0001558370-22-002582 | 10-K | XBRL Viewer

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Current assets:
Cash and cash equivalents	$ 100,808	$ 10,501
Short-term investments	56,458	124,452
OMIDRIA contract royalty asset, short-term	44,319
Receivables, net	38,155	3,841
Prepaid expense and other assets	8,149	10,455
Current assets from discontinued operations		2,036
Total current assets	247,889	151,285
OMIDRIA contract royalty asset	140,251
Property and equipment, net	1,731	2,551
Right of use assets	28,276	25,526
Restricted investments	1,054	1,055
Advanced payments, non-current	67	625
Total assets	419,268	181,042
Current liabilities:
Accounts payable	13,400	4,199
Accrued expenses	33,134	28,755
Current portion of lease liabilities	5,255	3,782
Total current liabilities	51,789	36,736
Lease liabilities, non-current	29,126	28,770
Unsecured convertible senior notes, net	313,458	236,288
Other accrued liabilities - noncurrent	1,115
Commitments and contingencies (Note 11)
Shareholders' equity (deficit):
Preferred stock, par value $0.01 per share, 20,000,000 shares authorized; none issued and outstanding at December 31, 2021 and December 31, 2020.
Common stock, par value $0.01 per share, 150,000,000 shares authorized at December 31, 2021 and December 31, 2020; 62,628,855 and 61,671,231 shares issued and outstanding at December 31, 2021 and December 31, 2020, respectively.	626	616
Additional paid-in capital	706,288	751,304
Accumulated deficit	(683,134)	(872,672)
Total shareholders' equity (deficit)	23,780	(120,752)
Total liabilities and shareholders' equity (deficit)	$ 419,268	$ 181,042

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Dec. 31, 2021	Dec. 31, 2020
Statement of Financial Position [Abstract]
Preferred stock, par value (USD per share)	$ 0.01	$ 0.01
Preferred stock, authorized shares	20,000,000	20,000,000
Preferred stock, Issued shares	0	0
Preferred stock, outstanding shares	0	0
Common stock, par value (USD per share)	$ 0.01	$ 0.01
Common stock, authorized shares	150,000,000	150,000,000
Common stock, Issued shares	62,628,855	61,671,231
Common stock, outstanding shares	62,628,855	61,671,231

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Costs and expenses:
Research and development	$ 118,775	$ 107,612	$ 106,324
Selling, general and administrative	54,842	49,306	39,714
Total costs and expenses	173,617	156,918	146,038
Loss from continuing operations	(173,617)	(156,918)	(146,038)
Loss on early extinguishment of debt		(13,374)
Interest expense	(19,669)	(26,751)	(22,657)
Other income	1,740	654	1,553
Loss from continuing operations before income tax benefit	(191,546)	(196,389)	(167,142)
Income tax benefit (expense)	0	23,256	19,774
Net loss from continuing operations	(191,546)	(173,133)	(147,368)
Net income from discontinued operations, net of tax	385,781	35,072	62,882
Net income (loss)	$ 194,235	$ (138,061)	$ (84,486)
Basic net loss per share continuing operations	$ (3.07)	$ (3.02)	$ (2.98)
Basic net income per share discontinued operations	6.19	0.61	1.27
Basic net income (loss) per share	3.12	(2.41)	(1.71)
Diluted net loss per share continuing operations	(3.07)	(3.02)	(2.98)
Diluted net income per share discontinued operations	6.19	0.61	1.27
Diluted net income (loss) per share	$ 3.12	$ (2.41)	$ (1.71)
Weighted-average shares used to compute basic net loss per share (in shares)	62,344,100	57,176,743	49,523,444
Weighted-average shares used to compute diluted net loss per share (in shares)	62,344,100	57,176,743	49,523,444

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT) - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member] Cumulative effect adjustment	Additional Paid-in Capital [Member]	Retained Earnings [Member] Cumulative effect adjustment	Retained Earnings [Member]	Cumulative effect adjustment	Total
Balance at Dec. 31, 2018	$ 490		$ 549,479		$ (650,125)		$ (100,156)
Balance (in shares) at Dec. 31, 2018	49,011,684
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock in direct offering, net of offering costs	$ 44		54,194				54,238
Issuance of common stock in direct offering, net of offering costs (in shares)	4,389,311
Issuance of common stock upon exercise of stock options	$ 8		7,590				7,598
Issuance of common stock upon exercise of stock options (in shares)	799,815
Stock-based compensation			13,785				13,785
Net Income (loss)					(84,486)		(84,486)
Balance at Dec. 31, 2019	$ 542		625,048		(734,611)		(109,021)
Balance (in shares) at Dec. 31, 2019	54,200,810
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock in direct offering, net of offering costs	$ 69		93,606				93,675
Issuance of common stock in direct offering, net of offering costs (in shares)	6,900,000
Issuance of common stock upon exercise of stock options	$ 5		5,017				5,022
Issuance of common stock upon exercise of stock options (in shares)	556,421
Issuance of common stock upon grant of restricted stock awards			155				155
Issuance of common stock upon grant of restricted stock awards (in shares)	14,000
Stock-based compensation			14,770				14,770
Purchases of 2026 Capped Calls			(23,223)				(23,223)
Equity component of 2026 Notes, net of issuance costs			61,628				61,628
Equity component of early extinguishment of 2023 Notes			(22,073)				(22,073)
Termination of the 2023 Capped Call contracts related to debt repurchased			8,387				8,387
Income tax benefit related to issuance of 2026 Notes			(12,011)				(12,011)
Net Income (loss)					(138,061)		(138,061)
Balance (ASU 2020-06) at Dec. 31, 2020		$ (70,777)		$ (4,697)		$ (75,474)
Balance at Dec. 31, 2020	$ 616		751,304		(872,672)		(120,752)
Balance (in shares) at Dec. 31, 2020	61,671,231
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock upon exercise of stock options and warrants	$ 10		8,372				$ 8,382
Issuance of common stock upon exercise of stock options (in shares)							921,023
Issuance of common stock upon exercise of stock options and warrants (in shares)	945,924
Issuance of common stock upon grant of restricted stock awards			91				$ 91
Issuance of common stock upon grant of restricted stock awards (in shares)	11,700
At the market offering costs			(241)				(241)
Stock-based compensation			17,539				17,539
Net Income (loss)					194,235		194,235
Balance at Dec. 31, 2021	$ 626		$ 706,288		$ (683,134)		$ 23,780
Balance (in shares) at Dec. 31, 2021	62,628,855

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Operating activities:
Net income (loss)	$ 194,235	$ (138,061)	$ (84,486)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense	17,630	14,925	13,785
Consideration received on sale of OMIDRIA	(310,563)
Non-cash interest expense	1,696	11,649	9,232
Depreciation and amortization	1,386	1,616	1,790
Loss on early extinguishment of debt		13,374
Deferred income tax		(12,011)
Fair value settlement upon termination of cap call contract		838
Changes in operating assets and liabilities:
Receivables	(34,314)	31,344	(12,367)
Prepaid expenses and other assets	4,900	(4,024)	(1,310)
Accounts payable and other expense	14,640	(19,736)	13,283
Other liabilities non-current	668
Net cash used in operating activities	(109,722)	(100,086)	(60,073)
Investing activities:
Cash proceeds on sale of OMIDRIA	125,993
Purchases of property and equipment	(277)	(283)	(334)
Purchases of investments	(32,006)	(133,194)	(58,217)
Proceeds from the sale and maturities of investments	100,000	66,446	55,150
Net cash provided by (used in) investing activities	193,710	(67,031)	(3,401)
Financing activities:
Proceeds from issuance of convertible senior notes		225,030
Payments for debt issuance costs		(6,785)
Purchases of capped calls related to convertible senior notes		(23,223)
Payments for repurchases of convertible senior notes		(125,638)
Proceeds from termination of capped call contracts		7,549
Proceeds from issuance of common stock, net		93,675	54,238
Release in restricted investments		99
Proceeds upon exercise of stock options and warrants	8,383	5,022	7,598
At the market offering costs	(241)
Payments on finance lease obligations	(1,823)	(1,195)	(1,139)
Net cash provided by financing activities	6,319	174,534	60,697
Net increase (decrease) in cash and cash equivalents	90,307	7,417	(2,777)
Cash and cash equivalents at beginning of period	10,501	3,084	5,861
Cash and cash equivalents at end of period	100,808	10,501	3,084
Supplemental cash flow information
Cash paid for interest	17,876	11,603	13,462
Property acquired under finance lease	$ 289	$ 216	$ 1,440

Organization and Basis of Presentation

12 Months Ended

Dec. 31, 2021

Organization and Basis of Presentation

Organization and Basis of Presentation

Note 1—Organization and Basis of Presentation

General

Omeros Corporation (“Omeros,” the “Company” or “we”) is a clinical-stage biopharmaceutical company committed to discovering, developing and commercializing small-molecule and protein therapeutics for large-market as well as orphan indications targeting immunologic diseases, including complement-mediated diseases and cancers related to dysfunction of the immune system, as well as addictive and compulsive disorders. Our first drug product, OMIDRIA^® (phenylephrine and ketorolac intraocular solution) 1% / 0.3%, is marketed in the United States (the “U.S.”) for use during cataract surgery or intraocular lens replacement. We sold OMIDRIA and related business assets on December 23, 2021. See “Sale of OMIDRIA Assets” below for additional information.

Our drug candidate narsoplimab is the subject of a biologics license application (“BLA”) pending before the U.S. Food and Drug Administration (“FDA”) for the treatment of hematopoietic stem cell transplant-associated thrombotic microangiopathy (“HSCT-TMA”). On October 18, 2021, we announced the receipt of a Complete Response Letter (“CRL”) from FDA regarding the BLA. In the CRL, FDA expressed difficulty in estimating the treatment effect of narsoplimab in HSCT-TMA and asserted that additional information will be needed to support regulatory approval. In February 2022, we had a Type A meeting with FDA to discuss the CRL, including each of the review issues that FDA identified as presenting difficulties interpreting the treatment response in the pivotal trial. We are currently awaiting FDA’s response to our rebuttals to each of those review issues. We continue to believe that our BLA, as submitted, merits approval and that the data meet or exceed the threshold for substantial evidence of effectiveness.

We also have multiple late-stage clinical development programs in our pipeline, which are focused on: complement-mediated disorders, including immunoglobulin A (“IgA”) nephropathy, atypical hemolytic uremic syndrome (“aHUS”) and COVID-19.

Sale of OMIDRIA Assets

On December 23, 2021, we closed on an Asset Purchase Agreement (the “Asset Purchase Agreement”) with Rayner Surgical Inc. (“Rayner”) for the sale of our commercial product OMIDRIA and certain related assets including inventory and prepaid expenses (the “Transaction”). Rayner paid us $126.0 million in cash at closing, and we retained all outstanding accounts receivable, accounts payable and accrued expenses as of the closing date. We will receive a royalty on worldwide sales of OMIDRIA and potentially a $200.0 million milestone payment if separate payment for OMIDRIA is secured in the U.S. for a continuous period of at least four years before January 1, 2025.

As a result of the divestiture, the results of OMIDRIA operations (e.g., revenues and operating costs) have been reclassified to discontinued operations in our consolidated statements of operations and comprehensive loss and excluded from continuing operations for all periods presented (See “Note 3 – Discontinued Operations”).

Basis of Presentation

Our consolidated financial statements include the financial position and results of operations of Omeros and our wholly owned subsidiaries. All inter-company transactions have been eliminated. The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Certain prior year amounts in the balance sheet, statement of cash flows and the footnotes have been reclassified in the consolidated financial statements to conform to the current year presentation.

Risks and Uncertainties

As of December 31, 2021, we had cash, cash equivalents and short-term investments of $157.3 million and outstanding accounts receivable of $38.2 million. Our loss from continuing operations for the year ended December 31,

2021 was $191.5 million. This loss from operations does not include the $80.1 million in earnings from OMIDRIA included in discontinued operations which occurred prior to the sale, a large portion of which we expect to retain through royalties and expense reductions on a go forward basis.

We plan to continue to fund our operations for the next twelve months with our existing cash and investments, our current accounts receivable, and OMIDRIA royalties. There is also the potential for us to receive a $200.0 million milestone related to achievement of long-term OMIDRIA separate payment. If FDA approval is granted for narsoplimab for HSCT-TMA within the next twelve months, sales of narsoplimab will also provide funds for our operations. We have a sales agreement to sell shares of our common stock, from time to time, in an “at the market” equity offering facility through which we may offer and sell shares of our common stock equaling an aggregate amount up to $150.0 million. Should it be determined to be strategically advantageous, we could pursue debt financings as well as public and private offerings of our equity securities, similar to those we have previously completed, or other strategic transactions, which may include licensing a portion of our existing technology.

Management believes the assets on hand along with expected royalties received are adequate to finance our operations at least through March 2, 2023. Accordingly, the accompanying consolidated financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

The outbreak of the novel strain of coronavirus that causes COVID-19 and the responses to the global pandemic by various governmental authorities, the medical community and others has had a significant impact on our business. Due to the unknown magnitude, duration, and outcome of the COVID-19 pandemic, it is not possible to estimate precisely the continued impact on our business, operations or financial results; however, the impact has been and could continue to be substantial.

