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Cover Page - USD ($)	12 Months Ended
Cover Page - USD ($)	Dec. 31, 2019	Feb. 21, 2020	Jun. 28, 2019
Cover page.
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 2019
Document Transition Report	false
Entity File Number	001-35006
Entity Registrant Name	SPECTRUM PHARMACEUTICALS, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	93-0979187
Entity Address, Address Line One	11500 South Eastern Avenue
Entity Address, Address Line Two	Suite 240
Entity Address, City or Town	Henderson
Entity Address, State or Province	NV
Entity Address, Postal Zip Code	89052
City Area Code	702
Local Phone Number	835-6300
Title of 12(b) Security	Common Stock, $0.001 par value
Trading Symbol	SPPI
Security Exchange Name	NASDAQ
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Public Float			$ 600,699,845
Entity Common Stock, Shares Outstanding		113,689,862
Documents Incorporated by Reference	Portions of the registrant’s Proxy Statement for its 2020 Annual Meeting of Stockholders, to be filed on or before April 29, 2020, are incorporated by reference into Part III, Items 10-14 of this Annual Report on Form 10-K.
Amendment Flag	false
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	FY
Entity Central Index Key	0000831547
Current Fiscal Year End Date	--12-31

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 64,418	$ 157,480
Marketable securities	159,455	46,508
Accounts receivable, net of allowance for doubtful accounts of $43 and $67, respectively	441	29,873
Other receivables	9,558	3,698
Prepaid expenses and other assets	10,148	7,574
Discontinued operations, current assets (Note 12)	0	5,555
Total current assets	244,020	250,688
Property and equipment, net of accumulated depreciation	11,607	385
Other assets	4,000	7,188
Facility and equipment under lease	3,806
Discontinued operations, non-current assets	0	132,625
Total assets	263,433	390,886
Current liabilities:
Accounts payable and other accrued liabilities	54,284	81,312
Accrued payroll and benefits	7,686	9,853
Contract liabilities	0	4,850
Discontinued operations, current liabilities (Note 12)	0	2,311
Total current liabilities	61,970	98,326
Deferred tax liabilities, net	0	1,469
Other long-term liabilities	11,070	5,650
Discontinued operations, non-current liabilities	0	14,031
Total liabilities	73,040	119,476
Commitments and contingencies (Note 10)
Stockholders’ equity:
Preferred stock, $0.001 par value; 5,000,000 shares authorized; no shares issued and outstanding	0	0
Common stock, $0.001 par value; 300,000,000 shares authorized; 113,299,612 and 110,525,141 issued and outstanding at December 31, 2019 and 2018, respectively	113	110
Additional paid-in capital	918,205	886,740
Accumulated other comprehensive loss	(3,498)	(3,702)
Accumulated deficit	(724,427)	(611,738)
Total stockholders’ equity	190,393	271,410
Total liabilities and stockholders’ equity	$ 263,433	$ 390,886

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Allowance for doubtful accounts receivable	$ 43	$ 67
Preferred stock, par value ($ per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (shares)	5,000,000	5,000,000
Preferred stock, shares issued (shares)	0	0
Preferred stock, shares outstanding (shares)	0	0
Common stock, par value ($ per share)	$ 0.001	$ 0.001
Common stock, shares authorized (shares)	300,000,000	300,000,000
Common stock, shares issued (shares)	113,299,612	110,525,141
Common stock, shares outstanding (shares)	113,299,612	110,525,141

Consolidated Statements of Operations - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Revenues:
Total revenues	$ 0	$ 0	$ 0
Operating costs and expenses:
Selling, general and administrative	61,373	62,690	64,759
Research and development	79,325	75,157	51,525
Total operating costs and expenses	140,698	137,847	116,284
Loss from continuing operations before other (expense) income and income taxes	(140,698)	(137,847)	(116,284)
Other (expense) income :
Interest income (expense), net	4,996	(340)	(6,798)
Other (expense) income, net	(8,892)	9,580	389
Total other (expense) income	(3,896)	9,240	(6,409)
Loss from continuing operations before income taxes	(144,594)	(128,607)	(122,693)
Benefit for income taxes from continuing operations	9,208	1,901	21,941
Loss from continuing operations	(135,386)	(126,706)	(100,752)
Income from discontinued operations, net of income taxes (Note 12)	22,697	5,965	8,563
Net loss	$ (112,689)	$ (120,741)	$ (92,189)
Basic and diluted (loss) income per share:
Loss per common share from continuing operations (in dollar per share)	$ (1.22)	$ (1.23)	$ (1.18)
Income per common share from discontinued operations (in dollar per share)	0.21	0.06	0.10
Net loss per common share (in dollars per share)	$ (1.02)	$ (1.17)	$ (1.08)
Weighted average shares outstanding:
Basic (shares)	110,585,768	103,305,911	85,115,592
Diluted (shares)	110,585,768	103,305,911	85,115,592

Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Statement of Comprehensive Income [Abstract]
Net loss	$ (112,689)	$ (120,741)	$ (92,189)
Other comprehensive income (loss):
Unrealized gain on available-for-sale securities, net of income tax expense of $0.2 million, $0, and $9.7 million for the years ended December 31, 2019, 2018, and 2017, respectively (see Note 3(a))	622	0	16,039
Foreign currency translation adjustments	(418)	(2,490)	1,539
Other comprehensive income (loss)	204	(2,490)	17,578
Total comprehensive loss	$ (112,485)	$ (123,231)	$ (74,611)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

Consolidated Statements of Comprehensive Loss (Parenthetical) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Statement of Comprehensive Income [Abstract]
Unrealized gain (loss) on available-for-sale securities, tax	$ 0.2	$ 0.0	$ 9.7

Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive (Loss) Income	Accumulated Deficit	Total Stockholders' Equity
Beginning Balance, (shares) at Dec. 31, 2016		80,466,735
Beginning Balance at Dec. 31, 2016		$ 80	$ 648,384	$ (1,579)	$ (421,040)	$ 225,845
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	$ (92,189)				(92,189)	(92,189)
Other comprehensive income (loss), net	$ 17,578			17,578		17,578
Recognition of stock-based compensation expense			14,227			14,227
Issuance of common stock to 401(k) plan for employees, (shares)		102,874
Issuance of common stock to 401(k) plan for employees			912			912
Issuance of common stock for employee stock purchase plan (shares)		203,229
Issuance of common stock for employee stock purchase plan			1,010			1,010
Issuance of common stock upon exercise of stock options, net (shares)	937,482	864,897
Issuance of common stock upon exercise of stock options, net		$ 1	5,477			5,478
Restricted stock award grants, net of forfeitures (shares)		548,394
Restricted stock award grants, net of forfeitures						0
Repurchase/retirement of restricted stock awards to satisfy employee tax withholding (shares)		(373,822)
Repurchase/retirement of restricted stock awards to satisfy employee tax withholding			(4,331)			(4,331)
Issuance of common shares under an at-the-market sales agreement (Note 5) (shares)		13,558,132
Issuance of common shares under an at-the-market sales agreement (Note 5)		$ 14	128,258			128,272
Common stock redeemed on 2018 Convertible Notes (Note 9) (shares)		5,372,296
Common stock redeemed on 2018 Convertible Notes (Note 9)		$ 5	43,410			43,415
Ending Balance, (shares) at Dec. 31, 2017		100,742,735
Ending Balance at Dec. 31, 2017		$ 100	837,347	15,999	(513,229)	340,217
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	$ (120,741)				(120,741)	(120,741)
Other comprehensive income (loss), net	$ (2,490)			(2,490)		(2,490)
Recognition of stock-based compensation expense			16,309			16,309
Issuance of common stock to 401(k) plan for employees, (shares)		70,379
Issuance of common stock to 401(k) plan for employees			1,175			1,175
Issuance of common stock for employee stock purchase plan (shares)		97,804
Issuance of common stock for employee stock purchase plan			1,122			1,122
Issuance of common stock upon exercise of stock options, net (shares)	7,858,141	7,858,141
Issuance of common stock upon exercise of stock options, net		$ 8	52,977			52,985
Restricted stock award grants, net of forfeitures (shares)		874,532
Restricted stock award grants, net of forfeitures		$ 1				1
Repurchase/retirement of restricted stock awards to satisfy employee tax withholding (shares)		(3,463,873)
Repurchase/retirement of restricted stock awards to satisfy employee tax withholding		$ (3)	(62,541)			(62,544)
Issuance of common stock upon vesting of restricted stock units (shares)		200,652
Issuance of common stock upon vesting of restricted stock units						0
Issuance of common stock upon exercise of warrants (shares)		292,575
Issuance of common stock upon exercise of warrants						0
Common stock redeemed on 2018 Convertible Notes (Note 9) (shares)		3,852,196
Common stock redeemed on 2018 Convertible Notes (Note 9)		$ 4	40,351			40,355
Ending Balance, (shares) at Dec. 31, 2018	110,525,141	110,525,141
Ending Balance at Dec. 31, 2018	$ 271,410	$ 110	886,740	(3,702)	(611,738)	271,410
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cumulative-effect adjustment of adopting ASUs \| Accounting Standards Update 2016-01				17,200	17,200
Net loss	(112,689)				(112,689)	(112,689)
Other comprehensive income (loss), net	$ 204			204		204
Recognition of stock-based compensation expense			20,416			20,416
Issuance of common stock to 401(k) plan for employees, (shares)		225,780
Issuance of common stock to 401(k) plan for employees			1,422			1,422
Issuance of common stock for employee stock purchase plan (shares)		131,966
Issuance of common stock for employee stock purchase plan			663			663
Issuance of common stock upon exercise of stock options, net (shares)	1,121,403	1,121,403
Issuance of common stock upon exercise of stock options, net		$ 2	7,147			7,149
Restricted stock award grants, net of forfeitures (shares)		830,033
Restricted stock award grants, net of forfeitures		$ 1				1
Issuance of common stock upon vesting of restricted stock units (shares)		243,760
Issuance of common stock upon vesting of restricted stock units						0
Issuance of common shares under an at-the-market sales agreement (Note 5) (shares)		221,529
Issuance of common shares under an at-the-market sales agreement (Note 5)			1,817			1,817
Ending Balance, (shares) at Dec. 31, 2019	113,299,612	113,299,612
Ending Balance at Dec. 31, 2019	$ 190,393	$ 113	$ 918,205	$ (3,498)	$ (724,427)	$ 190,393

Consolidated Statements of Cash Flows $ in Thousands	12 Months Ended
Consolidated Statements of Cash Flows $ in Thousands	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)
Cash Flows From Operating Activities:
Loss from continuing operations	$ (135,386)	$ (126,706)	$ (100,752)
Income from discontinued operations, net of income taxes (Note 12)	22,697	5,965	8,563
Net loss	(112,689)	(120,741)	(92,189)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	1,620	28,409	27,972
Stock-based compensation (Note 4)	21,838	17,483	15,139
Recognized gain on Commercial Product Portfolio Transaction (Note 12)	(34,568)	0	0
Amortization of operating leases (Note 10(a))	1,715	0	0
Amortization of discount on investments in debt securities, recorded to interest income (Note 3(a))	(431)	0	0
Income tax benefit recognition on unrealized gain for available-for-sale securities	(205)	0	(9,651)
Realized gain on sale of CASI stock (Note 8)	(2,674)	0	0
Unrealized loss (gain) on CASI stock holdings (Note 3(a) and Note 8)	12,665	(10,458)	0
Unrealized (gain) loss from transactions denominated in foreign currency	(6)	10	(23)
Change in deferred taxes	(1,469)	31	(5,237)
Change in fair value of contingent consideration	1,478	(1,927)	4,957
Accretion of debt discount on 2018 Convertible Notes, recorded to interest expense (Note 9)	0	1,931	4,890
Amortization of deferred financing costs on 2018 Convertible Notes, recorded to interest expense (Note 9)	0	220	567
Bad debt expense (recovery)	(12)	12	(17)
Loss on 2018 Convertible Note purchase (Note 9)	0	0	845
Change in cash surrender value of corporate-owned life insurance policy	0	(5)	(418)
Changes in operating assets and liabilities:
Accounts receivable, net	29,420	2,844	7,694
Other receivables	(5,871)	(1,571)	3,663
Inventories	(2,037)	3,390	4,318
Prepaid expenses and other assets	(2,473)	(3,642)	(6,137)
Other assets	(1,188)	5,010	1,573
Accounts payable and other accrued liabilities	(35,769)	12,112	6,459
Accrued payroll and benefits	(2,168)	592	280
FOLOTYN development liability	(4)	(389)	(744)
Contract liabilities (Note 3(i))	(4,850)	4,850	0
Other long-term liabilities	3,047	(564)	(3,389)
Deferred revenue	0	0	593
Net cash used in operating activities	(134,631)	(62,403)	(38,855)
Cash Flows From Investing Activities:
Proceeds from Commercial Product Portfolio Transaction (Note 1(b))	158,571	0	0
Proceeds from maturities of marketable securities	77,475	0	0
Proceeds from sale of CASI stock (Note 8)	5,074	0	0
Purchase of investment securities available-for-sale (Note 3(a))	(200,160)	0	0
Purchases of property and equipment (Note 3(b))	(9,018)	(107)	(465)
Proceeds from sale of property and equipment	50	0	0
Proceeds from redemption of corporate-owned life insurance policy	0	4,130	0
Cash paid for KHAPZORY distribution rights	0	(2,650)	0
Payment for corporate-owned life insurance premiums	0	0	(601)
Purchase of equity securities (Note 8)	0	0	(15)
Net cash provided by (used in) investing activities	31,992	1,373	(1,081)
Cash Flows From Financing Activities:
Proceeds from employees for exercises of stock options	7,147	13,475	5,477
Proceeds from sale of stock under our employee stock purchase plan	663	1,122	1,010
Proceeds from sale of common stock under an at-the-market sales agreement (Note 5)	1,817	0	128,272
Proceeds from employees, for our remittance to tax authorities, upon vesting of restricted stock and upon exercises of stock options	0	4,645	0
Payments to tax authorities upon employees' surrender of restricted stock upon vesting and upon exercises of stock options	0	(27,679)	(4,331)
Payment of principal upon the maturity of the 2018 Convertible Notes (Note 9)	0	(20)	0
Purchase of 2018 Convertible Notes (Note 9)	0	0	(27,500)
Purchase of warrants related to the conversion hedge of 2018 Convertible Notes (Note 9)	0	0	(27,189)
Proceeds from sale of call options related to the conversion hedge of 2018 Convertible Notes (Note 9)	0	0	32,982
Net cash provided by (used in) financing activities	9,627	(8,457)	108,721
Effect of exchange rates on cash and equivalents	(50)	(356)	316
Net (decrease) increase in cash and cash equivalents	(93,062)	(69,843)	69,101
Cash and cash equivalents — beginning of year	157,480	227,323	158,222
Cash and cash equivalents — end of year		157,480	227,323
Supplemental Disclosure of Cash Flow Information:
Cash paid for facility and equipment under operating leases	1,835	0	0
Cash paid for income taxes	38	45	17
Cash paid for interest	0	1,031	2,692
Noncash investing activities:
Additions of property and equipment that remain in accounts payable and other accrued liabilities (Note 3(b))	2,760	0	$ 0
Cash and Cash Equivalents, at Carrying Value	$ 64,418	$ 157,480

Description of Business, Basis of Presentation, and Operating Segment

12 Months Ended

Dec. 31, 2019

Accounting Policies [Abstract]

Description of Business, Basis of Presentation, and Operating Segment

DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION, AND OPERATING SEGMENT

(a) Description of Business

Spectrum Pharmaceuticals, Inc. (“Spectrum”, the “Company”, “we”, “our”, or “us”) is a biopharma company, with a primary strategy comprised of acquiring, developing, and commercializing novel and targeted oncology therapies. Our in-house development organization includes clinical development, regulatory, quality and data management. We plan to build out our commercial and marketing capabilities in the second half of 2020 to prepare for the launch of ROLONTIS.

