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Impact of Recently Issued Accounting Standards | 9 Months Ended
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Sep. 30, 2018
Accounting Policies [Abstract] |
Impact of Recently Issued Accounting Standards | Impact of Recently Issued Accounting Standards The recent accounting pronouncements below may have a significant effect on the Company's financial statements. Recent accounting pronouncements that are not anticipated to have an impact on or are unrelated to the Company's financial condition, results of operations, or related disclosures are not discussed. ASU No. 2014-09. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers ("Topic 606”), which amended the existing accounting standards for revenue recognition, outlines a comprehensive revenue recognition model and supersedes most current revenue recognition guidance. The new standard requires a company to recognize revenue upon transfer of goods or services to a customer at an amount that reflects the expected consideration to be received in exchange for those goods or services. The amended guidance defines a five-step approach for recognizing revenue, which will require a company to use more judgment and make more estimates than under the current guidance. The Company adopted this new standard effective January 1, 2018, using the modified retrospective transition method. The impact of adoption of Topic 606 on the Company's existing agreements was as follows: Collaboration Agreement with MedImmune The Company has determined that no cumulative catch-up adjustment was required. Grant Agreements The Company has determined that as of January 1, 2018, accounting for the Company’s various grant agreements falls under the contributions guidance under Subtopic 958-605, Not-for-Profit Entities-Revenue Recognition, which is outside the scope of Topic 606, as the government agencies granting the Company funds are not receiving reciprocal value for their contributions. Beginning on January 1, 2018, all contributions received from current grant agreements have been recorded as a contra-expense as opposed to revenue on the consolidated statement of operations. For the three and nine months ended September 30, 2018, $2.6 million and $6.7 million, respectively, would have been recorded as grant revenue but under the new guidance was instead recorded as a reduction to research and development expense. The following table illustrates the impact that adopting Topic 606 has had on the Company's reported results in the condensed consolidated statement of operations for the three months ended September 30, 2018.
| Balances Without Adoption of Topic 606 for the Three Months Ended September 30, 2018 |  | Impact of Adopting Topic 606 |  | As Reported for the Three Months Ended September 30, 2018
Revenues: |  |  |  |  |
Revenue under collaborative research and development arrangements | $ | 1,813,287 |  |  | $ | — |  |  | $ | 1,813,287 |
Revenue under collaborative research and development arrangements with affiliated entities | 184,990 |  |  | — |  |  | 184,990 |
Grants and miscellaneous revenue | 1,628,433 |  |  | (1,625,842 | ) |  | 2,591 |
Grants and miscellaneous revenue from affiliated entity | 951,884 |  |  | (951,884 | ) |  | — |
Total revenues | 4,578,594 |  |  | (2,577,726 | ) |  | 2,000,868 |
Operating expenses: |  |  |  |  |
Research and development | 24,429,584 |  |  | (2,577,726 | ) |  | 21,851,858 |
General and administrative | 6,791,693 |  |  | — |  |  | 6,791,693 |
Total operating expenses | $ | 31,221,277 |  |  | $ | (2,577,726 | ) |  | $ | 28,643,551 |
The following table illustrates the impact that adopting Topic 606 has had on the Company's reported results in the condensed consolidated statement of operations for the nine months ended September 30, 2018.
| Balances Without Adoption of Topic 606 for the Nine Months Ended September 30, 2018 |  | Impact of Adopting Topic 606 |  | As Reported for the Nine Months Ended September 30, 2018
Revenues: |  |  |  |  |
Revenue under collaborative research and development arrangements | $ | 27,488,185 |  |  | $ | — |  |  | $ | 27,488,185 |
Revenue under collaborative research and development arrangements with affiliated entities | 393,317 |  |  | — |  |  | 393,317 |
Grants and miscellaneous revenue | 3,645,107 |  |  | (3,547,336 | ) |  | 97,771 |
Grants and miscellaneous revenue from affiliated entity | 3,164,454 |  |  | (3,164,454 | ) |  | — |
Total revenues | 34,691,063 |  |  | (6,711,790 | ) |  | 27,979,273 |
Operating expenses: |  |  |  |  |
Research and development | 75,604,019 |  |  | (6,711,790 | ) |  | 68,892,229 |
General and administrative | 23,679,018 |  |  | — |  |  | 23,679,018 |
Total operating expenses | $ | 99,283,037 |  |  | $ | (6,711,790 | ) |  | $ | 92,571,247 |
ASU No. 2016-01. In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities. The amended guidance requires the Company to measure and record equity investments, except those accounted for under the equity method of accounting that have a readily determinable fair value, at fair value and for the Company to recognize the changes in fair value in its consolidated statements of operations, instead of recognizing unrealized gains and losses through accumulated other comprehensive income (loss), as done under the previous guidance. The amended guidance also changes several disclosure requirements for financial instruments, including the methods and significant assumptions used to estimate fair value. The standard was effective for annual reporting periods beginning after December 15, 2017, including interim periods within those annual reporting periods. The Company adopted this guidance on January 1, 2018 and recorded a $231,000 cumulative effect adjustment to reclassify the cumulative unrealized gain, net of tax effect, from its investment in Plumbline Life Sciences, Inc. ("PLS") from accumulated other comprehensive loss to accumulated deficit. After the adoption of ASU No. 2016-01, the Company recorded a gain on investment in affiliated entity related to PLS of $531,000 and $873,000 on the condensed consolidated statement of operations for the three and nine months ended September 30, 2018, respectively. The cumulative effect of the changes made to the Company's condensed consolidated balance sheet as of January 1, 2018 for the adoption of ASU No. 2016-01 are included in the table below:
Equity: | Balance at December 31, 2017 |  | Adjustments due to ASU No. 2016-01 |  | Balance at January 1, 2018
Accumulated deficit | $ | (523,356,317 | ) |  | $ | 231,366 |  |  | $ | (523,124,951 | )
Accumulated other comprehensive loss | $ | (117,005 | ) |  | $ | (231,366 | ) |  | $ | (348,371 | )
ASU No. 2016-02. In February 2016, the FASB issued ASU No. 2016-02, Leases. Under the new guidance, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: (a) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (b) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. The ASU will be effective for the Company beginning January 1, 2019, with early adoption permitted. The Company is currently evaluating the impact of the application of this accounting standard update on its financial statements and related disclosures. The Company currently has three operating leases for its office and laboratory spaces in San Diego, California and Plymouth Meeting, Pennsylvania that it expects to be impacted by the new accounting standard that will result in the present values of the future lease payments being presented as right-to-use assets, with a corresponding lease liability at the date of adoption.

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- Definition The entire disclosure of changes in accounting principles, including adoption of new accounting pronouncements, that describes the new methods, amount and effects on financial statement line items. + 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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