Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2016	Nov. 01, 2016
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q3
Trading Symbol	APVO
Entity Registrant Name	APTEVO THERAPEUTICS INC.
Entity Central Index Key	0001671584
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		20,248,824

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 10,894	$ 4,637
Restricted cash	400
Short-term investments	49,785
Accounts receivable, net	2,958	6,456
Inventories	11,574	20,322
Income tax receivable, net		1,376
Prepaid expenses and other current assets	3,818	2,343
Total current assets	79,429	35,134
Property and equipment, net	6,139	4,179
In-process research and development		41,800
Intangible assets, net	15,055	17,441
Goodwill		13,902
Total assets	100,623	112,456
Current liabilities:
Accounts payable and other accrued liabilities	8,951	10,084
Accrued compensation	3,429	3,334
Contingent consideration, current portion	183	444
Provisions for chargebacks	2,030	2,238
Deferred revenue, current portion	640	3,843
Total current liabilities	15,233	19,943
Deferred revenue, net of current portion	3,096	3,318
Long-term debt, net	18,111
Deferred income taxes		506
Other liabilities	433	71
Total liabilities	36,873	23,838
Stockholders' equity:
Preferred stock: $0.001 par value; 15,000,000 shares authorized, zero shares issued or outstanding
Common stock: $0.001 par value; 500,000,000 shares authorized; 20,246,355 and zero shares issued and outstanding at September 30, 2016 and December 31, 2015, respectively	20
Additional paid-in capital	149,493
Accumulated other comprehensive loss	(17)
Contribution receivable from former parent	(20,000)
Former parent investment in subsidiary		320,606
Accumulated deficit	(65,746)	(231,988)
Total stockholders' equity	63,750	88,618
Total liabilities and stockholders' equity	$ 100,623	$ 112,456

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares	Sep. 30, 2016	Dec. 31, 2015
Statement Of Financial Position [Abstract]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	15,000,000	15,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares issued	20,246,355	0
Common stock, shares outstanding	20,246,355	0

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Revenues:
Product sales	$ 9,405	$ 6,441	$ 27,512	$ 19,704
Contracts, grants and collaborations		121	153	5,611
Total revenues	9,405	6,562	27,665	25,315
Costs and expenses:
Cost of product sales	6,163	3,525	16,235	11,696
Research and development	7,114	7,712	22,851	27,319
Selling, general and administrative	11,680	8,513	29,958	28,900
Impairment of goodwill and intangible assets	55,702		55,702
Loss from operations	(71,254)	(13,188)	(97,081)	(42,600)
Other income (expense):
Other income (expense), net	(493)	84	(417)	(230)
Total other income (expense), net	(493)	84	(417)	(230)
Loss before income taxes	(71,747)	(13,104)	(97,498)	(42,830)
Benefit from income taxes	6	424	29	1,411
Net loss	(71,741)	(12,680)	(97,469)	(41,419)
Unrealized loss on available-for-sale investments	(17)		(17)
Comprehensive loss	$ (71,758)	$ (12,680)	$ (97,486)	$ (41,419)
Net loss per share - basic and diluted	$ (3.55)	$ (0.63)	$ (4.82)	$ (2.05)
Shares used to compute net loss per share - basic and diluted	20,235,987	20,229,849	20,231,910	20,229,849

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) $ in Thousands	9 Months Ended
	Sep. 30, 2016 USD ($)	Sep. 30, 2015 USD ($)
Operating Activities
Net loss	$ (97,469)	$ (41,419)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation	2,067	822
Depreciation and amortization	2,912	2,099
Impairment of goodwill and intangible assets	55,702
Income taxes	(506)	(694)
Change in fair value of contingent consideration	(261)	66
Changes in operating assets and liabilities:
Accounts receivable	3,497	(1,986)
Inventories	8,748	(4,093)
Income taxes	1,376	594
Prepaid expenses and other current assets	(1,475)	1,619
Accounts payable, accrued compensation and other liabilities	(1,155)	244
Provision for chargebacks	(208)	(296)
Deferred revenue	(3,425)	1,968
Net cash used in operating activities	(30,197)	(41,076)
Investing Activities
Purchases of property and equipment	(1,933)	(1,012)
Purchases of investments	(49,802)
Net cash used in investing activities	(51,735)	(1,012)
Financing Activities
Proceeds from exercise of stock options	2
Proceeds from long-term debt, net of issuance costs	18,038
Restricted cash	(400)
Payment from former parent upon spin-off, net of receivable	45,000
Net transfer from former parent, prior to spin-off	25,549	42,650
Contingent consideration payments		(678)
Net cash provided by financing activities	88,189	41,972
Increase (decrease) in cash and cash equivalents	6,257	(116)
Cash and cash equivalents at beginning of period	4,637	3,593
Cash and cash equivalents at end of period	10,894	$ 3,477
Supplemental disclosures:
Contribution receivable from former parent	20,000
Cash paid for interest	$ 261

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Unaudited) - 9 months ended Sep. 30, 2016 - USD ($) $ in Thousands	Total	Common Stock	Former Parent Investment in Subsidiary	Additional Paid-In Capital	Accumulated Deficit	Contribution Receivable from Former Parent	Accumulated Other Comprehensive Loss
Balance at Dec. 31, 2015	$ 88,618		$ 320,606		$ (231,988)
Capitalization upon spinoff	46,394	$ 20		$ 66,374		$ (20,000)
Capitalization upon spinoff (in shares)		20,229,849
Net transfers from former parent	24,155		(288,883)	81,050	231,988
Unrealized loss on available-for-sale investments	(17)						$ (17)
Common stock issued upon exercise of stock options	1			1
Common stock issued upon exercise of stock options (in shares)		6,675
Common stock issued upon vesting of restricted stock units	1			1
Common stock issued upon vesting of restricted stock units (in shares)		9,831
Stock-based compensation	2,067			2,067
Net loss for the period	(97,469)		(31,723)		(65,746)
Balance at Sep. 30, 2016	$ 63,750	$ 20	$ 0	$ 149,493	$ (65,746)	$ (20,000)	$ (17)
Balance (in shares) at Sep. 30, 2016		20,246,355

Nature of Business and Significant Accounting Changes

9 Months Ended

Sep. 30, 2016

Accounting Policies [Abstract]

Nature of Business and Significant Accounting Changes

Note 1. Nature of Business and Significant Accounting Changes

Organization and Basis of Presentation

Aptevo Therapeutics Inc. (Aptevo or the Company) is a biotechnology company focused on novel oncology and hematology therapeutics to meaningfully improve patients’ lives. On August 1, 2016 the Company became an independent publicly traded company through a pro-rata distribution of Aptevo’s common stock to Emergent BioSolutions Inc. (Emergent) stockholders. Each Emergent stockholder of record as of the close of business on August 1, 2016 received one share of Aptevo common stock for every two shares of Emergent common stock held on the record date. Aptevo’s common stock began “regular way” trading on the NASDAQ global stock market under the ticker symbol “APVO” on August 1, 2016.

In connection with the spin-off, on August 1, 2016, Aptevo and Emergent entered into a separation and distribution agreement as well as various other related agreements (collectively the Agreements) that govern the separation and the relationships between the parties going forward, including a transition services agreement, a manufacturing services agreement, an employee matters agreement, and a tax matters agreement. Prior to the separation, Aptevo was dependent upon Emergent for all of its working capital and financing requirements.

At the closing of the spin-off of Aptevo from Emergent, Emergent provided Aptevo cash in the amount of $45.0 million, along with a commitment in the form of a promissory note to provide another $20.0 million within six to twelve months after the separation. In addition, on August 4, 2016, we entered into a $35.0 million Credit and Security Agreement, or the Credit Agreement, by and among us and certain our subsidiaries as borrowers, MidCap Financial Trust, as agent, and the lenders from time to time party thereto. The Credit Agreement provides us with up to $35.0 million of available borrowing capacity, which will be available (subject to certain conditions) to us in two tranches of $20.0 million and $15.0 million, respectively, through August 31, 2017. See Note 6 — Debt.

The accompanying unaudited condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP). In management’s opinion, the unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited financial statements and include all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of the Company’s financial position.

Prior to August 1, 2016, the consolidated financial statements were prepared on a “carve-out” basis for the purpose of presenting Aptevo’s financial position, results of operations, and cash flows, and were derived from Emergent’s consolidated financial statements and accounting records. Aptevo did not operate as a standalone entity in the past and accordingly the selected financial data presented herein is not necessarily indicative of Aptevo’s future performance and does not reflect what Aptevo’s performance would have been had Aptevo operated as an independent publicly-traded company prior to August 1, 2016. The consolidated financial statements reflect Aptevo’s financial position, results of operations, and cash flows as a separately operated business in conformity with U.S. GAAP post the August 1, 2016 spin-off.

Prior to August 1, 2016, the consolidated financial statements included an allocation of certain assets and liabilities that have historically been held at the Emergent corporate level but which were specifically identifiable or allocable to Aptevo. All Aptevo intracompany transactions and accounts have been eliminated. All intercompany transactions between Aptevo and Emergent are considered to be effectively settled in the consolidated financial statements at the time the transaction is recorded. The total net effect of the settlement of these intercompany transactions is reflected in the consolidated statement of cash flows as a financing activity and in the consolidated balance sheet as a net investment from Emergent. As of August 1, 2016, in connection with the separation and distribution, Emergent’s investment in the Company’s business was redesignated as stockholder’s equity and allocated between common stock and additional paid-in capital based on the number of shares issued at the distribution date.

