SEC Filings

10-K
ARRAY BIOPHARMA INC filed this Form 10-K on 08/11/2017
Entire Document
 
ARRAY BIOPHARMA INC.
Notes to the Financial Statements







NOTE 1 – OVERVIEW, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

Array BioPharma Inc. (also referred to as "Array,","we", "us", "our" or "the Company"), incorporated in Delaware on February 6, 1998, is a biopharmaceutical company focused on the discovery, development and commercialization of targeted small molecule cancer therapies.

Basis of Presentation

The accompanying financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and include all adjustments necessary for the fair presentation of our financial position, results of operations and cash flows for the periods presented. The Company's management performed an evaluation of the Company's activities through the date of filing of this Annual Report on Form 10-K and has disclosed all subsequent events that require disclosure in Note 17 - Subsequent Events to the accompanying audited financial statements.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires the Company's management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. Management bases its estimates on the Company's historical experience and on various other assumptions that it believes are reasonable under the circumstances. These estimates are the basis for the Company's judgments about the carrying values of assets and liabilities, which in turn may impact its reported revenue and expenses. The Company's actual results could differ significantly from these estimates under different assumptions or conditions.

The Company believes the financial statements are most significantly impacted by the following accounting estimates and judgments: (i) identifying deliverables under collaboration, license and other agreements involving multiple elements and determining whether such deliverables are separable from other aspects of the contractual relationship; (ii) estimating the selling price of deliverables for the purpose of allocating arrangement consideration for revenue recognition; (iii) estimating the periods over which the allocated consideration for deliverables is recognized; (iv) estimating accrued outsourcing costs for clinical trials and preclinical testing; (v) estimating the fair value of non-marketable equity received from licensing or other transactions; and (vi) estimating the fair value of notes payable.

Liquidity

With the exception of fiscal year 2015, the Company has incurred operating losses and has an accumulated deficit as a result of ongoing research and development spending since inception. As of June 30, 2017, we had an accumulated deficit of $918.7 million. The Company had a net loss of $116.8 million for the fiscal year ended June 30, 2017, net loss of $92.8 million for the fiscal year ended June 30, 2016, and net income of $9.4 million for the fiscal year ended June 30, 2015. The net income in fiscal 2015 was primarily the result of the net gain realized in that year resulting from payments the Company received related to the return of binimetinib and acquisition of encorafenib, as well as realized gains from the sale of marketable securities.

In connection with the March 2, 2015 closing of the Novartis Agreements as discussed in Note 3 - Binimetinib and Encorafenib Agreements, to the accompanying audited financial statements, the Company received an $85.0 million cash payment, received $5.0 million for the reimbursement of certain transaction costs, extinguished net co-development liabilities of $21.6 million and recorded deferred revenue of $6.6 million. The Company also entered into a third party agreement during the third quarter to complete the Novartis transactions for a net consideration payment of $25.0 million.

For the year ended June 30, 2017, Array's net cash used in operations was $39.4 million. The Company has

F-10