2019 Q1 Form 10-K Financial Statement

#000165130819000018 Filed on February 28, 2019

View on sec.gov

Income Statement

Concept 2019 Q1 2018 Q4 2018 Q3
Revenue $77.83M $58.67M $54.20M
YoY Change 139.16% 222.82% -75.39%
Cost Of Revenue $15.26M $8.706M
YoY Change 235.41% 347.84%
Gross Profit $62.57M $45.50M
YoY Change 123.52% -79.16%
Gross Profit Margin 80.39% 83.94%
Selling, General & Admin $57.65M $48.82M
YoY Change 99.36% 212.13%
% of Gross Profit 92.13% 107.31%
Research & Development $178.4M $147.6M
YoY Change 62.58% 68.37%
% of Gross Profit 285.03% 324.4%
Depreciation & Amortization $3.416M $2.207M
YoY Change 52.23% 78.42%
% of Gross Profit 5.46% 4.85%
Operating Expenses $236.0M $196.4M
YoY Change 70.25% 90.13%
Operating Profit -$173.8M -$280.8M -$151.1M
YoY Change 56.81% 170.53% -231.5%
Interest Expense
YoY Change
% of Operating Profit
Other Income/Expense, Net $1.728M $1.585M
YoY Change 137.04% 43.7%
Pretax Income -$167.6M -$145.0M
YoY Change 54.38% -226.91%
Income Tax $519.0K -$472.0K
% Of Pretax Income
Net Earnings -$167.6M -$268.3M -$144.0M
YoY Change 60.27% 170.08% -222.7%
Net Earnings / Revenue -215.38% -457.23% -265.73%
Basic Earnings Per Share -$0.35 -$0.19
Diluted Earnings Per Share -$0.19
COMMON SHARES
Basic Shares Outstanding 776.1M shares 772.4M shares 739.8M shares
Diluted Shares Outstanding 739.8M shares

Balance Sheet

Concept 2019 Q1 2018 Q4 2018 Q3
SHORT-TERM ASSETS
Cash & Short-Term Investments $1.781B
YoY Change
Cash & Equivalents $764.5M $712.9M $643.5M
Short-Term Investments $1.069B
Other Short-Term Assets
YoY Change
Inventory $13.14M $16.24M $19.70M
Prepaid Expenses
Receivables $58.98M $41.06M $37.37M
Other Receivables
Total Short-Term Assets $1.797B $1.944B $2.180B
YoY Change 112.79%
LONG-TERM ASSETS
Property, Plant & Equipment $197.8M $157.1M $111.3M
YoY Change 151.02%
Goodwill $109.0K $109.0K $109.0K
YoY Change 0.0%
Intangibles
YoY Change
Long-Term Investments
YoY Change
Other Assets $58.61M $53.78M $28.91M
YoY Change 309.05% 25.31%
Total Long-Term Assets $375.5M $305.8M $228.4M
YoY Change 129.99%
TOTAL ASSETS
Total Short-Term Assets $1.797B $1.944B $2.180B
Total Long-Term Assets $375.5M $305.8M $228.4M
Total Assets $2.172B $2.250B $2.409B
YoY Change 114.98%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $105.3M $113.3M $85.55M
YoY Change 62.35%
Accrued Expenses $99.53M $100.4M
YoY Change
Deferred Revenue $17.50M $18.14M $16.71M
YoY Change 48.29%
Short-Term Debt
YoY Change
Long-Term Debt Due $8.940M $8.727M $8.736M
YoY Change -5.37%
Total Short-Term Liabilities $238.8M $246.5M $188.4M
YoY Change 64.31%
LONG-TERM LIABILITIES
Long-Term Debt $77.48M $40.79M $40.82M
YoY Change 342.26%
Other Long-Term Liabilities $47.92M $48.77M $34.88M
YoY Change 118.13% 52.61%
Total Long-Term Liabilities $310.7M $249.6M $236.8M
YoY Change 1314.47% 17.58%
TOTAL LIABILITIES
Total Short-Term Liabilities $238.8M $246.5M $188.4M
Total Long-Term Liabilities $310.7M $249.6M $236.8M
Total Liabilities $549.6M $496.0M $425.2M
YoY Change 36.93%
SHAREHOLDERS EQUITY
Retained Earnings -$1.175B -$1.007B -$739.0M
YoY Change 252.34% 204.74%
Common Stock $78.00K $77.00K $77.00K
YoY Change 30.51%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $1.609B $1.739B $1.970B
YoY Change
Total Liabilities & Shareholders Equity $2.172B $2.250B $2.409B
YoY Change 114.98%