Segments

We operate in one segment. Management uses cash flow as the primary measure to manage our business and does not segment our business for internal reporting or decision-making.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant items subject to such estimates include revenue recognition, OMIDRIA contract royalty asset valuation, stock-based compensation expense, and accruals for clinical trials and manufacturing of drug product. We base our estimates on historical experience and on various other factors, including the impact of the COVID-19 pandemic, that we believe are reasonable under the circumstances; however, actual results could differ from these estimates.

Significant Accounting Policies

12 Months Ended

Dec. 31, 2021

Significant Accounting Policies

Significant Accounting Policies

Note 2—Significant Accounting Policies

Discontinued Operations

We review the presentation of planned or completed business dispositions in the consolidated financial statements based on the available information and events that have occurred. The review consists of evaluating whether the business meets the definition of a component for which the operations and cash flows are clearly distinguishable from the other components of the business and, if so, whether it is anticipated that after the disposal the cash flows of the component would be eliminated from continuing operations and whether the disposition represents a strategic shift that has a major effect on operations and financial results.

Planned or completed business dispositions are presented as discontinued operations when all the criteria described above are met. For those divestitures that qualify as discontinued operations, all comparative periods presented are reclassified in the consolidated balance sheets. Additionally, the results of operations of a discontinued operation are reclassified to income from discontinued operations, net of tax, for all periods presented in the consolidated statements

of operations and comprehensive loss. Results of discontinued operations include all revenues and expenses directly derived from such businesses; general corporate overhead is not allocated to discontinued operations. The OMIDRIA asset sale to Rayner qualifies as a discontinued operation and has been presented as such for all reporting periods presented. The Company included information regarding cash flows from discontinued operations (see “Note 3 – Discontinued Operations”).

OMIDRIA Royalties and OMIDRIA Contract Royalty Assets

Upon the closing of the Transaction, we have rights to receive future royalties from Rayner on OMIDRIA net sales at royalty rates that vary based on geography and certain regulatory contingencies. Therefore, future OMIDRIA royalties are treated as variable consideration. The sale of OMIDRIA qualifies as an asset sale. To measure the OMIDRIA contract royalty asset, we used the expected value approach which is the sum of the discounted probability-weighted royalty payments, net of tax, we would receive using a range of potential outcomes, to the extent that it is probable that a significant reversal in the amount of cumulative income recognized will not occur. Accordingly, the contract royalty asset excludes the achievement of the $200.0 million milestone payment and any foreign royalties to the extent it is probable that a significant reversal in the amount of cumulative income recognized will not occur. Royalties earned will be recorded as a reduction to the OMIDRIA contract royalty asset. The amount recorded in discontinued operations in future periods will reflect interest earned on the outstanding OMIDRIA contract royalty asset and any amounts received received different from the expected royalties recorded at closing. The OMIDRIA contract royalty asset will also be re-measured periodically using the expected value approach based on actual results and future expectations. Any required adjustment to the OMIDRIA contract royalty asset will be recorded into discontinued operations.

Cash and Cash Equivalents, Short-Term Investments and Restricted Investments

Cash and cash equivalents include highly liquid investments with a maturity of three months or less on the date of purchase. Short-term investment securities are classified as available-for-sale and are carried at fair value. Unrealized gains and losses, if any, are reported as a separate component of shareholders’ equity. Amortization, accretion, interest, and dividends, realized gains and losses and declines in value judged to be other-than-temporary are included in other income. The cost of securities sold is based on the specific-identification method. Investments in securities with maturities of less than one year, or those for which management intends to use the investments to fund current operations, are included in current assets. We evaluate whether an investment is other-than-temporarily impaired based on the specific facts and circumstances. Factors that are considered in determining whether an other-than-temporary decline in value has occurred include: the market value of the security in relation to its cost basis; the financial condition of the investee; and the intent and ability to retain the investment for a sufficient period of time to allow for recovery in the market value of the investment. Restricted investments held in money-market funds include security deposits held by our landlord.

As of December 31, 2021 and 2020, all investments are classified as short-term and available-for-sale. Investment income, which is included as a component of other income, consists primarily of interest earned.

Inventory

Inventory is stated at the lower of cost or market determined on a specific identification basis in a manner that approximates the first-in, first-out (“FIFO’) method. Costs include amounts related to third-party manufacturing, transportation, and internal labor and overhead. Capitalization of costs as inventory begins when regulatory approval of the drug candidate is reasonably assured in the U.S. or the European Union (‘EU”). We expense inventory costs related to drug candidates as research and development expenses prior to receiving regulatory approval in the respective territory. Inventory is reduced to net realizable value for excess and obsolete inventories based on forecasted demand. Inventory with an alternative future use is capitalized.

Receivables, Net

Receivables relate primarily to sales of OMIDRIA made to wholesalers prior to the sale to Rayner and include reductions for estimated chargebacks and product returns that are expected to be settled through reductions in

receivables. Remaining receivables generally consist of amounts from subleases for space in our facilities. Considering the nature and historic collectability of our receivables, we concluded an allowance for doubtful accounts is not necessary as of December 31, 2021 and 2020.

Property and Equipment, Net

Property and equipment are stated at cost, and depreciation is calculated using the straight-line method over the estimated useful life of the assets, which is generally three to 10 years. Equipment acquired through finance leases is recorded as property and equipment and is amortized over the shorter of the useful lives of the related assets or the lease term. Expenditures for repairs and maintenance are expensed as incurred.

Right-of-Use Assets and Related Lease Liabilities

We record operating leases as right-of-use assets and recognize the related lease liabilities equal to the fair value of the lease payments using our incremental borrowing rate when the implicit rate in the lease agreement is not readily available. We recognize variable lease payments, when incurred. Costs associated with operating lease assets are recognized on a straight-line basis within operating expenses over the term of the lease.

We record finance leases as a component of property and equipment and amortize these assets within operating expenses on a straight-line basis to their residual values over the shorter of the term of the underlying lease or the estimated useful life of the equipment. The interest component of a finance lease is included in interest expense and recognized using the effective interest method over the lease term.

We account for leases with initial terms of 12 months or less as operating expenses on a straight-line basis over the lease term.

Unsecured Convertible Senior Notes

On January 1, 2021, we adopted Accounting Standards Update (“ASU”) 2020-06, Debt—Debt with Conversion Options (Subtopic 470.20 and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) on a modified retrospective basis. ASU 2020-06 removes the separate liability and equity accounting for our convertible senior notes that was required under previous guidance and allows us to account for our convertible senior notes wholly as debt. Upon adoption, we removed the equity component allocated to debt issuance costs increasing unsecured convertible senior notes and shareholders’ equity by $75.5 million.

Transactions involving contemporaneous exchanges of cash between the same debtor and creditor in connection with the issuance of a new debt obligation and satisfaction of an existing debt obligation by the debtor are evaluated as a modification or an exchange transaction depending on whether the exchange is determined to have substantially different terms. The 6.25% Convertible Senior Notes (the “2023 Notes”) repurchase and issuance of the 5.25% Convertible Senior Notes (“2026 Notes”) were deemed to have substantially different terms due to the significant difference between the value of the conversion option immediately prior to and after the exchange. Therefore, the repurchase of the 2023 Notes was accounted for as a debt extinguishment. (See “Note 9 – Unsecured Convertible Senior Debt”).

Impairment of Long-Lived Assets

We assess the impairment of long-lived assets, primarily property and equipment, whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Recoverability of these assets is measured by comparing the carrying value to future undiscounted cash flows that the asset is expected to generate. If the asset is impaired, the amount of any impairment will be reflected in the results of operations in the period of impairment. We have not recognized any impairment losses for the years ended December 31, 2021, 2020 and 2019.

Revenue Recognition

When we enter into a customer contract, we perform the following five steps: (i) identify the contract with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) we satisfy a performance obligation.

Product Sales, Net

We generally record revenue from product sales when the product is delivered to our wholesalers and title for the product is transferred. Product sales are recorded net of wholesaler distribution fees and estimated chargebacks, rebates, returns and purchase-volume discounts. Accruals or allowances are established for these deductions in the same period when revenue is recognized, and actual amounts incurred are offset against the applicable accruals or allowances. We reflect each of these accruals or allowances as either a reduction in the related accounts receivable or as an accrued liability depending on how the amount is expected to be settled.

Chargebacks and Rebates

Provisions for chargebacks are determined utilizing historical and projected payer mix and information regarding sell-through and inventory on-hand received directly from wholesalers. Chargebacks are generally settled within four weeks of recording product sales revenue.

We provide reimbursement support services and financial assistance in the form of a rebate to patients whose commercial insurance is inadequate to cover the full cost of our drug product. We apply an experience ratio based on historical and projected patient claims. This experience ratio is applied to product sales to determine the patient rebate accrual and is being reviewed and updated periodically to reflect actual results.

Distribution Fees and Product Return Allowances

We pay our wholesalers a distribution fee for services that they perform for us based on the wholesaler average cost value of their purchases. We record a provision against product sales for these charges at the time of sale to the wholesaler.

We allow for the return of product up to 12 months past its expiration date or for product that is damaged. In estimating product returns, we take into consideration our return experience to date, the remaining shelf-life of product we have previously sold, inventory in the wholesale channel and our expectation that product is typically not held by the health care providers based on the frequency of their reorders.

Research and Development

Research and development expenses are comprised primarily of contracted research and manufacturing costs prior to approval; costs for personnel, including salaries, benefits and stock compensation; clinical study costs; contracted research; manufacturing costs prior to approval; consulting services; depreciation; materials and supplies; milestones; an allocation of our occupancy costs; and other expenses incurred to sustain our overall research and development programs. Advance payments for goods or services that will be used or rendered for future research and development activities are deferred and then recognized as an expense as the related goods are delivered or the services are performed, or when the goods or services are no longer expected to be provided. All other research and development costs are expensed as incurred.

Selling, General and Administrative

Selling, general and administrative expenses are comprised primarily of salaries, benefits, and stock-compensation costs for sales, marketing, and other personnel not directly engaged in research and development. Additionally, selling, general and administrative expenses include marketing and selling expenses, professional and legal services; patent

costs; depreciation, an allocation of our occupancy costs; and other general corporate expenses. Advertising costs, which we consider to be media and marketing materials, are expensed as incurred and were $7.8 million, $5.6 million and $8.0 million during the years ended December 31, 2021, 2020 and 2019, respectively.

Income Taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their tax bases. Deferred tax assets and liabilities are measured using enacted tax rates applied to taxable income in the years in which those temporary differences are expected to be recovered or settled. We recognize the effect of income tax positions only if those positions are more likely than not of being sustained upon an examination. A valuation allowance is established when it is more likely than not that the deferred tax assets will not be realized.

Stock-Based Compensation

Stock-based compensation expense is recognized for all share-based payments based on estimated fair values. The fair value of our stock options is calculated using the Black-Scholes option-pricing model which requires judgmental assumptions around volatility, forfeiture rates and expected option term. Compensation expense is recognized over the optionees’ requisite service periods, which is generally the vesting period, using the straight-line method. Forfeiture expense is estimated at the time of grant and revised in subsequent periods if actual forfeitures differ from those estimates.

Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss is comprised of net loss and certain changes in equity that are excluded from net loss. There was no difference between comprehensive loss and net loss for the years ended December 31, 2021, 2020 or 2019.

Financial Instruments and Concentrations of Credit Risk

Cash and cash equivalents, receivables, accounts payable and accrued liabilities, which are recorded at invoiced amount or cost, approximate fair value based on the short-term nature of these financial instruments. The fair value of short-term investments is based on quoted market prices. Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents, short-term investments and receivables. Cash and cash equivalents are held by financial institutions and are federally insured up to certain limits. At times, our cash and cash equivalents balance held at a financial institution may exceeds the federally insured limits. To limit the credit risk, we invest our excess cash in high-quality securities such as money market mutual funds, certificates of deposit and commercial paper.

Major Customers

Prior to the sale of OMIDRIA to Rayner, we sold OMIDRIA through a limited number of wholesalers. Each of these wholesalers, together with entities under their common control, accounted for greater than 10% of our total

revenues for the years ended December 31, 2021, 2020 and 2019 and greater than 10% of accounts receivable as of December 31, 2021, 2020 and 2019 as noted below.


	2021				2020				2019
	Percentage		Percentage		Percentage		Percentage		Percentage		Percentage
	of Total		of Accounts		of Total		of Accounts		of Total		of Accounts
	Revenue		Receivable		Revenue		Receivable		Revenue		Receivable
Distributor A	20	%	16	%	25	%	36	%	25	%	23	%
Distributor B	24	%	20	%	26	%	31	%	24	%	19	%
Distributor C	40	%	46	%	32	%	10	%	29	%	33	%
Distributor D	16	%	18	%	17	%	23	%	22	%	25	%

Discontinued Operations

12 Months Ended

Dec. 31, 2021

Discontinued Operations

Discontinued Operations

Note 3—Discontinued Operations

On December 23, 2021, we closed an Asset and Purchase Agreement for the sale of OMIDRIA and certain related assets including inventory and prepaid expenses. We retained the outstanding accounts receivable and all outstanding liabilities related to OMIDRIA as of the closing date.

