Balance Sheet Components

3 Months Ended

Mar. 31, 2020

Organization Consolidation And Presentation Of Financial Statements [Abstract]

5.	Balance Sheet Components

Cash and Cash Equivalents

Cash and cash equivalents consisted of the following (in thousands):

	March 31, 2020		December 31, 2019
Cash	$	49,412	$	40,715
Money market funds		72,148		85,551
Total cash and cash equivalents	$	121,560	$	126,266

At March 31, 2020 and December 31, 2019, a total of $29.8 million and $11.9 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, term deposit and certificate of deposit. The amortized cost, gross unrealized holding gains or losses, and fair value of the Company’s investments by major investments type are summarized in the tables below (in thousands):

	March 31, 2020
	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses			Fair Value
U.S. treasury notes and bills	$	381,238	$	2,516	$	—		$	383,754
Certificates of deposit		30,000		115		—			30,115
Equity investments		125		98		—			223
Total investments	$	411,363	$	2,729	$	—		$	414,092

	December 31, 2019
	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses			Fair Value
U.S. treasury notes and bills	$	426,995	$	536	$	(25	)	$	427,506
Certificates of deposit		30,000		32		—			30,032
Bond and mutual funds		10,730		86		—			10,816
Equity investments		125		130		—			255
Total investments	$	467,850	$	784	$	(25	)	$	468,609

At March 31, 2020, all of the available-for-sale investments had contractual maturities within one year. During the three months ended March 31, 2020, the Company did not recognize any other-than-temporary impairment loss.

Inventories

Inventories consisted of the following (in thousands):

	March 31, 2020		December 31, 2019
Raw materials	$	459	$	325
Work-in-progress		2,948		2,264
Finished goods		5,001		4,298
Total inventories	$	8,408	$	6,887

The provision to write-down excess and obsolete inventory was nominal for the three months ended March 31, 2020.

Prepaid expenses and other current assets

Prepaid expenses and other current assets consisted of the following (in thousands):

	March 31, 2020			December 31, 2019
Unbilled contract assets	$	130,000		$	180,000
Deferred revenues from associated contracts		(3,442	)		(54,790	)
Net unbilled contract assets		126,558			125,210
Prepaid assets		5,267			6,464
Other current assets		2,203			1,717
Total prepaid expenses and other current assets	$	134,028		$	133,391

The unbilled contract assets as of March 31, 2020 were related to two regulatory milestones totaling $130.0 million under the Europe Agreement with Astellas associated with the planned MAA submission in Europe. The unbilled contract assets as of December 31, 2019 also included a $50.0 million regulatory milestone under the U.S./RoW Agreement with AstraZeneca associated with the NDA submission in the U.S, which was submitted in December 2019 and accepted for review in February 2020. Therefore, the $50.0 million milestone was billed during the first quarter of 2020, and recorded as accounts receivable as of March 31, 2020. See Note 2 for details.

Property and Equipment

Property and equipment consisted of the following (in thousands):

	March 31, 2020			December 31, 2019
Leasehold improvements	$	101,721		$	101,548
Laboratory equipment		17,359			17,329
Machinery		8,229			8,217
Computer equipment		8,879			8,399
Furniture and fixtures		5,883			5,822
Construction in progress		1,212			1,792
Total property and equipment	$	143,283		$	143,107
Less: accumulated depreciation		(103,225	)		(100,364	)
Property and equipment, net	$	40,058		$	42,743

Accrued Liabilities

Accrued liabilities consisted of the following (in thousands):

	March 31, 2020		December 31, 2019
Preclinical and clinical trial accruals	$	16,704	$	16,279
API product price adjustment		—		36,324
Payroll and related accruals		11,899		19,784
Property taxes and other		4,033		2,044
Professional services		4,608		4,842
Other		5,065		4,543
Total accrued liabilities	$	42,309	$	83,816

The amount of $36.3 million accrued as of December 31, 2019 was related to the change in estimated variable consideration of active pharmaceutical ingredient (“API”) product at the time the roxadustat listed price was issued by the Japanese Ministry of Health, Labour and Welfare. The amount was fully paid during the first quarter of 2020.

Other Long-term Liabilities

Other long-term liabilities consisted of the following (in thousands):

	March 31, 2020		December 31, 2019
Accrued long-term co-promotional expenses	$	78,301	$	53,071
Other long-term tax liabilities		8,786		8,913
Operating lease liabilities, non-current		678		942
Other		1,357		1,340
Total other long-term liabilities	$	89,122	$	64,266

The accrued long-term co-promotional expenses of $78.3 million and $53.1 million as of March 31, 2020 and December 31, 2019, respectively, were related to the estimated amount payable to AstraZeneca for its sales and marketing efforts related to the commercial launch for roxadustat in China. The payment for such amount is not expected to occur within the next year.