0001347178-20-000030 | 10-Q | XBRL Viewer | Vanda Pharmaceuticals INC

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Cover Page - shares	9 Months Ended
Cover Page - shares	Sep. 30, 2020	Oct. 22, 2020
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2020
Document Transition Report	false
Entity File Number	001-34186
Entity Registrant Name	VANDA PHARMACEUTICALS INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	03-0491827
Entity Address, Address Line One	2200 Pennsylvania Avenue NW
Entity Address, Address Line Two	Suite 300 E
Entity Address, City or Town	Washington
Entity Address, State or Province	DC
Entity Address, Postal Zip Code	20037
City Area Code	202
Local Phone Number	734-3400
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	VNDA
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		54,691,654
Entity Central Index Key	0001347178
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q3
Amendment Flag	false

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 56,973	$ 45,072
Marketable securities	291,575	267,057
Accounts receivable, net	28,033	26,367
Inventory	1,322	1,140
Prepaid expenses and other current assets	11,631	14,500
Total current assets	389,534	354,136
Property and equipment, net	3,921	3,864
Operating lease right-of-use assets	10,306	11,180
Intangible assets, net	21,929	23,037
Deferred tax assets	83,858	87,680
Non-current inventory and other	6,357	3,851
Total assets	515,905	483,748
Current liabilities:
Accounts payable and accrued liabilities	29,086	27,590
Product revenue allowances	32,273	31,915
Total current liabilities	61,359	59,505
Operating lease non-current liabilities	11,559	12,455
Other non-current liabilities	2,415	843
Total liabilities	75,333	72,803
Commitments and contingencies (Notes 8 and 13)
Stockholders’ equity:
Preferred stock, $0.001 par value; 20,000,000 shares authorized, and no shares issued or outstanding at September 30, 2020 and December 31, 2019	0	0
Common stock, $0.001 par value; 150,000,000 shares authorized; 54,689,654 and 53,549,612 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively	55	54
Additional paid-in capital	645,656	631,307
Accumulated other comprehensive income	379	249
Accumulated deficit	(205,518)	(220,665)
Total stockholders’ equity	440,572	410,945
Total liabilities and stockholders’ equity	$ 515,905	$ 483,748

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares	Sep. 30, 2020	Dec. 31, 2019
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	20,000,000	20,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	150,000,000	150,000,000
Common stock, shares issued (in shares)	54,689,654	53,549,612
Common stock, shares outstanding (in shares)	54,689,654	53,549,612

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Revenues:
Net product sales	$ 60,308	$ 59,485	$ 180,515	$ 166,258
Total revenues	60,308	59,485	180,515	166,258
Operating expenses:
Cost of goods sold excluding amortization	5,898	6,782	16,952	18,263
Research and development	12,298	11,347	40,728	35,575
Selling, general and administrative	34,001	30,221	104,939	92,718
Intangible asset amortization	369	376	1,108	1,135
Total operating expenses	52,566	48,726	163,727	147,691
Income from operations	7,742	10,759	16,788	18,567
Other income	659	1,517	3,943	4,651
Income before income taxes	8,401	12,276	20,731	23,218
Provision (benefit) for income taxes	2,454	(88,147)	5,584	(88,119)
Net income	$ 5,947	$ 100,423	$ 15,147	$ 111,337
Net income per share:
Basic (in dollars per share)	$ 0.11	$ 1.88	$ 0.28	$ 2.10
Diluted (in dollars per share)	$ 0.11	$ 1.84	$ 0.28	$ 2.03
Weighted average shares outstanding:
Basic (in shares)	54,666,128	53,297,298	54,325,832	53,052,521
Diluted (in shares)	55,209,032	54,541,625	55,054,772	54,803,851

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Statement of Comprehensive Income [Abstract]
Net income	$ 5,947	$ 100,423	$ 15,147	$ 111,337
Other comprehensive income (loss):
Net foreign currency translation gain (loss)	32	(19)	29	(17)
Change in net unrealized gain (loss) on marketable securities	(323)	(89)	130	294
Tax benefit (provision) on other comprehensive income (loss)	74	(67)	(29)	(67)
Other comprehensive income (loss), net of tax	(217)	(175)	130	210
Comprehensive income	$ 5,730	$ 100,248	$ 15,277	$ 111,547

- Definition

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

+ References + Details

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Other Comprehensive Income	Accumulated Deficit
Beginning balance (in shares) at Dec. 31, 2018		52,477,593
Beginning balance at Dec. 31, 2018	$ 275,422	$ 52	$ 611,587	$ 1	$ (336,218)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock form the exercise of stock options and settlement of restricted stock units (in shares)		485,083
Issuance of common stock from the exercise of stock options and settlement of restricted stock units	179	$ 1	178
Stock-based compensation expense	3,282		3,282
Net income (loss)	(612)				(612)
Other comprehensive income (loss), net of tax	134			134
Ending balance (in shares) at Mar. 31, 2019		52,962,676
Ending balance at Mar. 31, 2019	278,405	$ 53	615,047	135	(336,830)
Beginning balance (in shares) at Dec. 31, 2018		52,477,593
Beginning balance at Dec. 31, 2018	275,422	$ 52	611,587	1	(336,218)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	111,337
Other comprehensive income (loss), net of tax	210
Ending balance (in shares) at Sep. 30, 2019		53,333,211
Ending balance at Sep. 30, 2019	400,907	$ 53	625,524	211	(224,881)
Beginning balance (in shares) at Mar. 31, 2019		52,962,676
Beginning balance at Mar. 31, 2019	278,405	$ 53	615,047	135	(336,830)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock form the exercise of stock options and settlement of restricted stock units (in shares)		302,108
Issuance of common stock from the exercise of stock options and settlement of restricted stock units	3,411	$ 0	3,411
Stock-based compensation expense	3,101		3,101
Net income (loss)	11,526				11,526
Other comprehensive income (loss), net of tax	251			251
Ending balance (in shares) at Jun. 30, 2019		53,264,784
Ending balance at Jun. 30, 2019	296,694	$ 53	621,559	386	(325,304)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock form the exercise of stock options and settlement of restricted stock units (in shares)		68,427
Issuance of common stock from the exercise of stock options and settlement of restricted stock units	558	$ 0	558
Stock-based compensation expense	3,407		3,407
Net income (loss)	100,423				100,423
Other comprehensive income (loss), net of tax	(175)			(175)
Ending balance (in shares) at Sep. 30, 2019		53,333,211
Ending balance at Sep. 30, 2019	$ 400,907	$ 53	625,524	211	(224,881)
Beginning balance (in shares) at Dec. 31, 2019	53,549,612	53,549,612
Beginning balance at Dec. 31, 2019	$ 410,945	$ 54	631,307	249	(220,665)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock form the exercise of stock options and settlement of restricted stock units (in shares)		582,724
Issuance of common stock from the exercise of stock options and settlement of restricted stock units	479	$ 0	479
Stock-based compensation expense	3,944		3,944
Net income (loss)	486				486
Other comprehensive income (loss), net of tax	532			532
Ending balance (in shares) at Mar. 31, 2020		54,132,336
Ending balance at Mar. 31, 2020	$ 416,386	$ 54	635,730	781	(220,179)
Beginning balance (in shares) at Dec. 31, 2019	53,549,612	53,549,612
Beginning balance at Dec. 31, 2019	$ 410,945	$ 54	631,307	249	(220,665)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	15,147
Other comprehensive income (loss), net of tax	$ 130
Ending balance (in shares) at Sep. 30, 2020	54,689,654	54,689,654
Ending balance at Sep. 30, 2020	$ 440,572	$ 55	645,656	379	(205,518)
Beginning balance (in shares) at Mar. 31, 2020		54,132,336
Beginning balance at Mar. 31, 2020	416,386	$ 54	635,730	781	(220,179)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock form the exercise of stock options and settlement of restricted stock units (in shares)		496,000
Issuance of common stock from the exercise of stock options and settlement of restricted stock units	3,600	$ 1	3,599
Stock-based compensation expense	3,069		3,069
Net income (loss)	8,714				8,714
Other comprehensive income (loss), net of tax	(185)			(185)
Ending balance (in shares) at Jun. 30, 2020		54,628,336
Ending balance at Jun. 30, 2020	431,584	$ 55	642,398	596	(211,465)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock form the exercise of stock options and settlement of restricted stock units (in shares)		61,318
Issuance of common stock from the exercise of stock options and settlement of restricted stock units	123	$ 0	123
Stock-based compensation expense	3,135		3,135
Net income (loss)	5,947				5,947
Other comprehensive income (loss), net of tax	$ (217)			(217)
Ending balance (in shares) at Sep. 30, 2020	54,689,654	54,689,654
Ending balance at Sep. 30, 2020	$ 440,572	$ 55	$ 645,656	$ 379	$ (205,518)

- Definition

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

+ References + Details

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Cash flows from operating activities
Net income	$ 15,147	$ 111,337
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property and equipment	1,043	1,022
Stock-based compensation	10,148	9,790
Amortization of premiums and accretion of discounts on marketable securities	(175)	(2,627)
Gain on sale of marketable securities	(229)	0
Intangible asset amortization	1,108	1,135
Deferred income taxes	3,793	(89,155)
Other non-cash adjustments, net	1,361	1,517
Changes in operating assets and liabilities:
Accounts receivable	(1,774)	1,914
Prepaid expenses and other assets	2,897	(2,956)
Inventory	(3,128)	(896)
Accounts payable and other liabilities	1,408	3,191
Product revenue allowances	874	1,884
Net cash provided by operating activities	32,473	36,156
Cash flows from investing activities
Purchases of property and equipment	(829)	(951)
Purchases of marketable securities	(264,112)	(291,333)
Sales and maturities of marketable securities	240,128	230,205
Net cash used in investing activities	(24,813)	(62,079)
Cash flows from financing activities
Proceeds from the exercise of stock options	4,202	4,148
Net cash provided by financing activities	4,202	4,148
Effect of exchange rate changes on cash, cash equivalents and restricted cash	41	(24)
Net change in cash, cash equivalents and restricted cash	11,903	(21,799)
Cash, cash equivalents and restricted cash
Beginning of period	45,650	61,749
End of period	$ 57,553	$ 39,950