We have three drugs in development:


•	ROLONTIS, a novel long-acting granulocyte colony-stimulating (“G-CSF”) for chemotherapy-induced neutropenia which has been filed with the FDA and has a Prescription Drug User Fee Act date of October 24, 2020;


•	Poziotinib, a novel irreversible tyrosine kinase inhibitor under investigation for non-small cell lung cancer tumors with various mutations; and


•	Anti-CD20-IFNá, an antibody-interferon fusion molecule directed against CD20 that is in Phase 1 development for treating relapsed or refractory non-Hodgkin’s lymphoma (“NHL”) patients (including diffuse large B-cell lymphoma).

Our business strategy is the development of our late-stage assets through commercialization and the sourcing of additional assets that are synergistic with our existing portfolio (through purchase acquisitions, in-licensing transactions, or co-development and marketing arrangements).

(b) Basis of Presentation

Principles of Consolidation

The accompanying Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and with the rules and regulations of the Securities and Exchange Commission (“SEC”). These financial statements include the financial position, results of operations, and cash flows of Spectrum and its subsidiaries, all of which are wholly-owned. All inter-company accounts and transactions among these legal entities have been eliminated in consolidation. In May 2019, we dissolved Spectrum Pharma Canada Inc., previously consolidated as a “variable interest entity” (as defined under applicable GAAP).

Discontinued Operations - Sale of our Commercial Product Portfolio

On March 1, 2019, we completed the sale of our seven then-commercialized drugs, including FUSILEV, KHAPZORY, FOLOTYN, ZEVALIN, MARQIBO, BELEODAQ, and EVOMELA (the “Commercial Product Portfolio”) to Acrotech Biopharma LLC (“Acrotech”) (the “Commercial Product Portfolio Transaction”). Upon closing we received $158.8 million in an upfront cash payment (of which $4 million was held in escrow until November 5, 2019). We are also entitled to receive up to an aggregate of $140 million upon Acrotech’s future achievement of certain regulatory milestones (totaling $40 million) and sales-based milestones (totaling $100 million) relating to the Commercial Product Portfolio.

These Consolidated Financial Statements are recast for all periods presented to reflect the sale of the assets and liabilities associated with our Commercial Product Portfolio, as well as the corresponding revenue-deriving activities and allocable expenses of this commercial business within “discontinued operations” - see Note 12. We have presented our face financial statements in general conformity with our historical format, even where presented values are $-0- within continuing operations due to required discontinued operations classification for all periods presented. We believe this format provides increased clarity and comparability with our previously filed financial statements, as well as our expectation that these financial statement captions and associated footnote disclosures will remain relevant to our future business activities.

We operate in one reportable operating segment that is focused exclusively on developing (and eventually marketing) oncology and hematology drug products. For the years ended December 31, 2019, 2018, and 2017, all of our revenue and operating costs and expenses were solely attributable to these activities (and as applicable, currently and retrospectively classified as “discontinued” within the accompanying Consolidated Balance Sheets and Consolidated Statements of Operations - see Note 12). All of our assets are held in the U.S, except for cash held in certain foreign bank accounts.

Summary of Significant Accounting Policies and Use of Estimates

12 Months Ended

Dec. 31, 2019

Accounting Policies [Abstract]

Summary of Significant Accounting Policies and Use of Estimates

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND USE OF ESTIMATES

The preparation of financial statements in conformity with GAAP requires our management to make informed estimates and assumptions that affect our reported amounts of assets, liabilities, revenues, and expenses. These amounts may materially differ from the amounts ultimately realized and reported due to the inherent uncertainty of any estimate or assumption. On an on-going basis, our management evaluates (as applicable) its most critical estimates and assumptions, including those related to: (i) gross-to-net revenue adjustments; (ii) the timing of revenue recognition; (iii) the collectability of customer accounts; (iv) whether the cost of our inventories can be recovered; (v) the realization of our tax assets and estimates of our tax liabilities; (vi) the fair value of our investments; (vii) the valuation of our stock options and the periodic expense recognition of stock-based compensation; and (viii) the potential outcome of our ongoing or threatened litigation.

Our accounting policies and estimates that most significantly impact the presented amounts within these Consolidated Financial Statements are further described below:

(i) Revenue Recognition

On March 1, 2019, we completed the Commercial Product Portfolio Transaction -- see Note 1(b). In accordance with applicable GAAP (ASC 205-20, Presentation of Financial Statements), the revenue-deriving activities of our sold commercial operation are separately classified as “discontinued” for all periods presented within the accompanying Consolidated Statements of Operations -- see Note 12.

Impact of the Adoption of the New Revenue Recognition Standard: ASU No. 2014-09, Revenue from Contracts with Customers (“ASC 606”), became effective for us on January 1, 2018. We applied the “modified retrospective” transition method for open contracts for the implementation of Topic 606; this resulted in the recognition of an aggregate $4.7 million, net of tax, decrease to our January 1, 2018 “accumulated deficit” on our accompanying Consolidated Balance Sheets for the cumulative impact of applying this new standard. We made no adjustments to our previously-reported total revenues, as those periods continue to be presented in accordance with our historical accounting practices under Topic 605, Revenue Recognition (“Topic 605”).

Required Elements of Our Revenue Recognition: Revenue from our (a) product sales, (b) out-license arrangements, and (c) service arrangements is recognized under ASC 606 in a manner that reasonably reflects the delivery of our goods and/or services to customers in return for expected consideration and includes the following elements:


(1)	we ensure that we have an executed contract(s) with our customer that we believe is legally enforceable;


(2)	we identify the “performance obligations” in the respective contract;


(3)	we determine the “transaction price” for each performance obligation in the respective contract;


(4)	we allocate the transaction price to each performance obligation; and


(5)	we recognize revenue only when we satisfy each performance obligation.

These five elements, as applied to each of our revenue categories, are summarized below:

(a) Product Sales: We sell our products to pharmaceutical wholesalers/distributors or to our product licensees (i.e., our customers). Our wholesalers/distributors in turn sell our products directly to clinics, hospitals, and private oncology-based practices. Revenue from our product sales is recognized as physical delivery of product occurs (when our customer obtains control of the product), in return for agreed-upon consideration.

Our gross product sales (i.e., delivered units multiplied by the contractual price per unit) are reduced by our corresponding gross-to-net (“GTN”) estimates using the “expected value” method, resulting in our reported “product sales, net” that reflects the amount we ultimately expect to realize in net cash proceeds, taking into account our current period gross sales and related cash receipts, and the subsequent cash disbursements on these sales that we estimate for the various GTN categories discussed below. These estimates are based upon information received from external sources (such as written or oral information obtained from our customers with respect to their period-end inventory levels and sales to end-users during the period), in combination with management’s informed judgments. Due to the inherent uncertainty of these estimates, the actual amount incurred (of some, or all) of product returns, government chargebacks, prompt pay discounts, commercial rebates,

Medicaid rebates, and distribution, data, and GPO administrative fees may be materially above or below the amount estimated, then requiring prospective adjustments to our reported net product sales.

These GTN estimate categories (that comprise our GTN liabilities within Note 3(h)) are each discussed below:

Product Returns Allowances: Our customers are contractually permitted to return certain purchased products within the contractual allowable time before/after its applicable expiration date. Returns outside of this aforementioned criteria are not customarily allowed. We estimate expected product returns using our historical return rates. Returned products are typically destroyed since substantially all returns are due to its imminent expiry and cannot be resold.