Upon closing, we received an up-front cash payment of $126.0 million. We will also receive a 50% royalty on OMIDRIA net sales in the U.S. between December 23, 2021 and the earlier of January 1, 2025 or the payment of the $200.0 million milestone described below. After such date, we will receive a 30% royalty on OMIDRIA net sales in the U.S. (the “U.S. base royalty rate”) until the expiration or termination of the last issued and unexpired U.S. patent. The U.S. base royalty rate is reduced to 10% upon the occurrence of certain events described in the Asset Purchase Agreement, including during any specific period in which OMIDRIA is no longer eligible for separate payment. We will also receive a royalty of 15% on OMIDRIA net sales outside the U.S. on a country-by-country basis between the closing date and the expiration or termination of the last issued and unexpired OMIDRIA patent in such country. We will receive a $200.0 million milestone payment if, prior to January 1, 2025, separate payment for OMIDRIA is secured in the U.S. for a continuous period of at least four years.

The sale of OMIDRIA was recorded as an asset sale and all comparative periods presented are required to be reclassified in the consolidated balance sheets. Additionally, the results of operations for OMIDRIA are reclassified to income from discontinued operations for all periods presented in the consolidated statements of operations and comprehensive loss.

Net income from discontinued operations, net of tax is as follows:


	Year Ended December 31,
	2021		2020		2019

	(In thousands)
Product sales, net	$	110,735	$	73,813	$	111,805
Royalty income		1,035		—		—
OMIDRIA income		111,770		73,813		111,805

Costs and expenses:
Cost of product sales		1,364		902		865
Research and development		3,839		3,205		3,372
Selling, general and administrative		25,428		23,389		24,912
Total costs and expenses		30,631		27,496		29,149
Income before income tax expense		81,139		46,317		82,656
Income tax expense		(1,006)		(11,245)		(19,774)
Net income from discontinued operations, net of tax		80,133		35,072		62,882
Gain on sale of OMIDRIA, net		305,648		—		—
Net income from discontinued operations, net of tax	$	385,781	$	35,072	$	62,882

The gain on the sale of OMIDRIA included in discontinued operations for the year ended December 31, 2021 is as follows:


	(In thousands)
Cash proceeds	$	125,993
OMIDRIA contract royalty asset		184,570
Gain on sale of OMIDRIA, gross		310,563
Transaction and closing costs		(1,972)
Restricted Stock Units ("RSUs") granted to transferred employees		(1,419)
Prepaid assets and inventory at cost		(1,524)
Gain on sale of OMIDRIA, net	$	305,648

Cash flow from discontinued operations is as follows:


	Year Ended December 31,
	2021		2020		2019

	(In thousands)
Total operating cash flows from discontinued operations	$	56,344	$	25,888	$	(11,886)
Total investing cash flows from discontinued operations	$	125,993	$	—	$	—

Net Loss Per Share

12 Months Ended

Dec. 31, 2021

Net Loss Per Share

Net Loss Per Share

Note 4—Net Loss Per Share

Our potentially dilutive securities include potential common shares related to our stock options, warrants, restricted stock units and unsecured convertible senior notes. Diluted earnings per share (“Diluted EPS”) considers the impact of potentially dilutive securities except in periods in which there is a loss because the inclusion of the potential common shares would have an anti-dilutive effect. Diluted EPS excludes the impact of potential common shares related to our stock options in periods in which the option exercise price is greater than the average market price of our common stock for the period.

Potentially dilutive securities excluded from Diluted EPS are as follows:


	Year Ended December 31,
	2021	2020	2019
2023 Notes convertible to common stock ⁽¹⁾	4,941,739	7,932,791	10,923,843
Outstanding options to purchase common stock	1,707,371	1,585,332	2,664,841
Outstanding restricted stock units	2,642	—	—
Outstanding warrants to purchase common stock	—	10,792	16,153
Total potentially dilutive shares excluded from loss per share	6,651,752	9,528,915	13,604,837

(1)

The 2023 Notes are subject to a capped call arrangement that potentially reduces the dilutive effect as described in “Note 9 — Unsecured Convertible Senior Notes”. Any potential impact of the capped call arrangement is excluded from this table.

Accounts Receivable, Net

12 Months Ended

Dec. 31, 2021

Accounts Receivable, Net.

Accounts Receivable, Net

Note 5—Accounts Receivable, Net

Accounts receivable, net consists of the following:


	December 31,		December 31,
	2021		2020

	(In thousands)
Trade receivables, net	$	36,505	$	3,771
Sublease and other receivables		1,650		70
Total accounts receivables, net	$	38,155	$	3,841

Trade receivables are shown net of $2.0 million and $1.2 million of chargeback and product return allowances as of December 31, 2021 and 2020, respectively.

Fair-Value Measurements

12 Months Ended

Dec. 31, 2021

Fair-Value Measurements

Fair-Value Measurements

Note 6—Fair-Value Measurements

As of December 31, 2021 and 2020, all investments were classified as short-term and available-for-sale. Investment income, which was included as a component of other income, consists of interest earned.

On a recurring basis, we measure certain financial assets at fair value. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability, an exit price, in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The accounting standard establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs, where available. The following summarizes the three levels of inputs required:

Level 1—Observable inputs for identical assets or liabilities, such as quoted prices in active markets;

Level 2—Inputs other than quoted prices in active markets that are either directly or indirectly observable; and

Level 3—Unobservable inputs in which little or no market data exists, therefore they are developed using estimates and assumptions developed by us, which reflect those that a market participant would use.

Our fair-value hierarchy for our financial assets measured at fair value on a recurring basis are as follows:


	December 31, 2021
	Level 1		Level 2		Level 3		Total

	(In thousands)
Assets:
Money-market funds classified as short-term investments	$	56,458	$	—	$	—	$	56,458
Money-market funds classified as non-current restricted investments		1,054		—		—		1,054
Total	$	57,512	$	—	$	—	$	57,512


	December 31, 2020
	Level 1		Level 2		Level 3		Total

	(In thousands)
Assets:
Money-market funds classified as short-term investments	$	124,452	$	—	$	—	$	124,452
Money-market funds classified as non-current restricted investments		1,055		—		—		1,055
Total	$	125,507	$	—	$	—	$	125,507

Cash held in demand deposit accounts of $100.8 million and $10.5 million is excluded from our fair-value hierarchy disclosure as of December 31, 2021 and 2020, respectively. There were no unrealized gains or losses associated with our short-term investments as of December 31, 2021 or 2020. The carrying amounts for receivables, accounts payable and accrued liabilities, and other current monetary assets and liabilities, including lease financing obligations, approximate fair value.

See “Note 9--Unsecured Convertible Senior Notes” for the carrying amount and estimated fair value of our 5.25% Convertible Senior Notes due 2026 and 6.25% Convertible Senior Notes due 2023.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Certain Balance Sheet Accounts

12 Months Ended

Dec. 31, 2021

Certain Balance Sheet Accounts

Certain Balance Sheet Accounts

Note 7—Certain Balance Sheet Accounts

Property and Equipment, Net

Property and equipment, net consists of the following:


	December 31,		December 31,
	2021		2020

	(In thousands)
Finance leases	$	5,979	$	5,690
Laboratory equipment		3,091		2,898
Computer equipment		1,069		985
Office equipment and furniture		625		625
Total cost		10,764		10,198
Less accumulated depreciation and amortization		(9,033)		(7,647)
Total property and equipment, net	$	1,731	$	2,551

For the years ended December 31, 2021, 2020 and 2019, depreciation and amortization expenses were $1.4 million, $1.6 million and $1.8 million, respectively.

Accrued Expenses

Accrued expenses consist of the following:


	December 31,		December 31,
	2021		2020

	(In thousands)
Sales rebates, fees and discounts	$	8,442	$	3,326
Consulting and professional fees		7,455		5,393
Interest payable		5,172		5,205
Contract research and development		3,916		7,952
Employee compensation		3,706		3,948
Clinical trials		2,430		2,121
Other accrued expenses		2,013		810
Total accrued expenses	$	33,134	$	28,755

Line of Credit

12 Months Ended

Dec. 31, 2021

Line of Credit

Line of Credit

Note 8—Line of Credit

We have a Loan and Security Agreement with Silicon Valley Bank (“SVB”), which provides for a $50.0 million revolving line of credit facility (the “Line of Credit Agreement”). The Line of Credit Agreement is secured by all our assets excluding intellectual property and development program inventories and matures in August 2022. In connection with the execution of the Asset Purchase Agreement, on December 1, 2021 the Company and SVB entered into a Consent and Second Amendment to the Line of Credit Agreement, under which SVB provided its consent to the Transaction and release of liens with respect to the transferred assets. In addition, the amendment revised the original Line of Credit Agreement to provide that the borrowing base will include 85% of eligible monthly royalty payments, including those from the Rayner and its affiliates, less applicable discounts, credits and other offsets.

Interest on amounts outstanding is payable monthly at a floating rate equal to the greater of 5.50% and the prime rate per annum. If the Line of Credit Agreement is terminated prior to the maturity date for any reason other than replacement with a new SVB credit facility or a new syndicated facility in which SVB acts as the agent, we are required to pay a termination fee of $1.0 million. We paid an initial commitment fee of $150,000 upon closing and have paid additional commitment fees of $150,000 on each of the first and second anniversaries of the closing date.

The Line of Credit Agreement includes customary events of default that include, among other things, breach, non-payment, inaccuracy of representations and warranties, the occurrence of a material adverse change in our business or prospects for repayment of the Line of Credit Agreement, cross default to material indebtedness or material agreements, bankruptcy and insolvency, material judgments and a change in control. In the event of default, SVB may require all obligations under the Line of Credit Agreement to be immediately due and payable and charge a default rate of interest thereon. Additionally, under the loan and security agreement with SVB, we have agreed not to pay any dividends.

As of December 31, 2021 and 2020, we had no outstanding borrowings under the Line of Credit Agreement.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-URI http://asc.fasb.org/topic&trid=2208564

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (h)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (g)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495348-112611

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-Publisher FASB
-Name Accounting Standards Codification
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-Paragraph 1B
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
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-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (i)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

+ Details

Unsecured Convertible Senior Notes

12 Months Ended

Dec. 31, 2021

Unsecured Convertible Senior Notes

Unsecured Convertible Senior Notes

Note 9—Unsecured Convertible Senior Notes

On January 1, 2021, we adopted ASU 2020-06, Debt—Debt with Conversion Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) on a modified retrospective basis. ASU 2020-06 removes the separate liability and equity accounting for our convertible senior notes. Consequently, we now account for our convertible senior notes wholly as debt. Upon adoption, we removed the equity component allocated to debt issuance costs increasing unsecured convertible senior notes and shareholders’ equity by $75.5 million.

In November 2018, we issued $210.0 million in aggregate principal amount on our 2023 Notes, and in August and September 2020, we issued an aggregate principal amount of $225.0 million on our 2026 Notes. We used a portion of the proceeds from the 2026 Notes to repurchase $115.0 million principal amount of the 2023 Notes and terminate a corresponding portion of the related capped call.

Unsecured convertible senior notes outstanding at December 31, 2021 and 2020, respectively, are as follows:


	Balance as of December 31, 2021
	2023 Notes		2026 Notes		Total

	(In thousands)
Principal amount	$	95,000	$	225,030	$	320,030
Unamortized debt issuance costs		(1,282)		(5,290)		(6,572)
Total unsecured convertible senior notes, net	$	93,718	$	219,740	$	313,458

Fair value of outstanding unsecured convertible senior notes (1)	$	87,163	$	171,867

Amount by which the unsecured convertible senior notes if-converted value exceeds their principal amount	$	—	$	—



	Balance as of December 31, 2020
	2023 Notes		2026 Notes		Total

	(In thousands)
Principal amount	$	95,000	$	225,030	$	320,030
Unamortized discount		(17,101)		(60,544)		(77,645)
Unamortized issuance costs attributable to liability component		(1,481)		(4,616)		(6,097)
Total unsecured convertible senior notes, net	$	76,418	$	159,870	$	236,288

Fair value of outstanding unsecured convertible senior notes (1)	$	101,769	$	246,779

Amount by which the unsecured convertible senior notes if-converted value exceeds their principal amount	$	6,769	$	21,749

Equity component	$	25,854	$	63,544
Unamortized issuance costs		(837)		(1,916)
Net carrying amount of equity component (2)	$	25,017	$	61,628

(1)	The fair value is classified as Level 3 due to the limited trading activity for the unsecured convertible senior notes.

(2)	Included in the consolidated balance sheet within additional paid-in capital.

2023 Convertible Senior Notes

In November 2018, we issued $210.0 million in aggregate principal amount on our 2023 Notes. The 2023 Notes are unsecured and accrue interest at an annual rate of 6.25% per annum, payable semi-annually in arrears on May 15 and November 15 of each year. The 2023 Notes mature on November 15, 2023 unless earlier purchased, redeemed or converted in accordance with their terms.