Cashflow Statement

Concept 2019 Q1 2018 Q4 2018 Q3
OPERATING ACTIVITIES
Net Income -$167.6M -$268.3M -$144.0M
YoY Change 60.27% 170.08% -222.7%
Depreciation, Depletion And Amortization $3.416M $2.207M
YoY Change 52.23% 78.42%
Cash From Operating Activities -$172.0M
YoY Change 64.57%
INVESTING ACTIVITIES
Capital Expenditures $21.83M
YoY Change 125.12%
Acquisitions
YoY Change
Other Investing Activities
YoY Change
Cash From Investing Activities $172.4M
YoY Change -143.72%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities $42.96M
YoY Change -94.38%
NET CHANGE
Cash From Operating Activities -$172.0M
Cash From Investing Activities $172.4M
Cash From Financing Activities $42.96M
Net Change In Cash $47.67M
YoY Change -82.25%
FREE CASH FLOW
Cash From Operating Activities -$172.0M
Capital Expenditures $21.83M
Free Cash Flow -$193.8M
YoY Change 69.71%

Facts In Submission

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0 USD
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0 USD
CY2018 us-gaap Conversion Of Stock Amount Issued1
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0 USD
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0 USD
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4974000 USD
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28705000 USD
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822000 USD
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CurrentIncomeTaxExpenseBenefit
8172000 USD
CY2018 us-gaap Current Income Tax Expense Benefit
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6513000 USD
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0 USD
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2477000 USD
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14693000 USD
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0 USD
CY2018 us-gaap Debt Conversion Converted Instrument Amount1
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0 USD
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370000 USD
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0 USD
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0 USD
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CY2017 us-gaap Deferred State And Local Income Tax Expense Benefit
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115000 USD
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768000 USD
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370000 USD
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0 USD
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1909000 USD
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4758000 USD
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10388000 USD
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104000 USD
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5299000 USD
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P2Y4M24D
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154623000 USD
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250000 USD
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1144000 USD
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2750000 USD
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1326000 USD
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750000 USD
CY2018Q4 us-gaap Finite Lived Intangible Assets Amortization Expense Year Four
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750000 USD
CY2018Q4 us-gaap Finite Lived Intangible Assets Amortization Expense Year Three
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750000 USD
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846000 USD
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7250000 USD
CY2018Q4 us-gaap Finite Lived Intangible Assets Net
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7172000 USD
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0 USD
CY2017 us-gaap Gain Loss On Sale Of Property Plant Equipment
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CY2017Q4 us-gaap Goodwill
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109000 USD
CY2018Q4 us-gaap Goodwill
Goodwill
109000 USD
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0 USD
CY2018 us-gaap Impairment Of Intangible Assets Excluding Goodwill
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0 USD
CY2016 us-gaap Impairment Of Long Lived Assets Held For Use
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0 USD
CY2017 us-gaap Impairment Of Long Lived Assets Held For Use
ImpairmentOfLongLivedAssetsHeldForUse
0 USD
CY2018 us-gaap Impairment Of Long Lived Assets Held For Use
ImpairmentOfLongLivedAssetsHeldForUse
0 USD
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CY2017 us-gaap Income Loss From Continuing Operations Before Income Taxes Domestic
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CY2018 us-gaap Income Loss From Continuing Operations Before Income Taxes Domestic
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CY2017 us-gaap Income Loss From Continuing Operations Before Income Taxes Minority Interest And Income Loss From Equity Method Investments
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IncomeTaxExpenseBenefit
54000 USD
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2235000 USD
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1627000 USD
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30356000 USD
CY2018 us-gaap Income Tax Reconciliation Change In Deferred Tax Assets Valuation Allowance
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34009000 USD
CY2016 us-gaap Income Tax Reconciliation Change In Enacted Tax Rate
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0 USD
CY2017 us-gaap Income Tax Reconciliation Change In Enacted Tax Rate
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2642000 USD
CY2018 us-gaap Income Tax Reconciliation Change In Enacted Tax Rate
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1538000 USD
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27830000 USD
CY2017 us-gaap Income Tax Reconciliation Foreign Income Tax Rate Differential
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23275000 USD
CY2018 us-gaap Income Tax Reconciliation Foreign Income Tax Rate Differential
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134673000 USD
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-29791000 USD
CY2017 us-gaap Income Tax Reconciliation Income Tax Expense Benefit At Federal Statutory Income Tax Rate