Business Organization and Presentation	9 Months Ended
Business Organization and Presentation	Sep. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Business Organization and Presentation	Business Organization and Presentation Business organization Vanda Pharmaceuticals Inc. (the Company) is a leading global biopharmaceutical company focused on the development and commercialization of innovative therapies to address high unmet medical needs and improve the lives of patients. The Company commenced its operations in 2003 and operates in one reporting segment. The Company’s commercial portfolio is currently comprised of two products, HETLIOZ® for the treatment of Non-24-Hour Sleep-Wake Disorder (Non-24) and Fanapt® for the treatment of schizophrenia. HETLIOZ® is the first treatment for Non-24 approved by the U.S. Food and Drug Administration (FDA). In addition, the Company has a number of drugs in development, including: •HETLIOZ® (tasimelteon) for the treatment of Smith-Magenis Syndrome (SMS), jet lag disorder (JLD), pediatric Non-24 and delayed sleep phase disorder (DSPD); •Fanapt® (iloperidone) for the treatment of bipolar disorder and a long acting injectable (LAI) formulation for the treatment of schizophrenia; •Tradipitant (VLY-686), a small molecule neurokinin-1 receptor (NK-1R) antagonist, for the treatment of atopic dermatitis, gastroparesis, motion sickness and COVID-19 pneumonia; •VTR-297, a small molecule histone deacetylase (HDAC) inhibitor for the treatment of hematologic malignancies and with potential use as a treatment for several oncology indications; •VQW-765, a small molecule nicotinic acetylcholine receptor partial agonist, with potential use for the treatment of psychiatric disorders; and •Portfolio of Cystic Fibrosis Transmembrane Conductance Regulator (CFTR) activators and inhibitors for the treatment of dry eye and ocular inflammation and for the treatment of secretory diarrhea disorders, including cholera. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the Company’s consolidated financial statements and accompanying notes included in the Company's annual report on Form 10-K (Annual Report) for the fiscal year ended December 31, 2019. The financial information as of September 30, 2020 and for the three and nine months ended September 30, 2020 and 2019 is unaudited, but in the opinion of management, all adjustments considered necessary for a fair statement of the results for these interim periods have been included. All intercompany accounts and transactions have been eliminated in consolidation. The condensed consolidated balance sheet data as of December 31, 2019 was derived from audited financial statements but does not include all disclosures required by GAAP. The results of the Company’s operations for any interim period are not necessarily indicative of the results that may be expected for any other interim period or any future year or period.

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2020

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

There have been no material changes to the significant accounting policies previously disclosed in the Annual Report.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates that affect the reported amounts of assets and liabilities at the date of the financial statements, disclosure of contingent assets and liabilities, and the reported amounts of revenue and expenses during the reporting period. Management continually re-evaluates its estimates, judgments and assumptions, and management’s evaluation could change. Actual results could differ from those estimates.

Cash, Cash Equivalents and Restricted Cash

For purposes of the Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Cash Flows, cash equivalents represent highly liquid investments with a maturity date of three months or less at the date of purchase. Cash and cash equivalents include investments in money market funds with commercial banks and financial institutions, and commercial paper of high quality corporate issuers. Restricted cash relates primarily to amounts held as collateral for letters of credit for leases for office space at the Company’s Washington, D.C. headquarters.

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Condensed Consolidated Balance Sheets to the total end of period cash, cash equivalents and restricted cash reported within the Condensed Consolidated Statement of Cash Flows:


(in thousands)	September 30, 2020		September 30, 2019
Cash and cash equivalents	$	56,973	$	39,208
Restricted cash included in:
Prepaid expenses and other current assets	57		157
Non-current inventory and other	523		585
Total cash, cash equivalents and restricted cash	$	57,553	$	39,950

Revenue from Net Product Sales

The Company’s net product sales consist of sales of HETLIOZ® and Fanapt®. Net sales by product for the three and nine months ended September 30, 2020 and 2019 were as follows:


	Three Months Ended				Nine Months Ended
(in thousands)	September 30, 2020		September 30, 2019		September 30, 2020		September 30, 2019
HETLIOZ® net product sales	$	39,618	$	37,589	$	116,515	$	104,381
Fanapt® net product sales	20,690		21,896		64,000		61,877
Total net product sales	$	60,308	$	59,485	$	180,515	$	166,258

Major Customers

HETLIOZ® is available in the U.S. for distribution through a limited number of specialty pharmacies, and is not available in retail pharmacies. Fanapt® is available in the U.S. for distribution through a limited number of wholesalers and is available in retail pharmacies. The Company invoices and records revenue when its customers, specialty pharmacies and wholesalers, receive product from the third-party logistics warehouse which is the point at which control is transferred to the customer. There were five major customers that each accounted for more than 10% of total revenues and, as a group, represented 96% of total revenues for the nine months ended September 30, 2020. There were five major customers that each accounted for more than 10% of accounts receivable and, as a group, represented 93% of total accounts receivable at September 30, 2020. Receivables are carried at transaction price net of allowance for credit losses. Allowance for credit losses is measured using historical loss rates based on the aging of receivables and incorporating current conditions and forward-looking estimates.

Certain Risks and Uncertainties

In December 2019, a novel strain of coronavirus (COVID-19) surfaced in Wuhan, China. Since then, COVID-19 has spread to nearly every country in the world, including the U.S., and has rapidly evolved into a global pandemic. The extent to which the outbreak may impact the Company's business, financial condition and results of operations will depend on future developments, which are highly uncertain and the effects of which cannot be reasonably estimated at this time.

Recent Accounting Pronouncements

In December 2019, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes, which clarifies and simplifies certain aspects of the accounting for income taxes. The standard is effective for years beginning after December 15, 2020, and interim periods within annual periods beginning after December 15, 2020. The Company is evaluating the impact that this standard will have on the Company’s condensed consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses, which changes the impairment model for most financial assets and certain other financial instruments. The standard requires the use of a forward-looking “expected loss” model for instruments measured at amortized cost that generally will result in the earlier recognition of allowances for losses. The standard is effective for years beginning after December 15, 2019, and interim periods within annual periods beginning after December 15, 2019. The adoption of this standard on January 1, 2020 did not have a material impact on the Company's condensed consolidated financial results.

Marketable Securities

9 Months Ended

Sep. 30, 2020

Investments, Debt and Equity Securities [Abstract]

Marketable Securities

The following is a summary of the Company’s available-for-sale marketable securities as of September 30, 2020, which all have contractual maturities of less than two years:


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Market Value
(in thousands)
U.S. Treasury and government agencies	$	151,307	$	197	$	(3)	$	151,501
Corporate debt	139,831		249		(6)		140,074

Total marketable securities	$	291,138	$	446	$	(9)	$	291,575

The following is a summary of the Company’s available-for-sale marketable securities as of December 31, 2019, which all have contractual maturities of less than two years:


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Market Value
(in thousands)
U.S. Treasury and government agencies	$	88,535	$	68	$	(2)	$	88,601
Corporate debt	129,860		196		(1)		130,055
Asset-backed securities	48,355		49		(3)		48,401
Total marketable securities	$	266,750	$	313	$	(6)	$	267,057

Fair Value Measurements

9 Months Ended

Sep. 30, 2020

Fair Value Disclosures [Abstract]

Fair Value Measurements

Authoritative guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include:

•Level 1 — defined as observable inputs such as quoted prices in active markets

•Level 2 — defined as inputs other than quoted prices in active markets that are either directly or indirectly observable

•Level 3 — defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions

The Company's assets classified in Level 1 and Level 2 as of September 30, 2020 and December 31, 2019 consist of cash equivalents and available-for-sale marketable securities. The valuation of Level 1 instruments is determined using a market approach and is based upon unadjusted quoted prices for identical assets in active markets. The valuation of Level 2 instruments is also determined using a market approach based upon quoted prices for similar assets in active markets, or other inputs that are observable for substantially the full term of the financial instrument. Level 2 securities include certificates of deposit, commercial paper, corporate notes and asset-backed securities that use as their basis readily observable market parameters.

As of September 30, 2020, the Company held certain assets that are required to be measured at fair value on a recurring basis, as follows:


			Fair Value Measurement as of September 30, 2020 Using
	Total Fair Value		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(in thousands)			(Level 1)		(Level 2)		(Level 3)
U.S. Treasury and government agencies	$	151,501	$	151,501	$	—	$	—
Corporate debt	140,074		—		140,074		—

Total assets measured at fair value	$	291,575	$	151,501	$	140,074	$	—

As of December 31, 2019, the Company held certain assets that are required to be measured at fair value on a recurring basis, as follows:


			Fair Value Measurement as of December 31, 2019 Using
	Total Fair Value		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(in thousands)			(Level 1)		(Level 2)		(Level 3)
U.S. Treasury and government agencies	$	88,601	$	88,601	$	—	$	—
Corporate debt	137,025		—		137,025		—
Asset-backed securities	48,401		—		48,401		—
Total assets measured at fair value	$	274,027	$	88,601	$	185,426	$	—

Total assets measured at fair value as of September 30, 2020 include no cash equivalents. Total assets measured at fair value as of December 31, 2019 include $7.0 million of cash equivalents.

The Company also has financial assets and liabilities, not required to be measured at fair value on a recurring basis, which primarily consist of cash, accounts receivable, restricted cash, accounts payable and accrued liabilities, product revenue allowances and milestone obligations under license agreements, the carrying values of which materially approximate their fair values.

- 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

Inventory

9 Months Ended

Sep. 30, 2020

Inventory Disclosure [Abstract]

Inventory

The Company evaluates expiry risk by evaluating current and future product demand relative to product shelf life. The Company builds demand forecasts by considering factors such as, but not limited to, overall market potential, market share, market acceptance and patient usage. Inventory levels are evaluated for the amount of inventory that would be sold within one year. At certain times, the level of inventory can exceed the forecasted level of cost of goods sold for the next twelve months. The Company classifies the estimate of such inventory as non-current.