The 2023 Notes are convertible into cash, shares of our common stock or a combination thereof, as we elect at our sole discretion. The initial conversion rate is 52.0183 shares of our common stock per $1,000 of note principal (equivalent to an initial conversion price of approximately $19.22 per share of common stock), subject to adjustment in certain circumstances. To reduce the dilutive impact or potential cash expenditure associated with conversion of the 2023 Notes, we entered into a capped call transaction (the 2023 Capped Call), which essentially covers the number of shares of our common stock underlying the 2023 Notes when our common stock is trading between the initial conversion price of $19.22 per share and $28.84 per share. However, should the market price of our common stock exceed the $28.84 cap, then the conversion of the 2023 Notes would have an additional dilutive impact or may require a cash expenditure to the extent the market price exceeds the cap price.

In August and September 2020, we issued the 2026 Notes and used approximately $125.6 million of the net proceeds to repurchase $115.0 million principal amount of the 2023 Notes (see “2026 Convertible Senior Notes” below).

The settlement consideration was allocated between the repurchase of the liability and the equity component with the fair value of the liability component estimated to be $103.6 million based on the expected future cash flows associated with the $115.0 million principal amount discounted at a 9.9% effective interest rate. The remaining $22.0 million was accounted for as a repurchase of the equity component, reducing additional paid-in capital. As of the repurchase date of August 14, 2020, the carrying value of the repurchased 2023 Notes, net of unamortized debt discount and issuance costs, was $90.2 million. The difference between the $103.6 million fair value of the 2023 Notes repurchased and the carrying value of $90.2 million resulted in a $13.4 million loss on early extinguishment of debt. After giving effect to the repurchase, the total principal amount outstanding under the 2023 Notes as of August 14, 2020 was $95.0 million.

In connection with the repurchase of $115.0 million in principal amount of the 2023 Notes, we terminated a proportionate amount of the related 2023 Capped Call for approximately 6.0 million underlying shares. Upon settlement, the Company received $7.5 million in cash and recorded a $0.8 million loss due to the change in fair value of the contract between signing and settlement dates. The proceeds were recorded as cash with a corresponding increase in additional paid-in capital, and the loss was recorded to other expense in the consolidated statements of operations and comprehensive loss. As of December 31, 2020, approximately 4.9 million shares remained outstanding on the 2023 Capped Call.

The following table sets forth total interest expense recognized in connection with the 2023 Notes:


	Year Ended December 31,
	2021		2020		2019

	(In thousands)
Contractual interest expense	$	5,938	$	10,410	$	13,089
Amortization of debt issuance costs		618		669		8,496
Amortization of debt discount		—		7,728		736
Total	$	6,556	$	18,807	$	22,321

2026 Convertible Senior Notes

In August and September 2020, we issued $225.0 million aggregate principal amount on our 2026 Notes. The issuance of the 2026 Notes and use of proceeds are as follows:


	(In thousands)
2026 Notes principal amount issued	$	225,030
Repurchase of 2023 Notes		(125,638)
Purchase of 2026 Capped Call		(23,223)
Termination of the 2023 Capped Call contracts related to debt repurchased		7,549
Issuance costs		(6,785)
Net proceeds available for corporate use	$	76,933

The 2026 Notes are unsecured and accrue interest at an annual rate of 5.25% per annum, payable semi-annually in arrears on February 15 and August 15 of each year. The 2026 Notes mature on February 15, 2026, unless earlier purchased, redeemed or converted in accordance with their terms.

The initial conversion rate is 54.0906 shares of our common stock per $1,000 of note principal (equivalent to an initial conversion price of approximately $18.4875 per share of common stock), which equals approximately 12.2 million shares issuable upon conversion, subject to adjustment in certain circumstances.

The 2026 Notes are convertible at the option of the holders on or after November 15, 2025 at any time prior to the close of business on February 12, 2026, the second scheduled trading day immediately before the stated maturity date of February 15, 2026. Additionally, holders may convert their 2026 Notes at their option at specified times prior to the maturity date only if:

(1)

during any calendar quarter, beginning after September 30, 2020, that the last reported sale price per share of our common stock exceeds 130% of the conversion price of the 2026 Notes for each of at least 20 trading days in the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter;

(2)

during the five consecutive business days immediately after any five-consecutive-trading-day period (such five-consecutive-trading-day period, the “measurement period”) in which the trading price per $1,000 principal amount of 2026 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price per share of our common stock on such trading day and the conversion rate on such trading day;

(3)

there is an occurrence of one or more certain corporate events or distributions of our common stock; or

(4)

we call the 2026 Notes for redemption.

We may elect, at our sole discretion, to convert the 2026 Notes into cash, shares of our common stock or a combination thereof.

Subject to the satisfaction of certain conditions, we may redeem in whole or in part the 2026 Notes at our option beginning August 15, 2023 through the 50th scheduled trading day immediately before the maturity date at a cash redemption price equal to the principal amount of the 2026 Notes to be redeemed plus any accrued and unpaid interest to, but excluding, the redemption date. The 2026 Notes are subject to redemption only if certain requirements are satisfied, including that the last reported sale price per share of our common stock exceeds 130% of the conversion price on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date we send the related redemption notice and (ii) the trading day immediately before the date we send such notice.

In order to reduce the dilutive impact or potential cash expenditure associated with the conversion of the 2026 Notes, we entered into capped call transactions in connection with the issuances of the 2026 Notes (the 2026 Capped Call). The 2026 Capped Call will cover, subject to anti-dilution adjustments substantially similar to those applicable to the 2026 Notes, the number of shares of common stock underlying the 2026 Notes when our common stock is trading within the range of approximately $18.49 and $26.10. However, should the market price of our common stock exceed the $26.10 cap, then the conversion of the 2026 Notes would have an additional dilutive impact or may require a cash expenditure to the extent the market price exceeds the cap price. The 2026 Capped Call will expire on various dates over the 50-trading-day period ranging from December 2, 2025 to February 12, 2026, if not exercised earlier. The 2026 Capped Call is a separate transaction and not part of the terms of the 2026 Notes and was executed separately from the issuance of the 2026 Notes. The amount paid for the 2026 Capped Call was recorded as a reduction to additional paid-in capital in the condensed consolidated balance sheet. As of December 31, 2021, approximately 12.2 million shares remained outstanding under the 2026 Capped Call.

We evaluated the accounting for the issuance of the 2026 Notes and concluded that the embedded conversion features meet the requirements for a derivative scope exception for instruments that are both indexed to an entity’s own stock and classified in stockholders’ equity in its balance sheet, and that the cash conversion guidance applies. Therefore, proceeds of $225.0 million are allocated first to the liability component based on the fair value of non-convertible debt with the residual proceeds allocated to the equity component for the conversion features. The Company allocated $6.8 million in issuance costs associated with the 2026 Notes to the liability and equity component in the same proportion as the $225.0 million in proceeds.

Further, we concluded the 2026 Capped Call qualifies for a derivative scope exception for instruments that are both indexed to an entity’s own stock and classified in stockholders’ equity in its balance sheet. Consequently, the fair value of the 2026 Capped Call of $23.2 million is classified as equity, not accounted for as derivatives, and will not be subsequently remeasured.

In accounting for the issuance of the 2026 Notes, we separated the 2026 Notes into liability and equity components, using an effective interest rate of 12.5% to determine the fair value of the liability component.

The following table sets forth interest expense recognized related to the 2026 Notes:


	Year Ended December 31,
	2021		2020		2019

	(In thousands)
Contractual interest expense	$	11,814	$	4,397	$	—
Amortization of debt issuance costs		1,078		230		—
Amortization of debt discount		—		3,022		—
Total	$	12,892	$	7,649	$	—

Future minimum principal for the 2023 and 2026 Notes as of December 31, 2021 are as follows:


	(In thousands)
2022	$	—
2023		95,000
2024		—
2025		—
2026		225,030
Total future minimum principal payments under the convertible senior notes	$	320,030

Leases Liabilities

12 Months Ended

Dec. 31, 2021

Leases

Leases

Note 10—Lease Liabilities

We have operating leases related to our office and laboratory space. The initial term of the leases is through November 2027 and we have two options to extend the lease term, each by five years. We have finance leases for certain laboratory and office equipment that have lease terms expiring through March 2025.

Lease-related assets and liabilities recorded on the balance sheet are as follows:


	December 31,			December 31,
	2021			2020

	(In thousands)
Assets
Operating lease assets	$	28,276		$	25,526
Finance lease assets, net		1,009			1,822
Total lease assets	$	29,285		$	27,348

Liabilities
Current:
Operating leases	$	4,607		$	2,740
Finance leases		648			1,042
Non-current:
Operating leases		28,811			28,032
Finance leases		315			738
Total lease liabilities	$	34,381		$	32,552

Weighted-average remaining lease term
Operating leases		5.9 years			6.8 years
Finance leases		1.7 years			1.9 years
Weighted-average discount rate
Operating leases		12.81	%		12.85	%
Finance leases		12.70	%		11.85	%

The components of total lease costs are as follows:


	Year Ended
	December 31,
	2021		2020

	(In thousands)
Lease cost
Operating lease cost	$	7,364	$	6,055
Finance lease cost:
Amortization		1,102		1,367
Interest		181		295
Variable lease cost		3,519		2,893
Sublease income		(1,776)		(1,300)
Net lease cost	$	10,390	$	9,310

The supplemental cash flow information related to leases during 2021 is as follows:


	Year Ended
	December 31,
	2021		2020

	(In thousands)
Cash paid for amounts included in the measurement of lease liabilities
Cash payments for operating leases	$	10,162	$	10,103
Cash payments for financing leases	$	1,171	$	1,490

The future maturities of our lease liabilities as of December 31, 2021 are as follows:


	Operating		Finance
	Leases		Leases

	(In thousands)
2022	$	7,118	$	702
2023		7,276		274
2024		7,438		71
2025		7,508		—
2026		7,302		—
Thereafter		6,264		—
Total undiscounted lease payments		42,906		1,047
Less interest		(9,488)		(84)
Total lease liabilities	$	33,418	$	963

In January 14, 2022, we entered into an agreement with our landlord to early terminate a portion of the rentable square footage of our office and lab premises. Effective December 31, 2021, the square footage was reduced by 13,904 square feet.

Commitments and Contingencies

12 Months Ended

Dec. 31, 2021

Commitments and Contingencies.

Commitments and Contingencies

Note 11—Commitments and Contingencies

Contracts

We have various agreements with third parties that collectively require payment of termination fees totaling $32.0 million as of December 31, 2021 if we cancel the work within specific time frames, either prior to commencing or during performance of the contracted services.

Development Milestones and Product Royalties

We have licensed a variety of intellectual property from third parties that we are currently developing or may develop in the future. These licenses may require milestone payments during the clinical development processes or upon approval of commercial sale as well as low single to low double-digit royalties on the net income or net sales of the product. For the years ended December 31, 2021 and December 31, 2020, we paid $0.5 million and $5.5 million in technology access fees.

Shareholders' Equity

12 Months Ended

Dec. 31, 2021

Shareholders' Deficit

Shareholders' Deficit

Note 12—Shareholders’ Equity

Common Stock

As of December 31, 2021, we had reserved shares of common stock under our equity plans as follows:


Options granted and outstanding		12,709,887
Restricted stock units granted and outstanding		222,000
Common stock warrants		200,000
Awards available under issuance under the 2017 Plan		6,046,652
Total shares reserved		19,178,539

Securities Offerings – In August 2020, we sold 6.9 million shares of our common stock at a public offering price of $14.50 per share. After deducting underwriter discounts and offering expenses, we received net proceeds from the transaction of $93.7 million.

In December 2019, we sold 4.4 million shares of our common stock at a public offering price of $13.10 per share. After deducting underwriter discounts and offering expense, we received net proceeds from the transaction of $54.2 million.

At the Market Sales Agreement – We have a sales agreement to sell shares of our common stock having an aggregate offering price of up to $150.0 million, from time to time, through an “at the market” equity offering program.

Warrants

In connection with various previously outstanding debt agreements we have issued warrants to purchase shares of our common stock as follows:


Outstanding At
December 31, 2021	Expiration Date	Exercise Price
200,000	April 12, 2023	$	23.00

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

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+ Details

Stock-Based Compensation

12 Months Ended

Dec. 31, 2021

Stock-Based Compensation.

Stock-Based Compensation

Note 13—Stock-Based Compensation

Our equity plans provide for the grant of incentive and non-statutory stock options, stock appreciation rights, restricted stock awards, restricted stock units, performance units, performance shares and other stock and cash awards to employees, directors and consultants. Stock options are granted with an exercise price not less than the fair market value of Omeros’ common stock on the date of the grant. Any unexercised options expire 10 years from grant date, and any unvested stock options granted which are subsequently canceled become available for future reissuance.

Vesting schedules for our equity plans generally are as follows:


Grant Type		Vesting Schedule
Employee initial options grants		25% at one-year anniversary, 1/48 monthly thereafter
Employee recurring options grants		1/48 monthly
Board member initial options grants		33+% per year for 3 years
Board member recurring options grants		100% after one year
Non-employee consultant options grants		1/12 or 1/48 monthly
Employee RSUs		50% after one year, 50% after two years

In November 2020, restricted stock awards (“RSA’s”) totaling 14,000 shares with a fair value of $11.05 per share were granted to OMIDRIA sales employees. The awards vested immediately upon grant.