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CY2018 us-gaap Income Tax Reconciliation Income Tax Expense Benefit At Federal Statutory Income Tax Rate
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-172457000 USD
CY2016 us-gaap Income Tax Reconciliation Nondeductible Expense
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593000 USD
CY2017 us-gaap Income Tax Reconciliation Nondeductible Expense
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1608000 USD
CY2018 us-gaap Income Tax Reconciliation Nondeductible Expense
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4471000 USD
CY2016 us-gaap Income Tax Reconciliation Nondeductible Expense Share Based Compensation Cost
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0 USD
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1989000 USD
CY2018 us-gaap Income Tax Reconciliation Nondeductible Expense Share Based Compensation Cost
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CY2016 us-gaap Income Tax Reconciliation Tax Credits Research
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205000 USD
CY2017 us-gaap Income Tax Reconciliation Tax Credits Research
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5431000 USD
CY2018 us-gaap Income Tax Reconciliation Tax Credits Research
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12659000 USD
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25000 USD
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29286000 USD
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12361000 USD
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2707000 USD
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55298000 USD
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23470000 USD
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0 USD
CY2017 us-gaap Increase Decrease In Accounts Receivable
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29428000 USD
CY2018 us-gaap Increase Decrease In Accounts Receivable
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11628000 USD
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804000 USD
CY2017 us-gaap Increase Decrease In Accrued Income Taxes Payable
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7426000 USD
CY2018 us-gaap Increase Decrease In Accrued Income Taxes Payable
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CY2016 us-gaap Increase Decrease In Inventories
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0 USD
CY2017 us-gaap Increase Decrease In Inventories
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10930000 USD
CY2018 us-gaap Increase Decrease In Inventories
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5312000 USD
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13946000 USD
CY2017 us-gaap Increase Decrease In Other Accounts Payable And Accrued Liabilities
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24978000 USD
CY2018 us-gaap Increase Decrease In Other Accounts Payable And Accrued Liabilities
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50543000 USD
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29701000 USD
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40228000 USD
CY2016 us-gaap Increase Decrease In Other Noncurrent Liabilities
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459000 USD
CY2017 us-gaap Increase Decrease In Other Noncurrent Liabilities
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31395000 USD
CY2018 us-gaap Increase Decrease In Other Noncurrent Liabilities
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16962000 USD
CY2016 us-gaap Increase Decrease In Prepaid Deferred Expense And Other Assets
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2070000 USD
CY2017 us-gaap Increase Decrease In Prepaid Deferred Expense And Other Assets
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28880000 USD
CY2018 us-gaap Increase Decrease In Prepaid Deferred Expense And Other Assets
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46302000 USD
CY2016 us-gaap Increase Decrease In Unbilled Receivables
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0 USD
CY2017 us-gaap Increase Decrease In Unbilled Receivables
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0 USD
CY2018 us-gaap Increase Decrease In Unbilled Receivables
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CY2017 us-gaap Interest Costs Capitalized
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614000 USD
CY2017 us-gaap Interest Expense Related Party
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7649000 USD
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383000 USD
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13947000 USD
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826000 USD
CY2017 us-gaap Interest Paid Net
InterestPaidNet
1260000 USD
CY2018 us-gaap Interest Paid Net
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2209000 USD
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1557000 USD
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3096000 USD
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10930000 USD
CY2018Q4 us-gaap Inventory Net
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16242000 USD
CY2016 us-gaap Lease And Rental Expense
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1974000 USD
CY2017 us-gaap Lease And Rental Expense
LeaseAndRentalExpense
3810000 USD
CY2018 us-gaap Lease And Rental Expense
LeaseAndRentalExpense
8930000 USD
CY2017Q4 us-gaap Liabilities
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362248000 USD
CY2018Q4 us-gaap Liabilities
Liabilities
496037000 USD
CY2017Q4 us-gaap Liabilities And Stockholders Equity
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1046479000 USD
CY2018Q4 us-gaap Liabilities And Stockholders Equity
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2249684000 USD
CY2017Q4 us-gaap Liabilities Current
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149988000 USD
CY2018Q4 us-gaap Liabilities Current
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2133000 USD
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2470000 USD
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4627000 USD
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2115000 USD
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20097000 USD
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P10Y
