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Balance Sheet Components | 6 Months Ended
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Jun. 30, 2019
Organization Consolidation And Presentation Of Financial Statements [Abstract] |
Balance Sheet Components |
5. | Balance Sheet Components
Cash and Cash Equivalents Cash and cash equivalents consisted of the following (in thousands):
|  | June 30, 2019 |  |  | December 31, 2018 |
Cash |  | $ | 40,783 |  |  | $ | 38,783 |
US treasury notes and bills |  |  | — |  |  |  | 49,934 |
Money market funds |  |  | 33,804 |  |  |  | 541 |
Total cash and cash equivalents |  | $ | 74,587 |  |  | $ | 89,258 |
At June 30, 2019 and December 31, 2018, a total of $26.0 million and $21.9 million, respectively, of the Company’s cash and cash equivalents were held outside of the U.S. in its foreign subsidiaries to be used primarily for its China operations. Investments The Company’s investments consist of available-for-sale debt investments, marketable equity investments, a term deposit and a certificate of deposit. The amortized cost, gross unrealized holding gains or losses, and fair value of the Company’s available-for-sale investments by major investments type are summarized in the tables below (in thousands):
|  | June 30, 2019 |
|  | Amortized Cost |  |  | Gross Unrealized Holding Gains |  |  | Gross Unrealized Holding Losses |  |  | Fair Value |
US treasury notes and bills |  | $ | 475,126 |  |  | $ | 1,028 |  |  | $ | — |  |  | $ | 476,154 |
Term deposit |  |  | 80,000 |  |  |  | — |  |  |  | — |  |  |  | 80,000 |
Certificates of deposit |  |  | 30,000 |  |  |  | 21 |  |  |  | — |  |  |  | 30,021 |
Bond and mutual funds |  |  | 10,602 |  |  |  | 75 |  |  |  | — |  |  |  | 10,677 |
Equity investments |  |  | 125 |  |  |  | 112 |  |  |  | — |  |  |  | 237 |
Total investments |  | $ | 595,853 |  |  | $ | 1,236 |  |  | $ | — |  |  | $ | 597,089 |
|  | December 31, 2018 |
|  | Amortized Cost |  |  | Gross Unrealized Holding Gains |  |  | Gross Unrealized Holding Losses |  |  | Fair Value |
US treasury notes and bills |  | $ | 467,296 |  |  | $ | 109 |  |  | $ | (69 | ) |  | $ | 467,336 |
Term deposit |  |  | 80,000 |  |  |  | — |  |  |  | — |  |  |  | 80,000 |
Certificates of deposit |  |  | 30,000 |  |  |  | — |  |  |  | (90 | ) |  |  | 29,910 |
Bond and mutual funds |  |  | 10,464 |  |  |  | 20 |  |  |  | — |  |  |  | 10,484 |
Equity investments |  |  | 125 |  |  |  | 109 |  |  |  | — |  |  |  | 234 |
Total investments |  | $ | 587,885 |  |  | $ | 238 |  |  | $ | (159 | ) |  | $ | 587,964 |
At June 30, 2019, all of the available-for-sale investments had contractual maturities within one year. The Company periodically reviews its available-for-sale investments and term deposit for other-than-temporary impairment. The Company considers factors such as the duration, severity and the reason for the decline in value, the potential recovery period and its intent to sell. For debt securities, the Company also considers whether (i) it is more likely than not that the Company will be required to sell the debt securities before recovery of their amortized cost basis, and (ii) the amortized cost basis cannot be recovered as a result of credit losses. During the three and six months ended June 30, 2019 and 2018, the Company did not recognize any other-than-temporary impairment loss. Inventories Inventories consisted of the following (in thousands):
|  | June 30, 2019 |
Raw materials |  | $ | 797 |
Work-in-progress |  |  | 1,035 |
Finished goods |  |  | 149 |
Total inventories |  | $ | 1,981 |
The Company started capitalizing inventory costs in June 2019 when FibroGen China began productions of roxadustat for commercial sales purposes. There was no provision to write-down excess and obsolete inventory for the three months ended June 30, 2019. Prepaid expenses and other current assets Prepaid expenses and other current assets consisted of the following (in thousands):
|  | June 30, 2019 |  |  | December 31, 2018 |
Unbilled contract assets |  | $ | 180,000 |  |  | $ | — |
Deferred revenues from associated contracts |  |  | (52,019 | ) |  |  | — |
Net unbilled contract assets |  |  | 127,981 |  |  |  | — |
Prepaid assets |  |  | 4,716 |  |  |  | 2,705 |
Other current assets |  |  | 3,899 |  |  |  | 2,224 |
Total prepaid expenses and other current assets |  | $ | 136,596 |  |  | $ | 4,929 |
The unbilled contract assets as of June 30, 2019 were related to two regulatory milestones totaling $130.0 million under the Europe Agreement with Astellas associated with the planned MAA submission in Europe, and a $50.0 million regulatory milestone under the U.S./RoW Agreement with AstraZeneca associated with the planned NDA submission in the U.S. See Note 2 for details. Property and Equipment Property and equipment consisted of the following (in thousands):
|  | June 30, 2019 |  |  | December 31, 2018 |
Leasehold improvements |  | $ | 101,250 |  |  | $ | 101,200 |
Building shell |  |  | — |  |  |  | 53,880 |
Laboratory equipment |  |  | 16,754 |  |  |  | 16,405 |
Machinery |  |  | 8,461 |  |  |  | 8,382 |
Computer equipment |  |  | 6,655 |  |  |  | 6,473 |
Furniture and fixtures |  |  | 5,778 |  |  |  | 5,690 |
Construction in progress |  |  | 1,888 |  |  |  | 367 |
Total property and equipment |  | $ | 140,786 |  |  | $ | 192,397 |
Less: accumulated depreciation |  |  | (95,921 | ) |  |  | (65,199 | )
Property and equipment, net |  | $ | 44,865 |  |  | $ | 127,198 |
As of December 31, 2018, the Company had $53.9 million building shell cost and $13.5 million accumulated depreciation related to its building leases under build-to-suit arrangements. Upon the adoption of ASC 842 as of January 1, 2019, using the modified retrospective transition method, the Company derecognized these assets previously recognized under ASC 840 build-to-suit designation. Up to December 31, 2018, the leasehold improvements related to these building leases were depreciated over the life of the building under ASC 840. Upon the adoption of ASC 842, these leasehold improvements should have a useful life based on the lease term. As a result, at the adoption date, the Company recorded a cumulative adjustment of $38.9 million to the accumulated depreciation for these leasehold improvements so that their net balance equals the undepreciated amount had the useful life of the leasehold improvements always been equal to the lease terms. Refer to Note 1 for details. Accrued Liabilities Accrued liabilities consisted of the following (in thousands):
|  | June 30, 2019 |  |  | December 31, 2018 |
Preclinical and clinical trial accruals |  | $ | 41,104 |  |  | $ | 35,413 |
Payroll and related accruals |  |  | 14,001 |  |  |  | 21,430 |
Property taxes and other |  |  | 1,778 |  |  |  | 1,095 |
Professional services |  |  | 3,588 |  |  |  | 2,648 |
Other |  |  | 6,074 |  |  |  | 5,537 |
Total accrued liabilities |  | $ | 66,545 |  |  | $ | 66,123 |

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