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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Spectrum Pharmaceuticals Inc | NASDAQ:SPPI | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 1.03 | 1.14 | 0.9785 | 0 | 01:00:00 |
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ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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93-0979187
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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11500 South Eastern Avenue, Suite 240
Henderson, Nevada
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89052
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
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¨
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Accelerated filer
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ý
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Emerging Growth Company
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¨
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Item
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Page
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PART I. FINANCIAL INFORMATION
|
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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PART II. OTHER INFORMATION
|
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Item 1.
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||
Item 1A.
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||
Item 6.
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||
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September 30,
2017 |
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December 31,
2016 |
||||
ASSETS
|
|
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|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
247,468
|
|
|
$
|
158,222
|
|
Marketable securities
|
248
|
|
|
247
|
|
||
Accounts receivable, net of allowance for doubtful accounts of $88 and $88, respectively
|
37,767
|
|
|
39,782
|
|
||
Other receivables
|
5,876
|
|
|
5,754
|
|
||
Inventories
|
8,983
|
|
|
8,715
|
|
||
Prepaid expenses and other assets
|
2,957
|
|
|
3,930
|
|
||
Total current assets
|
303,299
|
|
|
216,650
|
|
||
Property and equipment, net of accumulated depreciation
|
615
|
|
|
449
|
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Intangible assets, net of accumulated amortization and impairment charges
|
144,036
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|
|
164,234
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||
Goodwill
|
18,131
|
|
|
17,886
|
|
||
Other assets
|
35,736
|
|
|
29,549
|
|
||
Total assets
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$
|
501,817
|
|
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$
|
428,768
|
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LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable and other accrued liabilities
|
$
|
49,635
|
|
|
$
|
52,483
|
|
Accrued payroll and benefits
|
7,636
|
|
|
8,981
|
|
||
Deferred revenue
|
2,783
|
|
|
3,188
|
|
||
FOLOTYN development liability
|
153
|
|
|
861
|
|
||
Total current liabilities
|
60,207
|
|
|
65,513
|
|
||
FOLOTYN development liability, less current portion
|
12,273
|
|
|
12,269
|
|
||
Deferred revenue, less current portion
|
324
|
|
|
323
|
|
||
Acquisition-related contingent obligations
|
4,551
|
|
|
1,315
|
|
||
Deferred tax liabilities
|
6,829
|
|
|
6,675
|
|
||
Other long-term liabilities
|
11,127
|
|
|
9,604
|
|
||
Convertible senior notes
|
101,770
|
|
|
97,043
|
|
||
Total liabilities
|
197,081
|
|
|
192,742
|
|
||
Commitments and contingencies
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock, $0.001 par value; 5,000,000 shares authorized; no shares issued and outstanding
|
—
|
|
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—
|
|
||
Series B junior participating preferred stock, $0.001 par value; 1,500,000 shares authorized; no shares issued and outstanding
|
—
|
|
|
—
|
|
||
Series E convertible voting preferred stock, $0.001 par value and $10,000 stated value; 2,000 shares authorized; no shares issued and outstanding.
|
—
|
|
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—
|
|
||
Common stock, $0.001 par value; 175,000,000 shares authorized; 94,061,740 and 80,466,735 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively
|
94
|
|
|
80
|
|
||
Additional paid-in capital
|
765,754
|
|
|
640,166
|
|
||
Accumulated other comprehensive income (loss)
|
3,673
|
|
|
(1,579
|
)
|
||
Accumulated deficit
|
(464,785
|
)
|
|
(402,641
|
)
|
||
Total stockholders’ equity
|
304,736
|
|
|
236,026
|
|
||
Total liabilities and stockholders’ equity
|
$
|
501,817
|
|
|
$
|
428,768
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Product sales, net
|
$
|
31,234
|
|
|
$
|
30,272
|
|
|
$
|
88,235
|
|
|
$
|
96,401
|
|
License fees and service revenue
|
5,161
|
|
|
3,121
|
|
|
11,562
|
|
|
14,807
|
|
||||
Total revenues
|
$
|
36,395
|
|
|
$
|
33,393
|
|
|
$
|
99,797
|
|
|
$
|
111,208
|
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of sales (excludes amortization and impairment charges of intangible assets)
|
12,179
|
|
|
7,503
|
|
|
31,618
|
|
|
18,715
|
|
||||
Cost of service revenue
|
—
|
|
|
2,221
|
|
|
4,221
|
|
|
5,716
|
|
||||
Selling, general and administrative
|
18,880
|
|
|
19,465
|
|
|
54,595
|
|
|
69,047
|
|
||||
Research and development
|
13,878
|
|
|
13,293
|
|
|
43,670
|
|
|
43,037
|
|
||||
Amortization and impairment charges of intangible assets
|
6,928
|
|
|
6,907
|
|
|
20,718
|
|
|
19,052
|
|
||||
Total operating costs and expenses
|
51,865
|
|
|
49,389
|
|
|
154,822
|
|
|
155,567
|
|
||||
Loss from operations
|
(15,470
|
)
|
|
(15,996
|
)
|
|
(55,025
|
)
|
|
(44,359
|
)
|
||||
Other (expense) income:
|
|
|
|
|
|
|
|
||||||||
Interest expense, net
|
(2,014
|
)
|
|
(2,373
|
)
|
|
(6,196
|
)
|
|
(7,087
|
)
|
||||
Change in fair value of contingent consideration related to acquisitions
|
(2,942
|
)
|
|
78
|
|
|
(3,236
|
)
|
|
(1,249
|
)
|
||||
Other income, net
|
251
|
|
|
372
|
|
|
901
|
|
|
990
|
|
||||
Total other expenses
|
(4,705
|
)
|
|
(1,923
|
)
|
|
(8,531
|
)
|
|
(7,346
|
)
|
||||
Loss before income taxes
|
(20,175
|
)
|
|
(17,919
|
)
|
|
(63,556
|
)
|
|
(51,705
|
)
|
||||
Benefit for income taxes
|
1,466
|
|
|
464
|
|
|
1,412
|
|
|
635
|
|
||||
Net loss
|
$
|
(18,709
|
)
|
|
$
|
(17,455
|
)
|
|
$
|
(62,144
|
)
|
|
$
|
(51,070
|
)
|
Net loss per share:
|
|
|
|
|
|
|
|
||||||||
Basic and diluted
|
$
|
(0.22
|
)
|
|
$
|
(0.22
|
)
|
|
$
|
(0.78
|
)
|
|
$
|
(0.73
|
)
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic and diluted
|
83,463,153
|
|
|
79,303,380
|
|
|
80,177,370
|
|
|
70,437,885
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net loss
|
$
|
(18,709
|
)
|
|
$
|
(17,455
|
)
|
|
$
|
(62,144
|
)
|
|
$
|
(51,070
|
)
|
Other comprehensive income:
|
|
|
|
|
|
|
|
||||||||
Unrealized gain on available-for-sale securities, net of income tax expense of $2,068, $342, and $2,068, $872 for the three and nine months ended September 30, 2017 and 2016, respectively.
