2019 Q1 Form 10-K Financial Statement

#000107008119000018 Filed on March 01, 2019

View on sec.gov

Income Statement

Concept 2019 Q1 2018 Q4 2018
Revenue $53.58M $85.83M $264.7M
YoY Change -4.42% 48.11% 36.19%
Cost Of Revenue $2.376M $3.800M $12.67M
YoY Change -21.97% 58.33% 176.82%
Gross Profit $51.21M $82.60M $252.1M
YoY Change -3.41% 9.26% 32.79%
Gross Profit Margin 95.57% 96.23% 95.21%
Selling, General & Admin $40.54M $48.70M $153.5M
YoY Change 22.98% 37.18% 26.62%
% of Gross Profit 79.18% 58.96% 60.92%
Research & Development $52.57M $53.60M $172.0M
YoY Change 67.61% 83.56% 46.42%
% of Gross Profit 102.65% 64.89% 68.23%
Depreciation & Amortization $7.059M $6.770M $26.09M
YoY Change 17.22% 13.97% 47.53%
% of Gross Profit 13.79% 8.2% 10.35%
Operating Expenses $122.7M $131.5M $380.4M
YoY Change 68.56% 81.15% 47.06%
Operating Profit -$69.14M -$45.14M -$115.7M
YoY Change 312.95% -927.92% 79.94%
Interest Expense -$2.288M -$3.200M -$12.55M
YoY Change -30.73% -5.88% 3.8%
% of Operating Profit
Other Income/Expense, Net -$109.0K -$900.0K $129.0K
YoY Change -110.86% -1000.0% -110.09%
Pretax Income -$71.54M -$49.30M -$128.1M
YoY Change 275.68% -2447.62% 64.95%
Income Tax $576.0K -$1.000M -$29.00K
% Of Pretax Income
Net Earnings -$72.11M -$48.33M -$128.1M
YoY Change 274.36% -3905.51% 62.13%
Net Earnings / Revenue -134.58% -56.31% -48.38%
Basic Earnings Per Share -$2.75
Diluted Earnings Per Share -$1.290M -$958.3K -$2.749M
COMMON SHARES
Basic Shares Outstanding 58.40M shares 50.45M shares
Diluted Shares Outstanding

Balance Sheet

Concept 2019 Q1 2018 Q4 2018
SHORT-TERM ASSETS
Cash & Short-Term Investments $407.2M $227.6M $227.6M
YoY Change 128.38% 19.04% 19.04%
Cash & Equivalents $201.1M $169.5M $169.5M
Short-Term Investments $206.0M $58.10M $58.10M
Other Short-Term Assets $9.300M $9.200M $9.200M
YoY Change 60.34% 37.31% 37.31%
Inventory $16.22M $16.12M $16.10M
Prepaid Expenses
Receivables $46.40M $67.90M $67.90M
Other Receivables $0.00 $0.00 $0.00
Total Short-Term Assets $479.1M $320.9M $320.9M
YoY Change 97.97% 28.83% 28.82%
LONG-TERM ASSETS
Property, Plant & Equipment $14.54M $12.69M $12.70M
YoY Change 75.14% 51.55% 51.19%
Goodwill $82.34M $82.34M
YoY Change
Intangibles $695.0M $701.0M
YoY Change 444.79% 427.12%
Long-Term Investments
YoY Change
Other Assets $2.300M $2.300M $2.300M
YoY Change 53.33% 91.67% 91.67%
Total Long-Term Assets $804.8M $798.4M $798.3M
YoY Change 485.69% 459.9% 459.82%
TOTAL ASSETS
Total Short-Term Assets $479.1M $320.9M $320.9M
Total Long-Term Assets $804.8M $798.4M $798.3M
Total Assets $1.284B $1.119B $1.119B
YoY Change 238.4% 185.77% 185.73%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $9.786M $6.001M $6.000M
YoY Change 215.27% -60.73% -60.78%
Accrued Expenses $24.00M $27.60M $27.60M
YoY Change 160.87% 55.93% 55.93%
Deferred Revenue $5.497M $3.716M
YoY Change -5.61%
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due $16.67M $11.67M $11.70M
YoY Change
Total Short-Term Liabilities $143.0M $166.8M $166.8M
YoY Change 96.72% 103.29% 103.41%
LONG-TERM LIABILITIES
Long-Term Debt $138.5M $141.3M $141.3M
YoY Change -5.73% -2.5% -2.55%
Other Long-Term Liabilities $8.770M $58.00K $338.3M
YoY Change 4096.17% -76.13% 4025.61%
Total Long-Term Liabilities $147.2M $141.4M $479.6M
YoY Change 0.1% -2.62% 213.05%
TOTAL LIABILITIES
Total Short-Term Liabilities $143.0M $166.8M $166.8M
Total Long-Term Liabilities $147.2M $141.4M $479.6M
Total Liabilities $771.0M $768.5M $768.5M
YoY Change 236.52% 226.72% 226.74%
SHAREHOLDERS EQUITY
Retained Earnings -$1.011B -$938.9M
YoY Change 21.79% 15.33%
Common Stock $58.00K $51.00K
YoY Change 38.1% 21.43%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $512.9M $350.7M $350.7M
YoY Change
Total Liabilities & Shareholders Equity $1.284B $1.119B $1.119B
YoY Change 238.4% 185.77% 185.73%

Cashflow Statement

Concept 2019 Q1 2018 Q4 2018
OPERATING ACTIVITIES
Net Income -$72.11M -$48.33M -$128.1M
YoY Change 274.36% -3905.51% 62.13%
Depreciation, Depletion And Amortization $7.059M $6.770M $26.09M
YoY Change 17.22% 13.97% 47.53%
Cash From Operating Activities -$42.41M -$15.14M -$27.64M
YoY Change 167.09% -171.11% 174.68%
INVESTING ACTIVITIES
Capital Expenditures $2.865M -$4.610M $7.097M
YoY Change 498.12% 125.98% 128.86%
Acquisitions $48.89M
YoY Change
Other Investing Activities -$147.6M -$19.99M -$35.52M
YoY Change 12517.95% -61.56% -318.99%
Cash From Investing Activities -$150.5M -$24.59M -$42.61M
YoY Change 9032.16% -54.5% -424.87%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net $224.4M $117.9M
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities $225.7M 3.720M 131.6M
YoY Change 19769.89% 101.08% 197.55%
NET CHANGE
Cash From Operating Activities -$42.41M -15.14M -27.64M
Cash From Investing Activities -$150.5M -24.59M -42.61M
Cash From Financing Activities $225.7M 3.720M 131.6M
Net Change In Cash $31.65M -36.01M 57.71M
YoY Change -293.08% 16.54% 7.92%
FREE CASH FLOW
Cash From Operating Activities -$42.41M -$15.14M -$27.64M
Capital Expenditures $2.865M -$4.610M $7.097M