In November 2021, RSA’s totaling 11,700 shares with a fair value of $7.80 per share were granted to OMIDRIA sales employees. The awards vested immediately upon grant.

In December 2021, the Company granted 222,000 shares of RSUs with a fair value of $7.53 per share to employees of the Company who accepted offers to transition to Rayner after December 31, 2021.

Stock-based compensation expense is as follows:



	Year Ended December 31,
	2021		2020		2019

	(In thousands)
Continuing operations
Research and development	$	6,791	$	6,163	$	6,008
Selling, general and administrative		8,154		7,614		6,959
Total stock-based compensation in continuing operations		14,945		13,777		12,967
Discontinued operations		2,685		1,148		818
Total Stock-based compensation	$	17,630	$	14,925	$	13,785

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model. The following assumptions were applied to stock option grants during the periods ended:


	Year Ended December 31,
	2021			2020			2019
Estimated weighted-average fair value	$	10.54		$	8.19		$	9.93
Weighted-average assumptions:
Expected volatility		81	%		77	%		80	%
Expected life, in years		6.0			6.0			6.0
Risk-free interest rate		1.06	%		1.06	%		2.41	%
Expected dividend yield		—	%		—	%		—	%

Expected volatility is based on the historical volatility of our stock price weighted by grant issuances over the reporting period. We use the simplified method to calculate expected life used in the valuation of our stock options. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant. Forfeiture expense is estimated at the time of grant and revised in subsequent periods if actual forfeitures differ from those estimates.

Stock option activity for all stock plans is as follows:


		Weighted-
		Average			Aggregate
		Exercise		Remaining	Intrinsic
	Options	Price per		Contractual Life	Value
	Outstanding	Share		(In years)	(In thousands)
Balance at December 31, 2020	11,938,528	$	11.92
Granted	2,525,525		15.34
Exercised	(921,023)		9.10
Forfeited	(833,143)		14.85
Balance at December 31, 2021	12,709,887	$	12.61	5.6	$	261
Vested and expected to vest at December 31, 2021	12,348,044	$	12.56	5.5	$	261
Exercisable at December 31, 2021	9,295,395	$	12.00	4.5	$	261

The total intrinsic value of options exercised during the years ended December 31, 2021, 2020 and 2019 was $7.8 million, $5.6 million and $5.4 million, respectively.

At December 31, 2021, there were 3.4 million unvested options outstanding that vest over a weighted-average period of 2.6 years. The remaining estimated compensation expense to be recognized in connection with these unvested options is $27.7 million.

Income Taxes

12 Months Ended

Dec. 31, 2021

Income Taxes

Income Taxes

Note 14—Income Taxes

The components of income tax benefit from continuing operations are as follows:


	December 31,
	2021		2020		2019

	(In thousands)
Current income tax expense:
Federal	$	—	$	—	$	—
State		—		—		—
Total current income tax expense		—		—		—

Deferred income tax expense (benefit)
Federal		—		(19,472)		(16,716)
State		—		(3,784)		(3,058)
Total deferred income tax expense (benefit)		—		(23,256)		(19,774)
Income tax expense (benefit)	$	—	$	(23,256)	$	(19,774)

In December 2019, the Financial Accounting Standards Board issued ASU 2019-12, Income Taxes (Topic 740), which is intended to simplify various aspects of the income tax accounting guidance. ASU 2019-12 eliminates the exception to the incremental approach of intra-period tax allocation when there is a loss from continuing operations and income or gain from other items. As the Company prospectively adopted ASU 2019-12 January 1, 2021, we did not apply any intraperiod allocation rules to 2021.

To reflect intra-period tax allocation rules in prior years, we reclassified the tax benefit of income from discontinued operations to offset losses from continuing operations. During 2020, we recorded an income tax benefit of $23.3 million comprising $12.0 million related to the issuance of our 2026 and 2023 Notes, and an additional $11.2 million income tax benefit related to the sale of OMIDRIA assets to Rayner into income from continuing operations. During 2019, we recorded $19.8 million of income tax benefit into continuing operations related to OMIDRIA assets sold to Rayner.

Under intraperiod allocation rules, the deferred tax liability related to the convertible debt and income earned from the sale of assets to Rayner, is a source of income that can be used to recognize the tax benefit of the current year loss through continuing operations. Deferred income taxes reflect the tax effect of net operating loss and tax credit carryforwards and the net temporary difference between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

For the year ended December 31, 2021, we recorded state income tax expense of $1.0 million as a component of net income from discontinued operations, net of tax related to the sale of OMIDRIA to Rayner which could not be offset by net operating losses and tax credit carryforwards. The $0.3 million income tax payable is included in accrued expense in

our consolidated balance sheet as of December 31, 2021 and $0.7 million of deferred income tax liability is included in the table below.

Significant components of deferred income taxes are as follows:


	December 31,
	2021		2020

	(In thousands)
Deferred tax assets:
Net operating loss carryforwards	$	143,657	$	149,993
Research and development tax credits		66,612		56,103
Stock-based compensation		11,327		10,586
Lease liability		9,995		8,646
Disallowed interest expense		—		11,859
Other		17,862		7,411
Total deferred tax assets		249,453		244,598
Deferred tax liabilities:
Property and equipment		(102)		(113)
Gain on discontinued operations		(42,212)		—
Equity component of Convertible Notes		—		(18,302)
Right of use assets		(6,467)		(6,197)
Total deferred tax liabilities		(48,781)		(24,612)
Net deferred tax assets before valuation allowance		200,672		219,986
Less valuation allowance		(201,340)		(219,986)
Net deferred tax liabilities	$	(668)	$	—

Net deferred tax liabilities are are included as other accrued liabilities – noncurrent in our consolidated balance sheet as of December 31, 2021.

As of December 31, 2021 and 2020, we had federal net operating loss carryforwards of approximately $630.6 million and $658.8 million, respectively, and state net operating losses of approximately $245.1 million and $257.1 million, respectively.

In certain circumstances, due to ownership changes, our net operating loss and tax credit carryforwards may be subject to limitations under Section 382 of the Internal Revenue Code. To date, we have not completed a Section 382 study. Unless previously utilized, net operating losses of $407.7 million generated prior to 2018 will expire between 2032 and 2037. The net operating loss of $251.5 million generated after 2018 should carryforward indefinitely. Unless previously utilized, research and development tax credit carryforward will expire between 2022 and 2041.

We have established a 100% valuation allowance due to the uncertainty of our ability to generate sufficient taxable income to realize the deferred tax assets. During 2021, our valuation allowance decreased $19.3 million due to utilizing NOLs to offset our income from discontinued operations. During 2020 our valuation allowance increased $37.8 million primarily due to incurring net operating losses during these periods.

Reconciliation of income tax computed at federal statutory rates to the reported provisions for income taxes on continuing operations is as follows:


	Year ended December 31,
	2021		2020		2019
U.S. Federal statutory rate on net loss	(21.0)	%	(21.0)	%	(21.0)	%
State tax, net of federal tax benefit	(1.6)	%	(3.1)	%	(2.8)	%
Change in valuation allowance	27.9	%	19.3	%	14.3	%
Tax credits	(5.5)	%	(6.2)	%	(3.0)	%
Other	0.2	%	(0.8)	%	0.7	%
Effective tax rate	(0.0)	%	(11.8)	%	(11.8)	%

We file federal and certain state income tax returns, which provides varying statutes of limitations on assessments. However, because of net operating loss carryforwards, substantially all our tax years remain open to federal and state tax examination.

We recognize interest and penalties related to the underpayment of income taxes as a component of income tax expense. To date, there have been no interest or penalties charged to us in relation to the underpayment of income taxes.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted and signed into law in response to COVID-19. The CARES Act, among other things, includes several significant provisions which impact corporate taxpayers' accounting for income taxes, including a modification to the utilization of net operating losses and interest expense deduction limitations. The provisions of the CARES Act do not impact our tax provision.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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+ Details

401k Retirement Plan

12 Months Ended

Dec. 31, 2021

401(k) Retirement Plan

401(k) Retirement Plan

Note 15—401(k) Retirement Plan

Our 401(k) retirement plan provides for an annual company discretionary match on employee contributions up to 4.0% of each participating employee’s eligible earnings, with a maximum company match of $4,000 per employee per year. All employees are eligible to participate.

- Definition

The entire disclosure for retirement benefits.

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-URI http://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920

+ Details

Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2021

Significant Accounting Policies

Basis of Presentation

Risks and Uncertainties

Segments

We operate in one segment. Management uses cash flow as the primary measure to manage our business and does not segment our business for internal reporting or decision-making.

Use of Estimates

Discontinued Operations

OMIDRIA Royalties and OMIDRIA Contract Royalty Assets

Cash and Cash Equivalents, Short-Term Investments and Restricted Investments

Inventory

Receivables, Net

Property and Equipment, Net

Right-of-Use Assets and Related Lease Liabilities

Right-of-Use Assets and Related Lease Liabilities

We account for leases with initial terms of 12 months or less as operating expenses on a straight-line basis over the lease term.

Unsecured Convertible Senior Notes

Impairment of Long-Lived Assets

Revenue Recognition

Product Sales, Net

Chargeback and Rebates

Chargebacks and Rebates

Distribution Fees and Product Return Allowances

Research and Development

Selling, General and Administrative

Income Taxes

Stock-Based Compensation

Accumulated Other Comprehensive Loss

Financial Instruments and Concentrations of Credit Risk

Major Customers

revenues for the years ended December 31, 2021, 2020 and 2019 and greater than 10% of accounts receivable as of December 31, 2021, 2020 and 2019 as noted below.


	2021				2020				2019
	Percentage		Percentage		Percentage		Percentage		Percentage		Percentage
	of Total		of Accounts		of Total		of Accounts		of Total		of Accounts
	Revenue		Receivable		Revenue		Receivable		Revenue		Receivable
Distributor A	20	%	16	%	25	%	36	%	25	%	23	%
Distributor B	24	%	20	%	26	%	31	%	24	%	19	%
Distributor C	40	%	46	%	32	%	10	%	29	%	33	%
Distributor D	16	%	18	%	17	%	23	%	22	%	25	%

Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2021

Significant Accounting Policies

Schedule of Revenue by Major Customers by Reporting Segments


	2021				2020				2019
	Percentage		Percentage		Percentage		Percentage		Percentage		Percentage
	of Total		of Accounts		of Total		of Accounts		of Total		of Accounts
	Revenue		Receivable		Revenue		Receivable		Revenue		Receivable
Distributor A	20	%	16	%	25	%	36	%	25	%	23	%
Distributor B	24	%	20	%	26	%	31	%	24	%	19	%
Distributor C	40	%	46	%	32	%	10	%	29	%	33	%
Distributor D	16	%	18	%	17	%	23	%	22	%	25	%

Discontinued Operations (Tables)

12 Months Ended

Dec. 31, 2021

Discontinued Operations

Schedule of net income from discontinued operation


	Year Ended December 31,
	2021		2020		2019

	(In thousands)
Product sales, net	$	110,735	$	73,813	$	111,805
Royalty income		1,035		—		—
OMIDRIA income		111,770		73,813		111,805

Costs and expenses:
Cost of product sales		1,364		902		865
Research and development		3,839		3,205		3,372
Selling, general and administrative		25,428		23,389		24,912
Total costs and expenses		30,631		27,496		29,149
Income before income tax expense		81,139		46,317		82,656
Income tax expense		(1,006)		(11,245)		(19,774)
Net income from discontinued operations, net of tax		80,133		35,072		62,882
Gain on sale of OMIDRIA, net		305,648		—		—
Net income from discontinued operations, net of tax	$	385,781	$	35,072	$	62,882

Schedule of gain on sale of Omidria


	(In thousands)
Cash proceeds	$	125,993
OMIDRIA contract royalty asset		184,570
Gain on sale of OMIDRIA, gross		310,563
Transaction and closing costs		(1,972)
Restricted Stock Units ("RSUs") granted to transferred employees		(1,419)
Prepaid assets and inventory at cost		(1,524)
Gain on sale of OMIDRIA, net	$	305,648

Schedule of cash flow from discontinued operation


	Year Ended December 31,
	2021		2020		2019

	(In thousands)
Total operating cash flows from discontinued operations	$	56,344	$	25,888	$	(11,886)
Total investing cash flows from discontinued operations	$	125,993	$	—	$	—

- Definition

Tabular disclosure of information related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 11: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 12: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 13: http://fasb.org/us-gaap/role/ref/legacyRef
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-Name Accounting Standards Codification
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-URI http://asc.fasb.org/extlink&oid=109222650&loc=SL51721663-107760

+ Details

Net Loss Per Share (Tables)

12 Months Ended

Dec. 31, 2021

Net Loss Per Share

Calculation of Historical Outstanding Dilutive Securities Not Included in Diluted Loss per Share


	Year Ended December 31,
	2021	2020	2019
2023 Notes convertible to common stock ⁽¹⁾	4,941,739	7,932,791	10,923,843
Outstanding options to purchase common stock	1,707,371	1,585,332	2,664,841
Outstanding restricted stock units	2,642	—	—
Outstanding warrants to purchase common stock	—	10,792	16,153
Total potentially dilutive shares excluded from loss per share	6,651,752	9,528,915	13,604,837

(1)

Accounts Receivable, Net (Tables)

12 Months Ended

Dec. 31, 2021

Accounts Receivable, Net.