|
5,047
|
|
|
465
|
|
|
3,903
|
|
|
2,975
|
|
||||
Foreign currency translation adjustments
|
405
|
|
|
96
|
|
|
1,349
|
|
|
254
|
|
||||
Other comprehensive income
|
5,452
|
|
|
561
|
|
|
5,252
|
|
|
3,229
|
|
||||
Total comprehensive loss
|
$
|
(13,257
|
)
|
|
$
|
(16,894
|
)
|
|
$
|
(56,892
|
)
|
|
$
|
(47,841
|
)
|
|
Nine Months Ended
September 30, |
||||||
|
2017
|
|
2016
|
||||
Cash Flows From Operating Activities:
|
|
|
|
||||
Net loss
|
$
|
(62,144
|
)
|
|
$
|
(51,070
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
||||
Depreciation and amortization
|
20,965
|
|
|
19,493
|
|
||
Stock-based compensation
|
9,654
|
|
|
9,754
|
|
||
Accretion of debt discount, recorded to interest expense on 2018 Convertible Notes
(Note 14)
|
4,236
|
|
|
4,246
|
|
||
Amortization of deferred financing costs, recorded to interest expense on 2018 Convertible Notes (
Note 14
)
|
491
|
|
|
521
|
|
||
Bad debt recovery
|
—
|
|
|
(15
|
)
|
||
Unrealized foreign currency exchange gain
|
(18
|
)
|
|
(155
|
)
|
||
Change in cash surrender value of corporate owned life insurance
|
(266
|
)
|
|
—
|
|
||
Research and development expense recognized for the value of common stock issued in connection with QAPZOLA (
Note 16(b)(x)
) and ROLONTIS (
Note 16(b)(xiii)
) milestone achievements
|
—
|
|
|
2,419
|
|
||
Deferred tax liabilities
|
154
|
|
|
(40
|
)
|
||
Income tax recognition on unrealized gain for available-for-sale securities
|
(2,068
|
)
|
|
—
|
|
||
Change in fair value of contingent consideration related to the Talon and EVOMELA acquisitions (
Note 9
)
|
3,236
|
|
|
1,249
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable, net
|
2,143
|
|
|
(12,040
|
)
|
||
Other receivables
|
(88
|
)
|
|
5,571
|
|
||
Inventories
|
554
|
|
|
(6,768
|
)
|
||
Prepaid expenses
|
972
|
|
|
804
|
|
||
Other assets
|
183
|
|
|
(2,095
|
)
|
||
Accounts payable and other accrued obligations
|
(2,954
|
)
|
|
(6,595
|
)
|
||
Accrued payroll and benefits
|
(1,343
|
)
|
|
(451
|
)
|
||
FOLOTYN development liability (
Note 15
)
|
(704
|
)
|
|
(526
|
)
|
||
Acquisition related contingent obligations
|
—
|
|
|
(1,300
|
)
|
||
Deferred revenue
|
(483
|
)
|
|
(1,417
|
)
|
||
Other long-term liabilities
|
1,523
|
|
|
1,321
|
|
||
Net cash used in operating activities
|
(25,957
|
)
|
|
(37,094
|
)
|
||
Cash Flows From Investing Activities:
|
|
|
|
||||
Payment for corporate-owned life insurance premiums
|
(601
|
)
|
|
—
|
|
||
Redemption of mutual funds
|
(1
|
)
|
|
(1
|
)
|
||
Purchases of property and equipment
|
(412
|
)
|
|
(61
|
)
|
||
Net cash used in investing activities
|
(1,014
|
)
|
|
(62
|
)
|
||
Cash Flows From Financing Activities:
|
|
|
|
||||
Proceeds from exercise of stock options
|
3,051
|
|
|
190
|
|
||
Proceeds from sale of stock under employee stock purchase plan
|
406
|
|
|
383
|
|
||
Purchase and retirement of restricted stock to satisfy employees' tax liability at vesting
|
(1,476
|
)
|
|
(829
|
)
|
||
Payment of contingent consideration related to EVOMELA acquisition (
Note 9(b)
)
|
—
|
|
|
(4,700
|
)
|
||
Proceeds from common shares sold under an at-market-issuance sales agreement (
Note 18
)
|
113,966
|
|
|
73,869
|
|
||
Dividends paid upon conversion of Series E Convertible Voting Preferred Stock (
Note 18
)
|
—
|
|
|
(6
|
)
|
||
Net cash provided by financing activities
|
115,947
|
|
|
68,907
|
|
||
Effect of exchange rates on cash and equivalents
|
270
|
|
|
113
|
|
||
Net increase in cash and cash equivalents
|
89,246
|
|
|
31,864
|
|
||
Cash and cash equivalents—beginning of period
|
158,222
|
|
|
139,741
|
|
||
Cash and cash equivalents—end of period
|
$
|
247,468
|
|
|
$
|
171,605
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
||||
Cash paid for income taxes
|
$
|
10
|
|
|
$
|
11
|
|
Cash paid for interest
|
$
|
1,513
|
|
|
$
|
1,650
|
|
•
|
ROLONTIS (formerly referred to as SPI-2012 or LAPS-G-CSF) for chemotherapy-induced neutropenia.
|
•
|
QAPZOLA (formerly referred to as APAZIQUONE) for immediate intravesical instillation in post-transurethral resection of bladder tumors in patients with non-muscle invasive bladder cancer ("NMIBC").
|
•
|
POZIOTINIB, a novel pan-HER inhibitor used in the treatment of patients with a variety of solid tumors, including breast and lung cancer.
|
(1)
|
appropriate evidence of a binding arrangement exists with our customer;
|
(2)
|
price is substantially fixed or determinable;
|
(3)
|
collection from our customer is reasonably assured;
|
(4)
|
our customer’s obligation to pay us is not contingent on resale of the product;
|
(5)
|
we do not have significant continued performance obligations to our customer; and
|
(6)
|
we have a reasonable basis to estimate returns.
|
(i)
|
We first assess the number of “units of accounting” for the elements in our out-license arrangements in accordance with multiple element arrangement guidance. We consider if elements (deliverables) have standalone value, and if standalone value does not exist for a deliverable, it is combined (as applicable) with other deliverables until the "bundle" has standalone value (as a single unit of accounting).
|
(ii)
|
Next, we allocate arrangement consideration among the separate units of accounting (using the "relative selling price method").
|
(iii)
|
Finally, we evaluate the timing of revenue recognition, which is impacted by the nature of the consideration to which we are entitled, as follows:
|
(a)
|
Upfront license fees
:
We consider whether upfront license fees are earned (i.e., realized) at the time of contract execution (i.e., when the license rights transfer to the customer) or over the actual (or implied) contractual term of the out-license. We give specific consideration to whether we have any on-going contractual service obligations to the licensee, including any requirements for us to provide on-going support services, and/or for us to supply drug products for the licensee’s future sales. As a result, we may either recognize all upfront license fees as revenue in the period of contract execution, or recognize these fees over the actual (or implied) contractual term of the out-license.
|
(b)
|
Royalties
: We recognize revenue in the period that our licensees report product sales to us in their territory for which we are contractually entitled to a percentage-based royalty receipt (i.e., representing the period when earned and realizable).
|
(c)
|
Sales milestones
: We recognize revenue in the period that our licensees report achievement of annual or aggregate product sales levels in their territories for which we are contractually entitled to a specified lump-sum receipt (i.e., representing the period when earned and realizable).
|
(d)
|
Regulatory milestones
: Under the terms of the respective out-license, regulatory achievements may either be our responsibility, or that of our licensee.
|
•
|
When our licensee is responsible for the achievement of the regulatory milestone (and we have no on-going obligations), we recognize this revenue in the period that our product achieves specified regulatory approvals for which we are contractually entitled to a fixed receipt (i.e., representing the period when earned and realizable).
|
•
|
When we are responsible for the achievement of the regulatory milestone, we recognize this revenue in the period that our product achieves specified regulatory approvals for which we are contractually entitled to a fixed receipt. Regulatory approvals by governmental agencies are inherently uncertain, and require our substantial cost and effort in completing our submission for potential approval. Therefore, these regulatory milestones are “substantive” and these fixed receipts remain at-risk (i.e. unearned and unrealizable) until the period of achievement. We believe the amounts we are entitled to receive upon our achievement relates solely to our past performance and is commensurate with either (i) our performance in achieving the milestone, or (ii) the resulting enhancement in value of the drug compound.
|
(a)
|
a significant decrease in the market value of an asset;
|
(b)
|
a significant adverse change in the extent or manner in which an asset is used; or
|
(c)
|
an accumulation of costs significantly in excess of the amount originally expected for the acquisition of an asset.
