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Prior-Period Financial Statements | 12 Months Ended
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Dec. 31, 2018
Prior-Period Financial Statements |
Prior-Period Financial Statements | 12. 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. Balance Sheet
| 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
Statement of Operation
|  | As Reported |  |  |  |  | As Revised
|  | Year Ended |  | Effect of |  | Year Ended
|  | December 31, |  | Adoption of |  | December 31,
|  | 2017 |  | ASC 606 |  | 2017
Revenue |  |  |  |  |  |  |  |  |
Collaborations, licenses and milestones |  | $ | 35,711 |  | $ | 10,439 |  | $ | 46,150
Operating expenses |  |  |  |  |  |  |  |  |
Research and development |  |  | 71,772 |  |  | — |  |  | 71,772
General and administrative |  |  | 17,501 |  |  | — |  |  | 17,501
Total operating expenses |  |  | 89,273 |  |  | — |  |  | 89,273
Loss from operations |  |  | (53,562) |  |  | 10,439 |  |  | (43,123)
Other income (expenses) |  |  |  |  |  |  |  |  |
Interest income |  |  | 4,194 |  |  | — |  |  | 4,194
Interest expense |  |  | (13) |  |  | — |  |  | (13)
Other income |  |  | (7) |  |  | — |  |  | (7)
Total other income, net |  |  | 4,174 |  |  | — |  |  | 4,174
Loss before income tax benefit |  |  | (49,388) |  |  | 10,439 |  |  | (38,949)
Income tax benefit |  |  | (463) |  |  | — |  |  | (463)
Net loss |  |  | (48,925) |  |  | 10,439 |  |  | (38,486)
Other comprehensive loss |  |  |  |  |  |  |  |  |
Net unrealized loss on marketable securities |  |  | (367) |  |  | — |  |  | (367)
Comprehensive loss |  | $ | (49,292) |  | $ | 10,439 |  | $ | (38,853)
Basic and diluted net loss per common share |  | $ | (1.05) |  | $ | 0.23 |  | $ | (0.82)
|  | As Reported |  |  |  |  | As Revised
|  | Year Ended |  | Effect of |  | Year Ended
|  | December 31, |  | Adoption of |  | December 31,
|  | 2016 |  | ASC 606 |  | 2016
Revenue |  |  |  |  |  |  |  |  |
Collaborations, licenses and milestones |  | $ | 87,520 |  | $ | 21,500 |  | $ | 109,020
Operating expenses |  |  |  |  |  |  |  |  |
Research and development |  |  | 51,872 |  |  | — |  |  | 51,872
General and administrative |  |  | 13,108 |  |  | — |  |  | 13,108
Total operating expenses |  |  | 64,980 |  |  | — |  |  | 64,980
Income from operations |  |  | 22,540 |  |  | 21,500 |  |  | 44,040
Other income (expenses) |  |  |  |  |  |  |  |  |
Interest income |  |  | 2,091 |  |  | — |  |  | 2,091
Interest expense |  |  | (21) |  |  | — |  |  | (21)
Other income |  |  | 6 |  |  | — |  |  | 6
Total other income, net |  |  | 2,076 |  |  | — |  |  | 2,076
Income before income tax expense |  |  | 24,616 |  |  | 21,500 |  |  | 46,116
Income tax expense |  |  | 991 |  |  | — |  |  | 991
Net income |  |  | 23,625 |  |  | 21,500 |  |  | 45,125
Other comprehensive loss |  |  |  |  |  |  |  |  |
Net unrealized loss on marketable securities |  |  | (925) |  |  | — |  |  | (925)
Comprehensive income |  | $ | 22,700 |  | $ | 21,500 |  | $ | 44,200
Basic net income per common share |  | $ | 0.57 |  | $ | 0.52 |  | $ | 1.09
Diluted net income per common share |  | $ | 0.56 |  | $ | 0.51 |  | $ | 1.07
Statement of Stockholders’ Equity
|  |  |  |  |  |  |  |  |  | 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
|  |  |  |  |  |  |  |  |  | Accumulated |  |  |  |  |  |
|  |  |  |  |  |  | Additional |  | Other |  |  |  |  | Total
|  | Common Stock |  | Paid |  | Comprehensive |  | Accumulated |  | Stockholders’