Prior to August 1, 2016, Aptevo’s consolidated financial statements included an allocation of expenses related to certain Emergent corporate functions, including senior management, legal, human resources, finance, information technology, and quality assurance. These expenses were allocated to Aptevo based on direct usage or benefit where identifiable, with the remainder allocated on a pro rata basis of expenses, headcount, square footage, or other measures. Aptevo considers the expense allocation methodology and results to be reasonable for all periods presented. However, the allocations may not be indicative of the actual expense that would have been incurred had Aptevo operated as an independent, publicly-traded company for the periods presented.

Prior to August 1, 2016, the income tax amounts in these consolidated financial statements were calculated based on a separate return methodology and presented as if Aptevo’s operations were a standalone taxpayer in each of its tax jurisdictions.

Principles of Consolidation

The consolidated financial statements include the accounts of the company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated.

Revenue Recognition

Aptevo recognizes revenue if four basic criteria have been met: (1) there is persuasive evidence of an arrangement, (2) delivery has occurred or services have been rendered, (3) the fee is fixed or determinable, and (4) collectability is reasonably assured. Where the revenue recognition criteria are not met, we defer the recognition of revenue by recording deferred revenue until such time as all criteria are met.

Chargebacks, Rebates, and other Discounts

Aptevo markets and sells its products through commercial wholesalers (direct customers) who purchase the products at a price referred to as the wholesale acquisition cost (WAC). Additionally, Aptevo may enter into separate agreements with indirect customers to acquire its products for a contracted price that is less than the product’s WAC. The indirect customers, such as group-purchasing organizations, physician practice-management groups and hospitals, continue to purchase Aptevo’s products from the wholesalers, but at their respective contractual prices. Per its wholesaler agreements, Aptevo guarantees to credit the wholesaler for the difference between the WAC and the indirect customers’ contracted price. This credit is referred to as a chargeback and revenues from product sales are recorded net of estimated chargebacks. Adjustments to the chargeback provisions are made periodically to reflect new facts and circumstances, therefore historical experience may not be indicative of current and/or future results.

All revenues from product sales are also recorded net of applicable allowances for sales and government rebates, special promotional programs, and discounts. These allowances are estimated based on historical payment experience, historical relationship to revenues, estimated customer inventory levels, contract terms, and actual discounts offered. In arriving at these estimates, Aptevo further utilizes information received from third parties including market data, inventory reports from major wholesalers, historical information and analysis. These estimates are subject to the inherent limitations of estimates that rely on third-party data, as certain third-party information may itself rely on estimates and reflect other limitations.

Collaborations

Revenue generating collaborative research and development agreements may contain one or more provisions including licensing, research services and milestone deliverables. Aptevo analyzes its multiple element revenue generating arrangements to determine whether the elements can be separated and accounted for individually as separate units of accounting. An item can generally be considered a separate unit of accounting if both of the following criteria are met: (1) the delivered item(s) has value to the customer on a standalone basis, and (2) if the arrangement includes a general right of return and delivery, the performance of the undelivered item(s) is considered probable and substantially in the control of Aptevo. Items that cannot be divided into separate units are consolidated with other units of accounting, as appropriate. Consideration to be received is allocated among the separate units based on each unit’s relative selling price and is then recognized when the appropriate revenue recognition criteria are met. Aptevo deems services to be rendered if no continuing obligation exists on the part of Aptevo.

Revenue associated with non-refundable upfront license fees that can be treated as a single unit of accounting is recognized when all ongoing obligations have been delivered. Revenue associated with non-refundable upfront license fees under arrangements where the license fees and research and development activities cannot be accounted for as separate units of accounting is deferred and recognized as revenue either on a straight-line basis over Aptevo’s continued involvement in the research and development process or based on the proportional performance of Aptevo’s expected future obligations under the contract.

Revenues from the achievement of research and development milestones, if deemed substantive, are recognized as revenue when the milestones are achieved and the milestone payments are due and collectible. Milestones are considered substantive if all of the following conditions are met: (1) the milestone is non-refundable, (2) achievement of the milestone was not reasonably assured at the inception of the arrangement, (3) substantive effort is involved to achieve the milestone and (4) the amount of the milestone payment appears reasonable in relation to the effort expended. If not deemed substantive, Aptevo recognizes such milestone as revenue on a percent of completion basis over the remaining expected term of continued involvement in the research and development process. Payments received in advance of revenue recognized are recorded as deferred revenue.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

Cash Equivalents

Cash equivalents are highly liquid investments with a maturity of 90 days or less at the date of purchase and include time deposits and investments in money market funds with commercial banks and financial institutions.

Investments

Investments are classified as available-for-sale and are carried at fair value. Unrealized gains and losses, if any, are reported as a separate component of shareholders’ equity. Amortization, accretion, interest and dividends, realized gains and losses and declines in value judged to be other-than-temporary are included in other income (expense). The cost of securities sold is based on the specific-identification method. Investments in securities with maturities of less than one year, or those for which management intends to use the investments to fund current operations, are included in current assets. We evaluate whether an investment is other-than-temporarily impaired based on the specific facts and circumstances. Factors that are considered in determining whether an other-than-temporary decline in value has occurred include: the market value of the security in relation to its cost basis; the financial condition of the investee; and the intent and ability to retain the investment for a sufficient period of time to allow for recovery in the market value of the investment.

Fair Value of Financial Instruments

The Company measures and records cash equivalents and investment securities considered available-for-sale at fair value in the accompanying financial statements. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability, an exit price, in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs.

The three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value include:

Level 1—Observable inputs for identical assets or liabilities such as quoted prices in active markets;

Level 2—Inputs other than quoted prices in active markets that are either directly or indirectly observable; and

Level 3—Unobservable inputs in which little or no market data exists, which are therefore developed by the Company’s management using estimates and assumptions that reflect those that a market participant would use.

The carrying amounts of the Company’s short-term financial instruments, which include cash and cash equivalents, accounts receivable and accounts payable, approximate their fair value due to their short maturities.

Accounts Receivable

When appropriate, Aptevo records an allowance for doubtful accounts based upon its assessment of collectability. Aptevo performs ongoing credit evaluations of its customers and generally does not require collateral. Aptevo recorded an allowance for doubtful accounts of $3.5 million in the fourth quarter of 2015 and $0.0 for the nine month periods ended September 30, 2016.

Concentrations of Credit Risk

Financial instruments that potentially subject Aptevo to concentrations of credit risk consist primarily of cash and cash equivalents, certain investments and accounts receivable. Aptevo places its cash and cash equivalents with high quality financial institutions and may maintain cash balances in excess of insured limits. Management believes that the financial risks associated with its cash and cash equivalents are minimal.

Inventories

Inventories, including purchased inventories, are stated at the lower of cost or market with cost being determined using a standard cost method, which approximates weighted-average cost. Average cost consists primarily of material, labor and manufacturing overhead expenses (including allocation of fixed production-overhead costs) and includes the services and products of third-party suppliers. Aptevo analyzes its inventory levels quarterly and writes down, in the applicable period, inventory that has become obsolete, inventory that has a cost basis in excess of its expected net realizable value and inventory in excess of expected customer demand. Aptevo also writes off, in the applicable period, the costs related to expired inventory.

Debt Issuance Costs

We defer costs related to debt issuance and amortize these cost to interest expense over the term of the debt, using the effective interest method. Debt issuance costs are presented in the balance sheet as a reduction of the carrying amount of the debt liability.

Property and Equipment

Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the following estimated useful lives:


Building improvements	10-39 years
Furniture and equipment	3-15 years
Software	3-7 years or product life
Leasehold improvements	Lesser of the asset life or the remaining lease term

Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is credited or charged to operations. Repairs and maintenance costs are expensed as incurred.

Income Taxes

Income taxes are accounted for using the liability method. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases and net operating loss and research and development tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which those temporary differences are expected to be recovered or settled.

Aptevo’s ability to realize deferred tax assets depends upon future taxable income as well as the limitations discussed below. For financial reporting purposes, a deferred tax asset must be reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax assets will not be realized prior to expiration. Aptevo considers future taxable income and ongoing tax planning strategies in assessing the need for valuation allowances. In general, if Aptevo determines that it is more likely than not to realize more than the recorded amounts of net deferred tax assets in the future, Aptevo will reverse all or a portion of the valuation allowance established against its deferred tax assets, resulting in a decrease to the provision for income taxes in the period in which the determination is made. Likewise, if Aptevo determines that it is not more likely than not to realize all or part of the net deferred tax asset in the future, Aptevo will establish a valuation allowance against deferred tax assets, with an offsetting increase to the provision for income taxes, in the period in which the determination is made.

Because tax laws are complex and subject to different interpretations, significant judgment is required. As a result, Aptevo makes certain estimates and assumptions, in (1) calculating Aptevo’s income tax expense, deferred tax assets and deferred tax liabilities, (2) determining any valuation allowance recorded against deferred tax assets and (3) evaluating the amount of unrecognized tax benefits, as well as the interest and penalties related to such uncertain tax positions. Aptevo’s estimates and assumptions may differ significantly from tax benefits ultimately realized.

Mergers and Acquisitions

In a business combination, the acquisition method of accounting requires that the assets acquired and liabilities assumed be recorded as of the date of the merger or acquisition at their respective fair values with limited exceptions. Assets acquired and liabilities assumed in a business combination that arise from contingencies are recognized at fair value if fair value can reasonably be estimated. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Accordingly, Aptevo may be required to value assets at fair value measures that do not reflect Aptevo’s intended use of those assets. Any excess of the purchase price (consideration transferred) over the estimated fair values of net assets acquired is recorded as goodwill. Transaction costs and costs to restructure the acquired company are expensed as incurred. The operating results of the acquired business are reflected in Aptevo’s consolidated financial statements after the date of the merger or acquisition

The fair values of intangible assets are determined utilizing information available near the merger or acquisition date based on expectations and assumptions that are deemed reasonable by management. Given the considerable judgment involved in determining fair values, Aptevo typically obtains assistance from third-party valuation specialists for significant items. The judgments made in determining estimated fair values assigned to assets acquired and liabilities assumed in a business combination, as well as asset lives, can materially affect Aptevo’s results of operations.