|
|
|
|
|
|
|
|
|
|
|
|
Marketable Securities
|
||||||||||||||||
|
Cost
|
|
Gross
Unrealized Gains |
|
Gross
Unrealized Losses |
|
Estimated
Fair Value |
|
Cash and Cash
Equivalents |
|
Current
|
|
Long
Term |
||||||||||||||
September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Bank deposits
|
$
|
21,574
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
21,574
|
|
|
$
|
21,574
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Money market funds
|
225,894
|
|
|
—
|
|
|
—
|
|
|
225,894
|
|
|
225,894
|
|
|
—
|
|
|
—
|
|
|||||||
Bank certificates of deposits
|
248
|
|
|
—
|
|
|
—
|
|
|
248
|
|
|
—
|
|
|
248
|
|
|
—
|
|
|||||||
Total cash and cash equivalents and marketable securities
|
$
|
247,716
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
247,716
|
|
|
$
|
247,468
|
|
|
$
|
248
|
|
|
$
|
—
|
|
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Bank deposits
|
$
|
23,915
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
23,915
|
|
|
$
|
23,915
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Money market funds
|
128,563
|
|
|
—
|
|
|
—
|
|
|
128,563
|
|
|
128,563
|
|
|
—
|
|
|
—
|
|
|||||||
Bank certificates of deposits
|
5,991
|
|
|
—
|
|
|
—
|
|
|
5,991
|
|
|
5,744
|
|
|
247
|
|
|
—
|
|
|||||||
Total cash and cash equivalents and marketable securities
|
$
|
158,469
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
158,469
|
|
|
$
|
158,222
|
|
|
$
|
247
|
|
|
$
|
—
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
Computer hardware and software
|
$
|
2,933
|
|
|
$
|
2,550
|
|
Laboratory equipment
|
622
|
|
|
622
|
|
||
Office furniture
|
218
|
|
|
211
|
|
||
Leasehold improvements
|
2,938
|
|
|
2,912
|
|
||
Property and equipment, at cost
|
6,711
|
|
|
6,295
|
|
||
(Less): Accumulated depreciation
|
(6,096
|
)
|
|
(5,846
|
)
|
||
Property and equipment, net of accumulated depreciation
|
$
|
615
|
|
|
$
|
449
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
Raw materials
|
$
|
1,683
|
|
|
$
|
2,991
|
|
Work-in-process
|
7,457
|
|
|
7,838
|
|
||
Finished goods
|
3,439
|
|
|
2,305
|
|
||
(Less:) Non-current portion of inventories included within "other assets" *
|
(3,596
|
)
|
|
(4,419
|
)
|
||
Inventories
|
$
|
8,983
|
|
|
$
|
8,715
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
Prepaid insurance
|
$
|
185
|
|
|
$
|
721
|
|
Inventory other
|
712
|
|
|
1,458
|
|
||
Other miscellaneous prepaid operating expenses
|
2,060
|
|
|
1,751
|
|
||
Prepaid expenses and other assets
|
$
|
2,957
|
|
|
$
|
3,930
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
FOLOTYN milestone for first sale in Japan
(Note 16(b)(vii)
)
|
2,000
|
|
|
—
|
|
||
CASI note - short term*
|
1,515
|
|
|
—
|
|
||
Other miscellaneous receivables**
|
1,033
|
|
|
239
|
|
||
Employee receivables***
|
857
|
|
|
—
|
|
||
Reimbursements due from development partners for incurred research and development expenses
|
418
|
|
|
1,796
|
|
||
Insurance receivable
|
53
|
|
|
500
|
|
||
Receivable for contracted sales and marketing services (
Note 13
)
|
—
|
|
|
1,831
|
|
||
Income tax receivable
|
—
|
|
|
1,388
|
|
||
Other receivables
|
$
|
5,876
|
|
|
$
|
5,754
|
|
|
|
|
September 30, 2017
|
||||||||||||||||||||
|
Historical
Cost |
|
Accumulated
Amortization |
|
Foreign
Currency Translation |
|
Impairment
|
|
Net Amount
|
|
Full
Amortization Period (months) |
|
Remaining
Amortization Period (months) |
||||||||||
MARQIBO IPR&D (NHL and other novel indications)
|
$
|
17,600
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
17,600
|
|
|
n/a
|
|
n/a
|
EVOMELA distribution rights
(1)
|
7,700
|
|
|
(888
|
)
|
|
—
|
|
|
—
|
|
|
6,812
|
|
|
156
|
|
138
|
|||||
BELEODAQ distribution rights
|
25,000
|
|
|
(6,094
|
)
|
|
—
|
|
|
—
|
|
|
18,906
|
|
|
160
|
|
121
|
|||||
MARQIBO distribution rights
|
26,900
|
|
|
(16,102
|
)
|
|
—
|
|
|
—
|
|
|
10,798
|
|
|
81
|
|
30
|
|||||
FOLOTYN distribution rights
(2)
|
118,400
|
|
|
(50,843
|
)
|
|
—
|
|
|
—
|
|
|
67,557
|
|
|
152
|
|
62
|
|||||
ZEVALIN distribution rights – U.S.
|
41,900
|
|
|
(36,688
|
)
|
|
—
|
|
|
—
|
|
|
5,212
|
|
|
123
|
|
18
|
|||||
ZEVALIN distribution rights – Ex-U.S.
|
23,490
|
|
|
(16,579
|
)
|
|
(2,763
|
)
|
|
—
|
|
|
4,148
|
|
|
96
|
|
30
|
|||||
FUSILEV distribution rights
(3)
|
16,778
|
|
|
(9,618
|
)
|
|
—
|
|
|
(7,160
|
)
|
|
—
|
|
|
56
|
|
0
|
|||||
FOLOTYN out-license
(4)
|
27,900
|
|
|
(13,874
|
)
|
|
—
|
|
|
(1,023
|
)
|
|
13,003
|
|
|
110
|
|
58
|
|||||
Total intangible assets
|
$
|
305,668
|
|
|
$
|
(150,686
|
)
|
|
$
|
(2,763
|
)
|
|
$
|
(8,183
|
)
|
|
$
|
144,036
|
|
|
|
|
|
(1)
|
The FDA approval of EVOMELA in March 2016 triggered a
$6 million
payment due to CyDex Pharmaceuticals, Inc. (a wholly-owned subsidiary of Ligand Pharmaceuticals Incorporated ("Ligand")). This event also resulted in a reclassification of our
$7.7 million
"EVOMELA IPR&D" to "EVOMELA distribution rights" due to our ability to begin its commercialization with this FDA approval. Amortization commenced on April 1, 2016, in accordance with our capitalization policy for intangible assets.
|
(2)
|
Beginning June 2016, we adjusted the amortization period of our FOLOTYN distribution rights to November 2022 from March 2025, representing the period through which we expect to have patent protection from generic competition (see
Note 16(g)
).
|
(3)
|
On February 20, 2015, the U.S. District Court for the District of Nevada found the patent covering FUSILEV to be invalid, which was upheld on appeal. On April 24, 2015, Sandoz Inc. began to commercialize a generic version of FUSILEV. This represented a “triggering event” under applicable GAAP in evaluating the value of our FUSILEV distribution rights as of March 31, 2015, resulting in a
$7.2 million
impairment charge (non-cash) in the first quarter of 2015. We accelerated amortization expense recognition in 2015 for the then remaining net book value of FUSILEV distribution rights.
|
(4)
|
On May 29, 2013, we amended our FOLOTYN collaboration agreement with Mundipharma International Corporation Limited ("Mundipharma"). As a result of the amendment, Europe and Turkey were excluded from Mundipharma’s commercialization territory, and their royalty rates and milestone payments to us were modified. This constituted a change under which we originally valued the FOLOTYN out-license as part of business combination accounting, resulting in an impairment charge (non-cash) of
$1.0 million
in the second quarter of 2013.
|
|
|
|
December 31, 2016
|
||||||||||||||||
|
Historical
Cost |
|
Accumulated
Amortization |
|
Foreign
Currency Translation |
|
Impairment
|
|
Net Amount
|
||||||||||
MARQIBO IPR&D (NHL and other novel indications)
|
$
|
17,600
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
17,600
|
|
EVOMELA distribution rights
|
7,700
|
|
|
(444
|
)
|
|
—
|
|
|
—
|
|
|
7,256
|
|
|||||
BELEODAQ distribution rights
|
25,000
|
|
|
(4,688
|
)
|
|
—
|
|
|
—
|
|
|
20,312
|
|
|||||
MARQIBO distribution rights
|
26,900
|
|
|
(12,863
|
)
|
|
—
|
|
|
—
|
|
|
14,037
|
|
|||||
FOLOTYN distribution rights
|
118,400
|
|
|
(41,036
|
)
|
|
—
|
|
|
—
|
|
|
77,364
|
|
|||||
ZEVALIN distribution rights – U.S.
