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Balance Sheet Components | 9 Months Ended
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Sep. 30, 2020
Organization Consolidation And Presentation Of Financial Statements [Abstract] |
Balance Sheet Components |
6. | Balance Sheet Components
Cash and Cash Equivalents Cash and cash equivalents consisted of the following (in thousands):
|  | September 30, 2020 |  |  | December 31, 2019 |
Cash |  | $ | 80,551 |  |  | $ | 40,715 |
Money market funds |  |  | 451,917 |  |  |  | 85,551 |
Total cash and cash equivalents |  | $ | 532,468 |  |  | $ | 126,266 |
The underlying investments in the money market funds as of September 30, 2020 are all US government obligations. At September 30, 2020 and December 31, 2019, a total of $51.2 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):
|  | September 30, 2020 |
|  | Amortized Cost |  |  | Gross Unrealized Holding Gains |  |  | Gross Unrealized Holding Losses |  |  | Fair Value |
U.S. treasury notes and bills |  | $ | 124,993 |  |  | $ | 395 |  |  | $ | — |  |  | $ | 125,388 |
Certificates of deposit |  |  | 30,000 |  |  |  | 10 |  |  |  | — |  |  |  | 30,010 |
Equity investments |  |  | 125 |  |  |  | 122 |  |  |  | — |  |  |  | 247 |
Total investments |  | $ | 155,118 |  |  | $ | 527 |  |  | $ | — |  |  | $ | 155,645 |
|  | 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 September 30, 2020, all of the available-for-sale investments had contractual maturities within one year. During the three and nine months ended September 30, 2020 and 2019, the Company did not recognize any other-than-temporary impairment loss. Inventories Inventories consisted of the following (in thousands):
|  | September 30, 2020 |  |  | December 31, 2019 |
Raw materials |  | $ | 1,152 |  |  | $ | 325 |
Work-in-progress |  |  | 5,616 |  |  |  | 2,264 |
Finished goods |  |  | 5,034 |  |  |  | 4,298 |
Total inventories |  | $ | 11,803 |  |  | $ | 6,887 |
The provision to write-down excess and obsolete inventory was immaterial for the three and nine months ended September 30, 2020. There was no provision to write-down excess and obsolete inventory for the three and nine months ended September 30, 2019. Prepaid expenses and other current assets Prepaid expenses and other current assets consisted of the following (in thousands):
|  | September 30, 2020 |  |  | December 31, 2019 |
Unbilled contract assets |  | $ | — |  |  | $ | 180,000 |
Deferred revenues from associated contracts |  |  | — |  |  |  | (54,790 | )
Net unbilled contract assets |  |  | — |  |  |  | 125,210 |
Prepaid assets |  |  | 5,549 |  |  |  | 6,464 |
Other current assets |  |  | 6,014 |  |  |  | 1,717 |
Total prepaid expenses and other current assets |  | $ | 11,563 |  |  | $ | 133,391 |
The unbilled contract assets as of December 31, 2019 included two regulatory milestones totaling $130.0 million under the Europe Agreement with Astellas associated with the planned MAA submission in Europe. The MAA was submitted in the second quarter of 2020. Therefore, the $130 million milestones were billed in the same quarter. 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. See Note 3, Collaboration Agreements and Revenues, for details. Property and Equipment Property and equipment consisted of the following (in thousands):
|  | September 30, 2020 |  |  | December 31, 2019 |
Leasehold improvements |  | $ | 101,162 |  |  | $ | 101,548 |
Laboratory equipment |  |  | 17,890 |  |  |  | 17,329 |
Machinery |  |  | 8,012 |  |  |  | 8,217 |
Computer equipment |  |  | 9,124 |  |  |  | 8,399 |
Furniture and fixtures |  |  | 6,110 |  |  |  | 5,822 |
Construction in progress |  |  | 1,506 |  |  |  | 1,792 |
Total property and equipment |  | $ | 143,804 |  |  | $ | 143,107 |
Less: accumulated depreciation |  |  | (107,651 | ) |  |  | (100,364 | )
Property and equipment, net |  | $ | 36,153 |  |  | $ | 42,743 |
Accrued and Other Current Liabilities Accrued and other current liabilities consisted of the following (in thousands):
|  | September 30, 2020 |  |  | December 31, 2019 |
Preclinical and clinical trial accruals |  | $ | 29,396 |  |  | $ | 16,279 |
API product price adjustment |  |  | 3,957 |  |  |  | 36,324 |
Payroll and related accruals |  |  | 19,606 |  |  |  | 19,784 |
Accrued co-promotion expenses - current |  |  | 14,836 |  |  |  | — |
Property taxes and other |  |  | 6,057 |  |  |  | 2,044 |
Professional services |  |  | 7,384 |  |  |  | 4,842 |
Other |  |  | 9,336 |  |  |  | 4,543 |
Total accrued and other current liabilities |  | $ | 90,572 |  |  | $ | 83,816 |
The API product price adjustment of $36.3 million accrued as of December 31, 2019 was related to the change in estimated variable consideration of API product at the time the roxadustat listed price was issued by the Japanese Ministry of Health, Labour and Welfare in the fourth quarter of 2019. This amount was fully paid during the first quarter of 2020. The API product price adjustment of $4.0 million accrued as of September 30, 2020 related to the change in estimated variable consideration of API product at the time an updated roxadustat listed price was issued by the same Japanese authority in the first quarter of 2020. See Note 3, Collaboration Agreements and Revenues, for details. On July 8, 2020, the Parties entered into an amendment to the China Agreement, relating to the development and commercialization of roxadustat in China, which revised, among other things, the arrangements and calculation of the estimated co-promotion expenses payable to AstraZeneca for its sales and marketing efforts associated with the commercial sales for roxadustat in China. As a result, the previously accrued long-term co-promotion expenses were significantly reduced during the third quarter of 2020. $14.8 million of the recalculated accrued co-promotion expenses is anticipated to be paid within the next 12 months, therefore was recorded as a current liability as of September 30, 2020. Other Long-term Liabilities Other long-term liabilities consisted of the following (in thousands):
|  | September 30, 2020 |  |  | December 31, 2019 |
Accrued long-term co-promotion expenses |  | $ | 26,344 |  |  | $ | 53,071 |
Other long-term tax liabilities |  |  | 8,637 |  |  |  | 8,913 |
Operating lease liabilities, non-current |  |  | 472 |  |  |  | 942 |
Other |  |  | 2,186 |  |  |  | 1,340 |
Total other long-term liabilities |  | $ | 37,639 |  |  | $ | 64,266 |
As mentioned above, the China Amendment revised the arrangements and calculation of the estimated co-promotion expenses payable to AstraZeneca. As a result, we reversed approximately $84.4 million of previously accrued long-term co-promotion expenses during the third quarter of 2020. $26.3 million of the recalculated accrued co-promotion expenses remained in the long-term liabilities as of September 30, 2020, as it is not anticipated to be paid within the next 12 months.

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