The fair values of identifiable intangible assets related to currently marketed products and product rights are primarily determined by using an "income approach" through which fair value is estimated based on each asset’s discounted projected net cash flows. Aptevo's estimates of net cash flows consider historical and projected pricing, margins and expense levels, the performance of competing products where applicable, relevant industry and therapeutic area growth drivers and factors, current and expected trends in technology and product life cycles, the time and investment that will be required to develop products and technologies, the ability to obtain marketing and regulatory approvals, the ability to manufacture and commercialize the products, the extent and timing of potential new product introductions by Aptevo’s competitors, and the life of each asset’s underlying patent, if any. The net cash flows are then probability-adjusted where appropriate to consider the uncertainties associated with the underlying assumptions, as well as the risk profile of the net cash flows utilized in the valuation. The probability-adjusted future net cash flows of each product are then discounted to present value utilizing an appropriate discount rate.

The fair values of identifiable intangible assets related to in-process research and development (“IPR&D”) are determined using an income approach, through which fair value is estimated based on each asset’s probability-adjusted future net cash flows, which reflect the different stages of development of each product and the associated probability of successful completion. The net cash flows are then discounted to present value using an appropriate discount rate. Amounts allocated to acquired IPR&D are capitalized and accounted for as indefinite-lived intangible assets. Upon successful completion of each project, Aptevo will make a separate determination as to the then useful life of the asset and begin amortization.

In-Process Research and Development and Long-lived Assets

Aptevo assesses IPR&D assets for impairment on an annual basis or more frequently if indicators of impairment are present. Aptevo’s annual assessment includes a comparison of the fair value of IPR&D assets to existing carrying value, and recognizes an impairment when the carrying value is greater than the determined fair value. Aptevo believes that the assumptions used in valuing the intangible and IPR&D assets are reasonable and are based upon its best estimate of likely outcomes of sales and clinical development. The underlying assumptions and estimates used to value these assets are subject to change in the future, and actual results may differ significantly from the assumptions and estimates. Aptevo has selected October 1 as its annual impairment test date for indefinite-lived intangible assets.

Aptevo assesses the recoverability of its long-lived assets or asset groups for which an indicator of impairment exists by determining whether the carrying value of such assets can be recovered through undiscounted future operating cash flows. If Aptevo concludes that the carrying value will not be recovered, Aptevo measures the amount of such impairment by comparing the fair value to the carrying value of the assets or asset groups. See Note 7 — Impairment of Intangible Assets, In Process Research and Development and Goodwill.

Goodwill

Aptevo assesses the carrying value of goodwill for impairment on an annual basis or whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. Aptevo utilizes either: (1) a two-step impairment test, which is a quantitative analysis, or (2) a step zero test, which is a qualitative analysis.

If Aptevo is required to do a two-step test, it would first compare the fair value of its reporting unit to the carrying value of the reporting unit. If the carrying value of the reporting unit exceeds its fair value, then the second step of the impairment test is performed in order to determine the implied fair value of the reporting unit’s goodwill. If the carrying value of the reporting unit’s goodwill exceeds its implied fair value, an impairment loss is recognized. Aptevo calculates the fair value of the reporting unit utilizing the income approach.

We generally base our measurement of fair value of reporting units on a blended analysis of the present value of future discounted cash flows and market valuation approach. The discounted cash flows model indicates the fair value of the reporting units based on the present value of the cash flows that we expect the reporting units to generate in the future. Our significant estimates in the discounted cash flows model include: our weighted average cost of capital; long-term rate of growth and profitability of our business; and working capital effects. The market valuation approach indicates the fair value of the business based on a comparison of the Company to comparable publicly traded firms in similar lines of business. Our significant estimates in the market approach model include identifying similar companies with comparable business factors such as size, growth, profitability, risk and return on investment and assessing comparable revenue and operating income multiples in estimating the fair value of the reporting units.

If Aptevo is not required to do a quantitative analysis, it will evaluate goodwill using the qualitative assessment method, which permits companies to qualitatively assess whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount. Aptevo considers developments in its operations, the industry in which it operates and overall macroeconomic factors that could have affected the fair value of the reporting unit since the date of the most recent quantitative analysis of the reporting unit’s fair value.

The determination of the fair value of a reporting unit is judgmental in nature and involves the use of significant estimates and assumptions. The estimates and assumptions used in calculating fair value include identifying future cash flows, which requires that Aptevo make a number of critical legal, economic, market and business assumptions that reflect best estimates as of the testing date. Aptevo’s assumptions and estimates may differ significantly from actual results, or circumstances could change that would cause Aptevo to conclude that an impairment now exists or that it previously understated the extent of impairment. See Note 7 — Impairment of Intangible Assets, In Process Research and Development and Goodwill.

Contingent Consideration

Aptevo records contingent consideration associated with sales-based royalties at fair value. The fair value model used to calculate this obligation is based on the income approach (a discounted cash flow model) that has been risk adjusted based on the probability of achievement of net sales and achievement of the milestones. The inputs Aptevo uses for determining the fair value of the contingent consideration associated with sales based royalties are Level 3 fair value measurements. Aptevo re-evaluates the fair value on a quarterly basis. Changes in the fair value can result from adjustments to the discount rates and updates in the assumed timing of or achievement of net sales. Any future increase in the fair value of the contingent consideration associated with sales based royalties are based on an increased likelihood that the underlying net sales will be achieved.

The associated payment or payments which will therefore become due and payable for sales based royalties will result in a charge to cost of product sales in the period in which the increase is determined. Similarly, any future decrease in the fair value of contingent consideration associated with sales based royalties will result in a reduction in cost of product sales.

Research and Development

Research and development costs are expensed as incurred. Research and development costs primarily consist of internal labor costs, fees paid to outside service providers and the costs of materials used in clinical trials and research and development. Other research and development expenses include facility, maintenance and related support expenses.

A substantial portion of Aptevo’s pre-clinical studies and all of its clinical studies have been performed by third-party contract research organizations (CRO). The Company reviews the activities performed by the CROs each period. For pre-clinical studies, the significant factors used in estimating accruals include the percentage of work completed to date and contract milestones achieved. For clinical study expenses, the significant factors used in estimating accruals include the number of patients enrolled and percentage of work completed to date. The Company’s estimates are highly dependent upon the timeliness and accuracy of the data provided by its CRO’s regarding the status of each program and total program spending and adjustments are made when deemed necessary.

Segment Reporting

The Company has determined that it operates in a single segment and has one reporting unit: the discovery, development, commercialization and sale of novel oncology and hematology therapeutics

New Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, “Revenue from Contracts with Customers (Topic 606).” ASU 2014-09 completes the joint effort by the FASB and International Accounting Standards Board (IASB) to improve financial reporting by creating common revenue recognition guidance for GAAP and International Financial Reporting Standards (IFRS). Subsequently, the FASB has issued several additional ASUs to clarify the implementation guidance on principal versus agent considerations, identifying performance obligations, assessing collectability, presentation of sales taxes and other similar taxes collected from customers, non-cash consideration, contract modifications and completed contracts at transition. These ASUs apply to all companies that enter into contracts with customers to transfer goods or services. These ASUs are effective for public entities for interim and annual reporting periods beginning after December 15, 2017. Early adoption is permitted, but not before interim and annual reporting periods beginning after December 15, 2016. Entities have the choice to apply these ASUs either retrospectively to each reporting period presented or by recognizing the cumulative effect of applying these standards at the date of initial application and not adjusting comparative information. Aptevo is are currently evaluating the requirements of these standards and have not yet determined the impact on its condensed consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” ASU 2016-02 requires lessees to recognize a lease liability and a right-of-use asset on the balance sheet and aligns many of the underlying principles of the new lessor model with those in Accounting Standards Codification Topic 606, Revenue from Contracts with Customers. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. Aptevo is currently evaluating the requirements of ASU 2016-02 and have not yet determined the impact on its condensed consolidated financial statements.

In March 2016, the FASB issued ASU 2016-09, “Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” ASU 2016-09 simplifies the accounting for share-based payment award transactions including the financial statement presentation of excess tax benefits and deficiencies, classification of awards as either equity or liabilities, accounting for forfeitures and classification on the statement of cash flows. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted. Aptevo is currently evaluating the requirements of ASU 2016-09 and have not yet determined the impact on its condensed consolidated financial statements.

In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments,” which clarifies the classification and presentation of eight specific cash flow issues in the statement of cash flows. This standard is effective beginning January 1, 2018, with early adoption permitted. The new standard requires a retrospective transition. We are currently evaluating the impact of the new standard on our consolidated financial statements.

MorphoSys Collaboration Agreement

9 Months Ended

Sep. 30, 2016

Organization Consolidation And Presentation Of Financial Statements [Abstract]

MorphoSys Collaboration Agreement

Note 2. MorphoSys Collaboration Agreement

In August 2014, Aptevo entered into a collaboration agreement with MorphoSys AG (MorphoSys Agreement) for the joint worldwide development and commercialization of MOR209/ES414, a targeted immunotherapeutic protein, which activates host T-cell immunity specifically against cancer cells expressing prostate specific membrane antigen, an antigen commonly overexpressed on prostate cancer cells. MOR209/ES414 was constructed using Aptevo’s proprietary ADAPTIR™ platform technology.

In accordance with the initial terms of the MorphoSys Agreement, Aptevo received a nonrefundable $20.0 million upfront payment and could receive up to $163.0 million in additional contingent payments, comprised of up to $80.0 million and up to $83.0 million, respectively, due upon the achievement of specified development and regulatory milestones. MorphoSys and Aptevo jointly agreed to fund further development of MOR209/ES414, with Aptevo responsible for 36% of the total development costs and MorphoSys responsible for the remainder, with Aptevo’s funding requirement capped at $186.0 million. Aptevo’s development effort includes the performance of non-clinical, clinical, manufacturing and regulatory activities. Aptevo retains commercialization rights in the U.S. and Canada, with a tiered royalty obligation to MorphoSys, ranging from mid-single digit up to 20% of sales. MorphoSys has worldwide commercialization rights excluding the U.S. and Canada, with a low single digit royalty obligation to Aptevo.

In December 2015, after a joint review of data from the ongoing Phase 1 dose escalation study of MOR209/ES414 in prostate cancer patients, Aptevo and MorphoSys decided to adjust the dosing regimen and administration of MOR209/ES414. Patients receiving weekly doses of MOR209/ES414 developed antibodies against the drug; this is called anti-drug antibodies, or ADA. ADA developed in most patients including those receiving the maximum tolerated dose of drug which could be given safely on a weekly basis. These antibodies bind to the drug and reduce the concentration of active MOR209/ES414 in the blood and thus could potentially reduce its efficacy. However, no safety issues related to the development of ADA were observed.

The cause of these antibodies is unclear but could be due to the weekly administration of the drug. Hence, the protocol was amended to a continuous intravenous infusion as a way to administer higher levels of drug and prevent the development of ADA. Aptevo plans to continue the current clinical trial under an amended protocol with recruitment expected to start in the second half of 2016. As a result of the required dosing regimen change and the impact to the overall development timeline and technical risk, our co-development agreement with MorphoSys was restructured. In December 2015, Aptevo and MorphoSys amended the collaboration agreement to: (1) decrease the additional contingent payments due to Aptevo upon the achievement of specified development and regulatory milestones of up to $32.5 million and up to $41.5 million, respectively, (2) change the total funding requirement cap for Aptevo to up to approximately $250.0 million and (3) change the jointly funded development cost allocation to the following:

•

2016: Aptevo is responsible for 75%; MorphoSys responsible for 25%

•

2017-2018: Aptevo is responsible for 49%; MorphoSys responsible for 51%

•

2019 and beyond: Aptevo is responsible for 36%; MorphoSys responsible for 64%

In addition, the termination provisions under the MorphoSys collaboration agreement were amended to give MorphoSys a one-time right to terminate the collaboration agreement, without notice, at either the end of 2016 or after review of clinical data from the first six patients enrolled and dosed in the Phase 1 trial.

Aptevo evaluated the MorphoSys Agreement and determined that it was a revenue arrangement with multiple deliverables or performance obligations. Aptevo determined there were two units of accounting under the MorphoSys Agreement: (1) the delivered license to further develop and commercialize MOR209/ES414, and (2) undelivered items related to development services. Aptevo determined that the license had standalone value as the drug candidate has been: (1) developed and is currently Phase 1 clinical trial ready, (2) MorphoSys possesses the knowledge, technology, skills, experience and infrastructure necessary to complete all further development of the drug through commercialization, and (3) MorphoSys has the right to further sublicense the product. In 2014, Aptevo allocated the $20.0 million upfront payment to the two units of accounting using the relative selling price method. Aptevo determined the estimated selling price for the license using the income approach and an appropriate discount rate. The estimated selling price includes unobservable inputs (Level 3), such as estimates of revenues and operating margins; the time and resources needed to complete the development and approval of the product candidate; and the risk related to the viability of and potential for alternative treatments. Aptevo determined the estimated selling price of the development services unit of accounting based on the estimated number of full-time equivalent personnel at the contractual rate as defined in the MorphoSys Agreement, whose rates and terms approximate those of other Emergent or Aptevo service related contracts and those observed generally through other collaboration negotiations. The allocation resulted in $15.3 million of the $20.0 million upfront payment being allocated to the license and $4.7 million being allocated to the development services. Aptevo determined the license fee unit of accounting was delivered and completed on the date the MorphoSys Agreement was executed and thus recognized $15.3 million of license revenue in August 2014. Revenue related to the development services is recognized as the services are performed with $0.0 million and $0.1 million, respectively, recognized in the nine months ended September 30, 2016 and 2015. The current estimated service period for the undelivered development services under the MorphoSys Agreement is through 2023.

Further, Aptevo determined that contingent payments for the achievement of the development and regulatory milestones are substantive milestones and will be accounted for as revenue in the period in which the milestones are achieved. Aptevo received a $5.0 million milestone payment from MorphoSys reflecting the initiation of a Phase I clinical study to evaluate the safety, tolerability, and clinical activity of MOR209/ES414 in patients with metastatic castration-resistant prostate cancer. Aptevo recognized this substantive milestone achievement payment as research and development revenue during the six months ended June 30, 2015.

The MorphoSys Agreement provides for the sharing of development and clinical costs related to MOR209/ES414. In the event Aptevo’s share of the total cost incurred for a given quarter exceeds its pro rata limit, Aptevo records a receivable from MorphoSys for the excess and reduces research and development expense by this amount. For the three and nine months ended September 30, 2016 Aptevo recorded a reduction to research and development expense of $0.0 million and $0.1 million, respectively. For the three and nine months ended September 30, 2015 Aptevo recorded a reduction to research and development expense of $1.0 million and $3.7 million, respectively.

As of September 30, 2016, the MorphoSys Agreement related accounts receivable balance was $0.1 million and the related total deferred revenue balance was $3.7 million.

Fair Value Measurements

9 Months Ended

Sep. 30, 2016

Fair Value Disclosures [Abstract]

Fair Value Measurements

Note 3. Fair Value Measurements

The Company’s estimates of fair value for financial assets and financial liabilities are based on the framework established in the fair value accounting guidance. The framework is based on the inputs used in valuation, gives the highest priority to quoted prices in active markets and requires that observable inputs be used in the valuations when available. The disclosure of fair value estimates in the fair value accounting guidance hierarchy is based on whether the significant inputs into the valuation are observable. In determining the level of the hierarchy in which the estimate is disclosed, the highest priority is given to unadjusted quoted prices in active markets and the lowest priority to unobservable inputs that reflect the Company’s significant market assumptions. The level in the fair value hierarchy within which the fair value measurement is reported is based on the lowest level input that is significant to the measurement in its entirety. The three levels of the hierarchy are as follows:

Level 1—Observable inputs for identical assets or liabilities such as quoted prices in active markets;

Level 2—Inputs other than quoted prices in active markets that are either directly or indirectly observable; and

The Company held no financial assets measured at fair value as of December 31, 2015. The Company’s financial assets measured at fair value consisted of the following as of September 30, 2016:

	September 30, 2016
(in thousands)	Level 1		Level 2		Level 3		Total
Financial Assets:
Money market funds	$	5,210	$	—	$	—	$	5,210
Corporate bonds		—		37,864		—		37,864
US government and agency debt securities		—		11,921		—		11,921
Total assets	$	5,210	$	49,785	$	—	$	54,995

If quoted market prices in active markets for identical assets are not available to determine fair value, then the Company uses quoted prices of similar instruments and other significant inputs derived from observable market data obtained from third-party data providers. These investments are included in Level 2 and consist of debt securities of U.S government agencies and corporate bonds. There were no transfers between Levels 1 and 2 during the three and six-month period ended June 30, 2016.

The following table is a reconciliation of the beginning and ending balance of the liabilities (contingent consideration) measured at fair value using significant unobservable inputs (Level 3) during the nine months ended September 30, 2016. The royalty agreement associated with HepaGam expired on June 30, 2016, and no future royalty payments are expected on sales after that date. The remaining liability is due to accrued but unpaid royalties.

(in thousands)
Balance at December 31, 2015	$	444
Expense included in earnings		19
Settlements		(280	)
Balance at September 30, 2016	$	183

- 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

Investments

9 Months Ended

Sep. 30, 2016

Investments Debt And Equity Securities [Abstract]

Investments

Note 4. Investments

Investments are classified as available-for-sale securities and are carried at fair value with unrealized temporary holding gains and losses excluded from net income or loss and reported in other comprehensive income or loss and also as a net amount in accumulated other comprehensive income or loss until realized. Available-for-sale securities are written down to fair value through income whenever it is necessary to reflect other than temporary impairments. The Company determined that the unrealized losses on its marketable securities as of September 30, 2016 were temporary in nature, and the Company currently does not intend to sell these securities before recovery of their amortized cost basis. All short-term investments are limited to a final maturity of less than one year from the reporting date.

	September 30, 2016
(in thousands)	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses			Estimated Fair Value
Cash equivalents:
Money market fund	$	5,210	$	—	$	—		$	5,210
Total cash equivalents	$	5,210	$	—	$	—		$	5,210

Short-term investments:
Corporate bonds	$	37,871	$	1	$	(6	)	$	37,864
US government and agency debt securities		11,937		2		(14	)		11,921
Total short-term investments	$	49,808	$	3	$	(20	)	$	49,785

Inventories

9 Months Ended

Sep. 30, 2016

Inventory Disclosure [Abstract]

Inventories

Note 5. Inventories

Inventories consist of the following:

	September 30,		December 31,
(in thousands)	2016		2015
Raw materials and supplies	$	4,644	$	6,520
Work-in-process		1,652		4,730
Finished goods		5,278		9,072
Total inventories	$	11,574	$	20,322

CMC ICOS Biologics, Inc., (CMC), is the exclusive manufacturer of bulk drug substance for the IXINITY product. During 2015, Aptevo ordered nine manufacturing lots of bulk drug substance from CMC. CMC has successfully manufactured and released only one of the nine lots of bulk drug substance ordered by Aptevo. On October 4, 2016 we provided a Notice of Interruption in Manufacturing (Notice) to the United States Food and Drug Administration (FDA) notifying the FDA of a potential interruption in the supply of IXINITY® coagulation factor IX (recombinant). The supply interruption relates to an ongoing challenge with the manufacture of bulk drug substance for IXINITY that meets release specifications for the final drug product. As part of the Notice, Aptevo submitted a proposal to the FDA seeking approval for a proposed mitigation plan aimed at ensuring the continued supply of IXINITY to patients. FDA has denied our proposal and therefore we anticipate that there will be a supply interruption of the 1500IU assay in December and the remaining dosage forms of IXINITY in January 2017. Such a supply shortage of IXINITY will adversely affect its sales, and could adversely affect its market position and commercial viability.

Due to the ongoing challenges with the manufacture of our IXINITY product that meets release specifications for the final drug product, in the third quarter of 2016, we wrote off approximately $2.9 million in unsaleable IXINITY inventory that was in the process of being manufactured. This cost is included in cost of product sales.

Debt	9 Months Ended
Debt	Sep. 30, 2016
Debt Disclosure [Abstract]
Debt	Note 6. Debt Credit Facility On August 4, 2016, we entered into a $35.0 million Credit and Security Agreement (the Credit Agreement), by and among Aptevo and certain subsidiaries of Aptevo as borrowers, MidCap Financial Trust, as agent, and the lenders from time to time party thereto. The Credit Agreement provides us with up to $35.0 million of available borrowing capacity, available (subject to certain conditions) in two tranches of $20.0 million and $15.0 million, respectively, through August 31, 2017. The loan repayment will include interest (no principal) through August 2018. Commencing in August 2018, the payments will include principal and interest and will be repaid in full on February 1, 2021 (54 months). Amounts drawn under the Credit Agreement bear interest at a rate of LIBOR plus 7.60% per annum. The first tranche of $20.0 million was funded on the closing date of the Credit Agreement with the second tranche of $15.0 million will be available (subject to certain conditions) following the date Aptevo and its subsidiaries: (1) achieve net commercial product revenue of $40.0 million on a trailing twelve-month basis, and (2) receive an additional $20.0 million in cash from Emergent. Emergent’s promise to pay this $20.0 million in cash is evidenced by a non-negotiable, unsecured promissory note issued to Aptevo from Emergent. The Credit Agreement contains customary representations and warranties and customary affirmative and negative covenants, in each case applicable to us and our subsidiaries. The negative covenants include restrictions on, among other things, indebtedness, liens, dividends and other distributions, repayment of subordinated indebtedness, mergers, dispositions, investments (including licensing), acquisitions, transactions with affiliates and modification of organizational documents or certain other agreements. The Credit Agreement contains financial covenants that require us and our subsidiaries to maintain increasing minimum net commercial product revenue for each twelve-month period ending on the last day of each calendar quarter, commencing with the twelve-month period ending September 30, 2016. The Credit Agreement also includes provision related to events of default and occurrence of material adverse effect. The occurrence of an event of default could result in the acceleration of the Credit Agreement. There was no event of default under the Credit Agreement as of September 30, 2016. The Credit Agreement also includes customary events of default, including, among other things, failure to pay principal or interest due under the Credit Agreement, default of covenants, a cross-default on our or our subsidiary’s material indebtedness, breach of material contracts by us or our subsidiaries, or commencement of liquidation, reorganization or similar relief. This and further obligations under the Credit Agreement are secured by all of our assets other than: (1) certain voting shares of excluded subsidiaries, (2) any lease, license or other contract where the grant of a security interest would constitute a default, be prohibited by applicable law, or will require certain third-party consents, and (3) intellectual property (except to the extent necessary to have a lien on such intellectual property in order to have a lien on cash and other proceeds arising out of or derived from such intellectual property). The related financing documents contain: (1) a customary agency fee, (2) an exit fee of up to 5.75% of the aggregate principal amount under the Credit Agreement for repayment or prepayment other than scheduled amortization payments and the final payment of principal and (3) a prepayment fee of up to 4% of the amount prepaid for the first year, decreasing over time, for any amounts prepaid prior to the maturity date, whether voluntary or by reason of the occurrence of an event of default or acceleration of the loan, other than certain mandatory prepayments. The obligations of Aptevo and the other borrowers under the Credit Agreement are secured by all of their assets other than (1) certain voting shares of excluded subsidiaries of Aptevo, (2) any lease, license or other contract where the grant of a security interest would constitute a default, be prohibited by applicable law, or will require certain third-party consents and (3) intellectual property of Aptevo (except to the extent necessary to have a lien on such intellectual property in order to have a lien on cash and other proceeds arising out of or derived from such intellectual property).

Impairment of Intangible Assets, In-Process Research and Development and Goodwill	9 Months Ended
	Sep. 30, 2016
Goodwill And Intangible Assets Disclosure [Abstract]
Impairment of Intangible Assets, In-Process Research and Development and Goodwill	Note 7. Impairment of Intangible Assets, In-Process Research and Development and Goodwill During the period between the spin off date and September 30, 2016, we experienced a significant decline in our stock price. Based on this, we concluded that a sufficient indicator existed to require us to perform an interim assessment of goodwill and indefinite-lived intangible assets as of September 30, 2016. We performed an interim first step of our impairment assessment and determined there was a potential impairment of goodwill. Therefore, we performed the second step of the assessment in which we compared the implied fair value of goodwill to the book value of that goodwill. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. That is, the estimated fair value of the business is allocated to all of the assets and liabilities as if the business had been acquired in a business combination and the estimated fair value of the business was the purchase price paid. If the carrying amount goodwill exceeds the implied fair value, an impairment loss is recognized in an amount equal to that excess. We measured the fair value of both our indefinite-lived and definite lived intangible assets using accepted valuation techniques. The significant estimates used included our weighted average cost of capital, long-term rate of growth and profitability of our business, and working capital effects. Our assumptions are based on actual historical performance, expected results after commercial launch of our otlertuzumab product, and implied risk premiums based on market prices of our equity and debt as of the assessment date. To validate the reasonableness of the fair values, we reconciled the aggregate fair values of the business determined in step one to the enterprise market capitalization. Enterprise market capitalization includes, among other factors, the market capitalization of our stock and an acquisition premium based on historical data from acquisitions within the same or similar industries. In performing the reconciliation, we used the market value of our stock price, the stock price on the valuation date and considered such other quantitative and qualitative factors we considered relevant. This assessment resulted in the recognition in the third quarter of 2016 of a loss on impairment of in process research and development costs related to our otlertuzumab candidate of approximately $41.8 million and $13.9 million of goodwill. As evidenced by a significant decline in our stock price, we determined that the adverse change in the business climate discussed above was an indicator requiring the testing of our long-lived assets for recoverability and performed this test as of September 30, 2016, prior to completing the tests above. We tested the long-lived assets for recoverability based on a comparison of the respective aggregate values of their undiscounted cash flows to the respective carrying values. The results of the evaluation indicated that the carrying values of the related assets were recoverable.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

+ References + Details

Net Loss Per Share

9 Months Ended

Sep. 30, 2016

Earnings Per Share [Abstract]

Net Loss Per Share

Note 8. Net Loss per Share

Net loss per share is calculated by dividing the net loss of the Company by the number of weighted shares outstanding on September 30, 2016, and the number of shares issued during the spin-off for prior periods. Prior to the spin-off, Aptevo did not operate as a separate entity and as a result did not have any common stock outstanding other than 1,000 shares held by Emergent. The calculation of basic and diluted net loss per share assumes that the 20,229,849 ordinary shares issued to Aptevo stockholders in connection with the spin-off were outstanding from the beginning of the periods presented. Diluted earnings per share is calculated using the weighted average number of common shares outstanding plus dilutive common stock equivalents outstanding during the period. Common stock equivalents are excluded for the three and nine month periods ended September 30, 2016 and 2015, since the effect is anti-dilutive due to the Company’s net losses. Common stock equivalents include stock options and unvested RSUs.

The following table represents all potentially dilutive shares, which were all anti-dilutive and therefore excluded from the calculation of diluted net loss per share:

	As of September 30,
(in thousands, except for per share amounts)	2016
Outstanding options to purchase common stock		2,053
Unvested RSUs		3,324

At December 31, 2015, no options or RSU’s were outstanding.

Equity

9 Months Ended

Sep. 30, 2016

Equity [Abstract]

Equity

Note 9. Equity

Capitalization Upon Spin-off

On August 1, 2016, in connection with the spin-off of the Company from Emergent, we issued 20.2 million shares to Emergent shareholders and recorded a contribution from Emergent of $46.4 million, which included a one-time payment of $45.0 million, and a working capital reimbursement for outstanding payments of $1.4 million, which we expect to receive by December 31, 2016. In addition, we recorded a promissory note to receive $20.0 million within six to twelve months, as well as recording a net transfer from Emergent of $24.2 million, which represents cash and non-cash activity between Emergent and the Company prior to the spin-off.