Stockholders’ Equity |  | Shares |  | Amount |  | in-Capital |  | Loss |  | Deficit |  | Equity
Balance, December 31, 2015 as originally reported |  | 40,551,039 |  | $ | 405 |  | $ | 424,128 |  | $ | (516) |  | $ | (261,585) |  | $ | 162,432
Adoption of ASC Topic 606 |  | — |  |  | — |  |  | — |  |  | — |  |  | 2,479 |  |  | 2,479
Balance, December 31, 2015 as revised |  | 40,551,039 |  |  | 405 |  |  | 424,128 |  |  | (516) |  |  | (259,106) |  |  | 164,911
Sale of common stock, net of issuance cost |  | 5,272,750 |  |  | 53 |  |  | 119,216 |  |  | — |  |  | — |  |  | 119,269
Issuance of common stock upon exercise of stock awards |  | 699,066 |  |  | 7 |  |  | 1,153 |  |  | — |  |  | — |  |  | 1,160
Issuance of common stock under the Employee Stock Purchase Plan |  | 45,123 |  |  | 1 |  |  | 544 |  |  | — |  |  | — |  |  | 545
Comprehensive income (loss) |  | — |  |  | — |  |  | — |  |  | (925) |  |  | 23,625 |  |  | 22,700
Stock-based compensation |  | — |  |  | — |  |  | 7,848 |  |  | — |  |  | — |  |  | 7,848
Balance, December 31, 2016 |  | 46,567,978 |  |  | 466 |  |  | 552,889 |  |  | (1,441) |  |  | (235,481) |  |  | 316,433
Adoption of ASC Topic 606 |  | — |  |  | — |  |  | — |  |  | — |  |  | 21,500 |  |  | 21,500
Balance, December 31, 2016 as revised |  | 46,567,978 |  | $ | 466 |  | $ | 552,889 |  | $ | (1,441) |  | $ | (213,981) |  | $ | 337,933
Statement of Cash Flows
|  | As Reported |  |  |  |  | As Revised
|  | Year Ended |  | Effect of |  | Year Ended
|  | December 31, |  | Adoption of |  | December 31,
|  | 2017 |  | ASC 606 |  | 2017
Cash flows from operating activities |  |  |  |  |  |  |  |  |
Net loss |  | $ | (48,925) |  | $ | 10,439 |  | $ | (38,486)
Adjustments to reconcile net loss to net cash used in operating activities: |  |  |  |  |  |  |  |  |
Depreciation and amortization |  |  | 2,030 |  |  | — |  |  | 2,030
Amortization of premium on marketable securities |  |  | 2,845 |  |  | — |  |  | 2,845
Stock-based compensation |  |  | 13,651 |  |  | — |  |  | 13,651
Abandonment of capitalized intangible assets |  |  | 396 |  |  | — |  |  | 396
Loss on disposal of assets |  |  | 83 |  |  | — |  |  | 83
Changes in operating assets and liabilities: |  |  |  |  |  |  |  |  |
Accounts receivable |  |  | 7,474 |  |  | — |  |  | 7,474
Interest receivable |  |  | (293) |  |  | (14) |  |  | (307)
Prepaid expenses and other assets |  |  | (2,705) |  |  | — |  |  | (2,705)
Income tax receivable |  |  | (1,524) |  |  | — |  |  | (1,524)
Other assets |  |  | (161) |  |  | — |  |  | (161)
Accounts payable |  |  | 2,989 |  |  | — |  |  | 2,989
Accrued expenses |  |  | (1,212) |  |  | — |  |  | (1,212)
Deferred rent |  |  | 589 |  |  | — |  |  | 589
Income tax payable |  |  | 91 |  |  | — |  |  | 91
Deferred revenue |  |  | (9,011) |  |  | (10,339) |  |  | (19,350)
Net cash used in operating activities |  |  | (33,683) |  |  | 86 |  |  | (33,597)
Cash flows from investing activities |  |  |  |  |  |  |  |  |
Proceeds from sale and maturities of marketable securities available-for-sale |  |  | 115,757 |  |  | — |  |  | 115,757
Purchase of marketable securities |  |  | (76,529) |  |  | — |  |  | (76,529)
Purchase of intangible assets |  |  | (1,967) |  |  | — |  |  | (1,967)
Purchase of property and equipment |  |  | (5,311) |  |  | — |  |  | (5,311)
Issuance of loan |  |  | — |  |  | (86) |  |  | (86)
Net cash provided by (used in) investing activities |  |  | 31,950 |  |  | (86) |  |  | 31,864
Cash flows from financing activities |  |  |  |  |  |  |  |  |