Schedule of accounts receivable


	December 31,		December 31,
	2021		2020

	(In thousands)
Trade receivables, net	$	36,505	$	3,771
Sublease and other receivables		1,650		70
Total accounts receivables, net	$	38,155	$	3,841

Fair-Value Measurements (Tables)

12 Months Ended

Dec. 31, 2021

Fair-Value Measurements

Financial Assets and Liabilities Measured at Fair Value on Recurring Basis


	December 31, 2021
	Level 1		Level 2		Level 3		Total

	(In thousands)
Assets:
Money-market funds classified as short-term investments	$	56,458	$	—	$	—	$	56,458
Money-market funds classified as non-current restricted investments		1,054		—		—		1,054
Total	$	57,512	$	—	$	—	$	57,512


	December 31, 2020
	Level 1		Level 2		Level 3		Total

	(In thousands)
Assets:
Money-market funds classified as short-term investments	$	124,452	$	—	$	—	$	124,452
Money-market funds classified as non-current restricted investments		1,055		—		—		1,055
Total	$	125,507	$	—	$	—	$	125,507

Certain Balance Sheet Accounts (Tables)

12 Months Ended

Dec. 31, 2021

Certain Balance Sheet Accounts

Schedule of accounts receivable


	December 31,		December 31,
	2021		2020

	(In thousands)
Trade receivables, net	$	36,505	$	3,771
Sublease and other receivables		1,650		70
Total accounts receivables, net	$	38,155	$	3,841

Property, Plant and Equipment


	December 31,		December 31,
	2021		2020

	(In thousands)
Finance leases	$	5,979	$	5,690
Laboratory equipment		3,091		2,898
Computer equipment		1,069		985
Office equipment and furniture		625		625
Total cost		10,764		10,198
Less accumulated depreciation and amortization		(9,033)		(7,647)
Total property and equipment, net	$	1,731	$	2,551

Accrued Expenses


	December 31,		December 31,
	2021		2020

	(In thousands)
Sales rebates, fees and discounts	$	8,442	$	3,326
Consulting and professional fees		7,455		5,393
Interest payable		5,172		5,205
Contract research and development		3,916		7,952
Employee compensation		3,706		3,948
Clinical trials		2,430		2,121
Other accrued expenses		2,013		810
Total accrued expenses	$	33,134	$	28,755

Unsecured Convertible Senior Notes (Tables)

12 Months Ended

Dec. 31, 2021

Debt Instrument [Line Items]

Summary of unsecured convertible senior notes outstanding


	Balance as of December 31, 2021
	2023 Notes		2026 Notes		Total

	(In thousands)
Principal amount	$	95,000	$	225,030	$	320,030
Unamortized debt issuance costs		(1,282)		(5,290)		(6,572)
Total unsecured convertible senior notes, net	$	93,718	$	219,740	$	313,458

Fair value of outstanding unsecured convertible senior notes (1)	$	87,163	$	171,867

Amount by which the unsecured convertible senior notes if-converted value exceeds their principal amount	$	—	$	—



	Balance as of December 31, 2020
	2023 Notes		2026 Notes		Total

	(In thousands)
Principal amount	$	95,000	$	225,030	$	320,030
Unamortized discount		(17,101)		(60,544)		(77,645)
Unamortized issuance costs attributable to liability component		(1,481)		(4,616)		(6,097)
Total unsecured convertible senior notes, net	$	76,418	$	159,870	$	236,288

Fair value of outstanding unsecured convertible senior notes (1)	$	101,769	$	246,779

Amount by which the unsecured convertible senior notes if-converted value exceeds their principal amount	$	6,769	$	21,749

Equity component	$	25,854	$	63,544
Unamortized issuance costs		(837)		(1,916)
Net carrying amount of equity component (2)	$	25,017	$	61,628

(1)	The fair value is classified as Level 3 due to the limited trading activity for the unsecured convertible senior notes.

(2)	Included in the consolidated balance sheet within additional paid-in capital.

Schedule of future minimum payments of debt


	(In thousands)
2022	$	—
2023		95,000
2024		—
2025		—
2026		225,030
Total future minimum principal payments under the convertible senior notes	$	320,030

2023 Unsecured Convertible Senior Notes

Debt Instrument [Line Items]

Schedule of total interest expense recognized


	Year Ended December 31,
	2021		2020		2019

	(In thousands)
Contractual interest expense	$	5,938	$	10,410	$	13,089
Amortization of debt issuance costs		618		669		8,496
Amortization of debt discount		—		7,728		736
Total	$	6,556	$	18,807	$	22,321

2026 Unsecured Convertible Senior Notes

Debt Instrument [Line Items]

Summary of issuance of the notes and use of proceeds


	(In thousands)
2026 Notes principal amount issued	$	225,030
Repurchase of 2023 Notes		(125,638)
Purchase of 2026 Capped Call		(23,223)
Termination of the 2023 Capped Call contracts related to debt repurchased		7,549
Issuance costs		(6,785)
Net proceeds available for corporate use	$	76,933

Schedule of total interest expense recognized


	Year Ended December 31,
	2021		2020		2019

	(In thousands)
Contractual interest expense	$	11,814	$	4,397	$	—
Amortization of debt issuance costs		1,078		230		—
Amortization of debt discount		—		3,022		—
Total	$	12,892	$	7,649	$	—

Leases Liabilities (Tables)

12 Months Ended

Dec. 31, 2021

Leases

Schedule of lease-related assets and liabilities recorded on the balance sheet


	December 31,			December 31,
	2021			2020

	(In thousands)
Assets
Operating lease assets	$	28,276		$	25,526
Finance lease assets, net		1,009			1,822
Total lease assets	$	29,285		$	27,348

Liabilities
Current:
Operating leases	$	4,607		$	2,740
Finance leases		648			1,042
Non-current:
Operating leases		28,811			28,032
Finance leases		315			738
Total lease liabilities	$	34,381		$	32,552

Weighted-average remaining lease term
Operating leases		5.9 years			6.8 years
Finance leases		1.7 years			1.9 years
Weighted-average discount rate
Operating leases		12.81	%		12.85	%
Finance leases		12.70	%		11.85	%

Schedule of lease costs


	Year Ended
	December 31,
	2021		2020

	(In thousands)
Lease cost
Operating lease cost	$	7,364	$	6,055
Finance lease cost:
Amortization		1,102		1,367
Interest		181		295
Variable lease cost		3,519		2,893
Sublease income		(1,776)		(1,300)
Net lease cost	$	10,390	$	9,310

Schedule of supplemental cash flow information


	Year Ended
	December 31,
	2021		2020

	(In thousands)
Cash paid for amounts included in the measurement of lease liabilities
Cash payments for operating leases	$	10,162	$	10,103
Cash payments for financing leases	$	1,171	$	1,490

Schedule of operating and finance lease liability


	Operating		Finance
	Leases		Leases

	(In thousands)
2022	$	7,118	$	702
2023		7,276		274
2024		7,438		71
2025		7,508		—
2026		7,302		—
Thereafter		6,264		—
Total undiscounted lease payments		42,906		1,047
Less interest		(9,488)		(84)
Total lease liabilities	$	33,418	$	963

Shareholders' Equity (Tables)

12 Months Ended

Dec. 31, 2021

Shareholders' Deficit

Reserved Shares of Common Stock


Options granted and outstanding		12,709,887
Restricted stock units granted and outstanding		222,000
Common stock warrants		200,000
Awards available under issuance under the 2017 Plan		6,046,652
Total shares reserved		19,178,539

Schedule of Stockholders' Equity Note, Warrants or Rights


Outstanding At
December 31, 2021	Expiration Date	Exercise Price
200,000	April 12, 2023	$	23.00

Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2021

Stock-Based Compensation.

Schedule of equity plan

Vesting schedules for our equity plans generally are as follows:


Grant Type		Vesting Schedule
Employee initial options grants		25% at one-year anniversary, 1/48 monthly thereafter
Employee recurring options grants		1/48 monthly
Board member initial options grants		33+% per year for 3 years
Board member recurring options grants		100% after one year
Non-employee consultant options grants		1/12 or 1/48 monthly
Employee RSUs		50% after one year, 50% after two years

Stock-Based Compensation Expense



	Year Ended December 31,
	2021		2020		2019

	(In thousands)
Continuing operations
Research and development	$	6,791	$	6,163	$	6,008
Selling, general and administrative		8,154		7,614		6,959
Total stock-based compensation in continuing operations		14,945		13,777		12,967
Discontinued operations		2,685		1,148		818
Total Stock-based compensation	$	17,630	$	14,925	$	13,785

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions


	Year Ended December 31,
	2021			2020			2019
Estimated weighted-average fair value	$	10.54		$	8.19		$	9.93
Weighted-average assumptions:
Expected volatility		81	%		77	%		80	%
Expected life, in years		6.0			6.0			6.0
Risk-free interest rate		1.06	%		1.06	%		2.41	%
Expected dividend yield		—	%		—	%		—	%

Schedule of Stock Option Activity


		Weighted-
		Average			Aggregate
		Exercise		Remaining	Intrinsic
	Options	Price per		Contractual Life	Value
	Outstanding	Share		(In years)	(In thousands)
Balance at December 31, 2020	11,938,528	$	11.92
Granted	2,525,525		15.34
Exercised	(921,023)		9.10
Forfeited	(833,143)		14.85
Balance at December 31, 2021	12,709,887	$	12.61	5.6	$	261
Vested and expected to vest at December 31, 2021	12,348,044	$	12.56	5.5	$	261
Exercisable at December 31, 2021	9,295,395	$	12.00	4.5	$	261

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

Income Taxes

Schedule of Components of Income Tax Expense (Benefit)


	December 31,
	2021		2020		2019

	(In thousands)
Current income tax expense:
Federal	$	—	$	—	$	—
State		—		—		—
Total current income tax expense		—		—		—

Deferred income tax expense (benefit)
Federal		—		(19,472)		(16,716)
State		—		(3,784)		(3,058)
Total deferred income tax expense (benefit)		—		(23,256)		(19,774)
Income tax expense (benefit)	$	—	$	(23,256)	$	(19,774)

Significant Components of Deferred Tax Assets


	December 31,
	2021		2020

	(In thousands)
Deferred tax assets:
Net operating loss carryforwards	$	143,657	$	149,993
Research and development tax credits		66,612		56,103
Stock-based compensation		11,327		10,586
Lease liability		9,995		8,646
Disallowed interest expense		—		11,859
Other		17,862		7,411
Total deferred tax assets		249,453		244,598
Deferred tax liabilities:
Property and equipment		(102)		(113)
Gain on discontinued operations		(42,212)		—
Equity component of Convertible Notes		—		(18,302)
Right of use assets		(6,467)		(6,197)
Total deferred tax liabilities		(48,781)		(24,612)
Net deferred tax assets before valuation allowance		200,672		219,986
Less valuation allowance		(201,340)		(219,986)
Net deferred tax liabilities	$	(668)	$	—

Reconciliation of Federal Statutory Tax Rate to Effective Income Tax


	Year ended December 31,
	2021		2020		2019
U.S. Federal statutory rate on net loss	(21.0)	%	(21.0)	%	(21.0)	%
State tax, net of federal tax benefit	(1.6)	%	(3.1)	%	(2.8)	%
Change in valuation allowance	27.9	%	19.3	%	14.3	%
Tax credits	(5.5)	%	(6.2)	%	(3.0)	%
Other	0.2	%	(0.8)	%	0.7	%
Effective tax rate	(0.0)	%	(11.8)	%	(11.8)	%

Organization and Basis of Presentation (Details) $ in Thousands		12 Months Ended
	Dec. 23, 2021 USD ($)	Dec. 31, 2021 USD ($) segment	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Cash proceeds on sale of OMIDRIA		$ 125,993
Milestone payment receivable		200,000
Cash, cash equivalents and short-term investments		157,300
Receivables, net		38,155	$ 3,841
Net loss from continuing operations		$ 191,546	173,133	$ 147,368
Number of Operating Segments \| segment		1
Discontinued Operation \| Omidria Assets Disposal
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Cash proceeds on sale of OMIDRIA	$ 126,000	$ 125,993
Milestone payment receivable	$ 200,000	200,000
Milestone period	4 years
Net income from discontinued operations, net of tax		80,133	$ 35,072	$ 62,882
Market Offerings
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Maximum Aggregate Offering Price		$ 150,000

Significant Accounting Policies - Property and Equipment (Details) $ in Millions	12 Months Ended
	Dec. 31, 2021 USD ($)
Property, Plant and Equipment [Line Items]
Milestone payment receivable	$ 200.0
Minimum
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	3 years
Maximum
Property, Plant and Equipment [Line Items]
Property and equipment, useful life	10 years