|
41,900
|
|
|
(34,083
|
)
|
|
—
|
|
|
—
|
|
|
7,817
|
|
|||||
ZEVALIN distribution rights – Ex-U.S.
|
23,490
|
|
|
(13,649
|
)
|
|
(5,038
|
)
|
|
—
|
|
|
4,803
|
|
|||||
FUSILEV distribution rights
|
16,778
|
|
|
(9,618
|
)
|
|
—
|
|
|
(7,160
|
)
|
|
—
|
|
|||||
FOLOTYN out-license
|
27,900
|
|
|
(11,832
|
)
|
|
—
|
|
|
(1,023
|
)
|
|
15,045
|
|
|||||
Total intangible assets
|
$
|
305,668
|
|
|
$
|
(128,213
|
)
|
|
$
|
(5,038
|
)
|
|
$
|
(8,183
|
)
|
|
$
|
164,234
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
Acquisition of Talon (MARQIBO rights)
|
$
|
10,526
|
|
|
$
|
10,526
|
|
Acquisition of ZEVALIN Ex-U.S. distribution rights
|
2,525
|
|
|
2,525
|
|
||
Acquisition of Allos (FOLOTYN rights)
|
5,346
|
|
|
5,346
|
|
||
Foreign currency exchange translation effects
|
(266
|
)
|
|
(511
|
)
|
||
Goodwill
|
$
|
18,131
|
|
|
$
|
17,886
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
Equity securities (see
Note 10
)*
|
$
|
17,751
|
|
|
$
|
11,533
|
|
Promissory note receivable - long term (see
Note 10
)**
|
—
|
|
|
1,510
|
|
||
Research & development supplies and other
|
267
|
|
|
224
|
|
||
Executive officer life insurance – cash surrender value
|
14,122
|
|
|
11,863
|
|
||
Inventories - non-current portion
|
3,596
|
|
|
4,419
|
|
||
Other assets
|
$
|
35,736
|
|
|
$
|
29,549
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
Trade accounts payable and other accrued liabilities
|
$
|
25,464
|
|
|
$
|
30,488
|
|
Accrued rebates
|
8,120
|
|
|
8,350
|
|
||
Accrued product royalty
|
4,610
|
|
|
4,723
|
|
||
Allowance for returns
|
3,458
|
|
|
2,309
|
|
||
Accrued data and distribution fees
|
4,344
|
|
|
4,222
|
|
||
Accrued GPO administrative fees
|
449
|
|
|
384
|
|
||
Accrued inventory management fee
|
1,347
|
|
|
540
|
|
||
Allowance for chargebacks
|
1,843
|
|
|
1,467
|
|
||
Accounts payable and other accrued liabilities
|
$
|
49,635
|
|
|
$
|
52,483
|
|
|
Rebates and
Chargebacks |
|
Data and
Distribution, GPO Fees, and Inventory Management Fees |
|
Returns
|
||||||
Balance as of December 31, 2015
|
$
|
20,167
|
|
|
$
|
3,386
|
|
|
$
|
1,394
|
|
Add: provisions
|
98,317
|
|
|
14,979
|
|
|
2,123
|
|
|||
(Less): credits or actual allowances
|
(108,667
|
)
|
|
(13,219
|
)
|
|
(1,208
|
)
|
|||
Balance as of December 31, 2016
|
9,817
|
|
|
5,146
|
|
|
2,309
|
|
|||
Add: provisions
|
85,602
|
|
|
15,495
|
|
|
2,164
|
|
|||
(Less): credits or actual allowances
|
(85,456
|
)
|
|
(14,501
|
)
|
|
(1,015
|
)
|
|||
Balance as of September 30, 2017
|
$
|
9,963
|
|
|
$
|
6,140
|
|
|
$
|
3,458
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
ZEVALIN out-license deferred revenue in Asia/other territories (see
Note 11
)
|
$
|
—
|
|
|
$
|
1,255
|
|
EVOMELA deferred revenue*
|
2,731
|
|
|
1,887
|
|
||
ZEVALIN out-license in India territory (see
Note 16(b)(iii)
)
|
376
|
|
|
369
|
|
||
Deferred revenue
|
$
|
3,107
|
|
|
$
|
3,511
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
Accrued executive deferred compensation
|
$
|
10,250
|
|
|
$
|
8,352
|
|
Deferred rent (non-current portion)
|
83
|
|
|
167
|
|
||
Clinical study holdbacks, non-current
|
56
|
|
|
47
|
|
||
Other tax liabilities
|
738
|
|
|
738
|
|
||
Royalty liability
|
—
|
|
|
300
|
|
||
Other long-term liabilities
|
$
|
11,127
|
|
|
$
|
9,604
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Gross product sales
|
$
|
66,517
|
|
|
$
|
61,513
|
|
|
$
|
192,443
|
|
|
$
|
175,963
|
|
Commercial rebates and government chargebacks
|
(28,075
|
)
|
|
(26,167
|
)
|
|
(85,400
|
)
|
|
(67,389
|
)
|
||||
Data and distribution fees, GPO fees, and inventory management fees
|
(5,864
|
)
|
|
(4,234
|
)
|
|
(15,503
|
)
|
|
(10,235
|
)
|
||||
Prompt pay discounts
|
(455
|
)
|
|
(300
|
)
|
|
(1,143
|
)
|
|
(380
|
)
|
||||
Product returns allowance
|
(889
|
)
|
|
(540
|
)
|
|
(2,162
|
)
|
|
(1,558
|
)
|
||||
Product sales, net
|
$
|
31,234
|
|
|
$
|
30,272
|
|
|
$
|
88,235
|
|
|
$
|
96,401
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||||||||||||
United States
|
$
|
29,184
|
|
|
93.4
|
%
|
|
$
|
29,576
|
|
|
97.7
|
%
|
|
$
|
82,049
|
|
|
93.0
|
%
|
|
$
|
93,392
|
|
|
96.9
|
%
|
Europe
|
2,050
|
|
|
6.6
|
%
|
|
696
|
|
|
2.3
|
%
|
|
6,186
|
|
|
7.0
|
%
|
|
3,009
|
|
|
3.1
|
%
|
||||
Product sales, net
|
$
|
31,234
|
|
|
100.0
|
%
|
|
$
|
30,272
|
|
|
100.0
|
%
|
|
$
|
88,235
|
|
|
100.0
|
%
|
|
$
|
96,401
|
|
|
100.0
|
%
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||||||||||||
FUSILEV
|
$
|
1,792
|
|
|
5.7
|
%
|
|
$
|
4,893
|
|
|
16.2
|
%
|
|
$
|
6,426
|
|
|
7.3
|
%
|
|
$
|
30,568
|
|
|
31.7
|
%
|
FOLOTYN
|
11,576
|
|
|
37.1
|
%
|
|
11,315
|
|
|
37.4
|
%
|
|
32,031
|
|
|
36.3
|
%
|
|
35,577
|
|
|
36.9
|
%
|
||||
ZEVALIN
|
2,737
|
|
|
8.8
|
%
|
|
2,627
|
|
|
8.7
|
%
|
|
7,881
|
|
|
8.9
|
%
|
|
8,224
|
|
|
8.5
|
%
|
||||
MARQIBO
|
1,227
|
|
|
3.9
|
%
|
|
1,925
|
|
|
6.4
|
%
|
|
5,369
|
|
|
6.1
|
%
|
|
4,921
|
|
|
5.1
|
%
|
||||
BELEODAQ
|
3,399
|
|
|
10.9
|
%
|
|
3,635
|
|
|
12.0
|
%
|
|
9,666
|
|
|
11.0
|
%
|
|
10,326
|
|
|
10.7
|
%
|
||||
EVOMELA
|
10,503
|
|
|
33.6
|
%
|
|
5,877
|
|
|
19.4
|
%
|
|
26,862
|
|
|
30.4
|
%
|
|
6,785
|
|
|
7.0
|
%
|
||||
Product sales, net
|
$
|
31,234
|
|
|
100.0
|
%
|
|
$
|
30,272
|
|
|
100.0
|
%
|
|
$
|
88,235
|
|
|
100.0
|
%
|
|
$
|
96,401
|
|
|
100.0
|
%
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||||||||||||
Sales and marketing contracted services (
Note 13
)
|
$
|
—
|
|
|
—
|
%
|
|
$
|
2,406
|
|
|
77.1
|
%
|
|
$
|
4,747
|
|
|
41.1
|
%
|
|
$
|
6,737
|
|
|
45.5
|
%
|
Out-license of ZEVALIN, FOLOTYN, BELEODAQ, MARQIBO: upfront cash receipt and subsequent royalties for the Canada territory (
Note 16(b)(xv)
)
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
3
|
|
|
—
|
%
|
|
6,000
|
|
|
40.5
|
%
|
||||
Out-license of ZEVALIN: recognition of upfront cash receipt and subsequent royalties for Asia and certain other territories, excluding China (
Note 11
)
|
—
|
|
|
—
|
%
|
|
474
|
|
|
15.2
|
%
|
|
1,245
|
|
|
10.8
|
%
|
|
1,308
|
|
|
8.8
|
%
|
||||
Out-license of FOLOTYN in all countries except the U.S., Canada, Europe, and Turkey: royalties (
Note 15
)
|
5,148
|
|
|
99.7
|
%
|
|
229
|
|
|
7.3
|
%