Government Chargebacks: Our products are subject to pricing limits under certain federal government programs (e.g., Medicare and 340B Drug Pricing Program). Qualifying entities (i.e., end-users) purchase products from our customers at their qualifying discounted price. The chargeback amount we incur represents the difference between our contractual sales price to our customer, and the end-user’s applicable discounted purchase price under the government program. There may be significant lag time between our reported net product sales and our receipt of the corresponding government chargeback claims from our customers.

Prompt Pay Discounts: Discounts for prompt payment are estimated at the time of sale, based on our eligible customers’ prompt payment history and the contractual discount percentage.

Commercial Rebates: Commercial rebates are based on (i) our estimates of end-user purchases through a group purchasing organization (“GPO”), (ii) the corresponding contractual rebate percentage tier we expect each GPO to achieve, and (iii) our estimates of the impact of any prospective rebate program changes made by us.

Medicaid Rebates: Our products are subject to state government-managed Medicaid programs, whereby rebates are issued to participating state governments. These rebates arise when a patient treated with our product is covered under Medicaid, resulting in a discounted price for our product under the applicable Medicaid program. Our Medicaid rebate accrual calculations require us to project the magnitude of our sales, by state, that will be subject to these rebates. There is a significant time lag in our receiving rebate notices from each state (generally several months or longer after our sale is recognized). Our estimates are based on our historical claim levels by state, as supplemented by management’s judgment.

Distribution, Data, and GPO Administrative Fees: Distribution, data, and GPO administrative fees are paid to authorized wholesalers/distributors of our products for various commercial services including: contract administration, inventory management, delivery of end-user sales data, and product returns processing. These fees are based on a contractually-determined percentage of our applicable sales.

(b) License Fees: Our out-license arrangements allow licensees to market our product(s) in certain territories for a specific term (representing the out-license of “functional intellectual property”). These arrangements may include one or more of the following forms of consideration: (i) upfront license fees, (ii) sales royalties, (iii) sales milestone-achievement fees, and (iv) regulatory milestone-achievement fees. We recognize revenue for each based on the contractual terms that establish our right to collect payment once the performance obligation is achieved, as follows:

(1) Upfront License Fees: We determine whether upfront license fees are earned at the time of contract execution (i.e., when rights transfer to the customer) or over the actual (or implied) contractual period of the out-license. As part of this determination, we evaluate whether we have any other requirements to provide substantive services that are inseparable from the performance obligation of the license transfer. Our customers’ “distinct” rights to licensed “functional intellectual property” at the time of contract execution results in concurrent revenue recognition of all upfront license fees (assuming that there are no other performance obligations at contract execution that are inseparable from this license transfer).

(2) Royalties: Under the “sales-or-usage-based royalty exception” we recognize revenue in the same period that our

licensees complete product sales in their territory for which we are contractually entitled to a percentage-based royalty receipt.

(3) Sales Milestones: Under the “sales-or-usage-based royalty exception” we recognize revenue in full within the period that our licensees achieve annual or aggregate product sales levels in their territories for which we are contractually entitled to a specified lump-sum receipt.

(4) 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, we recognize revenue in full (for the contractual amount due from our licensee) in the period that the approval occurs (i.e., when the “performance obligation” is satisfied by our customer) under the “most likely amount” method. This revenue recognition remains “constrained” (i.e., not recognized) until regulatory approval occurs, given its inherent uncertainty and the requirement of a significant revenue reversal not being probable if achievement does not occur. At each reporting period, we re-evaluate the probability of milestone achievement and the associated revenue constraint; any resulting adjustments would be recorded on a cumulative catch-up basis, thus reflected in our financial statements in the period of adjustment.

•

When we are responsible for the achievement of a regulatory milestone, the “relative selling price method” is applied for purposes of allocating the transaction price to our performance obligations. In such case, we consider (i) the extent of our effort to achieve the milestone and/or the enhancement of the value of the delivered item(s) as a result of milestone achievement and (ii) if the milestone payment is reasonable relative to all of the deliverables and payment terms (including other potential milestone consideration) within the arrangement. We have historically assessed the contractual value of these milestones upon their achievement to be identical to the allocation of value of our performance obligations and thus representing the “transaction price” for each milestone at contract inception. We recognize this revenue in the period that the regulatory approval occurs (i.e., when we complete the “performance obligation”) under the “most likely amount” method, and revenue recognition is otherwise “constrained” until regulatory approval occurs, given its inherent uncertainty and the requirement of a significant revenue reversal not being probable if achievement does not occur. At each reporting period, we re-evaluate the probability of milestone achievement and the associated revenue constraint; any resulting adjustments would be recorded on a cumulative catch-up basis, thus reflected in our financial statements in the period of adjustment.

(c) Service Revenue: We receive fees under certain arrangements for (i) sales and marketing services, (ii) supply chain services, (iii) research and development services, and (iv) clinical trial management services.

Our rights to receive payment for these services may be established by (1) a fixed-fee schedule that covers the term of the arrangement, so long as we meet ongoing performance obligations, (2) our completion of product delivery in our capacity as a procurement agent, (3) the successful completion of a phase of drug development, (4) favorable results from a clinical trial, and/or (5) regulatory approval events.

We consider whether revenue associated with these service arrangements is reportable each period, based on our completed services or deliverables (i.e., satisfied “performance obligations”) during the reporting period, and the terms of the arrangement that contractually result in fixed payments due to us. The promised service(s) within these arrangements are distinct and explicitly stated within each contract, and our customer benefits from the separable service(s) delivery/completion. Further, the nature of the promise to our customer as stated within the respective contract is to deliver each named service individually (not a transfer of combined items to which the promised goods or services are inputs), and thus are separable for revenue recognition.

(ii) Cash and Cash Equivalents

Cash and cash equivalents consist of bank deposits and highly liquid investments with maturities of three months or less from the purchase date.

(iii) Marketable Securities

Marketable securities consist of our holdings in equity securities, mutual funds, bank certificates of deposit (“Bank CDs”), government-related debt securities, and corporate debt securities. Since we classify these investments as “available-for-sale” any (1) realized gains (losses) or (2) unrealized gains (losses) on these securities are respectively recognized in (1) “other (expense) income, net” on the accompanying Consolidated Statements of Operations, or (2) depending on the nature of the marketable securities recognized in “accumulated other comprehensive loss” as a separate component of stockholder’s equity

on the accompanying Consolidated Statements of Stockholders’ Equity, or in “other (expense) income, net” on the accompanying Consolidated Statements of Operations.

(iv) Accounts Receivable

Our accounts receivable, net of allowance for doubtful accounts are derived from our product sales and license fees, and do not bear interest. The allowance for doubtful accounts is management’s best estimate of the amount of probable credit losses in our existing accounts receivable. Account balances are written off against the allowance after appropriate collection efforts are exhausted.

(v) Inventories

We value our inventory at the lower of (i) the actual cost of its purchase or manufacture, or (ii) its net realizable value. Inventory cost is determined on the first-in, first-out method. We regularly review our inventory quantities in process of manufacture and on hand. When appropriate, we record a provision for obsolete and excess inventory to derive its net realizable value, which takes into account our sales forecast by product and corresponding expiry dates of each product lot.

Manufacturing costs of drug products that are pending U.S. Food and Drug Administration (“FDA”) approval during clinical development and trials, and at-risk inventory build in anticipation of commercialization, are exclusively recognized through “research and development” expense on the accompanying Consolidated Statements of Operations.

(vi) Property and Equipment

Our property and equipment is stated at historical cost, and is depreciated on a straight-line basis over an estimated useful life that corresponds with its designated asset category. We evaluate the recoverability of “long-lived assets” (which includes property and equipment) whenever events or changes in circumstances in our business indicate that the asset’s carrying amount may not be recoverable through our on-going operations.