Significant accounting policies - Unsecured Convertible Senior Notes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Sep. 30, 2020	Aug. 14, 2020	Dec. 31, 2019	Dec. 31, 2018	Nov. 30, 2018	Nov. 15, 2018
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Stockholders' equity	$ 23,780	$ (120,752)			$ (109,021)	$ (100,156)
Period chargebacks are generally settled	28 days
Period for product return past its expiration or damaged	12 months
Cumulative effect adjustment \| ASU 2020-06
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Stockholders' equity		(75,474)
Convertible Debt		$ 75,500
2023 Unsecured Convertible Senior Notes
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Interest rate (as a percent)		6.25%					6.25%	6.25%
Convertible Debt				$ 90,200
2026 Unsecured Convertible Senior Notes
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Interest rate (as a percent)		5.25%	5.25%

Significant Accounting Policies - Selling, General and Administrative (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Significant Accounting Policies
Advertising expense	$ 7.8	$ 5.6	$ 8.0

Significant Accounting Policies - Major Customers and Major Suppliers (Details) - Customer Concentration Risk	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Distributor A \| Percentage of Total Revenue
Concentration Risk [Line Items]
Concentration risk, percentage	20.00%	25.00%	25.00%
Distributor A \| Percentage of Accounts Receivable
Concentration Risk [Line Items]
Concentration risk, percentage	16.00%	36.00%	23.00%
Distributor B \| Percentage of Total Revenue
Concentration Risk [Line Items]
Concentration risk, percentage	24.00%	26.00%	24.00%
Distributor B \| Percentage of Accounts Receivable
Concentration Risk [Line Items]
Concentration risk, percentage	20.00%	31.00%	19.00%
Distributor C \| Percentage of Total Revenue
Concentration Risk [Line Items]
Concentration risk, percentage	40.00%	32.00%	29.00%
Distributor C \| Percentage of Accounts Receivable
Concentration Risk [Line Items]
Concentration risk, percentage	46.00%	10.00%	33.00%
Distributor D \| Percentage of Total Revenue
Concentration Risk [Line Items]
Concentration risk, percentage	16.00%	17.00%	22.00%
Distributor D \| Percentage of Accounts Receivable
Concentration Risk [Line Items]
Concentration risk, percentage	18.00%	23.00%	25.00%

Discontinued Operations - Narratives (Details) - USD ($) $ in Thousands		12 Months Ended
	Dec. 23, 2021	Dec. 31, 2021
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Cash proceeds on sale of OMIDRIA		$ 125,993
Milestone payment receivable		200,000
Discontinued Operation \| Omidria Assets Disposal
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Cash proceeds on sale of OMIDRIA	$ 126,000	125,993
Percentage of royalty receivable	50.00%
Percentage of royalty receivable after January 1, 2025 or payment of milestone	30.00%
Milestone payment receivable	$ 200,000	$ 200,000
Milestone Period	4 years
Percent of reduction in royalty receivable	10.00%
Percentage of royalty receivable outside US	15.00%

Discontinued Operations - Net Income Loss (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net income from discontinued operations, net of tax	$ 385,781	$ 35,072	$ 62,882
Discontinued Operation \| Omidria Assets Disposal
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Revenue	111,770	73,813	111,805
Cost of product sales	1,364	902	865
Research and development	3,839	3,205	3,372
Selling, general and administrative	25,428	23,389	24,912
Total costs and expenses	30,631	27,496	29,149
Income before income tax benefit (expense)	81,139	46,317	82,656
Income tax expense	(1,006)	(11,245)	(19,774)
Net income from discontinued operations, net of tax	80,133	35,072	62,882
Gain on disposal of OMIDRIA	305,648
Net income from discontinued operations, net of tax	385,781	35,072	62,882
Discontinued Operation \| Omidria Assets Disposal \| Product sales, net
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Revenue	110,735	$ 73,813	$ 111,805
Discontinued Operation \| Omidria Assets Disposal \| Royalty income
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Revenue	$ 1,035

Discontinued Operations - Gain Loss (Details) - USD ($) $ in Thousands		12 Months Ended
	Dec. 23, 2021	Dec. 31, 2021
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Cash proceeds		$ 125,993
Discontinued Operation \| Omidria Assets Disposal
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Cash proceeds	$ 126,000	125,993
OMIDRIA contract royalty asset		184,570
Gain on sale of OMIDRIA, gross		310,563
Transaction and closing costs		(1,972)
Restricted Stock Units ("RSUs") granted to transferred employees		(1,419)
Prepaid assets and inventory at cost		(1,524)
Gain on sale of OMIDRIA, net		$ 305,648

Discontinued Operations - Cash Flow (Details) - Discontinued Operation - Omidria Assets Disposal - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Total operating cash flows from discontinued operations	$ 56,344	$ 25,888	$ (11,886)
Total investing cash flows from discontinued operations	$ 125,993

Net Loss Per Share (Details) - shares	12 Months Ended
Net Loss Per Share (Details) - shares	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive shares excluded from loss per share	6,651,752	9,528,915	13,604,837
2023 Unsecured Convertible Senior Notes
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive shares excluded from loss per share	4,941,739	7,932,791	10,923,843
Outstanding options to purchase common stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive shares excluded from loss per share	1,707,371	1,585,332	2,664,841
Restricted Stock Units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive shares excluded from loss per share	2,642
Outstanding warrants to purchase common stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total potentially dilutive shares excluded from loss per share		10,792	16,153

Accounts Receivable, Net - Grant and Other Receivables (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Certain Balance Sheet Accounts
Trade receivables, net	$ 36,505	$ 3,771
Sublease and other receivables	1,650	70
Total accounts receivables, net	38,155	3,841
Chargeback and product return allowances	$ 2,000	$ 1,200

Fair-Value Measurements - Recurring Basis (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Money-market funds classified as short-term investments	$ 56,458	$ 124,452
Money-market funds classified as non-current restricted investments	1,054	1,055
Fair Value, Measurements, Recurring \| Money Market Funds
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Money-market funds classified as short-term investments	56,458	124,452
Money-market funds classified as non-current restricted investments	1,054	1,055
Total	57,512	125,507
Fair Value, Measurements, Recurring \| Level 1 \| Money Market Funds
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Money-market funds classified as short-term investments	56,458	124,452
Money-market funds classified as non-current restricted investments	1,054	1,055
Total	$ 57,512	$ 125,507

Fair-Value Measurements - Narrative (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Sep. 30, 2020	Nov. 30, 2018	Nov. 15, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	$ 100,808	$ 10,501
Unrealized gain (loss) on investments	$ 0	$ 0
2023 Unsecured Convertible Senior Notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest rate (as a percent)		6.25%		6.25%	6.25%
2026 Unsecured Convertible Senior Notes
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest rate (as a percent)		5.25%	5.25%

Certain Balance Sheet Accounts - Property and Equipment, Net (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Property, Plant and Equipment [Line Items]
Total cost	$ 10,764	$ 10,198
Less accumulated depreciation and amortization	(9,033)	(7,647)
Total property and equipment, net	1,731	2,551
Depreciation and amortization	1,386	1,616	$ 1,790
Finance leases
Property, Plant and Equipment [Line Items]
Total cost	5,979	5,690
Laboratory equipment
Property, Plant and Equipment [Line Items]
Total cost	3,091	2,898
Computer equipment
Property, Plant and Equipment [Line Items]
Total cost	1,069	985
Office equipment and furniture
Property, Plant and Equipment [Line Items]
Total cost	$ 625	$ 625

Certain Balance Sheet Accounts - Accrued Expenses (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Accrued expenses
Sales rebates, fees and discounts	$ 8,442	$ 3,326
Consulting and professional fees	7,455	5,393
Interest payable	5,172	5,205
Contract research and development	3,916	7,952
Employee compensation	3,706	3,948
Clinical trials	2,430	2,121
Other accrued expenses	2,013	810
Total accrued expenses	$ 33,134	$ 28,755

Line of Credit (Details) - USD ($)	12 Months Ended
Line of Credit (Details) - USD ($)	Dec. 31, 2021	Dec. 31, 2020
Debt Instrument
Outstanding amount	$ 313,458,000	$ 236,288,000
Line of Credit Agreement
Debt Instrument
Maximum borrowing capacity	$ 50,000,000.0
Borrowing option - percentage of eligible monthly royalty payments	85.00%
Basis for variable rate	5.50%
Debt termination fee	$ 1,000,000.0
Payment of initial commitment fee	150,000
Additional commitment fees payable each of the first and second anniversaries of the closing date	150,000
Outstanding amount	$ 0	$ 0

- Definition

Amount, after unamortized (discount) premium and debt issuance costs, of long-term debt. Includes, but not limited to, notes payable, bonds payable, debentures, mortgage loans and commercial paper. Excludes capital lease obligations.

+ References + Details

Unsecured Convertible Senior Notes - Unsecured convertible senior notes outstanding (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2021	Aug. 14, 2020	Dec. 31, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Principal amount	$ 320,030	$ 320,030
Unamortized discount	(77,645)	(6,572)
Unamortized issuance costs	(6,097)
Total unsecured convertible senior notes, net	236,288	313,458
Stockholders' equity	(120,752)	23,780		$ (109,021)	$ (100,156)
2023 Unsecured Convertible Senior Notes
Debt Instrument [Line Items]
Principal amount	95,000	95,000	$ 95,000
Unamortized discount	(17,101)	(1,282)
Unamortized issuance costs	(1,481)
Total unsecured convertible senior notes, net	76,418	93,718
Fair value of outstanding unsecured convertible senior notes (1)	101,769	87,163
Amount by which the unsecured convertible senior notes if-converted value exceeds their principal amount	6,769
Equity component	25,854
Unamortized issuance costs	(837)
Net carrying amount of equity component (2)	25,017
Convertible Debt			$ 90,200
2026 Unsecured Convertible Senior Notes
Debt Instrument [Line Items]
Principal amount	225,030	225,030
Unamortized discount	(60,544)	(5,290)
Unamortized issuance costs	(4,616)
Total unsecured convertible senior notes, net	159,870	219,740
Fair value of outstanding unsecured convertible senior notes (1)	246,779	$ 171,867
Amount by which the unsecured convertible senior notes if-converted value exceeds their principal amount	21,749
Equity component	63,544
Unamortized issuance costs	(1,916)
Net carrying amount of equity component (2)	61,628
Cumulative effect adjustment \| ASU 2020-06
Debt Instrument [Line Items]
Stockholders' equity	(75,474)
Convertible Debt	$ 75,500

Unsecured Convertible Senior Notes - 2023 Unsecured Convertible Senior Notes (Details) $ / shares in Units, shares in Millions		1 Months Ended	12 Months Ended
	Aug. 14, 2020 USD ($) shares	Nov. 30, 2018 USD ($) $ / shares	Dec. 31, 2020 USD ($) shares	Nov. 15, 2018
Debt Instrument [Line Items]
Loss on early extinguishment of debt			$ 13,374,000
Adjustments to additional paid-in capital due to repurchase of the equity component			22,073,000
Proceeds From Termination Of Capped Call Contracts			$ 7,549,000
2023 Unsecured Convertible Senior Notes
Debt Instrument [Line Items]
Principal amount		$ 210,000,000.0
Interest rate (as a percent)		6.25%	6.25%	6.25%
Conversion rate		0.0520183
Value used in calculation of conversion rate		$ 1,000
Conversion price \| $ / shares		$ 19.22
Proceeds from 2026 debt issuance used to repurchase 2023 Notes	$ 125,600,000
Principal amount of debt repurchased	115,000,000.0
Fair value of the liability component	$ 103,600,000
Effective interest rate to determine fair value of liability component (as a percent)	9.90%
Amount outstanding	$ 90,200,000
Number of underlying shares \| shares	6.0
Settlement loss upon termination of cap call contract	$ 800,000
Number of shares outstanding on the 2023 Capped Call \| shares			4.9
Loss on early extinguishment of debt	13,400,000
Adjustments to additional paid-in capital due to repurchase of the equity component	22,000,000.0
Proceeds From Termination Of Capped Call Contracts	$ 7,500,000
2023 Unsecured Convertible Senior Notes \| Minimum
Debt Instrument [Line Items]
Conversion price \| $ / shares		19.22
2023 Unsecured Convertible Senior Notes \| Maximum
Debt Instrument [Line Items]
Conversion price \| $ / shares		$ 28.84

Unsecured Convertible Senior Notes - Interest expense recognized (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
2023 Unsecured Convertible Senior Notes
Interest Expense, Debt [Abstract]
Contractual interest expense	$ 5,938	$ 10,410	$ 13,089
Amortization of debt issuance costs	618	669	8,496
Amortization of debt discount		7,728	736
Total	6,556	18,807	$ 22,321
2026 Unsecured Convertible Senior Notes
Interest Expense, Debt [Abstract]
Contractual interest expense	11,814	4,397
Amortization of debt issuance costs	1,078	230
Amortization of debt discount		3,022
Total	$ 12,892	$ 7,649