|
|
5,530
|
|
|
47.8
|
%
|
|
705
|
|
|
4.8
|
%
|
||||
Out-license of ZEVALIN: amortization of upfront cash receipt related to India territory (
Note 16(b)(iii)
) and other
|
13
|
|
|
0.3
|
%
|
|
12
|
|
|
0.4
|
%
|
|
37
|
|
|
0.3
|
%
|
|
57
|
|
|
0.4
|
%
|
||||
License fees and service revenues
|
$
|
5,161
|
|
|
100.0
|
%
|
|
$
|
3,121
|
|
|
100.0
|
%
|
|
$
|
11,562
|
|
|
100.0
|
%
|
|
$
|
14,807
|
|
|
100.0
|
%
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Cost of sales
|
$
|
68
|
|
|
$
|
30
|
|
|
$
|
150
|
|
|
$
|
84
|
|
Research and development
|
592
|
|
|
470
|
|
|
1,438
|
|
|
1,461
|
|
||||
Selling, general and administrative
|
2,750
|
|
|
2,650
|
|
|
8,066
|
|
|
8,209
|
|
||||
Total stock-based compensation
|
$
|
3,410
|
|
|
$
|
3,150
|
|
|
$
|
9,654
|
|
|
$
|
9,754
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net loss
|
$
|
(18,709
|
)
|
|
$
|
(17,455
|
)
|
|
$
|
(62,144
|
)
|
|
$
|
(51,070
|
)
|
Weighted average shares – basic and diluted
|
83,463,153
|
|
|
79,303,380
|
|
|
80,177,370
|
|
|
70,437,885
|
|
||||
Net loss per share – basic and diluted
|
$
|
(0.22
|
)
|
|
$
|
(0.22
|
)
|
|
$
|
(0.78
|
)
|
|
$
|
(0.73
|
)
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||
2018 Convertible Notes
|
10,454,799
|
|
|
11,401,284
|
|
|
10,454,799
|
|
|
11,401,284
|
|
Common stock options
|
3,144,969
|
|
|
1,603,028
|
|
|
1,504,155
|
|
|
1,498,034
|
|
Restricted stock awards
|
2,025,661
|
|
|
2,609,533
|
|
|
2,025,661
|
|
|
2,609,533
|
|
Common stock warrants
|
111,441
|
|
|
—
|
|
|
32,833
|
|
|
1,674
|
|
Preferred stock*
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total
|
15,736,870
|
|
|
15,613,845
|
|
|
14,017,448
|
|
|
15,510,525
|
|
|
September 30, 2017
Fair Value Measurements |
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Bank certificates of deposits
|
$
|
—
|
|
|
$
|
248
|
|
|
$
|
—
|
|
|
$
|
248
|
|
|
Money market funds
|
—
|
|
|
225,894
|
|
|
—
|
|
|
225,894
|
|
|
||||
Equity securities (
Note 10
)
|
17,751
|
|
|
—
|
|
|
—
|
|
|
17,751
|
|
|
||||
Mutual funds
|
—
|
|
|
58
|
|
|
—
|
|
|
58
|
|
|
||||
Deferred compensation investments (life insurance cash surrender value)
|
—
|
|
|
14,122
|
|
|
—
|
|
|
14,122
|
|
*
|
||||
|
$
|
17,751
|
|
|
$
|
240,322
|
|
|
$
|
—
|
|
|
$
|
258,073
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Deferred executive compensation liability (
Note 16(f)
)
|
$
|
—
|
|
|
$
|
10,250
|
|
|
$
|
—
|
|
|
$
|
10,250
|
|
*
|
FOLOTYN development liability (
Note 15
)
|
—
|
|
|
—
|
|
|
12,426
|
|
|
12,426
|
|
|
||||
Talon CVR - MARQIBO (
Note 9(a)
)
|
—
|
|
|
—
|
|
|
4,489
|
|
|
4,489
|
|
|
||||
Corixa Liability - ZEVALIN (
Note 16(b)(i)
)
|
—
|
|
|
—
|
|
|
62
|
|
|
62
|
|
|
||||
|
$
|
—
|
|
|
$
|
10,250
|
|
|
$
|
16,977
|
|
|
$
|
27,227
|
|
|
|
December 31, 2016
Fair Value Measurements |
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Bank certificates of deposits
|
$
|
—
|
|
|
$
|
5,991
|
|
|
$
|
—
|
|
|
$
|
5,991
|
|
|
Money market funds
|
—
|
|
|
128,563
|
|
|
—
|
|
|
128,563
|
|
|
||||
Equity securities (
Note 10
)
|
11,533
|
|
|
—
|
|
|
—
|
|
|
11,533
|
|
|
||||
Mutual funds
|
—
|
|
|
56
|
|
|
—
|
|
|
56
|
|
|
||||
Deferred compensation investments (life insurance cash surrender value)
|
—
|
|
|
11,863
|
|
|
—
|
|
|
11,863
|
|
*
|
||||
|
$
|
11,533
|
|
|
$
|
146,473
|
|
|
$
|
—
|
|
|
$
|
158,006
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Deferred executive compensation liability (
Note 16(f)
)
|
$
|
—
|
|
|
$
|
8,352
|
|
|
$
|
—
|
|
|
$
|
8,352
|
|
*
|
FOLOTYN development liability (
Note 15
)
|
—
|
|
|
—
|
|
|
13,130
|
|
|
13,130
|
|
|
||||
Talon CVR - MARQIBO (
Note 9(a)
)
|
—
|
|
|
—
|
|
|
1,253
|
|
|
1,253
|
|
|
||||
Corixa Liability - ZEVALIN (
Note 16(b)(i)
)
|
—
|
|
|
—
|
|
|
62
|
|
|
62
|
|
|
||||
|
$
|
—
|
|
|
$
|
8,352
|
|
|
$
|
14,445
|
|
|
$
|
22,797
|
|
|
|
Fair Value Measurements of
Unobservable Inputs (Level 3) |
||
Balance at December 31, 2015
|
$
|
21,352
|
|
Settlement of Ligand Contingent Consideration liability - EVOMELA (see
Note 9(b)
)
|
(6,000
|
)
|
|
FOLOTYN development liability (see
Note 15
)
|
(1,556
|
)
|
|
Ligand Contingent Consideration fair value adjustment prior to settlement - EVOMELA (see
Note 9(b)
)
|
773
|
|
|
Talon CVR fair value adjustment - MARQIBO (see
Note 9(a)
)
|
(124
|
)
|
|
Balance at December 31, 2016
|
14,445
|
|
|
FOLOTYN development liability (see
Note 15
)
|
(704
|
)
|
|
Talon CVR fair value adjustment - MARQIBO (see
Note 9(a)
)
|
3,236
|
|
|
Balance at September 30, 2017*
|
$
|
16,977
|
|
•
|
$5 million
upon the achievement of net sales of MARQIBO in excess of
$30 million
in any calendar year
|
•
|
$10 million
upon the achievement of net sales of MARQIBO in excess of
$60 million
in any calendar year
|
•
|
$25 million
upon the achievement of net sales of MARQIBO in excess of
$100 million
in any calendar year
|
•
|
$50 million
upon the achievement of net sales of MARQIBO in excess of
$200 million
in any calendar year
|
•
|
$100 million
upon the achievement of net sales of MARQIBO in excess of
$400 million
in any calendar year
|
•
|
$5 million
upon receipt of marketing authorization from the FDA regarding Menadione Topical Lotion
|
|
Fair Value
of Talon CVR |
||
December 31, 2016
|
$
|
1,253
|
|
Fair value adjustment for the nine months ended September 30, 2017
|
3,236
|
|
|
September 30, 2017
|
$
|
4,489
|
|
|
|
||
Cash consideration
|
$
|
3,000
|
|
Ligand Contingent Consideration
|
4,700
|
|
|
Total purchase consideration
|
$
|
7,700
|
|
EVOMELA distribution rights
|
$
|
7,700
|
|
|
Fair Value of
Ligand Contingent Consideration |
||
December 31, 2015
|
$
|
5,227
|
|
Fair value adjustment for the three months ended March 31, 2016
|
773
|
|
|
Payment to Ligand in April 2016 for FDA approval milestone achievement
|
(6,000
|
)
|
|
December 31, 2016
|
$
|
—
|
|
CASI common stock (5.4 million shares)
|
$
|
8,649
|
|
(a)
|
CASI secured promissory note due March 17, 2018, net of fair value discount ($1.5 million face value and 0.5% annual coupon)
|
1,310
|
|
(b)
|
|
Total consideration received, net of fair value discount
|
$
|
9,959
|
|
(c)
|
(a)
|