(vii) Stock-Based Compensation

Stock-based compensation expense for equity awards granted to our employees and members of our Board of Directors is recognized on a straight-line basis over each award’s vesting period. Recognized compensation expense is net of an estimated forfeiture rate, representing the percentage of awards that are expected to be forfeited prior to vesting, though is ultimately adjusted for actual forfeitures. We use the Black-Scholes option pricing model to determine the fair value of stock options (as of the date of grant) that have service conditions for vesting. We use the Monte Carlo valuation model to value equity awards (as of the date of grant) that have combined market conditions and service conditions for vesting.

The recognition of stock-based compensation expense and the initial calculation of stock option fair value requires uncertain assumptions, including (a) the pre-vesting forfeiture rate of the award, (b) the expected term that the stock option will remain outstanding, (c) our stock price volatility over the expected term (and that of our designated peer group with respect to certain market-based awards), and (d) the prevailing risk-free interest rate for the period matching the expected term.

With regard to (a)-(d): We estimate forfeiture rates based on our employees’ overall forfeiture history, which we believe will be representative of future results. We estimate the expected term of stock options granted based on our employees’ historical exercise patterns, which we believe will be representative of their future behavior. We estimate the volatility of our common stock on the date of grant based on the historical volatility of our common stock for a look-back period that corresponds with the expected term. We estimate the risk-free interest rate based upon the U.S. Department of the Treasury yields in effect at award grant, for a period equaling the expected term of the stock option.

(viii) Basic and Diluted Net Loss per Share

We calculate basic and diluted net loss per share using the weighted average number of common shares outstanding during the periods presented. In periods of a net loss, basic and diluted loss per share are the same. For the diluted earnings per share calculation, we adjust the weighted average number of common shares outstanding to include only dilutive stock options, warrants, and other common stock equivalents outstanding during the period.

(ix) Income Taxes

Deferred tax assets and liabilities are recorded based on the estimated future tax effects of temporary differences between the tax basis of assets and liabilities and amounts reported in the financial statements, as well as operating losses and tax credit carry forwards using enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. Realization of deferred tax assets is dependent upon future earnings, the timing and amount of which are uncertain.

We have recorded a valuation allowance to reduce our deferred tax assets, because we believe that, based upon a weighting of positive and negative factors, it is more likely than not that these deferred tax assets will not be realized. If/when we were to determine that our deferred tax assets are realizable, an adjustment to the corresponding valuation allowance would increase our net income in the period that such determination was made.

In the event that we are assessed interest and/or penalties from taxing authorities that have not been previously accrued, such amounts would be included in “benefit for income taxes from continuing operations” within the Consolidated Statements of Operations in the period the notice was received.

(x) Research and Development Costs

Our research and development costs are expensed as incurred (see Note 10(c)), or as certain milestone payments become contractually due to our licensors, as triggered by the achievement of clinical or regulatory events.

(xi) Fair Value Measurements

We determine measurement-date fair value based on the proceeds that would be received through the sale of the asset, or that we would pay to settle or transfer the liability, in an orderly transaction between market participants. We utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. Fair value measurements are based on a three-tier hierarchy that prioritizes the inputs used to measure fair value. These tiers include the following:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that are publicly accessible at the measurement date.

Level 2: Observable prices that are based on inputs not quoted on active markets, but that are corroborated by market data. These inputs may include quoted prices for similar assets or liabilities or quoted market prices in markets that are not active to the general public.

Level 3: Unobservable inputs are used when little or no market data is available.

Balance Sheet Account Detail

12 Months Ended

Dec. 31, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Balance Sheet Account Detail

BALANCE SHEET ACCOUNT DETAIL

The composition of selected financial statement captions that comprise the accompanying Consolidated Balance Sheets are summarized below:

(a) Cash and Cash Equivalents and Marketable Securities

As of December 31, 2019 and December 31, 2018, our “cash and cash equivalents” were held with major financial institutions. As of December 31, 2019, our “marketable securities” include our equity holdings in CASI Pharmaceuticals, Inc. (“CASI”), mutual funds, government-related debt securities, corporate debt securities, and bank certificates of deposits (“bank

CDs”).

We maintain cash balances with select financial institutions. The Federal Deposit Insurance Corporation (FDIC) and other third parties insure a fraction of these deposits. Accordingly, these cash deposits are not insured against the possibility of a substantial or complete loss of principal and are inherently subject to the credit risk of the corresponding financial institution.

Our investment policy requires that purchased investments may only be in highly-rated and liquid financial instruments and limits our holdings of any single issuer (excluding any debt or equity securities received from our strategic partners in connection with an out-license arrangement, as discussed in Note 8).

The carrying amount of our equity securities, money market funds, and Bank CDs approximates their fair value (utilizing “Level 1” or “Level 2” inputs - see Note 2(xi)) because of our ability to immediately convert these instruments into

cash with minimal expected change in value. As of December 31, 2019, our held securities that remain in an unrealized loss position for less than one year were insignificant and are presented in the table below.

The following is a summary of our presented composition of “cash and cash equivalents” and “marketable securities”:



	Historical or Amortized Cost		Foreign Currency Translation			Unrealized Gains		Unrealized Losses			Fair Value		Cash and Cash equivalents		Marketable Securities
	Historical or Amortized Cost		Foreign Currency Translation			Unrealized Gains		Unrealized Losses			Fair Value		Cash and Cash equivalents		Marketable Securities
December 31, 2019
Equity securities* (see Note 8)	$	6,310	$	(2,477	)	$	27,214	$	—		$	31,047	$	—	$	31,047
Money market funds	54,199		—			—		—			54,199		54,199		—
Government-related debt securities**	62,617		—			19		(10		)	62,626		—		62,626
Corporate debt securities**	58,235		—			38		(25		)	58,248		5,000		53,248
Bank deposits	5,219		—			—		—			5,219		5,219		—
Mutual funds	4,375		—			783		—			5,158		—		5,158
Bank CDs	7,354		—			22		—			7,376		—		7,376
Total cash and cash equivalents and marketable securities	$	198,309	$	(2,477	)	$	28,076	$	(35	)	$	223,873	$	64,418	$	159,455
December 31, 2018
Equity securities*	$	8,710	$	(2,168	)	$	39,880	$	—		$	46,422	$	—	$	46,422
Money market funds	142,745		—			—		—			142,745		142,745		—
Bank deposits	14,735		—			—		—			14,735		14,735		—
Bank CDs	86		—			—		—			86		—		86
Total cash and cash equivalents and marketable securities	$	166,276	$	(2,168	)	$	39,880	$	—		$	203,988	$	157,480	$	46,508

* Beginning January 1, 2018, under the new requirements of ASU 2016-01, Recognition and Measurement of Financial Assets and Liabilities, the unrealized gains (losses) on our CASI equity securities are recognized as an increase (decrease) to “other (expense) income, net” on the Consolidated Statements of Operations (rather than through “other comprehensive loss” on the Consolidated Statements of Comprehensive Loss). Our adoption of ASU 2016-01 on January 1, 2018, resulted in a $17.2 million cumulative-effect adjustment, net of income tax, reported as a decrease to “accumulated other comprehensive loss” and a decrease to “accumulated deficit” on the accompanying Consolidated Balance Sheets. Our unrealized (losses) gains on these equity securities for the year ended December 31, 2019 and 2018 was $(12.7) million and 10.5 million, respectively, as reported in “other (expense) income, net” on the accompanying Consolidated Statements of Operations.