Converted Equity Awards Incentive Plan

The Company had no stock-based compensation plans prior to spin off from Emergent; however certain Aptevo employees participated in Emergent’s stock-based compensation plans (Emergent Plans), which provided for the grants of stock options and restricted stock units (RSUs). The expense associated with Aptevo employees who participated in the Emergent Plans was allocated to the Company in the accompanying Combined Condensed Statements of Operations for the associated periods prior to the spin off.

In connection with the spin off and the employee matters agreement, the Company adopted the Converted Equity Awards Incentive Plan (the Converted Plan) and outstanding equity awards of Emergent held by Aptevo employees (the Converted Awards) were converted into or replaced with equity awards of Aptevo (the Conversion Awards) under the Converted Plan and were adjusted to maintain the economic value before and after the distribution date using the relative fair market value of the Emergent and Aptevo common stock based on the closing prices as of August 1, 2016. There was no significant incremental stock-based compensation expense recorded as a result of the equity award conversion. A total of 1.3 million shares of Aptevo common stock have been authorized for issuance under the Converted Plan.

2016 Stock Incentive Plan

On August 1, 2016, the Company adopted the 2016 Stock Incentive Plan (2016 SIP). A total of 3.1 million shares of Aptevo common stock have been authorized for issuance under the 2016 SIP in the form of incentive stock options.

Stock options under the 2016 SIP generally vest pro rata over a three-year period and terminate 7 to 10 years from the grant date, though the specific terms of each grant are determined individually. The Company’s executive officers and certain other employees may be awarded options with different vesting criteria, and options granted to non-employee directors also vest over a three-year period. Option exercise prices for new options granted by the Company equal the closing price of the Company’s common stock on the NASDAQ global stock market on the date of grant, while options issued as Conversion Awards were priced according to the Converted Plan.

RSUs issued under the 2016 SIP or as part of the Converted Plan provide for the issuance of a share of the Company’s common stock at no cost to the holder. RSUs granted to employees under the 2016 SIP generally provide for time-based vesting over an eighteen-month period, although certain employees may be awarded RSUs with different time-based vesting criteria. Prior to vesting, RSUs granted under the Stock Plan do not have dividend equivalent rights, do not have voting rights and the shares underlying the RSUs are not considered issued or outstanding.

The equity compensation awards granted by the Company generally vest only if the employee is employed by the Company (or in the case of directors, the director continues to serve on the Board) on the vesting date.

Issuance of Shares

When options are exercised or RSU’s are converted, it is the Company’s policy to issue new shares.

Stock-Based Compensation Expense

Stock-based compensation expense includes amortization of stock options and restricted stock units granted to employees and non-employees and has been reported in our Condensed Consolidated Statements of Operation and Comprehensive Loss as follows:

	September 30, 2016				September 30, 2015
(in thousands)	Three Months		Nine Months		Three Months		Nine Months
Research and development	$	1,027	$	1,761	$	281	$	822
General and administrative		306		306		—		—
Total stock-based compensation expense	$	1,333	$	2,067	$	281	$	822

The Company accounts for stock-based compensation by measuring the cost of employee services received in exchange for all equity awards granted based on the fair value of the award as of the grant date. The Company recognizes the compensation expense over the requisite service period, which is generally the vesting period.

Stock Options

Aptevo utilizes the Black-Scholes valuation model for estimating the fair value of all stock options granted. Set forth below are the assumptions used in valuing the stock options granted:

	September 30, 2016
	Three Months		Nine Months
Expected dividend yield		0%		0%
Expected volatility		75%		75%
Risk-free interest rate		1.00%		1.00%
Expected average life of options	3 years		3 years

Management applied an estimated forfeiture rate for the three and nine month periods of 10%.

The following is a summary of option activity for the nine months ended September 30, 2016:

	Number of Shares			Weighted- Average Exercise Price		Aggregate Intrinsic Value
Outstanding Aptevo Options at December 31, 2015		—		$	—	$	—
Aggregate impact of conversion related to spin-off		1,661,563			2.49		203,644
Granted		387,975			2.94		36,858
Exercised		(6,675	)		2.18		(7,062	)
Outstanding at September 30, 2016		2,042,863		$	2.58	$	233,440
Exercisable at September 30, 2016		461,096		$	2.29	$	126,319

As of September 30, 2016, we had $0.9 million of unrecognized compensation expense related to options expected to vest over a weighted average period of 2.14 years. The weighted average remaining contractual life of exercisable options is 6.4 years.

The aggregate intrinsic value in the table above represents the total pretax intrinsic value (the difference between the closing stock price of Aptevo’s common stock on the last trading day of the third quarter of 2016 and the exercise price, multiplied by the number of in the money options) that would have been received by the option holders had all the option holders exercised their options on September 30, 2016. The amount of aggregate intrinsic value will change based on the price of Aptevo’s common stock.

Restricted Stock Units

The following is a summary of restricted stock activity for the nine months ended September 30, 2016:

	Number of Units			Weighted Average Fair Value per Unit		Aggregate Fair Value
Outstanding Aptevo RSU's at December 31, 2015		—		$	—	$	—
Aggregate impact of conversion related to spin-off		1,122,179			2.76
Granted		2,115,772			2.94
Converted		(15,051	)		2.65
Outstanding at September 30, 2016		3,222,900		$	2.88	$	8,250,624
Expected to Vest		2,888,726		$	2.88	$	7,395,139

As of September 30, 2016, we had $6.7 million of unrecognized compensation expense related to RSU’s expected to vest over a period of 1.5 years. The weighted average remaining contractual life of exercisable RSU’s is 3.5 years.

The fair value of each RSU has been determined to be the closing trading price of the Company’s common shares on the date of grant as quoted in NASDAQ Global Market.

Nature of Business and Significant Accounting Changes (Policies)

9 Months Ended

Sep. 30, 2016

Accounting Policies [Abstract]

Principles of Consolidation

The consolidated financial statements include the accounts of the company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated.

Revenue Recognition

Chargebacks, Rebates, and other Discounts

Fair Value of Financial Instruments

The three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value include:

Level 1—Observable inputs for identical assets or liabilities such as quoted prices in active markets;

Level 2—Inputs other than quoted prices in active markets that are either directly or indirectly observable; and

Accounts Receivable

Concentrations of Credit Risk

Inventories

Debt Issuance Costs

Property and Equipment

Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the following estimated useful lives:


Building improvements	10-39 years
Furniture and equipment	3-15 years
Software	3-7 years or product life
Leasehold improvements	Lesser of the asset life or the remaining lease term

Income Taxes

Mergers and Acquisitions and Contingent Consideration

Mergers and Acquisitions

Contingent Consideration

In-Process Research and Development and Long-lived Assets

Goodwill

Research and Development

Segment Reporting

The Company has determined that it operates in a single segment and has one reporting unit: the discovery, development, commercialization and sale of novel oncology and hematology therapeutics

New Accounting Pronouncements

Nature of Business and Significant Accounting Changes (Tables)

9 Months Ended

Sep. 30, 2016

Accounting Policies [Abstract]

Schedule of Estimated Useful Lives of Property and Equipment

Depreciation is computed using the straight-line method over the following estimated useful lives:


Building improvements	10-39 years
Furniture and equipment	3-15 years
Software	3-7 years or product life
Leasehold improvements	Lesser of the asset life or the remaining lease term

Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2016

Fair Value Disclosures [Abstract]

Summary of Financial Assets Measured at Fair Value

The Company’s financial assets measured at fair value consisted of the following as of September 30, 2016

	September 30, 2016
(in thousands)	Level 1		Level 2		Level 3		Total
Financial Assets:
Money market funds	$	5,210	$	—	$	—	$	5,210
Corporate bonds		—		37,864		—		37,864
US government and agency debt securities		—		11,921		—		11,921
Total assets	$	5,210	$	49,785	$	—	$	54,995

Summary of Reconciliation of Liabilities Measured at Fair Value Using Significant Unobservable Inputs (Level 3)

(in thousands)
Balance at December 31, 2015	$	444
Expense included in earnings		19
Settlements		(280	)
Balance at September 30, 2016	$	183

Investments (Tables)

9 Months Ended

Sep. 30, 2016

Investments Debt And Equity Securities [Abstract]

Schedule of short-term investments

All short-term investments are limited to a final maturity of less than one year from the reporting date.

	September 30, 2016
(in thousands)	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses			Estimated Fair Value
Cash equivalents:
Money market fund	$	5,210	$	—	$	—		$	5,210
Total cash equivalents	$	5,210	$	—	$	—		$	5,210

Short-term investments:
Corporate bonds	$	37,871	$	1	$	(6	)	$	37,864
US government and agency debt securities		11,937		2		(14	)		11,921
Total short-term investments	$	49,808	$	3	$	(20	)	$	49,785

- Definition

Tabular disclosure of available-for-sale securities which includes, but is not limited to, changes in the cost basis and fair value, fair value and gross unrealized gain (loss), fair values by type of security, contractual maturity and classification, amortized cost basis, contracts to acquire securities to be accounted for as available-for-sale, debt maturities, transfers to trading, change in net unrealized holding gain (loss) net of tax, continuous unrealized loss position fair value, aggregate losses qualitative disclosures, other than temporary impairment (OTTI) losses or other disclosures related to available for sale securities.