Value determined based on the September 17, 2014 closing price of
5.4 million
shares of CASI common stock on the NASDAQ Capital Market of
$1.60
per share. Our current intention is to hold these securities on a long-term basis. Accordingly, we have presented its value of
$17.8 million
as of
September 30, 2017
within "other assets" (rather than "marketable securities") on our accompanying Condensed Consolidated Balance Sheets. The change in fair value of these securities is reported within "other assets" and "accumulated deficit" (as a component of "other comprehensive income (loss)") within the accompanying Condensed Consolidated Balance Sheets (see
Note 3(g)
).
|
(b)
|
Value estimated using the terms of the
$1.5 million
promissory note, the application of a synthetic debt rating based on CASI’s publicly-available financial information, and the prevailing interest yields on similar public debt securities as of September 17, 2014. This full balance was prospectively reclassified beginning March 31, 2017 to "other receivables" (presented within current assets on the accompanying Condensed Consolidated Balance Sheets) from "other assets" (presented within non-current assets) due to this note's maturity date of March 17, 2018 (i.e., within 12 months of March 31, 2017).
|
(c)
|
Presented within “license fees and service revenue” in the Consolidated Statements of Operations for the year ended December 31, 2015 (see below).
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
Principal amount
|
$
|
110,037
|
|
|
$
|
110,037
|
|
(Less): Unamortized debt discount (amortized through December 2018)
|
(7,410
|
)
|
|
(11,646
|
)
|
||
(Less): Debt issuance costs
|
(857
|
)
|
|
(1,348
|
)
|
||
Carrying value
|
$
|
101,770
|
|
|
$
|
97,043
|
|
|
Nine Months Ended
September 30, |
||||||
|
2017
|
|
2016
|
||||
Contractual coupon interest expense
|
$
|
2,270
|
|
|
$
|
2,475
|
|
Amortization of debt issuance costs
|
491
|
|
|
521
|
|
||
Accretion of debt discount
|
4,236
|
|
|
4,246
|
|
||
Total
|
$
|
6,997
|
|
|
$
|
7,242
|
|
Effective interest rate
|
8.65
|
%
|
|
8.66
|
%
|
|
FOLOTYN
Development Liability, Current |
|
FOLOTYN
Development Liability, Long Term |
|
FOLOTYN
Development Liability, Total |
||||||
Balance at December 31, 2016
|
$
|
861
|
|
|
$
|
12,269
|
|
|
$
|
13,130
|
|
Transfer from long-term to current in 2017
|
(4
|
)
|
|
4
|
|
|
—
|
|
|||
(Less): Expenses incurred in 2017
|
(704
|
)
|
|
—
|
|
|
(704
|
)
|
|||
Balance at September 30, 2017
|
$
|
153
|
|
|
$
|
12,273
|
|
|
$
|
12,426
|
|
Description of Financing Transaction
|
|
No. of Common Shares Issued
|
|
Proceeds Received (Net of Broker Commissions and Fees )
|
|||
Common shares issued pursuant to the December 2015 ATM Agreement between April 1, 2016 and September 30, 2016 (no shares issued in remainder of 2016)
|
|
10,890,915
|
|
|
$
|
73,869
|
|
Common shares issued pursuant to the December 2015 ATM Agreement between July 1, 2017 and July 31, 2017
|
|
3,243,882
|
|
|
$
|
23,745
|
|
Common shares issued pursuant to the August 2017 ATM Agreement between August 1, 2017 and September 30, 2017
|
|
9,314,250
|
|
|
$
|
90,221
|
|
•
|
our ability to successfully develop, obtain regulatory approval for and market our products;
|
•
|
our ability to continue to grow sales revenue of our marketed products;
|
•
|
risks associated with doing business internationally;
|
•
|
our ability to generate and maintain sufficient cash resources to fund our business;
|
•
|
our ability to enter into strategic alliances with partners for manufacturing, development and commercialization;
|
•
|
efforts of our development partners;
|
•
|
the ability of our manufacturing partners to meet our timelines;
|
•
|
the ability to timely deliver product supplies to our customers;
|
•
|
our ability to identify new product candidates and to successfully integrate those product candidates into our operations;
|
•
|
the timing and/or results of pending or future clinical trials, and our reliance on contract research organizations;
|
•
|
reports of adverse events or safety concerns involving each of our products;
|
•
|
our ability to protect our intellectual property rights;
|
•
|
competition in the marketplace for our drugs;
|
•
|
delay in approval of our products or new indications for our products by the FDA;
|
•
|
the impact of legislative or regulatory reform on the pricing for pharmaceutical products;
|
•
|
actions by the FDA and other regulatory agencies, including international agencies;
|
•
|
securing positive reimbursement for our products;
|
•
|
the impact of any product liability, or other litigation to which we are, or may become a party;
|
•
|
the impact of legislative or regulatory reform of the healthcare industry and the impact of recently enacted healthcare reform legislation;
|
•
|
the availability and price of acceptable raw materials and components from third-party suppliers, and their ability to meet our demands;
|
•
|
our ability, and that of our suppliers, development partners, and manufacturing partners, to comply with laws, regulations and standards, and the application and interpretation of those laws, regulations and standards, that govern or affect the pharmaceutical and biotechnology industries, the non-compliance with which may delay or prevent the development, manufacturing, regulatory approvals and sale of our products;
|
•
|
defending against claims relating to improper handling, storage or disposal of hazardous chemical, radioactive or biological materials which could be time consuming and expensive;
|
•
|
our ability to maintain the services of our key executives and technical and sales and marketing personnel;
|
•
|
the difficulty in predicting the timing or outcome of product development efforts and regulatory approvals; and
|
•
|
demand and market acceptance for our approved products.
|
•
|
ROLONTIS (formerly referred to as SPI-2012 or LAPS-G-CSF) for chemotherapy-induced neutropenia.
|
•
|
QAPZOLA (formerly referred to as APAZIQUONE) for immediate intravesical instillation in post-transurethral resection of bladder tumors in patients with non-muscle invasive bladder cancer, or NMIBC.