Proceeds from issuance of common stock upon exercise of stock awards |  |  | 2,797 |  |  | — |  |  | 2,797
Proceeds from issuance of common stock from Employee Stock Purchase Plan |  |  | 936 |  |  | — |  |  | 936
Net cash provided by financing activities |  |  | 3,733 |  |  | — |  |  | 3,733
Net increase in cash and cash equivalents |  |  | 2,000 |  |  | — |  |  | 2,000
Cash and cash equivalents, beginning of period |  |  | 14,528 |  |  | — |  |  | 14,528
Cash and cash equivalents, end of period |  | $ | 16,528 |  | $ | — |  | $ | 16,528
|  | As Reported |  |  |  |  | As Revised
|  | Year Ended |  | Effect of |  | Year Ended
|  | December 31, |  | Adoption of |  | December 31,
|  | 2016 |  | ASC 606 |  | 2016
Cash flows from operating activities |  |  |  |  |  |  |  |  |
Net income |  | $ | 23,625 |  | $ | 21,500 |  | $ | 45,125
Adjustments to reconcile net income to net cash provided by operating activities: |  |  |  |  |  |  |  |  |
Depreciation and amortization |  |  | 1,466 |  |  | — |  |  | 1,466
Amortization of premium on marketable securities |  |  | 2,037 |  |  | — |  |  | 2,037
Stock-based compensation |  |  | 7,848 |  |  | — |  |  | 7,848
Abandonment of capitalized intangible assets |  |  | 356 |  |  | — |  |  | 356
Gain on sale of marketable securities available for sale |  |  | (5) |  |  | — |  |  | (5)
Changes in operating assets and liabilities: |  |  |  |  |  |  |  |  |
Accounts receivable |  |  | (8,572) |  |  | — |  |  | (8,572)
Interest receivable |  |  | (530) |  |  | (79) |  |  | (609)
Prepaid expenses and other assets |  |  | (1,700) |  |  | — |  |  | (1,700)
Other assets |  |  | (40) |  |  | — |  |  | (40)
Accounts payable |  |  | (2,520) |  |  | — |  |  | (2,520)
Accrued expenses |  |  | 3,058 |  |  | — |  |  | 3,058
Deferred rent |  |  | (89) |  |  | — |  |  | (89)
Deferred tax liability |  |  | 65 |  |  | — |  |  | 65
Deferred revenue |  |  | 69,618 |  |  | (20,800) |  |  | 48,818
Net cash provided by operating activities |  |  | 94,617 |  |  | 621 |  |  | 95,238
Cash flows from investing activities |  |  |  |  |  |  |  |  |
Proceeds from sale and maturities of marketable securities available-for-sale |  |  | 105,505 |  |  | — |  |  | 105,505
Purchase of marketable securities |  |  | (316,149) |  |  | — |  |  | (316,149)
Purchase of intangible assets |  |  | (1,502) |  |  | — |  |  | (1,502)
Purchase of property and equipment |  |  | (1,507) |  |  | — |  |  | (1,507)
Proceeds from repayment of (investment in) loan receivable |  |  | — |  |  | (621) |  |  | (621)
Net cash used in investing activities |  |  | (213,653) |  |  | (621) |  |  | (214,274)
Cash flows from financing activities |  |  |  |  |  |  |  |  |
Proceeds from issuance of common stock upon exercise of stock awards |  |  | 1,160 |  |  | — |  |  | 1,160
Proceeds from issuance of common stock from Employee Stock Purchase Plan |  |  | 545 |  |  | — |  |  | 545
Proceeds from issuance of common stock |  |  | 126,546 |  |  | — |  |  | 126,546
Common stock issuance costs |  |  | (7,277) |  |  | — |  |  | (7,277)
Net cash provided by financing activities |  |  | 120,974 |  |  | — |  |  | 120,974
Net increase in cash and cash equivalents |  |  | 1,938 |  |  | — |  |  | 1,938
Cash and cash equivalents, beginning of period |  |  | 12,590 |  |  | — |  |  | 12,590
Cash and cash equivalents, end of period |  | $ | 14,528 |  | $ | — |  | $ | 14,528

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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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