Inventory consisted of the following as of September 30, 2020 and December 31, 2019:


(in thousands)	September 30, 2020		December 31, 2019
Current assets

Finished goods	$	1,322	$	1,140
Total inventory, current	$	1,322	$	1,140
Non-Current assets
Raw materials	$	745	$	659
Work-in-process	4,109		1,109
Finished goods	527		1,056
Total inventory, non-current	5,381		2,824
Total inventory	$	6,703	$	3,964

Intangible Assets

9 Months Ended

Sep. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

HETLIOZ®. In January 2014, the Company announced that the FDA had approved the New Drug Application (NDA) for HETLIOZ®. As a result of this approval, the Company met a milestone under its license agreement with Bristol-Myers Squibb (BMS) that required the Company to make a license payment of $8.0 million to BMS. The $8.0 million is being amortized on a straight-line basis over the estimated economic useful life of the related product patents, the latest of which expires in July 2035.

In April 2018, the Company met its final milestone under its license agreement with BMS when cumulative worldwide sales of HETLIOZ® reached $250.0 million. As a result of the achievement of this milestone, the Company made a payment to BMS of $25.0 million in 2018. The $25.0 million, which was capitalized as an intangible asset in the first quarter of 2015, was determined to be additional consideration for the acquisition of the HETLIOZ® intangible asset and is being amortized on a straight-line basis over the estimated economic useful life of the related product patents, the latest of which expires in July 2035.

The estimated economic useful life of both the $8.0 million and the $25.0 million intangible assets were changed from February 2035 to July 2035 based on the July 2035 expiration date of U.S. patent number 10,376,487 ('487 Patent) issued by the U.S. Patent and Trademark Office in August 2019.

The following is a summary of the Company’s intangible assets as of September 30, 2020:


		September 30, 2020
(in thousands)	Estimated Useful Life	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
HETLIOZ®	July 2035	$	33,000	$	11,071	$	21,929

The following is a summary of the Company’s intangible assets as of December 31, 2019:


		December 31, 2019
(in thousands)	Estimated Useful Life	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
HETLIOZ®	July 2035	$	33,000	$	9,963	$	23,037

As of September 30, 2020 and December 31, 2019, the Company also had $27.9 million of fully amortized intangible assets related to Fanapt®.

Intangible assets are amortized over their estimated useful economic life using the straight-line method. Amortization expense was $0.4 million for each of the three months ended September 30, 2020 and 2019. Amortization expense was $1.1 million for each of the nine months ended September 30, 2020 and 2019. The following is a summary of the future intangible asset amortization schedule as of September 30, 2020:


(in thousands)	Total		2020		2021		2022		2023		2024		Thereafter
HETLIOZ®	$	21,929	$	370	$	1,478	$	1,478	$	1,478	$	1,478	$	15,647

Accounts Payable and Accrued Liabilities

9 Months Ended

Sep. 30, 2020

Payables and Accruals [Abstract]

Accounts Payable and Accrued Liabilities

The following is a summary of the Company’s accounts payable and accrued liabilities as of September 30, 2020 and December 31, 2019:


(in thousands)	September 30, 2020		December 31, 2019
Compensation and employee benefits	$	8,129	$	6,597
Research and development expenses	6,089		5,893
Consulting and other professional fees	5,847		5,376
Royalties payable	5,211		5,904
Operating lease liabilities	1,978		2,147
Other	1,832		1,673
Total accounts payable and accrued liabilities	$	29,086	$	27,590

Commitments and Contingencies	9 Months Ended
Commitments and Contingencies	Sep. 30, 2020
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Guarantees and Indemnifications The Company has entered into a number of standard intellectual property indemnification agreements in the ordinary course of its business. Pursuant to these agreements, the Company indemnifies, holds harmless, and agrees to reimburse the indemnified party for losses suffered or incurred by the indemnified party, generally the Company’s business partners or customers, in connection with any U.S. patent or any copyright or other intellectual property infringement claim by any third party with respect to the Company’s products. The term of these indemnification agreements is generally perpetual from the date of execution of the agreement. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited. Since inception, the Company has not incurred costs to defend lawsuits or settle claims related to these indemnification agreements. The Company also indemnifies its officers and directors for certain events or occurrences, subject to certain conditions. License Agreements The Company’s rights to develop and commercialize its products are subject to the terms and conditions of licenses granted to the Company by other pharmaceutical companies. HETLIOZ®. In February 2004, the Company entered into a license agreement with BMS under which it received an exclusive worldwide license under certain patents and patent applications, and other licenses to intellectual property, to develop and commercialize HETLIOZ®. As of September 30, 2020, the Company has paid BMS $37.5 million in upfront fees and milestone obligations, including $33.0 million of regulatory approval and commercial milestones capitalized as intangible assets (see Note 6). The Company has no remaining milestone obligations to BMS. Additionally, the Company is obligated to make royalty payments on HETLIOZ® net sales to BMS in any territory where the Company commercializes HETLIOZ® for a period equal to the greater of 10 years following the first commercial sale in the territory or the expiry of the new chemical entity (NCE) patent in that territory. During the period prior to the expiry of the NCE patent in a territory, the Company is obligated to pay a 10% royalty on net sales in that territory. The royalty rate is decreased by half for countries in which no NCE patent existed or for the remainder of the 10 years after the expiry of the NCE patent. The Company is also obligated under the license agreement to pay BMS a percentage of any sublicense fees, upfront payments and milestone and other payments (excluding royalties) that it receives from a third party in connection with any sublicensing arrangement, at a rate which is in the mid-twenties. The Company is obligated to use its commercially reasonable efforts to develop and commercialize HETLIOZ®. Fanapt®. Pursuant to the terms of a settlement agreement with Novartis, Novartis transferred all U.S. and Canadian rights in the Fanapt® franchise to the Company on December 31, 2014. The Company paid directly to Sanofi S.A (Sanofi) a fixed royalty of 3% of net sales through December 2019 related to manufacturing know-how. The Company is also obligated to pay Sanofi a fixed royalty on Fanapt® net sales equal to 6% on Sanofi know-how not related to manufacturing under certain conditions for a period of up to 10 years in markets where the NCE patent has expired or was not issued. The Company is obligated to pay this 6% royalty on net sales in the U.S. through November 2026. Tradipitant. In April 2012, the Company entered into a license agreement with Eli Lilly and Company (Lilly) pursuant to which the Company acquired an exclusive worldwide license under certain patents and patent applications, and other licenses to intellectual property, to develop and commercialize an NK-1R antagonist, tradipitant, for all human indications. Lilly is eligible to receive future payments based upon achievement of specified development, regulatory approval and commercialization milestones as well as tiered-royalties on net sales at percentage rates up to the low double digits. As of September 30, 2020, the Company has paid Lilly $3.0 million in upfront fees and development milestones, including a $2.0 million milestone payment in July 2018 as a result of enrolling the first subject into a Phase III study for tradipitant. As of September 30, 2020, remaining milestone obligations include a $2.0 million development milestone due upon the filing of the first marketing authorization for tradipitant in either the U.S. or European Union (E.U.), $10.0 million and $5.0 million for the first approval of a marketing authorization for tradipitant in the U.S. and E.U., respectively, and up to $80.0 million for sales milestones. The Company is obligated to use its commercially reasonable efforts to develop and commercialize tradipitant. VQW-765. In connection with a settlement agreement with Novartis relating to Fanapt®, the Company received an exclusive worldwide license under certain patents and patent applications, and other licenses to intellectual property, to develop and commercialize VQW-765, a Phase II alpha-7 nicotinic acetylcholine receptor partial agonist. Pursuant to the license agreement, the Company is obligated to use its commercially reasonable efforts to develop and commercialize VQW-765 and is responsible for all development costs. The Company has no milestone obligations; however, Novartis is eligible to receive tiered-royalties on net sales at percentage rates up to the mid-teens. Portfolio of CFTR activators and inhibitors. In March 2017, the Company entered into a license agreement with the University of California San Francisco (UCSF), under which the Company acquired an exclusive worldwide license to develop and commercialize a portfolio of CFTR activators and inhibitors. Pursuant to the license agreement, the Company will develop and commercialize the CFTR activators and inhibitors and is responsible for all development costs under the license agreement, including current pre-investigational new drug development work. UCSF is eligible to receive future payments based upon achievement of specified development and commercialization milestones as well as single-digit royalties on net sales. As of September 30, 2020, the Company has paid UCSF $1.2 million in upfront fees and development milestones, including an upfront license fee payment of $1.0 million in 2017 and a $0.2 million development milestone payment in March 2019. As of September 30, 2020, remaining milestone obligations include $12.2 million for development milestones and $33.0 million for future regulatory approval and sales milestones. Included in the $12.2 million of development milestones is a $350,000 milestone due upon the conclusion of a Phase I study for each licensed product but not to exceed $1.1 million in total for the CFTR portfolio. Purchase CommitmentsIn the course of its business, the Company regularly enters into agreements with clinical organizations to provide services relating to clinical development and clinical manufacturing activities under fee service arrangements. The Company’s current agreements for clinical, marketing, and other services may be terminated on generally 90 days’ notice without incurring additional charges, other than charges for work completed but not paid for through the effective date of termination and other costs incurred by the Company’s contractors in closing out work in progress as of the effective date of termination. Noncancellable long-term contractual cash obligations include noncancellable purchase commitments longer than one year and primarily relate to commitments for data services, of which $0.2 million, $1.0 million and $0.5 million are expected to be paid in 2020, 2021 and 2022, respectively.