** Beginning in the second quarter of 2019, we purchased certain government-related and corporate debt securities. We have classified these as “available-for-sale” since we may redeem or sell these investments before their stated maturity to fund our operations. Under the requirements of ASC 320, Investments - Debt and Equity Securities: (i) we recorded these securities at initial “book value” and then amortize, through maturity, the determined “discount” or “premium” within “interest income” on the accompanying Consolidated Statements of Operations, and (ii) we recognize the “unrealized gains (loss)” of these securities (i.e., fair value versus amortized book value) as a separate component of “other comprehensive loss” on the accompanying Consolidated Statements of Comprehensive Loss for the year ended December 31, 2019.

(b) Property and Equipment, net of Accumulated Depreciation

“Property and equipment, net of accumulated depreciation” consists of the following:



	December 31,
	2019			2018
Manufacturing equipment*	$	10,355		$	—
Computers hardware and software	3,606			3,079
Laboratory equipment	36			635
Office furniture	248			212
Leasehold improvements	3,374			2,957
Property and equipment, at cost	17,619			6,883
(Less): Accumulated depreciation	(6,012		)	(6,498		)
Property and equipment, net of accumulated depreciation	$	11,607		$	385

* This account is comprised of our owned ROLONTIS production equipment on location at our contract manufacturer. This equipment has alternative future use for the general production of various biologic agents. Accordingly, we have capitalized these purchases, rather than recording it as “research and development” expense, despite its current designation for the manufacture of pre-FDA approved product. The majority of this manufacturing equipment was not in use and therefore not being depreciated as of December 31, 2019.

Depreciation expense (included within “total operating costs and expenses” in the accompanying Consolidated Statements of Operations) for the years ended December 31, 2019, 2018, and 2017 was $0.4 million, $0.2 million, and $0.3 million, respectively.

“Accounts receivable, net of allowance for doubtful accounts” consists of trade receivables from our customers. We are exposed to credit risk associated with trade receivables that result from these product sales. We do not require collateral or deposits from our customers due to our assessment of their creditworthiness and our long-standing relationship with them. We maintain reserves for potential bad debt, though credit losses have historically been nominal and within management’s expectations. A summary of our customers that represent 10% or more of our accounts receivables as of December 31, 2019 and 2018, are as follows:



	December 31,
	2019				2018
McKesson Corporation and its affiliates	$	9	2.0	%	$	7,615	25.5	%
AmerisourceBergen Corporation, and its affiliates	—		—	%	10,448		35.0	%
Cardinal Health, Inc. and its affiliates	—		—	%	8,228		27.5	%
All other customers	432		98.0	%	3,582		12.0	%
Accounts receivable, net	$	441	100.0	%	$	29,873	100.0	%

(d) Prepaid Expenses and Other Assets

“Prepaid expenses and other assets” consists of the following:



	December 31,
	2019		2018
Vendor deposits	$	8,740	$	6,792
Prepaid insurance	1,408		782
Prepaid expenses and other assets	$	10,148	$	7,574

(e) Other Receivables

“Other receivables” consists of the following:



	December 31,
	2019		2018
CASI other receivables	$	2,393	$	—
Other miscellaneous receivables (including Medicaid rebate credits and royalty receivables from licensees)	1,490		1,189
Insurance receivable*	4,015		206
Income tax receivable - current portion	973		643
Interest receivable from marketable securities (see Note 3(a))	561		—
Reimbursements due from development partners for incurred research and development expenses	126		135
Secured promissory note (see Note 8)	—		1,525
Other receivables	$	9,558	$	3,698

* This insurance receivable balance represents our incurred legal fees and pending and completed settlements that are expected to be

reimbursed by our insurance carriers.

(f) Other Assets

“Other assets” consists of the following:



	December 31,
	2019		2018
Key employee life insurance – cash surrender value (associated with our deferred compensation plan - see Note 7	$	3,547	$	6,274
Research & development supplies and other	119		246
Income tax receivable - non-current portion*	334		668
Other assets	$	4,000	$	7,188

* This value represents the non-current portion of refundable alternative minimum tax payments that are expected to be received over the next few years (see Note 11).

(g) Facility and Equipment Under Lease

“Facility and equipment under lease” consists of the following:



	December 31, 2019		December 31, 2018
Office and research facilities	$	3,391	$	—
Office equipment	415		—
Facility and equipment under lease	$	3,806	$	—

(h) Accounts Payable and Other Accrued Liabilities

“Accounts payable and other accrued liabilities” consists of the following:



	December 31,
	2019		2018
Trade accounts payable and other	$	32,012	$	44,919
Lease liability - current portion	1,683		—
Accrued commercial/Medicaid rebates*	2,925		8,580
Accrued product royalty due to licensors	66		4,337
Allowance for product returns	4,714		5,171
Accrued data and distribution fees	768		3,248
Accrued GPO administrative fees	6		296
Accrued inventory management fees	364		388
Allowance for government chargebacks*	11,746		14,373
Accounts payable and other accrued liabilities	$	54,284	$	81,312

* The values in 2018 have been restated for certain immaterial corrections related to “Accrued commercial/Medicaid rebates” and “Allowance for government chargebacks.” (see Note 15).

Amounts presented within “accounts payable and other accrued liabilities” in the accompanying Consolidated Balance Sheets for GTN estimates (see Note 2(i)) were as follows:



Description	Commercial/Medicaid Rebates and Government Chargebacks*			Distribution, Data, Inventory, and GPO Administrative Fees			Product Return Allowances
Balance as of December 31, 2017	$	21,480		$	5,727		$	4,045
Add: GTN accruals recorded for product sales	69,704			13,962			1,700
(Less): Payments made and credits against GTN accruals	(68,232		)	(15,757		)	(574		)
Balance as of December 31, 2018	22,952			3,932			5,171
Add: GTN accruals recorded for product sales	7,702			1,209			167
(Less): Payments made and credits against GTN accruals	(15,983		)	(4,003		)	(624		)
Balance as of December 31, 2019	$	14,671		$	1,138		$	4,714

* The values in 2018 and 2017 have been restated for certain immaterial corrections related to “Commercial/Medicaid Rebates and Government Chargebacks.” (see Note 15).

(i) Contract Liabilities

“Contract liabilities” consists of the following:



	December 31,
	2019		2018
Customer deposit for EVOMELA supply in China territory (see Note 8)	$	—	$	4,850
Contract liabilities	$	—	$	4,850

(j) Other Long-Term Liabilities

“Other long-term liabilities” consists of the following:



	December 31,
	2019		2018
Deferred compensation liability (Note 10(f))	$	8,597	$	5,474
Lease liability - non-current portion (Note 10(a))	2,372		—
Other tax liabilities	101		176
Other long-term liabilities	$	11,070	$	5,650

Stock-Based Compensation

12 Months Ended

Dec. 31, 2019

Share-based Payment Arrangement [Abstract]

Stock-Based Compensation

STOCK-BASED COMPENSATION

2018 Long-Term Incentive Plan

We have one active stockholder-approved stock-based compensation plan, the 2018 Long- Term Incentive Plan (the “2018 Plan”). In June 2018, the 2018 Plan replaced our former 2009 Incentive Award Plan (the “2009 Plan”). Under the 2018 Plan we may grant incentive stock options, non-qualified stock options, restricted stock awards, restricted stock units, performance awards, stock appreciation rights and other stock-based awards.

The stated maximum availability of common stock under the 2018 Plan is 9.5 million shares, except for additional availability provided on a one-for-one basis for awards formerly issued under the 2009 Plan that are terminated, forfeited, cancelled or expire unexercised. Awards issued under the 2018 Plan reduce share availability on a one-to-one basis for stock options and on a 1.5-to-one basis for restricted stock awards and restricted stock units. Accordingly, as of December 31, 2019, 5.9 million awards were available for grant under the 2018 Plan, assuming all were issued in the form of stock options, though would be reduced to 4.0 million awards available for grant if all were issued in the form of restricted stock.