|
•
|
POZIOTINIB, a novel pan-HER inhibitor used in the treatment of patients with a variety of solid tumors, including breast and lung cancer.
|
•
|
Company Overview
|
•
|
Cancer Background and Market Size
|
•
|
Product Portfolio
|
•
|
Manufacturing
|
•
|
Sales and Marketing
|
•
|
Customers
|
•
|
Competition
|
•
|
Research and Development
|
•
|
ROLONTIS, a novel long-acting G-CSF:
A pivotal Phase 3 study (ADVANCE Study, or SPI-GCF-301) was initiated in the first quarter of 2016 to evaluate ROLONTIS as a treatment for chemotherapy-induced neutropenia. Based on the
|
•
|
QAPZOLA, a potent tumor-activated drug being investigated for NMIBC:
In February 2017, we received a SPA from the FDA for our redesigned Phase 3 study of QAPZOLA. This Phase 3 study has been specifically designed to build on learnings from our previous studies, as well as recommendations from the FDA. The phase 3 study is currently enrolling 425 evaluable patients, using a dose of 8 mg of QAPZOLA, and will evaluate time-to-recurrence as the primary endpoint. We began enrolling patients in the third quarter of 2017.
|
•
|
POZIOTINIB, a novel pan-HER inhibitor:
|
◦
|
In March 2016, we initiated a Phase 2 breast cancer trial for POZIOTINIB. The Phase 2 study is an open-label study that will enroll approximately 75 patients with HER-2 positive metastatic breast cancer, who have failed at least two HER-2 directed therapies. The dose and schedule of oral POZIOTINIB is based on clinical experience from the studies in South Korea, and will include the use of prophylactic therapies to help minimize the known side-effects of pan-HER directed therapies.
|
◦
|
Tumors with exon 20 insertion mutations have generally not been responsive to several other EGFR inhibitors. However, POZIOTINIB, due to its unique structure and characteristics, is believed to inhibit cell growth of EGFR or HER2 exon 20 insertions. In collaboration with The University of Texas MD Anderson Cancer Center, an investigator-sponsored Phase 2 trial is currently enrolling in non-small cell lung cancer patients with EGFR or HER2 exon 20 insertion mutations. The study yielded interim results demonstrating evidence of significant antitumor activity in NSCLC patients with EGFR exon 20 insertion mutations, with interim data showing an Objective Response Rate of 73%.
|
◦
|
In addition to the these studies, other Phase 2 studies for POZIOTINIB in breast, lung, head-and-neck, and gastric cancer indications are being conducted in South Korea by Hanmi Pharmaceuticals and the Korean National OncoVenture.
|
•
|
Revenue recognition
|
•
|
Inventories – lower of cost or market
|
•
|
Fair value of acquired assets and assumed liabilities
|
•
|
Goodwill and intangible assets – impairment evaluations
|
•
|
Income taxes
|
•
|
Stock-based compensation
|
•
|
Litigation accruals (as required)
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||||||||||||
|
($ in thousands)
|
|
($ in thousands)
|
||||||||||||||||||||||||
Total revenues
|
$
|
36,395
|
|
|
100.0
|
%
|
|
$
|
33,393
|
|
|
100.0
|
%
|
|
$
|
99,797
|
|
|
100.0
|
%
|
|
$
|
111,208
|
|
|
100.0
|
%
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of sales (excludes amortization and impairment charges of intangible assets)
|
12,179
|
|
|
33.5
|
%
|
|
7,503
|
|
|
22.5
|
%
|
|
31,618
|
|
|
31.7
|
%
|
|
18,715
|
|
|
16.8
|
%
|
||||
Cost of service revenue
|
—
|
|
|
—
|
%
|
|
2,221
|
|
|
6.7
|
%
|
|
4,221
|
|
|
4.2
|
%
|
|
5,716
|
|
|
5.1
|
%
|
||||
Selling, general and administrative
|
18,880
|
|
|
51.9
|
%
|
|
19,465
|
|
|
58.3
|
%
|
|
54,595
|
|
|
54.7
|
%
|
|
69,047
|
|
|
62.1
|
%
|
||||
Research and development
|
13,878
|
|
|
38.1
|
%
|
|
13,293
|
|
|
39.8
|
%
|
|
43,670
|
|
|
43.8
|
%
|
|
43,037
|
|
|
38.7
|
%
|
||||
Amortization and impairment charges of intangible assets
|
6,928
|
|
|
19.0
|
%
|
|
6,907
|
|
|
20.7
|
%
|
|
20,718
|
|
|
20.8
|
%
|
|
19,052
|
|
|
17.1
|
%
|
||||
Total operating costs and expenses
|
51,865
|
|
|
142.5
|
%
|
|
49,389
|
|
|
147.9
|
%
|
|
154,822
|
|
|
155.1
|
%
|
|
155,567
|
|
|
139.9
|
%
|
||||
Loss from operations
|
(15,470
|
)
|
|
(42.5
|
)%
|
|
(15,996
|
)
|
|
(47.9
|
)%
|
|
(55,025
|
)
|
|
(55.1
|
)%
|
|
(44,359
|
)
|
|
(39.9
|
)%
|
||||
Interest expense, net
|
(2,014
|
)
|
|
(5.5
|
)%
|
|
(2,373
|
)
|
|
(7.1
|
)%
|
|
(6,196
|
)
|
|
(6.2
|
)%
|
|
(7,087
|
)
|
|
(6.4
|
)%
|
||||
Change in fair value of contingent consideration related to acquisitions
|
(2,942
|
)
|
|
(8.1
|
)%
|
|
78
|
|
|
0.2
|
%
|
|
(3,236
|
)
|
|
(3.2
|
)%
|
|
(1,249
|
)
|
|
(1.1
|
)%
|
||||
Other income, net
|
251
|
|
|
0.7
|
%
|
|
372
|
|
|
1.1
|
%
|
|
901
|
|
|
0.9
|
%
|
|
990
|
|
|
0.9
|
%
|
||||
Loss before income taxes
|
(20,175
|
)
|
|
(55.4
|
)%
|
|
(17,919
|
)
|
|
(53.7
|
)%
|
|
(63,556
|
)
|
|
(63.7
|
)%
|
|
(51,705
|
)
|
|
(46.5
|
)%
|
||||
Benefit for income taxes
|
1,466
|
|
|
4.0
|
%
|
|
464
|
|
|
1.4
|
%
|
|
1,412
|
|
|
1.4
|
%
|
|
635
|
|
|
0.6
|
%
|
||||
Net loss
|
$
|
(18,709
|
)
|
|
(51.4
|
)%
|
|
$
|
(17,455
|
)
|
|
(52.3
|
)%
|
|
$
|
(62,144
|
)
|
|
(62.3
|
)%
|
|
$
|
(51,070
|
)
|
|
(45.9
|
)%
|
|
Three months ended September 30,
|
|
|
|
|
|||||||||
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|||||||
|
($ in millions)
|
|
|
|
|
|||||||||
Product sales, net:
|
|
|
|
|
|
|
|
|||||||
FUSILEV
|
$
|
1.8
|
|
|
$
|
4.9
|
|
|
$
|
(3.1
|
)
|
|
(63.3
|
)%
|
FOLOTYN
|
11.6
|
|
|
11.3
|
|
|
0.3
|
|
|
2.7
|
%
|
|||
ZEVALIN
|
2.7
|
|
|
2.6
|
|
|
0.1
|
|
|
3.8
|
%
|
|||
MARQIBO
|
1.2
|
|
|
1.9
|
|
|
(0.7
|
)
|
|
(36.8
|
)%
|
|||
BELEODAQ
|
3.4
|
|
|
3.6
|
|
|
(0.2
|
)
|
|
(5.6
|
)%
|
|||
EVOMELA
|
10.5
|
|
|
5.9
|
|
|
4.6
|
|
|
78.0
|
%
|
|||
|
$
|
31.2
|
|
|
$
|
30.2
|
|
*
|
$
|
1.0
|
|
|
3.3
|
%
|
License fees and service revenue
|
5.2
|
|
|
3.1
|
|
|