Accumulated Other Comprehensive Income

9 Months Ended

Sep. 30, 2020

Equity [Abstract]

Accumulated Other Comprehensive Income

The accumulated balances related to each component of other comprehensive income (loss), net of taxes, were as follows as of September 30, 2020 and December 31, 2019:


(in thousands)	September 30, 2020		December 31, 2019
Foreign currency translation	$	42	$	13
Unrealized gain on marketable securities	337		236
Accumulated other comprehensive income	$	379	$	249

Stock-Based Compensation

9 Months Ended

Sep. 30, 2020

Share-based Payment Arrangement [Abstract]

Stock-Based Compensation

As of September 30, 2020, there were 5,429,647 shares subject to outstanding options and restricted stock units (RSUs) under the 2006 Equity Incentive Plan (2006 Plan) and the Amended and Restated 2016 Equity Incentive Plan (2016 Plan, and together with the 2006 Plan, Plans). The 2006 Plan expired by its terms in April 2016, and the Company adopted the 2016 Plan. Outstanding options and RSUs under the 2006 Plan remain in effect and the terms of the 2006 Plan continue to apply, but no additional awards can be granted under the 2006 Plan. In June 2016, the Company’s stockholders approved the 2016 Plan. The 2016 Plan has been amended and restated three times to increase the number of shares reserved for issuance, among other administrative changes. Each of the amendments and restatements of the 2016 Plan was approved by the Company's stockholders. There are a total of 8,790,000 shares of common stock authorized for issuance under the 2016 Plan, 3,983,284 shares of which remained available for future grant as of September 30, 2020.

Stock Options

The Company has granted option awards under the Plans with service conditions (service option awards) that are subject to terms and conditions established by the compensation committee of the board of directors. Service option awards have 10-year contractual terms. Service option awards granted to employees and new directors upon their election vest and become exercisable over four years with the first 25% of the shares subject to service option awards vesting on the first anniversary of the grant date and remaining 75% of the shares subject to the service option awards in 36 equal monthly installments thereafter. Subsequent annual service option awards granted to directors vest and become exercisable in full on the first anniversary of the grant date. Certain service option awards granted to employees and executive officers provide for partial acceleration of vesting if the employee or executive officer is subject to an involuntary termination, and full acceleration of vesting if the employee or executive officer is subject to an involuntary termination within 24 months after a change in control of the Company. Service option awards granted to directors provide for accelerated vesting if there is a change in control of the Company or if the director's service terminates as a result of the director's death or total and permanent disability.

As of September 30, 2020, $7.9 million of unrecognized compensation costs related to unvested service option awards are expected to be recognized over a weighted average period of 1.4 years. No option awards are classified as a liability as of September 30, 2020.

A summary of option activity under the Plans for the nine months ended September 30, 2020 follows:


2006 and 2016 Plans (in thousands, except for share and per share amounts)	Number of Shares	Weighted Average Exercise Price at Grant Date		Weighted Average Remaining Term (Years)	Aggregate Intrinsic Value
Outstanding at December 31, 2019	4,495,145	$	12.21	5.58	$	22,148
Granted	627,500	11.27
Forfeited	(225,000)	18.83
Expired	(557,604)	14.21
Exercised	(568,973)	7.39			2,155
Outstanding at September 30, 2020	3,771,068	12.09		5.77	3,331
Exercisable at September 30, 2020	2,639,153	11.17		4.42	3,331
Vested and expected to vest at September 30, 2020	3,604,062	12.05		5.61	3,331

The weighted average grant-date fair value of options granted was $5.53 and $10.34 per share for the nine months ended September 30, 2020 and 2019, respectively. Proceeds from the exercise of stock options amounted to $4.2 million and $4.1 million for the nine months ended September 30, 2020 and 2019, respectively.

Restricted Stock Units

An RSU is a stock award that entitles the holder to receive shares of the Company’s common stock as the award vests. The fair value of each RSU is based on the closing price of the Company’s stock on the date of grant. The Company has granted RSUs under the Plans with service conditions (service RSUs) that are subject to terms and conditions established by the compensation committee of the board of directors. Service RSUs granted to employees vest in four equal annual installments provided that the employee remains employed with the Company. Certain service RSUs granted to employees and executive officers provide for accelerated vesting if the employee or executive officer is subject to an involuntary termination within 24 months after a change in control. Annual service RSUs granted to directors vest on the first anniversary of the grant date and provide for accelerated vesting if there is a change in control of the Company.

As of September 30, 2020, $20.7 million of unrecognized compensation costs related to unvested service RSUs are expected to be recognized over a weighted average period of 1.7 years. No RSUs are classified as a liability as of September 30, 2020.

A summary of RSU activity under the Plans for the nine months ended September 30, 2020 follows:


2006 and 2016 Plans	Number of Shares Underlying RSUs	Weighted Average Grant Date Fair Value
Unvested at December 31, 2019	1,649,285	$	18.04
Granted	828,162	11.28
Forfeited	(247,799)	17.35
Vested	(571,069)	16.53
Unvested at September 30, 2020	1,658,579	15.29

The grant date fair value for the 571,069 shares underlying RSUs that vested during the nine months ended September 30, 2020 was $9.4 million.

Stock-Based Compensation Expense

Stock-based compensation expense recognized for the three and nine months ended September 30, 2020 and 2019 was comprised of the following:


	Three Months Ended				Nine Months Ended
(in thousands)	September 30, 2020		September 30, 2019		September 30, 2020		September 30, 2019
Research and development	$	853	$	827	$	2,864	$	2,311
Selling, general and administrative	2,282		2,580		7,284		7,479
Total stock-based compensation expense	$	3,135	$	3,407	$	10,148	$	9,790

The fair value of each option award is estimated on the date of grant using the Black-Scholes-Merton option pricing model that uses the assumptions noted in the following table. Expected volatility rates are based on the historical volatility of the Company’s publicly traded common stock and other factors. The risk-free interest rates are based on the U.S. Treasury yield for a period consistent with the expected term of the option in effect at the time of the grant. The Company has never paid cash dividends to its stockholders and does not plan to pay dividends in the foreseeable future. Assumptions used in the Black-Scholes-Merton option pricing model for employee and director stock options granted during the nine months ended September 30, 2020 and 2019 were as follows:


	Nine Months Ended
	September 30, 2020		September 30, 2019
Expected dividend yield	0	%	0	%
Weighted average expected volatility	51	%	58	%
Weighted average expected term (years)	6.07		5.94
Weighted average risk-free rate	1.14	%	2.29	%

Income Taxes	9 Months Ended
Income Taxes	Sep. 30, 2020
Income Tax Disclosure [Abstract]
Income Taxes	Income TaxesFor the three months ended September 30, 2020 and 2019, the Company recorded income tax expense of $2.5 million and income tax benefit of $88.1 million, respectively. For the nine months ended September 30, 2020 and 2019, the Company recorded income tax expense of $5.6 million and income tax benefit of $88.1 million, respectively. The income tax expense for the three and nine months ended September 30, 2020 was primarily driven by the estimated effective tax rate for the year and the discrete impact of net shortfall tax expense related to stock-based compensation activity. The income tax benefit for the three and nine months ended September 30, 2019 was primarily due to the reduction of the Company's tax valuation allowance against substantially all of its deferred tax assets in the U.S. recognized during the three months ended September 30, 2019. Net income tax benefit of $1.6 million was also recorded during the three and nine months ended September 30, 2019 related to the generation of 2019 research and development and orphan drug credits, partially offset by current taxes payable to certain U.S. state and foreign jurisdictions and uncertain tax positions.The Company assesses the need for a valuation allowance against its deferred tax asset each quarter through the review of all available positive and negative evidence. Deferred tax assets are reduced by a tax valuation allowance when, in the opinion of management, it is more likely than not that some portion of the deferred tax assets will not be realized. The analysis depends on historical and projected taxable income. Projected taxable income includes significant assumptions related to revenue, commercial expenses and research and development activities. During the third quarter of 2019, after considering all available positive and negative evidence, including but not limited to cumulative income in recent periods, historical, current and future projected results and significant risks and uncertainties related to forecasts, the Company concluded that it was more likely than not that substantially all of its deferred tax assets in the U.S. are realizable in future periods. A valuation allowance was retained against certain District of Columbia state deferred tax assets as of September 30, 2020 and December 31, 2019.

Earnings per Share

9 Months Ended

Sep. 30, 2020

Earnings Per Share [Abstract]

Earnings per Share

Earnings per ShareBasic earnings per share (EPS) is calculated by dividing the net income by the weighted average number of shares of common stock outstanding. Diluted EPS is computed by dividing the net income by the weighted average number of shares of common stock outstanding, plus potential outstanding common stock for the period. Potential outstanding common stock includes stock options and shares underlying RSUs, but only to the extent that their inclusion is dilutive.