Free Cash Flow -$45.27M -$10.53M -$34.74M
YoY Change 176.79% -145.14% 163.89%

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0 USD
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CY2018 us-gaap Cost Of Goods Sold Excluding Depreciation Depletion And Amortization
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CY2017 us-gaap Current Federal Tax Expense Benefit
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0 USD
CY2018 us-gaap Current Federal Tax Expense Benefit
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0 USD
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669000 USD
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2000 USD
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6000 USD
CY2018 us-gaap Current State And Local Tax Expense Benefit
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10087000 USD
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3000 USD
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16223000 USD
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8000 USD
CY2018Q4 us-gaap Debt Securities Available For Sale Unrealized Loss Position
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26310000 USD
CY2018Q4 us-gaap Debt Securities Available For Sale Unrealized Loss Position Accumulated Loss
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11000 USD
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198000 USD
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0 USD
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CY2016 us-gaap Deferred Income Tax Expense Benefit
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CY2017 us-gaap Deferred Income Tax Expense Benefit
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199000 USD
CY2018 us-gaap Deferred Income Tax Expense Benefit
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CY2018Q4 us-gaap Deferred Income Tax Liabilities
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0 USD
CY2017 us-gaap Deferred State And Local Income Tax Expense Benefit
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0 USD
CY2018 us-gaap Deferred State And Local Income Tax Expense Benefit
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10067000 USD
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736000 USD
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165000 USD
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21411000 USD
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1601000 USD
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180500000 USD
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0 USD
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122032000 USD
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140000 USD
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1100000 USD
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1600000 USD
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2200000 USD
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2300000 USD
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3290000 USD
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17682000 USD
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26087000 USD
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0.0002
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0.34
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0.34
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0.2910
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0.0220
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-0.1033
CY2018 us-gaap Effective Income Tax Rate Reconciliation Foreign Income Tax Rate Differential
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-0.0910
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0.1666
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0.1953
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0.0649
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0.0001
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CY2018 us-gaap Effective Income Tax Rate Reconciliation Other Adjustments
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0.0001
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0.0014
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-0.0026
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0.0000
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0.0305
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CY2018 us-gaap Effective Income Tax Rate Reconciliation State And Local Income Taxes
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27629000 USD
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62600000 USD
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P2Y11M16D
CY2016 us-gaap Fair Value Adjustment Of Warrants
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CY2017 us-gaap Fair Value Adjustment Of Warrants
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0 USD
CY2018 us-gaap Fair Value Adjustment Of Warrants
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0 USD