+ References + Details

Inventories (Tables)

9 Months Ended

Sep. 30, 2016

Inventory Disclosure [Abstract]

Schedule of Inventories

Inventories consist of the following:

	September 30,		December 31,
(in thousands)	2016		2015
Raw materials and supplies	$	4,644	$	6,520
Work-in-process		1,652		4,730
Finished goods		5,278		9,072
Total inventories	$	11,574	$	20,322

Net Loss Per Share (Tables)

9 Months Ended

Sep. 30, 2016

Earnings Per Share [Abstract]

Summary of Potentially Dilutive Shares Excluded from Calculation of Net Loss Per Share

The following table represents all potentially dilutive shares, which were all anti-dilutive and therefore excluded from the calculation of diluted net loss per share:

	As of September 30,
(in thousands, except for per share amounts)	2016
Outstanding options to purchase common stock		2,053
Unvested RSUs		3,324

Equity (Tables)

9 Months Ended

Sep. 30, 2016

Equity [Abstract]

Summary of Stock-based Compensation Expense Includes Amortization of Stock Options and Restricted Stock Units Granted

	September 30, 2016				September 30, 2015
(in thousands)	Three Months		Nine Months		Three Months		Nine Months
Research and development	$	1,027	$	1,761	$	281	$	822
General and administrative		306		306		—		—
Total stock-based compensation expense	$	1,333	$	2,067	$	281	$	822

Assumptions used in Valuing the Stock Options Granted under Black-Scholes Valuation Model

Aptevo utilizes the Black-Scholes valuation model for estimating the fair value of all stock options granted. Set forth below are the assumptions used in valuing the stock options granted:

	September 30, 2016
	Three Months		Nine Months
Expected dividend yield		0%		0%
Expected volatility		75%		75%
Risk-free interest rate		1.00%		1.00%
Expected average life of options	3 years		3 years

Summary of Stock Option Activity

The following is a summary of option activity for the nine months ended September 30, 2016:

	Number of Shares			Weighted- Average Exercise Price		Aggregate Intrinsic Value
Outstanding Aptevo Options at December 31, 2015		—		$	—	$	—
Aggregate impact of conversion related to spin-off		1,661,563			2.49		203,644
Granted		387,975			2.94		36,858
Exercised		(6,675	)		2.18		(7,062	)
Outstanding at September 30, 2016		2,042,863		$	2.58	$	233,440
Exercisable at September 30, 2016		461,096		$	2.29	$	126,319

Summary of Restricted Stock Activity

The following is a summary of restricted stock activity for the nine months ended September 30, 2016:

	Number of Units			Weighted Average Fair Value per Unit		Aggregate Fair Value
Outstanding Aptevo RSU's at December 31, 2015		—		$	—	$	—
Aggregate impact of conversion related to spin-off		1,122,179			2.76
Granted		2,115,772			2.94
Converted		(15,051	)		2.65
Outstanding at September 30, 2016		3,222,900		$	2.88	$	8,250,624
Expected to Vest		2,888,726		$	2.88	$	7,395,139

Nature of Business and Significant Accounting Changes - Additional Information (Details)		1 Months Ended	9 Months Ended	12 Months Ended
	Aug. 02, 2016	Aug. 31, 2016 USD ($)	Sep. 30, 2016 USD ($) Segment Unit	Dec. 31, 2015 USD ($)	Aug. 04, 2016 USD ($)
Nature Of Business [Line Items]
Spin off transaction separation distribution agreement date			Aug. 01, 2016
Cash received upon spin-off		$ 45,000,000	$ 45,000,000
Cash funding committed by Emergent in connection with spin-off			20,000,000
Maximum borrowing capacity					$ 35,000,000
Allowance for doubtful accounts			$ 0	$ 3,500,000
Number of operating segment \| Segment			1
Number of reporting unit \| Unit			1
Credit Facility First Tranche
Nature Of Business [Line Items]
Maximum borrowing capacity					20,000,000
Credit Facility Second Tranche
Nature Of Business [Line Items]
Maximum borrowing capacity					$ 15,000,000
Emergent
Nature Of Business [Line Items]
Business close of date			Aug. 01, 2016
Emergent \| Common Stock
Nature Of Business [Line Items]
Ratio of stock received by Emergent’s shareholders	0.5

Nature of Business and Significant Accounting Changes - Schedule of Estimated Useful Lives of Property and Equipment (Details)	9 Months Ended
	Sep. 30, 2016
Building Improvements \| Minimum
Property Plant And Equipment [Line Items]
Estimated useful lives	10 years
Building Improvements \| Maximum
Property Plant And Equipment [Line Items]
Estimated useful lives	39 years
Furniture and Equipment \| Minimum
Property Plant And Equipment [Line Items]
Estimated useful lives	3 years
Furniture and Equipment \| Maximum
Property Plant And Equipment [Line Items]
Estimated useful lives	15 years
Software
Property Plant And Equipment [Line Items]
Estimated useful lives	product life
Software \| Minimum
Property Plant And Equipment [Line Items]
Estimated useful lives	3 years
Software \| Maximum
Property Plant And Equipment [Line Items]
Estimated useful lives	7 years
Leasehold Improvements
Property Plant And Equipment [Line Items]
Estimated useful lives	Lesser of the asset life or the remaining lease term

MorphoSys Collaboration Agreement - Additional Information (Details)	1 Months Ended		3 Months Ended		6 Months Ended	9 Months Ended		12 Months Ended
	Dec. 31, 2015 USD ($)	Aug. 31, 2014 USD ($)	Sep. 30, 2016 USD ($)	Sep. 30, 2015 USD ($)	Jun. 30, 2015 USD ($)	Sep. 30, 2016 USD ($) Unit	Sep. 30, 2015 USD ($)	Dec. 31, 2014 USD ($)
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Reduction to research and development expense			$ 7,114,000	$ 7,712,000		$ 22,851,000	$ 27,319,000
MorphoSys Agreement
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Nonrefundable upfront payment received		$ 20,000,000
Additional contingent payment that may be receive		$ 163,000,000
First contingent payment received based upon development and regulatory milestones					$ 5,000,000
Collaborative agreement, rights and obligations						MorphoSys and Aptevo jointly agreed to fund further development of MOR209/ES414, with Aptevo responsible for 36% of the total development costs and MorphoSys responsible for the remainder.
Maximum percentage of tiered royalty obligation on sales		20.00%
Number of units of accounting \| Unit						2
Allocation of collaborative arrangements upfront payment units of accounting								$ 20,000,000
Upfront payment allocated to license fee unit								15,300,000
License revenue		$ 15,300,000
Upfront payment allocated to service development								$ 4,700,000
Revenue recognized						$ 0	100,000
Current estimated service period for undelivered development services						2023
Reduction to research and development expense			0	$ 1,000,000		$ 100,000	$ 3,700,000
Accounts receivable			100,000			100,000
Deferred revenue			$ 3,700,000			$ 3,700,000
MorphoSys Agreement 2016
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Collaborative agreement, rights and obligations						Aptevo is responsible for 75%; MorphoSys responsible for 25%
MorphoSys Agreement 2017-2018
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Collaborative agreement, rights and obligations						Aptevo is responsible for 49%; MorphoSys responsible for 51%
MorphoSys Agreement 2019 and Beyond
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Collaborative agreement, rights and obligations						Aptevo is responsible for 36%; MorphoSys responsible for 64%
Aptevo \| MorphoSys Agreement
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Share of joint development costs percentage		36.00%
Maximum funding requirement cap	$ 250,000,000	$ 186,000,000
Aptevo \| MorphoSys Agreement 2016
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Share of joint development costs percentage	75.00%
Aptevo \| MorphoSys Agreement 2017-2018
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Share of joint development costs percentage	49.00%
Aptevo \| MorphoSys Agreement 2019 and Beyond
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Share of joint development costs percentage	36.00%
MorphoSys \| MorphoSys Agreement 2016
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Share of joint development costs percentage	25.00%
MorphoSys \| MorphoSys Agreement 2017-2018
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Share of joint development costs percentage	51.00%
MorphoSys \| MorphoSys Agreement 2019 and Beyond
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Share of joint development costs percentage	64.00%
Maximum \| MorphoSys Agreement
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
First contingent payment received based upon development and regulatory milestones		80,000,000
Second contingent payment received based upon development and regulatory milestones		$ 83,000,000
First additional contingent payments decrease upon the achievement of specified development and regulatory milestones	$ 32,500,000
Second additional contingent payments decrease upon the achievement of specified development and regulatory milestones	$ 41,500,000

Fair Value Measurements - Additional Information (Details) - USD ($)	9 Months Ended
	Sep. 30, 2016	Jun. 30, 2016	Dec. 31, 2015
Fair Value Disclosures [Abstract]
Financial assets measured at fair value	$ 54,995,000		$ 0
Fair value assets, level 1 to level 2 transfers		$ 0
Fair value assets, level 2 to level 1 transfers		$ 0
Future royalty payments expected	$ 0
Royalty agreement expiration date	Jun. 30, 2016

Fair Value Measurements - Summary of Financial Assets Measured at Fair Value (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Financial Assets:
Assets fair value	$ 54,995,000	$ 0
Money Market Funds
Financial Assets:
Assets fair value	5,210,000
Corporate Bonds
Financial Assets:
Assets fair value	37,864,000
US Government and Agency Debt Securities
Financial Assets:
Assets fair value	11,921,000
Level 1
Financial Assets:
Assets fair value	5,210,000
Level 1 \| Money Market Funds
Financial Assets:
Assets fair value	5,210,000
Level 2
Financial Assets:
Assets fair value	49,785,000
Level 2 \| Corporate Bonds
Financial Assets:
Assets fair value	37,864,000
Level 2 \| US Government and Agency Debt Securities
Financial Assets:
Assets fair value	$ 11,921,000

Fair Value Measurements - Summary of Reconciliation of Liabilities Measured at Fair Value Using Significant Unobservable Inputs (Level 3) (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2016 USD ($)
Fair Value Disclosures [Abstract]
Beginning balance	$ 444
Expense included in earnings	19
Settlements	(280)
Ending balance	$ 183

Investments - Schedule of Short-term Investments (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2016 USD ($)
Short-term Investments
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	$ 49,808
Gross Unrealized Holding Gains	3
Gross Unrealized Holding Losses	(20)
Estimated Fair Value	49,785
Short-term Investments \| Corporate Bonds
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	37,871
Gross Unrealized Holding Gains	1
Gross Unrealized Holding Losses	(6)
Estimated Fair Value	37,864
Short-term Investments \| US Government and Agency Debt Securities
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	11,937
Gross Unrealized Holding Gains	2
Gross Unrealized Holding Losses	(14)
Estimated Fair Value	11,921
Cash Equivalents
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	5,210
Estimated Fair Value	5,210
Cash Equivalents \| Money Market Fund
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	5,210
Estimated Fair Value	$ 5,210

Inventories - Schedule of Inventories (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Inventory Adjustments [Abstract]
Raw materials and supplies	$ 4,644	$ 6,520
Work-in-process	1,652	4,730
Finished goods	5,278	9,072
Total inventories	$ 11,574	$ 20,322

Inventories - Additional Information (Details) $ in Millions	3 Months Ended
	Sep. 30, 2016 USD ($)
Inventory Adjustments [Abstract]
Inventory Write-down	$ 2.9

Debt - Additional Information (Details) - USD ($)		9 Months Ended
Debt - Additional Information (Details) - USD ($)	Aug. 04, 2016	Sep. 30, 2016
Line Of Credit Facility [Line Items]
Maximum borrowing capacity	$ 35,000,000
Credit facility repayment term, description		The loan repayment will include interest (no principal) through August 2018. Commencing in August 2018, the payments will include principal and interest and will be repaid in full on February 1, 2021 (54 months).
Credit facility repayment period	54 months
Maturity date of credit agreement	Feb. 01, 2021
Credit agreement reference rate for the variable rate		LIBOR
Credit agreement basis spread on variable rate	7.60%
Cash funding committed by Emergent in connection with spin-off		$ 20,000,000
Credit agreement exit fee, percentage	5.75%
Credit agreement prepayment fee for first year, percentage	4.00%
Credit Facility First Tranche
Line Of Credit Facility [Line Items]
Maximum borrowing capacity	$ 20,000,000
Credit Facility Second Tranche
Line Of Credit Facility [Line Items]
Maximum borrowing capacity	15,000,000
Net commercial product revenue required to be achieved on trailing twelve month basis	40,000,000
Emergent \| Non Negotiable Unsecured Promissory Note
Line Of Credit Facility [Line Items]
Cash funding committed by Emergent in connection with spin-off	$ 20,000,000

Impairment of Intangible Assets, In-Process Research and Development and Goodwill - Additional Information (Details) $ in Millions	3 Months Ended
	Sep. 30, 2016 USD ($)
Goodwill And Intangible Assets Disclosure [Abstract]
Loss on impairment of in process research and development costs	$ 41.8
Goodwill impairment loss	$ 13.9

Net Loss Per Share - Additional Information (Details) - shares	Sep. 30, 2016	Dec. 31, 2015
Schedule Of Earnings Per Share Basic And Diluted [Line Items]
Ordinary shares outstanding	20,246,355	0
Ordinary shares issued in connection with spin-off	20,246,355	0
Option
Schedule Of Earnings Per Share Basic And Diluted [Line Items]
Options outstanding	2,042,863	0
Restricted Stock Units
Schedule Of Earnings Per Share Basic And Diluted [Line Items]
RSU's outstanding	3,222,900	0
Emergent
Schedule Of Earnings Per Share Basic And Diluted [Line Items]
Ordinary shares outstanding	1,000
Spin-off
Schedule Of Earnings Per Share Basic And Diluted [Line Items]
Ordinary shares issued in connection with spin-off	20,229,849

Net Loss Per Share - Summary of Potentially Dilutive Shares Excluded from Calculation of Net Loss Per Share (Details) shares in Thousands	9 Months Ended
	Sep. 30, 2016 shares
Outstanding Options to Purchase Common Stock
Schedule Of Earnings Per Share Basic And Diluted [Line Items]
Anti-dilutive shares excluded from calculation of diluted net loss per share	2,053
Unvested RSUs
Schedule Of Earnings Per Share Basic And Diluted [Line Items]
Anti-dilutive shares excluded from calculation of diluted net loss per share	3,324

Equity - Additional Information (Details) - USD ($)		3 Months Ended	9 Months Ended
Equity - Additional Information (Details) - USD ($)	Aug. 02, 2016	Sep. 30, 2016	Sep. 30, 2016	Sep. 30, 2015	Aug. 01, 2016
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Capitalization upon spinoff			$ 46,394,000
One-time payment amount			25,549,000	$ 42,650,000
Cash funding committed by Emergent in connection with spin-off		$ 20,000,000	20,000,000
Net transfers from former parent			24,155,000
Restricted Stock Units
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unrecognized compensation expense		$ 6,700,000	$ 6,700,000
Expected vesting period			1 year 6 months
Weighted average remaining contractual life			3 years 6 months
Option
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Estimated forfeiture rate		10.00%	10.00%
Unrecognized compensation expense		$ 900,000	$ 900,000
Options expected to vest , weighted average period			2 years 1 month 21 days
Options exercisable weighted average remaining contractual life			6 years 4 months 24 days
Common Stock
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Capitalization upon spinoff			$ 20,000
Converted Equity Awards Incentive Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Incremental stock-based compensation expense recorded as result of equity award conversion	$ 0
Converted Equity Awards Incentive Plan \| Common Stock
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock authorized for issuance under Stock Plan					1,300,000
2016 Stock Incentive Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock authorized for issuance under Stock Plan					3,100,000
Stock plan vesting period	3 years
2016 Stock Incentive Plan \| Restricted Stock Units
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock plan vesting period	18 months
2016 Stock Incentive Plan \| Non-employee Directors
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock plan vesting period	3 years
2016 Stock Incentive Plan \| Minimum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock plan termination period	7 years
2016 Stock Incentive Plan \| Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock plan termination period	10 years
Promissory Note \| Emergent
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Cash funding committed by Emergent in connection with spin-off					$ 20,000,000
Spin-off \| Emergent
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares issued					20,200,000
Capitalization upon spinoff			$ 46,400,000
One-time payment amount	$ 45,000,000
Working capital reimbursement for outstanding payments	1,400,000
Prior to the spin-off \| Emergent
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Net transfers from former parent	$ 24,200,000

Equity - Summary of Stock-based Compensation Expense Includes Amortization of Stock Options and Restricted Stock Units Granted (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	$ 1,333	$ 281	$ 2,067	$ 822
Research and Development
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	1,027	$ 281	1,761	$ 822
General and Administrative
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	$ 306		$ 306

Equity - Assumptions used in Valuing the Stock Options Granted under Black-Scholes Valuation Model (Details) - Option	3 Months Ended	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2016
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expected dividend yield	0.00%	0.00%
Expected volatility	75.00%	75.00%
Risk-free interest rate	1.00%	1.00%
Expected average life of options	3 years	3 years

Equity - Summary of Stock Option Activity (Details) - Option	9 Months Ended
	Sep. 30, 2016 USD ($) $ / shares shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of Shares, Outstanding, Beginning balance	0
Number of Shares, Aggregate impact of conversion related to spin-off	1,661,563
Number of Shares, Granted	387,975
Number of Shares, Exercised	(6,675)
Number of Shares, Outstanding, Ending balance	2,042,863
Number of Shares, Exercisable	461,096
Weighted-Average Exercise Price, Aggregate impact of conversion related to spin-off \| $ / shares	$ 2.49
Weighted-Average Exercise Price, Granted \| $ / shares	2.94
Weighted-Average Exercise Price, Exercised \| $ / shares	2.18
Weighted-Average Exercise Price, Outstanding, Ending balance \| $ / shares	2.58
Weighted-Average Exercise Price, Exercisable \| $ / shares	$ 2.29
Aggregate Intrinsic Value, Aggregate impact of conversion related to spin-off \| $	$ 203,644
Aggregate Intrinsic Value, Granted \| $	36,858
Aggregate Intrinsic Value, Exercised \| $	(7,062)
Aggregate Intrinsic Value, Outstanding, Ending balance \| $	233,440
Aggregate Intrinsic Value, Exercisable \| $	$ 126,319

Equity - Summary of Restricted Stock Activity (Details) - Restricted Stock Units	9 Months Ended
	Sep. 30, 2016 USD ($) $ / shares shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of Units, Outstanding, Beginning balance	0
Number of Units, Aggregate impact of conversion related to spin-off	1,122,179
Number of Units, Granted	2,115,772
Number of Units, Converted	(15,051)
Number of Units, Outstanding, Ending balance	3,222,900
Number of Units, Exercisable	2,888,726
Grant Date Fair Value Per Share, Aggregate impact of conversion related to spin-off \| $ / shares	$ 2.76
Weighted Average Fair Value per Unit, Granted \| $ / shares	2.94
Weighted Average Fair Value per Unit, Converted \| $ / shares	2.65
Weighted Average Fair Value per Unit, Outstanding Ending Balance \| $ / shares	2.88
Weighted Average Fair Value per Unit, Exercisable \| $ / shares	$ 2.88
Aggregate Fair Value, Outstanding, Ending balance \| $	$ 8,250,624
Aggregate Fair Value, Exercisable \| $	$ 7,395,139