Unsecured Convertible Senior Notes - 2026 Unsecured Convertible Senior Notes (Details) $ / shares in Units, shares in Millions	2 Months Ended	12 Months Ended
	Sep. 30, 2020 USD ($) D $ / shares shares	Dec. 31, 2020 USD ($)	Dec. 31, 2021 shares
Debt Instrument [Line Items]
Repurchase of 2023 Notes		$ (125,638,000)
Proceeds from termination of capped call contracts		7,549,000
Issuance costs		$ (6,785,000)
2026 Unsecured Convertible Senior Notes
Debt Instrument [Line Items]
Principal amount	$ 225,000,000.0
Interest rate (as a percent)	5.25%	5.25%
2026 Notes principal amount issued	$ 225,030,000
Repurchase of 2023 Notes	(125,638,000)
Proceeds from termination of capped call contracts	7,549,000
Issuance costs	(6,785,000)
Purchase of 2026 Capped Call	(23,223,000)
Net proceeds available for corporate use	$ 76,933,000
Conversion rate	0.0540906
Value used in calculation of conversion rate	$ 1,000
Conversion price \| $ / shares	$ 18.4875
Shares upon conversion \| shares	12.2
Capped Call Transactions, Threshold Trading Day Period	50 days
Number of shares outstanding on the 2026 Capped Call \| shares			12.2
Fair value of equity component	$ 23,200,000
Effective interest rate to determine fair value of liability component (as a percent)	12.50%
2026 Unsecured Convertible Senior Notes \| Debt Conversion, After September 30, 2020
Debt Instrument [Line Items]
Stock price trigger (as a percent)	130.00%
Trading days, number \| D	20
Consecutive trading days, period \| D	30
Consecutive business days, period	5 days
Consecutive trading-day period	5 days
Maximum product of the closing sale price of shares of the Company's common stock and the applicable conversion rate for such trading day (as a percent)	98.00%
2026 Unsecured Convertible Senior Notes \| Debt Conversion, On Or After August 15, 2023
Debt Instrument [Line Items]
Stock price trigger (as a percent)	130.00%
Trading days, number \| D	20
Consecutive trading days, period \| D	30
2026 Unsecured Convertible Senior Notes \| Minimum
Debt Instrument [Line Items]
Conversion price \| $ / shares	$ 18.49
2026 Unsecured Convertible Senior Notes \| Maximum
Debt Instrument [Line Items]
Conversion price \| $ / shares	$ 26.10

Unsecured Convertible Senior Notes - Future minimum payments (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Long-term Debt, Fiscal Year Maturity [Abstract]
Total future minimum payments under the convertible senior notes	$ 320,030	$ 320,030
2023 and 2026 Convertible Senior Notes
Long-term Debt, Fiscal Year Maturity [Abstract]
2023	95,000
2026	225,030
Total future minimum payments under the convertible senior notes	$ 320,030

Leases (Details) $ in Thousands	12 Months Ended
Leases (Details) $ in Thousands	Dec. 31, 2021 USD ($) ft² item	Dec. 31, 2020 USD ($)
Leases
Number of options to extend lease \| item	2
Option to Extend	true
Expected lease term	5 years
Classification on the Balance Sheet
Right of use assets	$ 28,276	$ 25,526
Finance lease assets, net	1,009	1,822
Total lease assets	29,285	27,348
Operating leases, current	$ 4,607	$ 2,740
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]	Operating And Finance Lease Liability Current	Operating And Finance Lease Liability Current
Finance leases, current	$ 648	$ 1,042
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List]	Operating And Finance Lease Liability Current	Operating And Finance Lease Liability Current
Operating leases, non-current	$ 28,811	$ 28,032
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	Operating And Finance Lease Liability Noncurrent	Operating And Finance Lease Liability Noncurrent
Finance leases, non-current	$ 315	$ 738
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	Operating And Finance Lease Liability Noncurrent	Operating And Finance Lease Liability Noncurrent
Total lease liabilities	$ 34,381	$ 32,552
Operating leases	5 years 10 months 24 days	6 years 9 months 18 days
Finance leases	1 year 8 months 12 days	1 year 10 months 24 days
Operating leases	12.81%	12.85%
Finance leases	12.70%	11.85%
Lease cost
Operating lease cost	$ 7,364	$ 6,055
Amortization	1,102	1,367
Interest	181	295
Variable lease cost	3,519	2,893
Sublease income	(1,776)	(1,300)
Net lease cost	10,390	9,310
Cash payments for operating leases	10,162	10,103
Cash payments for financing leases	$ 1,171	$ 1,490
Area of operating leases \| ft²	13,904

Leases - Maturities (Details) $ in Thousands	Dec. 31, 2021 USD ($)
Operating Leases
2022	$ 7,118
2023	7,276
2024	7,438
2025	7,508
2026	7,302
Thereafter	6,264
Total undiscounted lease payments	42,906
Less interest	(9,488)
Lease liabilities	33,418
Finance Leases
2022	702
2023	274
2024	71
Total undiscounted lease payments	1,047
Less interest	(84)
Lease liabilities	$ 963

Commitments and Contingencies (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Commitments and Contingencies.
Contract termination fees	$ 32.0
Payment of technology access fees	$ 0.5	$ 5.5

Shareholders' Equity - Reserved Share of Common Stock (Details)	Dec. 31, 2021 shares
Reserved Common Stock [Line Items]
Shares reserved for further issuance	19,178,539
Options granted and outstanding
Reserved Common Stock [Line Items]
Shares reserved for further issuance	12,709,887
Restricted stock units granted and outstanding
Reserved Common Stock [Line Items]
Shares reserved for further issuance	222,000
Common stock warrants
Reserved Common Stock [Line Items]
Shares reserved for further issuance	200,000
Awards available under issuance under the 2017 Plan
Reserved Common Stock [Line Items]
Shares reserved for further issuance	6,046,652

Shareholders' Equity - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended		12 Months Ended
	Aug. 31, 2020	Dec. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2021
Class of Stock [Line Items]
Issuance of stock (in shares)	6,900,000	4,400,000
Share price (in USD per share)	$ 14.50	$ 13.10		$ 13.10
Proceeds from issuance of common stock, net	$ 93,700	$ 54,200	$ 93,675	$ 54,238
23.00
Class of Stock [Line Items]
Shares of common stock right to purchase by warrant (in shares)					200,000
Warrant exercise price (in USD per share)					$ 23.00
At The Market (ATM) Program
Class of Stock [Line Items]
Maximum aggregate offering price					$ 150,000

Stock-Based Compensation - Narrative (Details) - Outstanding options to purchase common stock - USD ($) shares in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Share-based Compensation Arrangement by Share-based Payment Award
Unvested options outstanding (shares)	3.4
Period for recognition	2 years 7 months 6 days
Unrecognized compensation expense	$ 27.7
Intrinsic value	$ 7.8	$ 5.6	$ 5.4
Maximum
Share-based Compensation Arrangement by Share-based Payment Award
Contractual term	10 years

Stock-Based Compensation - Equity plan (Details) - $ / shares	1 Months Ended			12 Months Ended
	Dec. 31, 2021	Nov. 30, 2021	Nov. 30, 2020	Dec. 31, 2021
Employee recurring grants
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Monthly vesting percentage				2.083%
Board member initial grants
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Vesting period				3 years
Yearly vesting percentage				33.00%
Board member recurring grants
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Vesting period				1 year
Yearly vesting percentage				100.00%
Non-employee consultant grants \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Monthly vesting percentage				8.33%
Non-employee consultant grants \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Monthly vesting percentage				2.0833%
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Granted (in shares)		11,700	14,000
Weighted average grant date fair value		$ 7.80	$ 11.05
Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Granted (in shares)	222,000
Weighted average grant date fair value	$ 7.53
One year anniversary \| Employee initial grants
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Yearly vesting percentage				25.00%
One year anniversary \| Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Yearly vesting percentage				50.00%
Thereafter \| Employee initial grants
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Monthly vesting percentage				2.083%
Thereafter \| Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Yearly vesting percentage				50.00%

Stock-Based Compensation - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation in continuing operations	$ 14,945	$ 13,777	$ 12,967
Discontinued operations	2,685	1,148	818
Stock-based compensation expense	17,630	14,925	13,785
Research and development
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation in continuing operations	6,791	6,163	6,008
Selling, general and administrative
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation in continuing operations	$ 8,154	$ 7,614	$ 6,959

Stock-Based Compensation - Fair Value of Employee Option Grant Estimated on Date of Grant (Details) - Equity Option - $ / shares	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Share-based Compensation Arrangement by Share-based Payment Award
Estimated weighted-average fair value (USD per share)	$ 10.54	$ 8.19	$ 9.93
Weighted Average
Weighted-average assumptions
Expected volatility	81.00%	77.00%	80.00%
Expected life, in years	6 years	6 years	6 years
Risk-free interest rate	1.06%	1.06%	2.41%
Expected dividend yield	0.00%	0.00%	0.00%

Stock-Based Compensation - Summary of Stock Option Activity and Related Information (Details) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2021 USD ($) $ / shares shares
Options Outstanding
Beginning balance (shares) \| shares	11,938,528
Granted (shares) \| shares	2,525,525
Exercised (shares) \| shares	(921,023)
Cancelled (shares) \| shares	(833,143)
Ending balance (shares) \| shares	12,709,887
Vested and expected to vest (shares) \| shares	12,348,044
Exercisable (shares) \| shares	9,295,395
Weighted-Average Exercise Price per Share
Beginning balance (USD per share) \| $ / shares	$ 11.92
Granted (USD per share) \| $ / shares	15.34
Exercised (USD per share) \| $ / shares	9.10
Cancelled (USD per share) \| $ / shares	14.85
Ending balance (USD per share) \| $ / shares	12.61
Vested and expected to vest (USD per share) \| $ / shares	12.56
Exercisable (USD per share) \| $ / shares	$ 12.00
Weighted- Average Remaining Contractual Life
Balance (in years)	5 years 7 months 6 days
Vested and expected to vest (in years)	5 years 6 months
Exercisable (in years)	4 years 6 months
Aggregate Intrinsic Value
Balance \| $	$ 261
Vested and expected to vest \| $	261
Exercisable \| $	$ 261

Income Taxes - Components of Income Tax Benefit (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Income Taxes
Federal	$ 0	$ 0	$ 0
State	0	0	0
Total current income tax benefit	0	0	0
Federal	0	(19,472)	(16,716)
State	0	(3,784)	(3,058)
Total deferred income tax benefit	0	(23,256)	(19,774)
Income tax benefit	$ 0	$ (23,256)	$ (19,774)

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Income Taxes - Significant Components of Deferred Tax Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Deferred tax assets:
Net operating loss carryforwards	$ 143,657	$ 149,993
Research and development tax credits	66,612	56,103
Stock-based compensation	11,327	10,586
Lease liability	9,995	8,646
Disallowed interest expense		11,859
Other	17,862	7,411
Total deferred tax assets	249,453	244,598
Deferred tax liabilities:
Property and equipment	(102)	(113)
Gain on discontinued operations	(42,212)
Equity component of Convertible Notes		(18,302)
Right of use assets	(6,467)	(6,197)
Total deferred tax liabilities	(48,781)	(24,612)
Net deferred tax assets before valuation allowance	200,672	219,986
Less valuation allowance	(201,340)	(219,986)
Net deferred tax liabilities	$ (668)	$ 0

Income Taxes - Narrative (Details) - USD ($) $ in Thousands	12 Months Ended
Income Taxes - Narrative (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Income Taxes
Income tax benefit (expense)	$ 0	$ 23,256	$ 19,774
Net operating loss carryforwards with expiration	407,700
Net operating loss carryforwards with no expiration	$ 251,500
Deferred tax assets, percentage of valuation allowance	100.00%
Income tax payable	$ 300
Net deferred tax liabilities	668	0
Increase (decrease) in deferred tax valuation allowance	(19,300)	37,800
Discontinued Operation \| Omidria Assets Disposal
Income Taxes
Income tax benefit (expense)	(1,000)	11,200	$ 19,800
2023 and 2026 Convertible Senior Notes
Income Taxes
Income tax benefit (expense)		12,000
Federal
Income Taxes
Operating Loss Carryforwards	630,600	658,800
State
Income Taxes
Operating Loss Carryforwards	$ 245,100	$ 257,100

Income Taxes - Reconciliation of Federal Statutory Tax Rate (Details)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Income Taxes
U.S. Federal statutory rate on net loss	(21.00%)	(21.00%)	(21.00%)
State tax, net of federal tax benefit	(1.60%)	(3.10%)	(2.80%)
Change in valuation allowance	27.90%	19.30%	14.30%
Tax credits	(5.50%)	(6.20%)	(3.00%)
Other	0.20%	(0.80%)	0.70%
Effective tax rate	(0.00%)	(11.80%)	(11.80%)

401k Retirement Plan - Narrative (Details)	12 Months Ended
401k Retirement Plan - Narrative (Details)	Dec. 31, 2021 USD ($)
401(k) Retirement Plan
Maximum percent of each employee's contributions matched by employer	4.00%
Maximum company match per employee	$ 4,000