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P7Y
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124531000 USD
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459000 USD
CY2018 us-gaap Foreign Currency Transaction Gain Loss Unrealized
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59000 USD
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0 USD
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CY2018 us-gaap Gain Loss On Disposition Of Assets1
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CY2017Q4 us-gaap Goodwill
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18000000 USD
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CY2016 us-gaap Income Loss From Continuing Operations Before Income Taxes Extraordinary Items Noncontrolling Interest
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-128110000 USD
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CY2018 us-gaap Income Loss From Continuing Operations Before Income Taxes Foreign
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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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569000 USD
CY2017 us-gaap Income Tax Expense Benefit
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1335000 USD
CY2018 us-gaap Income Tax Expense Benefit
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943000 USD
CY2017 us-gaap Income Taxes Paid Net
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1101000 USD
CY2018 us-gaap Income Taxes Paid Net
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1583000 USD
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4259000 USD
CY2017 us-gaap Increase Decrease In Accounts Payable And Accrued Liabilities
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24011000 USD
CY2018 us-gaap Increase Decrease In Accounts Payable And Accrued Liabilities
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43877000 USD
CY2016 us-gaap Increase Decrease In Contract With Customer Liability
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1526000 USD
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9469000 USD
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6514000 USD
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278000 USD
CY2017 us-gaap Increase Decrease In Deposit Other Assets
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544000 USD
CY2018 us-gaap Increase Decrease In Deposit Other Assets
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1093000 USD
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0 USD
CY2017 us-gaap Increase Decrease In Inventories
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6454000 USD
CY2018 us-gaap Increase Decrease In Inventories
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5823000 USD
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733000 USD
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1932000 USD
CY2016 us-gaap Increase Decrease In Prepaid Deferred Expense And Other Assets
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CY2017 us-gaap Increase Decrease In Prepaid Deferred Expense And Other Assets
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1784000 USD
CY2018 us-gaap Increase Decrease In Prepaid Deferred Expense And Other Assets
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1609000 USD
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14842000 USD
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12203000 USD
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29589000 USD
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132993000 USD
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701031000 USD
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6271000 USD
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6390000 USD
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5362000 USD
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10754000 USD
CY2018Q4 us-gaap Inventory Net
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16117000 USD
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452000 USD
CY2018Q4 us-gaap Inventory Raw Materials
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1431000 USD
CY2017Q4 us-gaap Inventory Work In Process
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3912000 USD
CY2018Q4 us-gaap Inventory Work In Process
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9324000 USD
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1800000.0 USD
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13928000 USD
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3216000 USD
CY2018Q4 us-gaap Lessee Operating Lease Liability Payments Due Year Four
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2082000 USD
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2900000 USD
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Liabilities
768495000 USD
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391653000 USD
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1119222000 USD