It is our policy that before stock is issued through the exercise of stock options, we must first receive all required cash payment for such shares (whether through an upfront cash exercise or net-settlement exercise). At the time of vesting of restricted stock, by our policy, requisite shares are automatically sold on the open market by our designated broker to the extent required to cover the employee’s federal and state taxes due.

Stock-based awards are governed by agreements between us and the recipients. Incentive stock options (“ISOs”) and nonqualified stock options may be granted under the 2018 Plan at an exercise price of not less than 100% of the fair market value of our common stock on the respective date of grant and for certain recipients may not be less than 110% of such fair market value. The grant date is generally the date the terms of the award are approved by the Compensation Committee of our Board of Directors.

Stock-based awards generally vest at 25% to 33% on the first anniversary following the date of grant. Awards generally vest annually thereafter on a straight-line basis over three to four years. Stock options must generally be exercised, if at all, no later than 10 years from the date of grant. Upon termination of employment, vested stock options may generally be exercised based on the option termination rules including the following: six months after the date of termination upon retirement; 12 months after the date of termination upon disability or death; ninety days after the date of termination for all other separations (though whether vested or unvested, stock options of the employee recipient are immediately forfeited upon termination for “Cause” as defined in the 2018 Plan).

Employee Stock Purchase Plan

Under the terms of our 2009 Employee Stock Purchase Plan (the “ESPP”), eligible employees can purchase common stock through scheduled payroll deductions. The purchase price is equal to the closing price of our common stock on the first or last day of the offering period (whichever is less), minus a 15% discount. We use the Black-Scholes option-pricing model, in combination with the discounted employee price, in determining the value of ESPP expense to be recognized during each offering period. A participant may purchase a maximum of 50,000 shares of common stock during a six-month offering period, not to exceed $25,000 at full market value on the offering date during each plan year.

As of December 31, 2019, a total of 8.7 million shares of common stock are authorized and remain available for issuance under the ESPP. Beginning on January 1, 2010, and each January 1st thereafter, the number of shares of common stock available for issuance under the ESPP shall automatically increase by an amount equal to the lesser of (i) one million shares or (ii) an amount determined by the ESPP administrator. However, in no event shall the number of shares of common stock available for future sale under the ESPP exceed 10 million shares, subject to capitalization adjustments occurring due to dividends, splits, dissolution, liquidation, mergers, or changes in control.

Stock-Based Compensation Expense Summary

We report our stock-based compensation expense (inclusive of our incentive stock plan, employee stock purchase plan, and 401(k) contribution matching program) in the accompanying Consolidated Statements of Operations, based on the assigned department of the recipient. Stock-based compensation expense included within “total operating costs and expenses” for the years ended December 31, 2019, 2018, and 2017, was as follows:



	Year Ended December 31,
	2019		2018		2017
Selling, general and administrative	$	14,118	$	9,268	$	9,178
Research and development	4,316		2,566		1,885
Total stock-based compensation	$	18,434	$	11,834	$	11,063

Employee stock-based compensation expense for the years ended December 31, 2019, 2018, and 2017 was recognized (reduced for estimated forfeitures) on a straight-line basis over the vesting period. Forfeitures are estimated at the time of grant and prospectively revised if actual forfeitures differ from those estimates. We estimate forfeitures of stock options using the historical exercise behavior of our employees. For purposes of this estimate, we have applied an estimated forfeiture rate of 16%, 15%, and 14% for the years ended December 31, 2019, 2018, and 2017, respectively.

Valuation Assumptions – Restricted Stock and Stock Options

The grant-date fair value per share for restricted stock awards was based upon the closing market price of our common stock on the award grant-date.

The fair value of stock options granted was estimated at the date of grant using the Black-Scholes option-pricing model. The following assumptions were used to determine fair value for the stock awards granted in the applicable year:



	Year Ended December 31,
	2019	2018	2017
Expected option life (in years) (a)	5.34	4.73	4.84
Risk-free interest rate (b)	1.47% - 2.49%	1.81% - 2.75%	0.82% - 1.90%
Volatility (c)	61.6% - 76.1%	50.0% - 56.2%	49.3% - 61.4%
Dividend yield (d)	—%	—%	—%
Weighted-average grant-date fair value per stock option	$5.85	$8.64	$2.89


(a)	Determined by the historical stock option exercise behavior of our employees (maximum term is 10 years).


(b)	Based upon the U.S. Treasury yields in effect during the period which the options were granted (for a period equaling the stock options’ expected term).


(c)	Measured using our historical stock price for a period equal to stock options’ expected term.


(d)	We do not expect to declare any cash dividends in the foreseeable future.

Stock Option Activity

Stock option activity during the years ended December 31, 2019, 2018, and 2017 was as follows:



	Number of Shares		Weighted- Average Exercise Price/Share		Weighted- Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Outstanding — December 31, 2016	14,340,582		$	6.86
Granted	1,223,483		6.51
Exercised	(937,482	)	6.40			$	6,813	(1	)
Forfeited	(244,793	)	6.26
Expired	(524,577	)	6.27
Outstanding — December 31, 2017	13,857,213		6.89
Granted	1,094,358		18.87
Exercised	(7,858,141	)	6.74			$	84,758	(1	)
Forfeited	(214,464	)	6.54
Expired	(35,381	)	6.94
Outstanding — December 31, 2018	6,843,585		8.98
Granted	1,113,081		10.54
Exercised	(1,121,403	)	6.38			$	2,919	(1	)
Forfeited	(172,074	)	9.84
Expired	(223,253	)	11.09
Outstanding — December 31, 2019	6,439,936		$	9.61	6.16	$	1	(2	)
Vested (exercisable) — December 31, 2019	4,682,766		$	8.66	5.29	$	1	(2	)
Unvested (unexercisable) — December 31, 2019	1,757,170		$	12.14	8.47	$	—	(2	)


(1)	Represents the total difference between our closing stock price at the time of exercise and the stock option exercise price, multiplied by the number of options exercised.


(2)	Represents the total difference between our closing stock price on the last trading day of 2019 and the stock option exercise price, multiplied by the number of in-the-money options as of December 31, 2019. The amount of intrinsic value will change based on the fair market value of our stock.

The following table summarizes information with respect to stock option grants as of December 31, 2019:



	Outstanding				Exercisable
Exercise Price	Granted Stock Options Outstanding	Weighted- Average Remaining Contractual Life (Years)	Weighted- Average Exercise Price		Granted Stock Options Exercisable	Weighted- Average Exercise Price
$1.47 - 4.96	91,599	2.80	$	4.16	82,428	$	4.15
$4.97 - 6.91	2,210,050	6.18	6.00		1,866,277	5.97
$6.92 - 9.00	1,801,136	4.91	7.84		1,565,804	7.76
$9.01 - 12.00	1,135,793	7.23	11.03		509,250	10.70
$12.01 - 22.64	1,201,358	7.24	17.97		659,007	17.39
	6,439,936	6.16	$	9.61	4,682,766	$	8.66

As of December 31, 2019, there was unrecognized compensation expense of $7.3 million related to unvested stock options, which we expect to recognize over a weighted average period of 2.0 years.

Restricted Stock Award Activity

A summary of restricted stock award activity is as follows:



	Number of Restricted Stock Awards		Weighted Average Fair Value per Share at Grant Date
Unvested — December 31, 2016	2,152,157		$	6.29
Granted	927,306		6.22
Vested	(1,137,555	)	6.38
Forfeited	(378,990	)	5.95
Unvested — December 31, 2017	1,562,918		6.27
Granted	1,092,534		17.35
Vested	(635,320	)	6.51
Forfeited	(218,002	)	7.56
Unvested — December 31, 2018	1,802,130		12.75
Granted	1,091,353		10.50
Vested	(972,404	)	11.70
Forfeited	(261,320	)	11.48
Unvested — December 31, 2019	1,659,759		$	11.67



	Year Ended December 31,
	2019		2018		2017
Restricted stock award expense	$	9,170	$	5,180	$	4,985

As of December 31, 2019, there was approximately $13.5 million of unrecorded expense related to issued restricted stock awards that will be recognized over an estimated weighted average period of 1.9 years. These unvested shares are included in our reported issued and outstanding common stock as of December 31, 2019.

