  |  |  |  |  |  |
Stockholders’ equity |  |  |  |  |  |  |  |
Preferred stock, $0.01 par value: 10,000,000 authorized shares; -0- issued and outstanding shares at December 31, 2017 |  | — |  |  | — |  |  | —
Common stock, $0.01 par value: 200,000,000 authorized shares at December 31, 2017; 47,002,488 issued and outstanding at December 31, 2017 |  | 470 |  |  | — |  |  | 470
Additional paid-in capital |  | 570,670 |  |  | — |  |  | 570,670
Accumulated other comprehensive income loss |  | (1,808) |  |  | — |  |  | (1,808)
Accumulated deficit |  | (287,286) |  |  | 34,418 |  |  | (252,868)
Stockholders’ equity |  | 282,046 |  |  | 34,418 |  |  | 316,464
Total liabilities and stockholders’ equity | $ | 390,102 |  | $ | 100 |  | $ | 390,202
|  | As Reported |  |  |  |  | As Revised
|  | Three Months Ended |  | Effect of |  | Three Months Ended
|  | September 30, |  | Adoption of |  | September 30,
|  | 2017 |  | ASC 606 |  | 2017
Revenue |  |  |  |  |  |  |  |  |
Collaborations, licenses and milestones |  | $ | 7,090 |  | $ | (7,090) |  | $ | —
Operating expenses |  |  |  |  |  |  |  |  |
Research and development |  |  | 19,408 |  |  | — |  |  | 19,408
General and administrative |  |  | 4,172 |  |  | — |  |  | 4,172
Total operating expenses |  |  | 23,580 |  |  | — |  |  | 23,580
Loss from operations |  |  | (16,490) |  |  | (7,090) |  |  | (23,580)
Other income (expenses) |  |  |  |  |  |  |  |  |
Interest income |  |  | 1,048 |  |  | — |  |  | 1,048
Interest expense |  |  | (3) |  |  | — |  |  | (3)
Other income |  |  | 56 |  |  | — |  |  | 56
Total other income, net |  |  | 1,101 |  |  | — |  |  | 1,101
Loss before income tax expense |  |  | (15,389) |  |  | (7,090) |  |  | (22,479)
Income tax expense |  |  | 173 |  |  | — |  |  | 173
Net loss |  |  | (15,562) |  |  | (7,090) |  |  | (22,652)
Other comprehensive income (loss) |  |  |  |  |  |  |  |  |
Net unrealized loss on marketable securities |  |  | 143 |  |  | — |  |  | 143
Comprehensive loss |  | $ | (15,419) |  | $ | (7,090) |  | $ | (22,509)
Basic and diluted net loss per common share |  | $ | (0.33) |  | $ | (0.15) |  | $ | (0.48)
|  | As Reported |  |  |  |  | As Revised
|  | Nine Months Ended |  | Effect of |  | Nine Months Ended
|  | September 30, |  | Adoption of |  | September 30,
|  | 2017 |  | ASC 606 |  | 2017
Revenue |  |  |  |  |  |  |  |  |
Collaborations, licenses and milestones |  | $ | 24,771 |  | $ | (8,771) |  | $ | 16,000
Operating expenses |  |  |  |  |  |  |  |  |
Research and development |  |  | 51,376 |  |  | — |  |  | 51,376
General and administrative |  |  | 13,074 |  |  | — |  |  | 13,074
Total operating expenses |  |  | 64,450 |  |  | — |  |  | 64,450
Loss from operations |  |  | (39,679) |  |  | (8,771) |  |  | (48,450)
Other income (expenses) |  |  |  |  |  |  |  |  |
Interest income |  |  | 3,142 |  |  | — |  |  | 3,142
Interest expense |  |  | (8) |  |  | — |  |  | (8)
Other income |  |  | 86 |  |  | — |  |  | 86
Total other income, net |  |  | 3,220 |  |  | — |  |  | 3,220
Loss before income tax expense |  |  | (36,459) |  |  | (8,771) |  |  | (45,230)
Income tax expense |  |  | 623 |  |  | — |  |  | 623
Net loss |  |  | (37,082) |  |  | (8,771) |  |  | (45,853)
Other comprehensive income (loss) |  |  |  |  |  |  |  |  |
Net unrealized gain on marketable securities |  |  | 344 |  |  | — |  |  | 344
Comprehensive loss |  | $ | (36,738) |  | $ | (8,771) |  | $ | (45,509)
Basic and diluted net loss per common share |  | $ | (0.79) |  | $ | (0.19) |  | $ | (0.98)
|  |  |  |  |  |  |  |  |  | Accumulated |  |  |  |  |  |
|  |  |  |  |  |  | Additional |  | Other |  |  |  |  | Total
|  | Common Stock |  | Paid |  | Comprehensive |  | Accumulated |  | Stockholders’
Stockholders’ Equity |  | Shares |  | Amount |  | in-Capital |  | Loss |  | Deficit |  | Equity
Balance, December 31, 2016 as originally reported |  | 46,567,978 |  | $ | 466 |  | $ | 552,889 |  | $ | (1,441) |  | $ | (237,960) |  | $ | 313,954
Adoption of ASU 2016-09 |  | — |  |  | — |  |  | 401 |  |  | — |  |  | (401) |  |  | —
Adoption of ASC 606 |  | — |  |  | — |  |  | — |  |  | — |  |  | 23,979 |  |  | 23,979