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166796000 USD
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0 USD
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0 USD
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11667000 USD
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79454000 USD
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58088000 USD
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968000 USD
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44218000 USD
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131571000 USD
CY2016 us-gaap Net Cash Provided By Used In Investing Activities
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104481000 USD
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13117000 USD
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-103566000 USD
CY2017 us-gaap Net Cash Provided By Used In Operating Activities
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-10063000 USD
CY2018 us-gaap Net Cash Provided By Used In Operating Activities
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-27641000 USD
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<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-bottom:10px;padding-top:10px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Concentration of credit risk</font></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;text-indent:32px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Company&#8217;s financial instruments that are exposed to credit risks consist primarily of cash and cash equivalents, available-for-sale marketable securities and accounts receivable. The Company maintains its cash and cash equivalents in bank accounts, which, at times, exceed federally insured limits. The Company has not experienced any credit losses in these accounts and does not believe it is exposed to any significant credit risk on these funds. The Company&#8217;s investment policy includes guidelines on the quality of the financial institutions and financial instruments the Company is allowed to invest in, which the Company believes minimizes the exposure to concentration of credit risk.</font></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;text-indent:32px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Company is subject to credit risk from its accounts receivable related to its product sales. The payment terms are predetermined and the Company evaluates the creditworthiness of each customer or distributor on a regular basis. The Company reserves all uninsured amounts billed directly to a patient until the time of cash receipt as collectability is not reasonably assured at the time the product is received. To date, the Company has not incurred any credit losses.</font></div></div>
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<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-bottom:10px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">The Company</font></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">PTC Therapeutics,&#160;Inc. (the &#8220;Company&#8221; or &#8220;PTC&#8221;) is a science-led global biopharmaceutical company focused on the discovery, development and commercialization of clinically-differentiated medicines that provide benefits to patients with rare disorders. The Company&#8217;s ability to globally commercialize products is the foundation that drives its continued investment in a robust pipeline of transformative medicines and its mission to provide access to best-in-class treatments for patients who have an unmet medical need. The Company&#8217;s strategy is to bring best-in-class therapies with differentiated clinical benefit to patients affected by rare disorders and to leverage its global commercial infrastructure to maximize value for its patients and other stakeholders.</font></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Company has two products, Translarna</font><font style="font-family:inherit;font-size:8pt;">&#8482; </font><font style="font-family:inherit;font-size:10pt;">(ataluren) and Emflaza&#8482; (deflazacort), for the treatment of Duchenne muscular dystrophy, or DMD, a rare, life threatening disorder. Translarna received marketing authorization from the European Commission in August 2014 for the treatment of nonsense mutation Duchenne muscular dystrophy, or nmDMD, in ambulatory patients aged </font><font style="font-family:inherit;font-size:10pt;">5</font><font style="font-family:inherit;font-size:10pt;">&#160;years and over in the </font><font style="font-family:inherit;font-size:10pt;">31</font><font style="font-family:inherit;font-size:10pt;"> member states of the European Economic Area, or EEA, subject to annual renewal and other conditions. In July 2018, the European Commission approved a label-extension request to the marketing authorization for Translarna in the EEA to include patients from two to up to five years of age. Emflaza is approved in the United States for the treatment