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2821000 USD
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55642000 USD
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1753647000 USD
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681940000 USD
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9156000 USD
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5888000 USD
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0 USD
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8612000 USD
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16307000 USD
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110000 USD
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918000 USD
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2295000 USD
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0 USD
CY2017 us-gaap Unrecognized Tax Benefits Decreases Resulting From Prior Period Tax Positions
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91000 USD
CY2018 us-gaap Unrecognized Tax Benefits Decreases Resulting From Prior Period Tax Positions
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44000 USD
CY2016 us-gaap Unrecognized Tax Benefits Increases Resulting From Current Period Tax Positions
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110000 USD
CY2017 us-gaap Unrecognized Tax Benefits Increases Resulting From Current Period Tax Positions
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665000 USD
CY2018 us-gaap Unrecognized Tax Benefits Increases Resulting From Current Period Tax Positions
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1410000 USD
CY2016 us-gaap Unrecognized Tax Benefits Increases Resulting From Prior Period Tax Positions
UnrecognizedTaxBenefitsIncreasesResultingFromPriorPeriodTaxPositions
0 USD
CY2017 us-gaap Unrecognized Tax Benefits Increases Resulting From Prior Period Tax Positions
UnrecognizedTaxBenefitsIncreasesResultingFromPriorPeriodTaxPositions
234000 USD
CY2018 us-gaap Unrecognized Tax Benefits Increases Resulting From Prior Period Tax Positions
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11000 USD
CY2018Q4 us-gaap Unrecognized Tax Benefits That Would Impact Effective Tax Rate
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1532000 USD
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0 USD
CY2018Q4 us-gaap Value Added Tax Receivable Noncurrent
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14671000 USD
CY2016 us-gaap Weighted Average Number Of Share Outstanding Basic And Diluted
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403619446 shares
CY2017 us-gaap Weighted Average Number Of Share Outstanding Basic And Diluted
WeightedAverageNumberOfShareOutstandingBasicAndDiluted
543185460 shares
CY2018 us-gaap Weighted Average Number Of Share Outstanding Basic And Diluted
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720753819 shares
CY2018 us-gaap Concentration Risk Credit Risk
ConcentrationRiskCreditRisk
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-bottom:16px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;font-weight:bold;">Concentration of Risks</font></div><div style="line-height:120%;padding-bottom:16px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;">Concentration of credit risk</font></div><div style="line-height:120%;padding-bottom:16px;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Financial instruments that are potentially subject to credit risk consist of cash and cash equivalents and short-term investments. The carrying amounts of cash and cash equivalents and short-term investments represent the maximum amount of loss due to credit risk. As of </font><font style="font-family:inherit;font-size:10pt;">December&#160;31, 2018</font><font style="font-family:inherit;font-size:10pt;"> and </font><font style="font-family:inherit;font-size:10pt;">2017</font><font style="font-family:inherit;font-size:10pt;">, </font><font style="font-family:inherit;font-size:10pt;">$712,937</font><font style="font-family:inherit;font-size:10pt;"> and </font><font style="font-family:inherit;font-size:10pt;">$239,602</font><font style="font-family:inherit;font-size:10pt;"> were deposited with various major reputable financial institutions located in the PRC and international financial institutions outside of the PRC. The deposits placed with financial institutions are not protected by statutory or commercial insurance. In the event of bankruptcy of one of these financial institutions, the Company may be unlikely to claim its deposits back in full. Management believes that these financial institutions are of high credit quality and continually monitors the credit worthiness of these financial institutions. As of </font><font style="font-family:inherit;font-size:10pt;">December&#160;31, 2018</font><font style="font-family:inherit;font-size:10pt;"> and </font><font style="font-family:inherit;font-size:10pt;">2017</font><font style="font-family:inherit;font-size:10pt;">, the Company had short-term investments amounting to </font><font style="font-family:inherit;font-size:10pt;">$1,068,509</font><font style="font-family:inherit;font-size:10pt;"> and </font><font style="font-family:inherit;font-size:10pt;">$597,914</font><font style="font-family:inherit;font-size:10pt;">, respectively.</font></div><div style="line-height:120%;padding-bottom:16px;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">At </font><font style="font-family:inherit;font-size:10pt;">December&#160;31, 2018</font><font style="font-family:inherit;font-size:10pt;">, the Company&#8217;s short-term investments were comprised of U.S. treasury securities. The Company believes that U.S. treasury securities are of high credit quality and continually monitor the credit worthiness of these institutions.