The following table presents the calculation of basic and diluted net income per share of common stock for the three and nine months ended September 30, 2020 and 2019:


	Three Months Ended				Nine Months Ended
(in thousands, except for share and per share amounts)	September 30, 2020		September 30, 2019		September 30, 2020		September 30, 2019
Numerator:
Net income	$	5,947	$	100,423	$	15,147	$	111,337
Denominator:
Weighted average shares outstanding, basic	54,666,128		53,297,298		54,325,832		53,052,521
Effect of dilutive securities	542,904		1,244,327		728,940		1,751,330
Weighted average shares outstanding, diluted	55,209,032		54,541,625		55,054,772		54,803,851
Net income per share, basic and diluted:
Basic	$	0.11	$	1.88	$	0.28	$	2.10
Diluted	$	0.11	$	1.84	$	0.28	$	2.03
Antidilutive securities excluded from calculations of diluted net income per share	3,898,896		2,646,933		3,602,648		1,826,279

Legal Matters	9 Months Ended
Legal Matters	Sep. 30, 2020
Commitments and Contingencies Disclosure [Abstract]
Legal Matters	Legal Matters Fanapt®. In 2014 and 2015 Roxane Laboratories, Inc. (Roxane) and its affiliates, West-Ward Pharmaceuticals International Limited and West-Ward Pharmaceuticals Corp (West-Ward), Inventia Healthcare Pvt. Ltd. (Inventia), Lupin Ltd. and Lupin Pharmaceuticals, Inc. (Lupin), Taro Pharmaceuticals USA, Inc. and Taro Pharmaceutical Industries, Ltd. (Taro), and Apotex Inc. and Apotex Corp. (Apotex) (collectively, the Fanapt® Defendants) each submitted an Abbreviated New Drug Applications (ANDA) to the U.S. Food and Drug Administration (FDA) seeking approval to market generic versions of Fanapt® prior to the expiration of certain of the Company’s patents covering Fanapt®, including U.S. Patent No. 8,586,610 (‘610 Patent) and U.S. Patent No. 9,138,432 (‘432 Patent). In response, the Company filed separate lawsuits in 2014 and 2015 against each of the Fanapt® Defendants in the U.S. District Court for the District of Delaware (Delaware District Court) for patent infringement. In August 2016, the Delaware District Court ruled in the Company’s favor, permanently enjoining Roxane from manufacturing, using, selling, offering to sell, distributing or importing any generic iloperidone product described in Roxane’s ANDA until the expiration of the ‘610 Patent in November 2027, or May 2028 if the Company obtains pediatric exclusivity. This ruling was affirmed on appeal by the Federal Circuit Court of Appeals in April 2018. West-Ward, having replaced Roxane as defendant following the acquisition of Roxane by West-Ward’s parent company, Hikma Pharmaceuticals PLC (Hikma), petitioned the U.S. Supreme Court for a writ of certiorari, which was denied in January 2020. The Company’s lawsuit against Hikma regarding the ‘432 Patent remains pending. The Company entered into separate license agreements with each of Taro, Apotex and Lupin resolving these lawsuits in October 2016, December 2016 and July 2020, respectively. The license agreements grant Taro, Apotex and Lupin non-exclusive licenses to manufacture and commercialize a version of Fanapt® in the U.S. effective as of the expiration of the ‘610 Patent or earlier under certain limited circumstances. The Company entered into a confidential stipulation with Inventia regarding any potential launch of its generic versions of Fanapt®, but the Company’s lawsuit against Inventia regarding the ‘610 and ‘432 Patents remains pending. HETLIOZ®. In April and May 2018, the Company filed three separate patent infringement lawsuits in the Delaware District Court against Teva Pharmaceuticals USA, Inc. (Teva), MSN Pharmaceuticals Inc. and MSN Laboratories Private Limited (MSN) and Apotex (collectively with Teva and MSN, the HETLIOZ® Defendants) after having received Paragraph IV certification notice letters (Paragraph IV Letters) from each of the HETLIOZ® Defendants alleging that certain of the Company’s patents covering HETLIOZ® (collectively, the HETLIOZ® Patents) were invalid, unenforceable and/or would not be infringed by the manufacture, use or sale of their generic versions of HETLIOZ®, as described in the ANDAs submitted to the FDA by each of the HETLIOZ® Defendants, prior to the expiration of the latest to expire of the HETLIOZ® Patents in 2034. Each of the HETLIOZ® Patents are listed in the Approved Drug Products with Therapeutic Equivalence Evaluations (Orange Book). In December 2018, the Company filed amended complaints against each of the HETLIOZ® Defendants following the receipt of additional Paragraph IV Letters from Teva and Apotex concerning its Orange Book listed 10,071,977 Patent, which expires in 2035. These lawsuits are scheduled for trial in July 2021. In March 2019, April 2019, and May 2019, the Company filed three additional patent infringement lawsuits in the Delaware District Court against the HETLIOZ® Defendants following the receipt of additional Paragraph IV Letters from each concerning its Orange Book listed U.S. Patent No. 10,149,829, which expires in 2033. These lawsuits have been consolidated with the other lawsuits against the HETLIOZ® Defendants and are also scheduled for trial in July 2021. In November and December 2019, the Company filed additional patent infringement lawsuits in the Delaware District Court against Apotex and Teva, respectively, for infringement of its Orange Book listed U.S. Patent No. 10,376,487 (‘487 Patent) following the receipt of additional Paragraph IV Letters from Apotex and Teva regarding the ‘487 Patent, which expires in July 2035. Teva asserted a counterclaim for a declaratory judgment that the ‘487 Patent is invalid. The Company answered Teva’s counterclaim by denying their allegation that the ‘487 Patent is invalid. In January 2020, the Company filed two additional patent infringement lawsuits in the Delaware District Court against Teva and Apotex for infringement of its Orange Book-listed U.S. Patent No. 10,449,176 (‘176 Patent) following the receipt of additional Paragraph IV Letters from Teva and Apotex regarding the ‘176 Patent, which expires in January 2033. These lawsuits have been consolidated with the other lawsuits against the HETLIOZ® Defendants and are also scheduled for trial in July 2021. In January 2020 and February 2020, the Company received additional Paragraph IV Letters from MSN concerning the ‘487 Patent and the ‘176 Patent, respectively, in which MSN alleges that the ‘487 and the ‘176 Patents are invalid, unenforceable and/or will not be infringed by the commercial manufacture, use, sale, offer for sale, or importation of MSN's generic version of HETLIOZ® as described in MSN’s ANDA. In February and March 2020, the Company filed two additional lawsuits in the Delaware District Court against MSN for infringement of its ‘487 Patent and ‘176 Patent. These lawsuits have been consolidated with the other lawsuits against the HETLIOZ® Defendants and are also scheduled for trial in July 2021. Other Matters. In February 2019, a qui tam action filed against the Company was unsealed by order of the DC District Court. The qui tam action, which was filed under seal in March 2017, was brought by a former Company employee on behalf of the U.S., 28 states and the District of Columbia (collectively, the Plaintiff States) and the policyholders of certain insurance companies under the Federal False Claims Act and state law equivalents to the Federal False Claims Act and related state laws. The complaint alleged that the Company violated these laws through the promotion and marketing of its products Fanapt® and HETLIOZ® and sought, among other things, treble damages, civil penalties for each alleged false claim, and attorneys’ fees and costs. By virtue of the DC District Court having unsealed the original complaint, the Company learned that in January 2019, the U.S. Department of Justice (the DOJ), as well as the Plaintiff States, elected not to intervene in the qui tam action at that time. In May 2019, the plaintiff filed an amended complaint under seal repeating the same allegations and seeking the same relief. According to a filing unsealed in June 2019, the DOJ reaffirmed its decision not to intervene and incorporated its prior filing, indicating that neither the DOJ nor the Plaintiff States were intervening regarding the original complaint. Although the DOJ and the Plaintiff States have elected not to intervene, the plaintiff may litigate this action and the DOJ and the Plaintiff States may later seek to intervene in the action. In August 2019, the Company filed a motion to dismiss, and in October 2019 the plaintiff filed a reply. In May 2020, the DC District Court dismissed the plaintiff’s complaint in its entirety, without prejudice. In June 2020, the plaintiff filed a second amended complaint with similar allegations and seeking the same relief. In July 2020, the Company filed another motion to dismiss and in October 2020 the plaintiff filed a reply. The Company intends to continue to vigorously defend itself in the case. In February 2019, a securities class action, Gordon v. Vanda Pharmaceuticals Inc., was filed in the U.S. District Court for the Eastern District of New York naming the Company and certain of its officers as defendants. An amended complaint was filed in July 2019. The amended complaint, filed on behalf of a purported stockholder, asserts claims on behalf of a putative class of all persons who purchased the Company’s publicly traded securities between November 4, 2015 and February 11, 2019, for alleged violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder. The amended complaint alleges that the defendants made false and misleading statements and/or omissions regarding Fanapt®, HETLIOZ® and the Company’s interactions with the FDA regarding tradipitant between November 3, 2015 and February 11, 2019. In March 2020, the Company filed a motion to dismiss the complaint. The Company believes that it has meritorious defenses and intends to vigorously defend this lawsuit. The Company does not anticipate that this litigation will have a material adverse effect on its business, results of operations or financial condition. However, this lawsuit is subject to inherent uncertainties, the actual cost may be significant, and the Company may not prevail. The Company believes it is entitled to coverage under its relevant insurance policies, subject to a retention, but coverage could be denied or prove to be insufficient. In July 2019, a shareholder derivative complaint, Samuel Williams v. Mihael Polymeropoulos, et al., was filed in the U.S. District Court for the Eastern District of New York naming certain current and former Company directors and officers as defendants. In September 2019, a shareholder derivative complaint, Michael Bavaro v. Mihael Polymeropoulos, et al., was filed in the Delaware District Court naming certain current and former Company directors and officers as defendants. In October 2019, the Company filed a motion to transfer the Bavaro case to the Eastern District of New York, where the Gordon and Williams cases are pending. In March 2020, the Delaware District Court transferred the Bavaro case to the Eastern District of New York, consolidating the Williams and Bavaro cases, and the plaintiffs filed a consolidated complaint in April 2020. These complaints, filed on behalf of purported stockholders, derivatively on behalf of the Company, assert claims for alleged breach of fiduciary duties by certain of the Company’s current and former directors and officers. The Company believes that it has meritorious defenses and intends to vigorously defend this lawsuit. The Company does not anticipate that this litigation will have a material adverse effect on its business, results of operations or financial condition. However, this lawsuit is subject to inherent uncertainties, the actual cost may be significant, and the Company may not prevail. The Company believes it is entitled to coverage under its relevant insurance policies, subject to a retention, but coverage could be denied or prove to be insufficient. In July 2017, the CHMP issued a negative opinion recommending against approval of Fanaptum® (oral iloperidone tablets) for the treatment of schizophrenia in adult patients in the E.U. The CHMP was of the opinion that the benefits of Fanaptum® did not outweigh its risks and recommended against marketing authorization. In March 2018, the Company filed an application seeking annulment of the EMA’s negative opinion and the subsequent European Commission decision refusing marketing authorization of Fanaptum in the E.U. General Court. In December 2019, the General Court issued its judgment dismissing the action, leaving the EMA opinion and Commission decision intact. In February 2020, the Company filed an appeal of this judgment with the Court of Justice of the E.U.

Summary of Significant Accounting Policies (Policies)	9 Months Ended
Summary of Significant Accounting Policies (Policies)	Sep. 30, 2020
Accounting Policies [Abstract]
Basis of Presentation	Basis of PresentationThe accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the Company’s consolidated financial statements and accompanying notes included in the Company's annual report on Form 10-K (Annual Report) for the fiscal year ended December 31, 2019. The financial information as of September 30, 2020 and for the three and nine months ended September 30, 2020 and 2019 is unaudited, but in the opinion of management, all adjustments considered necessary for a fair statement of the results for these interim periods have been included. All intercompany accounts and transactions have been eliminated in consolidation. The condensed consolidated balance sheet data as of December 31, 2019 was derived from audited financial statements but does not include all disclosures required by GAAP. The results of the Company’s operations for any interim period are not necessarily indicative of the results that may be expected for any other interim period or any future year or period.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates that affect the reported amounts of assets and liabilities at the date of the financial statements, disclosure of contingent assets and liabilities, and the reported amounts of revenue and expenses during the reporting period. Management continually re-evaluates its estimates, judgments and assumptions, and management’s evaluation could change. Actual results could differ from those estimates.
Cash, Cash Equivalents and Restricted Cash	Cash, Cash Equivalents and Restricted CashFor purposes of the Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Cash Flows, cash equivalents represent highly liquid investments with a maturity date of three months or less at the date of purchase. Cash and cash equivalents include investments in money market funds with commercial banks and financial institutions, and commercial paper of high quality corporate issuers. Restricted cash relates primarily to amounts held as collateral for letters of credit for leases for office space at the Company’s Washington, D.C. headquarters.
Major Customers	Major Customers HETLIOZ® is available in the U.S. for distribution through a limited number of specialty pharmacies, and is not available in retail pharmacies. Fanapt® is available in the U.S. for distribution through a limited number of wholesalers and is available in retail pharmacies. The Company invoices and records revenue when its customers, specialty pharmacies and wholesalers, receive product from the third-party logistics warehouse which is the point at which control is transferred to the customer. There were five major customers that each accounted for more than 10% of total revenues and, as a group, represented 96% of total revenues for the nine months ended September 30, 2020. There were five major customers that each accounted for more than 10% of accounts receivable and, as a group, represented 93% of total accounts receivable at September 30, 2020. Receivables are carried at transaction price net of allowance for credit losses. Allowance for credit losses is measured using historical loss rates based on the aging of receivables and incorporating current conditions and forward-looking estimates.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In December 2019, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes, which clarifies and simplifies certain aspects of the accounting for income taxes. The standard is effective for years beginning after December 15, 2020, and interim periods within annual periods beginning after December 15, 2020. The Company is evaluating the impact that this standard will have on the Company’s condensed consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses, which changes the impairment model for most financial assets and certain other financial instruments. The standard requires the use of a forward-looking “expected loss” model for instruments measured at amortized cost that generally will result in the earlier recognition of allowances for losses. The standard is effective for years beginning after December 15, 2019, and interim periods within annual periods beginning after December 15, 2019. The adoption of this standard on January 1, 2020 did not have a material impact on the Company's condensed consolidated financial results.
Marketable securities	The Company's assets classified in Level 1 and Level 2 as of September 30, 2020 and December 31, 2019 consist of cash equivalents and available-for-sale marketable securities. The valuation of Level 1 instruments is determined using a market approach and is based upon unadjusted quoted prices for identical assets in active markets. The valuation of Level 2 instruments is also determined using a market approach based upon quoted prices for similar assets in active markets, or other inputs that are observable for substantially the full term of the financial instrument. Level 2 securities include certificates of deposit, commercial paper, corporate notes and asset-backed securities that use as their basis readily observable market parameters.
Inventory	InventoryThe Company evaluates expiry risk by evaluating current and future product demand relative to product shelf life. The Company builds demand forecasts by considering factors such as, but not limited to, overall market potential, market share, market acceptance and patient usage. Inventory levels are evaluated for the amount of inventory that would be sold within one year. At certain times, the level of inventory can exceed the forecasted level of cost of goods sold for the next twelve months. The Company classifies the estimate of such inventory as non-current.
Earnings per Share	Earnings per ShareBasic earnings per share (EPS) is calculated by dividing the net income by the weighted average number of shares of common stock outstanding. Diluted EPS is computed by dividing the net income by the weighted average number of shares of common stock outstanding, plus potential outstanding common stock for the period. Potential outstanding common stock includes stock options and shares underlying RSUs, but only to the extent that their inclusion is dilutive.

Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2020

Accounting Policies [Abstract]

Schedule of Cash Flow, Supplemental Disclosures


(in thousands)	September 30, 2020		September 30, 2019
Cash and cash equivalents	$	56,973	$	39,208
Restricted cash included in:
Prepaid expenses and other current assets	57		157
Non-current inventory and other	523		585
Total cash, cash equivalents and restricted cash	$	57,553	$	39,950

Net Sales by Product

The Company’s net product sales consist of sales of HETLIOZ® and Fanapt®. Net sales by product for the three and nine months ended September 30, 2020 and 2019 were as follows:


	Three Months Ended				Nine Months Ended
(in thousands)	September 30, 2020		September 30, 2019		September 30, 2020		September 30, 2019
HETLIOZ® net product sales	$	39,618	$	37,589	$	116,515	$	104,381
Fanapt® net product sales	20,690		21,896		64,000		61,877
Total net product sales	$	60,308	$	59,485	$	180,515	$	166,258

Marketable Securities (Tables)

9 Months Ended

Sep. 30, 2020

Investments, Debt and Equity Securities [Abstract]

Summary of Available-for-Sale Marketable Securities

The following is a summary of the Company’s available-for-sale marketable securities as of September 30, 2020, which all have contractual maturities of less than two years:


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Market Value
(in thousands)
U.S. Treasury and government agencies	$	151,307	$	197	$	(3)	$	151,501
Corporate debt	139,831		249		(6)		140,074

Total marketable securities	$	291,138	$	446	$	(9)	$	291,575

The following is a summary of the Company’s available-for-sale marketable securities as of December 31, 2019, which all have contractual maturities of less than two years:


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Market Value
(in thousands)
U.S. Treasury and government agencies	$	88,535	$	68	$	(2)	$	88,601
Corporate debt	129,860		196		(1)		130,055
Asset-backed securities	48,355		49		(3)		48,401
Total marketable securities	$	266,750	$	313	$	(6)	$	267,057

Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2020

Fair Value Disclosures [Abstract]

Assets Measured at Fair Value on Recurring Basis

As of September 30, 2020, the Company held certain assets that are required to be measured at fair value on a recurring basis, as follows:


			Fair Value Measurement as of September 30, 2020 Using
	Total Fair Value		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(in thousands)			(Level 1)		(Level 2)		(Level 3)
U.S. Treasury and government agencies	$	151,501	$	151,501	$	—	$	—
Corporate debt	140,074		—		140,074		—

Total assets measured at fair value	$	291,575	$	151,501	$	140,074	$	—

As of December 31, 2019, the Company held certain assets that are required to be measured at fair value on a recurring basis, as follows:


			Fair Value Measurement as of December 31, 2019 Using
	Total Fair Value		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(in thousands)			(Level 1)		(Level 2)		(Level 3)
U.S. Treasury and government agencies	$	88,601	$	88,601	$	—	$	—
Corporate debt	137,025		—		137,025		—
Asset-backed securities	48,401		—		48,401		—
Total assets measured at fair value	$	274,027	$	88,601	$	185,426	$	—

Inventory (Tables)

9 Months Ended

Sep. 30, 2020

Inventory Disclosure [Abstract]

Inventory

Inventory consisted of the following as of September 30, 2020 and December 31, 2019:


(in thousands)	September 30, 2020		December 31, 2019
Current assets

Finished goods	$	1,322	$	1,140
Total inventory, current	$	1,322	$	1,140
Non-Current assets
Raw materials	$	745	$	659
Work-in-process	4,109		1,109
Finished goods	527		1,056
Total inventory, non-current	5,381		2,824
Total inventory	$	6,703	$	3,964

Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Summary of Intangible Assets

The following is a summary of the Company’s intangible assets as of September 30, 2020:


		September 30, 2020
(in thousands)	Estimated Useful Life	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
HETLIOZ®	July 2035	$	33,000	$	11,071	$	21,929

The following is a summary of the Company’s intangible assets as of December 31, 2019:


		December 31, 2019
(in thousands)	Estimated Useful Life	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
HETLIOZ®	July 2035	$	33,000	$	9,963	$	23,037

Summary of Future Intangible Asset Amortization

The following is a summary of the future intangible asset amortization schedule as of September 30, 2020:


(in thousands)	Total		2020		2021		2022		2023		2024		Thereafter
HETLIOZ®	$	21,929	$	370	$	1,478	$	1,478	$	1,478	$	1,478	$	15,647

Accounts Payable and Accrued Liabilities (Tables)

9 Months Ended

Sep. 30, 2020

Payables and Accruals [Abstract]

Summary of Accounts Payable and Accrued Liabilities

The following is a summary of the Company’s accounts payable and accrued liabilities as of September 30, 2020 and December 31, 2019:


(in thousands)	September 30, 2020		December 31, 2019
Compensation and employee benefits	$	8,129	$	6,597
Research and development expenses	6,089		5,893
Consulting and other professional fees	5,847		5,376
Royalties payable	5,211		5,904
Operating lease liabilities	1,978		2,147
Other	1,832		1,673
Total accounts payable and accrued liabilities	$	29,086	$	27,590

Accumulated Other Comprehensive Income (Tables)

9 Months Ended

Sep. 30, 2020

Equity [Abstract]

Summary of Accumulated Balances Related to Each Component of Other Comprehensive Income (Loss)

The accumulated balances related to each component of other comprehensive income (loss), net of taxes, were as follows as of September 30, 2020 and December 31, 2019:


(in thousands)	September 30, 2020		December 31, 2019
Foreign currency translation	$	42	$	13
Unrealized gain on marketable securities	337		236
Accumulated other comprehensive income	$	379	$	249

Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2020

Share-based Payment Arrangement [Abstract]

Summary of Option Activity

A summary of option activity under the Plans for the nine months ended September 30, 2020 follows:


2006 and 2016 Plans (in thousands, except for share and per share amounts)	Number of Shares	Weighted Average Exercise Price at Grant Date		Weighted Average Remaining Term (Years)	Aggregate Intrinsic Value
Outstanding at December 31, 2019	4,495,145	$	12.21	5.58	$	22,148
Granted	627,500	11.27
Forfeited	(225,000)	18.83
Expired	(557,604)	14.21
Exercised	(568,973)	7.39			2,155
Outstanding at September 30, 2020	3,771,068	12.09		5.77	3,331
Exercisable at September 30, 2020	2,639,153	11.17		4.42	3,331
Vested and expected to vest at September 30, 2020	3,604,062	12.05		5.61	3,331

Summary of RSU Activity

A summary of RSU activity under the Plans for the nine months ended September 30, 2020 follows:


2006 and 2016 Plans	Number of Shares Underlying RSUs	Weighted Average Grant Date Fair Value
Unvested at December 31, 2019	1,649,285	$	18.04
Granted	828,162	11.28
Forfeited	(247,799)	17.35
Vested	(571,069)	16.53
Unvested at September 30, 2020	1,658,579	15.29

Stock-Based Compensation Expense

Stock-based compensation expense recognized for the three and nine months ended September 30, 2020 and 2019 was comprised of the following:


	Three Months Ended				Nine Months Ended
(in thousands)	September 30, 2020		September 30, 2019		September 30, 2020		September 30, 2019
Research and development	$	853	$	827	$	2,864	$	2,311
Selling, general and administrative	2,282		2,580		7,284		7,479
Total stock-based compensation expense	$	3,135	$	3,407	$	10,148	$	9,790

Black-Scholes-Merton Option Pricing Model for Employee and Director Stock Options Granted

Assumptions used in the Black-Scholes-Merton option pricing model for employee and director stock options granted during the nine months ended September 30, 2020 and 2019 were as follows:


	Nine Months Ended
	September 30, 2020		September 30, 2019
Expected dividend yield	0	%	0	%
Weighted average expected volatility	51	%	58	%
Weighted average expected term (years)	6.07		5.94
Weighted average risk-free rate	1.14	%	2.29	%

Earnings per Share (Tables)

9 Months Ended

Sep. 30, 2020

Earnings Per Share [Abstract]

Basic and Diluted Net Income Per Share of Common Stock

The following table presents the calculation of basic and diluted net income per share of common stock for the three and nine months ended September 30, 2020 and 2019:


	Three Months Ended				Nine Months Ended
(in thousands, except for share and per share amounts)	September 30, 2020		September 30, 2019		September 30, 2020		September 30, 2019
Numerator:
Net income	$	5,947	$	100,423	$	15,147	$	111,337
Denominator:
Weighted average shares outstanding, basic	54,666,128		53,297,298		54,325,832		53,052,521
Effect of dilutive securities	542,904		1,244,327		728,940		1,751,330
Weighted average shares outstanding, diluted	55,209,032		54,541,625		55,054,772		54,803,851
Net income per share, basic and diluted:
Basic	$	0.11	$	1.88	$	0.28	$	2.10
Diluted	$	0.11	$	1.84	$	0.28	$	2.03
Antidilutive securities excluded from calculations of diluted net income per share	3,898,896		2,646,933		3,602,648		1,826,279

Business Organization and Presentation (Detail)	9 Months Ended
Business Organization and Presentation (Detail)	Sep. 30, 2020 segment
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of operating segments	1

Summary of Significant Accounting Policies - Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019	Sep. 30, 2019	Dec. 31, 2018
Cash and Cash Equivalents [Line Items]
Cash and cash equivalents	$ 56,973	$ 45,072	$ 39,208
Restricted cash included in:
Total cash, cash equivalents and restricted cash	57,553	$ 45,650	39,950	$ 61,749
Prepaid expenses and other current assets
Restricted cash included in:
Restricted cash	57		157
Non-current inventory and other
Restricted cash included in:
Restricted cash	$ 523		$ 585

Summary of Significant Accounting Policies - Net Sales by Product (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Revenue from External Customer [Line Items]
Net product sales	$ 60,308	$ 59,485	$ 180,515	$ 166,258
HETLIOZ® net product sales
Revenue from External Customer [Line Items]
Net product sales	39,618	37,589	116,515	104,381
Fanapt® net product sales
Revenue from External Customer [Line Items]
Net product sales	$ 20,690	$ 21,896	$ 64,000	$ 61,877

Summary of Significant Accounting Policies - Major Customers (Detail)	9 Months Ended
	Sep. 30, 2020 customer
Customer Concentration Risk \| Sales Revenue, Net
Summary Of Significant Accounting Policies [Line Items]
Number of major customers that each accounted for more than 10% of total revenues	5
Concentration risk, percentage	96.00%
Credit Concentration Risk \| Accounts Receivable
Summary Of Significant Accounting Policies [Line Items]
Concentration risk, percentage	93.00%
Number of major customers that each accounted for more than 10% of total accounts receivable	5

Marketable Securities - Available-For-Sale Marketable Securities (Detail) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	$ 291,138	$ 266,750
Gross Unrealized Gains	446	313
Gross Unrealized Losses	(9)	(6)
Fair Market Value	291,575	267,057
U.S. Treasury and government agencies
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	151,307	88,535
Gross Unrealized Gains	197	68
Gross Unrealized Losses	(3)	(2)
Fair Market Value	151,501	88,601
Corporate debt
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	139,831	129,860
Gross Unrealized Gains	249	196
Gross Unrealized Losses	(6)	(1)
Fair Market Value	$ 140,074	130,055
Asset-backed securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost		48,355
Gross Unrealized Gains		49
Gross Unrealized Losses		(3)
Fair Market Value		$ 48,401

Inventory (Detail) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Current assets
Finished goods	$ 1,322	$ 1,140
Total inventory, current	1,322	1,140
Non-Current assets
Raw materials	745	659
Work-in-process	4,109	1,109
Finished goods	527	1,056
Total inventory, non-current	5,381	2,824
Total inventory	$ 6,703	$ 3,964

Intangible Assets - (HETLIOZ) - Additional Information (Detail) - HETLIOZ® - USD ($) $ in Millions	1 Months Ended	3 Months Ended		12 Months Ended	200 Months Ended
	Apr. 30, 2018	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2018	Sep. 30, 2020
Finite-Lived Intangible Assets [Line Items]
Acquisition of intangible assets			$ 8.0	$ 25.0	$ 37.5
Cumulative worldwide sales milestone	$ 250.0
Intangible assets capitalized		$ 25.0			$ 33.0

Intangible Assets - (Fanapt) - Additional Information (Detail) - USD ($) $ in Millions	Sep. 30, 2020	Dec. 31, 2019
Fanapt®
Finite-Lived Intangible Assets [Line Items]
Fully amortized intangible assets	$ 27.9	$ 27.9

Intangible Assets - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Goodwill and Intangible Assets Disclosure [Abstract]
Intangible asset amortization	$ 369	$ 376	$ 1,108	$ 1,135

Intangible Assets - Summary of Intangible Assets (Detail) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Finite-Lived Intangible Assets [Line Items]
Net Carrying Amount	$ 21,929	$ 23,037
HETLIOZ®
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	33,000	33,000
Accumulated Amortization	11,071	9,963
Net Carrying Amount	$ 21,929	$ 23,037

Intangible Assets - Summary of Future Intangible Asset Amortization (Detail) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Finite-Lived Intangible Assets [Line Items]
Net Carrying Amount	$ 21,929	$ 23,037
HETLIOZ®
Finite-Lived Intangible Assets [Line Items]
Net Carrying Amount	21,929	$ 23,037
2020	370
2021	1,478
2022	1,478
2023	1,478
2024	1,478
Thereafter	$ 15,647

Accounts Payable and Accrued Liabilities (Detail) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Payables and Accruals [Abstract]
Compensation and employee benefits	$ 8,129	$ 6,597
Research and development expenses	6,089	5,893
Consulting and other professional fees	5,847	5,376
Royalties payable	5,211	5,904
Operating lease liabilities	1,978	2,147
Other	1,832	1,673
Total accounts payable and accrued liabilities	$ 29,086	$ 27,590

Commitments and Contingencies - (HETLIOZ) - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended	12 Months Ended	200 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Sep. 30, 2020	Dec. 31, 2018	Sep. 30, 2020
HETLIOZ
Percentage of future sublicense fees payable to third-party			mid-twenties
HETLIOZ®
HETLIOZ
Acquisition of intangible assets		$ 8.0		$ 25.0	$ 37.5
Intangible assets capitalized	$ 25.0				$ 33.0
Royalty payment period			10 years
Royalty payable percentage on net sales			10.00%

Commitments and Contingencies - (Fanapt) - Additional Information (Detail)	9 Months Ended
	Sep. 30, 2020
November 16, 2016 through December 31, 2019
Fanapt
Royalty payable percentage on net sales	3.00%
Fanapt®
Fanapt
Royalty payable percentage on net sales	6.00%
Royalty payment period	10 years

Commitments and Contingencies - (Tradipitant) - Additional Information (Detail) - Tradipitant - USD ($) $ in Millions	1 Months Ended	9 Months Ended	102 Months Ended
	Jul. 31, 2018	Sep. 30, 2020	Sep. 30, 2020
Commitments and Contingencies [Line Items]
Future percentage of royalty payments based net sales		low double digits
Development and milestone obligations paid to third party	$ 2.0		$ 3.0
Possible future milestone payment		$ 2.0
Sales Milestone
Commitments and Contingencies [Line Items]
Possible future milestone payment		80.0
U.S. \| Regulatory Approval Milestone
Commitments and Contingencies [Line Items]
Possible future milestone payment		10.0
E.U. \| Regulatory Approval Milestone
Commitments and Contingencies [Line Items]
Possible future milestone payment		$ 5.0

Commitments and Contingencies - (VQW-765) - Additional Information (Detail)	9 Months Ended
	Sep. 30, 2020
VQW-765
Commitments and Contingencies [Line Items]
Future percentage of royalty payments based net sales	mid-teens

Commitments and Contingencies - (CFTR Activators and Inhibitors) - Additional Information (Detail) - CFTR Activators and Inhibitors - USD ($) $ in Thousands	1 Months Ended	9 Months Ended	12 Months Ended	43 Months Ended
	Mar. 31, 2019	Sep. 30, 2020	Dec. 31, 2017	Sep. 30, 2020
Commitments and Contingencies [Line Items]
Future percentage of royalty payments based net sales		single-digit
Development and milestone obligations paid to third party				$ 1,200
Regulatory Approval Milestone
CFTR activators and inhibitors
Possible future milestone payments		$ 12,200
Future Regulatory Approval And Sales Milestones
CFTR activators and inhibitors
Possible future milestone payments		33,000
Development and Milestone Payment, Conclusion Of Phase I Study
Commitments and Contingencies [Line Items]
Development and milestone obligations paid to third party	$ 200		$ 1,000
CFTR activators and inhibitors
Possible future milestone payments		350
Maximum \| Development and Milestone Payment, Conclusion Of Phase I Study
CFTR activators and inhibitors
Possible future milestone payments		$ 1,100

Commitments and Contingencies - Purchase Commitments (Details) $ in Millions	9 Months Ended
	Sep. 30, 2020 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Agreements for clinical and marketing services, termination notice period	90 days
Purchase Obligation, Fiscal Year Maturity [Abstract]
2020	$ 0.2
2021	1.0
2022	$ 0.5

Accumulated Other Comprehensive Income - Summary of Accumulated Balances Related to Each Component of Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Equity [Abstract]
Foreign currency translation	$ 42	$ 13
Unrealized gain on marketable securities	337	236
Accumulated other comprehensive income	$ 379	$ 249

- Definition

Accumulated adjustment, net of tax, that results from the process of translating subsidiary financial statements and foreign equity investments into the reporting currency from the functional currency of the reporting entity, net of reclassification of realized foreign currency translation gains or losses.

+ References + Details

Stock-Based Compensation - (Stock-Based Compensation) - Additional Information (Detail)	9 Months Ended
	Sep. 30, 2020 shares
2006 Plan and 2016 Plan \| Outstanding Options and RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares subject to outstanding options and RSUs (in shares)	5,429,647
2016 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares of common stock authorized for issuance (in shares)	8,790,000
Number of shares of common stock available for future grant (in shares)	3,983,284

Stock-Based Compensation - (Stock Option) - Additional Information (Detail) $ / shares in Units, $ in Thousands	9 Months Ended
	Sep. 30, 2020 USD ($) installment $ / shares	Sep. 30, 2019 USD ($) $ / shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share based compensation option awards contractual term	10 years
Vesting period for subsequent stock options granted to employees and new directors	4 years
Portion of initial stock options granted to employees and new directors that vests on first anniversary of grant date	25.00%
Portion of initial stock options granted to employees and new directors that vests ratably over three years after completion of first year of service	75.00%
Number of vesting equal installments \| installment	36
Options granted, weighted average fair value per share (in dollars per share) \| $ / shares	$ 5.53	$ 10.34
Proceeds from exercise of employee stock options	$ 4,202	$ 4,148
Service option awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Full acceleration of vesting, employee or executive officer subject to involuntary termination, period post change of control of the Company	24 months
Unrecognized compensation expenses	$ 7,900
Unrecognized compensation expenses, weighted average period	1 year 4 months 24 days

Stock-Based Compensation - (RSU) - Additional Information (Detail) $ in Millions	9 Months Ended
	Sep. 30, 2020 USD ($) installment shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of vesting equal installments \| installment	36
Restricted Stock Units (RSU)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of vesting equal installments \| installment	4
Full acceleration of vesting, employee or executive officer subject to involuntary termination, period post change of control of the Company	24 months
Unrecognized compensation expenses related to unvested RSUs \| $	$ 20.7
Unrecognized compensation expenses, weighted average period	1 year 8 months 12 days
Grant date fair value of common stock granted (in shares) \| shares	571,069
Grant date fair value of common stock vested \| $	$ 9.4

Stock-Based Compensation - Summary of Option Activity (Detail) - 2006 Plan and 2016 Plan - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2020	Dec. 31, 2019
Number of Shares
Beginning balance (in shares)	4,495,145
Granted (in shares)	627,500
Forfeited (in shares)	(225,000)
Expired (in shares)	(557,604)
Exercised (in shares)	(568,973)
Ending balance (in shares)	3,771,068	4,495,145
Exercisable at end of period (in shares)	2,639,153
Vested and expected to vest at end of period (in shares)	3,604,062
Weighted Average Exercise Price at Grant Date
Beginning balance (in dollars per share)	$ 12.21
Granted (in dollars per share)	11.27
Forfeited (in dollars per share)	18.83
Expired (in dollars per share)	14.21
Exercised (in dollars per share)	7.39
Ending balance (in dollars per share)	12.09	$ 12.21
Exercisable at end of period (in dollars per share)	11.17
Vested and expected to vest at end of period (in dollars per share)	$ 12.05
Weighted Average Remaining Term (Years)
Weighted Average Remaining Term	5 years 9 months 7 days	5 years 6 months 29 days
Exercisable at end of period	4 years 5 months 1 day
Vested and expected to vest at end of period	5 years 7 months 9 days
Aggregate Intrinsic Value
Beginning balance	$ 22,148
Exercised	2,155
Ending balance	3,331	$ 22,148
Exercisable at end of period	3,331
Vested and expected to vest at end of period	$ 3,331

Stock-Based Compensation - Summary of RSU Activity Plan (Detail) - Restricted Stock Units (RSU)	9 Months Ended
	Sep. 30, 2020 $ / shares shares
Number of Shares Underlying RSUs
Beginning balance (in shares) \| shares	1,649,285
Granted (in shares) \| shares	828,162
Forfeited (in shares) \| shares	(247,799)
Vested (in shares) \| shares	(571,069)
Ending balance (in shares) \| shares	1,658,579
Weighted Average Grant Date Fair Value
Beginning balance (in dollars per share) \| $ / shares	$ 18.04
Granted (in dollars per share) \| $ / shares	11.28
Forfeited (in dollars per share) \| $ / shares	17.35
Vested (in dollars per share) \| $ / shares	16.53
Ending balance (in dollars per share) \| $ / shares	$ 15.29

Stock-Based Compensation - Total Stock-Based Compensation Expense (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation expense	$ 3,135	$ 3,407	$ 10,148	$ 9,790
Research and development
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation expense	853	827	2,864	2,311
Selling, general and administrative
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation expense	$ 2,282	$ 2,580	$ 7,284	$ 7,479

Stock-Based Compensation - Black-Scholes-Merton Option Pricing Model for Stock Options Granted (Detail)	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Share-based Payment Arrangement [Abstract]
Expected dividend yield	0.00%	0.00%
Weighted average expected volatility	51.00%	58.00%
Weighted average expected term (years)	6 years 25 days	5 years 11 months 8 days
Weighted average risk-free rate	1.14%	2.29%

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Tax Credit Carryforward [Line Items]
Income tax expense (benefit)	$ 2,454	$ (88,147)	$ 5,584	$ (88,119)
Research Tax Credit
Tax Credit Carryforward [Line Items]
Income tax expense (benefit)		$ (1,600)		$ (1,600)

Earnings per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2020	Sep. 30, 2019
Numerator:
Net income	$ 5,947	$ 8,714	$ 486	$ 100,423	$ 11,526	$ (612)	$ 15,147	$ 111,337
Denominator:
Weighted average shares outstanding, basic (in shares)	54,666,128			53,297,298			54,325,832	53,052,521
Effect of dilutive securities (in shares)	542,904			1,244,327			728,940	1,751,330
Weighted average shares outstanding, diluted (in shares)	55,209,032			54,541,625			55,054,772	54,803,851
Net income per share, basic and diluted:
Basic (in dollars per share)	$ 0.11			$ 1.88			$ 0.28	$ 2.10
Diluted (in dollars per share)	$ 0.11			$ 1.84			$ 0.28	$ 2.03
Antidilutive securities excluded from calculations of diluted net income per share (in shares)	3,898,896			2,646,933			3,602,648	1,826,279

Fair Value Measurements - Assets Measured at Fair Value on Recurring Basis (Detail) - USD ($)	Sep. 30, 2020	Dec. 31, 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	$ 291,575,000	$ 274,027,000
U.S. Treasury and government agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	151,501,000	88,601,000
Corporate debt
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	140,074,000	137,025,000
Asset-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		48,401,000
Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	151,501,000	88,601,000
Quoted Prices in Active Markets for Identical Assets (Level 1) \| U.S. Treasury and government agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	151,501,000	88,601,000
Quoted Prices in Active Markets for Identical Assets (Level 1) \| Corporate debt
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	0	0
Quoted Prices in Active Markets for Identical Assets (Level 1) \| Asset-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		0
Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	140,074,000	185,426,000
Significant Other Observable Inputs (Level 2) \| U.S. Treasury and government agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	0	0
Significant Other Observable Inputs (Level 2) \| Corporate debt
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	140,074,000	137,025,000
Significant Other Observable Inputs (Level 2) \| Asset-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		48,401,000
Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	0	0
Significant Unobservable Inputs (Level 3) \| U.S. Treasury and government agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	0	0
Significant Unobservable Inputs (Level 3) \| Corporate debt
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	0	0
Significant Unobservable Inputs (Level 3) \| Asset-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value		0
Cash Equivalents
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	$ 0	$ 7,000,000.0