2.1
|
|
|
67.7
|
%
|
|||
Total revenues
|
$
|
36.4
|
|
|
$
|
33.3
|
|
*
|
$
|
3.1
|
|
|
9.3
|
%
|
|
Three months ended September 30,
|
|
|
|
|
|||||||||
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|||||||
|
($ in millions)
|
|
|
|
|
|||||||||
Operating costs and expenses:
|
|
|
|
|
|
|
|
|||||||
Cost of sales (excludes amortization of intangible assets)
|
$
|
12.2
|
|
|
$
|
7.5
|
|
|
$
|
4.7
|
|
|
62.7
|
%
|
Cost of service revenue
|
—
|
|
|
2.2
|
|
|
(2.2
|
)
|
|
(100.0
|
)%
|
|||
Selling, general and administrative
|
18.9
|
|
|
19.5
|
|
|
(0.6
|
)
|
|
(3.1
|
)%
|
|||
Research and development
|
13.9
|
|
|
13.3
|
|
|
0.6
|
|
|
4.5
|
%
|
|||
Amortization and impairment charges of intangible assets
|
6.9
|
|
|
6.9
|
|
|
—
|
|
|
—
|
%
|
|||
Total operating costs and expenses
|
$
|
51.9
|
|
|
$
|
49.4
|
|
|
$
|
2.5
|
|
|
5.1
|
%
|
|
Three months ended September 30,
|
|
|
|
|
|||||||||
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|||||||
|
($ in millions)
|
|
|
|
|
|||||||||
Total other expenses
|
$
|
(4.7
|
)
|
|
$
|
(1.9
|
)
|
|
$
|
(2.8
|
)
|
|
(147.4
|
)%
|
|
Three months ended September 30,
|
|
|
|
|
|||||||||
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|||||||
|
($ in millions)
|
|
|
|
|
|||||||||
Benefit for income taxes
|
$
|
1.5
|
|
|
$
|
0.5
|
|
|
$
|
1.0
|
|
|
200.0
|
%
|
|
Nine months ended September 30,
|
|
|
|
|
|||||||||
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|||||||
|
($ in millions)
|
|
|
|
|
|||||||||
Product sales, net:
|
|
|
|
|
|
|
|
|||||||
FUSILEV
|
$
|
6.4
|
|
|
$
|
30.6
|
|
|
$
|
(24.2
|
)
|
|
(79.1
|
)%
|
FOLOTYN
|
32.0
|
|
|
35.6
|
|
|
$
|
(3.6
|
)
|
|
(10.1
|
)%
|
||
ZEVALIN
|
7.9
|
|
|
8.2
|
|
|
$
|
(0.3
|
)
|
|
(3.7
|
)%
|
||
MARQIBO
|
5.4
|
|
|
4.9
|
|
|
$
|
0.5
|
|
|
10.2
|
%
|
||
BELEODAQ
|
9.7
|
|
|
10.3
|
|
|
$
|
(0.6
|
)
|
|
(5.8
|
)%
|
||
EVOMELA
|
26.9
|
|
|
6.8
|
|
|
$
|
20.1
|
|
|
>100.0
|
%
|
||
|
$
|
88.3
|
|
*
|
$
|
96.4
|
|
|
$
|
(8.1
|
)
|
|
(8.4
|
)%
|
License fees and service revenue
|
11.6
|
|
|
14.8
|
|
|
(3.2
|
)
|
|
(21.6
|
)%
|
|||
Total revenues
|
$
|
99.9
|
|
*
|
$
|
111.2
|
|
|
$
|
(11.3
|
)
|
|
(10.2
|
)%
|
|
Nine months ended September 30,
|
|
|
|
|
|||||||||
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|||||||
|
($ in millions)
|
|
|
|
|
|||||||||
Operating costs and expenses:
|
|
|
|
|
|
|
|
|||||||
Cost of sales (excludes amortization and impairment charges of intangible assets)
|
$
|
31.6
|
|
|
$
|
18.7
|
|
|
$
|
12.9
|
|
|
69.0
|
%
|
Cost of service revenue
|
4.2
|
|
|
5.7
|
|
|
(1.5
|
)
|
|
(26.3
|
)%
|
|||
Selling, general and administrative
|
54.6
|
|
|
69.0
|
|
|
(14.4
|
)
|
|
(20.9
|
)%
|
|||
Research and development
|
43.7
|
|
|
43.0
|
|
|
0.7
|
|
|
1.6
|
%
|
|||
Amortization and impairment charges of intangible assets
|
20.7
|
|
|
19.1
|
|
|
1.6
|
|
|
8.4
|
%
|
|||
Total operating costs and expenses
|
$
|
154.8
|
|
|
$
|
155.5
|
|
*
|
$
|
(0.7
|
)
|
|
(0.5
|
)%
|
|
Nine months ended September 30,
|
|
|
|
|
|||||||||
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|||||||
|
($ in millions)
|
|
|
|
|
|||||||||
Total other expenses
|
$
|
(8.5
|
)
|
|
$
|
(7.3
|
)
|
|
$
|
(1.2
|
)
|
|
(16.4
|
)%
|
|
Nine months ended September 30,
|
|
|
|
|
|||||||||
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|||||||
|
($ in millions)
|
|
|
|
|
|||||||||
Benefit for income taxes
|
$
|
1.4
|
|
|
$
|
0.6
|
|
|
$
|
0.8
|
|
|
(133.3
|
)%
|
|
September 30, 2017
|
|
December 31, 2016
|
|
September 30, 2016
|
||||||
|
(in thousands, except financial metrics data)
|
||||||||||
Cash, cash equivalents and marketable securities
|
$
|
247,716
|
|
|
$
|
158,469
|
|
|
$
|
171,852
|
|
Accounts receivable, net
|
$
|
37,767
|
|
|
$
|
39,782
|
|
|
$
|
42,466
|
|
Total current assets
|
$
|
303,299
|
|
|
$
|
216,650
|
|
|
$
|
231,414
|
|
Total current liabilities
|
$
|
60,207
|
|
|
$
|
65,513
|
|
|
$
|
62,332
|
|
Working capital surplus (a)
|
$
|
243,092
|
|
|
$
|
151,137
|
|
|
$
|
169,082
|
|
Current ratio (b)
|
5.0
|
|
|
3.3
|
|
|
3.7
|
|
(a)
|
Total current assets at period end
minus
total current liabilities at period end.
|
(b)
|
Total current assets at period end
divided by
total current liabilities at period end.
|
•
|
the need for additional capital to fund future development programs;
|
•
|
the need for additional capital to fund strategic acquisitions;
|
•
|
the need for additional capital to fund licensing arrangements;
|
•
|
our requirement for additional information technology infrastructure and systems; and
|
•
|
adverse outcomes from potential litigation and the cost to defend such litigation.
|
|
|
|
Incorporated by Reference
|
||||
Exhibit
Number
|
Description
|
Form
|
File No.
|
Exhibit
|
Filing Date
|
Filed Herewith
|
|
1.1
|
At Market Issuance Sales Agreement, dated August 4, 2017, between Spectrum Pharmaceuticals, Inc., H.C. Wainwright & Co. LLC, FBR Capital Markets & Co., and MLV & Co. LLC.
|
8-K
|
001-35006
|
1.1
|
8/4/17
|
|
|
|
|
|
|
X
|
|||
|
|
|
|
X
|
|||
|
|
|
|
X
|
|||
|
|
|
|
X
|
|||
101.INS
|
XBRL Instance Document.
|
|
|
|
|
X
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document.
|
|
|
|
|
X
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
|
X
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
|
|
X
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
|
|
X
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
|
|
|
X
|
|
|
SPECTRUM PHARMACEUTICALS, INC.
|
|
|
|
|
|
Date:
|
November 3, 2017
|
By:
|
/s/ Kurt A. Gustafson
|
|
|
|
Kurt A. Gustafson
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
(Authorized Signatory and Principal Financial and Accounting Officer)
|
1 Year Spectrum Pharmaceuticals Chart |
1 Month Spectrum Pharmaceuticals Chart |
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