</font></div><div style="line-height:120%;padding-bottom:16px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;">Customer concentration risk</font></div><div style="line-height:120%;padding-bottom:16px;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">For the years ended </font><font style="font-family:inherit;font-size:10pt;">December&#160;31, 2018</font><font style="font-family:inherit;font-size:10pt;"> and 2017, substantially all of the Company's revenue was from Celgene and our product distributor in China. For the year ended </font><font style="font-family:inherit;font-size:10pt;">2016</font><font style="font-family:inherit;font-size:10pt;">, substantially all of the Company&#8217;s revenue was generated solely from </font><font style="font-family:inherit;font-size:10pt;">one</font><font style="font-family:inherit;font-size:10pt;"> customer, Merck KGaA, Darmstadt Germany. &#160;</font></div><div style="line-height:120%;padding-bottom:16px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;">Business, customer, political, social and economic risks</font></div><div style="line-height:120%;padding-bottom:16px;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Company participates in a dynamic biopharmaceutical industry and believes that changes in any of the following areas could have a material adverse effect on the Company&#8217;s future financial position, results of operations or cash flows: changes in the overall demand for services and products; competitive pressures due to new entrants; advances and new trends in new drugs and industry standards; changes in clinical research organizations, contract manufacturers and other key vendors; changes in certain strategic relationships or customer relationships; regulatory considerations; intellectual property considerations; and risks associated with the Company&#8217;s ability to attract and retain employees necessary to support its growth. The Company&#8217;s operations could be also adversely affected by significant political, economic and social uncertainties in the PRC.</font></div><div style="line-height:120%;padding-bottom:16px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;">Currency convertibility risk</font></div><div style="line-height:120%;padding-bottom:16px;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">A significant portion of the Company&#8217;s expenses, assets and liabilities are denominated in RMB. On January 1, 1994, the PRC government abolished the dual rate system and introduced a single rate of exchange as quoted daily by the People&#8217;s Bank of China (the &#8220;PBOC&#8221;). However, the unification of the exchange rates does not imply that the RMB may be readily convertible into U.S. dollar or other foreign currencies. All foreign exchange transactions continue to take place either through the PBOC or other banks authorized to buy and sell foreign currencies at the exchange rates quoted by the PBOC. Approvals of foreign currency payments by the PBOC or other institutions require submitting a payment application form together with suppliers&#8217; invoices, shipping documents and signed contracts.</font></div><div style="line-height:120%;padding-bottom:16px;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Additionally, the value of the RMB is subject to changes in central government policies and international economic and political developments affecting supply and demand in the PRC foreign exchange trading system market.</font></div><div style="line-height:120%;padding-bottom:16px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;">Foreign currency exchange rate risk</font></div><div style="line-height:120%;padding-bottom:16px;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">From July 21, 2005, the RMB is permitted to fluctuate within a narrow and managed band against a basket of certain foreign currencies. For RMB against U.S. dollar, there was depreciation of approximately </font><font style="font-family:inherit;font-size:10pt;">5.7%</font><font style="font-family:inherit;font-size:10pt;">, appreciation of approximately </font><font style="font-family:inherit;font-size:10pt;">6.5%</font><font style="font-family:inherit;font-size:10pt;"> and depreciation of approximately </font><font style="font-family:inherit;font-size:10pt;">6.3%</font><font style="font-family:inherit;font-size:10pt;">, in the years ended </font><font style="font-family:inherit;font-size:10pt;">December&#160;31, 2018</font><font style="font-family:inherit;font-size:10pt;">, </font><font style="font-family:inherit;font-size:10pt;">2017</font><font style="font-family:inherit;font-size:10pt;"> and </font><font style="font-family:inherit;font-size:10pt;">2016</font><font style="font-family:inherit;font-size:10pt;">. It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between the RMB and the U.S. dollar in the future.</font></div><div style="line-height:120%;padding-bottom:16px;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">To the extent that the Company needs to convert U.S. dollar into RMB for capital expenditures and working capital and other business purposes, appreciation of RMB against U.S. dollar would have an adverse effect on the RMB amount the Company would receive from the conversion. Conversely, if the Company decides to convert RMB into U.S. dollar for the purpose of making payments for dividends on ordinary shares, strategic acquisitions or investments or other business purposes, appreciation of U.S. dollar against RMB would have a negative effect on the U.S. dollar amount available to the Company. In addition, a significant depreciation of the RMB against the U.S. dollar may significantly reduce the U.S. dollar equivalent of the Company&#8217;s earnings or losses.</font></div></div>
CY2018 us-gaap Use Of Estimates
UseOfEstimates
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-bottom:16px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;font-weight:bold;">Use of Estimates</font></div><div style="line-height:120%;padding-bottom:16px;text-indent:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Areas where management uses subjective judgment include, but are not limited to, estimating the useful lives of long-lived assets, estimating variable consideration in product sales and collaboration revenue arrangements, identifying separate accounting units and the standalone selling price of each performance obligation in the Company&#8217;s revenue arrangements, estimating the fair value of net assets acquired in business combinations, assessing the impairment of long-lived assets, share-based compensation expenses, realizability of deferred tax assets, estimating uncertain tax positions and the fair value of financial instruments. Management bases the estimates on historical experience, known trends and various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from these estimates.</font></div></div>

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