of DMD in patients five years and older. </font></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Company has a pipeline of gene therapy product candidates, including PTC-AADC for the treatment of Aromatic L-Amino Acid Decarboxylase, or AADC, deficiency, or AADC deficiency. The Company is preparing a biologics license application, or BLA, for PTC-AADC for the treatment of AADC deficiency in the United States, which it anticipates submitting to the U.S. Food and Drug Administration, or FDA, in late 2019, with an anticipated commercial launch in the United States in 2020. The Company is also preparing a marketing authorization application, or MAA, for PTC-AADC for the treatment of AADC deficiency in the European Union, or EU, for submission to the European Medicines Agency, or EMA, which will follow its BLA submission to the FDA.</font></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Company holds the rights for the commercialization of Tegsedi&#8482; (inotersen) and Waylivra&#8482; (volanesorsen) for the treatment of rare diseases in countries in Latin America and the Caribbean. Tegsedi has received marketing authorization in the U.S., EU and Canada for the treatment of stage 1 or stage 2 polyneuropathy in adult patients with hATTR amyloidosis. The Company filed for marketing authorization with ANVISA, the Brazilian regulatory authority, which granted priority review. It expects approval in Brazil by the end of 2019. Waylivra is currently under regulatory review in EU for the treatment of familial chylomicronemia syndrome, or FCS. </font></div><div style="line-height:120%;padding-bottom:6px;padding-top:6px;text-align:justify;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> The Company also has a spinal muscular atrophy (&#8220;SMA&#8221;) collaboration with F. Hoffman-La Roche&#160;Ltd and Hoffman-La Roche&#160;Inc., which it refers to collectively as Roche, and the Spinal Muscular Atrophy Foundation, or SMA Foundation. Currently, its collaboration has two pivotal clinical trials ongoing to evaluate the safety and effectiveness of risdiplam (RG7916, RO7034067), the lead compound in the SMA program. Roche is preparing an NDA and a MAA for risdiplam for the treatment of SMA in the United States and the EU, respectively, which Roche anticipates submitting to the FDA and the EMA in the second half of 2019. In addition, the Company has a pipeline of product candidates and discovery programs that are in early clinical, pre-clinical and research and development stages focused on the development of new treatments for multiple therapeutic areas, including rare diseases and oncology.</font></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Company&#8217;s marketing authorization for Translarna in the EEA is subject to annual review and renewal by the European Commission following reassessment by the EMA of the benefit-risk balance of the authorization, which the Company refers to as the annual EMA reassessment. This marketing authorization is further subject to the specific obligation to conduct and submit the results of a multi-center, randomized, double-blind, 18-month, placebo-controlled trial, followed by an 18-month open-label extension, according to an agreed protocol, in order to confirm the efficacy and safety of Translarna. The final report on the trial and open-label extension is to be submitted by the Company to the EMA by the end of the third quarter of 2021. Due to enrollment at a slower pace in certain countries than initially expected, in its February 2019 marketing authorization renewal request, the Company asked the EMA to extend the timeframe for submission of the results of Study 041 to the EMA to the end of the third quarter of 2022. The Company refers to the trial and open-label extension together as Study 041.</font></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The marketing authorization in the EEA was last renewed in July 2018 and is effective, unless extended, through August 5, 2019. The renewal was based on the Company&#8217;s commitment to conduct Study 041 and the totality of the clinical data available from its trials and studies of Translarna for the treatment of nmDMD, including the safety and efficacy results of the Phase 2b and Phase 3 clinical trials. The primary efficacy endpoint was not achieved in either trial within the pre-specified level of statistical significance. </font></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In June 2014, the Company initiated reimbursed early access programs, or EAP programs, for Translarna for nmDMD patients in selected territories in the EEA and recorded its first sales of Translarna in the third quarter of 2014 pursuant to an EAP program. In December 2014, the Company recorded its first commercial sales in Germany. As of </font><font style="font-family:inherit;font-size:10pt;">December&#160;31, 2018</font><font style="font-family:inherit;font-size:10pt;">, Translarna was available in </font><font style="font-family:inherit;font-size:10pt;">over 40</font><font style="font-family:inherit;font-size:10pt;"> countries on a commercial basis or pursuant to the EAP program. The Company expects to expand its commercial activities across the EEA pursuant to the marketing authorization granted by the EMA throughout 2019 and future years, subject to continued renewal of its marketing authorization following annual EMA reassessments and successful completion of pricing and reimbursement negotiations. Concurrently, the Company plans to continue to pursue EAP programs in select countries where those mechanisms exist, both within the EEA and in other countries that will reference the marketing authorization in the EEA.