Balance, December 31, 2016 as revised |  | 46,567,978 |  |  | 466 |  |  | 553,290 |  |  | (1,441) |  |  | (214,382) |  |  | 337,933
Issuance of common stock upon exercise of stock awards |  | 363,603 |  |  | 4 |  |  | 2,793 |  |  | — |  |  | — |  |  | 2,797
Issuance of common stock under the Employee Stock Purchase Plan |  | 70,907 |  |  | — |  |  | 936 |  |  | — |  |  | — |  |  | 936
Comprehensive loss |  | — |  |  | — |  |  | — |  |  | (367) |  |  | (48,925) |  |  | (49,292)
Stock-based compensation |  | — |  |  | — |  |  | 13,651 |  |  | — |  |  | — |  |  | 13,651
Balance, December 31, 2017 |  | 47,002,488 |  | $ | 470 |  | $ | 570,670 |  | $ | (1,808) |  | $ | (263,307) |  | $ | 306,025
Adoption of ASC topic 606 |  | — |  |  | — |  |  | — |  |  | — |  |  | 10,439 |  |  | 10,439
Balance, December 31, 2017 as revised |  | 47,002,488 |  | $ | 470 |  | $ | 570,670 |  | $ | (1,808) |  | $ | (252,868) |  | $ | 316,464
|  | As Reported |  |  |  |  | As Revised
|  | Nine Months Ended |  | Effect of |  | Nine Months Ended
|  | September 30, |  | Adoption of |  | September 30,
|  | 2017 |  | ASC 606 |  | 2017
Cash flows from operating activities |  |  |  |  |  |  |  |  |
Net loss |  | $ | (37,082) |  | $ | (8,771) |  | $ | (45,853)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: |  |  |  |  |  |  |  |  |
Depreciation and amortization |  |  | 1,420 |  |  | — |  |  | 1,420
Amortization of premium on marketable securities |  |  | 2,148 |  |  | — |  |  | 2,148
Stock-based compensation |  |  | 10,211 |  |  | — |  |  | 10,211
Abandonment of capitalized intangible assets |  |  | 273 |  |  | — |  |  | 273
Gain on disposal of assets |  |  | (2) |  |  | — |  |  | (2)
Gain on sale of marketable securities available for sale |  |  | — |  |  | — |  |  | —
Changes in operating assets and liabilities: |  |  |  |  |  |  |  |  |
Accounts receivable |  |  | 7,785 |  |  | — |  |  | 7,785
Interest receivable |  |  | (588) |  |  | (14) |  |  | (602)
Prepaid expenses and other assets |  |  | (3,971) |  |  | — |  |  | (3,971)
Accounts payable |  |  | 2,722 |  |  | — |  |  | 2,722
Accrued expenses |  |  | (2,056) |  |  | — |  |  | (2,056)
Income taxes |  |  | (65) |  |  | — |  |  | (65)
Deferred rent |  |  | 359 |  |  | — |  |  | 359
Deferred revenue |  |  | (8,171) |  |  | 8,871 |  |  | 700
Net cash used in operating activities |  |  | (27,017) |  |  | 86 |  |  | (26,931)
Cash flows from investing activities |  |  |  |  |  |  |  |  |
Purchase of marketable securities |  |  | (49,203) |  |  | — |  |  | (49,203)
Purchase of intangible assets |  |  | (1,520) |  |  | — |  |  | (1,520)
Purchase of property and equipment |  |  | (3,834) |  |  | — |  |  | (3,834)
Proceeds from sale of property and equipment |  |  | 2 |  |  | — |  |  | 2
Proceeds from sale and maturities of marketable securities |  |  | 77,566 |  |  | — |  |  | 77,566
Issuance of loan |  |  | — |  |  | (86) |  |  | (86)
Net cash provided by investing activities |  |  | 23,011 |  |  | (86) |  |  | 22,925
Cash flows from financing activities |  |  |  |  |  |  |  |  |
Proceeds from issuance of common stock upon exercise of stock awards |  |  | 2,669 |  |  | — |  |  | 2,669
Proceeds from issuance of common stock under the Employee Stock Purchase Plan |  |  | 443 |  |  | — |  |  | 443
Net cash provided by financing activities |  |  | 3,112 |  |  | — |  |  | 3,112
Net increase in cash and cash equivalents |  |  | (894) |  |  | — |  |  | (894)
Cash and cash equivalents, beginning of period |  |  | 14,528 |  |  | — |  |  | 14,528
Cash and cash equivalents, end of period |  | $ | 13,634 |  | $ | — |  | $ | 13,634

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- Definition The entire disclosure for reporting accounting changes and error corrections. It includes the conveyance of information necessary for a user of the Company's financial information to understand all aspects and required disclosure information concerning all changes and error corrections reported in the Company's financial statements for the period. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 250 -URI http://asc.fasb.org/topic&trid=2122394 + Details
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