Restricted Stock Unit Activity

Our outstanding restricted stock units substantially relate to awards that contain “market-based” vesting conditions that are issued to our executive officers. These conditions are specified in each award agreement and result in a variable number of shares that become issuable at the assessment date, after review and approval by our Compensation Committee. A summary of restricted stock unit activity is as follows:



	Number of Restricted Stock Units		Weighted Average Fair Value per Share at Grant Date
Outstanding — December 31, 2017	217,206		$	6.49
Granted	138,334		28.31
Market-based achievement adjustment at vesting	100,326		6.49
Share issuance upon approved achievement date	(200,652	)	6.49
Outstanding — December 31, 2018	255,214		17.91
Granted	257,585		12.87
Market-based achievement adjustment at vesting	116,880		6.49
Share issuance	(243,760	)	7.04
Outstanding — December 31, 2019	385,919		$	18.00



	2019		2018		2017
Restricted stock unit expense	$	3,019	$	2,301	$	1,030

401(k) Plan – Stock Matching Contribution

We issued shares of common stock to our employees in connection with our 401(k) program, partially matching our employees’ annual 401(k) contributions, as summarized below:



	Year Ended December 31,
	2019		2018		2017
Shares of common stock issued	225,780		70,379		102,874
Value of employer match in shares	$	1,289	$	762	$	639

Stockholders' Equity

12 Months Ended

Dec. 31, 2019

Equity [Abstract]

Stockholders' Equity

STOCKHOLDERS’ EQUITY

Authorized Stock

In June 2018, our stockholders approved an amendment and restatement of our Certificate of Incorporation to reflect an increase in the number of authorized shares of our common stock from 175 million shares to 300 million shares. In addition to the increase in the authorized number of shares of common stock, the amendment eliminates designated series of preferred stock that are obsolete and are no longer outstanding or issuable, including Series B Junior Participating Preferred Stock and Series E Convertible Voting Preferred Stock. As of December 31, 2019, we had five million shares of preferred stock authorized and no shares of preferred stock outstanding. The amendment was filed with the Delaware Secretary of State in June 2018.

Stockholder Rights Agreement

On November 29, 2010, our Board of Directors approved a stockholder rights agreement (the “Stockholder Rights Agreement”), effective December 13, 2010. A stockholder rights agreement is designed to deter coercive, unfair, or inadequate takeovers and other abusive tactics that might be used in an attempt to gain control of our company. A stockholder rights agreement will not prevent takeovers at a full and fair price, but rather is designed to deter coercive takeover tactics and to encourage anyone attempting to acquire our company to first negotiate with our Board of Directors.

On March 27, 2018, we entered into a Second Amendment to Rights Agreement which had the effect of suspending the Stockholders Rights Agreement as of March 30, 2018, though it will expire under its terms on December 13, 2020.

Common Stock Issuable Upon Exercise of Stock Options and Vesting of Restricted Stock Units

As of December 31, 2019, (i) 4.7 million shares of our common stock are issuable upon the exercise of outstanding stock options (regardless of whether in or out-of-the-money) and (ii) 0.5 million shares of our common stock are issuable if the maximum market conditions of our outstanding restricted stock unit agreements are met.

Stock Warrant Activity

We typically issue warrants to purchase shares of our common stock to investors as part of a financing transaction or in connection with services rendered by placement agents or consultants. During 2018, our previously outstanding warrants were exercised, and therefore no outstanding warrants remained as of December 31, 2019. A summary of warrant activity is as follows:



	Number of Shares		Weighted Average Exercise Price
Outstanding — December 31, 2016	445,000		$	6.78
Outstanding — December 31, 2017	445,000		6.78
Exercised	(445,000	)	6.78
Outstanding — December 31, 2018	—		$	—

Sale of Common Stock Under ATM Agreements

In December 2015, and August 2017, we entered into a new collective at-market-issuance (ATM) sales agreement with FBR Capital Markets & Co., MLV & Co. LLC, and H.C. Wainwright & Co., LLC. (“December 2015 ATM Agreement” and the “August 2017 ATM Agreement”, respectively). These agreements allowed us to raise aggregate gross proceeds through these brokers of up to $250 million from the sale of our common stock on the public market. During the year ended December 31, 2017 we raised net proceeds of $128.3 million. We had no sales under the ATM during the year ended December 31, 2018.

In April 2019, we entered into a new collective at-market-issuance sales agreement with Cantor Fitzgerald & Co., H.C. Wainwright & Co., LLC and B. Riley FBR, Inc. (the “April 2019 ATM Agreement”) connected to our automatic shelf registration statement on Form S-3ASR, filed with the SEC on April 5, 2019.

The April 2019 ATM Agreement allows us to raise aggregate gross proceeds of $150 million from the periodic sales of our common stock on the public market. Through December 31, 2019, we raised aggregate net proceeds of $1.8 million under this ATM. These proceeds and any future proceeds raised will support the advancement of our in-development drug candidates, activities in connection with the launch of our in-development drug candidates, including hiring and building inventory supply, making acquisitions of assets, businesses, companies or securities, capital expenditures, and for other working capital purposes.



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 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 December 31, 2017	10,314,250	$	104,527
Common shares issued pursuant to the April 2019 ATM Agreement during the year ended December 31, 2019	221,529	$	1,814

There were no sales of our common stock under the April 2019 ATM Agreement during the three months ended December 31, 2019.

Net Loss Per Share

12 Months Ended

Dec. 31, 2019

Earnings Per Share [Abstract]

Net Loss Per Share

NET LOSS PER SHARE

Net loss per share was computed by dividing net loss by the weighted average number of common shares outstanding for the years ended December 31, 2019, 2018, and 2017:



	Year Ended December 31,
	2019			2018			2017
Net loss	$	(112,689	)	$	(120,741	)	$	(92,189	)
Weighted average shares—basic and diluted	110,585,768			103,305,911			85,115,592
Net loss per share—basic and diluted	$	(1.02	)	$	(1.17	)	$	(1.08	)

The below outstanding securities were excluded from the above calculation of net loss per share because their impact under the “treasury stock method” and “if-converted method” would have been anti-dilutive due to our net loss per share for the years ended December 31, 2019, 2018, and 2017, as summarized below:



	Year Ended December 31,
	2019	2018	2017
Common stock options issued	1,059,846	4,407,765	3,668,662
Restricted stock awards issued	1,659,759	1,802,130	1,562,918
Restricted stock units issued	385,919	255,214	217,206
2013 Convertible Notes outstanding - if converted into common shares	—	—	3,854,959
Common stock warrants issued	—	—	138,277
Total	3,105,524	6,465,109	9,442,022

Fair Value Measurements

12 Months Ended

Dec. 31, 2019

Fair Value Disclosures [Abstract]

Fair Value Measurements

FAIR VALUE MEASUREMENTS

The table below summarizes certain asset and liability fair values that are included within our accompanying Consolidated Balance Sheets, and their designations among the three fair value measurement categories (see Note 2(xi)):



	December 31, 2019 Fair Value Measurements
	Level 1		Level 2		Level 3		Total
Assets:
Equity securities (Note 8)	$	31,047	$	—	$	—	$	31,047
Bank CDs	—		7,376		—		7,376
Mutual funds	5,158		11		—		5,169
Key employee life insurance, cash surrender value - Note 3(f))	—		3,547		—		3,547		*
Money market funds	54,199		—		—		54,199
Government-related debt securities	47,636		14,990		—		62,626
Corporate debt securities	—		58,248		—		58,248
	$	138,040	$	84,172	$	—	$	222,212
Liabilities: