Document and Entity Information - USD ($) $ in Millions	12 Months Ended
Document and Entity Information - USD ($) $ in Millions	Dec. 31, 2018	Feb. 12, 2019	Jun. 30, 2018
Document And Entity Information [Abstract]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	FY
Trading Symbol	VNDA
Entity Registrant Name	Vanda Pharmaceuticals Inc.
Entity Central Index Key	0001347178
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Large Accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		52,642,754
Entity Public Float			$ 974.3

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 61,005	$ 33,627
Marketable securities	196,355	109,786
Accounts receivable, net	28,780	17,601
Inventory	994	840
Prepaid expenses and other current assets	11,998	8,003
Total current assets	299,132	169,857
Property and equipment, net	4,417	5,306
Intangible assets, net	24,542	26,069
Non-current inventory and other	4,039	4,193
Total assets	332,130	205,425
Current liabilities:
Accounts payable and accrued liabilities	21,584	20,335
Product revenue allowances	31,231	23,028
Milestone obligations under license agreements	200	27,000
Total current liabilities	53,015	70,363
Other non-current liabilities	3,693	3,675
Total liabilities	56,708	74,038
Commitments and contingencies (Notes 9 and 16)
Stockholders’ equity:
Preferred stock, $0.001 par value; 20,000,000 shares authorized, and no shares issued or outstanding	0	0
Common stock, $0.001 par value; 150,000,000 shares authorized; 52,477,593 and 44,938,133 shares issued and outstanding at December 31, 2018 and 2017, respectively	52	45
Additional paid-in capital	611,587	492,802
Accumulated other comprehensive income (loss)	1	(34)
Accumulated deficit	(336,218)	(361,426)
Total stockholders’ equity	275,422	131,387
Total liabilities and stockholders’ equity	$ 332,130	$ 205,425

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Dec. 31, 2018	Dec. 31, 2017
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)	52,477,593	44,938,133
Common stock, shares outstanding (in shares)	52,477,593	44,938,133

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Revenues:
Net product sales	$ 193,118	$ 165,083	$ 146,017
Total revenues	193,118	165,083	146,017
Operating expenses:
Cost of goods sold excluding amortization	20,508	17,848	24,712
Research and development	43,594	38,547	29,156
Selling, general and administrative	105,751	123,841	99,787
Intangible asset amortization	1,527	1,750	10,933
Total operating expenses	171,380	181,986	164,588
Income (loss) from operations	21,738	(16,903)	(18,571)
Other income	3,608	1,472	665
Income (loss) before income taxes	25,346	(15,431)	(17,906)
Provision for income taxes	138	136	104
Net income (loss)	$ 25,208	$ (15,567)	$ (18,010)
Net income (loss) per share:
Basic (in dollars per share)	$ 0.50	$ (0.35)	$ (0.41)
Diluted (in dollars per share)	$ 0.48	$ (0.35)	$ (0.41)
Weighted average shares outstanding:
Basic (in shares)	50,859,947	44,735,146	43,449,441
Diluted (in shares)	53,045,257	44,735,146	43,449,441

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ 25,208	$ (15,567)	$ (18,010)
Other comprehensive income (loss):
Net foreign currency translation gain (loss)	(22)	30	(1)
Change in net unrealized gain (loss) on marketable securities	57	(122)	20
Tax provision on other comprehensive income	0	0	0
Other comprehensive income (loss), net of tax	35	(92)	19
Comprehensive income (loss)	$ 25,243	$ (15,659)	$ (17,991)

- Definition

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

+ References + Details

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Other Comprehensive Income (Loss)	Accumulated Deficit
Beginning balance (in shares) at Dec. 31, 2015		42,815,291
Beginning balance at Dec. 31, 2015	$ 133,027	$ 43	$ 460,794	$ 39	$ (327,849)
Issuance of common stock from the exercise of stock options and settlement of restricted stock units	7,751	$ 1	7,750
Issuance of common stock from the exercise of stock options and settlement of restricted stock units (in shares)		1,185,323
Stock-based compensation expense	8,543		8,543
Net income (loss)	(18,010)				(18,010)
Other comprehensive income (loss), net of tax	19			19
Ending balance (in shares) at Dec. 31, 2016		44,000,614
Ending balance at Dec. 31, 2016	131,330	$ 44	477,087	58	(345,859)
Issuance of common stock from the exercise of stock options and settlement of restricted stock units	5,251	$ 1	5,250
Issuance of common stock from the exercise of stock options and settlement of restricted stock units (in shares)		937,519
Stock-based compensation expense	10,465		10,465
Net income (loss)	(15,567)				(15,567)
Other comprehensive income (loss), net of tax	$ (92)			(92)
Ending balance (in shares) at Dec. 31, 2017	44,938,133	44,938,133
Ending balance at Dec. 31, 2017	$ 131,387	$ 45	492,802	(34)	(361,426)
Net proceeds from public offering of common stock	100,870	$ 6	100,864
Net proceeds from public offering of common stock (in shares)		6,325,000
Issuance of common stock from the exercise of stock options and settlement of restricted stock units	6,256	$ 1	6,255
Issuance of common stock from the exercise of stock options and settlement of restricted stock units (in shares)		1,214,460
Stock-based compensation expense	11,666		11,666
Net income (loss)	25,208				25,208
Other comprehensive income (loss), net of tax	$ 35			35
Ending balance (in shares) at Dec. 31, 2018	52,477,593	52,477,593
Ending balance at Dec. 31, 2018	$ 275,422	$ 52	$ 611,587	$ 1	$ (336,218)

- Definition

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

+ References + Details

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Cash flows from operating activities
Net income (loss)	$ 25,208	$ (15,567)	$ (18,010)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation of property and equipment	1,429	1,234	935
Stock-based compensation	11,666	10,465	8,543
Amortization of premiums (discounts) on marketable securities	(2,221)	(426)	62
Intangible asset amortization	1,527	1,750	10,933
Other non-cash adjustments, net	167	587	542
Changes in operating assets and liabilities:
Accounts receivable	(11,207)	2,525	(4,298)
Prepaid expenses and other assets	(4,258)	3,652	(6,159)
Inventory	70	(1,060)	200
Accounts payable and other liabilities	(618)	5,953	575
Product revenue allowances	8,223	(11,096)	(1,426)
Net cash provided by (used in) operating activities	29,986	(1,983)	(8,103)
Cash flows from investing activities
Acquisition of intangible asset	(25,000)	0	0
Purchases of property and equipment	(368)	(1,664)	(1,407)
Purchases of marketable securities	(282,395)	(148,135)	(165,405)
Maturities of marketable securities	198,103	139,568	156,787
Net cash used in investing activities	(109,660)	(10,231)	(10,025)
Cash flows from financing activities
Net proceeds from offering of common stock	100,870	0	0
Proceeds from exercise of employee stock options	6,256	5,251	7,751
Net cash provided by financing activities	107,126	5,251	7,751
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(38)	42	5
Net increase (decrease) in cash, cash equivalents and restricted cash	27,414	(6,921)	(10,372)
Cash, cash equivalents and restricted cash
Beginning of year	34,335	41,256	51,628
End of year	$ 61,749	$ 34,335	$ 41,256

Business Organization and Presentation

12 Months Ended

Dec. 31, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Business Organization and Presentation

Business organization

Vanda Pharmaceuticals Inc. (the Company) is a 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 portfolio includes the following products:

•

HETLIOZ^® (tasimelteon), a product for the treatment of Non-24-Hour Sleep-Wake Disorder (Non-24), was approved by the U.S. Food and Drug Administration (FDA) in January 2014 and launched commercially in the U.S. in April 2014. In July 2015, the European Commission (EC) granted centralized marketing authorization with unified labeling for HETLIOZ^® for the treatment of Non-24 in totally blind adults. HETLIOZ^® was commercially launched in Germany in August 2016. HETLIOZ^® has potential utility in a number of other circadian rhythm disorders and is presently in clinical development for the treatment of jet lag disorder, Smith-Magenis Syndrome (SMS) and Pediatric Non-24. An assessment of new HETLIOZ^® clinical opportunities including the treatment of delayed sleep phase disorder and for sleep disorders in patients with neurodevelopmental disorders is ongoing.

•

Fanapt^® (iloperidone), a product for the treatment of schizophrenia, the oral formulation of which was approved by the FDA in May 2009 and launched commercially in the U.S. by Novartis Pharma AG (Novartis) in January 2010. Novartis transferred all the U.S. and Canadian commercial rights to the Fanapt^® franchise to the Company on December 31, 2014. Additionally, the Company’s distribution partners launched Fanapt^® in Israel in 2014. Fanapt^® has potential utility in a number of other disorders. Initial clinical work studying a long acting injectable (LAI) formulation of Fanapt^® began in 2018. An assessment of new Fanapt^® clinical opportunities including the treatment of bipolar depression is ongoing.


•	Tradipitant (VLY-686), a small molecule neurokinin-1 receptor (NK-1R) antagonist, which is presently in clinical development for the treatment of chronic pruritus in atopic dermatitis and the treatment of gastroparesis. An assessment of new tradipitant clinical opportunities including the treatment of motion sickness is ongoing.


•	VTR-297, a small molecule histone deacetylase (HDAC) inhibitor presently in clinical development for the treatment of hematologic malignancies.


•	Portfolio of Cystic Fibrosis Transmembrane Conductance Regulator (CFTR) activators and inhibitors. An early stage CFTR activator program is planned for the treatment of dry eye and ocular inflammation. In addition, an early stage CFTR inhibitor program is planned for the treatment of secretory diarrhea disorders, including cholera.


•	VQW-765, a Phase II alpha-7 nicotinic acetylcholine receptor partial agonist.

Basis of presentation

The accompanying consolidated financial statements includes the accounts of Vanda Pharmaceuticals Inc. and its wholly-owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S.). All intercompany accounts and transactions have been eliminated in consolidation.

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 and Cash Equivalents

For purposes of the consolidated balance sheets and 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 includes investments in money market funds with commercial banks and financial institutions, and commercial paper of high-quality corporate issuers.

Marketable Securities

The Company classifies all of its marketable securities as available-for-sale securities. The Company’s investment policy requires the selection of high-quality issuers, with bond ratings of AAA to A1+/P1. Available-for-sale securities are carried at fair market value, with unrealized gains and losses reported as a component of stockholders’ equity in accumulated other comprehensive income (loss). At each balance sheet date, the Company assesses available-for-sale securities in an unrealized loss position to determine whether the unrealized loss is other-than-temporary. If declines in the value of available for-sale securities are determined to be other-than-temporary, a loss is recorded in earnings in the current period. Interest and dividend income is recorded when earned and included in interest income. Premiums and discounts on marketable securities are amortized and accreted, respectively, to maturity and included in interest income. The Company uses the specific identification method in computing realized gains and losses on the sale of investments, which would be included in the consolidated statements of operations when generated. Marketable securities with a maturity of more than one year as of the balance sheet date and which the Company does not intend to sell within the next twelve months are classified as non-current. All other marketable securities are classified as current.

Inventory

Inventory, which is recorded at the lower of cost or net realizable value, includes the cost of third-party manufacturing and other direct and indirect costs and is valued using the first-in, first-out method. The Company capitalizes inventory costs associated with its products upon regulatory approval when, based on management’s judgment, future commercialization is considered probable and the future economic benefit is expected to be realized; otherwise, such costs are expensed as research and development. Inventory not expected to be sold within 12 months following the balance sheet date are classified as non-current.

Intangible Assets

Costs incurred for products not yet approved by the FDA and for which no alternative future use exists are recorded as expense. Obligations for milestone payments to other pharmaceutical companies that may result in a capitalized intangible asset are recognized when it is deemed probable that the milestone event will occur. In the event a product has been approved by the FDA or an alternative future use exists for a product, patent and license costs are capitalized and amortized on a straight-line basis over the estimated useful economic life of the of the related product patents. For intangible assets related to HETLIOZ^®, the estimated useful life is the estimated economic useful life of the related product patents, the latest of which expires in February 2035. Intangible assets related Fanapt^® have been fully amortized on a straight-line basis to November 2016. The useful life estimate for Fanapt^® was based on the market participant methodology prescribed by ASC 805, and therefore does not reflect the impact of additional Fanapt^® patents solely owned by the Company with varying expiration dates, the latest of which is December 2031.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation. The costs of leasehold improvements funded by or reimbursed by the lessor are capitalized and amortized as leasehold improvements along with a corresponding deferred rent liability. Depreciation of most property and equipment is provided on a straight-line basis over the estimated useful lives of the assets. Leasehold improvements are amortized using a straight-line basis over the lesser of the estimated useful lives of the assets or the terms of the related leases. The costs of additions and improvements are capitalized, and repairs and maintenance costs are charged to operations in the period incurred. Upon retirement or disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the statement of operations for that period.

Accounts Payable and Accrued Liabilities

The Company’s management is required to estimate accrued liabilities as part of the process of preparing financial statements. The estimation of accrued liabilities involves identifying services that have been performed on the Company’s behalf, and then estimating the level of service performed and the associated cost incurred for such services as of each balance sheet date in the financial statements. Accrued liabilities include research and development expenses, such as accrued costs under contracts with clinical monitors, data management organizations and investigators in conjunction with clinical trials, fees to contract manufacturers in conjunction with the production of clinical materials, consulting and professional fees, such as lawyers and fees for marketing and other commercialization activities, accrued compensation and employee benefits, such as accrued bonus, royalties payable under licensing agreements, and other accrued fees. Pursuant to management’s assessment of the services that have been performed on clinical trials and other contracts, the Company recognizes these expenses as the services are provided. Such management assessments include, but are not limited to: (i) an evaluation by the project manager of the work that has been completed during the period, (ii) measurement of progress prepared internally and/or provided by the third-party service provider, (iii) analyses of data that justify the progress, and (iv) management’s judgment. In the event that the Company does not identify certain costs that have begun to be incurred or the Company under- or over-estimates the level of services performed or the costs of such services, the Company’s reported expenses for such period would be too low or too high.

Revenue Recognition

In accordance with Accounting Standards Codification (ASC) Subtopic 606 Revenue from Contracts with Customers (ASC 606), which the Company adopted January 1, 2018, the Company accounts for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. The Company recognizes revenue when control of the product is transferred to the customer in an amount that reflects the consideration the Company expects to be entitled to in exchange for those product sales, which is typically once the product physically arrives at the customer. Sales taxes, value add taxes, and usage-based taxes are excluded from revenues.

The Company’s net product sales consist of sales of HETLIOZ^® and Fanapt^®. Net sales by product for the years ended December 31, 2018, 2017 and 2016 were as follows:



	Year Ended December 31,
(in thousands)	2018		2017		2016
HETLIOZ^® product sales, net	$	115,835	$	89,978	$	71,671
Fanapt^® product sales, net	77,283		75,105		74,346
	$	193,118	$	165,083	$	146,017

Major Customers

HETLIOZ^® is only available in the U.S. for distribution through a limited number of specialty pharmacies, and is not available in retail pharmacies. Specialty pharmacy customers include Diplomat Pharmacy, Inc., Accredo (a subsidiary of Express Scripts) and Walgreens Company. Fanapt^® is available in the U.S. for distribution through a limited number of wholesalers and is available in retail pharmacies. Wholesaler customers include Cardinal Health, Inc., AmerisourceBergen Drug Corporation, and McKesson Corporation. 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. Revenues and accounts receivable are concentrated with these customers. The following table presents each major customer that represented more than 10% of total revenues for the years ended December 31, 2018, 2017 and 2016:



	Year Ended December 31,
Percent of Net Product Sales	2018		2017		2016
Distributor A	37	%	32	%	23	%
Distributor B	17	%	10	%	1	%
Distributor C	14	%	15	%	16	%
Distributor D	12	%	12	%	15	%
Distributor E	12	%	15	%	16	%
Distributor F	5	%	11	%	16	%

The following table presents each major customer that represented more than 10% of accounts receivable, net, as of December 31, 2018 and 2017:



	December 31,
Percent of Accounts Receivable, Net	2018		2017
Distributor A	30	%	28	%
Distributor B	15	%	9	%
Distributor C	20	%	18	%
Distributor D	16	%	21	%
Distributor E	13	%	10	%

Reserves for Variable Consideration

The transaction price is determined based upon the consideration to which the Company will be entitled in exchange for transferring product to the customer. The Company’s product sales are recorded net of applicable discounts, rebates, chargebacks, service fees, co-pay assistance and product returns that are applicable for various government and commercial payors. The Company estimates the amount of variable consideration that should be included in the transaction price utilizing the most likely amount method and updates its estimate at each reporting date. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. Reserves for variable consideration for rebates, chargebacks and co-pay assistance are based upon the insurance benefits of the end customer, which are estimated using historical activity and, where available, actual and pending prescriptions for which the Company has validated the insurance benefits. Reserves for variable consideration are classified as product revenue allowances on the consolidated balance sheets, with the exception of prompt-pay discounts which are classified as reductions of accounts receivable. The reserve for product returns for which the product may not be returned for a period of greater than one year from the balance sheet date is included as a component of other non-current liabilities in the consolidated balance sheets. Uncertainties related to variable consideration are generally resolved in the quarter subsequent to period end, with the exception of product returns which are resolved during the product expiry period specified in the customer contract. The Company currently records sales allowances for the following:

Prompt-pay: Specialty pharmacies and wholesalers are offered discounts for prompt payment. The Company expects that the specialty pharmacies and wholesalers will earn prompt payment discounts and, therefore, deducts the full amount of these discounts from total product sales when revenues are recognized.

Rebates: Allowances for rebates include mandated and supplemental discounts under the Medicaid Drug Rebate Program as well as contracted rebate programs with other payors. Rebate amounts owed after the final dispensing of the product to a benefit plan participant are based upon contractual agreements or legal requirements with public sector benefit providers, such as Medicaid. The allowance for rebates is based on statutory or contracted discount rates and expected patient utilization.

Chargebacks: Chargebacks are discounts that occur when contracted indirect customers purchase directly from specialty pharmacies and wholesalers. Contracted indirect customers, which currently consist primarily of Public Health Service institutions, non-profit clinics, and Federal government entities purchasing via the Federal Supply Schedule, generally purchase the product at a discounted price. The specialty pharmacy or wholesaler, in turn, charges back the difference between the price initially paid by the specialty pharmacy or wholesaler and the discounted price paid to the specialty pharmacy or wholesaler by the contracted customer.

Medicare Part D Coverage Gap: Medicare Part D prescription drug benefit mandates manufacturers to fund approximately 50% of the Medicare Part D insurance coverage gap for prescription drugs sold to eligible patients through 2018. Public Law No. 115-123, also known as the Bipartisan Budget Act of 2018 enacted on February 9, 2018 increased the manufacturer discount from 50% to 70% effective in 2019 for applicable drugs. Vanda accounts for the Medicare Part D coverage gap using a point of sale model. Estimates for expected Medicare Part D coverage gap are based in part on historical activity and, where available, actual and pending prescriptions for which the Company has validated the insurance benefits.

Service Fees: The Company receives sales order management, data and distribution services from certain customers. These fees are based on contracted terms and are known amounts. The Company accrues service fees at the time of revenue recognition, resulting in a reduction of product sales and the recognition of an accrued liability, unless it is a payment for a distinct good or service from the customer in which case the fair value of those distinct goods or services are recorded as selling, general and administrative expense.

Co-payment Assistance: Patients who have commercial insurance and meet certain eligibility requirements may receive co-payment assistance. Co-pay assistance utilization is based on information provided by the Company’s third-party administrator.

Product Returns: Consistent with industry practice, the Company generally offers direct customers a limited right to return as defined within the Company’s returns policy. The Company considers several factors in the estimation process, including historical return activity, expiration dates of product shipped to specialty pharmacies and wholesalers, inventory levels within the distribution channel, product shelf life, prescription trends and other relevant factors. The Company does not expect returned goods to be resalable. There was no right of return asset as of December 31, 2018 or 2017. The following table summarizes activity for product returns as of and for the years ended December 31, 2018, 2017 and 2016:



(in thousands)	Reserve for Product Returns
Balances at December 31, 2015	$	1,059
Additions	2,507
Credits/payments	(486		)
Balances at December 31, 2016	3,080
Additions	5,978
Credits/payments	(4,939		)
Balances at December 31, 2017	4,119
Additions	2,684
Credits/payments	(1,616		)
Balances at December 31, 2018	$	5,187

Cost of Goods Sold

Cost of goods sold includes royalties payable, the cost of inventory sold, manufacturing and supply chain costs and product shipping and handling costs related to sales of HETLIOZ^® and Fanapt^® to the Company’s distribution partners.

Research and Development Expenses

Research and development expenses consist primarily of fees for services provided by third parties in connection with the clinical trials, costs of contract manufacturing services, milestone payments, costs of materials used in clinical trials and research and development, costs for regulatory consultants and filings, depreciation of capital resources used to develop products, related facilities costs, and salaries, other employee-related costs and stock-based compensation for research and development personnel. The Company expenses research and development costs as they are incurred for products in the development stage, including manufacturing costs and milestone payments made under license agreements prior to FDA approval. Upon and subsequent to FDA approval, manufacturing and milestone payments related to license agreements are capitalized. Milestone payments are accrued when it is deemed probable that the milestone event will be achieved. Costs related to the acquisition of intellectual property are expensed as incurred if the underlying technology is developed in connection with the Company’s research and development efforts and has no alternative future use.

Selling, General and Administrative Expenses

Selling, general and administrative expenses consist of salaries, stock-based compensation, facilities and third party expenses. Selling, general and administrative expenses are associated with the activities of the executive, finance, accounting, information technology, business development, commercial support, trade and distribution, sales, marketing, legal, medical affairs and human resource functions. Additionally, selling, general and administrative expenses included an estimate for the annual Patient Protection and Affordable Care fee.

Stock-Based Compensation

Compensation costs for all stock-based awards to employees and directors are measured based on the grant date fair value of those awards and recognized over the period during which the employee or director is required to perform service in exchange for the award. The Company recognizes the expense over the award’s vesting period. The fair value of stock options granted and restricted stock units (RSUs) awarded are amortized using the straight-line method. As stock-based compensation expense recognized in the consolidated statements of operations is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

Advertising Expense

The Company expenses the costs of advertising, including branded promotional expenses, as incurred. Branded advertising expenses, recorded in selling, general and administrative expenses, were $0.9 million, $1.3 million and $1.4 million for the years ended December 31, 2018, 2017 and 2016, respectively.

Foreign Currency

The reporting currency of the Company is the U.S. dollar. The functional currency of the Company’s international subsidiaries is the local currency. Assets and liabilities denominated in foreign currencies, including intercompany balances for which settlement is anticipated in the foreseeable future, are translated at exchange rates in effect at the balance sheet date. Foreign currency equity balances are translated at historical rates. Revenues and expenses denominated in foreign currencies are translated at average exchange rates for the respective periods. Foreign currency translation adjustments are recorded in accumulated other comprehensive income (loss).

Transactions denominated in currencies other than subsidiaries’ functional currencies are recorded based on exchange rates at the time such transactions arise. Changes in exchange rates with respect to amounts recorded in the consolidated balance sheets related to these items will result in unrealized foreign currency transaction gains and losses based upon period-end exchange rates. The Company also records realized foreign currency transaction gains and losses upon settlement of the transactions. Foreign currency transaction gains and losses are included in other income and amounted to loss of $0.5 million, income of $0.1 million, and loss of $0.2 million for the years ended December 31, 2018, 2017 and 2016, respectively.

Income Taxes

The Company accounts for income taxes using the asset and liability method. Under the asset and liability method, current income tax expense or benefit is the amount of income taxes expected to be payable or refundable for the current year. A deferred income tax asset or liability is recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credits and loss carryforwards. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Tax rate changes are reflected in income during the period such changes are enacted. Changes in ownership may limit the amount of NOL carryforwards that can be utilized in the future to offset taxable income.

Non-Cash Investing and Financing Activities

Purchases of property and equipment accrued in current liabilities amounted to $0.2 million, zero and $0.2 million for each of the years ended December 31, 2018, 2017 and 2016, respectively.

Certain Risks and Uncertainties

The Company’s products under development require approval from the FDA or other international regulatory agencies prior to commercial sales. There can be no assurance the products will receive the necessary clearance. If the Company is denied clearance or clearance is delayed, it may have a material adverse impact on the Company.

The Company’s products are concentrated in rapidly-changing, highly-competitive markets, which are characterized by rapid technological advances, changes in customer requirements and evolving regulatory requirements and industry standards. Any failure by the Company to anticipate or to respond adequately to technological developments in its industry, changes in customer requirements or changes in regulatory requirements or industry standards or any significant delays in the development or introduction of products or services could have a material adverse effect on the Company’s business, operating results and future cash flows.

The Company depends on single source suppliers for critical raw materials for manufacturing, as well as other components required for the administration of its products. The loss of these suppliers could delay the clinical trials or prevent or delay commercialization of the products.

Concentrations of Credit Risk

Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist primarily of cash, cash equivalents and marketable securities. The Company places its cash, cash equivalents and marketable securities with highly-rated financial institutions. At December 31, 2018, the Company maintained all of its cash, cash equivalents and marketable securities in two financial institutions. Deposits held with these institutions may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon demand, and the Company believes there is minimal risk of losses on such balances.

Segment and Geographic Information

The Company operates in one reporting segment and, accordingly, no segment disclosures are presented herein. Foreign sales were not material for each of the years ended December 31, 2018, 2017 and 2016.

Recent Accounting Pronouncements

In August 2018, the U.S. Securities and Exchange Commission (SEC) adopted the final rule under SEC Release No. 33-10532, Disclosure Update and Simplification. This final rule amends certain disclosure requirements that are redundant, duplicative, overlapping, outdated or superseded. In addition, the amendments expand the disclosure requirements on the analysis of stockholders' equity for interim financial statements. Under the amendments, an analysis of changes in each caption of stockholders' equity presented in the balance sheet must be provided in a note or separate statement. The analysis should present a reconciliation of the beginning balance to the ending balance of each period for which a statement of comprehensive income is required to be filed. This final rule is effective for the Company for all filings made on or after November 5, 2018. The SEC staff clarified that the first presentation of the changes in shareholders' equity may be included in the first Form 10-Q for the quarter that begins after the effective date of the amendments. The adoption of the final rule did not have a material impact on the Company’s consolidated financial statements. The Company will change its presentation of shareholder's equity in the first quarter of 2019.

In November 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-18, Restricted Cash. The new standard requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The standard is effective for annual reporting periods beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2017. The Company adopted this new standard in the first quarter of 2018 and applied the provisions retrospectively. As a result of the adoption of the new guidance, the Company increased the beginning of year total amount shown on the consolidated statements of cash flows by $0.7 million, $0.8 million, and $0.8 million for the years ended December 31, 2018, 2017 and 2016, equal to the balance of restricted cash included in the consolidated balance sheets as of December 31, 2017, 2016 and 2015, respectively. 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. As of December 31, 2018, restricted cash of $0.1 million and $0.6 million is included in prepaid and other current assets and other non-current assets, respectively. As of December 31, 2017, restricted cash of $0.7 million is included in other non-current assets.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows – Classification of Certain Cash Receipts and Cash Payments, to clarify guidance on the classification of certain cash receipts and cash payments in the statement of cash flow. The standard is effective for annual reporting periods beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2017. The Company’s adoption of this standard in the first quarter of 2018 had no impact to the Company’s consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses, related to the measurement of credit losses on financial instruments. The standard will require the use of an “expected loss” model for instruments measured at amortized cost. The standard is effective for years beginning after December 15, 2019, and interim periods within annual periods beginning after December 15, 2019. The Company is evaluating this standard to determine if adoption will have a material impact on the Company’s consolidated financial statements.

In February 2016, the FASB issued ASU 2016-2, Leases, which was further clarified by ASU 2018-10, Codification Improvements to Topic 842, Leases, and ASU 2018-11, Leases - Targeted Improvements, issued in July 2018. ASC 842 supersedes existing lease guidance, including ASC 840 - Leases. The new standard requires that lessees will need to recognize a right-of-use asset and a lease liability for virtually all of their leases (other than leases that meet the definition of a short-term lease). The liability will be equal to the present value of lease payments. The asset will be based on the liability subject to certain adjustments. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. Operating leases will result in straight-line expense (similar to current operating leases) while finance leases will result in a front-loaded expense pattern (similar to current capital leases). The Company will adopt the new leasing standard in the first quarter of 2019 using the modified retrospective approach transition method through a cumulative-effect adjustment at the beginning of the period of adoption. Results for reporting periods beginning after January 1, 2019 will be presented under ASC 842, while prior period amounts are not adjusted and continue to be reported in accordance with historic accounting under ASC 840. The Company expects to elect the package of practical expedients permitted under the transition guidance within the standard, which eliminates the reassessment of past leases, classification and initial direct costs. The Company does not expect to elect the hindsight practical expedient. The Company expects that the adoption of the new leasing standard will result in the recognition of material right-of-use asset and liabilities on the consolidated balance sheets for its operating lease commitments with terms greater than twelve months.

In May 2014, the FASB issued ASU 2014-9, Revenue from Contracts with Customers. This ASU supersedes the revenue recognition requirements in ASC 605, Revenue Recognition, and creates ASC 606, Revenue from Contracts with Customers. ASC 606 requires companies to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which a company expects to be entitled in exchange for those goods or services. Under the new standard, revenue is recognized when a customer obtains control of a good or service. The standard allows for two transition methods—entities can either apply the new standard (i) retrospectively to each prior reporting period presented (full retrospective), or (ii) retrospectively with the cumulative effect of initially applying the standard recognized at the date of initial adoption (modified retrospective). In July 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers, which defers the effective date by one year to December 15, 2017 for fiscal years, and interim periods within those fiscal years, beginning after that date. Early adoption of the standard is permitted, but not before the original effective date of December 15, 2016. In March 2016, the FASB issued ASU 2016-8 Revenue from Contracts with Customers, Principal versus Agent Considerations (Reporting Revenue versus Net), in April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers, identifying Performance Obligations and Licensing, and in May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers, Narrow-Scope Improvements and Practical Expedients, which provide additional clarification on certain topics addressed in ASU 2014-9. ASU 2016-8, ASU 2016-10, and ASU 2016-12 follow the same implementation guidelines as ASU 2014-9 and ASU 2015-14. The Company adopted this new standard in the first quarter of 2018 using the modified retrospective method to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported in accordance with historic accounting under ASC 605. There was no impact to opening retained earnings as of January 1, 2018 as a result of adoption of the new standard. The impact to the consolidated statements of operations if the Company had applied ASC 605 for the years ended December 31, 2017 and 2016 is not material. As a result of adoption, the Company reclassified the provision for product revenue returns of $5.2 million from accounts receivable, net to product revenue allowances and other non-current liabilities in the consolidated balance sheets as of December 31, 2018. The provision for product returns as of December 31, 2017 of $4.1 million is included in accounts receivable in the consolidated balance sheet.

Marketable Securities

12 Months Ended

Dec. 31, 2018

Investments, Debt and Equity Securities [Abstract]

Marketable Securities

The following is a summary of the Company’s available-for-sale marketable securities as of December 31, 2018, all of which have contract maturities of less than one year:



December 31, 2018 (in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Market Value
U.S. Treasury and government agencies	$	69,275	$	12	$	(17	)	$	69,270
Corporate debt	105,897		38		(25		)	105,910
Asset-backed securities	21,189		—		(14		)	21,175
	$	196,361	$	50	$	(56	)	$	196,355

The following is a summary of the Company’s available-for-sale marketable securities as of December 31, 2017:



December 31, 2017 (in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Market Value
U.S. Treasury and government agencies	$	60,681	$	—	$	(63	)	$	60,618
Corporate debt	49,168		12		(12		)	49,168
	$	109,849	$	12	$	(75	)	$	109,786

Fair Value Measurements

12 Months Ended

Dec. 31, 2018

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

Marketable securities classified in Level 1 and Level 2 as of December 31, 2018 and 2017 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 investments classified in Level 2 also is 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 and corporate notes that use as their basis readily observable market parameters. The Company did not transfer any assets between Level 2 and Level 1 during the years ended December 31, 2018 and 2017.

The Company held certain assets that are required to be measured at fair value on a recurring basis as of December 31, 2018, as follows:



			Fair Value Measurement as of December 31, 2018 Using
(in thousands)	December 31, 2018		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
U.S. Treasury and government agencies	69,270		69,270		—		—
Corporate debt	105,910		—		105,910		—
Asset-backed securities	21,175		—		21,175		—
	$	196,355	$	69,270	$	127,085	$	—

The Company held certain assets that are required to be measured at fair value on a recurring basis as of December 31, 2017, as follows:



			Fair Value Measurement as of December 31, 2017 Using
(in thousands)	December 31, 2017		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
U.S. Treasury and government agencies	$	60,618	$	60,618	$	—	$	—
Corporate debt	53,164		—		53,164		—
	$	113,782	$	60,618	$	53,164	$	—

Total assets measured at fair value as of December 31, 2017 include $4.0 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 and cash equivalents, accounts receivable, restricted cash, accounts payable and accrued liabilities, 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

Intangible Assets

12 Months Ended

Dec. 31, 2018

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 February 2035. The estimated economic useful life of the intangible asset was changed from May 2034 to February 2035 based on the February 2035 expiration date of U.S. patent number 10,071,977 ('977 patent) issued by the U.S. Patent and Trademark Office in September 2018.

In April 2018, the Company met its final milestone under its license agreement 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 obligation was recorded as a current liability as of December 31, 2017. The $25.0 million 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 February 2035. The estimated economic useful life of the intangible asset was changed from May 2034 to February 2035 based on the February 2035 expiration date of the '977 patent issued by the U.S. Patent and Trademark Office in September 2018.

Fanapt^®. In 2009, the Company announced that the FDA had approved the NDA for Fanapt^®. As a result of this approval, the Company met a milestone under its original sublicense agreement with Novartis that required the Company to make a license payment of $12.0 million to Novartis. The $12.0 million was amortized on a straight-line basis over the remaining life of the U.S. composition of matter patent for Fanapt^® to November 2016.

Pursuant to a settlement agreement entered into in December 2014, Novartis transferred all U.S. and Canadian rights in the Fanapt^® franchise to the Company. As a result, the Company recognized an intangible asset of $15.9 million on December 31, 2014 related to the reacquired rights to Fanapt^®, which was fully amortized on a straight-line basis as of November 2016. The useful life estimation for the Fanapt^® intangible asset was based on the market participant methodology prescribed by ASC 805, and therefore does not reflect the impact of additional Fanapt^® patents solely owned by the Company with varying expiration dates, the latest of which is December 2031.

The following is a summary of the Company’s intangible assets as of December 31, 2018:



		December 31, 2018
(in thousands)	Estimated Useful Life (Years)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
HETLIOZ^®	February 2035	$	33,000	$	8,458	$	24,542
Fanapt^®	November 2016	27,941		27,941		—
		$	60,941	$	36,399	$	24,542

The following is a summary of the Company’s intangible assets as of December 31, 2017:



		December 31, 2017
(in thousands)	Estimated Useful Life (Years)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
HETLIOZ^®	May 2034	$	33,000	$	6,931	$	26,069
Fanapt^®	November 2016	27,941		27,941		—
		$	60,941	$	34,872	$	26,069

Intangible assets are amortized over their estimated useful economic life using the straight-line method. Amortization expense for the years ended December 31, 2018, 2017 and 2016 was as follows:



	Year Ended December 31,
(in thousands)	2018		2017		2016
HETLIOZ^®	$	1,527	$	1,750	$	1,721
Fanapt^®	—		—		9,212
	$	1,527	$	1,750	$	10,933

The following is a summary of the future intangible asset amortization schedule as of December 31, 2018:



(in thousands)	Total		2019		2020		2021		2022		2023		Thereafter
HETLIOZ^®	$	24,542	$	1,518	$	1,518	$	1,518	$	1,518	$	1,518	$	16,952

Commitments and Contingencies

12 Months Ended

Dec. 31, 2018

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

The following is a summary of the Company's noncancellable long-term contractual cash obligations as of December 31, 2018:



	Cash Payments Due by Year
(in thousands)	Total		2019		2020		2021		2022		2023		Thereafter
Operating leases	$	22,757	$	2,483	$	2,495	$	2,335	$	2,355	$	2,420	$	10,669
Milestone obligations	200		200		—		—		—		—		—
Purchase commitments	7,315		5,122		847		890		456		—		—
	$	30,272	$	7,805	$	3,342	$	3,225	$	2,811	$	2,420	$	10,669

Operating Leases

Commitments relating to operating leases represent the minimum annual future payments under operating leases and subleases for its Company's headquarters at 2200 Pennsylvania Avenue, N.W. in Washington, D.C., and operating leases for office space in London and Berlin.

In June 2011, the Company entered into an operating lease for its headquarters at 2200 Pennsylvania Avenue, N.W. in Washington, D.C. for 21,400 square feet of office space. The Company subsequently amended the lease in March 2014 and March 2018 to increase the office space under lease to 33,534 square feet and, in March 2018, extended the lease term to July 2028. Subject to the prior rights of other tenants, the Company has the right to renew the lease for five years following its expiration. The Company has the right to sublease or assign all or a portion of the premises, subject to standard conditions. The lease may be terminated early by the Company or the landlord under certain circumstances.

In June 2016, the Company entered into a sublease under which the Company leases 9,928 square feet of office space for its headquarters at 2200 Pennsylvania Avenue, N.W. in Washington, D.C. The sublease term began in January 2017 and ends in July 2026, but may be terminated earlier by either party under certain circumstances. The Company has the right to sublease or assign all or a portion of the premises, subject to standard conditions.

The Company has an operating lease for 2,880 square feet of office space for the Company’s European headquarters in London that has a noncancellable lease term ending in 2021, and 1,249 square feet of office space in Berlin under a short-term operating lease.

Rent expense under operating leases and subleases was $3.6 million, $3.2 million and $2.5 million for the years ended December 31, 2018, 2017 and 2016, respectively.

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 a result of the FDA’s approval of the HETLIOZ^® NDA in January 2014, the Company made an $8.0 million milestone payment to BMS in the first quarter of 2014 under the license agreement that was capitalized as an intangible asset and is being amortized over the estimated economic useful life of the related product patents for HETLIOZ^® in the U.S. In April 2018, the Company met another milestone under its license agreement 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 the second quarter of 2018. The $25.0 million milestone obligation was capitalized as an intangible asset in the first quarter of 2015 and is being amortized over the estimated economic useful life of the related product patents for HETLIOZ^® in the U.S. 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 has agreed with BMS in the license agreement for HETLIOZ^® 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 was obligated to make royalty payments to Sanofi S.A. (Sanofi) and Titan Pharmaceuticals Inc. (Titan) at a percentage rate equal to 23% on annual U.S. net sales of Fanapt® up to $200.0 million, and at a percentage rate in the mid-twenties on sales over $200.0 million through November 2016. In February 2016, the Company amended the agreement with Sanofi and Titan to remove Titan as the entity through which royalty payments from the Company are directed to Sanofi following the expiration of the new chemical entity patent for Fanapt^® in the U.S. on November 15, 2016. Under the amended agreement, the Company pays directly to Sanofi a fixed royalty of 3% of net sales from November 16, 2016 through December 31, 2019 related to manufacturing know-how. The Company made a $2.0 million payment during the year ended December 31, 2016 that applied to this 3% manufacturing know-how royalty. No further royalties on manufacturing know-how are payable by the Company after December 31, 2019. This amended agreement did not alter Titan’s obligation under the license agreement to make royalty payments to Sanofi prior to November 16, 2016 or the Company’s obligations to pay Sanofi a fixed royalty on Fanapt^® net sales equal up 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 new chemical entity patent has expired or was not issued.

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. The patent describing tradipitant as a NCE expires in April 2023, except in the U.S., where it expires in June 2024 absent any applicable patent term adjustments. Lilly is eligible to receive future payments based upon achievement of specified development and commercialization milestones as well as tiered-royalties on net sales at percentage rates up to the low double digits. These milestones include $4.0 million for pre-NDA approval milestones, $10.0 million and $5.0 million for the first approval of a marketing authorization for tradipitant in the U.S. and European Union (E.U.), respectively, and up to $80 million for sales milestones. The $4.0 million of pre-NDA approval milestones includes $2.0 million due upon enrollment of the first subject into a Phase III study for tradipitant and $2.0 million due upon the filing of the first marketing authorization for tradipitant in either the U.S. or the E.U. As a result of enrolling the first subject into a Phase III study for tradipitant in July 2018, the Company made a $2.0 million milestone payment to Lilly in the third quarter of 2018. The likelihood of achieving this milestone was determined to be probable during 2017 and the obligation of $2.0 million tied to such milestone was recorded as research and development expense in the consolidated statement of operations during the year ended December 31, 2017 and a current liability in the consolidated balance sheet as of December 31, 2017. 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 Vanda 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. These milestones include an initial license fee of $1.0 million that was paid by the Company in 2017, annual maintenance fees, $12.4 million for pre-NDA approval milestones and $33.0 million for future regulatory approval and sales milestones. Included in the $12.4 million in pre-NDA approval 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. In the fourth quarter of 2018, the Company determined the first pre-NDA approval milestone to be probable and accrued a current liability of $0.2 million as of December 31, 2018.

Purchase Commitments

In 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 and marketing 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. Purchase commitments included in the noncancellable long-term contractual cash obligations table above include noncancellable purchase commitments longer than one year and primarily relate to commitments for advertising and data services.

Stock-Based Compensation

12 Months Ended

Dec. 31, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

As of December 31, 2018, there were 5,682,618 shares that were 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 on April 12, 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 twice to increase the number of shares reserved for issuance, among other administrative changes. Both amendments and restatements of the 2016 Plan were approved by the Company's stockholders. There are a total of 7,100,000 shares of common stock reserved for issuance under the 2016 Plan, 4,576,126 shares of which remained available for future grant as of December 31, 2018.

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 and all service option awards granted prior to December 31, 2006, service option awards granted to new employees, and certain service option awards granted to existing employees vest and become exercisable on the first anniversary of the grant date with respect to the 25% of the shares subject to service option awards. The remaining 75% of the shares subject to the service option awards vest and become exercisable monthly in equal installments thereafter over three years. Certain service option awards granted to existing employees after December 31, 2006 vest and become exercisable monthly in equal installments over four years. The initial service option awards granted to directors upon their election vest and become exercisable in equal monthly installments over a period of four years, while the subsequent annual service option awards granted to directors vest and become exercisable in equal monthly installments over a period of one year. Certain service option awards to executives and directors provide for accelerated vesting if there is a change in control of the Company. Certain service option awards to employees and executives provide for accelerated vesting if the respective employee’s or executive’s service is terminated by the Company for any reason other than cause or permanent disability.

As of December 31, 2018, $7.2 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 December 31, 2018.

The following is a summary of option activity for the 2006 Plan and the 2016 Plan for the years ended December 31, 2018, 2017, and 2016:



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, 2015	6,252,448		$	11.87	6.16	$	7,498
Granted	866,011		8.43
Forfeited	(392,700	)	11.23
Expired	(279,766	)	17.38
Exercised	(897,657	)	8.63			4,264
Outstanding at December 31, 2016	5,548,336		11.62		5.58	32,453
Granted	643,000		14.44
Forfeited	(290,729	)	10.73
Expired	(605,617	)	29.87
Exercised	(575,206	)	9.13			3,140
Outstanding at December 31, 2017	4,719,784		10.03		5.63	24,421
Granted	567,500		19.22
Forfeited	(232,527	)	13.99
Exercised	(685,715	)	9.12			5,945
Outstanding at December 31, 2018	4,369,042		11.15		5.28	65,438
Exercisable at December 31, 2018	3,487,495		10.01		4.48	56,222
Vested and expected to vest at December 31, 2018	4,248,680		10.96		5.18	64,466

The weighted average grant-date fair value of options granted was $10.66, $7.81 and $4.53 per share for the years ended December 31, 2018, 2017 and 2016, respectively. Proceeds from the exercise of stock options amounted to $6.3 million, $5.3 million and $7.8 million for the years ended December 31, 2018, 2017 and 2016, 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 vest in four equal annual installments provided that the employee remains employed with the Company. Annual service RSUs granted to directors vest on the first anniversary of the grant date.

As of December 31, 2018, $14.9 million of unrecognized compensation costs related to unvested service RSUs are expected to be recognized over a weighted average period of 1.8 years. No RSUs are classified as a liability as of December 31, 2018.

The following is a summary of RSU activity for the 2006 Plan and the 2016 Plan for the years ended December 31, 2018, 2017, and 2016:



RSUs	Number of Shares		Weighted Average Grant Date Fair Value
Unvested at December 31, 2015	1,022,681		$	10.90
Granted	657,742		8.71
Forfeited	(254,329	)	10.38
Vested	(287,666	)	9.65
Unvested at December 31, 2016	1,138,428		10.07
Granted	857,336		14.57
Forfeited	(275,613	)	11.41
Vested	(362,313	)	9.78
Unvested at December 31, 2017	1,357,838		12.72
Granted	714,086		18.93
Forfeited	(229,603	)	15.19
Vested	(528,745	)	12.69
Unvested at December 31, 2018	1,313,576		15.68

The grant date fair value for the 528,745 shares underlying RSUs that vested during the year ended December 31, 2018 was $6.7 million.

Stock-Based Compensation Expense

Stock-based compensation expense recognized for the years ended December 31, 2018, 2017 and 2016 was allocated as follows:



	Year Ended December 31,
(in thousands)	2018		2017		2016
Research and development	$	1,290	$	1,152	$	2,087
Selling, general and administrative	10,376		9,313		6,456
	$	11,666	$	10,465	$	8,543

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 not paid dividends to its stockholders since its inception (other than a dividend of preferred share purchase rights, which was declared in September 2008) 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 years ended December 31, 2018, 2017 and 2016 were as follows:



	Year Ended December 31,
	2018		2017		2016
Expected dividend yield	—	%	—	%	—	%
Weighted average expected volatility	58	%	57	%	57	%
Weighted average expected term (years)	5.90		5.89		6.08
Weighted average risk-free rate	2.68	%	1.97	%	1.37	%

Income Taxes

12 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

Income Taxes

The Company recorded total tax expense of $0.1 million on consolidated pretax income of $25.3 million, consisting of $25.1 million and $0.2 million of pretax income in the U.S. and foreign subsidiaries, respectively, for the year ended December 31, 2018. The Company recorded total tax expense of $0.1 million on consolidated pretax loss of $15.4 million, consisting of $15.7 million of pretax loss in the U.S. and $0.3 million of pretax income from foreign subsidiaries for the year ended December 31, 2017. The Company recorded total tax expense of $0.1 million on consolidated pretax loss of $17.9 million, consisting of $18.1 million of pretax loss in the U.S. and $0.2 million of pretax income from foreign subsidiaries for the year ended December 31, 2016.

The following is a summary of the provision (benefit) for income taxes for the years ended December 31, 2018, 2017 and 2016:



	Year Ended December 31,
(in thousands)	2018			2017			2016
Current:
Federal	$	—		$	—		$	—
State	53			65			66
Foreign	99			(66		)	142
Deferred:
Federal	—			—			—
State	—			—			—
Foreign	(14		)	137			(104		)
Provision for income taxes	$	138		$	136		$	104

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 or all of the deferred tax assets will not be realized. The fact that the Company has historically generated pretax losses in the U.S. serves as strong evidence that it is more likely than not that deferred tax assets in the U.S. will not be realized in the future. Therefore, the Company had a full tax valuation allowance against all net deferred tax assets in the U.S. as of December 31, 2018 and 2017. A reduction of the valuation allowance, in whole or in part, would result in a non-cash income tax benefit during the period of reduction. The potential timing and amount of any future valuation allowance release has yet to be determined and requires an analysis that is highly dependent upon historical and future projected earnings, among other factors. Any such adjustment could have a material impact on the Company’s finance position and results of operations.

As a result of the tax valuation allowance against deferred tax assets in the U.S., there was no expense (benefit) for income taxes associated with the U.S. income (loss) before income taxes for each of the years ended December 31, 2018, 2017 and 2016. The following is reconciliation between the federal statutory tax rate and the Company’s effective tax rate for the years ended December 31, 2018, 2017 and 2016:



	Year Ended December 31,
	2018		2017		2016
Federal tax at statutory rate	21.0	%	35.0	%	35.0	%
State taxes	1.7	%	1.7	%	0.8	%
U.S. Tax Cuts and Job Act (1)	0.0	%	-262.6	%	0.0	%
Change in valuation allowance - U.S. Tax Cuts and Jobs Act	0.0	%	262.6	%	0.0	%
Other change in valuation allowance (2)	-16.4	%	-47.8	%	-38.4	%
Research and development credit	-9.1	%	9.0	%	3.8	%
Orphan drug credit	-2.7	%	6.3	%	7.6	%
Section 162(m) limitation	3.1	%	8.1	%	0.0	%
Other tax rate changes	-0.7	%	-2.6	%	3.9	%
Other changes in state deferred taxes (3)	5.9	%	5.1	%	0.0	%
Stock-based compensation	-3.9	%	-13.0	%	-12.5	%
Other items	1.6	%	-2.7	%	-0.8	%
Effective tax rate	0.5	%	-0.9	%	-0.6	%


(1)	Includes the effect of the Tax Cuts and Jobs Act, which primarily relates to the remeasurement of existing deferred taxes as a result of the change to the U.S. federal tax rate.


(2)	Reductions in 2018 valuation allowances are attributable to profitable 2018 U.S. results.


(3)	Includes adjustments to state deferred taxes based on changes to filing jurisdictions.

The following is a summary of the components of the Company’s deferred tax liabilities, net, and the related tax valuation allowance as of December 31, 2018 and 2017:



(in thousands)	December 31, 2018			December 31, 2017
Deferred tax assets:
Net operating loss carryforwards	$	55,742		$	59,222
Stock-based compensation	5,202			5,383
Accrued and deferred expenses	2,096			1,967
Allowance for returns and uncollectable receivables	1,247			1,051
Research and development and orphan drug credit carryforwards	48,066			43,976
Intangible assets	—			3,745
Other	1,405			1,123
Total deferred tax assets	113,758			116,467
Deferred tax liabilities:
Intangible assets	(1,247		)	—
Other	(576		)	(386		)
Total deferred tax liabilities	(1,823		)	(386		)
Deferred tax assets, net	111,935			116,081
Valuation allowance	111,950			116,110
Net deferred tax assets (liabilities)	$	(15	)	$	(29	)

The Company’s net deferred tax liability of less than $0.1 million as of December 31, 2018 and 2017 is included as a component of other non-current liabilities.

The following is a summary of changes in the Company’s tax valuation allowance for the years ended December 31, 2018, 2017 and 2016:



(in thousands)	Balance at Beginning of Year		Additions		Reductions			Balance at End of Year
Year Ended:
December 31, 2018	$	116,110	$	4,036	$	(8,196	)	$	111,950
December 31, 2017	146,012		12,403		(42,305		)	116,110
December 31, 2016	139,037		11,031		(4,056		)	146,012

The Company has net operating loss (NOL) and other tax credit carryforwards in several jurisdictions. As of December 31, 2018, the Company has $46.7 million of deferred tax assets relating to U.S. federal NOL carryforwards, along with deferred tax assets of $12.1 million and $36.0 million related to U.S. federal research and development credits and orphan drug credits, respectively. These tax attributes will begin to expire in 2029, 2024 and 2030, respectively. In addition, the Company has $9.0 million of deferred tax assets relating to U.S. state NOL carryforwards, which primarily relate to the District of Columbia. State NOLs for the District of Columbia will begin to expire in 2031 and other state NOLs will begin to expire in 2019. A valuation allowance is recorded against these U.S. federal and U.S. state deferred tax assets.

Because the Company has generated or utilized NOLs from inception through December 31, 2018, all income tax returns filed by the Company are open to examination by tax jurisdictions. As of December 31, 2018, the Company’s income tax returns had not been under examination by any federal or state tax jurisdictions. As of December 31, 2018 and 2017, the Company had no uncertain tax positions.

Certain tax attributes of the Company, including NOLs and credits, would be subject to a limitation should an ownership change as defined under the Internal Revenue Code of 1986, as amended (IRC), Section 382, occur. The limitations resulting from a change in ownership could affect the Company’s ability to utilize its NOLs and credit carryforward (tax attributes). Ownership changes occurred in the years ending December 31, 2014 and December 31, 2008. The Company believes that the ownership changes in 2014 and 2008 will not impact its ability to utilize NOL and credit carryforwards; however, future ownership changes may cause the Company’s existing tax attributes to have additional limitations. Because the Company maintains a valuation allowance on its U.S. tax attributes, any limitation as a result of application of IRC Section 382 limitation would not have a material impact on the Company’s provision for income taxes for the year ended December 31, 2018.

The Tax Cuts and Jobs Act (TCJA) was enacted in December 2017. The TCJA reduces the U.S. federal corporate tax rate from 35% to 21%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously deferred and creates new taxes on certain foreign sourced earnings. During the fourth quarter of 2018, the Company completed its accounting for the tax effects of the TCJA. No material measurement period adjustments were recorded in 2018 to adjust estimated effects of the Act that were recorded in 2017. Immaterial measurement period adjustments that were recorded resulted in no tax expense as they were fully offset by a change in the Company's valuation allowance.

Earnings per Share

12 Months Ended

Dec. 31, 2018

Earnings Per Share [Abstract]

Earnings per Share

Basic earnings per share (EPS) is calculated by dividing the net loss by the weighted average number of shares of common stock outstanding. Diluted EPS is computed by dividing the net loss 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 (loss) per share of common stock for the years ended December 31, 2018, 2017 and 2016:



	Year Ended December 31,
(in thousands, except for share and per share amounts)	2018		2017			2016
Numerator:
Net income (loss)	$	25,208	$	(15,567	)	$	(18,010	)
Denominator:
Weighted average shares outstanding, basic	50,859,947		44,735,146			43,449,441
Effect of dilutive securities	2,185,310		—			—
Weighted average shares outstanding, diluted	53,045,257		44,735,146			43,449,441
Net income (loss) per share, basic and diluted:
Basic	$	0.50	$	(0.35	)	$	(0.41	)
Diluted	$	0.48	$	(0.35	)	$	(0.41	)
Antidilutive securities excluded from calculations of diluted net income (loss) per share	903,265		3,136,515			4,943,797

The Company incurred a net loss for each of the years ended December 31, 2017 and 2016 causing inclusion of any potentially dilutive securities to have an anti-dilutive effect, resulting in dilutive loss per share and basic loss per share attributable to common stockholders being equivalent.

Legal Matters	12 Months Ended
Legal Matters	Dec. 31, 2018
Commitments and Contingencies Disclosure [Abstract]
Legal Matters	Legal Matters Fanapt^®. In June 2014, the Company filed suit against Roxane Laboratories, Inc. (Roxane) in the U.S. District Court for the District of Delaware (Delaware District Court). The suit sought an adjudication that Roxane has infringed one or more claims of the Company's U.S. Patent No. 8,586,610 (‘610 Patent) by submitting to the U.S. Food and Drug Administration (FDA) an Abbreviated New Drug Application (ANDA) for a generic version of Fanapt^® prior to the expiration of the ‘610 Patent in November 2027. In addition, pursuant to a settlement agreement with Novartis Pharma AG (Novartis), the Company assumed Novartis’ patent infringement action against Roxane in the Delaware District Court. That suit alleges that Roxane has infringed one or more claims of U.S. Patent RE39198 (‘198 Patent), which is licensed exclusively to the Company, by filing an ANDA for a generic version of Fanapt^® prior to the expiration of the ‘198 Patent in November 2016. These two cases against Roxane were consolidated by agreement of the parties and were tried together in a five-day bench trial that concluded in March 2016. In August 2016, the Delaware District Court ruled that the Company is entitled to a permanent injunction against Roxane enjoining Roxane from infringing the ‘610 Patent, including the manufacture, use, sale, offer to sell, sale, distribution or importation of any generic iloperidone product described in the ‘610 Patent ANDA until the expiration of the ‘610 Patent in November 2027. If the Company obtains pediatric exclusivity, the injunction against Roxane would be extended until May 2028 under the Delaware District Court’s order. In September 2016, Roxane filed a notice of appeal with the Federal Circuit Court of Appeals (Federal Circuit). In July 2017, Roxane, now a subsidiary of Hikma Pharmaceuticals PLC (Hikma), petitioned the Federal Circuit to substitute Roxane with new defendants West-Ward Pharmaceuticals International Limited and West-Ward Pharmaceuticals Corp. (each of which is a subsidiary of Hikma and both of which are referred to collectively herein as West-Ward). In April 2018, the Federal Circuit affirmed the Delaware District Court’s decision that West-Ward infringed the ‘610 Patent. In June 2018, West-Ward filed with the Federal Circuit a petition seeking rehearing en banc. The Federal Circuit invited the Company to respond to West-Ward’s petition; the Company's response was filed in July 2018. In August 2018, the Federal Circuit denied West-Ward's petition for rehearing. In January 2019, West-Ward filed a petition in the United States Supreme Court for a writ of certiorari seeking reversal of the Federal Circuit’s decision. The Company submitted a response to that petition on February 12, 2019. In 2015, the Company filed six separate patent infringement lawsuits in the Delaware District Court against Roxane, 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, and collectively with Roxane, Inventia, Lupin and Taro, the Defendants). The lawsuits each seek an adjudication that the respective Defendants infringed one or more claims of the ‘610 Patent and/or the Company's U.S. Patent No. 9,138,432 (‘432 Patent) by submitting to the FDA an ANDA for a generic version of Fanapt^® prior to the expiration of the ‘610 Patent in November 2027 or the ‘432 Patent in September 2025. The Defendants denied infringement and counterclaimed for declaratory judgment of invalidity and noninfringement of the ‘610 Patent and the ‘432 Patent. Certain Defendants have since entered into agreements resolving these lawsuits, as discussed below. The remaining matters have been stayed until the later of November 30, 2018 or 14 days after final disposition by the U.S. Supreme Court of any petition for a writ of certiorari filed by West-Ward. The Company entered into a confidential stipulation with each of Inventia and Lupin regarding any potential launch of Inventia’s and Lupin's generic ANDA products. Lupin filed counter claims for declaratory judgment of invalidity and noninfringement of seven of the Company's method of treatment patents that are listed in the Approved Drug Products with Therapeutic Equivalence Evaluations (Orange Book) related to Fanapt^® (such seven patents, the Method of Treatment Patents). The Company has not sued Lupin for infringing the Method of Treatment Patents. In October 2016, the Company, along with Lupin, filed a Stipulation of Dismissal in the Delaware District Court pursuant to which Lupin’s counterclaims relating to the Method of Treatment Patents were dismissed without prejudice in recognition of an agreement reached between the parties by which the Company would not assert those patents against Lupin absent certain changes in Lupin’s proposed prescribing information for its iloperidone tablets. Taro and Apotex each entered into separate License Agreements (together, the License Agreements) resolving these lawsuits in October 2016 and December 2016, respectively. The License Agreements grant Taro and Apotex non-exclusive licenses to manufacture and commercialize a version of Fanapt^® in the U.S. effective November 2027, unless prior to that date the Company obtains pediatric exclusivity for Fanapt^®, in which case, the license will be effective May 2028. Taro and Apotex each may enter the market earlier under certain limited circumstances. The License Agreements, which are subject to review by the U.S. Federal Trade Commission (FTC) and the U.S. Department of Justice (DOJ), provide for a full settlement and release of all claims that are the subject of the respective litigation with Taro and Apotex. In February 2016, Roxane filed suit against the Company in the U.S. District Court for the Southern District of Ohio (Ohio District Court). The suit sought a declaratory judgment of invalidity and noninfringement of the Method of Treatment Patents. In December 2016, the Ohio District Court dismissed Roxane’s suit without prejudice for lack of personal jurisdiction. In February 2016, Roxane filed a Petition for Inter Partes Review (IPR) of the ‘432 Patent with the Patent Trials and Appeals Board (PTAB) of the U.S. Patent and Trademark Office. In August 2016, the PTAB denied the request by Roxane to institute an IPR of the ‘432 Patent. In September 2016, Roxane filed a Petition for Rehearing with the PTAB. In November 2016, the PTAB denied Roxane’s Petition for Rehearing. HETLIOZ^®. In March 2018, the Company received a Paragraph IV certification notice letter from Teva Pharmaceuticals USA, Inc. (Teva) notifying the Company that Teva had submitted an ANDA for HETLIOZ^® to the FDA requesting approval to market, sell and use a generic version of the 20mg HETLIOZ^® capsules for Non-24-Hour-Sleep-Wake Disorder. In its notice letter, Teva alleges that the Company's Orange Book listed U.S. Patent No. RE46,604, U.S. Patent No. 9,060,995, U.S. Patent 9,539,234, U.S. Patent 9,549,913, U.S. Patent 9,730,910 and U.S. Patent 9,885,241 (collectively, the Vanda Patents), which cover methods of using HETLIOZ^®, are invalid, unenforceable and/or will not be infringed by Teva’s manufacture, use or sale of the product described in its ANDA. The Company received similar notice letters in April 2018 from MSN Pharmaceuticals Inc. and MSN Laboratories Private Limited (together, MSN) and Apotex. In April 2018, the Company filed a patent infringement lawsuit in the Delaware District Court against Teva and in May 2018, the Company filed patent infringement lawsuits in the Delaware District Court against MSN and Apotex. The lawsuits seek an adjudication that Teva, MSN and Apotex have infringed one or more claims of the Vanda Patents by submitting to the FDA an ANDA for a generic version of HETLIOZ^® prior to the expiration of the latest to expire of the Vanda Patents in 2034. The relief requested by the Company in the lawsuits includes requests for permanent injunctions preventing Teva, MSN and Apotex from infringing the asserted claims of the Vanda Patents by engaging in the manufacture, use, offer to sell, sale, importation or distribution of generic versions of HETLIOZ^® before the last expiration date of the Vanda Patents and for an order that any effective date of FDA approval of Teva, MSN, and Apotex’s generic versions of HETLIOZ^® be a date not earlier than the expiration of the Vanda Patents. The lawsuits automatically preclude the FDA from approving the submitted ANDAs until the earlier of seven and one-half years after the January 2014 approval of the Company's application for New Chemical Entity Status or entry of a district court decision finding the Vanda Patents invalid, unenforceable or not infringed. In June 2018, Teva, MSN and Apotex each answered the Company's complaint, and Teva included counterclaims for declarations that the Vanda Patents are invalid. MSN included additional counterclaims for declarations that the Vanda Patents are not infringed. In July 2018, the Company answered Teva and MSN's counterclaims, denying their allegations. In October 2018, the Company received an additional Paragraph IV certification notice letter from Teva concerning its Orange Book listed U.S. Patent No. 10,071,977, which expires in 2035 (the ‘977 Patent). In November 2018, the Company received a similar additional Paragraph IV certification notice letter from Apotex concerning the ’977 Patent. In December 2018, the Company filed amended complaints against Teva, Apotex, and MSN alleging infringement of one or more claims of the ’977 Patent. The amended complaints seek an adjudication that Teva, Apotex, and MSN have infringed one or more claims of the ’977 Patent by submitting to FDA an ANDA for a generic version of HETLIOZ^® prior to the expiration of the ’977 Patent. The relief requested by the Company in the amended complaints includes requests for permanent injunctions preventing Teva, Apotex, and MSN from infringing the asserted claims of the ’977 Patent by engaging in the manufacture, use, offer to sell, sale, importation or distribution of generic versions of HETLIOZ^® before the expiration date of the ’977 Patent and for an order that any effective date of FDA approval of Teva, MSN, and Apotex’s generic versions of HETLIOZ^® be a date not earlier than the expiration of the ’977 Patent. In December 2018, Teva, MSN, and Apotex answered the Company's amended complaints, and Teva and MSN included counterclaims for declarations that the ’977 Patent is invalid, and MSN included an additional counterclaim that the ’977 Patent is unenforceable for inequitable conduct. In January 2019, the Company answered Teva and MSN’s counterclaims. A trial date for these lawsuits has been set for September 2020. In February 2019, the Company received an additional Paragraph IV certification notice letter from Teva concerning its Orange Book listed U.S. Patent No. 10,149,829, which expires in 2033 (the ’829 Patent). In its notice letter, Teva alleges that the ’829 Patent, which covers methods of using HETLIOZ^®, is invalid, unenforceable and will not be infringed by Teva’s manufacture, use or sale of the product described in its ANDA. Other Matters. In April 2018, the Company submitted a protocol amendment to the FDA, proposing a 52-week open-label extension (OLE) period for patients who had completed the tradipitant Phase II clinical study (2301) in gastroparesis. In May 2018, based on feedback from the FDA, the Company amended the protocol limiting the duration of treatment in the 2301 study to a total of three months, while continuing to seek further dialogue with the FDA on extending the study duration to 52-weeks. As a part of this negotiation process, in September 2018, the Company submitted a new follow-on 52-week OLE protocol to the FDA (2302) for patients who had completed the 2301 study. While waiting for further feedback, no patients were ever enrolled in any study beyond 12 weeks. On December 19, 2018, the FDA imposed a partial clinical hold (PCH) on the two proposed studies, stating that the Company is required first to conduct additional chronic toxicity studies in canines, monkeys or minipigs before allowing patients access in any clinical protocol beyond 12 weeks. The PCH was not based on any safety or efficacy data related to tradipitant. Rather, the FDA informed the Company that these additional toxicity studies are required by a guidance document. The Company believes that the FDA does not have legal authority to issue the PCH on the basis of the guidance at issue. The Company also believes that it has provided the FDA with sufficient information regarding the safety of tradipitant to justify the continued study of tradipitant in patients beyond 12 weeks, in accordance with applicable law and FDA regulations. On February 5, 2019, the Company filed a lawsuit against the FDA in the United States District Court for the District of Columbia (DC District Court), challenging the FDA’s legal authority to issue the PCH, and seeking an order to set it aside. On February 14, 2019, the FDA filed a Motion for Voluntary Remand to the Agency and for a Stay of the Case. The Company intends to continue vigorously pursuing its interests in the matter. The PCH and the Company's plans for tradipitant clinical development are discussed in greater detail in Part I, Item 1, Business, of this annual report on Form 10-K. On February 4, 2019, a qui tam action filed against the Company was unsealed by order of the DC District Court entered on January 31, 2019. The qui tam action, United States ex rel. Richard Gardner v. Vanda Pharmaceuticals Inc., which was filed under seal on March 10, 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 alleges that the Company violated these laws through the promotion and marketing of its products Fanapt^® and HETLIOZ^®. The complaint seeks, among other things, treble damages, civil penalties for each alleged false claim, and attorneys’ fees and costs. The Company has not been served with the qui tam complaint. By virtue of the court having unsealed the case, it learned that on January 29, 2019, the U.S., as well as the Plaintiff States, filed notice of their election not to intervene in the qui tam action at this time. The U.S.’ and the Plaintiff States’ election not to intervene does not prevent the plaintiff/relator from litigating this action and the U.S. and the Plaintiff States may later seek to intervene in the action. The Company intends to vigorously defend itself in the litigation if served.

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

Business organization

•


•	Tradipitant (VLY-686), a small molecule neurokinin-1 receptor (NK-1R) antagonist, which is presently in clinical development for the treatment of chronic pruritus in atopic dermatitis and the treatment of gastroparesis. An assessment of new tradipitant clinical opportunities including the treatment of motion sickness is ongoing.


•	VTR-297, a small molecule histone deacetylase (HDAC) inhibitor presently in clinical development for the treatment of hematologic malignancies.


•	Portfolio of Cystic Fibrosis Transmembrane Conductance Regulator (CFTR) activators and inhibitors. An early stage CFTR activator program is planned for the treatment of dry eye and ocular inflammation. In addition, an early stage CFTR inhibitor program is planned for the treatment of secretory diarrhea disorders, including cholera.


•	VQW-765, a Phase II alpha-7 nicotinic acetylcholine receptor partial agonist.

Basis of presentation

Use of Estimates

Cash and Cash Equivalents

Marketable Securities

Inventory

Intangible Assets

Property and Equipment

Accounts Payable and Accrued Liabilities

Revenue Recognition

Major Customers

Reserves for Variable Consideration

Cost of Goods Sold

Research and Development Expenses

Selling, General and Administrative Expenses

Stock-Based Compensation

Advertising Expense

Foreign Currency

Income Taxes

Non-Cash Investing and Financing Activities

Purchases of property and equipment accrued in current liabilities amounted to $0.2 million, zero and $0.2 million for each of the years ended December 31, 2018, 2017 and 2016, respectively.

Certain Risks and Uncertainties

Concentrations of Credit Risk

Segment and Geographic Information

Recent Accounting Pronouncements

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

Net Sales by Product

The Company’s net product sales consist of sales of HETLIOZ^® and Fanapt^®. Net sales by product for the years ended December 31, 2018, 2017 and 2016 were as follows:



	Year Ended December 31,
(in thousands)	2018		2017		2016
HETLIOZ^® product sales, net	$	115,835	$	89,978	$	71,671
Fanapt^® product sales, net	77,283		75,105		74,346
	$	193,118	$	165,083	$	146,017

Schedule of Major Customers that Represented More Than 10% of Total Revenues

The following table presents each major customer that represented more than 10% of total revenues for the years ended December 31, 2018, 2017 and 2016:



	Year Ended December 31,
Percent of Net Product Sales	2018		2017		2016
Distributor A	37	%	32	%	23	%
Distributor B	17	%	10	%	1	%
Distributor C	14	%	15	%	16	%
Distributor D	12	%	12	%	15	%
Distributor E	12	%	15	%	16	%
Distributor F	5	%	11	%	16	%

Schedule of Major Customers that Represented More Than 10% of Accounts Receivable, Net

The following table presents each major customer that represented more than 10% of accounts receivable, net, as of December 31, 2018 and 2017:



	December 31,
Percent of Accounts Receivable, Net	2018		2017
Distributor A	30	%	28	%
Distributor B	15	%	9	%
Distributor C	20	%	18	%
Distributor D	16	%	21	%
Distributor E	13	%	10	%

Summary of Product Return Allowance

The following table summarizes activity for product returns as of and for the years ended December 31, 2018, 2017 and 2016:



(in thousands)	Reserve for Product Returns
Balances at December 31, 2015	$	1,059
Additions	2,507
Credits/payments	(486		)
Balances at December 31, 2016	3,080
Additions	5,978
Credits/payments	(4,939		)
Balances at December 31, 2017	4,119
Additions	2,684
Credits/payments	(1,616		)
Balances at December 31, 2018	$	5,187

Marketable Securities (Tables)

12 Months Ended

Dec. 31, 2018

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 December 31, 2018, all of which have contract maturities of less than one year:



December 31, 2018 (in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Market Value
U.S. Treasury and government agencies	$	69,275	$	12	$	(17	)	$	69,270
Corporate debt	105,897		38		(25		)	105,910
Asset-backed securities	21,189		—		(14		)	21,175
	$	196,361	$	50	$	(56	)	$	196,355

The following is a summary of the Company’s available-for-sale marketable securities as of December 31, 2017:



December 31, 2017 (in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Market Value
U.S. Treasury and government agencies	$	60,681	$	—	$	(63	)	$	60,618
Corporate debt	49,168		12		(12		)	49,168
	$	109,849	$	12	$	(75	)	$	109,786

Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2018

Fair Value Disclosures [Abstract]

Assets Measured at Fair Value on Recurring Basis

The Company held certain assets that are required to be measured at fair value on a recurring basis as of December 31, 2018, as follows:



			Fair Value Measurement as of December 31, 2018 Using
(in thousands)	December 31, 2018		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
U.S. Treasury and government agencies	69,270		69,270		—		—
Corporate debt	105,910		—		105,910		—
Asset-backed securities	21,175		—		21,175		—
	$	196,355	$	69,270	$	127,085	$	—

The Company held certain assets that are required to be measured at fair value on a recurring basis as of December 31, 2017, as follows:



			Fair Value Measurement as of December 31, 2017 Using
(in thousands)	December 31, 2017		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
U.S. Treasury and government agencies	$	60,618	$	60,618	$	—	$	—
Corporate debt	53,164		—		53,164		—
	$	113,782	$	60,618	$	53,164	$	—

Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Summary of Intangible Assets

The following is a summary of the Company’s intangible assets as of December 31, 2018:



		December 31, 2018
(in thousands)	Estimated Useful Life (Years)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
HETLIOZ^®	February 2035	$	33,000	$	8,458	$	24,542
Fanapt^®	November 2016	27,941		27,941		—
		$	60,941	$	36,399	$	24,542

The following is a summary of the Company’s intangible assets as of December 31, 2017:



		December 31, 2017
(in thousands)	Estimated Useful Life (Years)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
HETLIOZ^®	May 2034	$	33,000	$	6,931	$	26,069
Fanapt^®	November 2016	27,941		27,941		—
		$	60,941	$	34,872	$	26,069

Summary of Amortization Expense

Amortization expense for the years ended December 31, 2018, 2017 and 2016 was as follows:



	Year Ended December 31,
(in thousands)	2018		2017		2016
HETLIOZ^®	$	1,527	$	1,750	$	1,721
Fanapt^®	—		—		9,212
	$	1,527	$	1,750	$	10,933

Summary of Future Intangible Asset Amortization

The following is a summary of the future intangible asset amortization schedule as of December 31, 2018:



(in thousands)	Total		2019		2020		2021		2022		2023		Thereafter
HETLIOZ^®	$	24,542	$	1,518	$	1,518	$	1,518	$	1,518	$	1,518	$	16,952

Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Summary of Option Activity Plan

The following is a summary of option activity for the 2006 Plan and the 2016 Plan for the years ended December 31, 2018, 2017, and 2016:



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, 2015	6,252,448		$	11.87	6.16	$	7,498
Granted	866,011		8.43
Forfeited	(392,700	)	11.23
Expired	(279,766	)	17.38
Exercised	(897,657	)	8.63			4,264
Outstanding at December 31, 2016	5,548,336		11.62		5.58	32,453
Granted	643,000		14.44
Forfeited	(290,729	)	10.73
Expired	(605,617	)	29.87
Exercised	(575,206	)	9.13			3,140
Outstanding at December 31, 2017	4,719,784		10.03		5.63	24,421
Granted	567,500		19.22
Forfeited	(232,527	)	13.99
Exercised	(685,715	)	9.12			5,945
Outstanding at December 31, 2018	4,369,042		11.15		5.28	65,438
Exercisable at December 31, 2018	3,487,495		10.01		4.48	56,222
Vested and expected to vest at December 31, 2018	4,248,680		10.96		5.18	64,466

Summary of RSU Activity for 2006 Plan and 2016 Plan

The following is a summary of RSU activity for the 2006 Plan and the 2016 Plan for the years ended December 31, 2018, 2017, and 2016:



RSUs	Number of Shares		Weighted Average Grant Date Fair Value
Unvested at December 31, 2015	1,022,681		$	10.90
Granted	657,742		8.71
Forfeited	(254,329	)	10.38
Vested	(287,666	)	9.65
Unvested at December 31, 2016	1,138,428		10.07
Granted	857,336		14.57
Forfeited	(275,613	)	11.41
Vested	(362,313	)	9.78
Unvested at December 31, 2017	1,357,838		12.72
Granted	714,086		18.93
Forfeited	(229,603	)	15.19
Vested	(528,745	)	12.69
Unvested at December 31, 2018	1,313,576		15.68

Stock-Based Compensation Expense

Stock-based compensation expense recognized for the years ended December 31, 2018, 2017 and 2016 was allocated as follows:



	Year Ended December 31,
(in thousands)	2018		2017		2016
Research and development	$	1,290	$	1,152	$	2,087
Selling, general and administrative	10,376		9,313		6,456
	$	11,666	$	10,465	$	8,543

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 years ended December 31, 2018, 2017 and 2016 were as follows:



	Year Ended December 31,
	2018		2017		2016
Expected dividend yield	—	%	—	%	—	%
Weighted average expected volatility	58	%	57	%	57	%
Weighted average expected term (years)	5.90		5.89		6.08
Weighted average risk-free rate	2.68	%	1.97	%	1.37	%

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

Summary of Provision (Benefit) for Income Taxes

The following is a summary of the provision (benefit) for income taxes for the years ended December 31, 2018, 2017 and 2016:



	Year Ended December 31,
(in thousands)	2018			2017			2016
Current:
Federal	$	—		$	—		$	—
State	53			65			66
Foreign	99			(66		)	142
Deferred:
Federal	—			—			—
State	—			—			—
Foreign	(14		)	137			(104		)
Provision for income taxes	$	138		$	136		$	104

Reconciliation Between Statutory Tax Rate and Effective Tax Rate

The following is reconciliation between the federal statutory tax rate and the Company’s effective tax rate for the years ended December 31, 2018, 2017 and 2016:



	Year Ended December 31,
	2018		2017		2016
Federal tax at statutory rate	21.0	%	35.0	%	35.0	%
State taxes	1.7	%	1.7	%	0.8	%
U.S. Tax Cuts and Job Act (1)	0.0	%	-262.6	%	0.0	%
Change in valuation allowance - U.S. Tax Cuts and Jobs Act	0.0	%	262.6	%	0.0	%
Other change in valuation allowance (2)	-16.4	%	-47.8	%	-38.4	%
Research and development credit	-9.1	%	9.0	%	3.8	%
Orphan drug credit	-2.7	%	6.3	%	7.6	%
Section 162(m) limitation	3.1	%	8.1	%	0.0	%
Other tax rate changes	-0.7	%	-2.6	%	3.9	%
Other changes in state deferred taxes (3)	5.9	%	5.1	%	0.0	%
Stock-based compensation	-3.9	%	-13.0	%	-12.5	%
Other items	1.6	%	-2.7	%	-0.8	%
Effective tax rate	0.5	%	-0.9	%	-0.6	%


(1)	Includes the effect of the Tax Cuts and Jobs Act, which primarily relates to the remeasurement of existing deferred taxes as a result of the change to the U.S. federal tax rate.


(2)	Reductions in 2018 valuation allowances are attributable to profitable 2018 U.S. results.


(3)	Includes adjustments to state deferred taxes based on changes to filing jurisdictions.

Components of Deferred Tax Assets, Net, and Related Valuation Allowance

The following is a summary of the components of the Company’s deferred tax liabilities, net, and the related tax valuation allowance as of December 31, 2018 and 2017:



(in thousands)	December 31, 2018			December 31, 2017
Deferred tax assets:
Net operating loss carryforwards	$	55,742		$	59,222
Stock-based compensation	5,202			5,383
Accrued and deferred expenses	2,096			1,967
Allowance for returns and uncollectable receivables	1,247			1,051
Research and development and orphan drug credit carryforwards	48,066			43,976
Intangible assets	—			3,745
Other	1,405			1,123
Total deferred tax assets	113,758			116,467
Deferred tax liabilities:
Intangible assets	(1,247		)	—
Other	(576		)	(386		)
Total deferred tax liabilities	(1,823		)	(386		)
Deferred tax assets, net	111,935			116,081
Valuation allowance	111,950			116,110
Net deferred tax assets (liabilities)	$	(15	)	$	(29	)

Summary of Changes in Tax Valuation Allowance

The following is a summary of changes in the Company’s tax valuation allowance for the years ended December 31, 2018, 2017 and 2016:



(in thousands)	Balance at Beginning of Year		Additions		Reductions			Balance at End of Year
Year Ended:
December 31, 2018	$	116,110	$	4,036	$	(8,196	)	$	111,950
December 31, 2017	146,012		12,403		(42,305		)	116,110
December 31, 2016	139,037		11,031		(4,056		)	146,012

Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) $ in Thousands		12 Months Ended
	Jan. 01, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Summary Of Significant Accounting Policies [Line Items]
Percentage of insurance coverage gap allocated for prescription drugs under Medicare Part D		50.00%
Advertising expenses		$ 900	$ 1,300	$ 1,400
Purchases of property, plant and equipment and the related current liability		200	0	200
Other Income
Summary Of Significant Accounting Policies [Line Items]
Foreign currency transaction gains and losses		(500)	100	(200)
Accounting Standards Update 2016-18
Summary Of Significant Accounting Policies [Line Items]
Restricted cash			700	800	$ 800
Prepaid Expenses and Other Current Assets \| Accounting Standards Update 2016-18
Summary Of Significant Accounting Policies [Line Items]
Restricted cash		100
Other Noncurrent Assets \| Accounting Standards Update 2016-18
Summary Of Significant Accounting Policies [Line Items]
Restricted cash		600	700
Subsequent Event
Summary Of Significant Accounting Policies [Line Items]
Percentage of insurance coverage gap allocated for prescription drugs under Medicare Part D	70.00%
Reserve for Product Returns
Summary Of Significant Accounting Policies [Line Items]
Provision for product revenue returns		$ 5,187	$ 4,119	$ 3,080	$ 1,059

Summary of Significant Accounting Policies - Net Sales by Product (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Revenue from External Customer [Line Items]
Net product sales	$ 193,118	$ 165,083	$ 146,017
HETLIOZ®
Revenue from External Customer [Line Items]
Net product sales	115,835	89,978	71,671
Fanapt®
Revenue from External Customer [Line Items]
Net product sales	$ 77,283	$ 75,105	$ 74,346

Summary of Significant Accounting Policies - Schedule of Major Customers that Represented More Than 10% of Total Revenues (Detail) - Customer Concentration Risk - Sales Revenue, Net	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Distributor A
Revenue, Major Customer [Line Items]
Concentration risk, percentage	37.00%	32.00%	23.00%
Distributor B
Revenue, Major Customer [Line Items]
Concentration risk, percentage	17.00%	10.00%	1.00%
Distributor C
Revenue, Major Customer [Line Items]
Concentration risk, percentage	14.00%	15.00%	16.00%
Distributor D
Revenue, Major Customer [Line Items]
Concentration risk, percentage	12.00%	12.00%	15.00%
Distributor E
Revenue, Major Customer [Line Items]
Concentration risk, percentage	12.00%	15.00%	16.00%
Distributor F
Revenue, Major Customer [Line Items]
Concentration risk, percentage	5.00%	11.00%	16.00%

Summary of Significant Accounting Policies - Schedule of Major Customers that Represented More Than 10% of Accounts Receivable, Net (Detail) - Credit Concentration Risk - Accounts Receivable	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Distributor A
Concentration Risk [Line Items]
Concentration risk, percentage	30.00%	28.00%
Distributor B
Concentration Risk [Line Items]
Concentration risk, percentage	15.00%	9.00%
Distributor C
Concentration Risk [Line Items]
Concentration risk, percentage	20.00%	18.00%
Distributor D
Concentration Risk [Line Items]
Concentration risk, percentage	16.00%	21.00%
Distributor E
Concentration Risk [Line Items]
Concentration risk, percentage	13.00%	10.00%

Summary of Significant Accounting Policies - Summary of Product Return Allowance (Detail) - Reserve for Product Returns - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items]
Beginning balance	$ 4,119	$ 3,080	$ 1,059
Additions	2,684	5,978	2,507
Credits/payments	(1,616)	(4,939)	(486)
Ending balance	$ 5,187	$ 4,119	$ 3,080

Marketable Securities - Available-For-Sale Marketable Securities (Detail) - Current Investment - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	$ 196,361	$ 109,849
Gross Unrealized Gains	50	12
Gross Unrealized Losses	(56)	(75)
Fair Market Value	196,355	109,786
U.S. Treasury and government agencies
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	69,275	60,681
Gross Unrealized Gains	12	0
Gross Unrealized Losses	(17)	(63)
Fair Market Value	69,270	60,618
Corporate debt
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	105,897	49,168
Gross Unrealized Gains	38	12
Gross Unrealized Losses	(25)	(12)
Fair Market Value	105,910	$ 49,168
Asset-backed securities
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	21,189
Gross Unrealized Gains	0
Gross Unrealized Losses	(14)
Fair Market Value	$ 21,175

Fair Value Measurements - Assets Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	$ 196,355	$ 113,782
U.S. Treasury and government agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	69,270	60,618
Corporate debt
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	105,910	53,164
Asset-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	21,175
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	69,270	60,618
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	69,270	60,618
Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	127,085	53,164
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	105,910	$ 53,164
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	$ 21,175

Inventory (Detail) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Current assets
Work-in-process	$ 48	$ 80
Finished goods	946	760
Total	994	840
Non-Current assets
Raw materials	86	87
Work-in-process	2,290	2,821
Finished goods	516	408
Total	$ 2,892	$ 3,316

Property and Equipment - Property and Equipment-at Cost (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 9,636	$ 9,786
Accumulated depreciation and amortization	(5,219)	(4,480)
Property and equipment, net	$ 4,417	5,306
Computer and other equipment
Property, Plant and Equipment [Line Items]
Estimated Useful Life (Years)	3 years
Property and equipment, gross	$ 3,642	3,342
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 1,488	1,929
Furniture and fixtures \| Minimum
Property, Plant and Equipment [Line Items]
Estimated Useful Life (Years)	5 years
Furniture and fixtures \| Maximum
Property, Plant and Equipment [Line Items]
Estimated Useful Life (Years)	7 years
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 4,506	$ 4,515
Leasehold improvements \| Minimum
Property, Plant and Equipment [Line Items]
Estimated Useful Life (Years)	5 years
Leasehold improvements \| Maximum
Property, Plant and Equipment [Line Items]
Estimated Useful Life (Years)	11 years

Intangible Assets - HETLIOZ - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended			12 Months Ended
	Jun. 30, 2018	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Finite-Lived Intangible Assets [Line Items]
Acquisition of intangible assets				$ 25,000	$ 0	$ 0
Milestone obligation under license agreement				200	$ 27,000
HETLIOZ®
Finite-Lived Intangible Assets [Line Items]
Acquisition of intangible assets	$ 25,000		$ 8,000	$ 25,000
Intangible assets, estimated future useful life				2035-02	2034-05
Cumulative worldwide sales milestone				$ 250,000
Milestone obligation under license agreement					$ 25,000
Intangible assets capitalized		$ 25,000

Intangible Assets - Fanapt - Additional Information (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2009	Dec. 31, 2014
Finite-Lived Intangible Assets [Line Items]
Acquisition of intangible assets	$ 25,000	$ 0	$ 0
Fanapt®
Finite-Lived Intangible Assets [Line Items]
Acquisition of intangible assets				$ 12,000
Intangible assets, estimated useful life	2016-11	2016-11
Assets acquired and recorded at fair value, Intangible re-acquired right					$ 15,900

Intangible Assets - Summary of Intangible Assets (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 60,941	$ 60,941
Accumulated Amortization	36,399	34,872
Net Carrying Amount	$ 24,542	$ 26,069
HETLIOZ®
Finite-Lived Intangible Assets [Line Items]
Intangible assets, estimated future useful life	2035-02	2034-05
Gross Carrying Amount	$ 33,000	$ 33,000
Accumulated Amortization	8,458	6,931
Net Carrying Amount	$ 24,542	$ 26,069
Fanapt®
Finite-Lived Intangible Assets [Line Items]
Intangible assets, estimated useful life	2016-11	2016-11
Gross Carrying Amount	$ 27,941	$ 27,941
Accumulated Amortization	27,941	27,941
Net Carrying Amount	$ 0	$ 0

Intangible Assets - Summary of Amortization Expense (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Finite-Lived Intangible Assets [Line Items]
Intangible asset amortization	$ 1,527	$ 1,750	$ 10,933
HETLIOZ®
Finite-Lived Intangible Assets [Line Items]
Intangible asset amortization	1,527	1,750	1,721
Fanapt®
Finite-Lived Intangible Assets [Line Items]
Intangible asset amortization	$ 0	$ 0	$ 9,212

Intangible Assets - Summary of Future Intangible Asset Amortization (Detail) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Finite-Lived Intangible Assets [Line Items]
Net Carrying Amount	$ 24,542	$ 26,069
HETLIOZ®
Finite-Lived Intangible Assets [Line Items]
Net Carrying Amount	24,542	$ 26,069
2019	1,518
2020	1,518
2021	1,518
2022	1,518
2023	1,518
Thereafter	$ 16,952

Accounts Payable and Accrued Liabilities (Detail) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Payables and Accruals [Abstract]
Compensation and employee benefits	$ 6,363	$ 5,323
Research and development expenses	5,593	4,663
Royalties payable	5,172	4,394
Consulting and other professional fees	2,924	3,961
Other	1,532	1,994
Accounts payable and accrued liabilities	$ 21,584	$ 20,335

Commitments and Contingencies - Additional Information (Detail) $ in Millions	12 Months Ended
	Dec. 31, 2018 USD ($) ft²	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Jun. 30, 2011 ft²
Commitments and Contingencies Disclosure [Line Items]
Rent expense \| $	$ 3.6	$ 3.2	$ 2.5
Agreements for clinical and marketing services, termination notice period	90 days
Washington DC Leases and Sublease \| Sublease
Commitments and Contingencies Disclosure [Line Items]
Leased square footage	9,928
Washington DC Lease Amendment
Commitments and Contingencies Disclosure [Line Items]
Area of real estate property	33,534			21,400
Renewal term of lease agreement	5 years
London Lease
Commitments and Contingencies Disclosure [Line Items]
Area of real estate property	2,880
Noncancellable lease term ending date	2021
Berlin Lease
Commitments and Contingencies Disclosure [Line Items]
Area of real estate property	1,249

Commitments and Contingencies - HETLIOZ - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended			12 Months Ended
	Jun. 30, 2018	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
HETLIOZ
Acquisition of intangible assets				$ 25,000	$ 0	$ 0
Percentage of future sublicense fees payable to third-party				mid-twenties
HETLIOZ®
HETLIOZ
Acquisition of intangible assets	$ 25,000		$ 8,000	$ 25,000
Royalty payable percentage on net sales				10.00%
Cumulative worldwide sales milestone				$ 250,000
Intangible assets capitalized		$ 25,000
Royalty payment period				10 years

Commitments and Contingencies - Fanapt - Additional Information (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2016
Royalty Rate for Annual Sales up to $200 million through November 2016
Fanapt
Royalty percentage payable on net sales below annual threshold		23.00%
Royalty Rate for Annual Sales up to $200 million through November 2016 \| Maximum
Fanapt
Agreed upon sales threshold level for royalty rate		$ 200,000,000
Royalty Rate for Annual Sales in Excess of $200 million through November 2016
Fanapt
Royalty percentage payable on net sales above annual threshold		mid-twenties
Royalty Rate for Annual Sales in Excess of $200 million through November 2016 \| Maximum
Fanapt
Agreed upon sales threshold level for royalty rate		$ 200,000,000
November 16,2016 through December 31,2019
Fanapt
Royalty payable percentage on net sales		3.00%
Prepaid royalty		$ 2,000,000
Fanapt®
Fanapt
Royalty payable percentage on net sales	6.00%
Royalty payment period	10 years

Commitments and Contingencies - Tradipitant - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2018	Dec. 31, 2017
Commitments and Contingencies [Line Items]
Milestone obligation under license agreement		$ 200	$ 27,000
Tradipitant
Commitments and Contingencies [Line Items]
Future percentage of royalty payments based net sales		low double digits
Possible future milestone payment		$ 4,000
Tradipitant \| Research and development
Commitments and Contingencies [Line Items]
Milestone obligation under license agreement			$ 2,000
Tradipitant \| Pre-NDA Approval Milestones
Commitments and Contingencies [Line Items]
Possible future milestone payment		4,000
Tradipitant \| Sales Milestone
Commitments and Contingencies [Line Items]
Possible future milestone payment		80,000
Tradipitant \| Development and Milestone Payments of Phase III Study Potentially Due to Third Party
Commitments and Contingencies [Line Items]
Possible future milestone payment		2,000
Payment of pre-NDA milestone	$ 2,000
Tradipitant \| Development and Milestone Payment for First Marketing Authorization Potentially Due to Third Party
Commitments and Contingencies [Line Items]
Possible future milestone payment		2,000
UNITED STATES \| Tradipitant \| Regulatory Approval Milestone
Commitments and Contingencies [Line Items]
Possible future milestone payment		10,000
Europe \| Tradipitant \| Regulatory Approval Milestone
Commitments and Contingencies [Line Items]
Possible future milestone payment		$ 5,000

Commitments and Contingencies - CFTR Activators and Inhibitors - Additional Information (Detail) - CFTR Activators and Inhibitors - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2017	Dec. 31, 2018
CFTR activators and inhibitors
Milestone payment under license agreement	$ 1,000
Tiered royalties payable on future net sales	single-digit
Milestone obligation under license agreement		$ 200
Regulatory Approval Milestone
CFTR activators and inhibitors
Possible future milestone payments		12,400
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
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 - Summary of Minimum Annual Future Payments Under Operating Leases and Subleases for Office Space (Detail) $ in Thousands	Dec. 31, 2018 USD ($)
Operating leases
Operating leases	$ 22,757
2019	2,483
2020	2,495
2021	2,335
2022	2,355
2023	2,420
Thereafter	10,669
Milestone obligations
Milestone obligations	200
2019	200
2020	0
2021	0
2022	0
2023	0
Thereafter	0
Purchase commitments
Purchase commitments	7,315
2019	5,122
2020	847
2021	890
2022	456
2023	0
Thereafter	0
Contractual Obligation, Fiscal Year Maturity [Abstract]
Total	30,272
2019	7,805
2020	3,342
2021	3,225
2022	2,811
2023	2,420
Thereafter	$ 10,669

Public Offering of Common Stock (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	12 Months Ended
	Mar. 31, 2018	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Subsidiary, Sale of Stock [Line Items]
Net proceeds from public offering		$ 100,870	$ 0	$ 0
Public Offering
Subsidiary, Sale of Stock [Line Items]
Public offering of common stock (in shares)	6,325,000
Public offering of common stock (in dollars per shares)	$ 17.00
Net proceeds from public offering	$ 100,900
Over-Allotment Option
Subsidiary, Sale of Stock [Line Items]
Public offering of common stock (in shares)	825,000

Accumulated Other Comprehensive Income (Loss) - Summary of Accumulated Balances Related to Each Component of Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
Foreign currency translation	$ 7	$ 29
Available-for-sale securities	(6)	(63)
Accumulated other comprehensive income (loss)	$ 1	$ (34)

Stock-Based Compensation - Additional Information (Detail)	12 Months Ended
	Dec. 31, 2018 shares
2006 Plan and 2016 Plan \| Outstanding options and RSUs granted (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares subject to outstanding options and RSUs (in shares)	5,682,618
2016 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares of common stock reserved for issuance (in shares)	7,100,000
Number of shares of common stock available for future grant (in shares)	4,576,126

Stock-Based Compensation - Stock Option - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share based compensation option awards contractual term	10 years
Portion of initial stock options granted to employees that vests on employee's first anniversary	25.00%
Portion of initial stock options granted to employees that vests ratably over three years after completion of first year of service	75.00%
Option awards vesting period, after completion of one year of service	3 years
Vesting period	4 years
Vesting period for initial stock options granted to directors	4 years
Vesting period for subsequent stock options granted to directors	1 year
Options granted, weighted average fair value per share (in dollars per share)	$ 10.66	$ 7.81	$ 4.53
Proceeds from exercise of employee stock options	$ 6,256	$ 5,251	$ 7,751
Service option awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expenses	$ 7,200
Unrecognized compensation expenses, weighted average period	1 year 4 months 24 days

Stock-Based Compensation - RSU - Additional Information (Detail) - Restricted Stock Units (RSU) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period of RSU awards in equal installments	4 years
Unrecognized compensation expenses related to unvested RSUs	$ 14.9
Unrecognized compensation expenses, weighted average period	1 year 9 months 17 days
Grant date fair value of common stock vested (in shares)	528,745	362,313	287,666
Grant date fair value of common stock vested	$ 6.7

Stock-Based Compensation - Summary of Option Activity for 2006 Plan and the 2016 Plan (Detail) - 2006 Plan and 2016 Plan - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Number of Shares
Beginning balance (in shares)	4,719,784	5,548,336	6,252,448
Granted (in shares)	567,500	643,000	866,011
Forfeited (in shares)	(232,527)	(290,729)	(392,700)
Expired (in shares)		(605,617)	(279,766)
Exercised (in shares)	(685,715)	(575,206)	(897,657)
Ending balance (in shares)	4,369,042	4,719,784	5,548,336	6,252,448
Exercisable (in shares)	3,487,495
Vested and expected to vest at end of period (in shares)	4,248,680
Weighted Average Exercise Price at Grant Date
Beginning balance (in dollars per share)	$ 10.03	$ 11.62	$ 11.87
Granted (in dollars per share)	19.22	14.44	8.43
Forfeited (in dollars per share)	13.99	10.73	11.23
Expired (in dollars per share)		29.87	17.38
Exercised (in dollars per share)	9.12	9.13	8.63
Ending balance (in dollars per share)	11.15	$ 10.03	$ 11.62	$ 11.87
Exercisable (in dollars per share)	10.01
Vested and expected to vest at end of period (in dollars per share)	$ 10.96
Weighted Average Remaining Term (Years)
Weighted Average Remaining Term	5 years 3 months 11 days	5 years 7 months 17 days	5 years 6 months 29 days	6 years 1 month 27 days
Exercisable	4 years 5 months 23 days
Vested and expected to vest at end of period	5 years 2 months 5 days
Aggregate Intrinsic Value
Beginning balance	$ 24,421	$ 32,453	$ 7,498
Exercised	5,945	3,140	4,264
Ending balance	65,438	$ 24,421	$ 32,453	$ 7,498
Exercisable	56,222
Vested and expected to vest at end of period	$ 64,466

Stock-Based Compensation - Summary of RSU Activity Plan (Detail) - Restricted Stock Units (RSU) - $ / shares	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Number of Shares Unvested
Beginning balance (in shares)	1,357,838	1,138,428	1,022,681
Granted (in shares)	714,086	857,336	657,742
Forfeited (in shares)	(229,603)	(275,613)	(254,329)
Vested (in shares)	(528,745)	(362,313)	(287,666)
Ending balance (in shares)	1,313,576	1,357,838	1,138,428
Weighted Average Price/Share Unvested
Beginning balance (in dollars per share)	$ 12.72	$ 10.07	$ 10.90
Granted (in dollars per share)	18.93	14.57	8.71
Forfeited (in dollars per share)	15.19	11.41	10.38
Vested (in dollars per share)	12.69	9.78	9.65
Ending balance (in dollars per share)	$ 15.68	$ 12.72	$ 10.07

Stock-Based Compensation - Total Stock-Based Compensation Expense (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	$ 11,666	$ 10,465	$ 8,543
Research and development
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	1,290	1,152	2,087
Selling, general and administrative
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	$ 10,376	$ 9,313	$ 6,456

Stock-Based Compensation - Black-Scholes-Merton Option Pricing Model for Stock Options Granted (Detail)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Expected dividend yield	0.00%	0.00%	0.00%
Weighted average expected volatility	58.00%	57.00%	57.00%
Weighted average expected term (years)	5 years 10 months 24 days	5 years 10 months 21 days	6 years 29 days
Weighted average risk-free rate	2.68%	1.97%	1.37%

Employee Benefit Plan (Detail) - USD ($) $ in Millions	12 Months Ended
Employee Benefit Plan (Detail) - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Retirement Benefits [Abstract]
Defined contribution plan employer matching percent	50.00%
Defined contribution plan maximum employee contribution percent	6.00%
Defined contribution plan vesting period	4 years
Defined contribution plan matching amount	$ 0.9	$ 0.8	$ 0.4

Income Taxes - Additional Information (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Income Taxes [Line Items]
Provision for income taxes	$ 138,000	$ 136,000	$ 104,000
Income (loss) before income taxes	25,346,000	(15,431,000)	(17,906,000)
Pretax loss in U.S	25,100,000	(15,700,000)	(18,100,000)
Pretax income from foreign subsidiaries	200,000	300,000	200,000
Income tax benefit associated with the loss before income taxes	0	0	$ 0
Net deferred tax liability	15,000	29,000
Net operating loss carryforwards	55,742,000	59,222,000
Deferred tax assets related to U.S. federal research and development credits	$ 12,100,000
Net operating loss carryforwards beginning expiration year	2029
U.S. research and development credit beginning expiration year	2024
Orphan drug credit beginning expiration year	2030
Deferred tax assets relating to U.S. state NOL carryforwards	$ 9,000,000
Liability for uncertain tax positions	$ 0	$ 0
Federal tax at statutory rate	21.00%	35.00%	35.00%
Percentage at which certain U.S. federal deferred tax assets and liabilities remeasured	21.00%
U.S. Federal
Income Taxes [Line Items]
Net operating loss carryforwards	$ 46,700,000
Orphan Drug
Income Taxes [Line Items]
Net deferred tax assets	$ 36,000,000
District of Columbia
Income Taxes [Line Items]
Net operating loss carryforwards beginning expiration year	2031
Other States
Income Taxes [Line Items]
Net operating loss carryforwards beginning expiration year	2019
Other Non-current Liabilities \| Maximum
Income Taxes [Line Items]
Net deferred tax liability	$ 100,000	$ 100,000

Income Taxes - Summary of Provision (Benefit) for Income Taxes (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Current:
Federal	$ 0	$ 0	$ 0
State	53,000	65,000	66,000
Foreign	99,000	(66,000)	142,000
Deferred:
Federal	0	0	0
State	0	0	0
Foreign	(14,000)	137,000	(104,000)
Provision for income taxes	$ 138,000	$ 136,000	$ 104,000

Income Taxes - Reconciliation Between Statutory Tax Rate and Effective Tax Rate (Detail)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Income Tax Disclosure [Abstract]
Federal tax at statutory rate	21.00%	35.00%	35.00%
State taxes	1.70%	1.70%	0.80%
The U.S. Tax Cuts and Job Act	0.00%	(262.60%)	0.00%
Change in valuation allowance - U.S. Tax Cuts and Jobs Act	0.00%	262.60%	0.00%
Other change in valuation allowance	(16.40%)	(47.80%)	(38.40%)
Research and development credit	(9.10%)	9.00%	3.80%
Orphan drug credit	(2.70%)	6.30%	7.60%
Section 162(m) limitation	3.10%	8.10%	0.00%
Other tax rate changes	(0.70%)	(2.60%)	3.90%
Other changes in state deferred taxes	5.90%	5.10%	0.00%
Stock-based compensation	(3.90%)	(13.00%)	(12.50%)
Other items	1.60%	(2.70%)	(0.80%)
Effective tax rate	0.50%	(0.90%)	(0.60%)

Income Taxes - Components of Deferred Tax Assets, Net and Related Valuation Allowance (Detail) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Deferred tax assets:
Net operating loss carryforwards	$ 55,742	$ 59,222
Stock-based compensation	5,202	5,383
Accrued and deferred expenses	2,096	1,967
Allowance for returns and uncollectable receivables	1,247	1,051
Research and development and orphan drug credit carryforwards	48,066	43,976
Intangible assets	0	3,745
Other	1,405	1,123
Total deferred tax assets	113,758	116,467
Deferred tax liabilities:
Intangible assets	(1,247)	0
Other	(576)	(386)
Total deferred tax liabilities	(1,823)	(386)
Deferred tax assets, net	111,935	116,081
Valuation allowance	111,950	116,110	$ 146,012	$ 139,037
Net deferred tax liabilities	$ (15)	$ (29)

Earnings per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Numerator:
Net income (loss)	$ 10,360	$ 7,171	$ 4,611	$ 3,066	$ (1,838)	$ (4,550)	$ (1,534)	$ (7,645)	$ 25,208	$ (15,567)	$ (18,010)
Denominator:
Weighted average shares outstanding, basic (shares)									50,859,947	44,735,146	43,449,441
Effect of dilutive securities (in shares)									2,185,310	0	0
Weighted average shares outstanding, diluted (in shares)									53,045,257	44,735,146	43,449,441
Net income (loss) per share, basic and diluted:
Basic (in dollars per share)	$ 0.20	$ 0.14	$ 0.09	$ 0.07					$ 0.50	$ (0.35)	$ (0.41)
Diluted (in dollars per share)	$ 0.19	$ 0.13	$ 0.09	$ 0.06					$ 0.48	$ (0.35)	$ (0.41)
Antidilutive securities excluded from calculations of diluted net income (loss) per share (shares)									903,265	3,136,515	4,943,797

Quarterly Financial Data (Unaudited) (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Quarterly Financial Information Disclosure [Abstract]
Revenues	$ 53,041	$ 49,135	$ 47,350	$ 43,592	$ 44,276	$ 41,336	$ 42,056	$ 37,415	$ 193,118	$ 165,083	$ 146,017
Gross profit	46,994	43,670	41,739	38,680	39,053	36,379	37,095	32,958
Income from operations	9,150	6,233	3,913	2,442	(2,150)	(4,923)	(1,924)	(7,906)	21,738	(16,903)	(18,571)
Net income (loss)	$ 10,360	$ 7,171	$ 4,611	$ 3,066	$ (1,838)	$ (4,550)	$ (1,534)	$ (7,645)	$ 25,208	$ (15,567)	$ (18,010)
Net income per share, basic (in dollars per share)	$ 0.20	$ 0.14	$ 0.09	$ 0.07					$ 0.50	$ (0.35)	$ (0.41)
Net income per share, diluted (in dollars per share)	$ 0.19	$ 0.13	$ 0.09	$ 0.06					$ 0.48	$ (0.35)	$ (0.41)
Net loss per share, basic and diluted (in dollars per share)					$ (0.04)	$ (0.10)	$ (0.03)	$ (0.17)

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

+ References

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+ Details

- Definition

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

+ References

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+ Details

- Definition

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

+ References + Details

Public Offering of Common Stock	12 Months Ended
Public Offering of Common Stock	Dec. 31, 2018
Equity [Abstract]
Public Offering of Common Stock	Public Offering of Common Stock In March 2018, the Company completed a public offering of 6,325,000 shares of its common stock, including the exercise of the underwriters’ option to purchase an additional 825,000 shares of common stock, at a price to the public of $17.00 per share. Net cash proceeds from the public offering were $100.9 million, after deducting the underwriting discounts and commissions and offering expenses.

Business Organization and Presentation (Detail)	12 Months Ended
Business Organization and Presentation (Detail)	Dec. 31, 2018 Segment
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of operating segments	1

Property and Equipment - Additional Information (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 1,429	$ 1,234	$ 935

Employee Benefit Plan	12 Months Ended
Employee Benefit Plan	Dec. 31, 2018
Retirement Benefits [Abstract]
Employee Benefit Plan	Employee Benefit Plan The Company has a defined contribution plan under IRC Section 401(k). This plan covers substantially all employees who meet minimum age and service requirements and allows participants to defer a portion of their annual compensation on a pre-tax basis. Currently, the Company matches fifty percent up to the first six percent of employee contributions. All matching contributions have been paid by the Company. The Company match vests over a 4-year period and amounted to $0.9 million, $0.8 million and $0.4 million for the years ended December 31, 2018, 2017 and 2016, respectively.