</font></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Translarna is an investigational new drug in the United States. During the first quarter of 2017, the Company filed a New Drug Application, or NDA, over protest with the United States Food and Drug Administration, (the "FDA"), for which the FDA granted a standard review. In October 2017, the Office of Drug Evaluation I of the FDA issued a complete response letter for the NDA, stating that it was unable to approve the application in its current form. In response, the Company filed a formal dispute resolution request with the Office of New Drugs of the FDA. In February 2018, the Office of New Drugs of the FDA denied PTC&#8217;s appeal of the Complete Response Letter. In its response, the Office of New Drugs recommended a possible path forward for the ataluren NDA submission based on the accelerated approval pathway. This would involve a re-submission of an NDA containing the current data on effectiveness of ataluren with new data to be generated on dystrophin production in nmDMD patients&#8217; muscles. The Company intends to follow the FDA&#8217;s recommendation and will collect, using newer technologies via procedures and methods that the Company designed, such dystrophin data in a new study, Study 045, which the Company initiated in the fourth quarter of 2018. The Company expects that a potential re-submission of an NDA could occur in 2020. Additionally, should a re-submission of an NDA receive accelerated approval, the Office of New Drugs stated that Study 041, which is currently enrolling, could serve as the confirmatory post-approval trial required in connection with the accelerated approval framework.</font></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">On April 20, 2017, the Company completed its acquisition of all rights to Emflaza, or the Transaction. Emflaza is approved in the United States for the treatment of DMD in patients five years and older. The Transaction was completed pursuant to an asset purchase agreement, dated March 15, 2017, as amended on April 20, 2017, (the "Asset Purchase Agreement"), by and between the Company and Marathon Pharmaceuticals, LLC (now known as Complete Pharma Holdings, LLC), or Marathon. The Transaction was accounted for as an asset acquisition. The assets acquired by the Company in the Transaction include intellectual property rights related to Emflaza, inventories of Emflaza, and certain contractual rights related to Emflaza. The Company assumed certain liabilities and obligations in the Transaction arising out of, or relating to, the assets acquired in the Transaction. </font></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Upon the closing of the Transaction, the Company paid to Marathon total upfront consideration comprised of </font><font style="font-family:inherit;font-size:10pt;">$75.0 million</font><font style="font-family:inherit;font-size:10pt;"> in cash, funded through cash on hand, and </font><font style="font-family:inherit;font-size:10pt;">6,683,598</font><font style="font-family:inherit;font-size:10pt;"> shares of the Company&#8217;s common stock. The number of shares of common stock issued at closing was determined by dividing </font><font style="font-family:inherit;font-size:10pt;">$65.0 million</font><font style="font-family:inherit;font-size:10pt;"> by the volume weighted average price per share of the Company&#8217;s common stock on the Nasdaq Stock Market for the </font><font style="font-family:inherit;font-size:10pt;">15</font><font style="font-family:inherit;font-size:10pt;"> trading-day period ending on the third trading day immediately preceding the closing. Marathon will be entitled to receive contingent payments from the Company based on annual net sales of Emflaza beginning in 2018, up to a specified aggregate maximum amount over the expected commercial life of the asset, and a single </font><font style="font-family:inherit;font-size:10pt;">$50.0 million</font><font style="font-family:inherit;font-size:10pt;"> sales-based milestone, in each case subject to the terms and conditions of the Asset Purchase Agreement.</font></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">On August 23, 2018, the Company completed its acquisition of Agilis Biotherapeutics, Inc., or Agilis, pursuant to an Agreement and Plan of Merger, dated as of July 19, 2018 (the &#8220;Merger Agreement&#8221;), by and among the Company, Agility Merger Sub, Inc., a Delaware corporation and the Company's wholly owned, indirect subsidiary, Agilis and, solely in its capacity as the representative, agent and attorney-in-fact of the equityholders of Agilis, Shareholder Representative Services LLC, (the "Merger"). </font></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;text-indent:66px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Upon the closing of the Merger, the Company paid to Agilis equityholders total upfront consideration comprised of </font><font style="font-family:inherit;font-size:10pt;">$49.2 million</font><font style="font-family:inherit;font-size:10pt;"> in cash and </font><font style="font-family:inherit;font-size:10pt;">3,500,907</font><font style="font-family:inherit;font-size:10pt;"> shares of the Company&#8217;s common stock (the &#8220;Closing Stock Consideration&#8221;). The Closing Stock Consideration was determined by dividing </font><font style="font-family:inherit;font-size:10pt;">$150.0 million</font><font style="font-family:inherit;font-size:10pt;"> by the volume-weighted average price per share of the Company&#8217;s common stock on the Nasdaq Global Select Market for the </font><font style="font-family:inherit;font-size:10pt;">10</font><font style="font-family:inherit;font-size:10pt;"> consecutive trading-day period ending on the second trading-day immediately preceding the closing of the Merger. Agilis equityholders may become entitled to receive contingent payments from the Company based on the achievement of certain development, regulatory and net sales milestones as well as based upon a percentage of net sales of certain products. Under the Merger Agreement, the Company is required to pay </font><font style="font-family:inherit;font-size:10pt;">$40.0 million</font><font style="font-family:inherit;font-size:10pt;"> of the development milestone payments no later than the second anniversary of the closing of the Merger, regardless of whether the applicable milestones have been achieved.</font></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;text-indent:32px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">As of </font><font style="font-family:inherit;font-size:10pt;">December&#160;31, 2018</font><font style="font-family:inherit;font-size:10pt;">, the Company had an accumulated deficit of approximately </font><font style="font-family:inherit;font-size:10pt;">$938.9 million</font><font style="font-family:inherit;font-size:10pt;">. The Company has financed its operations to date primarily through the private offering in August 2015 of </font><font style="font-family:inherit;font-size:10pt;">3.00%</font><font style="font-family:inherit;font-size:10pt;"> convertible senior notes due 2022 (see Note&#160;7), public offerings of common stock in February 2014, October 2014, and April 2018, its initial public offering of common stock in June 2013, private placements of its convertible preferred stock, collaborations, bank debt, convertible debt financings, grant funding and clinical trial support from governmental and philanthropic organizations and patient advocacy groups in the disease area addressed by the Company&#8217;s product candidates. Since 2014, the Company has also relied on revenue generated from net sales of Translarna for the treatment of nmDMD in territories outside of the United States, and since May 2017, the Company generated revenue from net sales of Emflaza for the treatment of DMD in the United States. The Company&#160;expects&#160;that&#160;cash&#160;flows&#160;from&#160;the&#160;sales&#160;of&#160;its&#160;products,&#160;together&#160;with&#160;the&#160;Company&#8217;s&#160;cash, cash equivalents and marketable securities,&#160;will&#160;be&#160;sufficient&#160;to&#160;fund&#160;its&#160;operations&#160;for&#160;at&#160;least&#160;the&#160;next&#160;twelve&#160;months.</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:10px;padding-top:10px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Use of estimates</font></div><div style="line-height:120%;padding-bottom:10px;padding-top:10px;text-align:justify;text-indent:32px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">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 estimates in these consolidated financial statements have been made in connection with the calculation of net product sales, certain accruals related to the Company&#8217;s research and development expenses, stock-based compensation, valuation procedures for the convertible notes, allowance for doubtful accounts, inventory, acquired intangible assets, fair value of the contingent consideration, and the provision for or benefit from income taxes. Actual results could differ from those estimates. Changes in estimates are reflected in reported results in the period in which they become known.</font></div></div>

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